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Born and raised in the Midwest to parents originally from Egypt, sisters Alia and Radwa Elkaffas created their Food Dolls platform to share exciting, fast, healthy meals. Born and raised in the Twin Cities to parents originally from Egypt, their recipes from “Pretty Delicious” are flavor-packed, Mediterranean-inspired, and plated with their signature style.Recently, we had a chance to catch up with the Food Dolls sisters on the eve of their cookbook launch for “Pretty Delicious” (pre-order the book here now) when we recorded a “Taste Buds With Stephanie” (episode drops on Fox 9 2/22/2025 at 8:30 am. ) at Radwa's gorgeous home. The sisters were as delightful and warm as ever, and we loved the recipes. “10 out of 10.” We made 3 recipes from the book, “Pretty Delicious”. I also riffed on their Marinated Tomatoes and Feta Dip and made it my own with all the same ingredients but as a baked pasta dish in homage to their talents.Cheesy Tomato and Feta Baked with Pasta and HerbsBy Stephanie Hansen Ingredients* 2 cups cherry tomatoes about 1 pint* 1/4 cup olive oil* 2 teaspoons salt* 1 teaspoon pepper* 8 oz. full-fat cream cheese at room temperature* 8 oz. feta cheese at room temperature* juice of half a lemon* 1 Tablespoon honey* 1/4 cup fresh parsley* 1/4 cup fresh basil* 1/4 cup fresh mint* 8 oz penne pastaInstructionsPreheat the oven to 400°F.Add the tomatoes, olive oil, salt, pepper, lemon and honey to a 9 x 13 baking dish.Nestle the cream cheese and feta cheese in the center of the baking dish amongst the tomatoesBake for 22-25 minutesMeanwhile, boil the pasta until el denteRemove from the oven and add the sour cream and stir the mixture, breaking it up combining the cheese and the tomatoes with the pasta making a saucetop with the fresh basil, parsley and mint, and serve hotEPISODE TRANSCRIPT:Stephanie:Hello, everybody, and welcome to Dishing with Stephanie's dish, the podcast where we talk to people equally obsessed in the food spaces as we are. And today, I'm with the Food Dolls. I'm with Radwa and Alia Elkaffas, and we had an opportunity to record a taste buds episode with them that will air at the end of February. I think it's gonna be February 22nd right on the eve of your book being available at stores.Alia Elkaffas:It well, we go live on the 25th.Stephanie:Okay. So you can preorder, though, your book Pretty Delicious right now. And if we talk about cookbooks in particular, the preorder is like it's crazy because what people don't know is all those preorders that you say you want this book, they count towards day 1 sales. And for people like Food Dolls who have such a massive following, it could be the day that launches them potentially to the top of the New York Times, cookbook list. So preorders for cookbook authors are super important. So we want you to get your books when they come out live, but we also want you to preorder because all of that stacked up on that first day counts to get them we're trying to get them on the New York Times bestseller list with their book. Would you like that, girls?Radwa Elkaffas:That would be just a dream.Stephanie:I know. It would. When when we spent time together in your home and watching you guys make your magic, When I left, one of the things that I asked, I'm like, so, you know, what are your intentions? And you were like, we wanna get our book on the New York Times bestseller list. And I think I really think you can do it because you guys have such a huge following. The book is so great. It's pretty delicious. Can we just back up? Like, you guys said you've been doing this pretty much since pre pandemic, but I feel like, you know, you've amassed such a huge following. Like, how did it get started?Radwa Elkaffas:Well, first of all, thank you so much for having me on, and it was so fun cooking with you last week. I well, we definitely started around 9 years ago now, which is so crazy to think that it's been that long. I think when we first started, we didn't really have, like, the best direction of what exactly Sure.Stephanie:No one did.Radwa Elkaffas:And we were trying to figure out social media. Both of our backgrounds were not chefs. We have no we have no photography background, no videography background. We had nothing, but we just knew that we love to cook, and we wanted to share with the world how easy and delicious you can make recipes. And I think that's been it since day 1. Our shift kind of changed a few years later on really kind of honing in on, like, our culture and our background and what we grew up eating, and people loved it. People loved it, and they love our, like, sister vibe.Stephanie:Yeah. You 2 are real life sisters, and are you 4 years apart?Alia Elkaffas:Yes. That's right.Stephanie:And, your background is your parents are from Egypt. Right. So you're you're leaning into that sort of cultural vibe. And what maybe a lot of people don't know, and I know a tiny, tiny bit, but, that Egypt is a very modern place all told. Like, can you just give us a little bit of, why it's a touchstone for you to still be speaking about this food that you guys have lived here most of your lives, but you still feel like this is such an influence for you?Alia Elkaffas:So our parents were they immigrated here in the early eighties. And so we were both born and raised here, but they really tried very hard to keep our Egyptian background alive. So whether it was with food, with, cultures, traditions. So, basically, we're very we're very Egyptian and Midwestern at the same time. So you even see a lot of our recipes. We do fusions between Egyptian and Mediterranean, Middle Eastern food with our Minnesota side.Stephanie:It's funny that you mentioned that today because, prior to talking with you, the way that taste buds works usually is we go out and we have an adventure somewhere. And in this episode, that adventure was with you guys in your home. And then we take what we learned from that adventure, and we come back into my kitchen. And so one of the things that I made was your, what was it? It was the Egyptian orzo with ground beef, and it had cinnamon in it. It was super delicious. The recipe worked beautifully, and everybody loved it. But what was funny was when we were making it, my cameraman said, oh, it's just like a casserole or a hot dish. And so I laughed.Stephanie:I was like, yes. This is like the Egyptian hot dish. That's exactly the mashup.Alia Elkaffas:Exactly. Yep. And that's what we we always say. It's like an Egyptian, hamburger helper, you know, casserole. So it's it's yeah. It's really good.Stephanie:Even down to, like I don't know if you guys ever have had rice aaroni, but it was like a combination between rice and pasta, and you sauteed it just like you did with the orzo to get the color on the pasta. So it was just really it it was a delicious recipe. The other thing that we did that will surprise you maybe is I was trying to think about how to take what I learned from you and your book and the way you cook and make that kinda my own too because I think that's so much of what you inspire people to do. So I took the marinated tomato, and creamy whipped feta dip that we made on the show with you, and I took all those same ingredients literally to the letter, but we made a pasta bake with it.Radwa Elkaffas:Oh, that sounds delicious.Stephanie:Yeah. So you'll see that on the episode. We made it and we made it into, like, a pasta bake because when I was looking at the recipe that you guys made when we were in your kitchen, I was like, oh, this is kinda like that feta where the roasted tomatoes. And so that's the surprise for you that you'll see that we just took your dish and all the ingredients. It was very fun to and it was interesting too because, Michelle, my producer, she was like because she loved your dip so much. And then she was like, and it's so weird that this is the exact same ingredients, but the flavor profile is so different.Radwa Elkaffas:Changes everything.Stephanie:Yeah. And maybe just the roasting of the tomatoes too and the heat and the pasta because that was the one thing we did add. But it was really fun to think about how to take a recipe from your book, but kinda, like, just twist it with all the same stuff. It was fun.Alia Elkaffas:Yep. Awesome. Yeah. And that's what we love to do. We love taking these just these simple ingredients and just turning them into something amazing. You know? You don't need like, you don't need anything crazy and any crazy ingredients, and you could just make something that's really good and with simple ingredients.Stephanie:Yeah. I think that's why we really liked your recipes that also, we made a beautiful chicken dish. Do you wanna describe the chicken dish that we made?Radwa Elkaffas:Oh, that's sassy chicken and potatoes? Yes. And that's the thing. Like, we are busy moms who don't really have a lot of time, so we're always thinking, okay. What can we do that's just easy, delicious, and you could just throw it together. Literally throw everything into the baking dish, make your, marinade, and throw it together and pop it in the oven. So you could do it the night before, so it's a great make ahead, or you can make it the same day, but really just getting those flavors to infuse overnight is awesome. And who doesn't love having dinner the day before? So all you have to do is throw it in the oven when you're ready to eat it is exactly what we love to do.Stephanie:How many days a week do you okay. Let's just back up a second. You guys have I think we determined it was 8,000,000 followers over all the platforms. How many days a week do you actually spend together creating content versus the marketing and the managing of the content?Radwa Elkaffas:I think this that's the beauty of having 2 of us is we do a lot of divide and conquer, which really helps us a lot, and it alleviates a lot of pressure off of each other. There's things that we obviously have to do together, like our end shots. Or if we're filming, like, a recipe clip that we're actually in, then we have to be together. I think we just kinda take it week by week because maybe we have, like, a high sponsored week that we have to do our sponsors, or if we have a lighter week, or we, you know, are going on vacation and we need to film as many as we can so we can have a little bit extra, content. I think we just kind of take it week by week.Stephanie:When you look at your content calendar, how far in advance do you go, or do you just do it week by week?Radwa Elkaffas:I mean, I would love to say that we're the most organized, sisters ever, but we're not. We really just kind of sometimes we wing it. Sometimes even we don't recipe test the recipe. We're like, okay. Let's just try this, And sometimes it is a 100% fail and it does not work. And other times, we're like, we nailed that. Like, it is absolutely amazing, and then we get super excited. Sometimes those are our best recipes when it's just spur of the moment.Alia Elkaffas:I I was gonna say sometimes we have this, like, master plan. Oh, we're gonna make x y z today. It's gonna be great. And all of a sudden, we're in the middle of making it, and it turns into something a 100% different, and and we just we just goStephanie:with it.Alia Elkaffas:You know?Stephanie:Yeah. It's so fun. And the styling of the book, what I noticed when I was at your home is you both have a similar style, but your homes are very curated and full of beautiful art and beautiful flowers, and you have a a real, statement color palette. And that kinda translates to your work online and the book. Have you always been like that since you were little kids? Oh, you're both matching. You have all the perfect lips, the perfect hair, all the stuff.Radwa Elkaffas:You know, it's so funny. Like, our favorite color is really black and white. Like, it's not just something that we created for our brand. It is it's legit what we love. We love black and white. When we went through our brand and what we wanted it to look like, it was okay. How are we gonna incorporate this into our brand? Because what we like at home, this is what we do at home, and we also love it in our clothes. So it's not just we like black and white, and I I this might sound a little crazy that we love black and white and everything, but we do.Radwa Elkaffas:So it ended up being that we love it at home. We love it in the book. We love it in online. Like, it's just so it's it's just part of our, Food Dolls identity at this point.Stephanie:Can you remember the first thing you guys ever made, like, by yourselves just, like, as a kid? Or, like, did you have a first cookbook? Or do you remember just, like, that first thing you really made?Alia Elkaffas:I would I'm pretty sure the first thing we probably ever made together was probably baked cookies. You know? Like, just straight up cookies or a box of brownie mix or something.Stephanie:Totally. That is and, it was always like cookies or brownies because it was kind of a one bowl situation. Right? I didn't wanna make a mess with your mom. Is there a recipe that you feel like, a, gets a lot of attraction, but, b, like, really represents you? It's like, this is the one that we feel like is our statement.Radwa Elkaffas:Wow. That's a really good question. Okay. I will say this. Our most popular recipes are the most shocking that we would have never guessed that these are, like, the most popular recipes. We did, a a baked spaghetti that went absolutely crazy. Would we have thought that that was gonna be our number one recipe on the website? No. We love it, but people went crazy overAlia Elkaffas:it. Yeah.Radwa Elkaffas:So crazy. And it was it's just really shocking to us. But I think we kinda came to the conclusion is our top recipes are, like, the simplest, easiest. Like, you've got these recipe you've got these ingredients in your pantry. So all you have to do is throw it together, and I think that's what always wins.Stephanie:Yeah. And it's always surprising, like, the ones that get the most traction, and you just think like, wow. That's weird. Like, one of mine is this chao chao relish that they bake usually in the south, and I always have green tomatoes that I garden with. So I ended up just having to kind of make this thing, and it's, like, always in the top three. I don't know who's clicking on that recipe that much, but people are. It's weird.Alia Elkaffas:Yeah. It's funny how that works. It's just what what you think is gonna like, people are like, oh my god. This is so good. It's the opposite, and it's like something that, you know, is the most, like, and simple and basic. And you know?Stephanie:When we talk about your Egyptian heritage, and I asked you guys about this when we met, What is it specifically, like for instance, when we were doing the Orzo bake, they the the producer asked, she was like, what do you think about this makes it Egyptian? And I was, like, saying the flavor profiles and the types of ingredients that we use. But is there something that you feel like is uniquely Egyptian that you bring to the party?Alia Elkaffas:That's a really good question. So I'd say a lot of the dishes in the book are not necessarily, like, true Egyptian. It's got, like, some fusion to it with, like, Mediterranean flavors. And a lot of the, like, the real traditional Egyptian recipes might be a little bit more intricate, so we were trying to simplify it by using some of those those same flavor profiles, but not necessarily doing it step by step like our mom would do our aunts or grandma. You know?Stephanie:One of the ingredients in the casserole that we made was tomato paste, and you cooked down the tomato paste. But that like, when you think about tomatoes in warm climates, you know, the flavor is so intense and so concentrated, and you do kinda get that from a tomato paste. I hadn't really thought about that before.Alia Elkaffas:Yeah. That's very true. And we do have a lot of dishes that are very tomato based as well.Stephanie:Yeah. I love it. Okay. So when you guys are, like, absolutely exhausted and the kids are driving you crazy and it's 6 o'clock and you have to put something is there, like, a go to meal for each of you?Radwa Elkaffas:I'm, like, thinking about it because I'm like, okay. There's a lot. I feel like our like, the chicken and potatoes, I think, for sure, to just kind of throw together. But I really do love that to sit overnight. But if I'm, like, in a pinch, I will say the kids maybe sometimes eat something different than I do, because they're so picky. Like, I have a 4 year old, a 9 year old, and one wants, you know, quesadillas, and the other one's, like, fighting me on the chicken and potatoes and rice. Like so I would say that what it's always 2 different things. I'm not even gonna lie about it because they they drive me absolutely crazy about getting them to eat everything all at the same time and and the same thing.Radwa Elkaffas:So I would say for me, it would be the chicken potatoes. For them, it would definitely be some sort of pasta. And we love 1 pot pastas because you can have it ready in 15 minutes, and we have so many 1 pot pastas in our book.Stephanie:Yeah. You do have a lot. I tried to make the dish as a 1 pot with the pasta already in the baking dish and make the sauce right in the pan, but I couldn't get the right ratio of water to pasta. I made it twice, and the pasta kept coming out a little crunchy. So I'm done, and I just make I just made it I just boiled the pasta and did it that way and added it later. But I did try twice to get it, like because I kept thinking it would be so great if you could just do this all in the oven in the one pan. And maybe a different pan or a flatter pan, I could haveAlia Elkaffas:That could be. And it could be also the kind of pasta that sometimes makes a difference as well.Stephanie:Yeah. I should have tried an orzo, but I had a penne. So yep. Do you when your kids are, like, picky like that, do you feel like, okay. No, kids. This is what I made. This is what we're eating. I'm not a short order cook.Stephanie:Or are you more lax and you're like, just whatever we're eating, go ahead. Eat it as long as you eat.Radwa Elkaffas:I would have to say I kind of started, especially with my kids, learning how they are, and I don't care if I make the same thing every single week if I know they're gonna eat it. Why am I gonna sit here and fight every single week to try to get them to try new things? Because I I see I see Alia as, like, the perfect examples because my kids are younger. Hers are older. So now they're starting to eat anything. So I know hopefully, eventually, they'll get there, but we're in this, like, little phase right now where I'm trying to just get them to eat. I just want them to eat. I don't care what they eat. I just want them to eat the dinner.Radwa Elkaffas:So I will make the same things over and over and over again because I know they like it, and I know they'll eat it. SoAlia Elkaffas:I was gonna say a lot of times, like, even, like, for example, we do have, like, a southwest salad in the cookbook. So what I'll do instead of assembling it altogether as a salad, I kind of keep it some of the components separate so all the kids could kind of grab what they do like and what they don't like. So that way, it's like it feels custom to them versus, you know, making it putting everything together and forcing them to eat it as is.Stephanie:That's smart. It's like the Chipotle method. Right? Giving them choices. Yep. I I do think too, like, we spend a lot of time worrying about stuff that's probably not super consequential in the grand scheme of life. Kids are gonna eat, you know. Sooner or later, they're gonna eat. Sooner or later, they're gonna develop their palate whether, you know, they were part of the clean plate club or not.Stephanie:It feels like kind of a weird thing to worry about looking back on my childhood and how much time and struggle there was about, like, what you ate and you couldn't leave the table till you ate it and just kinda dumb. When you think about social media with your kids, I noticed that we don't really see your kids. Is that intentional, or how do you feel like you want your kids to show up as, teenagers and young adults in this profile of their moms being so famous?Alia Elkaffas:Yes. That is a great question. So we purposely, we do not put our kids on social media, and we have very, very little images of images of them anywhere just to protect their privacy as well. You know? And it's like once stuff is out in social media, once it's out in the world, it's out there forever. So, yeah, we choose to keep them up.Radwa Elkaffas:Sure that they have that decision later. You know? Like, it will not come back at us. Like, why did you put me on there? You know? Have that choice later. And so now we're gonna be mama bears and just protect them.Stephanie:I think too we're seeing, the social media I guess Facebook just turned 20 recently, which is hard to believe. But when it first came about, you know, like, we were just on it, and it was new, and it was exciting, and we didn't really think about the big picture. And I think now if I had my daughter's 25. So if I had it I made her wait till 13. And if I had to do it all over again and I was in this day and age, I definitely would I might get my kid, like, a flip phone or something terrible that they can only call me on, but I would have waited because I do think social media adds an element to young, kids' lives that maybe they don't need or aren't ready for it until later.Radwa Elkaffas:Absolutely. A 100% agree with you on that.Stephanie:How do your parents feel about your business?Radwa Elkaffas:I think it took them such a long time to fully understand it.Stephanie:It's probably soRadwa Elkaffas:weird. Grasp what we what it is exactly we are doing. But I we know that they're so proud of us and super excited to see us do this and, you know, especially mom, you know, she was a really big influence for us growing up and in in the cooking world. So we love making them proud.Stephanie:Do you have anxiety about, like, keeping up or, like, always being on the churn? And what do you do for, like, self care?Alia Elkaffas:Oh, that's a great one. Yes. I'd say we do have definitely have the anxiety, but we try to we always talk each other down, calm each other down, and just know that, you know, just talk things through together. But and I'd say probably self care. We like to work out just to kind of, you know, really get the release those endorphins. You know?Radwa Elkaffas:And we we actually do yell at each other, like, stop working. You need to stop working. Stop looking at your screen. Put your computer down. Stop doing this. We do that all all the time to each other.Alia Elkaffas:Yep.Stephanie:What are your favorite types of workouts?Radwa Elkaffas:I would say lifting and walking.Stephanie:What was lifting and walking?Alia Elkaffas:Yep. Same lifting, walking, and, you know, doing some sort of cardio.Stephanie:Yeah. And you have kids too. So you're probably trying to fit it in when you can. And it's hard to, like, go to a structured gym and do all that when you've got a lot of family at home and, a structured gym and do all that when you've got a lot of family at home. And how do you feel about working from home? And does that work for your schedules? Or do you ever visualize, like, someday having an office where you have all your production stuff? AndRadwa Elkaffas:I I love working from home because of the flexibility and having everything at home where you could quickly just, but it it's definitely a challenge to disconnect sometimes because work is home, home is work. So it's hard to, like, break the 2 apart. But it's nice that we have 2 houses. So if we need a break from 1 house, we go to the other one.Stephanie:Yeah. That is nice. Like, just it because it can just feel so much like, oh, you're just in your house all the time doing all this stuff.Alia Elkaffas:And it's it really is hard to disconnect. So it's not like we try to have work hours, but it's like it's almost impossible. So, like, we'll work, and then we'll take a break, even run kids' activities, come back, finish working. So it's like it feels like sometimes it's like a nonstop cycle. But, yeah, that's when we have to put each other in check, say, get off and go take a break.Stephanie:Yeah. Okay. Switching gears, what is your and each of you can have a separate answer, of course, but what is your, like, most used kitchen utensil or gadget or thing that, like, you could not live without?Radwa Elkaffas:Air fryer.Stephanie:That was so fast.Radwa Elkaffas:Absolutely. I have to suck at her on.Stephanie:Yeah. Yep. Really? I I use my air fryer so rarely. It's in the garage. Like, do you use it every day? What are you doing with it?Radwa Elkaffas:Every single day. Like, there is not a day that goes by that I don't use that.Alia Elkaffas:Really? For reheating things, for making things. We actually do have some instructions in the cookbook. Like, if if you wanna make this recipe in an air fryer, how to do that. But it just makes things so much easier even if, like, the kids wanna make chicken and fries or something. You know? It crisps it up perfectly, and it feels like you're eating it, you know, freshly, like, deep fried. You know?Stephanie:Alright. I'm gonna have to get my air fryer out of the garage and give it another try. I just I don't know. It's like, and I have a convection oven too. So I think the convection oven does the same thing, but I don't have kids, so maybe that's different, you know, just the speed and convenience of it being right on the counter like that.Radwa Elkaffas:And you mentioned what we do on there. And, honestly, like, even we do, like, French toast. Like, if you wanna make French toast, you can throw your French toast in there. Or if you make a marinated chicken, just throw it in there, shut it, and it's done in no time. And you don't have to worry about a mess.Stephanie:Yeah. And it goes faster too. You guys will be on a book tour, I'm imagining. Is that all coming together, and how is that feeling?Radwa Elkaffas:It's exciting. Super excited to do that. That's gonna be end of February, beginning of March. We have we're stopping at 5 different cities. So we're really excited about that.Alia Elkaffas:And our last office is gonna be here in Minneapolis.Stephanie:So we're gonna so great. Do you know where you're gonna be or what you're doing yet?Alia Elkaffas:We're gonna be at the Barnes and Noble in Edina. So that'll be where I don't think we have a confirmed time yet, but that'll be on March. It's a Sunday, March 2nd, I believe.Stephanie:Alright. Well, when you know, just let me know, and I'll make sure and share it. It's been super fun just chatting with you guys. I knew just from kinda following you that I like, oh, I'm gonna like these girls. But really, honestly, it was, like, one of my best days. And I just so proud of you, and I feel like you know, how you you meet people and you want them to be successful or you're so proud of their success? That's how I feel about you guys. You really work hard, and you've really earned, everything that's coming your way. And I think the book's gonna be amazing, and it was just it's been fun to just be a little tiny, tiny part of the journey for a second.Stephanie:It's been a blast.Radwa Elkaffas:Thank you so much. And, honestly, your energy that you brought to that table last week was everything. You made us feel so good, and we we we felt like a $1,000,000 after you left. So thankAlia Elkaffas:you for having me. So honored to have gotten to work with you, and now we get to be friends and Yes.Stephanie:I'm I'm actually I just I'm planning, I I I booked a do you know, a Khmeran feast at Vinay? And I've had one for a while, and so I was like, oh, I wonder. Maybe I'll do a gathering of, like, food ladies just to do something fun and different.Radwa Elkaffas:Yeah.Stephanie:Alright, you guys. Your book's gonna be great. Keep me in the loop. I'll keep you in the loop if anything fun's happening. And just thanks for being taste buds.Radwa Elkaffas:Awesome. Thank you so much.Stephanie:Alright. We'll see you soon. Bye. Bye bye. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit stephaniehansen.substack.com/subscribe
Born and raised in the Midwest to parents originally from Egypt, sisters Alia and Radwa Elkaffas created their Food Dolls platform to share exciting, fast, healthy meals. Born and raised in the Twin Cities to parents originally from Egypt, their recipes from “Pretty Delicious” are flavor-packed, Mediterranean-inspired, and plated with their signature style.Recently, we had a chance to catch up with the Food Dolls sisters on the eve of their cookbook launch for “Pretty Delicious” (pre-order the book here now) when we recorded a “Taste Buds With Stephanie” (episode drops on Fox 9 2/22/2025 at 8:30 am. ) at Radwa's gorgeous home. The sisters were as delightful and warm as ever, and we loved the recipes. “10 out of 10.” We made 3 recipes from the book, “Pretty Delicious”. I also riffed on their Marinated Tomatoes and Feta Dip and made it my own with all the same ingredients but as a baked pasta dish in homage to their talents.Cheesy Tomato and Feta Baked with Pasta and HerbsBy Stephanie Hansen Ingredients* 2 cups cherry tomatoes about 1 pint* 1/4 cup olive oil* 2 teaspoons salt* 1 teaspoon pepper* 8 oz. full-fat cream cheese at room temperature* 8 oz. feta cheese at room temperature* juice of half a lemon* 1 Tablespoon honey* 1/4 cup fresh parsley* 1/4 cup fresh basil* 1/4 cup fresh mint* 8 oz penne pastaInstructionsPreheat the oven to 400°F.Add the tomatoes, olive oil, salt, pepper, lemon and honey to a 9 x 13 baking dish.Nestle the cream cheese and feta cheese in the center of the baking dish amongst the tomatoesBake for 22-25 minutesMeanwhile, boil the pasta until el denteRemove from the oven and add the sour cream and stir the mixture, breaking it up combining the cheese and the tomatoes with the pasta making a saucetop with the fresh basil, parsley and mint, and serve hotEPISODE TRANSCRIPT:Stephanie:Hello, everybody, and welcome to Dishing with Stephanie's dish, the podcast where we talk to people equally obsessed in the food spaces as we are. And today, I'm with the Food Dolls. I'm with Radwa and Alia Elkaffas, and we had an opportunity to record a taste buds episode with them that will air at the end of February. I think it's gonna be February 22nd right on the eve of your book being available at stores.Alia Elkaffas:It well, we go live on the 25th.Stephanie:Okay. So you can preorder, though, your book Pretty Delicious right now. And if we talk about cookbooks in particular, the preorder is like it's crazy because what people don't know is all those preorders that you say you want this book, they count towards day 1 sales. And for people like Food Dolls who have such a massive following, it could be the day that launches them potentially to the top of the New York Times, cookbook list. So preorders for cookbook authors are super important. So we want you to get your books when they come out live, but we also want you to preorder because all of that stacked up on that first day counts to get them we're trying to get them on the New York Times bestseller list with their book. Would you like that, girls?Radwa Elkaffas:That would be just a dream.Stephanie:I know. It would. When when we spent time together in your home and watching you guys make your magic, When I left, one of the things that I asked, I'm like, so, you know, what are your intentions? And you were like, we wanna get our book on the New York Times bestseller list. And I think I really think you can do it because you guys have such a huge following. The book is so great. It's pretty delicious. Can we just back up? Like, you guys said you've been doing this pretty much since pre pandemic, but I feel like, you know, you've amassed such a huge following. Like, how did it get started?Radwa Elkaffas:Well, first of all, thank you so much for having me on, and it was so fun cooking with you last week. I well, we definitely started around 9 years ago now, which is so crazy to think that it's been that long. I think when we first started, we didn't really have, like, the best direction of what exactly Sure.Stephanie:No one did.Radwa Elkaffas:And we were trying to figure out social media. Both of our backgrounds were not chefs. We have no we have no photography background, no videography background. We had nothing, but we just knew that we love to cook, and we wanted to share with the world how easy and delicious you can make recipes. And I think that's been it since day 1. Our shift kind of changed a few years later on really kind of honing in on, like, our culture and our background and what we grew up eating, and people loved it. People loved it, and they love our, like, sister vibe.Stephanie:Yeah. You 2 are real life sisters, and are you 4 years apart?Alia Elkaffas:Yes. That's right.Stephanie:And, your background is your parents are from Egypt. Right. So you're you're leaning into that sort of cultural vibe. And what maybe a lot of people don't know, and I know a tiny, tiny bit, but, that Egypt is a very modern place all told. Like, can you just give us a little bit of, why it's a touchstone for you to still be speaking about this food that you guys have lived here most of your lives, but you still feel like this is such an influence for you?Alia Elkaffas:So our parents were they immigrated here in the early eighties. And so we were both born and raised here, but they really tried very hard to keep our Egyptian background alive. So whether it was with food, with, cultures, traditions. So, basically, we're very we're very Egyptian and Midwestern at the same time. So you even see a lot of our recipes. We do fusions between Egyptian and Mediterranean, Middle Eastern food with our Minnesota side.Stephanie:It's funny that you mentioned that today because, prior to talking with you, the way that taste buds works usually is we go out and we have an adventure somewhere. And in this episode, that adventure was with you guys in your home. And then we take what we learned from that adventure, and we come back into my kitchen. And so one of the things that I made was your, what was it? It was the Egyptian orzo with ground beef, and it had cinnamon in it. It was super delicious. The recipe worked beautifully, and everybody loved it. But what was funny was when we were making it, my cameraman said, oh, it's just like a casserole or a hot dish. And so I laughed.Stephanie:I was like, yes. This is like the Egyptian hot dish. That's exactly the mashup.Alia Elkaffas:Exactly. Yep. And that's what we we always say. It's like an Egyptian, hamburger helper, you know, casserole. So it's it's yeah. It's really good.Stephanie:Even down to, like I don't know if you guys ever have had rice aaroni, but it was like a combination between rice and pasta, and you sauteed it just like you did with the orzo to get the color on the pasta. So it was just really it it was a delicious recipe. The other thing that we did that will surprise you maybe is I was trying to think about how to take what I learned from you and your book and the way you cook and make that kinda my own too because I think that's so much of what you inspire people to do. So I took the marinated tomato, and creamy whipped feta dip that we made on the show with you, and I took all those same ingredients literally to the letter, but we made a pasta bake with it.Radwa Elkaffas:Oh, that sounds delicious.Stephanie:Yeah. So you'll see that on the episode. We made it and we made it into, like, a pasta bake because when I was looking at the recipe that you guys made when we were in your kitchen, I was like, oh, this is kinda like that feta where the roasted tomatoes. And so that's the surprise for you that you'll see that we just took your dish and all the ingredients. It was very fun to and it was interesting too because, Michelle, my producer, she was like because she loved your dip so much. And then she was like, and it's so weird that this is the exact same ingredients, but the flavor profile is so different.Radwa Elkaffas:Changes everything.Stephanie:Yeah. And maybe just the roasting of the tomatoes too and the heat and the pasta because that was the one thing we did add. But it was really fun to think about how to take a recipe from your book, but kinda, like, just twist it with all the same stuff. It was fun.Alia Elkaffas:Yep. Awesome. Yeah. And that's what we love to do. We love taking these just these simple ingredients and just turning them into something amazing. You know? You don't need like, you don't need anything crazy and any crazy ingredients, and you could just make something that's really good and with simple ingredients.Stephanie:Yeah. I think that's why we really liked your recipes that also, we made a beautiful chicken dish. Do you wanna describe the chicken dish that we made?Radwa Elkaffas:Oh, that's sassy chicken and potatoes? Yes. And that's the thing. Like, we are busy moms who don't really have a lot of time, so we're always thinking, okay. What can we do that's just easy, delicious, and you could just throw it together. Literally throw everything into the baking dish, make your, marinade, and throw it together and pop it in the oven. So you could do it the night before, so it's a great make ahead, or you can make it the same day, but really just getting those flavors to infuse overnight is awesome. And who doesn't love having dinner the day before? So all you have to do is throw it in the oven when you're ready to eat it is exactly what we love to do.Stephanie:How many days a week do you okay. Let's just back up a second. You guys have I think we determined it was 8,000,000 followers over all the platforms. How many days a week do you actually spend together creating content versus the marketing and the managing of the content?Radwa Elkaffas:I think this that's the beauty of having 2 of us is we do a lot of divide and conquer, which really helps us a lot, and it alleviates a lot of pressure off of each other. There's things that we obviously have to do together, like our end shots. Or if we're filming, like, a recipe clip that we're actually in, then we have to be together. I think we just kinda take it week by week because maybe we have, like, a high sponsored week that we have to do our sponsors, or if we have a lighter week, or we, you know, are going on vacation and we need to film as many as we can so we can have a little bit extra, content. I think we just kind of take it week by week.Stephanie:When you look at your content calendar, how far in advance do you go, or do you just do it week by week?Radwa Elkaffas:I mean, I would love to say that we're the most organized, sisters ever, but we're not. We really just kind of sometimes we wing it. Sometimes even we don't recipe test the recipe. We're like, okay. Let's just try this, And sometimes it is a 100% fail and it does not work. And other times, we're like, we nailed that. Like, it is absolutely amazing, and then we get super excited. Sometimes those are our best recipes when it's just spur of the moment.Alia Elkaffas:I I was gonna say sometimes we have this, like, master plan. Oh, we're gonna make x y z today. It's gonna be great. And all of a sudden, we're in the middle of making it, and it turns into something a 100% different, and and we just we just goStephanie:with it.Alia Elkaffas:You know?Stephanie:Yeah. It's so fun. And the styling of the book, what I noticed when I was at your home is you both have a similar style, but your homes are very curated and full of beautiful art and beautiful flowers, and you have a a real, statement color palette. And that kinda translates to your work online and the book. Have you always been like that since you were little kids? Oh, you're both matching. You have all the perfect lips, the perfect hair, all the stuff.Radwa Elkaffas:You know, it's so funny. Like, our favorite color is really black and white. Like, it's not just something that we created for our brand. It is it's legit what we love. We love black and white. When we went through our brand and what we wanted it to look like, it was okay. How are we gonna incorporate this into our brand? Because what we like at home, this is what we do at home, and we also love it in our clothes. So it's not just we like black and white, and I I this might sound a little crazy that we love black and white and everything, but we do.Radwa Elkaffas:So it ended up being that we love it at home. We love it in the book. We love it in online. Like, it's just so it's it's just part of our, Food Dolls identity at this point.Stephanie:Can you remember the first thing you guys ever made, like, by yourselves just, like, as a kid? Or, like, did you have a first cookbook? Or do you remember just, like, that first thing you really made?Alia Elkaffas:I would I'm pretty sure the first thing we probably ever made together was probably baked cookies. You know? Like, just straight up cookies or a box of brownie mix or something.Stephanie:Totally. That is and, it was always like cookies or brownies because it was kind of a one bowl situation. Right? I didn't wanna make a mess with your mom. Is there a recipe that you feel like, a, gets a lot of attraction, but, b, like, really represents you? It's like, this is the one that we feel like is our statement.Radwa Elkaffas:Wow. That's a really good question. Okay. I will say this. Our most popular recipes are the most shocking that we would have never guessed that these are, like, the most popular recipes. We did, a a baked spaghetti that went absolutely crazy. Would we have thought that that was gonna be our number one recipe on the website? No. We love it, but people went crazy overAlia Elkaffas:it. Yeah.Radwa Elkaffas:So crazy. And it was it's just really shocking to us. But I think we kinda came to the conclusion is our top recipes are, like, the simplest, easiest. Like, you've got these recipe you've got these ingredients in your pantry. So all you have to do is throw it together, and I think that's what always wins.Stephanie:Yeah. And it's always surprising, like, the ones that get the most traction, and you just think like, wow. That's weird. Like, one of mine is this chao chao relish that they bake usually in the south, and I always have green tomatoes that I garden with. So I ended up just having to kind of make this thing, and it's, like, always in the top three. I don't know who's clicking on that recipe that much, but people are. It's weird.Alia Elkaffas:Yeah. It's funny how that works. It's just what what you think is gonna like, people are like, oh my god. This is so good. It's the opposite, and it's like something that, you know, is the most, like, and simple and basic. And you know?Stephanie:When we talk about your Egyptian heritage, and I asked you guys about this when we met, What is it specifically, like for instance, when we were doing the Orzo bake, they the the producer asked, she was like, what do you think about this makes it Egyptian? And I was, like, saying the flavor profiles and the types of ingredients that we use. But is there something that you feel like is uniquely Egyptian that you bring to the party?Alia Elkaffas:That's a really good question. So I'd say a lot of the dishes in the book are not necessarily, like, true Egyptian. It's got, like, some fusion to it with, like, Mediterranean flavors. And a lot of the, like, the real traditional Egyptian recipes might be a little bit more intricate, so we were trying to simplify it by using some of those those same flavor profiles, but not necessarily doing it step by step like our mom would do our aunts or grandma. You know?Stephanie:One of the ingredients in the casserole that we made was tomato paste, and you cooked down the tomato paste. But that like, when you think about tomatoes in warm climates, you know, the flavor is so intense and so concentrated, and you do kinda get that from a tomato paste. I hadn't really thought about that before.Alia Elkaffas:Yeah. That's very true. And we do have a lot of dishes that are very tomato based as well.Stephanie:Yeah. I love it. Okay. So when you guys are, like, absolutely exhausted and the kids are driving you crazy and it's 6 o'clock and you have to put something is there, like, a go to meal for each of you?Radwa Elkaffas:I'm, like, thinking about it because I'm like, okay. There's a lot. I feel like our like, the chicken and potatoes, I think, for sure, to just kind of throw together. But I really do love that to sit overnight. But if I'm, like, in a pinch, I will say the kids maybe sometimes eat something different than I do, because they're so picky. Like, I have a 4 year old, a 9 year old, and one wants, you know, quesadillas, and the other one's, like, fighting me on the chicken and potatoes and rice. Like so I would say that what it's always 2 different things. I'm not even gonna lie about it because they they drive me absolutely crazy about getting them to eat everything all at the same time and and the same thing.Radwa Elkaffas:So I would say for me, it would be the chicken potatoes. For them, it would definitely be some sort of pasta. And we love 1 pot pastas because you can have it ready in 15 minutes, and we have so many 1 pot pastas in our book.Stephanie:Yeah. You do have a lot. I tried to make the dish as a 1 pot with the pasta already in the baking dish and make the sauce right in the pan, but I couldn't get the right ratio of water to pasta. I made it twice, and the pasta kept coming out a little crunchy. So I'm done, and I just make I just made it I just boiled the pasta and did it that way and added it later. But I did try twice to get it, like because I kept thinking it would be so great if you could just do this all in the oven in the one pan. And maybe a different pan or a flatter pan, I could haveAlia Elkaffas:That could be. And it could be also the kind of pasta that sometimes makes a difference as well.Stephanie:Yeah. I should have tried an orzo, but I had a penne. So yep. Do you when your kids are, like, picky like that, do you feel like, okay. No, kids. This is what I made. This is what we're eating. I'm not a short order cook.Stephanie:Or are you more lax and you're like, just whatever we're eating, go ahead. Eat it as long as you eat.Radwa Elkaffas:I would have to say I kind of started, especially with my kids, learning how they are, and I don't care if I make the same thing every single week if I know they're gonna eat it. Why am I gonna sit here and fight every single week to try to get them to try new things? Because I I see I see Alia as, like, the perfect examples because my kids are younger. Hers are older. So now they're starting to eat anything. So I know hopefully, eventually, they'll get there, but we're in this, like, little phase right now where I'm trying to just get them to eat. I just want them to eat. I don't care what they eat. I just want them to eat the dinner.Radwa Elkaffas:So I will make the same things over and over and over again because I know they like it, and I know they'll eat it. SoAlia Elkaffas:I was gonna say a lot of times, like, even, like, for example, we do have, like, a southwest salad in the cookbook. So what I'll do instead of assembling it altogether as a salad, I kind of keep it some of the components separate so all the kids could kind of grab what they do like and what they don't like. So that way, it's like it feels custom to them versus, you know, making it putting everything together and forcing them to eat it as is.Stephanie:That's smart. It's like the Chipotle method. Right? Giving them choices. Yep. I I do think too, like, we spend a lot of time worrying about stuff that's probably not super consequential in the grand scheme of life. Kids are gonna eat, you know. Sooner or later, they're gonna eat. Sooner or later, they're gonna develop their palate whether, you know, they were part of the clean plate club or not.Stephanie:It feels like kind of a weird thing to worry about looking back on my childhood and how much time and struggle there was about, like, what you ate and you couldn't leave the table till you ate it and just kinda dumb. When you think about social media with your kids, I noticed that we don't really see your kids. Is that intentional, or how do you feel like you want your kids to show up as, teenagers and young adults in this profile of their moms being so famous?Alia Elkaffas:Yes. That is a great question. So we purposely, we do not put our kids on social media, and we have very, very little images of images of them anywhere just to protect their privacy as well. You know? And it's like once stuff is out in social media, once it's out in the world, it's out there forever. So, yeah, we choose to keep them up.Radwa Elkaffas:Sure that they have that decision later. You know? Like, it will not come back at us. Like, why did you put me on there? You know? Have that choice later. And so now we're gonna be mama bears and just protect them.Stephanie:I think too we're seeing, the social media I guess Facebook just turned 20 recently, which is hard to believe. But when it first came about, you know, like, we were just on it, and it was new, and it was exciting, and we didn't really think about the big picture. And I think now if I had my daughter's 25. So if I had it I made her wait till 13. And if I had to do it all over again and I was in this day and age, I definitely would I might get my kid, like, a flip phone or something terrible that they can only call me on, but I would have waited because I do think social media adds an element to young, kids' lives that maybe they don't need or aren't ready for it until later.Radwa Elkaffas:Absolutely. A 100% agree with you on that.Stephanie:How do your parents feel about your business?Radwa Elkaffas:I think it took them such a long time to fully understand it.Stephanie:It's probably soRadwa Elkaffas:weird. Grasp what we what it is exactly we are doing. But I we know that they're so proud of us and super excited to see us do this and, you know, especially mom, you know, she was a really big influence for us growing up and in in the cooking world. So we love making them proud.Stephanie:Do you have anxiety about, like, keeping up or, like, always being on the churn? And what do you do for, like, self care?Alia Elkaffas:Oh, that's a great one. Yes. I'd say we do have definitely have the anxiety, but we try to we always talk each other down, calm each other down, and just know that, you know, just talk things through together. But and I'd say probably self care. We like to work out just to kind of, you know, really get the release those endorphins. You know?Radwa Elkaffas:And we we actually do yell at each other, like, stop working. You need to stop working. Stop looking at your screen. Put your computer down. Stop doing this. We do that all all the time to each other.Alia Elkaffas:Yep.Stephanie:What are your favorite types of workouts?Radwa Elkaffas:I would say lifting and walking.Stephanie:What was lifting and walking?Alia Elkaffas:Yep. Same lifting, walking, and, you know, doing some sort of cardio.Stephanie:Yeah. And you have kids too. So you're probably trying to fit it in when you can. And it's hard to, like, go to a structured gym and do all that when you've got a lot of family at home and, a structured gym and do all that when you've got a lot of family at home. And how do you feel about working from home? And does that work for your schedules? Or do you ever visualize, like, someday having an office where you have all your production stuff? AndRadwa Elkaffas:I I love working from home because of the flexibility and having everything at home where you could quickly just, but it it's definitely a challenge to disconnect sometimes because work is home, home is work. So it's hard to, like, break the 2 apart. But it's nice that we have 2 houses. So if we need a break from 1 house, we go to the other one.Stephanie:Yeah. That is nice. Like, just it because it can just feel so much like, oh, you're just in your house all the time doing all this stuff.Alia Elkaffas:And it's it really is hard to disconnect. So it's not like we try to have work hours, but it's like it's almost impossible. So, like, we'll work, and then we'll take a break, even run kids' activities, come back, finish working. So it's like it feels like sometimes it's like a nonstop cycle. But, yeah, that's when we have to put each other in check, say, get off and go take a break.Stephanie:Yeah. Okay. Switching gears, what is your and each of you can have a separate answer, of course, but what is your, like, most used kitchen utensil or gadget or thing that, like, you could not live without?Radwa Elkaffas:Air fryer.Stephanie:That was so fast.Radwa Elkaffas:Absolutely. I have to suck at her on.Stephanie:Yeah. Yep. Really? I I use my air fryer so rarely. It's in the garage. Like, do you use it every day? What are you doing with it?Radwa Elkaffas:Every single day. Like, there is not a day that goes by that I don't use that.Alia Elkaffas:Really? For reheating things, for making things. We actually do have some instructions in the cookbook. Like, if if you wanna make this recipe in an air fryer, how to do that. But it just makes things so much easier even if, like, the kids wanna make chicken and fries or something. You know? It crisps it up perfectly, and it feels like you're eating it, you know, freshly, like, deep fried. You know?Stephanie:Alright. I'm gonna have to get my air fryer out of the garage and give it another try. I just I don't know. It's like, and I have a convection oven too. So I think the convection oven does the same thing, but I don't have kids, so maybe that's different, you know, just the speed and convenience of it being right on the counter like that.Radwa Elkaffas:And you mentioned what we do on there. And, honestly, like, even we do, like, French toast. Like, if you wanna make French toast, you can throw your French toast in there. Or if you make a marinated chicken, just throw it in there, shut it, and it's done in no time. And you don't have to worry about a mess.Stephanie:Yeah. And it goes faster too. You guys will be on a book tour, I'm imagining. Is that all coming together, and how is that feeling?Radwa Elkaffas:It's exciting. Super excited to do that. That's gonna be end of February, beginning of March. We have we're stopping at 5 different cities. So we're really excited about that.Alia Elkaffas:And our last office is gonna be here in Minneapolis.Stephanie:So we're gonna so great. Do you know where you're gonna be or what you're doing yet?Alia Elkaffas:We're gonna be at the Barnes and Noble in Edina. So that'll be where I don't think we have a confirmed time yet, but that'll be on March. It's a Sunday, March 2nd, I believe.Stephanie:Alright. Well, when you know, just let me know, and I'll make sure and share it. It's been super fun just chatting with you guys. I knew just from kinda following you that I like, oh, I'm gonna like these girls. But really, honestly, it was, like, one of my best days. And I just so proud of you, and I feel like you know, how you you meet people and you want them to be successful or you're so proud of their success? That's how I feel about you guys. You really work hard, and you've really earned, everything that's coming your way. And I think the book's gonna be amazing, and it was just it's been fun to just be a little tiny, tiny part of the journey for a second.Stephanie:It's been a blast.Radwa Elkaffas:Thank you so much. And, honestly, your energy that you brought to that table last week was everything. You made us feel so good, and we we we felt like a $1,000,000 after you left. So thankAlia Elkaffas:you for having me. So honored to have gotten to work with you, and now we get to be friends and Yes.Stephanie:I'm I'm actually I just I'm planning, I I I booked a do you know, a Khmeran feast at Vinay? And I've had one for a while, and so I was like, oh, I wonder. Maybe I'll do a gathering of, like, food ladies just to do something fun and different.Radwa Elkaffas:Yeah.Stephanie:Alright, you guys. Your book's gonna be great. Keep me in the loop. I'll keep you in the loop if anything fun's happening. And just thanks for being taste buds.Radwa Elkaffas:Awesome. Thank you so much.Stephanie:Alright. We'll see you soon. Bye. Bye bye. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit stephaniehansen.substack.com/subscribe
Joël and Stephanie talk RailsConf! (https://railsconf.org/). Joël shares how he performed as a D&D character, Glittersense the gnome, to make his Turbo features talk entertaining and interactive. Stephanie's talk focused on addressing test pain by connecting it to code coupling, offering practical insights and solutions. They agree on the importance of continuous improvement as speakers and developers and trying new approaches in talks and code design, and recommend Jared Norman's RailsConf talk on design patterns, too! That One Thing: Reduce Coupling for More Scalable and Sustainable Software (https://www.informit.com/articles/article.aspx?p=2222816) Connascence.io (https://connascence.io/) [Connascence as a vocabulary to discuss coupling](https://thoughtbot.com/blog/connascence-as-a-vocabulary-to-discuss-coupling](https://thoughtbot.com/blog/connascence-as-a-vocabulary-to-discuss-coupling) The value of specialized vocabulary (https://bikeshed.thoughtbot.com/356?t=0) Transcript: We're excited to announce a new workshop series for helping you get that startup idea you have out of your head and into the world. It's called Vision to Value. Over a series of 90-minute working sessions, you'll work with a thoughtbot product strategist and a handful of other founders to start testing your idea in the market and make a plan for building an MVP. Join for all seven of the weekly sessions or pick and choose the ones that address your biggest challenge right now. Learn more and sign up at tbot.io/visionvalue. JOËL: Hello and welcome to another episode of The Bike Shed, a weekly podcast from your friends at thoughtbot about developing great software. I'm Joël Quenneville. STEPHANIE: And I'm Stephanie Minn. And together, we're here to share a bit of what we've learned along the way. JOËL: So, Stephanie, what's new in your world? STEPHANIE: So, I think I can speak for both of us and say what's new in our world is that you and I just came back from RailsConf in Detroit. JOËL: Yeah, we were there for, I guess, it's a three-day conference. Both of us were giving talks. STEPHANIE: Yeah. I don't think we've both spoken at a conference for at least a little over a year, so that was really fun kind of to catch up in person. And there was a whole crew of thoughtboters who were there. Yeah, I feel like we were hanging out, like, a lot [chuckles] all of last week, just seeing each other, talking about, you know, rehearsing our talks and spending time together on...there was, like, a hack day, and we were sitting at the table together. So, I feel like I'm totally caught up on everything that's new in your world, and that's it. That's the end of the show [laughs]. JOËL: On that note, shall we wrap up? STEPHANIE: [laughs] That would not be very fair to our listeners. [laughter] JOËL: Yeah. So, how was the conference speaking experience for you? STEPHANIE: Ooh, it was really great this year. I have not spoken at a RailsConf before, so this was actually, I think, a bigger stage than I had experienced before, and I had a great time. I met Ruby friends, new and old, and, yeah, I left feeling very gooeyed, and very energized, and just so grateful for the Rails community [laughs]. Yeah, I had a very lovely time, kind of being a little bit outside my normal life for a few days. And I think my favorite part about these things is just like, anywhere you go, you can kind of just have a shared interest with someone, and you can start a conversation with them. JOËL: That's really interesting. Do you find yourself just reaching out to strangers at conferences like this? Or do you tend to just hang out with the people that you know? STEPHANIE: Oh, I think a little bit of both. I like to get meals with people I know. But if I'm just hanging out in, like, the lobby or if I happen to get a seat for a talk and I'm sitting next to someone that I don't know, I find it quite easy to just be like, "Hi, like, I'm Stephanie. Are you excited for this talk?" Or, like, "What good talks have you seen recently?" There's an aspect of, like, the social butterfly that comes out of me when I'm at these things. Because I just don't get to have, like, easy access to, I don't know, people with, like, that shared interest or people who are willing to just have a conversation with you normally, I think. JOËL: Yeah, would you describe yourself more as an introvert or an extrovert? STEPHANIE: I am an extroverted introvert [laughter]. I feel like maybe that might be interpreted as a non-answer, but I think I lean more on the introvert side. But you know when you're with a group of people, and there's not, like, a very clear extrovert in that conversation, and then you're like, oh, I have to do the heavy [chuckles] lifting of the social lubrication [laughs] in this conversation, I can step into that role, reluctantly [laughs]. JOËL: Okay. I like the label that you used, the extrovert introvert, in that I enjoy social situations. I do well in social situations. But they also consume a lot of energy for me. I don't necessarily get sort of recharged by doing social events. So, people will be surprised when they find out that I tend to talk about myself as an introvert because, like, "Oh, but you're, like, you know, you're not awkward. You engage very well in different group situations." STEPHANIE: You have a podcast [laughs]. JOËL: And the truth is I enjoy those things, right? I really like social interaction, but it does, after a while, wear me out. STEPHANIE: Yeah, that makes sense. I did want to spend a little bit of time talking about the talk you gave at RailsConf this year: "Dungeons & Dragons & Rails." JOËL: I got to have a lot of fun with the theme. The actual content was introducing people to Turbo by building an interactive Dungeons & Dragons character sheet using vanilla Rails and a little bit of Turbo. So, we're not even writing any JavaScript. We're just using the Turbo helpers, a little bit of Action Cable to mimic something a little bit like...people who are in the know might be familiar with the site D&D Beyond, which is kind of the official D&D online character sheet website. Of course, it wasn't anywhere near as fancy because it's a 30-minute talk and showcasing different features, but that's what we were aiming for. STEPHANIE: Yeah, you know, you've talked a bit about giving talks on the show before, but I wanted to get into what made this one different because I think it could be fun for our listeners. [laughter] JOËL: The way I structured this talk so it has a theme. It's about Dungeons & Dragons, and we're building a character sheet. The way I wrote the talk was it's broken up into chapters. Each chapter is teaching a new feature in Turbo that I want to show off. In order to motivate learning each of these features...because I don't like to just say, "Oh, here's a thing that technology can do. Oh, here's a thing that technology can do." That's boring. You need a reason to learn that. So, I needed a reason to say, "We need to add this to a character sheet." So, every sort of chapter of the talk opens up with a little narrative portion. We're following this character, Glittersense, the gnome, and he's on adventures. And at different points in the adventures, he's going to do different types of roles or need different stats and things. And so, when we reach the point in the adventure where we need that, we sort of freeze frame and then say, "Okay, let's add that as a feature to the character sheet." And then, oh no, it turns out that this feature is a little bit more complicated. We're going to have to learn a new Turbo feature to do that. Who would have guessed? And then, we learn a new Turbo feature together. And then, we go back to the narrative portion. The adventures of Glittersense continue. And then, oh no, we're going to need to add another feature to the character sheet. And that's sort of how the talk is structured. STEPHANIE: Yeah. And you did a really cool thing with the narrative portions, which was you basically performed as Glittersense, the gnome, voice and posture, and a lot of really great acting from you [laughs], in my opinion. JOËL: That is something that came out pretty late in the talk preparation. So, I knew I wanted this kind of alternating story and code structure. Then, like, the weekend before RailsConf, I'm running through my slide deck, and I realized, you know what? What if instead of narrating Glittersense's adventures, what if I went first person for those sections? Glittersense tells his own story. And then, from there, it wasn't a big jump to say, you know what? This is D&D. If I'm going first person and narrating, I really should do a voice. And this is a conversation I had with a couple of people at the speaker dinner. And, of course, everyone's like, "You should 100% do the voice." And I was really not feeling confident in my ability to pull it off. So, for the next two nights, because I was speaking on the third day, the next two nights at the conference, in the evenings, I'm in the hotel room in front of the mirror just practicing my gnome voice to try to get something that got the persona of Glitterense, the gnome, across to the audience. STEPHANIE: How would you describe the persona? JOËL: Very extra. STEPHANIE: [laughs] JOËL: Very high energy. STEPHANIE: Yes. The name Glittersense is very extra, after all. JOËL: [laughs]. I punctuated a lot of the things that he says with just high-pitched laughter. He's also...so, the framing device for all of this is that you're in a tavern listening to him tell his adventures. I wanted a little bit of the sense that Glittersense is maybe embellishing a little bit. I think it may be too much to say he's full of himself, but he's definitely making himself to be the hero of the story, and maybe making himself to be slightly cooler than he really was. STEPHANIE: Yeah. I definitely got, like, a little bit of eccentricity, too, from the persona. And you know when you just, I don't know, meet an older person who has, like, a lot of life experience, and they want to tell you about it [laughter], but you do kind of maybe have a little bit of suspicion around how much they're exaggerating [laughs]. But it was really fun. Everyone I talked to afterwards, like, loved it. And I got to share the little nugget that, like, oh yeah, and Joël only, like, started doing the voice, like, decided that he was going to do it two days ago. And they were just all really, like, blown away because it seemed so well practiced, and it was really fun. JOËL: I got to do something really fun, also, with physical space because Glittersense narrates his portion, sort of the story portions, but then the code portions where we're talking about Turbo, I'm talking in my own voice. And so, when I'm talking about Turbo, I'm standing at the lectern. And when I'm Glittersense, I'm kind of off to the side on the stage and doing the voice. And so, there's this almost, like, two worlds that are inhabited: one by Joël, the speaker, and one by Glittersense, the gnome. And it got to the point where I don't say or do anything. I only move from the lectern to the, like, portion of the stage where Glittersense lives. And the audience starts chuckling and, like, nothing has happened yet, like, no jokes have been told. No voice has happened. No slides have changed. But the anticipation, people know what's coming. STEPHANIE: Yeah. And I think the best part, what I really found just really fun and, I don't know, every time it happened, I just really enjoyed it, when you transitioned out of Glittersense, the gnome, and back to Joël because you were so nonchalant about it. You kind of, like, straighten up rather than having your little kind of crouchy gnome posture, and then just walk across back to the podium. And then, in your normal voice, go back to just, you know, sharing very...not necessarily dry, but just, like, straight to the point. "And this is, like, how you, you know, create a frame in [laughs] Turbo," as if nothing happened [laughs] when even just, like, you know, 20 seconds ago, you were just enthusing about, like, slaying the bandit, chieftain [laughter] known as Glittersense. JOËL: Uh-huh. I think, especially when I open, so I get introduced. I'm off stage. I walk onto the stage, and I'm immediately Glittersense. And I'm telling a story, and the intro goes on for, like, quite a while. It's a big story chunk. And then, at some point, I just walk over to the lectern, drop the voice, hit next slide, and it's my title slide. I'm just like, "Okay, now welcome to Dungeons & Dragons on Rails. We're going to build a character sheet together." STEPHANIE: Yeah, that's exactly the moment I'm thinking of. JOËL: The walking in as Glittersense and just immediately going to the voice caught everyone by surprise. And then, the, like, oh, he keeps going for this. Is the whole talk going to be like this? And then, the, like, just when you think, oh, he's really going for it, the, like, dropping it and going to the podium and title slide. It wasn't intended to be a funny moment, but I think the contrast and the fact that I just switched over was one of the biggest laughs I got. STEPHANIE: Yeah, I mean, I think that attests to how good the delivery of it was because that contrast was very felt. So, props to you. JOËL: I love the idea of, you know, the thought that you put into building a talk and, like, the narrative structure and the pedagogy of the stuff. And, I think, in this particular case, this is almost like a narrative approach called in media res, where you start kind of in the middle. You open your book, or your movie, or whatever in the middle of the story. And then, you kind of come back to the beginning at some point later. So, it starts with some kind of action scene that grabs your attention. So, in this case, my title slide is 10, 15 slides into the talk. We get immediately started with Glittersense and his adventures. And then, once we're sort of all bought into this world, then we move to the title slide and talk about, okay, we're here to build a character sheet and all that stuff. And I think that it wouldn't have had the same impact if I'd, like, opened with that and then gone into Glittersense's adventures. And that's something that was not the case at the beginning. I really reworked the talk to make it in that order. And I think that the talk had a lot more impact for doing that. STEPHANIE: Yeah, definitely. I guess I also just wanted to point out that this is very different from all your other talks. And I think it's really cool that, you know, you are a veteran speaker, but you still find ways to do something new and try something that you've never done before, and yeah, find ways, new ways to, like, speak and engage people and teach. I don't know, do you have just any thoughts about why or how you got into a position to be like, "Oh, you know, I'm going to do something super different this time around" [laughs]? JOËL: So, every talk I give, I try to do something new, something different, to push myself as a speaker to get better. That might be in the writing of the talk; that might be in the delivery. More recently, I've been trying to do more with dynamic presence on stage. So, when I spoke at RubyConf San Diego, I was trying to not just stand at the lectern but to learn to be able to give my talk while also, you know, walking around the stage, looking at the audience, making pauses where it's necessary, not to just be so into the delivery of the talk by just standing at the podium and, like, going through my deck, which is a small thing but I think is an area I wanted to improve in. This time, I was playing around with some more narrative framing and ended up, yeah, like, pushing it to an extreme. And it works with the theme because inhabiting a character and role-playing is the core part of D&D. Not everybody plays a D&D character by doing a voice. You are a little bit extra if you do that. But it's not uncommon for people to do a voice. And so, it kind of fit perfectly with my theme. I just needed to get the self-confidence to do it. So, thank you to everyone at the speaker dinner that was like, "No, you totally got this. You should do this," because I was feeling very unsure. STEPHANIE: It really paid off, so... JOËL: I'd like to circle back to your talk, though. So, you gave, basically, the first talk of the conference. You were the first session after the keynote. A theme that came up multiple times in your talk was this idea of coupling and how it affects different parts of our code and, particularly the way that we structure tests or the way that we feel test pain. How did you, when you were prepping this talk, discover that theme and decide to lift it up? Was that something that you knew ahead of time you wanted to talk about, or did it just sort of emerge as part of the talk preparation process? STEPHANIE: That's a really great question, and I'm glad you picked up on that. So, my talk was called: "So, Writing Tests Feels Painful. What Now?" Originally, when I came up with this idea, it actually started with coupling. I realized that I wanted to give a talk about coupling because it's just something that I was struggling with or, like, had seen other people struggle with and really wanting kind of a discrete resource, wanting to provide that. But as I was just thinking about it, I was like, oh, like, there are so many different ways that this could go. On one hand, it was a very like important topic to me, but also maybe too big of a topic. And so, I actually, like, kind of put that on the back burner. And it wasn't until later when I connected it to another...it wasn't necessarily different at all, but just, like, an extension of this idea is, oh, like, people are struggling with coupling in tests or, like, it manifests in tests. And so, I thought maybe that could be the angle that I took on this topic that kind of gave me a little bit more focus. And I didn't even end up saying like, "Yeah, this talk was, like, born out of just, you know, wrestling with coupling or anything like that." So, it's cool, to me, that you picked up on it as a theme because it was...I had, you know, ended up not being super explicit about it, but it was certainly, like, a thing that was driving the content from my perspective. JOËL: Interesting. So, it started as a coupling talk and then got sort of focused through the lens of testing. STEPHANIE: Yeah. And I think there was a part of me that was like, you know, I don't know if I could just teach the concept of coupling, like, by itself without the framing of testing for people who this is, like, a new concept for them. I realized that maybe it would be more effective to be like, "Hey, like, have you experienced test pain? You know, have you had to mock out a billion objects or changed, you know, made one change and then had to fix, like, a million tests subsequently? Then this talk is for you." And then weave in the idea of coupling in it to kind of start to help people feel familiar with it or just, like, identify it without as much, like, jargon as kind of I've seen when I've tried to figure out, like, how to manage it. JOËL: It's interesting because I think it gives you a, like, concrete, valuable thing to optimize for as opposed to, like, hey, let's lower coupling because then you're writing, you know, quote, unquote, "better code." And you get to feel better about yourself as a programmer because you're doing things the, quote, unquote, "right way." That's very kind of hand-wavy, and I think sometimes leads people down a bad path where they're optimizing things that they shouldn't be. But the tests give you this very concrete way to say, "Hey, we're not just trying to reach the, like, low score record for the app in terms of coupling. We're trying to reduce test pain. Tests are painful. And that pain is telling us something. It's telling us that we've crossed some sort of threshold for coupling. Let's find ways to reduce it, not so that we can feel good about ourselves, but so that our tests are actually manageable." STEPHANIE: Yeah, I am really glad you picked up on that, too, because I feel the exact same way when someone just tells me to decouple something or, like, makes a note that, like, oh, this feels really coupled. I don't know what that means necessarily. And it's not very convincing to just be like, "Oh, you should write loosely coupled code [laughs]," at least for me. What you said just now, it's like, it's not to feel good about ourselves, you know, to write code that way, but, actually, to just feel good about our code, period [laughs]. And, yeah, finding that validation through just, like, actually working with code that is easier to change that is the goal, not necessarily to, yeah, kind of pursue some totally subjective, like, metric. JOËL: So, one of the kinds of coupling that you called out, I think, was where you hardcode a class name of some other class in your object. And that feels, like, really sort of innocuous. Like, of course, my objects can talk to other objects. And maybe I want to, like, refer to a class somewhere. Why is that such a like tricky piece of coupling to work with? STEPHANIE: It's not necessarily intentional sometimes. Like, you just do it because you're like, well, I need access to this class somewhere, and I happen to already be in this file. So, why not just hard-code it here? I do think it's a little tricky because the file that you're writing might be, like, very far down in, like, your code flow or, like, your code path, like, very far from, like, a controller or any kind of entry point into your system, at least based on what I've seen in a lot of modern Rails apps. And so, I think that coupling gets really, really obscured. I have found that, like, if I have to kind of write a more, like, a higher level test, like, maybe a request spec or something, there are times when I'm, like, having to deal with a lot of classes just to set stuff up in a test like that that I didn't think I would have to [chuckles] when I first went about trying to just be like, oh, like, let's just figure out how to get a 200 response [laughs] from this request. So, you're really burying perhaps the things that are needed to set up, like, that full path of execution. And sometimes, it only comes out when you're writing a test for it. JOËL: And you mentioned briefly, in passing, the idea that oftentimes this sort of coupling manifests as a lot of extra test setup because your object that you're trying to test now also needs all these other things that are related in order to be tested. But sometimes even when you hard code a class, though, you can't even just say, "Oh, I want this particular user or something returned." So, you have to then do something like allow this class to receive class method and return, and now you're stubbing. And I don't know how you feel about stubs in RSpec. I always treat them a little bit like a code smell in the like classic sense of it's not necessarily bad, but maybe pause, take a look, and ask yourself, "Why is that there, and should I do things differently?" STEPHANIE: Yeah. I ended up having, like, a lot of examples of stubbing in my example because the code had just been set up where that was the only way that you could access those collaborators, essentially, to, like, make an assertion on them, or have them do something different because you actually needed to go into a different path, right? And I was like, yeah, this should feel weird. You should feel a little bad [laughs] or at least, you know, kind of just pay attention to that feeling, even if you can't really do anything about it in that particular instance. But on the flip side, you know, it's like, yes, it feels a bit strange, you know, but it's not all bad, right? Like, you're kind of learning like, oh, hey, like, I am coupled to this hard-coded class because I am needing to stub, like, a class method that returns it, or that constructs it. And at least you've exposed that, you know, for yourself. One thing that I was running into a lot in my example, too, was that those things, like, weren't obvious when you were just reading maybe, like, the public methods and trying to figure out what was happening in them because they were wrapped in private methods. I was a little bit conflicted about this because there were times when it was already just a single method call, but then it was just kind of wrapped in a private method that actually hid [laughs] the things, like all the dependencies that were passed as arguments. And I found that to be, sure, it looks kind of cleaner. But then all you need to do is scroll down [laughs], and then you're like, oh, actually, there's all these other things involved, but it was kind of hidden away for me. And I found that, actually, like, at least when I actually needed to change things, less helpful than I imagine what the, you know, code author intended. Do you have any thoughts about hiding details like that? JOËL: I'm kind of a big fan. STEPHANIE: Hmmm. JOËL: The general idea, I think, is called the single level of abstraction principle. Whatever sort of public method that you're calling is often implemented in terms of...let's say it does a few different things. It's implemented in terms of, like, these sort of high-level concepts. So, whoever is reading the public method doesn't need to like care about the details of how each step is implemented. So, maybe you're fetching something from an API, and then you're making a database call, and then you're doing some transformation and creating some new objects from it. Having all of the, like, HTTP calls and the ActiveRecord stuff and the, like, transformation all in the public method, yes, there's a lot of complexity happening there, and it makes that obvious. But it also makes it really hard to get a sense of what is happening. So, I like to say, "Hey, there are four steps. Let's wrap them all each in a private method then you can call all of those in the public method." The public method now sort of reads like a very simple sort of script. First, fetch data from the HTTP API, then fetch some data from the database, then apply this transformation, then create this object. And if I'm mostly caring about what this object does and not the how let's say I'm building some other objects that interact with this, that is the information I want to know. Where I care about the actual implementation of, oh, well, exactly how is the ActiveRecord stuff done when I'm doing internal changes to the object, that's when I care about those private methods. I think where it gets tricky, and I think that's the point that you were bringing up, is that if you write code in that way, it has to change the heuristics of how you read code to detect complexity. Because, oftentimes, I think a very classic heuristic for code complexity is just line length. If you have a 50-line method, probably there's a lot of complexity there. Maybe there's a lot of coupling. If it's a four-line method that is written at a high level of abstraction that just calls out to private methods, you scan over. You're like, oh, nice and clean. Nothing to see here. Move on. And so, that heuristic doesn't really hold up in a codebase where you're applying this single level of abstraction. Do you think that lines up with your experience? STEPHANIE: Hmm. As I was listening to you, I was like, yeah, like, that makes total sense to me. But then I also clearly disagreed a little bit [laughs] in my initial...kind of what I was saying initially. And I think it's because that single layer of abstraction was not very well defined. JOËL: Hmm. That's fair. STEPHANIE: Yeah. Where, in fact, it was actually misleading. Like, it wanted to be at that level of abstraction, but it really wasn't. Like, it was operating on things at, like, a lower level and wasn't designed with that kind of readability in mind. So, it was more, like, it was just hiding stuff a little bit, at least for me. And, I think, it certainly would have taken, like, more work to figure out what that code, like, really was meant to convey. It might have taken some refactoring to coalesce at that single level. And that was essentially kind of what I was showing in my talk as, like, how to get to saying, like, "Hey, we actually are operating in the lower level, but I don't think we need to." There was some amount of, like, looking at all of the how to figure out, like, oh, maybe these things we don't even need to expose in this class. And we kind of got to a place where those details weren't, like, needed in that class at all. So, it's one of those things where it's harder than it sounds [laughs]. JOËL: It's definitely an art. STEPHANIE: Yeah. JOËL: And I think what you're saying about some of the coupling being, like, scattered throughout the class, it's something that I see a lot with situations where you're coupled, not so much to, like, a single class, but to something side effectful. So, you're building some kind of integration with a third-party API, and you're going to have to make a lot of HTTP calls. And each of those might be individually simple, and they're all sort of maybe in different private methods or whatever, or they're interspersed among a larger chunk of logic. And that makes your tests really complicated. But there's no, like, one place you can point at and be like, ooh, that's the one place where there's a lot of complexity. What's happening here, though, is that your business object that's doing stuff is coupled to the network, and that coupling is going to force you to do some stubbing. It's going to force you to deal with a bunch of side effects that are non-deterministic in your code. And you used the word coalesce earlier that I really liked because I think that's often a situation where you do have to stand back and say, "Look, there's a lot of HTTP going on here. What if I coalesced it all into an object? Now I have two objects: one that's responsible for business logic, and one that's responsible for just the HTTP calls." And, all of a sudden, the tests just totally simplify. And we've removed some coupling, but that's not something that you would have seen just from reading the code. Because, as you were saying, it's sort of scattered in little bits and pieces throughout your file that don't necessarily catch your eye. STEPHANIE: Yeah. Which brings me to a blog post that I had found a lot of inspiration from in the talk that I'll link. It's called "That One Thing: Reduce Coupling for More Scalable and Sustainable Software." But it's actually about tests [laughs], even though it doesn't make an appearance in the title of the blog post at all. But this is where I kind of got the idea of necessary versus unnecessary coupling in test. Because I had never thought about how, yeah, like, when you write a test, you are very correctly coupling yourself to at least the method and class under test [laughs], if not also the arguments, right? Or anything else needed to construct what you're testing. And literally having that listed out for me in this blog post I think it's a...they use some examples in Java. And so, there's, like, a little bit more [laughs] setup involved. But I think they're like, yeah, these are six things that, like, it's mostly fine if you're coupled to these because that's kind of what needs to happen in a test. But, like, even having something to compare a test I wrote to just, like, okay, these are the things I know I need. And then, you can start to see when you've diverged from that list, when you are finding yourself coupled to some internals of your class. I really...that was actually, like, really helpful for me because, as we talked about earlier, like, it can be kind of communicated so abstractly. But here is, like, a very clear heuristic for when you should at least, like, start to pay attention or be like, oh, this is something that was needed to get the test to run but is now starting to feel a little unnecessary because it's not on this list. JOËL: That list reminds me, or the idea of a list of things to check out for when thinking about coupling, reminds me of the concept of connascence, which is a fancy word for almost a, like, categorization of different types of coupling because coupling comes in different flavors, some of which are tighter forms of coupling than others. And so, having that vocabulary has been really helpful for me when I'm looking at PRs and code review, or even when I'm refactoring my own code. Kind of like that list that you mentioned that you have, now I have some heuristics to look at that and say, "Oh, can I go from a connascence of position to a connascence of naming, and does that help me?" STEPHANIE: Yeah, I like that you mentioned the positional connascence because I also came across a really great metaphor for kind of things that need to change together, like, when that makes sense. And it was basically the idea of a dishwasher and a laundry machine [laughs]. I wish I could recall, like, what book this was from. But it was basically like, oh yeah, like, in theory, you're washing two things. So, maybe they are similar, but then you're like, no, actually, you want these to be a little bit separate because, you know, you don't want to wash your dishes and your clothes in the same machine. I don't know, maybe that exists [laughs], but I don't think it would do a very good job for either goal. And I think that was really helpful, for me, in imagining, like, the difference between kind of coupling and cohesion, like things that...even just imagining, like, kind of where I'm doing those things in the house, right? It's like, okay, that lives in a separate room. And, like, the kitchen is for the dishes, and that could be like, you know, a module if you will. And, like, laundry happens in the laundry room, and how to kind of just separate those things, even though they also do share some qualities, too. Like, they're both appliances, right? And so, that's the way that they are similar, but they're not the same. JOËL: You just mentioned the sort of keyword cohesion. And for our listeners who are not familiar with that term, it refers to an object sort of having one thing that it does well. Like, everything in that class sort of works towards the same goal, kind of similar to the idea of the single responsibility principle. So, in my earlier example, where we're sort of interspersing some business logic, a lot of HTTP requests, and pulling out an object that's focused on HTTP, like everything is based around that, now that object has higher cohesion because it's all doing one thing. So, if you read classic object-oriented literature, the recommendations that you'll typically see are that objects should have high cohesion and low coupling. STEPHANIE: Yeah. Think of a dishwasher and a washing machine next time [laughs] you come across something like that. Because I feel like those are really great, like, real-life examples of that separation. JOËL: Did you go to Jared Norman's talk on the third day: "Undervalued: The Most Useful Design Pattern"? STEPHANIE: No, I didn't. Can you tell me about it? JOËL: It felt like he was addressing a lot of the same themes as you were but from more of a code perspective than a test perspective. Talking a lot about, again, forms of coupling, dependencies, and then, specifically, one of the tools that he focused on to reduce the coupling that we see is value objects and factory methods to construct those. So, for any of our listeners who, when the talks come out, watch Stephanie's talk and are like, "Wow, I would love to learn more about this," a great follow-up, Jared Norman's talk: "Undervalued: The Most Useful Design Pattern." STEPHANIE: Yeah, that's neat because I can see that being a solution to the hard code did class names that we were talking about earlier. And I like how that is kind of, like, a progressive lesson in coupling a little bit. I'm really glad you shared that talk with me because now I'm excited to watch it when it comes out. And in general, I just love learning new vocabulary or finding new ways to speak about this topic with clarity. So, if any of our listeners have just additional mental models for coupling [laughs] different metaphors, different household appliances [laughs], or something like that, I would love to know. JOËL: You would like that, given that our first episode together was about "The Value Of Specialized Vocabulary." STEPHANIE: Yeah, it's clearly undervalued. JOËL: Haha, I see what you did there. STEPHANIE: Thank you. Thank you very much [laughs]. JOËL: On that terrible/wonderful pun, shall we wrap up? STEPHANIE: Let's wrap up. Show notes for this episode can be found at bikeshed.fm. JOËL: This show has been produced and edited by Mandy Moore. STEPHANIE: If you enjoyed listening, one really easy way to support the show is to leave us a quick rating or even a review in iTunes. It really helps other folks find the show. JOËL: If you have any feedback for this or any of our other episodes, you can reach us @_bikeshed, or you can reach me @joelquen on Twitter. STEPHANIE: Or reach both of us at hosts@bikeshed.fm via email. JOËL: Thanks so much for listening to The Bike Shed, and we'll see you next week. ALL: Byeeeeeeee!!!!! AD: Did you know thoughtbot has a referral program? If you introduce us to someone looking for a design or development partner, we will compensate you if they decide to work with us. More info on our website at: tbot.io/referral. Or you can email us at: referrals@thoughtbot.com with any questions.
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It's updates on the work front today! Stephanie was tasked with removing a six-year-old feature flag from a codebase. Joël's been doing a lot of small database migrations. A listener question sparked today's main discussion on gerunds' interesting relationship to data modeling. Episode 386: Value Objects Revisited: The Tally Edition (https://www.bikeshed.fm/386) RailsConf 2017: In Relentless Pursuit of REST by Derek Prior (https://www.youtube.com/watch?v=HctYHe-YjnE) REST Turns Humans Into Database Clients (https://chrislwhite.com/rest-contortion/) Parse, don't validate (https://lexi-lambda.github.io/blog/2019/11/05/parse-don-t-validate/) Wikipedia Getting to Philosophy (https://en.wikipedia.org/wiki/Wikipedia:Getting_to_Philosophy) Transcript: JOËL: Hello and welcome to another episode of The Bike Shed, a weekly podcast from your friends at thoughtbot about developing great software. I'm Joël Quenneville. STEPHANIE: And I'm Stephanie Minn. And together, we're here to share a bit of what we've learned along the way. JOËL: So, Stephanie, what's new in your world? STEPHANIE: So, this week, I've been tasked with something that I've been finding very fun, which is removing a six-year-old feature flag from the codebase that is still very much in use in the sense that it is actually a mechanism for providing customers access to a feature that had been originally launched as a beta. And that was why the feature flag was introduced. But in the years since, you know, the business has shifted to a model where you have to pay for those features. And some customers are still hanging on to this beta feature flag that lets them get the features for free. So one of the ways that we're trying to convert those people to be paying for the feature is to, you know, gradually remove the feature flag and maybe, you know, give them a heads up that this is happening. I'm also getting to improve the codebase with this change as well because it has really been propagating [laughs] in there. There wasn't necessarily a single, I guess, entry point for determining whether customers should get access to this feature through the flag or not. So it ended up being repeated in a bunch of different places because the feature set has grown. And so, now we have to do this check for the flag in several places, like, different pages of the application. And it's been really interesting to see just how this kind of stuff can grow and mutate over several years. JOËL: So, if I understand correctly, there's kind of two overlapping conditions now around this feature. So you have access to it if you've either paid for the feature or if you were a beta tester. STEPHANIE: Yeah, exactly. And the interesting thought that I had about this was it actually sounds a lot like the strangler fig pattern, which we've talked about before, where we've now introduced the new source of data that we want to be using moving forward. But we still have this, you know, old limb or branch hanging on that hasn't quite been removed or pruned off [chuckles] yet. So that's what I'm doing now. And it's nice in the sense that I can trust that we are already sending the correct data that we want to be consuming, and it's just the cleanup part. So, in some ways, we had been in that half-step for several years, and they're now getting to the point where we can finally remove it. JOËL: I think in kind of true strangler fig pattern, you would probably move all of your users off of that feature flag so that the people that have it active are zero, at which point it is effectively dead code, and then you can remove it. STEPHANIE: Yeah, that's a great point. And we had considered doing that first, but the thing that we had kind of come away with was that removing all of those customers from that feature flag would probably require a script or, you know, updating the production data. And that seemed a bit riskier actually to us because it wasn't as reversible as a code change. JOËL: I think you bring up a really interesting point, which is that production data changes, in general, are just scarier than code changes. At least for me, it feels like it's fairly easy generally to revert a code change. Whereas if I've messed up the production database, [laughs] that's going to be unpleasant few days. STEPHANIE: What's interesting is that this feature flag is not really supported by a nice user interface for managing it. And so, we inevitably had to do a more developer-focused solution to remove these customers from being able to access this feature. And so, the two options, you know, that we had available were to do it through data, like I mentioned, or do it through that code change. And again, I think we evaluated both options. But what's kind of nice about doing it with the code change is that when we eventually get to delete those feature flag records, it will be really nice and easy. JOËL: That's really exciting. One thing that's different about kind of more mature projects is that we often get to do some kind of change management, unlike a greenfield app where you just get to, oh, let's introduce this new thing, cool. Oftentimes, on a more mature project, before you introduce the new thing, you have to figure out, like, what is the migration path towards that? Is that a kind of work that you enjoy? STEPHANIE: I think this was definitely an exercise in thinking about how to break this down into steps. So, yeah, that change management process you mentioned, I, like, did find a lot of satisfaction in trying to break it up, you know, especially because I was also thinking that you know, maybe I am not able to see the complete, like, cleanup and removal, and, like, where can someone pick up after me? In some ways, I feel like I was kind of stepping into that migration, you know, six years [laughs] in the making from beta to the paid product. But I think I will feel really satisfied if I'm able to see this thing through and get to celebrate the success of saying, hey, like, I removed...at this point, it's a few hundred lines of code. [laughs] And also, you know, with the added business value of encouraging more customers to pay for the product. But I think I also I'm maybe figuring out how to accept like, okay, like, how could I, like, step away from this in the middle and be able to feel good that I've left it in a place that someone else could see through? JOËL: So you mentioned you're taking this over from somebody else, and this has been kind of six years in the making. I'm curious, is the person who introduced this feature flag six years ago are they even still at the company? STEPHANIE: No, they are not, which I think is pretty typical, you know, it's, like, really common for someone who had all that context about how it came to be. In fact, I actually didn't even realize that the feature flag was the original beta version of the product because that's not what it's called. [laughs] And it was when I was first onboarding onto this project, and I was like, "Hey, like, what is this? Like, why is this still here?" Knowing that the canonical, you know, version that customers were using was the paid version. And the team was like, "Oh, yeah, like, that's this whole thing that we've been meaning to remove for a long time." So it's really interesting to see the lifecycle, like, as to some of this code a little bit. And sometimes, it can be really frustrating, but this has felt a little more like an archaeology dig a little bit. JOËL: That sounds like a really interesting project to be on. STEPHANIE: Yeah. What about you, Joël, what's new in your world? JOËL: So, on my project, I've been having to do a lot of small database migrations. So I've got a bunch of these little features to do that all involve doing database migrations. They're not building on each other. So I'm just doing them all, like, in different feature branches, and pushing them all up to GitHub to get reviewed, kind of working on them in parallel. And the problem that happens is that when you switch from one branch where you've run a migration to another and then run migrations again, some local database state persists between the branch switch, which means that when you run the migrations, then this app uses a structure.sql. And the structure.sql has a bunch of extra junk from other branches you've been on that you don't want as part of your diff. And beyond, like, two or three branches, this becomes an absolute mess. STEPHANIE: Oh, I have been there. [laughs] It's always really frustrating when I switch branches and then try to do my development and then realize that I have had my leftover database changes. And then having to go back and then always forgetting what order of operations to do to reverse the migration and then having to re-migrate. I know that pain very well. JOËL: Something I've been doing for this project is when I switch branches, making sure that my structure SQL is checked out to the latest version from the main branch. So I have a clean structure SQL then I drop my local database, recreate an empty one, and run a rake db:schema:load. And that will load that structure file as it is on the main branch into the database schema. That does not have any of the migrations on this branch run, so, at that point, I can run a rake db:migrate. And I will get exactly what's on main plus what gets generated on this branch and nothing else. And so, that's been a way that I've been able to kind of switch between branches and run database operations without getting any cross-contamination. STEPHANIE: Cross-contamination. I like that term. Have you automated this at all, or are you doing this manually? JOËL: Entirely manually. I could probably script some of this. Right now...so it's three steps, right? Drop, create, schema load. I just have them in one command because you can chain Unix commands with a double ampersand. So that's what I'm doing right now. I want to say there's a db:reset task, but I think that it uses migrate rather than schema load. And I don't want to actually run migrations. STEPHANIE: Yeah, that would take longer. That's funny. I do love the up arrow key [laughs] in your terminal for, you know, going back to the thing you're running over and over again. I also appreciate the couple extra seconds that you're spending in waiting for your database to recreate. Like, you're paying that cost upfront rather than down the line when you are in the middle of doing [laughs] what you're trying to do and realize, oh no, my database is not in the state that I want it to be for this branch. JOËL: Or I'm dealing with some awful git conflict when trying to merge some of these branches. Or, you know, somebody comments on my PR and says, "Why are you touching the orders table? This change has nothing to do with orders." I'm like, "Oh, sorry, that actually came out of a different thing that I did." So, yep, keeping those diffs small. STEPHANIE: Nice. Well, I'm glad that you found a way to manage it. JOËL: So you mentioned the up arrow key and how that's really nice in the terminal. Something that I've been relying on a lot recently is reverse history search, CTRL+R in the terminal. That allows me to, instead of, like, going one by one in order of the history, filter for something that matches the thing that I've written. So, in this case, I'll hit CTRL+R, type, you know, Rails DB or whatever, then immediately it shows me, oh, did you want this long command? Hit enter, and I'm done. Even if I've done, you know, 20 git commands between then and the last time I ran it. STEPHANIE: Yeah, that's a great tip. So, a few weeks ago, we received a listener question from John, and he was responding to an episode where I'd asked about what the grammatical term is for verbs that are also nouns. He told us about the phrase, a verbal noun, for which there's a specific term called gerund, which is basically, in English, the words ending in ING. So, the gerund version of bike would be biking. And he pointed out a really interesting relationship that gerunds have to data modeling, where you can use a gerund to model something that you might describe as a verb, especially as a user interaction, but can be turned into a noun to form a resource that you might want to introduce CRUD operations for in your application. So one example that he was telling us about is the idea of maybe confirming a reservation. And, you know, we think of that as an action, but there is also a noun form of that, which is a confirmation. And so, confirmation could be a new resource, right? It could even be backed at the database level. And now you have a simpler way of representing the idea of confirming a reservation that is more about the confirmation as the resource itself rather than some kind of append them to a reservation itself. JOËL: That's really cool. We get to have a crossover between grammar terms and programming, and being able to connect those two is always a fun day for me. STEPHANIE: Yeah, I actually find it quite difficult, I think, to come up with noun forms of verbs on my own. Like, I just don't really think about resources that way. I'm so used to thinking about them in a more tangible way, I suppose. And it's really kind of cool that, you know, in the English language, we have turned these abstract ideas, these actions into, like, an object form. JOËL: And this is particularly useful when we're trying to design RESTful either APIs or even just resources for a Rails app that's server-rendered so that instead of trying to create all these, like, extra actions on our controller that are verbs, we might decide to instead create new resources in the system, new nouns that people can do the standard 7 to. STEPHANIE: Yes. I like that better than introducing custom controller actions or routes that deviate from RESTful conventions because, you know, I probably have seen a slash confirm reservation [laughs] URL. And, you know, this is, I think, an interesting way of avoiding having too many of those deviating endpoints. JOËL: Yeah, I found that while Rails does have support for those, just all the built-in things play much more nicely if you're restricting yourself to the classic seven. And I think, in general, it's easier to model and think about things in a Rails app when you have a lot of noun resources rather than one giant controller with a bunch of kind of verb actions that you can do to it. In the more formal jargon, I think we might refer to that as RESTful style versus RPC style, a Remote Procedure Call. STEPHANIE: Could you tell me more about Remote Procedure Calls and what that means? JOËL: The general idea is that it's almost like doing a method call on an object somewhere. And so, you would say, hey, I've got an account, and I want to call the confirm method on it because I know that maybe underlying this is an ActiveRecord account model. And the API or the web UI is just a really thin layer over those objects. And so, more or less, whatever your methods on your object are, can be accessed through the API. So the two kind of mirror each other. STEPHANIE: Got it. That's interesting because I can see how someone might want to do that, especially if, you know, the account is the domain object they're using at the, you know, persistence layer, and maybe they're not quite able to see an abstraction for something else. And so, they kind of want to try to fit that into their API design. JOËL: So I have a perhaps controversial opinion, which is that the resources in your Rails application, so your controllers, shouldn't map one-to-one with your database tables, your models. STEPHANIE: So, are you saying that you are more likely to have more abstractions or various resources than what you might have at the database level? JOËL: Well, you know what? Maybe more, but I would say, in general, different. And I think because both layers, the controller layer, and the model layer, are playing with very different sets of constraints. So when I'm designing database tables, I'm thinking in terms of normalization. And so, maybe I would take one big concept and split it up into smaller concepts, smaller tables because I need this data to be normalized so that there's no ambiguity when I'm making queries. So maybe something that's one resource at the controller layer might actually be multiple tables at the database layer. But the inverse could also be true, right? You might have, in the example that John gave, you know, an account that has a single table in the database with just a Boolean field confirmed yes or no. And maybe there's just a generic account resource. But then, separately, there's also a confirmation resource. And so, now we've got more resources at the controller layer than at the database layer. So I think it can go either way, but they're just not tightly coupled to each other. STEPHANIE: Yeah, that makes sense. I think another way that I've seen this manifest is when, like you said, like, maybe multiple database tables need to be updated by, you know, a request to this endpoint. And now we get into [chuckles] what some people may call services or that territory of basically something. And what's interesting is that a lot of the service classes are named as verbs, right? So order, creator. And, like, whatever order of operations that needs to happen on multiple database objects that happens as a result of a user placing an order. But the idea that those are frequently named as verbs was kind of interesting to me and a bit of a connection to our new gerund tip. JOËL: That's really interesting. I had not made that connection before. Because I think my first instinct would be to avoid a service object there and instead use something closer to a form object that takes the same idea and represents it as a noun, potentially with the same name as the resource. So maybe leaning really heavily into that idea of the verbal noun, not just in describing the controller or the route but then also maybe the object backing it, even if it's not connecting directly to a database table. STEPHANIE: Interesting. So, in this case, would the form object be mapped closer to your controller resource? JOËL: Potentially, yes. So maybe I do have some kind of, like, object that represents a confirmation and makes it nicer to render the confirmation form on the edit page or the new page. In this case, you know, it's probably just one checkbox, so maybe it's not worth creating an object. But if there were multiple fields, then yes, maybe it's nice to create an in-memory object that has the same name as the resource. Similar maybe for a resource that represents multiple underlying database tables. It can be nice to have kind of one object that represents all of them, almost like a facade, I guess. STEPHANIE: Yeah, that's really interesting. I like that idea of a facade, or it's, like, something at a higher level representing hopefully, like, some kind of meaning of all of these database objects together. JOËL: I want to give a shout-out to talk from a former thoughtboter, Derek Prior—actually, former Bike Shed host—from RailsConf 2017 called In Relentless Pursuit of REST, where he digs into a lot of these concepts, particularly how to model resources in your Rails app that don't necessarily map one to one with a database table, and why that can be a good thing. Have you seen that talk? STEPHANIE: I haven't, but I love the title of it. It's a great pun. It's very evocative, I think because I'm really curious about this idea of a relentless pursuit. Because I think another way to react to that could be to be done with REST entirely and maybe go with something like GraphQL. JOËL: So instead of a relentless pursuit, it's a relentless...what's the opposite of pursuing? Fleeing? STEPHANIE: Fleeing? [laughs] I like how we arrived there at the same time. Yes. So now I'm thinking of I had mentioned a little bit ago on the show we had our spicy takes Lightning Talks on our Boost Team. And a fellow thoughtboter, Chris White, he had given a talk about Why REST Is Not the Best and for -- JOËL: Also, a great title. STEPHANIE: Yes, also, a great title. JOËL: I love the rhyming there. STEPHANIE: Yeah. And his reaction to the idea of trying to conform user interactions that don't quite map to a noun or an obvious resource was to potentially introduce GraphQL, where you have one endpoint that can service really anything that you can think of, I suppose. But, in his example, he was making the argument that human interactions are not database resources, right? And maybe if you're not able to find that abstraction as a noun or object, with GraphQL, you can encapsulate those ideas as closer to actions, but in the GraphQL world, like, I think they're called mutations. But it is, I think, a whole world of, like, deciding what you want to be changed on the server side that is a little less constrained to having to come up with the right abstraction. JOËL: I feel like GraphQL kind of takes that, like, complete opposite philosophy in that instead of saying, hey, let's have, like, this decoupling between the API layer and the database, GraphQL almost says, "No, let's lean into that." And yeah, you want to traverse the graph of, like, tables under the hood? Absolutely. You get to know the tables. You get to know how they're related to each other. I guess, in theory, you could build a middle layer, and that's the graph that gets traversed rather than the graph of the tables. In practice, I think most people build it so that the API layer more or less has access directly to tables. Has that been your experience? STEPHANIE: That's really interesting that you brought that up. I haven't worked with GraphQL in a while, but I was reading up on it before we started recording because I was kind of curious about how it might play with what we're talking about now. But the idea that it's graphed based, to me, was like, oh, like, that naturally, it could look very much like, you know, an entity graph of your relational database. But the more I was reading about the GraphQL schema and different types, I realized that it could actually look quite different. And because it is a little bit closer to your UI layer, like, maybe you are building an abstraction that is more for serving that as that middle layer between your front end and your back end. JOËL: That's really interesting that you mentioned that because I feel like the sort of traditional way that APIs are built is that they are built by the back-end team. And oftentimes, they will reflect the database schema. But you kind of mentioned with GraphQL here, sometimes it's the opposite that happens. Instead of being driven kind of from the back towards the front, it might be driven from the front towards the back where the UI team is building something that says, hey, we need these objects. We need these connections. Can you expose them to us? And then they get access to them. What has been your experience when you've been working with front ends that are backed by a GraphQL API? STEPHANIE: I think I've tended to see a GraphQL API when you do have a pretty rich client-side application with a lot of user interactions that then need to, you know, go and fetch some data. And you, like, really, you know, obviously don't want a page reload, right? So it's really interesting, actually, that you pointed out that it's, like, perhaps the front end or the UI driving the API. Because, on one hand, the flexibility is really nice. And there's a lot more freedom even in maybe, like, what the product can do or how it would look. On the other hand, what I've kind of also seen is that eventually, maybe we do just want an API that we can talk to separate from, you know, any kind of UI. And, at that point, we have to go and build a separate thing [laughs] for the same data. JOËL: So we've been talking about structuring APIs and, like, boundaries and things like that. I think my personal favorite feature of GraphQL is not the graph part but the fact that it comes with a built-in schema. And that plays really nicely with some typed technologies. Particularly, I've used Elm with some of the GraphQL libraries there, and that experience is just really nice. Where it will tell you if your front-end code is not compatible with the current API schema, and it will generate some things based off the schema. So you have this really nice feedback cycle where somebody makes a change to the API, or you want to make a change to the code, and it will tell you immediately is your front end compatible with the current state of the back end? Which is a classic problem with developing front-end code. STEPHANIE: First of all, I think it's very funny that you admitted to not preferring the graph part of GraphQL as a graph enthusiast yourself. [laughs] But I think I'm in agreement with you because, like, normally, I'm looking at it in its schema format. And that makes a lot of sense to me. But what you said was really interesting because, in some ways, we're now kind of going back to the idea of maybe boundaries blurring because the types that you are creating for GraphQL are kind of then servicing both your front end and your back end. Do you think that's accurate? JOËL: Ooh. That is an important distinction. I think you can. And I want to say that in some TypeScript implementations, you do use the types on both sides. In Elm, typically, you would not unless there's something really primitive, like a string or something like that. STEPHANIE: Okay, how does that work? JOËL: So you have some conversion layer that happens. STEPHANIE: Got it. JOËL: Honestly, I think that's my preference, and not just at the front end versus API layer but kind of all throughout. So the shape of an object in the database should not be the same shape as the object in the business logic that runs on the back end, which should not be the same shape as the object in transport, so JSON or whatever, which is also not the same shape as the object in your front-end code. Those might be similar, but each of these layers has different responsibilities, different things it's trying to optimize for. Your code should be built, in my opinion, in a way that allows all four of those layers to diverge in their interpretation of not only what maybe common entities are, so maybe a user looks slightly different at each of these layers, but maybe even what the entities are to start with. And that maybe in the database what, we don't have a full user, we've got a profile and an account, and those get merged somehow. And eventually, when it gets to the front end, all we care about is the concept of a user because that's what we need in that context. STEPHANIE: Yeah, that's really interesting because now it almost sounds like separate systems, which they kind of are, and then finding a way to make them work also as one bigger [laughs] system. I would love to ask, though, what that conversion looks like to you. Or, like, how have you implemented that? Or, like, what kind of pattern would you use for that? JOËL: So I'm going to give a shout-out to the article that I always give a shout-out to: Parse, Don't Validate. In general, yeah, you do a transformation, and potentially it can fail. Let's say I'm pulling data from a GraphQL API into an Elm app. Elm has some built-in libraries for doing those transformations and will tell you at compile time if you're incorrectly transforming the data that comes from the shape that we expect from the schema. But just because the schema comes in as, like, a flat object with certain fields or maybe it's a deeply nested chain of objects in GraphQL, it doesn't mean that it has to be that way in your Elm app. So that transformation step, you get to sort of make it whatever you want. So my general approach is, at each layer, forget what other people are sending you and just design the entities that you would like to. I've heard the term wish-driven development, which I really like. So just, you know, if you could have, like, to make your life easy, what would the entities look like? And then kind of work backwards from there to make that sort of perfect world a reality for you and make it play nicely with other systems. And, to me, that's true at every layer of the application. STEPHANIE: Interesting. So I'm also imagining that the transformation kind of has to happen both ways, right? Like, the server needs a way to transform data from the front end or some, you know, whatever, third party. But that's also true of the front end because what you're kind of saying is that these will be different. [laughs] JOËL: Right. And, in many ways, it has to be because JSON is a very limited format. But some of the fancier things that you might have access to either on the back end or on the front end might be challenging to represent natively in JSON. And a classic one would be what Elm calls a custom type. You know, they're also called tagged unions, discriminated unions, algebraic data types. These things go by a bajillion names, and it's confusing. But they're really kind of awkward and hard, almost impossible to represent in straight-up JSON because JSON is a very limited kind of transportation format. So you have to almost, like, have a rehydration step on one side and a kind of packing down step on the other when you're reading or writing from a JSON API. STEPHANIE: Have you ever heard of or played that Wikipedia game Getting to Philosophy? JOËL: I've done, I think, variations on it, the idea that you have a start and an end article, and then you have to either get through in the fewest amount of clicks, or it might be a timed thing, whoever can get to the target article first. Is that what you're referring to? STEPHANIE: Yeah. So, in this case, I'm thinking, how many clicks through Wikipedia to get to the Wiki article about philosophy? And that's how I'm thinking about how we end up getting to [laughs] talking about types and parsing, and graphs even [laughs] on the show. JOËL: It's all connected, almost as if it forms a graph of knowledge. STEPHANIE: Learning that's another common topic on the show. [laughs] I think it's great. It's a lot of interesting lenses to view, like, the same things and just digging further and further deeper into them to always, like, come away with a little more perspective. JOËL: So, in the vein of wish-driven development, if you're starting a brand-new front-end UI, what is your sort of dream approach for working with an API? STEPHANIE: Wish-driven development is very visceral to me because I often think about when I'm working with legacy code and what my wishes and dreams were for the, you know, the stack or the technology or whatever. But, at that point, I don't really have the power to change it. You know, it's like I have what I have. And that's different from being in the driver's seat of a greenfield application where you're not just wishing. You're just deciding for yourself. You get to choose. At the end of the day, though, I think, you know, you're likely starting from a simple application. And you haven't gotten to the point where you have, like, a lot of features that you have to figure out how to support and, like, complexity to manage. And, you know, you don't even know if you're going to get there. So I would probably start with REST. JOËL: So we started this episode from a very back-end perspective where we're talking about Rails, and routes, and controllers. And we kind of ended it talking from a very front-end perspective. We also contrasted kind of a more RESTful approach, versus GraphQL, versus more kind of old-school RPC-style routing. And now, I'm almost starting to wonder if there's some kind of correlation between whether someone primarily works from the back end and maybe likes, let's say, REST versus maybe somebody on the front end maybe preferring GraphQL. So I'd be happy for any of our listeners who have strong opinions preferring GraphQL, or REST, or something else; message us at hosts@bikeshed.fm and let us know. And, if you do, please let us know if you're primarily a front-end or a back-end developer because I think it would be really fun to see any connections there. STEPHANIE: Absolutely. On that note, shall we wrap up? JOËL: Let's wrap up. STEPHANIE: Show notes for this episode can be found at bikeshed.fm. JOËL: This show has been produced and edited by Mandy Moore. STEPHANIE: If you enjoyed listening, one really easy way to support the show is to leave us a quick rating or even a review in iTunes. It really helps other folks find the show. JOËL: If you have any feedback for this or any of our other episodes, you can reach us @_bikeshed, or you can reach me @joelquen on Twitter. STEPHANIE: Or reach both of us at hosts@bikeshed.fm via email. JOËL: Thanks so much for listening to The Bike Shed, and we'll see you next week. ALL: Byeeeeeee!!!!!! ANNOUNCER: This podcast is brought to you by thoughtbot, your expert strategy, design, development, and product management partner. We bring digital products from idea to success and teach you how because we care. Learn more at thoughtbot.com.
Stephanie just got back from a smaller regional Ruby Conference, Blue Ridge Ruby, in Asheville, North Carolina. Joël started a new project at work. Review season is upon us. Stephanie and Joël think about growth and goals and talk about reviews: how to do them, how to write them for yourself, and how to write them for others. Blue Ridge Ruby (https://blueridgeruby.com/) Impactful Articles of 2022 (https://www.bikeshed.fm/369) Constructive vs Predicative Data by Hillel Wayne (https://www.hillelwayne.com/post/constructive/) Parse, don't validate by Alexis King (https://lexi-lambda.github.io/blog/2019/11/05/parse-don-t-validate/) Working Iteratively (https://thoughtbot.com/blog/working-iteratively) thoughtbot's 20th Anniversary Live AMA (https://thoughtbot.com/events/ama-developers-20th-anniversary) 20th Anniversary e-book (https://thoughtbot.com/resources/20-for-20) Transcript: JOËL: Hello and welcome to another episode of The Bike Shed, a weekly podcast from your friends at thoughtbot about developing great software. I'm Joël Quenneville. STEPHANIE: And I'm Stephanie Minn. And, together, we're here to share a bit of what we've learned along the way. JOËL: So, Stephanie, what's new in your world? STEPHANIE: I just came back from a smaller regional Ruby Conference, Blue Ridge Ruby, in Asheville, North Carolina. And I had a really great time. JOËL: Oooh, I'll bet this is a great time of year to be in Asheville. It's The Blue Ridge Mountains, right? STEPHANIE: Yeah, exactly. It was perfect weather. It was in the 70s. And yeah, it was just so beautiful there, being surrounded by mountains. And I got to meet a lot of new and old Ruby friends. That was really fun, seeing some just conference folks that I don't normally get to see otherwise. And, yeah, this was my second regional conference, and I think I am really enjoying them. I'm considering prioritizing going to more regional conferences over the ones in some of the bigger cities that Ruby Central puts on moving forward. Just because I really like visiting smaller cities in the U.S., places that I otherwise wouldn't have as strong of a reason to go to. JOËL: And you weren't just attending this conference; you were speaking. STEPHANIE: I was, yeah. I gave a talk that I had given before about pair programming and nonviolent communication. And this was my first time giving a talk a second time, which was interesting. Is that something that you've done before? JOËL: I have not, no. I've created, like, a new bespoke talk for every conference that I've been at, and that's a lot of work. So I love the idea of giving a talk you've given before somewhere else. It seems like, you know, anybody can watch it on the first time on YouTube, generally. But it's not the same as being in the room and getting a chance for someone to see you live and to give a talk, especially at something like a regional conference. It sounds like a great opportunity. What was your experience giving a talk for the second time? STEPHANIE: Well, I was very excited not to do any more work [chuckles] and thinking that I could just show up [chuckles] and be totally prepared because I'd already done this thing before. And that was not necessarily the case. I still kind of came back to my talk after a few months of not looking at it for a while and had some fresh eyes, rewrote some of the things. I was able to apply a few things that I had learned since giving it the first time around, which was good, just having more perspective and insight into the things that I was talking about. Otherwise, the content didn't really change, just polished it further. I think in the editing process, you could edit forever, really. So I imagine if I revisit it again, I'll find other things that I want to change. But this time around, I also memorized my slides because, last time, I was a little more dependent on my speaker notes. And part of what I wanted to do this time around, because I had a little more time in preparing, was trying to go from memory. And that went pretty well, I think. JOËL: How did you feel about the delivery of it? Because now you had a chance to have a practice run in front of a real audience. And, as much as you practice at home in front of the mirror, it's not the same as actually giving a talk in front of an audience. STEPHANIE: Yeah. I was surprised by how the audience is also different, and the things that they'll react to is slightly different. There were some jokes that landed similarly and others that didn't land a little bit with this crowd, but maybe other parts, there was more of a reaction. So that was surprising. And I think I had to kind of adjust those expectations on the fly as I delivered whatever, you know, line I was kind of expecting some kind of reaction to. And I also, other than memorizing my slides, you know, I think had the mental capacity to focus a little more on the delivery component that you're talking about because I wasn't, you know, up until the last minute still working on the content itself, and just being able to direct my mental energy to, I guess, the next level of performance when giving a presentation. And, yeah, I would definitely give this talk again. I really liked that it was something that feels pretty evergreen, something I care a lot about. I don't think it will be a topic that I get kind of bored of anytime soon. So those were all some of the things I was thinking about in giving a talk a second time. JOËL: When you write your speaker notes, do you give yourself directions for expected audience reactions, so something like a pause for laughter after a joke or something like that? STEPHANIE: No. I think I am too nervous about presuming [laughs] how the audience will react to put something in and then have to be, like, super surprised and figure out what to do if they don't react the way that I think they will. So it ends up being that I just kind of go forth. And if I do get a reaction out of them, that's great. But not expecting it works for me because then, at least, I can control how I am presenting and how I'm showing [chuckles] up a little bit more. JOËL: So you're really working with the energy in the room then. STEPHANIE: Yeah, I think so. JOËL: Was this talk recorded? So if people in the audience want to go and watch this talk. STEPHANIE: Yeah. The first version that I gave of it is online if you search for the title "Empathetic Pair Programming with Nonviolent Communication." And this version was recorded as well. So, eventually, it'll also be up. And, I don't know, maybe I'll watch it back and [chuckles] see the difference in presentation. I would be very curious. I've never watched any one of my conference talks fully through the recording from start to end before. But I know that that's something that I could continue to improve on. So maybe one day I'll find the confidence. My other highlight that I wanted to share about this regional conference is how well-organized it was. So it was mainly organized by Jeremy Smith, and I thought he did such an awesome job. He organized a bunch of activities in Asheville for the Saturday after the conference if folks wanted to stay a little longer and just check out the city. There was a group that went hiking, a group that did a brewery tour. And the activity I chose to do was to go tubing. JOËL: Fun. STEPHANIE: Yeah, it was my first time. So you're basically in an inner tube floating down a very calm river, just hanging out. You...we were on the group, and you could clip yourself to the rest of the group so you're all, you know, kind of floating down together. But some people would unclip themselves and just go free for a little while. And, yeah, when you get too hot, you can dip into the water to cool off. And I just had such a great time. [laughs] It was almost like being on a Disney ride but out in nature, which I just, like, is totally my jam. JOËL: I tried tubing once in Texas. And the inner tubes are black, and in the Texas sun, they get really hot. So every, I don't know, 20 minutes or so, I had to get off the inner tube. It was too hot to sit on. And I had to flip it just because it absorbed so much heat. STEPHANIE: Wow. Yeah, that does sound like it would get very hot. I think the funny thing that I wasn't expecting was how hard it would be to get back into the inner tube after you had gotten in the water, at least for me, because the inner tubes were quite large. And so I couldn't get enough leverage to pull myself [laughs] back up onto it, and ended up several times just, like, flopping belly first into the inner tube and then having to, like, flop over so that I could be on my back and be sitting in it again. And other times that I had to wait a little while until the river got shallower so I could actually stand and just sit in it. So there were times that it was kind of a struggle, but 90% of it was very chill and fun. So, Joël, what's new in your world? JOËL: I started a new project at work. I'm working with a data warehouse, pulling data in from a variety of sources, getting it all into one kind of unified schema, doing some transformations on it. And then also setting up some sort of outgoing plugins to allow different sources to access that unified data. So this is not in a Rails app, but we do have a Rails app connecting to this data warehouse. Data engineering is, at least in this style, is newer to me. So I think it's a really interesting world to get into. I don't know if, technically, this counts as big data. I don't think the term is cool anymore. But five or so years ago, everybody was all about the big data, and that was the hip term to toss around. STEPHANIE: So, is this something pretty new to you? You haven't had too much experience doing this kind of data engineering work before? JOËL: Yeah, at least not with, like, a data warehouse. I think a lot of the work around data transformations, or creating unified schemas, thinking in terms of data in different stages that are at different levels of correctness...I've done a fair amount of ETL, Extract, Transform, Load, or sometimes people shift it around and say, ELT, Extract, Load, Transform. I've done a fair amount of those because I've done a lot of integrations with third-party systems. STEPHANIE: So I've always thought of data engineering as, in some ways, a separate role or a track. And I'm really curious about you having, you know, mostly been doing software development if that gives you an interesting lens to look at these problems. JOËL: So, to get the full answer, you should probably ask me again in six months. STEPHANIE: That's fair. JOËL: Initial thoughts is that there's a shocking amount of overlap between some of these ideas, again, because I've done ETL-style projects a lot. You know, if you've got any kind of Rails app and you're integrating with a third-party API, you're often doing ETL at a very small level. To a certain extent, even if you're doing, let's say, some front-end code, and you're interacting with a back end, depending on how you want to deal with that transformation of getting data from your API, you might be doing something kind of like an ETL. Designing types in something like a TypeScript or an Elm and thinking in terms of the data that you have, the transforms that you're doing has a lot of similarities to what you would do in a data warehouse. I think a lot of the general ideas apply. I know I talked at the beginning of this year articles that were impactful for me. And one of those articles that was really impactful was Hillel Wayne's "Constructive Versus Predicative Data," which is all about structuring data and when you can enforce constraints via the data structure versus when you need to enforce it via code. Similarly, a lot of the ideas from the article "Parse, Don't Validate" by Alexis King. The articles focused on designing types. But it also, I think, applies to when you're thinking of schemas because schemas and types are, in a sense, isomorphic to each other. STEPHANIE: I like what you said there about as a software developer; you've probably done this at a much smaller scale. And, yeah, like you were saying, things that you had already learned about before or thought about before you're able to apply to this different set of problems or, like, different approach to programming. Is there anything that has been challenging for you? JOËL: Yes, and it's a weird one. Because we're working with enterprise systems, navigating the websites for these enterprise systems and the documentation for them is not a pleasant experience, trying to get a feel for how the system is made to work. It's just so different when you're used to tools and documentation written by the open-source community. Even third-party tutorials and things it's never, like, oh, here's a great article where you can scan and find the thing that you want. It's, hey, I'm a consultant guru on this thing. Sign up for my webinar, and you can have a 15-hour course on how to use this tool. And that's not what I want to do. I just want give me the five-paragraph blog post on how to do data imports, or how to set up a staging area for data, or something like that. STEPHANIE: Right. You're basically being asked to develop skills in using the enterprise software rather than more general skills for the problem or task; it sounds like. Because apparently, there are people making a business out of teaching other people how to use or navigate the software. JOËL: And I think that's fine. I love that people are making businesses of teaching these. But just the way things are structured, information is not generally as available for this large enterprise software as it is in the open-source world, and even when it is, it's just different patterns of access. So even you go to a particular technology's website, and it's all marketing copy. It's all sales funnel and not a lot of actually telling you really what the technology does. It's all, like, really vague, you know, business speak on, you know, empowering your team, and gathering insights, and all this stuff. So you really do a lot of drilling down. And what you need to find is the developer site. That's where you get the actual tech documentation. Depending on the tech, it's more or less good. But yeah, the official website of the technologies is just...it's not aimed at me as a developer. It's speaking to a different audience. STEPHANIE: That is interesting. I didn't realize that once you are, you know, working on a data warehouse, it is because you are consuming so many different external sources of data, and having to figure out how to work with each one is part of the process to get what you need. JOËL: So there's the external services but the data warehouse itself that we're using is an enterprise product. STEPHANIE: Got it. JOËL: So, just figuring out how this data warehouse works, it feels like it's a different culture, a different developer culture. STEPHANIE: That's cool. I'll definitely ask you again in a few months, and I look forward to hearing what you report back. So the other topic that I wanted to get into today is reviews, specifically self-reviews. To be honest, our review cycle is happening right now. And I have very much procrastinated [chuckles] on writing them until, you know, one or two days before. So I came into our conversation today, like, in that mind space of thinking about my growth, and my goals, and that kind of stuff. And it got me thinking that I don't hear a lot of people talk about reviews, and how to do them, how to write them for yourself, how to write them for others, how people approach them. Though I would guess that the procrastination part is pretty common, [chuckles] just based on what I'm hearing from other folks on our team too, and what they're up to for the next couple of days before they do. Joël, have you written your review yet? JOËL: So it's interesting because this review cycle has a few different components. You write a self-review. You write a review of your manager, and then you write a review of several of your peers who have nominated you to write a review. So I've done my own review. I've done my manager's review. I've not completed all of my peer reviews yet. STEPHANIE: That's pretty good. That's better than me. I've only done my own. [laughs] So, yeah, the deadline is coming up. And I'll probably get back to it right after this. I'm curious about your process, though, for writing a self-review. Do you come into it having thought about how you've been doing so far in the last six months or so? Or, when you sit down to write it, are you thinking about these things for the first time in a while? JOËL: Combination. So I think I do come in without necessarily having, like, planned for the review cycle. That being said, throughout the year, I try to build a fair amount of, like, personal self-reflection, professional self-reflection at various points throughout the year. So I'm not coming into the review cycle being like, oh, I have not thought about professional growth at all. What have I done this year? I think one thing I haven't done quite as well is when I'm doing these moments of self-reflection on my own throughout the year, writing down notes that I could then use to apply when the review cycle comes up. So I am having to rely on memory on, like, oh yeah, last month, when I kind of sat down and thought about areas that I want to improve in or areas that, like, what are my goals that I want to have? And I just commit that to memory. So, yeah, I think live in the moment; now that you've asked me this question, you've made me think that maybe I should be taking more regular notes about this. STEPHANIE: One thing I've been really liking about the software that we're using for reviews and other professional growth things is...it's called 15Five. And you can give your co-workers shout-outs using this tool. And as I was writing my review, I could actually open all of the kudos and shout-outs that I received from my peers and just remember some of the things that I worked on or a lot of the things that other people noticed. I tend to sometimes have a hard time remembering some of the smaller things that I've done that made an impact, but other people are usually better about pointing that out than I am. [chuckles] And that has been really helpful because it's, yeah, nice to see like, oh, like, you know, so and so really appreciated when I paired with them on, you know, debugging this thing. And maybe I can pull that into something that I'm writing about the kind of mentorship I've been doing in the last few months. JOËL: How do you feel about the aspect where you have to then give feedback on colleagues? STEPHANIE: I really value and enjoy this aspect because most of the time, I am just gassing my colleagues up [chuckles] and writing, you know, really encouraging things about all of the awesome work that they're doing. So, for me, it actually feels really good. And I was thinking a little bit about my approach to reviewing my peers and review culture in general. I have worked at companies where we have had a very, like, healthy and positive review culture. So it happens often enough that it's become normalized. It's not a really scary thing. And I also like to think about feedback in two types, where you have feedback that you want to give someone so that they can change behavior in a way that helps you work with them better, and then feedback you have for someone for their growth. And once I separated those two things, I realized that really, the former, if you're, you know, giving someone constructive feedback because you maybe would like them to be doing something different. That's not necessarily what you want to be writing in their annual review. Those things are usually better communicated in a more timely manner, like, right when you are noticing what you might want to be changed. And so then when you are doing reviews, like, you've hopefully already kind of gotten all of that stuff out of the way. And you can just focus on areas of growth for them, which is the fun part, I think, in reviewing peers because, yeah, you can give some suggestions to further support them in, like, where they want to go. JOËL: I like that distinction between just general growth, suggestions, and then interaction suggestions. And just to give an example, it sounds like interaction suggestions would be like, "Oh, when we pair, I would like it if you used this style of communication from, let's say, nonviolent communication. Here's a talk; go watch it." STEPHANIE: [laughs] Yeah, I did talk on this; go watch it. There used to be a framework for reviews that I've done before that I actually don't quite like. It's the Stop, Start, Continue framework where you answer questions about, okay, what should this person stopped doing? What should they continue doing? And what should they start doing? And the things that you would put in stop, I think, are probably what you would want to have communicated in a more timely manner, like, not necessarily it happening, you know, really divorced from whatever behavior you might be asking. And, in general, I think focusing on what you would like others to be doing instead is usually a better approach to handling that kind of feedback just because it avoids making someone feel bad about having done something wrong and, instead, kind of redirecting them into what you would like them to be doing. JOËL: So you're saying if you have something in the stop category, let's say stop interrupting me all the time when we're in meetings, you're saying this is something you prefer not to bring up at all or something that you prefer to bring up one on one and not in the context of review? STEPHANIE: Something to bring up one on one. Ideally, pretty soon after, that might have happened. It's a little more top of mind. And then you don't end up in that position of maybe misremembering or having the other person misremember and having to figure out, like, who was in the right or in the wrong in understanding how that interaction went. Especially if you're able to do it a little sooner after it happened, you can point out, like, hey, this happened. And instead of framing it as please stop interrupting me, you could say, "Could you please make some space for some folks who've been a little more quiet in the meetings to make sure that they've been able to share?" Still, I think once you've made more space to give that kind of constructive feedback when you are writing reviews, you can then, like, focus on the growth aspect and not the redirection of how others are doing their work. JOËL: That makes sense. So, what would be an example of the kind of feedback that you like to give to other people in the context of a review? STEPHANIE: Yeah, I think especially if I know what someone is wanting to focus on, right? If I'm working with someone, hopefully, we've kind of gotten to talk about what they like to work on, what they don't like to work on, what they are hoping to spend more time doing, or yeah, just their hopes and dreams for their professional [chuckles] development, being able to point out some things that they maybe haven't thought about trying it I really like to do. I was thinking about a time when I gave a co-worker some feedback as a mentee of theirs where they had been really awesome at providing information to me about things that I was unfamiliar with. But one thing that I was really hoping for was more tools to figure things out on my own. So instead of sending me a link to some documentation, maybe helping me figure out how to search for the documentation that I'm looking for. And that was something that I could share with them because I knew that they wanted to work on their mentorship skills and an opportunity, I think, for them to take it to a level where it's closer to coaching and not just providing information. JOËL: That makes a lot of sense. Maybe flipping it around, is there a point in time where you've received a review feedback that has been really valuable to you or really helped you hit the next level in your career? STEPHANIE: I really appreciate feedback that encourages me when I'm maybe a little bit too timid to go seek the things out myself. So there were times when I received some feedback about how great of a leader I could be before I thought I was ready to be a leader. And they pointed out the qualities of leadership that I had demonstrated that led them to believe that I would be ready for a role like that. And that was really helpful because I don't think that was even necessarily a short-term goal of mine. And it took someone else saying, "I think you're ready," that made me feel a lot more confident about opening that door. I guess this is all to say that I really love review season because of, you know, all of the support I get from my co-workers. And, yeah, just remembering that it's not just a journey I have to take all by myself, that the point of working with other people is for all of us to help each other grow. JOËL: I think something that you mentioned earlier really connected with me, the idea of trying to give feedback in the...even, like, feedback that's about changing or improving, phrasing it in a more positive way, or at least framing it in a more positive way. So here's an opportunity for growth rather than here's the thing you're doing wrong. Because that reminds me of two pieces of review that I got when I was a fairly junior developer that have stuck with me ever since. And one of them was really a catalyst for growth, and the other one kind of haunted me. So this first one I got, someone in a review just mentioned that they thought that I was just generally a slow developer, just not fast at writing code. Not a whole lot of context; just that's who I was. And, in a sense, it was almost like I'd been given this identity, like, oh, I am now Joël, the slow developer. And I didn't want that identity. So I'm kind of like, I want to refuse to accept it. But at the same time, there's always that self-doubt in the back. And now, anytime I'm on a project with someone else, I'm comparing, oh, am I shipping stories quite as fast as someone else? And if not, why? Is it because I'm a slow developer? Or if I'm having a rough day and I'm not getting the ticket done that I was hoping to get done by the end of the day, you know, you just get that voice in the back of your head that's like, oh, it's because you're a slow developer. Someone called that out last year, and they were right. So, in a sense, it kind of haunted me. On the flip side, I once got some feedback talking about an opportunity for growth. If I focused on working in more iterative, incremental chunks, it would help have a smoother workflow and probably help me work faster as well. And that was really kind of an exciting opportunity. It's also stuck with me for years but not in the sort of haunting sort of way or this, like, bring in self-doubt but more in terms of opportunity. Because now I'm always like, oh, can I break this down into even smaller chunks? Would that help me move faster? Would that help me be less blocked on other people? Would that be easier for our QA team? Would this be easier for review for my colleagues? Just a lot of different opportunities for benefits with working in smaller iterative chunks. And, for years, I've just been kind of honing that skill. And now, looking back over, you know, a decade of doing this, I think it's one of the best skills that I have. And so, in a sense, I feel like both of these people that left me that review, in a sense, they're trying to get me to maybe have a slightly higher velocity. But they're different approaches, radically different in terms of how it impacted me as a person. STEPHANIE: Yeah, I am really glad you brought that up. Because I definitely have also received, quote, unquote, "constructive feedback," but maybe wasn't phrased in the right way, that also haunted me. And it doesn't feel good. I think that that sucks. That person wasn't really able to frame it in a way that pushed you to progress in the positive way that you mentioned with learning to work incrementally. And in fact, I almost think that the difference in those two phrasings is encapsulated by a framework for giving feedback that's actionable, specific, and kind. So suggesting you to work incrementally is all of those things, especially if they know that you do want to increase your velocity. But you're being supported in doing it in a way that is positive and growth-oriented as opposed to, like, out of fear that other people think that you are a slow developer. And, you know, that's certainly a way that people are motivated. But I would say that that's not the way that we want to be motivated. [laughs] JOËL: I'm glad we're having this conversation because I think it just reinforces to me just the value of good communication skills for developers. And, you know, you can see that when developers have to write documentation, or even things like comments or commit messages. You see it when developers write blog posts. So it's really valuable to work on your communication skills in a lot of these technical areas. But reviews are a very particular area where it's easy to maybe have not the impact that you wanted because you communicated a core idea that's probably right, but just the way it was communicated was not going to have the impact that you're hoping for. And so getting good at communicating specifically in the area of reviews, which I assume most of us in the software industry are doing on a semi-regular basis, is probably a good tool to have in your professional tool belt. STEPHANIE: Absolutely. JOËL: We recently hit a big milestone at thoughtbot, where thoughtbot turned 20 years old in early June. And so, throughout June, we've been doing a lot of fun internal things and some external things to celebrate turning 20. And one of those is we're hosting a live AMA with a variety of thoughtbot devs. That's going to be on Friday, June 23rd, so a couple of days after this podcast goes live. So, to our listeners, if you're listening to this, in the first few days after it goes live, you get a chance to join in on the live AMA and ask your questions of our team as we celebrate 20 years. There's a blog post with all the details, and we'll link to that in the show notes. STEPHANIE: One other thing that I think we're doing that's really cool for our 20th anniversary is we published a short ebook with a curated collection of 20 hits from our blog, the thoughtbot blog, over the course of its history, some of the more popular and impactful blog posts that we've ever published. So I highly recommend checking that out. You know, the thoughtbot blog is such an awesome resource. And I discovered a few things that I hadn't read before on the blog from this ebook. So that will also be linked in the show notes. JOËL: I mentioned earlier how one of my opportunities for growth through review was getting better at working iteratively. And, a couple of years ago, I took a lot of the lessons that I'd learned over the years of getting better at working iteratively, and I put them in a blog post, and that blog post made it into that 20th Anniversary ebook. So we can probably link the blog post itself in the show notes. But also, if you're picking up that ebook, you'll get a chance to see that article on my lessons learned on how to work iteratively. STEPHANIE: Awesome. On that note, shall we wrap up? JOËL: Let's wrap up. STEPHANIE: Show notes for this episode can be found at bikeshed.fm. JOËL: This show has been produced and edited by Mandy Moore. STEPHANIE: If you enjoyed listening, one really easy way to support the show is to leave us a quick rating or even a review in iTunes. It really helps other folks find the show. JOËL: If you have any feedback for this or any of our other episodes, you can reach us @_bikeshed, or you can reach me @joelquen on Twitter. STEPHANIE: Or reach both of us at hosts@bikeshed.fm via email. JOËL: Thanks so much for listening to The Bike Shed, and we'll see you next week. ALL: Byeeeeeeee!!!!!!! ANNOUNCER: This podcast is brought to you by thoughtbot, your expert strategy, design, development, and product management partner. We bring digital products from idea to success and teach you how because we care. Learn more at thoughtbot.com.
If you're in the market for bicycle shorts, Joël's got you. Stephanie just returned from RubyKaigi in Japan and shares details of her trip. Recently at thoughtbot, there have been conversations around an interesting data modeling exercise. Joël and Stephanie discuss the following: Value Objects vs. Hashes Doing Math on Compound Numbers Monoids and Folding Naming Concepts in Code This episode is brought to you by Airbrake (https://airbrake.io/?utm_campaign=Q3_2022%3A%20Bike%20Shed%20Podcast%20Ad&utm_source=Bike%20Shed&utm_medium=website). Visit Frictionless error monitoring and performance insight for your app stack. Ruby Kaigi (https://rubykaigi.org/2023/) Google Translate Lens (https://lens.google/) Video on city parks (https://www.youtube.com/watch?v=qnyikrFlGdU) Enumerable#tally (https://ruby-doc.org/3.2.2/Enumerable.html#method-i-tally) Hash#merge (https://ruby-doc.org/3.2.2/Hash.html#method-i-merge) Monoids (https://blog.ploeh.dk/2017/10/06/monoids/) Enumerable#all? (https://ruby-doc.org/3.2.2/Enumerable.html#method-i-all-3F) Value of specialized vocabulary (https://www.bikeshed.fm/356) Gist with Joël's code solution (https://gist.github.com/JoelQ/3056a0a6e8b5488faa5caeef630cd702) Transcript: STEPHANIE: Hello and welcome to another episode of The Bike Shed, a weekly podcast from your friends at thoughtbot about developing great software. I'm Stephanie Minn. JOËL: And I'm Joël Quenneville. And together, we're here to share a little bit of what we've learned along the way. STEPHANIE: So, Joël, what's new in your world? JOËL: I've made an unusual purchase this week. I went out and bought a pair of bicycle shorts. And, for those who are not aware, these are special shorts that have padding built into them. Typically, they're, like, skin-tight, but I got, I guess, what are called mountain biking shorts. So, they kind of look more like the cut of a normal short. But they've got this, like, built-in padding for biking. STEPHANIE: So. Just to confirm, you did get these shorts for biking purposes, right? JOËL: Yes. I purchased these shorts for biking purposes. STEPHANIE: Okay. [laughs] JOËL: And I got these because I was talking to a friend about this and mentioning that this was, like, probably the most ambitious cycling thing I've ever done in my life. And they recommended if you have not done bike shorts, you really should get them. They make a big difference. STEPHANIE: Wow. Okay, I have two thoughts here. First of all, you prefaced this saying that this was an unusual purchase. So I thought maybe that you bought these bike shorts for some other purpose. [laughs] But I am excited to talk about this because I've also been curious about trying bike shorts. I bike a lot in Chicago in the summer, and I've been doing, like, longer rides on the Lakefront trail. And one of my goals, actually, this summer is to do a bikepacking trip. But I have not been super comfortable on longer rides. And I was just thinking that this might be something really helpful to make them a little more enjoyable. JOËL: So, is the kind of biking that you're doing closer to what might be considered commuting? STEPHANIE: Yeah, mostly commuting. But also, just, like, going on long rides on the weekends, in addition to this, hopefully, forthcoming bikepacking trip up to a state park. So not too long, maybe, like, 60 miles, but definitely long enough to start getting a little uncomfy on your seat. JOËL: Yeah, is 60 miles, like, in one day? STEPHANIE: Yeah, exactly. JOËL: That's a lot. Yeah, the friend who recommended biking shorts to me told me that pretty much anything over maybe 10 miles is worth getting shorts. STEPHANIE: Wow, okay. I clearly have been suffering [laughs] for way too long, then. Tell me more about your cycling trip. JOËL: So this is a bikes plus beer trip. Basically, I plotted a bunch of breweries in Belgium on a map and constructed an itinerary that could hit a bunch of them while keeping fairly short rides between towns. And the goal is to do maybe 30-35 miles in a day. And so I'll be going probably, like, cycling in the morning, and then exploring and drinking in the afternoon and evening. STEPHANIE: That sounds amazing. That's really cool to do a little bit of a tour of the area and then also traveling by bike. JOËL: Yeah, I'm excited because other modes of transport really just give you the origin and the destination, whereas cycling, you kind of get all of the in-between places. You get a much better feel for the area that you're in. And you can make all these unexpected stops if you want. You can make detours. So I feel like you get the sort of being in the moment, being in the place effect that you would have as a pedestrian but with a much longer reign. STEPHANIE: Yeah, absolutely. That's exactly what I was going to say. I love cycling. And there's something really special about being able to be present in your surroundings and seeing people on the street or a cool building as you're going. But also going at a speed where it feels very fun and very freeing to just be cycling through a town and making stops when you want to, and traveling greater distances than you could be able to on foot. JOËL: So I just received these bike shorts yesterday in the mail. So today, at the end of the day, I'm going out for a bike ride, and I'm going to see if they perform as advertised. STEPHANIE: That's exciting. Keep us posted [laughs] on if you end up liking them or not. JOËL: Yeah, yeah. The next episode or two, I'll have to report bike shorts; yay or nay? STEPHANIE: Yeah, The Bike Shed will now become bike gear reviews. JOËL: The name will actually line up, then with what the people googling, it might think it actually is. Stephanie, what's new in your world? STEPHANIE: Speaking of vacation, I just got back from a two-and-a-half-week trip myself. I mentioned on the podcast a couple of episodes ago, I think, that I was traveling to Japan for RubyKaigi, an international Ruby Conference over in Japan. And then I spent another week in Taiwan, just on my own time. So, yeah, I had a really big, long trip, and it was really great. It was my first time going abroad in a really long time. It was my first time being somewhere where I didn't speak the language. So, in Japan...I don't speak any Japanese. And it was both challenging and also, like, not too bad. I found my way around through a lot of gesturing and smiling, and nodding. [laughs] And, hopefully, people were able to understand what I was trying to communicate. Also, pointing at menus, I highly recommend going to places that have pictures of the food, and then you can just point when you want to order. [laughs] JOËL: So, did you find that English was not particularly useful then in Japan as a tourist? STEPHANIE: Yeah, I would say so. The next thing was that most signs were translated. So we ended up taking public transportation a lot. And that was quite easy to navigate, especially since I have kind of navigated subways in other cities before, and reading the signs is no problem. But when you're trying to communicate with locals, that was a little harder. JOËL: Did you use any, like, apps on your phone or anything like that to help navigate kind of the different language? STEPHANIE: Yeah, the Google Translate Lens app. I can't remember exactly what it is. But this was my first time really using it. And I was really impressed by how it was able to translate things that you're using your camera to take pictures of, or just, like, having your camera view. I did feel a little silly, like, holding my phone up to everything and trying [laughs]...so I could understand what I was reading. But for menus that did not have pictures, that was my backup strategy. [laughs] JOËL: Did you ever have to have your phone translate something and then just show your phone to someone else? STEPHANIE: No, I didn't have to go that far. Though I do think that it has a feature where you can have someone speak into the phone, and it will translate that into your native language. And then you respond by speaking into it and then playing the sound for them, which, you know, I bet really works in a pinch. But I think that required a little more investment into the interaction [laughs] with the other person than I was ready for. Like I said, the gesturing served me quite well. JOËL: I got the experience of being on the other side of that a while back. So, here in Boston, I was just walking down the street, and someone stopped me and just holds up their phone. And they've typed something in Chinese on there. And they hit a button, and it comes in English. STEPHANIE: [laughs] JOËL: And they're asking for directions. And I think I typed a sentence back on their phone in English, and then they hit the translate button and got it back in Chinese. We went back and forth a few times. And eventually, I think he got what he wanted, and we went our separate ways. And I was kind of amazed that this whole interaction happened. STEPHANIE: Yeah, that's really cool. JOËL: Yeah, kudos to that person for having the courage to stop someone on the street when you don't speak their language. STEPHANIE: Yeah, absolutely. I think even when I was struggling to communicate with someone because of the language barrier, I could tell from their gesturing in return that we were, like, willing to help each other out. And that, like, there was still an ability to find some kind of connection, even though, you know, we didn't completely understand each other. And that was definitely one thing that I really enjoyed was being in a place with, you know, people different from me and having that exposure. It's been a really long time since I've got to experience that, and that was really valuable. JOËL: So, other than the conference, what would you say are some highlights of the trip for you, maybe one from Japan and one from Taiwan? STEPHANIE: So one of my favorite things about being in Tokyo was all the green space that was around. I ended up walking a lot just to explore the neighborhoods. And I always just stumbled across a local park or even a shrine that had really great nature around it, a lot of big trees. You know, some, like, water features, maybe like a pond, and a lot of really fun plants that I got to learn about. And, yeah, that was really nice, especially in such a dense urban area, like, coming across green space to just sit for a little while. And it was such a nice relief from the density and busyness of a big city. That was just one thing that I was really impressed by being in Japan. JOËL: That's really cool. I think that really speaks to the quality of their urban planning. I know that the stereotype of Tokyo that I have in my mind is that it's, like, you know, ultra-modern, ultra-urban, you know, it's the largest city in the world. So the idea that they've taken the time to set up all these little parks everywhere is really endearing. Particularly, I think the idea of smaller parks at the neighborhood level where you don't need, you know, something massive like, let's say, New York's Central Park, which is, you know, really cool. But having just a little green space in your neighborhood where you can, like, stop by, I think it's a wonderful upgrade to local people's quality of life. I was recently listening to a video on YouTube from a city planning channel talking about just all the thinking that goes behind city parks, and having them at different scales, and how that impacts the residents of different areas. So it's really cool to hear that Tokyo has done a great job with that. STEPHANIE: Yeah, absolutely. I think part of the joy of just stumbling upon it was that you know, even when I wasn't seeking it out, it would just come along during my walks. And, yeah, it really was very refreshing. JOËL: What about Taiwan? STEPHANIE: So, in Taiwan, what I really enjoyed about it it's a bit of a smaller island. And so you can actually get to a lot of places within a few days. And a lot of folks take day trips out to the coast from Taipei. And I was able to do a two-day trip to another county that had some hot springs, and I got to enjoy an outdoor hot springs in the rain. And that was really nice because it was, like, surrounded by trees. And it happened to be raining that morning, but, you know, we were all kind of already getting wet, so it didn't really matter. And it was just, like, this really serene and gorgeous experience being able to enjoy that. And I think that was another place where I was in a very urban area, and then being able to escape a little bit was really nice. JOËL: That sounds like a magical moment. Have you visited hot springs before, or was this your first time going to a hot spring? STEPHANIE: I have been to a few in the U.S. before. I like to take road trips to national parks. And there are some really great hot springs in the U.S. as well. And so this was kind of something that I really wanted to do somewhere else just to experience it elsewhere. And, yeah, I'm really glad to have checked that off my bucket list. JOËL: That's really cool. I've never been to a hot spring, and it sounds like a fun thing to do. So it's on my kind of greater bucket list. It's maybe not a top-five thing to do, but definitely, something I want to do one day. STEPHANIE: Cool. Love it. That was vacation talk from Joël and Stephanie. [laughs] MID-ROLL AD: Debugging errors can be a developer's worst nightmare...but it doesn't have to be. Airbrake is an award-winning error monitoring, performance, and deployment tracking tool created by developers for developers that can actually help cut your debugging time in half. So why do developers love Airbrake? It has all of the information that web developers need to monitor their application - including error management, performance insights, and deploy tracking! Airbrake's debugging tool catches all of your project errors, intelligently groups them, and points you to the issue in the code so you can quickly fix the bug before customers are impacted. 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JOËL: So recently at thoughtbot, we've been having conversations around this really interesting data modeling exercise, where let's say this is a company, and you want to purchase T-shirts for everyone at the company. You have already some T-shirts on hand because you've done this kind of thing before in a couple of different warehouses. And you need to know how many new T-shirts you need to order in order to have enough for everyone. So as long as you keep things simple, the math is pretty easy because you sum the number of people at your company, and then you sum the number of shirts across all of your warehouses, and that gives you the T-shirts that you need, the T-shirts that you have. You get the difference between those two numbers, and that tells you how many new T-shirts you need to order. Where things get more complicated is once you start introducing T-shirt sizes, and that's where the fun data modeling comes in. If everyone at your company has a T-shirt size that they want and then at your warehouses, you store...the object that represents a warehouse stores a hash of sizes and how many of each size you have. Now, how do you do all this, like, summing across things? And it's not really just a single number that you want. Now you need to know how many small, mediums, and larges. And, sometimes, you've got a hash. Sometimes you've got just symbols on a user, and you've got a sum across hashes. Maybe do some differences across hashes. And it gets kind of tricky to work with. So that's sort of the problem as it's initially presented. And we've been having a really interesting conversation around different ways to try to solve it in a way that's really kind of clean and nice. STEPHANIE: Yeah, that's interesting because what you described sounds like the first iteration of solving the problem is, oh, the warehouse stores this information as a hash. So maybe I will create a new hash for the counts of T-shirt sizes that I need and then do the comparison on those two hashes. It sounds like maybe there was some unwieldiness or maybe even some duplicated code there. Is that what you think you all were trying to solve by modeling this differently? JOËL: I think we kind of quickly hit some limitations with hashes. One thing that is fun before we start trying to combine a bunch of hashes is that some of the data exists as a hash on the warehouses. But to get the T-shirts that we need, all we have are an array of users and a size on all of them. And we can use this fun method from Enumerable called Tally to give us a kind of Tally hash that is just a mapping of size, two counts of that size in the array. And so that's a really fun method. You don't get to bring it out that often in Ruby. And it's nice because that hash format happens to match the same format as the hashes stored on the warehouse objects. STEPHANIE: Right. So now you're comparing apples to apples. But it sounds like maybe this hash representation does hold some kind of significance. JOËL: Yeah. I guess, for me, I tend to see anytime you're doing fancier operations on a hash more than just reading in and out; it probably wants to be some kind of value object. And, in this case, we kind of want to do math on hashes. I think the equation is kind of still the same thing. We're trying to get the difference between the two, between the want versus have, but you can't just subtract one hash from another directly. There's some things that you can do with the hash merge method that allows you to pass a custom block and do some things there. But we're going to have to do this sort of repeatedly. And now we're kind of leaking some of that knowledge a little bit. So it feels like something where you might want to actually name this concept and make it an object of its own that can then have its own kinds of domain operations as methods on it. STEPHANIE: Yeah, I like that a lot. Because even just as I was thinking about it when you are storing data like that in just a hash, what do you call it? Like, what do you name it? I think I've seen things like that named, like, T-shirt data, or, like, warehouse data, or warehouse T-shirt counts, or T-shirt counts. You know, that is when it starts to diverge, and you end up maybe seeing the same, like, data represented, but it being named different things in different parts of the code. And I, in experience, have found that very painful. JOËL: Yeah, because I guess you could have, like, T-shirts on hand from your warehouse; that's one hash. But the hash generated from the users might get called something like user preferences. And if you're reading through that code and you see a hash, and you're like, okay, do these two hashes that I'm looking at, maybe in a test, just kind of coincidentally have the same keys? Or are these kind of fundamentally the same thing? Or is the idea of, like, T-shirts on hand like a stock different from, like, a preference? And do they represent different things that just happen to be similar in this particular scenario? STEPHANIE: Right. And especially if then there are methods where you're passing that data structure that really represents the same thing. But you're passing it as arguments, and then, suddenly, one variable name, user preferences, or user T-shirt preferences becomes, you know, T-shirt count. That has been really confusing for me before. JOËL: One thing that does get, I think, clunky very quickly is that you have all of these warehouse objects that have that hash of, like, stock on hand on them. And what you really want is a kind of aggregate object that tells you not what's the stock on hand for one warehouse but across all warehouses. So you've got to go through, I guess, that array of warehouses and somehow kind of aggregate all of those hashes together. And because they're already tallies, you can't just do Enumerable Tally on it anymore. You've got to find some way to combine them together, and that gets tricky really quickly. STEPHANIE: Right. I can see they're starting to be, like, nested loops, especially if you're just working with primitives. JOËL: I think some initial implementations that we saw ended up doing either, like, some kind of reduce block or eachwithobject, or something like that, which are, I think, fine solutions here. But what lives inside of those blocks is what gets complicated. And I don't know about you, but I feel like if I'm reading through some code and then all of a sudden I see a reduce block, and it's, like, ten lines of logic with maybe some, like, nested things, like, maybe some nested loops or some conditions inside of it, that's kind of intimidating. Reduce is not a super easy method to wrap your head around, especially when the block has got a lot of logic. STEPHANIE: Yeah, that's a really good point. It definitely gives me pause. And I have to, like, you know, commit to reading the method in its entirety to fully understand [laughs] what's going on. JOËL: Sometimes, like, really pause and, like, annotate with comments and all this stuff. STEPHANIE: So, what did you end up thinking about in terms of solving that problem of aggregating the sums of all the different T-shirt sizes for each warehouse? JOËL: So I think, for me, oftentimes, it's easier to make the problem a little bit smaller, solve that smaller problem, and then try to kind of scale up back up again and particularly when you're dealing with something like reducing or aggregating a large collection. Like, forget about dealing with a collection. Just how could I combine two items of this type? So if I had two of these hashes. And forget about fitting it for an array. But if I have two of these hashes, how could I combine them together? And you could do this with hash merge. I wanted to do things a little bit more encapsulated. And because I also knew that we're building some more logic around these, I actually wrote a custom object. I called it a tally, maybe inspired by that Enumerable method, and implemented an operator plus on this tally object. So a tally object can plus another tally object. And the response from that is you get a third tally object that's gone through all of the keys and summed them together. So it's kind of an aggregate sum. STEPHANIE: This is a cool example of a method that's a verb also representing a noun to name the return value, right? So the Tally method on Enumerable returns a hash, which we have been talking about for a while as, like, a data structure that's, you know, perfectly fine, but maybe we can leverage turning it into like you said, a value object to give it more meaning or to make it easier to work with. And it seems like the naming part just kind of fell into your lap. JOËL: Yeah, tally is interesting in that it is both a noun and a verb in English. I'm not sure what the grammatical term for that kind of word is. STEPHANIE: So, once you extracted this new class out, what insights or observations did you have about this problem? JOËL: What becomes really cool about this is that once you have a way of combining two objects together, reduce is a way to just kind of scale that up to an arbitrary number. And so, just like you can sum an array of numbers by reducing plus over the array. Because I have plus on my tally object, I can reduce plus operator over an array of tally objects. And they all just kind of sum together in a single tally that's the combination of all of them. So this is really cool. What used to be an intimidating reduce block, the intimidating logic gets moved into a plus method, which I think is much more approachable. Because I can go in the context of an object and say, okay, I've got this tally object, and I'm trying to add it to another tally object. And we're just going one key at a time, adding them together. Simple enough. And then in the place where we're reducing, all we're saying is list of tallies reduce plus. And I know that pattern already because I do it with integers to sum them together. And so now I've just got this really simple one-line in the scary part. And the actual complex logic is much more approachable. STEPHANIE: That is very cool. I found it really interesting that this came about because we were trying to do math on these two hashes. So it seems like, you know, a tally because it represents a score or, like, a number. Like, we were able to implement those plus operators and get to a simple solution because we're working with numbers. JOËL: Yeah, I think it might be fair to describe it as maybe a compound number is the term that I use. I don't know if that's mathematically correct. Oftentimes, when you're dealing with things that represent a number or something that's represented numerically but that might have more than one number involved in it. But you still want to do math with this kind of compound, multi-number value anyway. And one example that you might have is, let's say, a point in 2D space. You have an X coordinate and a Y coordinate. And you can do math on points. In fact, there's a whole field of math to deal with that kind of thing. That's an important thing that you have to do. You might want to be able to add or subtract points. You might want to do certain types of multiplication on them. And so just because something has more than one number associated to it doesn't mean that it can't be used for math. In fact, oftentimes, that's where the fancier math does come into play. But when we treat them as primitives, and we just have, let's say, our XY pair was a hash, or, like, a two-element array, then we lose the ability to do math nicely. If we create, let's say, a point class that has an X and Y, and then we define plus, we define minus, we define scalar and vector multiplication, things like that, now we can do all those operations. And we can treat it like math, even though it's not just a simple integer anymore. STEPHANIE: Yeah, I like that a lot because we do end up working with data, you know, maybe even from our database. But then, inevitably, we want to, like, learn something about it. And so I was thinking about how frequently I use GROUP BY in MySQL queries and how, oftentimes, I care about counts, or, like, number of records. And perhaps this is why we see, like, the hash primitive used so frequently in codebases that then become pretty complicated once we're trying to, like I mentioned, like, learn something about it or, like, compare things or whatever logic that we need to do. And transforming them into objects that then know how to do math on themselves [laughs] is very cool. JOËL: Hashes are interesting because they're pretty much just basic data structures. And I think, very often, they're sort of pre-objects. They're things that want to eventually become objects. And, oftentimes, what I find is that hashes get passed around a system. And various other classes or subsystems all have bits of logic that act on the hash because the hash can't own that. And so you end up with the logic around the concept of whatever the hash represents kind of scattered and maybe duplicated across three or four places in the application. And then, all of a sudden, if you give that a name, if you create a class for it, you can pull all of that logic into one place. And, all of a sudden, it probably cleans up all of the surrounding places because now they don't have to care about the implementation of exactly what operating on the hash is. But, also, it means that these operations generally have, like, nice domain names. And, in the case of a complex number, you might even have that represented through math operations, like, plus or minus. And that allows your code to read really nicely. STEPHANIE: Right. Which gets me thinking about how I mentioned, like, tally as a noun, and, you know, you implemented your custom class. But do you think there's any value in the idea of a tally being specifically like a hash-like thing with a number as the value for each key, like, that existing as a more general class for people to use? JOËL: Oh, that's interesting. So, in my personal implementation, I hard-coded values for small, medium, and large because those were the T-shirt sizes from the example. But you're talking about some sort of generic tally object that maybe would be a gem or something like that that people could use that represents counts of arbitrary things or multiple counts of arbitrary things that might then implement some common math operators so that you could add or subtract them. STEPHANIE: Yeah, exactly. Because I was just thinking, you know, like I mentioned, I often represent that when I count number of records in my database. Or even I can recall a problem that I encountered previously where I had to figure out the number of orders for an e-commerce store based on the location. And I held that in a hash data structure, but really, it's a tally. [laughs] And so, yeah, I think that maybe we've kind of stumbled across a very useful representation of very common problems. JOËL: Yeah, I can see there being use for a generic version of this. Maybe that's your chance to go out and create some open source, or maybe this already exists. We should maybe research that first. STEPHANIE: Yeah, if any one of our listeners know, [laughs] send us an email. JOËL: So something that was really interesting to me about all of these changes, introducing the value object, cleaning up the reduce, all that stuff, is that, in the end, once the...there was this object that represented the sort of aggregate compound value, the tally, then the equation stayed the same. And I can just slot in those variables as before. Whereas previously, when we switch from just a single count to this, like, we need to take into account sizes that, like, broke the initial implementation of the code. So it's funny how you sort of go from a simple implementation and then a new requirement, which breaks it. But then just changing the hash to be an object all of a sudden made the original code, which didn't really need to change; it just worked again. STEPHANIE: Hmm. That's really interesting because it makes me think about how maybe the primitives were perfectly fine, you know, in the first set of requirements, and not until, like, an additional complexity or something new emerged that we needed to reach for an object that could support the change. JOËL: Yeah. And I think I'd argue that if you're doing just raw T-shirt count, an integer is probably the right value to use there. But if you're doing counts broken out by T-shirt size, then having an object that's a single thing that responds to plus and minus so that you can use it in the same equation where you're saying sum up all of these things from the warehouse, and then do a difference with the T-shirts that we need that becomes really nice. STEPHANIE: Do you think there was some value in going through the hash implementation first, though, and then arriving at using a more custom object? I'm curious, kind of, like, what that journey was like. JOËL: It's hard to say. I would say maybe yes. But I could also see someone who's done this a lot, who's built the sort of heuristics, the instincts around this could immediately be like, oh, wait, we're trying to sum hashes here. Clearly, these need to be objects. Clearly, what we need is something that implements a plus operator that we can reduce. STEPHANIE: Yeah, I like that a lot. Because part of, you know, knowing what to reach for is having seen it enough times and seeing patterns, right? JOËL: This reminds me of a particular pattern that comes from the world of functional programming. It has a kind of scary-sounding name. It's monoid, not monad, monoid. And the idea in the context of Ruby is it's some kind of object that implements a plus method. So two of these objects can combine each other. And typically, you also have some sort of empty version of this object or some sort of, like, zero value. And there's a few rules that go around, like, kind of how this object has to behave. Like, you can't just put any implementation you want in that plus method. Certain requirements that have to be met for it to be considered, like, a valid plus method in this pattern. But if you do meet those requirements, then arrays of this type of object are just inherently reducible because you can just reduce plus over them. And so I think anytime you're trying to aggregate some sort of unwieldy data structure, that's probably a useful pattern to have because, you know, wait, as long as I have a way to combine two items together and potentially some way to generate an empty state, I can aggregate this whole list. STEPHANIE: I'm curious, does that also apply to non-numerical values? JOËL: Yes, any kind of aggregation combination, whatever. So maybe what you're doing is you're combining strings together. STEPHANIE: Got it. JOËL: String concatenation is a form of combination. And so you could be reducing some kind of concatenation over an array of strings, and you end up with one aggregate string that's the combination of all of them. Sometimes, though, you're not just taking values and putting them next to each other so that what you have is kind of all of them at the same time. You might instead do some kind of comparison. An example here might be Boolean values. You might say the way that I'm sort of, quote, unquote, "aggregating" two values, two Boolean values is with the operator AND. And so you have two Boolean values, and you get a new sort of combo value out of them, that is, are both of these values true? STEPHANIE: Whoa, that's blowing my mind right now. Because I had never thought of the, like, AND operator on Booleans, essentially aggregating them into a single true or false value. [laughs] JOËL: It's kind of weird, right? But I guess we do the same thing with numbers. One plus one doesn't give us 11 unless you're writing JavaScript. STEPHANIE: [laughs] JOËL: You know, we get a new number too, that is some sort of, like, combination of the two. So, similarly, it kind of makes sense that two Booleans might combine to create a new sort of third Boolean value. Where it gets really interesting, though, is that once you have this sort of combination, if you try to reduce AND over an array of Booleans, what you effectively have created is Ruby's Enumerable all method that checks to say, are all values in this array true? STEPHANIE: Interesting. But really, the way that's implemented is just, like, a definition of what aggregate means for Booleans, right? JOËL: Right. But it's taking that idea of aggregating two values and scaling it up to an array of many values. So we know Boolean AND. Another way to think about it is, are both of these values true? Is the question it's trying to answer. And then we're scaling that out to say, is both of these values true for everything? So are all of these values true? Because we're going from two to many. STEPHANIE: Cool. So maybe the takeaway for some of our listeners could be, like, next time they find themselves having to deal with a collection or an Enumerable and, you know, using a reduce or, like, trying to break it down to compare two of those elements first, and figuring out how they want that interaction to work. Does that sound right? JOËL: Yeah, absolutely. Once you have a way to combine two elements together, if you want to scale it up to n elements, you just plug it into reduce, and it does the rest of the work for you. My big takeaways from this exercise were one: the value of creating custom objects. Wrapping primitives like hashes in an object and adding a few domain methods on them made such a difference in my final implementation. Secondly, I think it's what you're saying, this whole thing about breaking down complex reduce problems by figuring out how to combine two items and then just using reduce to scale it to an array. And then, finally, I think this is a point that we've mentioned on this podcast before, the value of specific vocabulary - being able to name things and patterns. And so knowing some of the details of this monoid pattern and having a name for it means that now I start seeing it in places. And so the moment I see, oh, wait, we're aggregating values; we're combining two values together and then doing this in a reduce, immediately, my mind goes, wait, that feels like monoid. And then, I can explore that with my custom object to try to make the code better. STEPHANIE: Yeah. And even if you don't remember the monoid part specifically, the idea of Tally, like, that is something that I think is really cool and really applicable to a lot of codebases. JOËL: So, for those who are interested in more practically what this code looks like, I've put this all in a Gist, and I'll link to it in the show notes. This was a really fun exercise for me because I used sort of two development techniques to help sort of build this out. One, I went with a kind of literate programming approach, where I had just a Ruby file and would have put in some big comment blocks talking about what the setup was, what I was trying to do, and then describing how I'd like to use the code, and then try to write code that made that happen. And then, for the actual objects that I was using under the hood, I used TDD to test drive and build them out. So you've got all of that in the Gist. We've got the tests and that sort of literate programming script that almost reads like a mini blog post, except it's executable Ruby. So, if you're curious to see about that, the link is in the show notes. STEPHANIE: That's a very cool format. I'm excited to take a look. On that note, shall we wrap up? JOËL: Let's wrap up. STEPHANIE: Show notes for this episode can be found at bikeshed.fm. JOËL: This show has been produced and edited by Mandy Moore. STEPHANIE: If you enjoyed listening, one really easy way to support the show is to leave us a quick rating or even a review in iTunes. It really helps other folks find the show. JOËL: If you have any feedback for this or any of our other episodes, you can reach us @_bikeshed, or you can reach me @joelquen on Twitter. STEPHANIE: Or reach both of us at hosts@bikeshed.fm via email. JOËL: Thanks so much for listening to The Bike Shed, and we'll see you next week. ALL: Byeeeeeee!!!!!!! ANNOUNCER: This podcast is brought to you by thoughtbot, your expert strategy, design, development, and product management partner. We bring digital products from idea to success and teach you how because we care. Learn more at thoughtbot.com.
It's gardening season! Stephanie swaps seeds with friends and talks about her Chicago garden. Joël recently started experimenting with a dedicated bookmark manager. They discuss the aspirational (and sometimes dogmatic) sides of TDD and explore when to test: first or after. How does that affect the tests? How does that affect the code? How does that affect workflow? Are you a "better" programmer because you 100% TDD? This episode is brought to you by Airbrake (https://airbrake.io/?utm_campaign=Q3_2022%3A%20Bike%20Shed%20Podcast%20Ad&utm_source=Bike%20Shed&utm_medium=website). Visit Frictionless error monitoring and performance insight for your app stack. Cassidy William's Productivity tools (https://dev.to/cassidoo/the-productivity-apps-i-use-in-2023-3m8l) raindrop.io Bookmark Manager (https://raindrop.io/) Simplifying Tests by Extracting Side-Effects (https://thoughtbot.com/blog/simplify-tests-by-extracting-side-effects) Transcript: JOËL: Hello and welcome to another episode of The Bike Shed, a weekly podcast from your friends at thoughtbot about developing great software. I'm Joël Quenneville. STEPHANIE: And I'm Stephanie Minn. And together, we're here to share a bit of what we've learned along the way. JOËL: So, Stephanie, what is new in your world? STEPHANIE: It's gardening season here in Chicago. So right now, it is like mid-April as we're recording this, and we are just starting to get some warm weather. And this is usually the time that I do my garden planning for the season. And the other week, I went over to a friend's place, and we did a bit of a seed share. So we just each have collected fruit and vegetable seeds and herbs and all that. And a really fun way to collect more things to grow is to share with your friends. Seeds are super cheap, but I feel like you could just have like an infinite amount for all of the things that you might want to grow. And so it's really nice to be able to, yes, spread that gardening love around and share with your friends. JOËL: I'm imagining something like people trading collectible trading cards but the plant version. STEPHANIE: Yeah, exactly. The fun thing that we did, my friend and I, because, you know, you usually get a little envelope with between 10 and 50 or more seeds, and they're super tiny. Some of them are really teeny tiny, like with broccoli, for example, it's like I can't even explain. It's less than a millimeter, I swear. It's very easy to just lose them, so you want to keep them contained. But because we are sharing, we don't have a second envelope for the other person to take home with them. And so we actually made our own little envelopes with some origami paper that she had. And we folded it and stapled it and made it very cute. And so I came home with a bunch of these very adorable handmade envelopes with all of my new seeds. JOËL: Are you mostly doing vegetables, or are these flowers? STEPHANIE: Yeah, so we mostly focus on vegetables for our garden. And we do like to sprinkle some flower seeds in our yard. But that is more just like throw some seeds out there, and whatever happens to them happens. But with the vegetables, we put a little bit more effort because we usually try to have a good yield. So in past years, that has meant starting seeds indoors because, in Chicago, we have a shorter growing season than some warmer climate places. And the late summer vegetables like tomatoes, peppers those usually take a little bit longer. So if you want to get a good yield, you might want to start them inside a little early before it's warm enough for them to go outside. JOËL: So, do you have a garden plot out in your yard, or do you have a community garden plot? How does that work? STEPHANIE: I am really grateful to have a bit of backyard space. And we have three raised beds that we built that cover...I think each one is 3 feet by 10 feet, so quite a good amount of space. Yeah, we're able to grow a lot of food. Our highlights include shishito peppers. That's one that I really like to grow myself a lot because I usually don't see them in stores as frequently. We grow really great eggplants. Tomatoes, obviously, is a pretty popular beginner-friendly vegetable plant. And we like to grow a lot because then we can process it all and can some of it so we can have nice tomato sauce that's homegrown year round. JOËL: Hmm, sounds delicious. Do you experiment with the different varieties? STEPHANIE: We do. That's also a way that the seed sharing is really helpful because maybe I'll get some varieties of certain vegetables like cucumbers or whatever, but maybe my friend has a different kind. And I think we try to do a mix of growing the varieties that we know we like and then experimenting with some ones that are new to us. JOËL: It's hard to beat fresh vegetables in the summer. STEPHANIE: Yeah. I'm very excited, especially because during the fall and winter seasons here in Chicago, our local food is a little less exciting. It still can be good, but it's been a lot of root vegetables and the like when we try to eat seasonally in the other season. So I'm really looking forward to stuff that's just juicy and fresh, and it's just one of my biggest joys during the summer. What about you, Joël, what's new in your world? JOËL: I've recently started experimenting with a dedicated bookmark manager. This is not because I have been to too many bookstores and have all the free bookmarks they give you. These are the digital bookmarks to websites, and I've been really bad at managing those. I mostly just memorize the keywords I need to Google to get access to that website, which is a terrible way of doing things. And then I've got a mix of a few different browsers, which I don't sync, and have a couple of bookmarks. I use a little bit of Pocket, which is a tool by Mozilla. It's all right, but the search capabilities are not very good. So sometimes I'll know it's in there, but I can't find it. STEPHANIE: I'm so glad you brought up this topic because I am in a similar boat where I read a lot of things on the internet and have just thrown them all into my top-level bookmarks hierarchy. And that has not really been working for me, either. So I'm really curious to find out how you've been solving this problem. JOËL: So recently, I volunteered to be a mentor for first-time speakers at the upcoming RailsConf in Atlanta. And someone was asking me about designing slides, and we were talking a little bit about when should you use maybe a bulleted list on a slide versus when there are other options available. I knew that I had read years ago a fantastic resource on slide design. But try as I could, I could not Google this and get the page that I was looking for. This was shared to me by somebody else as part of a conference preparation group years ago, and so I reached out to this person. I was like, "Hey, so do you happen to remember that link you shared with me five years ago?" And this person says, "I do remember it. I don't have the link either." STEPHANIE: I've literally been in this exact same situation where I remembered that there was an article that I read, and I remembered exactly who shared it with me or who I talked about it with, and when I couldn't find it, trying to reach out to them and also not being able to find it through them. JOËL: So the story ends well because I was able to log into an old Slack group... STEPHANIE: Wow. JOËL: That had been created for the speakers at this conference and dig through the history. And luckily, I still had access to the group. I was still in that private channel for the speakers. And I found the link, and I was able to share it with others. So that was great. But then I started thinking; I can't keep living this way. I need something better. STEPHANIE: It's true. Even though we are expert Googlers as developers, sometimes the search just doesn't get you the thing you're looking for. JOËL: So, about this time, I'm scrolling Twitter as one does. And I saw a tweet from Cassidy Williams talking about some of the productivity tools that she's been using this year did a longer article about it. And I started reading it, and a tool that she mentioned there is Raindrop.io, which is an all-in-one bookmark manager. And I'm like, oh, that is exactly, I think, the missing piece of technology in my life right now. So I went up and signed up for it, and so far, it's been pretty good. I'm experimenting with it. But I've consolidated a lot of the links that were in my head or in some of these other places, put it in there, categorized them a little bit, tagged them. And hopefully, this becomes a better way so that when I want to reference a link for someone else either in a conversation or as a resource or even for myself, maybe when I'm writing an article, I'm like, oh, I know I read something that would act as a good resource here. I can go to Raindrop and get that article without any of these other shenanigans I had to do this time. STEPHANIE: Amazing. What is special about Raindrop as opposed to just your native browser bookmark capabilities? JOËL: It has some deeper structuring capabilities in terms of not everything has to be hierarchical. It has tags as well as categories. And I think most importantly, for me, it has search, which seems to be pretty good at surfacing things. It also has some somewhat smart capabilities where it will automatically figure out if the thing that you've linked is an article, or a document, or a video, something like that. So you can filter by these inferred types as well. It has the ability to sync across devices, which browsers can do if you're signed up for them. STEPHANIE: Nice. I like that it has that search functionality that you mentioned because I think I'm definitely in the boat of just scrolling through all of my untagged, unorganized bookmarks. And it's really tough to find what I'm looking for, especially if the meta title also doesn't quite tell me exactly the keywords that I'm needing to be scanning for in that moment. So I will definitely have to give it a try. JOËL: I believe you can get full-text search if you pay for the premium version (I'm currently trying the free version.), which in theory, could mean that it searches the contents of the article. It's not clear with that. But I do know they save a snapshot of the text of the article. STEPHANIE: That's really interesting because then it's almost like a search engine but scoped to the things that you have saved. JOËL: Yes. STEPHANIE: Nice. JOËL: I'll see how that goes, and maybe six months from now, I can talk a little bit about what the experience has been using that. STEPHANIE: Yeah, six months from now, you can tell us all about how you have no issues or qualms with how you've been managing bookmarks because everything is working perfectly well for you. [laughs] JOËL: JK, I've dropped this whole bookmark thing. STEPHANIE: That's true. That's also the flip side of trying out a new tool, [laughs], isn't it? MID-ROLL AD: Debugging errors can be a developer's worst nightmare...but it doesn't have to be. Airbrake is an award-winning error monitoring, performance, and deployment tracking tool created by developers for developers that can actually help cut your debugging time in half. So why do developers love Airbrake? It has all of the information that web developers need to monitor their application - including error management, performance insights, and deploy tracking! Airbrake's debugging tool catches all of your project errors, intelligently groups them, and points you to the issue in the code so you can quickly fix the bug before customers are impacted. 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STEPHANIE: So our topic for today is something that we've had in our topic backlog for a while, and I'm excited to talk about it. It's TDD, which I think is a very well-known, potentially controversial topic of discussion in the world of software development. And specifically, we wanted to talk about when TDD is useful and when you actually might also have some value in writing tests afterwards. And in preparation for this topic today, I actually have been TDDing most of my client work this week. JOËL: What? You're telling me you don't TDD 100% of the time? Are you even a real developer? STEPHANIE: I am a real developer, and I do not TDD 100% of the time. I'm just going to say it. It's on record. JOËL: You know what? Me too. STEPHANIE: Wow, I'm glad we could clear the air on that one. [laughs] JOËL: What percent of the time would you say that you do TDD? In this case, test first as opposed to maybe testing after you've written the code or maybe not testing at all. STEPHANIE: Hmm, that's an interesting question. A part of me wants to answer it in my ideal workflow terms. But I think that is less interesting than reality, which is I will usually at least try to test first if I'm feeling like I am up for it. So maybe the percentage is, I don't know, I really couldn't tell you, but I'm just going to throw out 40% of the time [laughs] because that seems pretty, I don't know, reasonable. Sometimes you wake up, and you're just like, I'm not going to do it today. [laughs] And other days, you wake up, and you're like, you know? It sounds like a fun exercise to do for this particular feature. So yeah, if I TDD 40% of the time, then I think maybe I write tests after another 40% or 50%. And then [laughs] I'm hesitant to say this on the air, but sometimes you code, and you don't write tests for it and would not recommend it for the majority of your work. But I'm just going to be real here that sometimes it happens. JOËL: It's always a trade-off in terms of the work you put in versus the value you're getting out of it. And sometimes, you get very little value out of a test. STEPHANIE: Yeah, that's real. It totally depends on what you're doing. JOËL: I think one thing that's interesting for us, because we're consultants, so we move from one project to another, is that some projects are set up in a way that they're very test friendly. It's easy to have a testing workflow with them. And then others are just incredibly painful to test because of the way the system has been architected. And I think a TDD purist would then tell us that this is a symptom of high coupling or other architectural problems; that's probably true. But also, you don't have time to re-architect the entire system, and so then it becomes a question of trade-offs. Can I test some things easily today? Can I refactor a few things that will make this local change somewhat easier to test? And then, where is it not worth the effort to make something testable? STEPHANIE: Yeah, I've definitely struggled with that, where a part of me wanted to test something very thoroughly or even do test-driven development and then ran into some obstacles along the way and having to be realistic about that effort. The other thing I was referring to around it depending is also the actual code you're working on. So maybe if you're just writing a script or something to automate some dev workflow, it's okay for that not to be tested. And I also do think that the decision to TDD is very dependent on whether you are writing net new code, or refactoring, or having to deal with legacy code. JOËL: That definitely makes a difference. For me, when I'm refactoring in the purest sense, changing structure without changing behavior, in theory, I should not be writing tests for that because there should already be existing tests, and I'm not changing behaviors. So the test suite should prove that my changes did not change behavior. In practice, oftentimes, there is not the coverage that needs to be there. I don't know about you; I feel like I often don't trust the code enough, where I'm a little bit scared to do a refactor if there isn't test coverage. How about you? STEPHANIE: I've been running into that issue a lot on my current client project where I've been making an intentional effort to add test coverage before I make any changes because that forces me to really understand how things work because either I read a piece of code and I just can't tell at all. Or I learn later on that I thought I understood something based on the class or the method names, but it turns out that there was actually some nuance in there or side effects or what have you that belied my understanding [laughs] of what it was doing. And after a few times of that lack of trust that you talked about popping up, I was like, okay, I think, at least for me, the way that I can feel good about the work that I'm doing is to set myself up for success in that way. JOËL: Do you ever find that the code that you write in a test-driven approach tends to end up different than code that you might write with a test-after approach? STEPHANIE: Yeah, I think this can actually be answered at a few different levels but let me start with talking about how I like to practice TDD. If I'm given a user story, I usually try to work outside in. So I will write a feature or acceptance test and that involves testing how the user would interact with our application. At that point, I will usually go with the most naive implementation to get the test passing, and so it probably won't look pretty. In a recent case, I was adding a new parameter to a controller, and I just put everything in the controller to get the test green. [laughs] And then, at that point, is when I gave that code a second pass and looked for areas to extract where I could. JOËL: That refactor step and the red, green refactor cycle is really important. STEPHANIE: Yeah, absolutely. I think that is where I find TDD to be the most valuable from that higher-level perspective. And I know that there are different schools of thought on this. But that helps ensure that at least I have written the code to make the feature work the way that I was hoping. And I use TDD less for driving design decisions just because I like to have something to react to that is helpful for me rather than having a blank slate of, okay, let me write a test with an idea about how an object's interface will look. And so that's what works for me. So I do think it's kind of a mix of like from an acceptance test level; I am at least writing code that I know works, but the shape of the code for me is less determined by how I test. JOËL: So when you're looking at code that you've written six months down the line, you generally can't tell the difference whether it was test-driven or written first and tested after. STEPHANIE: That sounds right. That's just how my process works. In fact, I think recently we, to go on a quick tangent, we talked about writing conference talks, and I think I even mentioned for me the process is looking at the thing and then revising. And I think that the design driving element of TDD that a lot of people like is a bit less effective for me personally. JOËL: Hmm. Would you say that TDD does not impact the shape of the code that you end up creating in response to the tests? Or when you're talking about design, are you mostly thinking in terms of the interface that you would have in the test itself, like, what arguments the constructor takes or things like that? STEPHANIE: I think I was talking more about the latter, the interface, the construction arguments. When I do test afterwards, I also will notice the way the setup of my test how that is feeling. And if it is feeling a bit unwieldy or is a bit complicated, that will cue me to maybe take another pass at the code itself. So that's actually one way that testing after can signal to me a way that I might want to change my code. JOËL: Okay, so you're getting some of those pressures that you get from testing, but you respond to them in a like second path? STEPHANIE: Yeah, I think so. I'm curious how you TDD and whether you notice changes in how your code looks. JOËL: I think there are a couple of things that TDD does in my workflow that are really nice. One is it keeps me focused in terms of getting the work done because you're just following from one failure to another. It also keeps me focused in terms of scope. It's really easy for my engineering brain to be like, oh, we could totally do this thing and all that, and it's like, no, that's not needed to solve the problem at hand. Because in TDD, you try the smallest solution that will solve your problem, and then you will refactor it to make it maybe nicer to work with. But you try not to add new behavior that's not required in order to pass the test, and that can be a really helpful forcing function for me. STEPHANIE: That's interesting because I was just thinking about how sometimes, at least with the outside-in approach that I was talking about, I will find that the scope of the ticket is too big as I make changes to get the desired quality of the code that I want. Like I mentioned, the naive implementation, like, sure, maybe everything is in a controller, but as soon as I'm starting to do that second pass, and I want to maybe change another class and to make it work for my needs, I will notice it start to sprawl a little bit. And that is usually a signal to me that, like, oh, maybe what I need first is just refactoring the objects that I'm hoping to use to get the desired implementation. And that ends up being a separate PR that I do first to then set myself up for making the change. JOËL: The classic make the change easy before you then go and make the easy change. STEPHANIE: Right. But that does mean that that initial feature test that I wrote won't ever be green. So I do have to kind of like back out of making that change and just be like, okay, today is not the day [laughs] that I'm going to get this feature working. JOËL: There are some times where I'm in a situation like that, and I will kind of recognize, oh, there's a refactor step that's happening right now as a sort of subtask. And so, I will make that refactor change that I need to and then commit only those files that were a part of that refactor and may be included as part of the PR with the feature change or maybe push it up and make it its own PR. But depending on what the refactor is, oftentimes, I can kind of do it sort of all more or less continuously but decide once I've done that refactor step, okay, commit time but only those files for the smaller set of changes, and then keep moving with that outside-in approach. One thing I have noticed about the style of code that I tend to produce when I TDD versus when I don't is how I will tend to decouple things. And so because coupled code is really annoying to test in isolation, TDD sort of forces me to do more dependency injection, passing objects to others. It will often force me or maybe not force me, but it gives me that wholesome pressure to maybe separate HTTP requests from more of the business logic in my code, which otherwise I might completely intermix because it's just so convenient. Even certain things like class methods, I might tend to overuse them or use them more if I'm not test driving than if I were. STEPHANIE: When you talk about coupling, I'm curious, do you end up mocking a lot in the tests that you are writing to drive your development? JOËL: No, but if I'm testing after, I probably will. Mocking, I think, is a sign of coupling generally. In tests where you're just passing objects to each other, generally, you can get away with passing in a test double or something, whereas if you're hard-coding dependencies, you often have to mock. STEPHANIE: Got it. That makes a lot more sense now. I think that does require a bit of thought upfront about what kinds of objects you might need and what they would provide for you in the thing that you're testing. JOËL: Yes. There's definitely a phase where let's say; I'm testing some kind of third-party integration; I'm just kind of trying to do it all in one object that has a mix of business logic and some HTTP request stuff. It gets really annoying as we're adding...maybe the first feature is okay. I use WebMock, and I stub out a request, and it's good. And then the second one, I feel like I'm kind of duplicating that. And then the third one, I've got to deal with retries. So now I've got to go back to the first one and add some two or three WebMocks because now we've got exponential backoff code that's happening here. And this new feature broke the old tests. And it just becomes this really annoying thing to do. And then I might start thinking, okay, how do I separate these two things? I have one place where I test the HTTP logic, the exponential backoff, the what to do if I get a 404 from the API. And then, separately, I can just have the business logic and test all of those branches there without having to touch any of the HTTP stuff. I think you could get there from a few different paths. So you could get there by sort of following a lot of classic design principles, things like SOLID, because they kind of converge on that general idea as well. You could even get there if you took more of a functional programming approach where you are really good at separating side-effectful code from, I'm going to use the term loosely here, pure functions. I've heard some people make the distinction between IO versus non-IO in code and how that affects the types of tests that you write for them. And separating those two is a thing that you might do, even if you weren't writing tests at all, if that's a design principle that you know to follow. STEPHANIE: Yeah, that's a great point. I was thinking, as you were talking about your approach for handling that potential feature with talking to a third party, that I've heard that particular task or problem in software development used as an example for a lot of those different techniques or strategies that you mentioned. And I suppose TDD really is just a tool, and it doesn't replace your experience or intuition. And earlier, when we were talking about times that you don't do TDD, I will have to say that if I am doing something that I've done many times before, I feel confident enough that I don't need to lean on that red, green refactor cycle. At that point, it's more muscle memory. And maybe I do forget a step along the way, but I have the experience to know how to debug that or to see the error and know exactly what it was that I did wrong. And in that case, I am tapping into something different than using TDD. JOËL: I think definitely, for a lot of things now, there are patterns that I have learned where even if I weren't TDDing, I might do a third-party integration using this pattern because I've done it via TDD enough to know that this is a structure that I find works very well in terms of the coupling of things. And then maybe if I want to fill in some tests afterwards, then I'll thank my past self that I'm using a pattern that plays nicely with that. One thing that I do notice happens sometimes is that when people add tests after the fact, they will add tests that are green but that don't necessarily fail if the code breaks. Have you ever seen that? STEPHANIE: I have seen that before. In fact, I just saw it recently where we had a false positive test. And I made a change expecting the test to fail, and it didn't, which is not great because the value that tests have are when they fail, you want to be alerted when something goes wrong. Just because they're green doesn't mean that everything works. It just means that they didn't detect a problem. And in this particular case, I don't know if the developer who wrote this test had TDDed or not. But I did notice that in the test, we were mocking a method, and that ended up being the cause of the false positive. JOËL: I'm always a little bit skeptical of mocks because I feel like I've seen so many either brittle tests or tests that will succeed all the time come out of mocks. I don't know if you've ever heard the term tautological test or a test that is a tautology. STEPHANIE: No, I haven't. What does that mean? JOËL: In its sort of most basic sense, it's a test that is always green no matter what the output is. Some people think of it more in terms of self-referential tests, like, oh, a thing equals itself, which, yes, it does, and those tend to be always green. But it's not always self-referential. It can be some other subtle ways. Typically this happens when mocking or specifically if you mock the system under test. It's very easy to write a test that is now going to always be green, no matter how the code changes. A fun fact about the word tautology is it comes from discrete math, which is the topic of my RailsConf talk. If you write out a truth table that shows all the possible inputs and whether or not something will be true or false, depending on what the inputs are, the output column is all true in a tautology, which tells you that no matter what the inputs are, you're going to get true out of that method or function or equation. And so, if this was a Boolean expression in Ruby, you could replace that by hardcoding true and get the same result. STEPHANIE: Yeah, that's what I was imagining, a function that just returns true. [laughs] JOËL: And that's effectively what you can accidentally write when you're creating a test that is a tautological test is one where you could have just replaced the entire thing with expect true to be true, and it would have the same effect. And, like you said, tests only have value when they fail. And a test that never fails has no value. So TDD has this red, green refactor cycle. I feel like you could probably come up with a cute slogan like that for a testing-after style. So maybe I guess you'd start off you write some code, then you write a test that theoretically passes for it. So you start green, but then you want to make sure you see that test fail, so you got to go red and then comment out the code or something. Then comment it back in to see that it goes back to green to make sure that not only does this test fail when the code is broken but also that bringing this test back is what makes it pass, which is an important distinction. So maybe it's a green, red, green, and then maybe refactor. Because one thing that I admired in the style that you were talking about earlier is that even when you test after, you include a refactor step. The test at the end is not the final step in your workflow. STEPHANIE: Yeah, that's a really good point. When you said green, red, green, I was thinking of a Christmas garland [laughs] or something like that. But yeah, I do think that stuff gets skipped sometimes. If you are testing after, you're backfilling tests for code you wrote, and at that point, you think you know how it will work, and so you're writing your tests kind of colored with that in mind. I like the injecting commenting something out or changing an input or something that you know should make the test fail, just so that you can confirm that you didn't just write a test that expects true to equal true or give you a false positive like that, then go back to green. And as you were saying that, it did make me think like, oh, well, that's like a whole extra step as opposed to TDD where we do just have red, green refactor. We don't have that extra step. But I think the effort is just like put in at a different point in time. JOËL: Agreed. It's important that you see the code fail and that you see it pass after the change. The order has changed a little bit, but those two kinds of core elements are present. Kind of by default, you have no choice when you're doing TDD. You have the ability to skip that if you're testing after, but ideally, you incorporate those in a robust test after workflow as well. STEPHANIE: Yeah. And I know I mentioned times when I've done something enough or used a pattern enough that maybe I'll just go ahead and implement it and then backfill with tests. And I also recognize that in those moments, I could have done something wrong, that there is some amount of wanting to check that the test failed. And I imagine there is some kind of balance to achieve there between the speed that you get by having that experience and knowing the direction you want to take things and applying a pattern that you've done a lot with being like, oh, we're all human, and sometimes we make mistakes. JOËL: In a situation where you feel like you're coding something that you've coded up 100 times before, you're very familiar with this. Do you find that a test after workflow is faster for you? STEPHANIE: Hmm, that's an interesting question. JOËL: Because I think that's often a motivation. It's like, I don't want to bother, like, I just have the idea. I know what to do. Let me just write that code and get it done. STEPHANIE: I think if I were introducing a new route or controller action or whatever, I don't need to go through the cycle of writing a test and it failing because I haven't added the action to the controller yet. It's like I know that that is the next logical step, and so maybe I might skip it there. But if I'm at the point where I'm working with business or domain logic, I think that's where is the value of test writing first because it's like, I passed the framework and passed my tools. And now, I'm working at working through the logic of the business problem itself. JOËL: So you're working in maybe slightly larger iterations of that red, green refactor cycle. STEPHANIE: Yeah, that's a good way to describe it. JOËL: I was recently working on a gem and tried to TDD it from scratch and went with micro iterations. And it was actually really fun, and there was a flow to it. And this is a greenfield side project. And it helped me stay focused. I think it did give me a decent design. I really enjoyed it. STEPHANIE: Nice. Was there something satisfying about seeing that green each time and kind of doing that bit of mechanical labor? And I can see how that can feel almost meditative. JOËL: Yes. And I think also because this was a problem that I didn't fully know how I was going to solve, TDD helped really focus me on solving sub-parts of that problem, things that I can hold in my head and solve in a minimalistic way and then iterate on. STEPHANIE: I like that a lot. You were using that technique, and that really helped for the task at hand, which was, in this case, a bit smaller in scope. I think the way you and I have been talking about TDD has been very realistic and very reasonable. And I'm curious what you think about people who kind of use it as the pinnacle of how you should write code. JOËL: I think that's really interesting because TDD is a really wonderful technique, and I wish more people used it. But it's kind of taken on a mystique of its own where if you do TDD or claim to do TDD 100% of the time, now, all of a sudden, you've put yourself on another level. And I think people even who choose for pragmatic reasons not to TDD all the time maybe feel a little bit of guilt or at least feel the need to explain themselves to other people to say, "Hey, I didn't TDD this here. Well, let me explain to you why that's okay, and I'm not a bad programmer." STEPHANIE: Yeah, I think we even alluded a little bit to that earlier in the show, and I could hear my hesitancy to be like, oh, I guess I'm going to say this and have all these people hear it. But I think that's a good point that it's okay for you not to do it 100% of the time. That doesn't make you any less of a programmer. Also, the way we've been talking about it also makes it sound like one of those things where it's like you do have to learn the rules before you can break them. And so there is value in learning it and doing it. And then you also, after having done it enough, know when you want to use it or when you don't. My advice for folks who haven't really done it before or don't quite see the value of it is just to try it and then decide for yourself. I think at the end of the day, we should all feel empowered to be able to decide how we work best. JOËL: It's also really valuable, I think, to maybe pair with someone who is really good at that and to get to see what their workflow is like. Oftentimes, there's almost a hump of getting into it where you are more productive without TDDing because you're not comfortable with the flow or with the techniques. And it takes a lot of expertise to get over that hump where maybe at the expert end of things, you are more productive with it. And on the less expert end, it just becomes a chore that takes up all of your time or ends up giving you results that aren't that great anyway. And so, how do you cross that chasm? STEPHANIE: Yeah, that's a really, really great point because, in some ways, when you first get started, it will feel slow. You are unlearning the ways that you have known to code before and trying to do it in a different way. And I really like your advice about trying to pair with someone who has expertise or has been practicing it for a long time. That was my first real introduction to it too. At this point, I had been a few years into my career and hadn't really tried it because it seemed very daunting, and seeing someone else verbalize their process and seeing their workflow was really helpful for me to get on board. JOËL: I think what I would like is for TDD to be a tool that is aspirational for a lot of people. If you're new to the technique and you've paired with somebody who's really good at it, and you see the flow that they have and be like, wow, that's really good. I would love to get that incorporated in the way that I work. Rather than a sort of measuring stick for how elite of a programmer you are. There's no sense in shaming people over the tools they use. STEPHANIE: Right. Because it should also be accessible, and if you make people feel bad about it, and then it's not accessible to folks. JOËL: On that note. Shall we wrap up? STEPHANIE: Yeah, let's wrap up. Show notes for this episode can be found at bikeshed.fm. JOËL: This show has been produced and edited by Mandy Moore. STEPHANIE: If you enjoyed listening, one really easy way to support the show is to leave us a quick rating or even a review in iTunes. It really helps other folks find the show. JOËL: If you have any feedback for this or any of our other episodes, you can reach us @_bikeshed, or you can reach me @joelquen on Twitter. STEPHANIE: Or reach both of us at hosts@bikeshed.fm via email. JOËL: Thanks so much for listening to The Bike Shed, and we'll see you next week. ALL: Byeeeeeee!!!!!! ANNOUNCER: This podcast is brought to you by thoughtbot, your expert strategy, design, development, and product management partner. We bring digital products from idea to success and teach you how because we care. Learn more at thoughtbot.com.
Today's episode is "Old News"! Stephanie shares her ergonomic desk setup. Joël talks about the pyramids. Another old thing is the Bike Shed episode two weeks ago about success and fulfillment. Stephanie and Joël realized off-mic that one area they didn't really talk about so much is impact, and that is something that is very fulfilling for both of them. Today, they talk about impact and leadership as individual contributors because leadership is typically associated with management. But they believe that as ICs, at any level, you can be displaying attributes of leadership and show up in that way on teams. This episode is brought to you by Airbrake (https://airbrake.io/?utm_campaign=Q3_2022%3A%20Bike%20Shed%20Podcast%20Ad&utm_source=Bike%20Shed&utm_medium=website). Visit Frictionless error monitoring and performance insight for your app stack. Success and Fulfillment episode (https://www.bikeshed.fm/376) Logitech MX Vertical (https://www.bestbuy.com/site/logitech-mx-vertical-advanced-wireless-optical-mouse-with-ergonomic-design-graphite/6282602.p?skuId=6282602&ref=212&loc=1&extStoreId=319&ref=212&loc=1&&&gclid=EAIaIQobChMItMP27PT8_QIVfMiUCR0_dwVqEAQYASABEgIWJ_D_BwE&gclsrc=aw.ds) Rose Wiegley's Lead From Where You Are (https://www.youtube.com/watch?v=1GorXHiB7nw) Transcript: JOËL: Hello and welcome to another episode of The Bike Shed, a weekly podcast from your friends at thoughtbot about developing great software. I'm Joël Quenneville. STEPHANIE: And I'm Stephanie Minn. And together, we're here to share a bit of what we've learned along the way. JOËL: So, Stephanie, what's old in your world? STEPHANIE: I'm glad you asked that question because I don't think we get a chance to talk about things that are exactly the same as they've always been. And so today, I'd like to share my ergonomic desk setup, [laughs] which has been old for about a year or so. And back then, I was having some issues with some back pain and some wrist pain, and I made a few upgrades and since then have not had any issues. And I feel like it's one of those things that I just forgot about because when it stops being a problem, you don't really notice it. And today, I am able to reflect on my old problem of bodily pain while working. And I'm happy to say that things have been much better for a while now. JOËL: Oh, that's amazing. What's one thing you think had the most impact in your setup? STEPHANIE: Oh, I picked up one of those vertical mice for my wrist. I was having some wrist pain, like I mentioned. And I actually solicited some input from other thoughtboters for the best mouse to replace the Apple Magic Mouse that I was using, which I really wanted it to work for me because I liked the way it looked, but nevertheless, that was causing me issues. So I ended up with the Logitech MX vertical, and that has really solved my wrist pain. It is very not cute. [laughs] It kind of looks like a weird big, gray snail. But you know what? You got to do what you got to do. JOËL: That sounds like an art project waiting to happen. STEPHANIE: Yeah. I would love to see; I don't know, a way to make these vertical mice look a little more cute. Maybe I will stick some googly eyes or something on it and then just be like, this is my pet snail [laughs] that works with me every day. JOËL: Do you have a name? STEPHANIE: Not yet. Maybe I'll save it for what's new next week. [laughter] JOËL: Homework assignment. Years ago, I was also having some wrist pain. And I think one of the most impactful things I did was remapping some keys on my keyboard. So I'm a pretty heavy Vim user. And I think just reaching with that pinky for the Escape key all the time was putting a lot of strain on my wrist. So I remapped Caps Lock to control. That's what I did. Yes, because it was reaching down with the pinky for the Control key and remapped escape to hitting J twice. So now I can do those two very common things, Control for some kind of common chord and then Escape because you're always dropping in and out of modes, all from the Home row. And now, both my hands feel great, and I can be happy writing Vim. STEPHANIE: That's really nice. I think when I had asked in Slack about mouse recommendations, someone had trolled me a little bit and said that if I just use my keyboard for everything, then I won't need to use [laughs] a mouse at all. [laughs] So there's also that option too for listeners out there. JOËL: It's true. You go to tmux and Vim, and on a Mac, maybe something like Alfred and a few OS shortcuts, and you can get 90% of the way to keyboard only. STEPHANIE: What about you, Joël? What's old in your world? JOËL: So you know what, something that's really old? Pyramids. STEPHANIE: Wow. [laughter] I should have known that this is where we were headed. JOËL: Long-term listeners of the show will know I'm a huge history nerd. And we think of the pyramids as being old, but they are ridiculously old. A fun fact that I have not learned recently because this is something that is old in my world, but that I learned a while back is that if we look back to Cleopatra, the last Pharaoh, she is closer to us in time than she was to the building of the Great Pyramid. STEPHANIE: No. What? Wow. Okay, yeah, that definitely just messed with my brain a little bit. And now, I have to rethink my understanding of time. JOËL: I think the way the timeline sort of works in my mind is it tends to get compressed the further back you go. So it's like, yeah, I think of modern-ish times, like, yeah, there's like a lot of stuff, and I'm thinking in terms of decades until maybe like the 1900s. And now I start to think in terms of centuries. And they're kind of more or less equivalent, you know, the Victorian Age. It fills about the same amount of space in my mind as like the '60s. And then you get to the point where it's just like millennia. STEPHANIE: Mm-hmm. When you think of Ancient Egypt, do you think Cleopatra and also pyramids, so you kind of conflate? At least I do. I conflate the two a little bit. But yeah, I guess a lot of time passed in between that. [laughs] JOËL: The pyramids are also really cool because they were one of The Seven Wonders of the ancient world, which is sort of, I want to say, like a tourist circuit created by the ancient Greeks, sort of like monuments that they thought were particularly impressive. But they're also the only ones that are still standing; all of the others have been lost to time. STEPHANIE: Wow, it's the real wonder then [laughs] for being able to stand the test of time. JOËL: It's also the oldest of the seven and has managed to survive until today, so very impressive. STEPHANIE: I love that. Just now, when you were talking about thinking about time periods kind of compressed, I definitely fall victim to thinking that the '70s or whatever was just 30 years ago, even though we are solidly in the 2020s and, in reality, it's obviously like 50. But yeah, I think that always freaks me out a little bit. JOËL: Yes, it's no longer the year 2000. STEPHANIE: Turns out. [laughs] So, in case our listeners didn't know. [laughs] JOËL: I think when we were close-ish to the turn of the millennium, it just made mental math so easy because you're at that nice zero point. And then you get to the early 2010s, and it's close enough within a rounding error. And now we just can't pretend about that anymore. STEPHANIE: No, we really can't. JOËL: We need a new anchor point to do that mental math. STEPHANIE: I love that we're talking about what's old in our world because I love a chance to just repeat something that I've said before that I still think is really cool, but I feel like that doesn't get invited as frequently. It's just like, oh, how are you doing? What's new? So yeah, highly recommend asking people what's old in their world? JOËL: Yeah. And beyond that, not just like, what are some new things you're trying? But kind of like what you were talking about earlier, what's something that's stayed stable in your life, something that you've been doing for a while that works for you? STEPHANIE: Yeah, I love it. So another thing that's old is our episode from a couple of weeks ago about success and fulfillment. And you and I realized off-mic that one area we didn't really talk about so much is impact, and that being something that is very fulfilling for both of us. And that kind of got me thinking about impact and leadership. And I especially am interested in this topic as individual contributors because I think that leadership is typically associated with management. But I really believe that as ICs, at any level, really, you can be displaying attributes of leadership and showing up in that way on teams. JOËL: Definitely. I think you can have an impact at every level of the career ladder, not just an impact on a project but an impact on other people. I remember the first internship I did. I was maybe two weeks in, and I had a brand new intern join. It's day two, and I'm already pairing with him and being like, "Hey, I barely know anything about Rails. But if you want help with understanding instance variables, that's the one thing I know, and I can help you." STEPHANIE: Yeah, that's awesome. I mean, everyone knows something that another person doesn't. And just having that mindset of injecting leadership into things that you do at work, no matter how big or how small, I think is really important. JOËL: I think there's maybe a lie that we tell ourselves, which is that we need to wait to be an expert before we can help other people. STEPHANIE: Yeah, I've certainly fallen into that trap a little bit where I think it's held me back from sharing something because I assumed that the other person would know already or the thing I'm thinking is something I learned but not necessarily something that someone else would find interesting or new. JOËL: Right. Or even somebody's looking for help, and you feel like maybe you're not qualified to help on that problem, even though you probably are. STEPHANIE: One thing that I was really curious about is, can you remember a time when an IC on your team demonstrated leadership, and you were really impressed by it? Like, you thought, like, wow, that was really great leadership on their part, and I'm really glad that they did that. JOËL: Yeah. So I think one way that I really appreciate seeing leadership demonstrated is in client communication. Typically, the teams we have at thoughtbot are structured on a particular project where there's like a team lead who is in charge of the project. It's usually a couple of consultants working together as peers. Depending on the situation, one or the other might take leadership where it's necessary. But I've really appreciated situations where a colleague will just really knock it out of the park with some communication with the client or when they are maybe helping talk through a difficult situation. Or maybe even we realize that there's a risk coming down the pipeline for the project and raising it early and making sure that we de-risk that properly. Those are all things that I really appreciate seeing. STEPHANIE: Yeah. I think the way folks engage in channels of communication can have a really big impact. A few things that come to mind for me that I think is really great leadership is when more experienced or senior folks ask questions in public spaces because that kind of cultivates a space where asking questions is okay, and even people who have whatever title or whatever years of experience they still have questions and can signal to other folks in the team that this is okay to do. And the same thing goes for sharing mistakes as well. Also, just signaling that, like, yeah, we mess up, and that's totally normal and okay. And the consequences aren't so scary that people feel a lot of pressure not to make mistakes or share when they happen. JOËL: Yeah. The concept you're describing is very similar to the idea of vulnerability. STEPHANIE: Yeah, that sounds right. JOËL: So kind of modeling that from more senior people helps create a safer environment for the more junior people. STEPHANIE: I think another thing that I really love that others do for me, and something that I want to get better at doing for others, is speaking up when something is a little off because, again, with power dynamics, for people who are newer or less experienced, they might be noticing things, but they don't feel encouraged to speak up about it in a public space or even with their manager. But they might confide in another IC who is maybe a little more senior. And one thing that I really liked that happened on my client project recently is a senior engineer said in Slack, "Hey, I noticed some sentiment from our daily sync meeting that we're cutting it close to our deadline." And he asked like, "Should we shift some priorities around? Or what is more important to make sure that we focus on in the next few weeks before the end of the quarter?" And I was just really glad he said that because I certainly had been feeling it. But I don't know if I necessarily kept a pulse that other people were also feeling it. And so having someone keeping an eye on those things and being receptive to hearing that from folks and then being like, okay, I want to make sure that I bring it up to the manager because it's important. I thought that was really cool. JOËL: Yeah. Now we're almost dialing into sort of emotional awareness of what other people on the team might be feeling and also the ability to think in terms of risks and being proactive about managing those. STEPHANIE: I like your use of the word risks because that definitely feels like something that, in general, people are scared to bring up. But ultimately, it is the signal of someone who is experienced enough to know that it's important to make transparent and then adjust accordingly. Even beyond noticing what folks are feeling, there are also more concrete things that can be noticed as well, like if team members are complaining about CI build time being really long and that being a repeating issue in getting their work done. Or any other development or tooling thing that is causing people issues, having someone notice how frequently that happens and then being like, hey, this is a problem. And here's what I think we should do about it. JOËL: So not only the awareness but also the initiative to try to enact change. STEPHANIE: Yeah, absolutely. MID-ROLL AD: Debugging errors can be a developer's worst nightmare...but it doesn't have to be. Airbrake is an award-winning error monitoring, performance, and deployment tracking tool created by developers for developers that can actually help cut your debugging time in half. So why do developers love Airbrake? 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So I think you were playing around with the idea of giving people three days to merge, or else they'd have to rebase. JOËL: I thought it was being really comprehensive here with three days because, you know what? You solicited feedback, you got review, but maybe it's the end of the day, or maybe someone's in different time zones. So we definitely want to cover at least a 24-hour period. So three days gives you an extra day. It should be safe. Is there any common situation where you might want a PR to be open for more than three days, but you wouldn't have rebased the latest master changes? STEPHANIE: Yeah. I can see how you thought about it from a few different angles too. Like, you're thinking about time zones and folks working in other regions. And I ended up responding to you, and I was like, oh, what about the weekend? [laughs] JOËL: Oops. STEPHANIE: Because three days seems a little short if two of those days are eaten up by Saturday and Sunday. But what I liked was that you said, "Hey, I'm thinking about doing this. What do other people think?" Because you didn't claim to know what works best for everyone. And I think that's a really important skill to be honest, soliciting others for feedback, and knowing who to ask for and who to make sure you are not negatively affecting their work by making a change or making a decision. JOËL: And in this case, it helped me realize that I had skipped over the most obvious edge case while thinking I'd covered all the really niche ones STEPHANIE: We got there in the end, [laughs] and I think made the most informed decision. JOËL: I guess that's just good product design in general. Talk to your users, get early feedback, put a prototype out where necessary. You don't always want your users to dictate what you will do, but it's good to get their feedback. And similarly, I think that applies when working with dev-facing things; you want feedback from developers. If I asked everybody at the company, I would have gotten a lot of different answers. And I might not have gotten one that satisfied everybody. But having some of that feedback helps me make a more informed decision. STEPHANIE: Yeah, and to take it to the next step, I think there's also accountability for those decisions that you have to have. So if the decision that you made ends up being like a huge pain for some unforeseen reasons, I imagine you'd be on top of that as well and would want to figure out how to adjust if the experiment doesn't work as well as you would have liked. JOËL: Right. I think we often talk about failing early. In fact, we have a recent episode about dealing with failure. And we mostly talked about it from a technical perspective, catching errors or making code more resilient to failure. But there is also a human component of it, which is if you catch errors or design problems, and I'm using design here as a product design, not in visual design, at a prototype phase or maybe a user interview phase, you've saved yourself a lot of maybe unnecessary work that you would have had if you went out to the product phase and shipped it to your entire customer base. I guess, in a sense, it's worth thinking about other developers, the engineering team as customers sometimes. And a lot of the internal facing parts of your project are effectively a product geared towards them. They are the users. And so, throwing in a little bit of product development and design skills into building internally-facing software can have a huge impact. So beyond just thinking of developers as a sort of internal customer base, occasionally, we work on projects where you are building internal tooling for other teams; maybe it's business development, maybe it's the marketing team, maybe it's some form of customer support. And that can often have a really large level of impact. Have you ever been on a project like that? STEPHANIE: I have. One of my first jobs was for an e-commerce company. And I built tools for the customer support team for dealing with customers and getting their orders correct and fixed and whatnot. So I did work on an admin dashboard to make their jobs easier as well as the company also had its own internal software for dealing with warehouse logistics. And so, I also built a little bit of tooling for our logistics and fulfillment team. And I really liked that work a lot because I could just go over and talk to the folks internally and be like, "Hey, what did you mean by this?" Or like, "What do you want here, and what would make your life easier?" And I felt a much more tangible impact than I did sometimes working on customer-facing features because I would deliver, and that goes out in the world. And I don't get to see how it's being used, and the feedback loop is much longer. So I really liked working on the internal tooling. JOËL: In my experience, those teams are often really underserved when it comes to software. And so it's possible to make a huge impact on their quality of life with relatively little work. Sometimes you can just take an afternoon and eliminate a thing that's causing them to pull out their hair. STEPHANIE: Yeah, absolutely. And you get the satisfaction of knowing that you built something exactly as they wanted it. Whereas sometimes, with user or customer-facing features, we are guessing or experimenting a little bit. And yeah, I think having someone who then is very grateful for, I don't know, the button that you added that makes them have to click less buttons [laughs] when they do their work in an internal dashboard can feel really good. JOËL: Having that direct access can be really nice where you get to just go over and talk to them or shadow them for a day, see how their work happens, get to hear their frustrations real-time. It's often a smaller group as well than you would have for our customers, which might be thousands of people, and so you sample a few for user testing. But for an internal team, you can get them all in a Zoom call. I don't necessarily recommend doing a giant Zoom call for this kind of thing, but it's a small enough group that you could. STEPHANIE: I'd like to flip that around to you. Have you ever been on the receiving end of an improvement or someone else making your life a little easier, and if you could share what that was and how it made you feel? JOËL: I think pretty early on in my career, one of my first projects for thoughtbot, we were building a small kind of greenfield app for a startup. And another member on the team took a couple of hours one afternoon to just write a few small abstractions for the test suite that; just made it so much nicer to write tests. And we're pretty scrappy. We've got a tight deadline, and we're trying to iterate very quickly. But that quality of life difference was significant to the point I still remember this ten years later. I think we were rotating this developer off, and this was kind of a farewell present, so... STEPHANIE: That's really sweet. JOËL: You know what? I love that idea of saying when you rotate off a project, do a little something extra for the people you're leaving behind. STEPHANIE: Yeah, I love that too. It's your kind of like last chance to make a small impact in that world. JOËL: Especially because on your last couple days, you're probably not expected to pick up a ticket and get it halfway done. So as you're kind of ramping down, you might have a little bit of time to do some sort of refactoring task or something that needs to get done but hasn't been prioritized that will have a positive impact on the team. STEPHANIE: Yeah, or even writing a script to automate something that you have kind of developed the muscle memory for, like, oh, I run these three commands in succession. And if you could just wrap it up in a little script and hand it off to someone else, it is a very sweet parting gift as well. JOËL: Absolutely. So I'm curious, we opened the topic talking about impact, and you immediately connected that to leadership, and I want to explore that idea a little bit. Do you think impact has to be connected to leadership? Or are there ways to have impact, maybe outside of a leadership role? STEPHANIE: I think they kind of go hand in hand, don't you? Because if you are wanting to make an impact, then in some ways, you are demonstrating that you care about other people. And at least for me, that is kind of my definition of leadership is enabling other folks to do better work. And you and I talk about attending and speaking at conferences pretty frequently on the podcast. And that is a very clear way that you are making an impact on the community. But I also think that it is also a demonstration of leadership that you care enough about something that you want to share it with others and leave them with something that you've learned or something that you would like to see be done differently. JOËL: And just to be clear here, the way you're talking about leadership is not a title; it's an action that you do. You're demonstrating leadership, even if you don't have any form of leadership title. STEPHANIE: Yeah, absolutely. I think that because software development is a collaborative job, in some ways, in most things we do, there is some form of leadership component, even if you're not managing people or you don't have a particular title. JOËL: Like you said, it's about the things that you're doing to enable other people or to act as a sort of force multiplier on your team rather than how many people report to you in the org chart. STEPHANIE: Yeah, absolutely. JOËL: So if everybody aspires to enable each other and to be impactful, is it possible to have a team where every person on the team is a leader? STEPHANIE: Whoa, [laughs] asking the big questions, Joël. I mean, logically, the answer seems to be no based on our traditional understandings of leadership and being a leader or follower. But I also kind of disagree because, as developers, we have to make choices all of the time, and that can be at the level of the code that we write, the commit messages we write, what we communicate in our daily sync. And those are all opportunities, I think, to inject those skills that we're talking about. And so, yeah, everyone on the team is making decisions about their work. And inherently, to me, at least, the way you make those decisions and the impact of those decisions imply some form of leadership. What about you? What do you think about this? JOËL: It's tough because you can get into bikeshedding the definition. STEPHANIE: [laughs] JOËL: Which, hey, it's all about that, right? You know, is leadership about authority or decision-making capacity? Is it about impact? Is it about maybe even responsibility if things go wrong? Who's responsible for the consequences? It could be about position in the org tree and relative depth on that tree, to use some data structure terminology. But I liked your emphasis on the idea of impact and enabling others. So now it's a thing that you do. And so any member at any moment can be demonstrating leadership or acting in some leadership capacity, and they're contributing to the team in that way. And in the next moment, somebody else stands up and does the same thing. And it doesn't necessarily have to be in conflict. You can actually be in a beautiful harmony. STEPHANIE: Yeah, I really like the way you said that. I love a good beautiful harmony. [laughs] I think part of what has shaped my view on this is a keynote talk from RubyConf Mini back in November by Rose Wiegley. And her talk was called "Lead From Where You Are." And I think perhaps I've kind of internalized that a little bit to be like, oh yeah, everything we do, we can make a decision that can have a positive impact on others. So that has helped me at least feel like I have a lot more agency in what I do as a developer, even if I don't have the concrete responsibility of being a mentor to a particular person or having a direct report. It injects meaning into my work, and that goes back to the fulfillment piece that we were talking in, knowing that, like, okay, like, here's how I can make an impact. And that's all just wrapped up together. JOËL: So you kind of defined earlier the idea of leadership as work that has impact on others or that enables the work of others. And I think that there are some forms of that work which are kind of highly respected and will get you noticed and will be kind of called out as like, oh, you're performing leadership here. You stood up in that meeting, and you said the hard thing that needed to be said. And there are other forms of supporting or enabling the team that almost get viewed as the opposite of leadership that don't get recognized and are almost like you're seen as less of a leader if you're spending a lot of your time doing that. That can be sometimes more administrative work. How does that sort of fit into this model where we're talking about leadership as something that has an impact on others? STEPHANIE: Yeah, I'm glad you mentioned that because I have a lot of gripes [laughs] and thoughts, I suppose, about what work is visible and not visible and valued more or less. And I do think some more traditional signals of leadership, like talking the most in a meeting, like, that I don't necessarily think is my definition of leadership; in fact, the opposite. A true leader, in my opinion, is someone who makes space for others and makes sure that all voices are heard. And yeah, I guess it just speaks to like what I was saying about soliciting other people for feedback as well. It's like someone to me who demonstrates leadership is not someone who thinks that they have all the right answers but actively seeks out more information to invalidate what they think is right and find the right solution for the folks on their team. Similarly, in Rose's talk, she also mentions the idea of being a problem finder, so not just being tasked with solving a problem but looking around and being like, okay, like, what aren't we talking about and that we should be? And obviously, also contributing to making that better and not just being like, "Here's a bunch of problems, [laughs] and you have to deal with it," but that proactive work. Ideally, we are addressing those things before they become a huge problem. And I really liked that aspect of what leadership looks like as well. JOËL: Yeah, I think something that I've noticed that I do more as I've built more experience over time is that when I started off earlier in my career, it was a lot of here's a problem that needs to be solved, go and solve it. And then over time, it's what are the problems that need to be solved? You have to sort of figure out those problems before you go and solve them. And then sometimes it's even one level above that; what questions should we be asking so that we can find the problem so that we can solve them? And that will happen...it could be internally, so some of the things that I'm doing currently around improving the experience of a test suite is like, okay, we know sort of that it's slow in certain ways. How can we make that faster? We know that the experience is not great. But what are the actual problems that are happening here, the root causes? Or we're getting some complaints, but we don't really know what the underlying problem is. Let's go and search that out. STEPHANIE: Yeah, that brings to mind an issue that I think I see a lot on client projects where perhaps stakeholders or an engineering manager is seeing that we are slow to merge our PRs, and they kind of start reaching for solutions like, okay, well, people should spend more time doing code reviews or whatever, thinking that that's what the issue is. But in reality, maybe it's, I don't know, it can even be something as lower level as having to re-request reviews every single time you push a new commit because the GitHub settings are such that it requires additional approvals for every new change. And that is something that they would not know about unless someone spoke up and said, "Actually, this is what's causing us friction," and having to go back and do these manual tasks that maybe we should explore a different alternative to solve. JOËL: Yeah, instead of just jumping in with a solution of we need to throw more dev hours at this problem, it can be useful to step back and ask, okay, well, why do we have this problem in the first place? Is it a process issue that we have? Is there some sort of social element that we need to address and organizational problems? And if it's not that, then what are the questions that we're missing? What questions should we be asking here to understand this problem? STEPHANIE: Right. And even speaking up about it too and going against someone's assumption and saying, "Here's what I've been seeing, and this is what I think about it," that takes a lot of courage. And I do think it is something that is especially important for folks who are more experienced and have more responsibility or a higher-level title, but ideally is something that anyone could do. I would love to know for you, Joël, what is the most important way that you want to make an impact as a developer? JOËL: I think the human element is the most important. I want to have an impact on my colleagues, on the dev teams with my clients. I want to ship good work. But I think the most valuable thing to invest in is other people. STEPHANIE: Yeah, I agree. I think for me; it's like making a good work experience for the people that I work with. And it's also a little bit selfish because then that means I am having a good work experience, and I'm in a good culture and environment. But that is definitely an area that I spend a lot of time thinking about and wanting to start conversations about. JOËL: It's a win-win, right? You make it better for everybody else and better for you in the process. STEPHANIE: Exactly. JOËL: And it's okay for it to be somewhat selfishly motivated. Like, it doesn't have to always be every day super altruistic like; I just want to make the world a better place. STEPHANIE: [laughs] JOËL: Like, you know what? I want my corner of the world to be better, and in doing so, I'm going to make it better for everyone else. STEPHANIE: What's that phrase? The tide rising all the ships. [laughs] That is extremely not correct, but I think you know what I'm trying to say. JOËL: I think a rising tide lifts all boats. STEPHANIE: Yeah, something like that. I love a good rising tide. [laughs] On that note, shall we wrap up? JOËL: Let's wrap up. Or let's rise up. STEPHANIE: [laughs] STEPHANIE: Show notes for this episode can be found at bikeshed.fm. JOËL: This show has been produced and edited by Mandy Moore. STEPHANIE: If you enjoyed listening, one really easy way to support the show is to leave us a quick rating or even a review in iTunes. It really helps other folks find the show. JOËL: If you have any feedback for this or any of our other episodes, you can reach us @_bikeshed, or you can reach me @joelquen on Twitter. STEPHANIE: Or reach both of us at hosts@bikeshed.fm via email. JOËL: Thanks so much for listening to The Bike Shed, and we'll see you next week. ALL: Byeeeeeee!!!!! ANNOUNCER: This podcast is brought to you by thoughtbot, your expert strategy, design, development, and product management partner. We bring digital products from idea to success and teach you how because we care. Learn more at thoughtbot.com.
Joël is a mentor for RailsConf and got matched with a speaker. Stephanie has been having trouble stepping away from her work. It's frustrating when chasing down a bug because something's gone wrong, and you spend a whole afternoon figuring out where it is. Joël and Stephanie discuss error handling as a possible solution. This episode is brought to you by Airbrake (https://airbrake.io/?utm_campaign=Q3_2022%3A%20Bike%20Shed%20Podcast%20Ad&utm_source=Bike%20Shed&utm_medium=website). Visit Frictionless error monitoring and performance insight for your app stack. Mis en Place Writing (https://www.swyx.io/writing-mise-en-place) Errors accumulate at boundaries (https://thoughtbot.com/blog/testing-your-edge-cases) Retryable errors (https://thoughtbot.com/blog/handling-errors-when-working-with-external-apis) Transcript: STEPHANIE: Hello and welcome to another episode of The Bike Shed, a weekly podcast from your friends at thoughtbot about developing great software. I'm Stephanie Minn. JOËL: And I'm Joël Quenneville. And together, we're here to share a bit of what we've learned along the way. STEPHANIE: So, Joël, what's new in your world? JOËL: So recently, RailsConf has closed out their CFP, and they've started sending out acceptances and rejections for proposals. And one thing that they do that I think is really nice is that they offer first-time speakers the ability to get matched with a speaker-mentor, somebody else who has given talks before that can help them prep their talk, listen to them rehearse, that kind of thing. And so they had put out a call for mentors last week. I responded to that, and I got matched with a speaker today. STEPHANIE: Cool. Is this your first time being a speaker-mentor? JOËL: First time for RailsConf. I've done it for another conference before. STEPHANIE: That's really exciting. What do you like about playing that role? JOËL: So I very much like prepping and giving talks myself. And I really value if there's something that I'm excited about sharing it, helping others build up that skill as well. So I think it's a great opportunity. I also remember what it was like when I was a first-time speaker and just how very nervous I was and not sure. So I think having someone who can play that role is an opportunity to have a really powerful impact in what's oftentimes, I want to say, a monumental moment. But it's kind of like a milestone marker moment in someone's career, the first time I gave a talk at a conference. So you get to help them to make that moment the best it can be. STEPHANIE: I love that, yeah. You make a really great point that after you've been speaking for a while, you maybe might forget what it felt like to give your first talk and how big of a deal it is. And in general, I think one thing I really love about Ruby Central conferences is how supportive they are of first-time speakers. So even in the CFP, they mentioned that they welcome first-time speakers and want to make sure to accept talks from those folks and then provide them support through this mentor program. And yeah, it just makes me feel really happy. JOËL: Do you remember your first talk? STEPHANIE: I do. So my very first talk I gave virtually at RubyConf in 2021. And then last year was actually my first in-person talk. And I remember even though it was technically my second talk; it was really my first talk in front of an audience. And I saw speakers in the Slack workspace asking questions about the AV setup, and I didn't even think to consider that in my preparation. So it was nice. Even though I didn't get set up with a mentor, to share a space with other experienced speakers and see what kinds of things they were asking about or what kinds of things they were sharing in that Slack space was helpful for me. JOËL: So when you do a proposal, do you typically have an outline already built out, or is it mostly a concept that you're pitching, and then you maybe start with an outline? Or where do you go next after a proposal has been accepted? STEPHANIE: That's a great question. I think first, I procrastinate for several months, [laughs], but I do try to write an outline in the proposal when I submit it so I do have a starting point. And I think that actually helps the CFP committee, too, when they are evaluating proposals to kind of get a better idea of what the talk will be about. And so, in my ideal world, I already have some structure, so by the time I've procrastinated to the point where it's a month or so before the conference itself, [laughs] I have an outline. And I end up writing words, like, I will just write my talk as if it were an essay with this bullet point outline already. And I find that helpful for me because I definitely have a bit of a stream-of-consciousness productivity energy. And so if I just put it all out there, I will then go back and be very ruthless, I suppose, in my editing, and I think that's where the magic happens. So I kind of let myself just word vomit all over the page. And then the real work comes in the editing process and organizing and making sure it sounds the way I would want it to sound when I'm speaking. And yeah, that's how it has worked for me so far. JOËL: So you have a sort of a separate phase for sort of just stream of consciousness dumping and then separately editing. And having those two separate is an important part of your process. STEPHANIE: Yeah, I think so. I don't do as well trying to imagine the structure and everything perfectly the first time around and then filling things in. I find that just putting everything out there and, you know, a lot of things get cut. But that works well for me. What about you? What is your typical conference talk writing process? JOËL: I think mine is a little bit more iterative. I tend to put in some pieces that I like and then try to connect them together, try to make sure it's telling a story. I think a lot about the pedagogical side of things, where people are going to be confused, where they're going to have questions, where they might check out. And then very early, start doing kind of draft rehearsals where I'm starting to work on the talk. And I will stop halfway through because, in my mind, I'm trying to seat myself in the audience and be a person who's listening. And there might be a moment where I'm like, wait a minute, you just jump from one thing to another, and I don't get the logical connection here. And I might pause right there in the rehearsal and add in, say, okay, we need a transitional point, or we need to explain a concept between these two. And I keep doing that until I can get through the whole thing and then realize it's way too long and start cutting. And I cut aggressively, and now it's too short. And now I go through it again. And again, people have questions in the audience, hypothetical audience; I am the audience. And so I really kind of inflate it and then cut it down and re-inflate it and cut it down a bunch of times until I'm happy. STEPHANIE: I like that a lot. That sounds right. That sounds very you to work even on a conference talk iteratively. JOËL: It's very time-consuming. So I don't know it's the most efficient way to build a talk, but it's a process that works for me. STEPHANIE: Yeah, that's true. And then there's value in the journey, even if the talk ends up changing from the very beginning to the end product. JOËL: So the approach that you described for yourself, I think, where you have a rough draft, and you're separating the editing from almost like a creative process, reminds me a lot of an article that I read called "Mise en Place Writing" by...I'm not sure what their full name is. They go by the handle Swyx. This is an article about their process for writing, but I think it applies to conference talks as well. Have you seen this article? STEPHANIE: I haven't. But that, I think, is similar to how I've thought about it or I've seen or heard other authors talk about their writing process and it being kind of similar where the creative work...they give themselves a lot of grace and just letting it be. And then the, like I mentioned, real work is in the editing process. It's kind of two different mindsets, I think. JOËL: We'll link the article in the show notes. STEPHANIE: I'm curious then how you incorporate visuals into your process because I think that's where my workflow is a little less successful because I'm not really thinking about visuals along with the words, and they do feel more like an afterthought. And I've always been really impressed when people who give talks can have a really visual and dynamic slide presentation. How does that work for you? JOËL: So I think I try to avoid slides that are three bullet points in the slide, and then I'm going to talk about it for three or four minutes for each bullet point. People read those quickly and then check out. I'll oftentimes try to have, like, turn each of those bullet points into a full-on slide. And maybe it's just a title and a fun picture or something like that. What this ends up doing is I kind of really inflate my slide deck. I'm going through maybe 80 or 100 slides in a 30-minute presentation. So it's multiple slides a minute. They move by really quickly. So I usually have either just an image or a header. I will usually start by just sketching it out with headers and then, where it makes sense, using an image. An image can be just for fun, or it can be something like a diagram where it is trying to illustrate a point. STEPHANIE: Yeah, I like that. I think talks with a lot of slides that are mostly just images or something that you can grasp in a few seconds are really engaging because you're keeping it moving, and you don't really let people get bored. And so you show a new slide, and they look at it, but then they are able to direct their attention back to what you're saying. JOËL: It's fun too with images because you can reuse them, and then they become a way to connect people back to a theme or let them know that you're making the same point again. A lot of talks, I will have a central theme that gets repeated. I'll often have a slide with some fun image with my key point on it. And then that slide will show up three or four times in my presentation oftentimes because each of the main points I'm trying to make kind of culminates at that same takeaway. And so for example, in the talk I gave at RubyConf Mini last fall, I had a slide about writing Ruby code being delightful. I think having some children being happy with just a big title being like, "Oh, delightful," or something like that. And after each of my examples where we went from code that was less good to something that was more idiomatic, Ruby that was really fun to work with, I would finish on that slide and be like, hey, our code is now delightful. And hopefully, that helped people with the takeaway of, like, we want to write delightful code. Ruby has tools to do that. And then, hopefully, they either remember the things they can do to get to that point or can look it up and find a talk online. STEPHANIE: Yeah, I watched that talk, and I really vividly remember that slide and the theme that you were trying to hone in on. So I thought it was pretty effective. I think this makes me realize speaking, I mean; speaking is obviously a skill but even the process of creating a talk in that particular medium is also a vast skill and can go...there are so many different styles and flavors. But I really think that what you said will get me thinking next time I'm writing my talk and how I can better incorporate that kind of engagement with the audience and making sure that the way I deliver the talk is just as thoughtful as the content itself. JOËL: Yeah, I've been putting a lot of thought into what makes a good talk and what elements are unique to my process, what elements can be useful to others because now I have to coach someone else on their process and say, "Hey, here's the thing that worked for me. Maybe this will be helpful for you." Or maybe it's just, "Have you tried this?" Or "I think audiences will be asking this question at this moment, what do you think of this?" So that's definitely been top of mind in a whole other dimension for me recently. How about you? What's new in your world? STEPHANIE: So before we started recording, I was heads down deep in the muck of trying to write some tests, some RSpec tests on my client project. And the domain for this client project is really big. There are a lot of models. And I was starting to go deep into the factory setups for our test fixtures. And it was hairy. And I was just going further and further down the rabbit hole to the point where I was skipping lunch. JOËL: Ooooh. STEPHANIE: Yeah, I was like, I couldn't pull myself away from it, and I kind of regret it a little bit. [laughs] And so I was just thinking about, like, how can I incorporate taking breaks a little bit more and feeling better about stepping away from the work when I'm really deep in it? You and I had this standing appointment to record [laughs] a podcast, so that was kind of the signal to me that it was time to try to set it aside. And I did end up taking the dog for a walk around the block beforehand to get some fresh air, but yeah, it was a little rough, I don't know. How do you deal with just being so deep in the code that you don't really want to resurface? JOËL: That's hard because sometimes I'm feeling productive, and I don't want to stop because I feel like I might not get back into the flow quite as easily. Sometimes it's just out of frustration. It's like, oh, I'm just so close to getting this bug done. If I get this one more test to pass, then I'll be good. And I keep doing one more thing. And the next thing I know, I have skipped lunch, and it's late in the afternoon. And it's just like; it's been a frustrating day. STEPHANIE: And you're cranky, yeah, yep. I know that feeling. JOËL: I've stopped being productive for the past hour. But I'll be like, one more thing, one more thing. STEPHANIE: I think I was in that place because I was starting to get deep into the internals of models completely unrelated to the test that I was writing, but that was just where the rabbit hole led me. And I think after this, I will go and ask in Slack for a pair because I think that would be really helpful right now. I've just reached the limits of what I know. And I'm almost positive that someone knows how to do this more efficiently than I do. So that was a bit of a signal to me, but it was very challenging untangling myself out of that headspace. JOËL: Have you ever played the video game Civilization? STEPHANIE: No, I haven't. JOËL: It's a turn-based historical strategy game. The running joke about it is that people get really pulled into it. And they're always just saying, "I'm going to play one more turn, and then I'm going to be done for the evening." And the next thing you know, it's 4:00 a.m. And I think that sometimes applies to fixing one more failure, just getting one more file in that chain of figuring out what the bug is in code. It's a very similar feeling. STEPHANIE: Yeah, I know exactly what you're talking about. MID-ROLL AD: Debugging errors can be a developer's worst nightmare...but it doesn't have to be. Airbrake is an award-winning error monitoring, performance, and deployment tracking tool created by developers for developers that can actually help cut your debugging time in half. So why do developers love Airbrake? It has all of the information that web developers need to monitor their application - including error management, performance insights, and deploy tracking! Airbrake's debugging tool catches all of your project errors, intelligently groups them, and points you to the issue in the code so you can quickly fix the bug before customers are impacted. 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JOËL: So it can be really frustrating when you're kind of chasing down a bug because something's gone wrong, and now you're spending a whole afternoon figuring out where it is. Do you ever find yourself maybe acting preemptively to try to prevent those sorts of things from happening in the first place? So maybe putting in some sort of guards or error handling or something like that so that your future self won't have to spend that afternoon. STEPHANIE: That's a great point because the bug that I was facing just now was definitely something I think could have been avoided. It was a classic no method [laughs] on nil class error. And I am still unsure how that happened, and I hope to come back to it after this. But yeah, that certainly is a great topic to get into, error handling. I think it's been on my mind a little bit lately because I'm working on a full-stack feature that has user-facing errors and things we want to make sure that we communicate to the user so that they could hopefully do something about it or just contact customer support on this app. But there are also some API calls that are kicked off in the process of the user submitting the form, and those can lead to a bunch of different failures. And we may or may not have already discovered what those failures could be, and there may or may not have been designs created for those different failure states. And I feel like I haven't quite gotten a handle on how to deal with all of the possible errors that can happen when implementing a full-stack feature or a vertical slice. Yeah, that has tripped me up a lot lately. JOËL: I think my time working in Elm has really made me much more aware of the different ways that things can fail just because Elm's type system is very robust. It's very complete. And so it will point out to you every potential place that could have a failure and ask you to handle it because it doesn't want to get to a point where it doesn't know what to do and there's a runtime error for something like no method or something like that. So if you've got a potential nullable value and you're trying to say, okay, take this and render it, the compiler will say, wait a minute, you did not handle the null case. Give me something to do with the null case, or I refuse to compile. And now you've got to handle that. If there's something that might feel like an HTTP request, again, the compiler would be like, well, but what about the failure case? You didn't tell me what to do on the failure case. This is an incomplete piece of code. I refuse to compile that. So I think I've built now a little bit of anticipation because I know the compiler is going to tell me to do this. Now even when I write code that's not compiled like Ruby, my brain compiler is still like, oh, there's a nullable value here. You didn't check the null case. What are you going to do about that? STEPHANIE: Yeah, that's a great point. I think the more experience I gain, the more possible errors I see in the world or out in the wild. When I think about developing on the web, you know, you mentioned HTTP requests, but also, if we fail to connect to the database or a job fails to enqueue, there are just so many places where things can go wrong. And it's almost like the more I learn about all those possible failures, the more anxious I am [laughs] to make sure that I've covered everything though I think there is some amount of just that being impossible. And I'm particularly interested in figuring out what is enough because one thing that really I find quite painful is when you don't think through things enough and you just cross your fingers and hope it works and you ship it, and then your team is dealing with a lot of bugs or a lot of noisy error monitoring notifications afterwards. And so that's kind of what I'm trying to adjust for, I think. JOËL: I think there's like two general classes of approach you can use to deal with that; one is to try to prevent errors altogether, and there's a variety of tools you could use for that. I'm thinking of either something like a type system or maybe test-driven development or even some sort of analysis tool. That could be diagramming, that could be decision tables, something like that. All those, I think, fall under better understanding of the edges of your system. Whereas sometimes you want to do the opposite and sort of really lean into, okay, errors will happen. How do we recover from them? How do we make them easy to diagnose in the future? STEPHANIE: Yeah, that second bit is really interesting to me because I've started to try to think about the errors and who we want to notify about the errors. And so I feel like there are a few different categories of errors where if it's a validation error and it's something that the user can fix, you know, that we want to make sure to surface and tell them how they can fix it. If it's like a programming error, there's no value in showing that to the user. And I'm sure that we've all seen a website that responded with a 500, but then we actually saw the error message itself, and we're like, ooh, this is kind of weird [laughs] to be seeing this. And so realizing, okay, that's not valuable to the user. But what should I be doing with it instead? And maybe that is hooking it up to whatever error monitoring service you use to make sure someone is alerted. Or, I don't know, even in the third case, like, what should a customer support team be notified about? And that kind of sits in between not quite a user-facing error but also not a bug, and that's a different category. JOËL: So, something that is not necessarily a problem in the code, but you might want somebody in the company to know about and be notified about. STEPHANIE: Yeah, exactly. Maybe not something that is so urgent that it needs to be flagged in real-time but goes somewhere, and someone will check on it at some point. [laughs] So you were mentioning that you now have a better sense of what could go wrong. How much time do you spend writing code to cover all of those different possibilities? JOËL: Hmm, I don't know that I've ever put the time to quantify it. I would say a decent amount because you've got to think about...sometimes they're not even things that can go wrong per se. But they're off that very simple, linear happy path that you're thinking of. So you might think even for rendering some kind of view, and you've got some search results you're trying to display. Have you considered an empty state? Is there a difference between initially loading the page or have not performed a search yet, and search but did not find any results? Those are things that are not necessarily errors, but they're not things you're thinking in mind when you're just writing that first happy path of, like, oh, load page, show results. I assume there's always a result set. And so those are things that are important for the user experience that you need to have, but that are kind of edge cases that you have to add in afterwards, or you have to think about. And so I think that, for me, tends to fall under a similar category as okay; what if an error happened? Especially when you're dealing with kind of a full-stack situation where on the front end maybe you're making a result to a back end to pull down...let's say you're making a search and the back end is doing the actual search. You send up a query. Now you get back a failure. Is that the same thing as getting no results back? Like, a success with no results, versus an error code, versus not making a query yet. So you've got like four or five states you've got to think about on the front end to display and how you're going to handle those. So I think thinking about those upfront is often really helpful. STEPHANIE: As you were talking about that, I suppose I asked the question because I have experienced when those things are not thought about upfront, and then you discover them as you're implementing. And how much time do you use to kind of go into a little detouring trying to make sure that you have all of the edge cases covered, and at what point do you stop? Because you're like, I've covered what I can. And this ticket was supposed to only be three points [laughs] or whatever, you know. JOËL: Yeah. And how do you keep a feature from ballooning when there are all these edge cases? STEPHANIE: Yeah, exactly. It's a balance. JOËL: Are there any techniques that you like to do when you...so you pick up a ticket that looks easy, but that might have a lot of these hidden edge cases in it. Are there techniques you like to use that might help you figure out those edge cases and maybe give you some follow-up questions that you might reach out to the product person to clarify? Or maybe it's mostly intuition and experience as a developer that you kind of figure out that, oh, these are the things we need to ask about. It's like, have you thought about an error state? STEPHANIE: Yeah, that's a good question. In general, I'm a little suspicious of any ticket that doesn't include some kind of acceptance criteria about the unhappy path. And I certainly think it's a lot easier once you are embedded into this domain, and you have that expertise, and you are able to see the possible issues you'll run into. I do think that I like to do a little bit of coding just to kind of explore the space, and then that does give me more insight into how I might be able to follow up on the ticket. So you mentioned techniques. Especially if they're written as user stories, I don't think they necessarily incorporate the flow or the procedure of how things are kicked off. And so when you're thinking about implementing it, you're like, oh, this actually needs to happen in the background, or this should be synchronous or not. And those are a lot of error states that I find are missing when I pick up a ticket. And I think it also depends on which way you want to implement it what implementation is viable. And then maybe you bring it to a product person, and they are actually like, "No, we don't want it to work like that." And then you have to kind of rethink things a little bit. But yeah, certainly, the process of taking a user story and then doing an initial think-through of what approach you want to take definitely surfaces some potential unhappy paths. JOËL: It's almost like prototyping it in your mind. STEPHANIE: Yeah, I think so. I think it also depends a little bit on the team because if the engineer wrote the ticket, then there likely has been some thought about unhappy paths. But on other teams that I've been on when implementation is up to the person who picked it up rather than kind of spelled out for you by someone else who did that thinking, that's definitely an opportunity to pause, I think, and document which way you might want to go so that you can make sure that you account for the possible things that could go wrong that likely the user story didn't cover. JOËL: Sometimes there are some edge cases or failure states that are just sort of built into the problem that you're solving. If you're having to make a background request, there's always a chance that that might fail because the network is not trustworthy. Sometimes though, those things just kind of come out of our implementation, the fact that we implemented it in a particular way. And that's not something that you'd expect a product person to have to think about. That's more on us as developers to be like, oh yeah, well, I'm indexing into a hash and didn't think to check is a nested hash even present? Maybe that key isn't there. And now I've got a weird nil error, an undefined method. That's kind of on us rather than on, like, oh, a specific kind of thing that we can think about upfront. STEPHANIE: Yeah, that's fair. And I think that is just an important part of the development process. Though you make a good point because I think that just kind of speaks to all of the different layers of things that can go wrong [laughs] and figuring out which ones are specific to your role as developer to account for, and then which are ones that you need to bring in or pull in a designer to chat about. It can be a little overwhelming. I'm overwhelmed just thinking about it. [laughter] JOËL: Yeah, errors are not a sort of monolithic class of things. They can't be an afterthought. But they're also not just a thing where it's like, oh yeah, do the error handling, and then you're good. We kind of lump a lot of things under the concept of errors, even if they might all eventually manifest as some kind of exception. I guess a true solution is just one giant top-level rescue nil. STEPHANIE: [laughs] Very funny. JOËL: So we've talked about a few different dimensions of errors where they might be sort of user-visible or not, or something that's more implementation-based versus inherent to the problem. One thing that we haven't looked at is the dimension of errors that might be recoverable versus not. Have you ever built a system where you had errors that could be recovered from and didn't crash the program? STEPHANIE: Ooh, yes. That makes me think about retrying and especially what you're saying if things are happening in the background. Maybe there is an ephemeral error where the network timed out or something. But if it is given another shot, it might succeed on the second go. And I think there's a whole process of thinking about what happens when a process has to be retried and if there were any side effects that you didn't want to have committed the first time around, you know, but then something else that was supposed to happen and when the process happens again, things are very broken. So making sure that you are keeping things idempotent so that by undoing it again, there are not any unforeseen issues. JOËL: I heard you say that word commit here, and that's kind of a keyword to my mind. I immediately think database transactions. Is that the sense that you're thinking about this term here? Or does it have another meaning for you in this context? STEPHANIE: Yeah. I do think I used that word specifically because when I've run into this in the past, it has been around making database changes. I'm trying to think if there is another way that this might show up. I think even in something like sending an email, too, though it is a bit lower stakes. I've certainly, as a user, experienced when that goes wrong and just been [laughs] flooded with emails and being like, wow, this is annoying. And that's, I think, something valid to consider as well. JOËL: Yeah. You don't want that email job to be a thing that gets retried and just keeps failing because there's a nil error after the email gets sent. And so we just re-enqueue it, re-enqueue it, re-enqueue it, and the person ends up receiving 500 emails. STEPHANIE: What about you? Any thoughts about recoverable errors? JOËL: Yeah. I think really common for me is thinking about that in the context of a background job because those are things that I think are specifically designed to be retried if they fail; at least, a lot of job enqueuing systems assume that. When we write them, we don't always take that into account, but that's the system that we're working in. So that can be something as simple as marking somewhere that you have sent that email so that you don't resend it if that job ever re-executes. I think that goes to your point about idempotency earlier that you often want to write code that can get executed multiple times but doesn't necessarily do the action multiple times. It will do it at most once. And that's probably an interesting distinction to have is knowing what elements of your code need to execute at most once, versus as many times as the code is called, versus things that might get tried and then rolled back like a database transaction. And so then that will...I guess you could say it's at most once because you're writing it but unwriting it. But that plays out a little bit differently than something like an email where you can't undo sending an email outside of Gmail. STEPHANIE: Yeah, I love that undo button. [laughs] JOËL: You need some other mechanisms for that. STEPHANIE: Yeah. As you were talking about that, I was also thinking about the idea of failing gracefully, which I think also ties into the idea of recoverable. So this is not a development-specific example. But the idea of an escalator no longer working well; at least you can use it as stairs. So that doesn't mean that everything is totally broken and people are unable to get from one floor to another. So maybe if there is a network request that's touching data and that fails, you can at least fall back on something that's cached. That mindset, I think, really is important to think about at all the different levels we are talking about. JOËL: Yeah, or hopefully, even maybe some amount of graceful degradation. On a front-end app, you might not want to just crash the whole thing if one background request failed. So you can try again. You can be told, okay, try again in so much time. Maybe we automatically retry to make that same request with some sort of exponential backoff strategy. Or maybe we say, "Look, search is down for now. Here's a link if you want to go check a status page. Until then, other parts of the site are still working." I feel like we're getting back into what makes great product design and how great product designers have to make failure conditions. It has to be at the forefront of the thinking that comes to designing that product. STEPHANIE: Yeah, that's a good point. I think my initial feelings of being overwhelmed and stressed about dealing with errors may be because a lot of it falls on the developer if those things aren't accounted for. And we spoke a little bit earlier about, okay, what is within our realm or domain of actually being responsible for, and what can we loop in others for help with? JOËL: So we've been talking a lot about different ways of preventing errors, different ways of recovering, generally trying to make the whole experience really smooth. A slightly different philosophy around errors is rather than preventing them early is to fail early, like, fail early and loudly. And maybe you recover, maybe you don't. That depends on the context. But instead of putting so much effort into preventing errors upfront, it's better to just crash a lot or to fail loudly and deal with the consequences, or have a strategy for dealing with failure because failure is inevitable. How do you feel about that philosophy? STEPHANIE: Oh, I think it has a time and a place. One example I'm thinking of is if you don't want your application to be deployed if some configuration is not exactly how it needs to be for the app to run effectively. And so there is a matter of, like, okay, I really want to make sure that the DevOps team or the development team knows that something is very wrong because if this were to be deployed, the app would be unusable. And so that's an example to me of failing loudly but, ideally, not letting it affect end users because they're still using [laughs] the site on a different version. [laughs] JOËL: Right. I guess the classic example of that is for a Rails app, doing a Hash#fetch() on the environment to load up your environment variables instead of using the square bracket syntax so that as the app is booting and executing those initializers, it will crash if it encounters one of those and then fail to deploy if you're doing a deploy via something like Heroku. I've even sometimes when I'm adding environment variables, purposefully had them loaded in an initializer rather than maybe like in a class later on, specifically so that it would crash the app and prevent deployment if that environment variable was not set. STEPHANIE: Yeah, that's what I was thinking too, environment variables. Though I think even with that kind of mindset, you're either just delegating that responsibility to someone else down the line to either figure out how to accommodate or account for in a graceful manner. Or you are creating an environment where everyone is very stressed out [laughs] and having to fight fires. So I think it also requires a little bit of thought and isn't necessarily a strategy to just completely embody. [laughs] JOËL: I've noticed that bugs and errors often accumulate at the boundaries of systems or even subsystems or modules within a program. Maybe the place to apply the strategy of failing early and loudly is particularly valuable at those boundaries. But internally, within a subsystem or a module, maybe it's nicer to use other strategies for error handling. Does that sound like maybe a useful distinction to you? STEPHANIE: Yeah, I think subsystems was the keyword to me there because you don't want it to be such a catastrophe that it affects the usability of the app entirely. But that does still require some systems in place, I think, to respond to when that thing is failing loudly. JOËL: I think an example that came to mind for me is like you were mentioning earlier, a full-stack application. And if you've got the back end that's providing an API and something is wrong, I don't want that API to give me back garbage data and try to pretend that everything's okay. Let that API give me back some kind of error code. And I in the front end, I already know that the network is inherently unreliable. I'm planning to handle errors at that point. So it's fine for the API back end to fail loudly in this case. In fact, I think that's the optimal solution. STEPHANIE: Yeah, I think that's true because ideally, that error clues you into what kind of thing failed, and then maybe you can use that information more meaningfully than trying to guess at what happened with this bad data and then having to define some kind of error message in your app when ideally someone else who had more knowledge about it could have told you what went wrong. JOËL: And I guess the problem with not failing loudly or with an explicit failure is that if you try to just pass on some sort of value that will pretend to be like what you initially asked for, whoever's consuming that doesn't know that something went wrong. So then you use this garbage data, and you do some things and pass it along to the next person. And eventually, it may cause a failure three or four steps down the line. And now, trying to trace that, like, why did this fail? And it's not because something was wrong in Module D, or C, or B. It all comes back to oh, A had a problem but didn't crash or give us an error. It tried to pass its sort of best guess, like, this is probably okay. And then it just kind of moved all the way down the line. STEPHANIE: I'm imagining external API developers everywhere just nodding their heads in agreement. [laughs] JOËL: I've fought this on a local level as well. I was working on some kind of code for a JavaScript date picker plugin, and this was back in the jQuery days. It was some kind of...it was not a date picker. I think it was a typeahead drop-down thing. In some situations, I forget exactly how it would happen, but the input from there might be empty, but then that would get converted into an undefined value, which then JavaScript would convert to the string undefined, which would then get passed to something else that if it saw a string, it thought that was the thing that the user typed, and they would pass it through. And I think maybe in the end, I was looking at a crash ten functions away in the front-end code that had to deal with the input from this typeahead and being like, why am I getting these undefined? Or maybe it was a string NaN or something like that. Like, why am I dealing with these weird strings that should never have come out of this? And it turned out it was just kind of an edge case. It wasn't addressed in this component further on, and then it was kind of leaking strings that everybody else thought was sensible up until three or four jumps further down the stack. STEPHANIE: Yeah, that's a great point. I think it does go back to the idea of there being preventable errors. And then there are things that are truly not preventable because we live in a physical world [laughs] where computers talk to each other over the wire. And that distinction is, you know, perhaps the first being avoidable errors by writing resilient code. And the second being like, okay, in reality, there will be things that go wrong, and this is what we really have to watch out for. On that note, shall we wrap up? JOËL: Let's wrap up. [laughs] STEPHANIE: Show notes for this episode can be found at bikeshed.fm. JOËL: This show has been produced and edited by Mandy Moore. STEPHANIE: If you enjoyed listening, one really easy way to support the show is to leave us a quick rating or even a review in iTunes. It really helps other folks find the show. JOËL: If you have any feedback for this or any of our other episodes, you can reach us @_bikeshed, or you can reach me @joelquen on Twitter. STEPHANIE: Or reach both of us at hosts@bikeshed.fm via email. JOËL: Thanks so much for listening to The Bike Shed, and we'll see you next week. ALL: Byeeeeeeee!!!!!! ANNOUNCER: This podcast is brought to you by thoughtbot, your expert strategy, design, development, and product management partner. We bring digital products from idea to success and teach you how because we care. Learn more at thoughtbot.com.
Stephanie shares that she's been taking an intro to basket weaving class at a local art studio, and it's an interesting connection to computer science. Joël eats honeycomb live on air and shares a video that former Bike Shed host Steph Viccari found from Ian Anderson. It's a parody to the tune of "All I Want For Christmas Is You," but it's all about the Ruby 3.2 release. In this episode, Stephanie and Joël shift away from literature and lean into art. Writing code is technical work, but in many ways, it's also aesthetic work. It's a work of art. How do you feel about expressing yourself creatively through your code? This episode is brought to you by Airbrake (https://airbrake.io/?utm_campaign=Q3_2022%3A%20Bike%20Shed%20Podcast%20Ad&utm_source=Bike%20Shed&utm_medium=website). Visit Frictionless error monitoring and performance insight for your app stack. Weaving, Computing, and the Jacquard Loom (https://www.scienceandindustrymuseum.org.uk/objects-and-stories/jacquard-loom) Ian Anderson's Ruby Christmas song (https://www.instagram.com/reel/CmAxL_ZNMOa/?igshid=YmMyMTA2M2Y%3D) Dan McKinley's Boring Technology Club slides (https://boringtechnology.club/) Simple English Wikipedia (https://simple.wikipedia.org/wiki/Main_Page) Geepaw Hill's Twitter thread about levels of thinking (https://twitter.com/GeePawHill/status/1565389543628480518) Julia Evans's debugging puzzles (https://mysteries.wizardzines.com/) Tomorrow, and Tomorrow, and Tomorrow by Gabrielle Zevin (https://bookshop.org/p/books/tomorrow-and-tomorrow-and-tomorrow-gabrielle-zevin/17502475) Transcript: AD: thoughtbot is thrilled to announce our own incubator launching this year. If you are a non-technical founding team with a business idea that involves a web or mobile app, we encourage you to apply for our eight-week program. We'll help you move forward with confidence in your team, your product vision, and a roadmap for getting you there. Learn more and apply at tbot.io/incubator. JOËL: Hello and welcome to another episode of The Bike Shed, a weekly podcast from your friends at thoughtbot about developing great software. I'm Joël Quenneville. STEPHANIE: And I'm Stephanie Minn. And together, we're here to share a bit of what we've learned along the way. JOËL: So, Stephanie, what's new in your world? STEPHANIE: I'm really excited to share that I've been taking this intro to weaving class at a local art studio. I'm actually a few weeks in, and it's wrapping up soon. But one thing that I found really cool at the very first class was that the instructor mentioned that weaving was, in some ways, a predecessor or inspiration to modern computing. And he said that, and I got really excited because surely that meant that I would be good at this thing [laughs] and this craft, and then I promptly kind of forgot about it. But I was inspired the other night to look up this history to just learn more about weaving and its connection to computer science. And I learned that, in particular, the invention of something called the Jacquard loom really led to early computing machines because, basically, weaving involves threading horizontal and vertical fibers. And the way you do it if you thread the horizontal fiber, also called the weft, over or under the vertical fibers, called the warp, you get different patterns. And so with the Jacquard loom, this invention utilized punch cards as instructions for basically binary code, and that would tell the loom how to raise and lower those vertical threads, which would then lead to a beautiful pattern. And after that invention, this previously very laborious process became automated. And that also had a really big impact on the textile industry. And fabric became a lot more available at a much lower cost. So that was a really cool little history lesson for me. JOËL: That is really cool. So are you saying that punch cards, as we know them from early computing, were borrowed as a concept from the weaving industry? STEPHANIE: Yeah, that's at least what I've read. I can see now how complex weaving tapestries and patterns set the stage for more complex computations. And I don't know if I'm going to keep going down this weaving journey. I liked the intro class because it was very chill, and I got to use my hands. And I had a little bit of fun making, I don't know, like ten by 12-inch little tapestry. But yeah, I've definitely seen other more advanced weavers make really beautiful textiles and fiber arts. And it's really cool to see the application of that detail-oriented skill in different formats. JOËL: Are you going to try to make your own punch cards? STEPHANIE: That's an interesting evolution of this skill [laughs] for sure. I think what I really did like was the hands-on approach. And so the punch cards did make this process automated. But I personally enjoyed the switching of the threads and pulling them through and doing it with my hands instead of something that's kind of turned into automated machine work. Does that inspire you in some way? JOËL: I think sometimes it's interesting, right? As software people, we sort of have the two urges. We work in so much automation. When we see a process, we would love to try to automate it ourselves, even if it's been done before. So, oh, could I build a small, automatic mechanical loom using punch cards? That sounds like a fun automation challenge. At the same time, so much of my daily job is automation that sometimes it's nice to kind of remove automation entirely from the picture and, like you said, just work with your hands. STEPHANIE: That's a really interesting way to think about it. I do believe that people have different reactions to it, like you said, where they're like, "Wow, I can use my skills to do this really cool thing." On the other hand, you might also respond with, "Wow, I've done this automation code-writing work for eight hours. So now I really want to do something completely different." And I think that's the camp that I was in, at least when I first signed up for this class, just having space, like three hours a week, to sit and not look at a computer and deal with the physical realm. JOËL: So here's the other route that I think a lot of software people take, and that is, here's a fun mechanical process that can be automated. What if we simulated it virtually? So what if I create a program where you can sort of create your own punch card, like, decide where you want to punch the holes? And maybe these are just radio buttons or something or checkboxes in a grid on a webpage. And then, the program will output an SVG that is the thing that would have been woven if you'd used it in that pattern. And so now you can kind of play around with, like, huh, what if I punch here? What if I unpunch here? And you get all these patterns out, and you could just get to try it around. STEPHANIE: That's fascinating. I can't believe your brain went there. [laughter] But yeah, the idea that it's not actually about the pattern itself but the holes that you make, that part being the creative process and then what comes out of it then being a bit of a surprise or just something organic that's a really interesting take too. JOËL: Something that I find is really fun about software and things created from software is this sort of really short feedback loop in terms of trial and error. So if you were actually having a weaving machine and you made a physical punch card, and then you try something, and you realize it's not quite right, the machine weaved something you didn't quite like, now you've got to set it up again. You probably have to start from scratch with a new punch card because you can't really unpunch holes unless maybe you can put tape over it or something. That trial-and-error feedback loop is much shorter. Whereas with a program, you just pause the simulation, punch-unpunch some holes, restart, and then you just kind of keep trying. And there's something fun about that creative exploration when you've got that really tight feedback loop. STEPHANIE: That's fair. I think perhaps that actually might be why doing it manually, and by it, I mean weaving, gives you a little bit more room to [laughs] debug if you will, because you can see when something goes wrong. And this actually happened to me in class earlier this week where I didn't thread the fiber over instead of under. And I was like, oh, this doesn't look right. Like, that's not the look I'm going for. And then I could kind of quickly see, oh, I missed a thread over here and unravel and do it again. Whereas what you just described, if the punch card is wrong and then you create this big piece of fabric, at that point, I'm not really sure what happens then. If someone out there is a weaving expert and knows the answer; I would be very curious to know. JOËL: Now I kind of wish we'd had this conversation last month because, in early January, there was a game jam event that happened. It's a yearly or biyearly Historically Accurate Game Jam, and they select a theme, and then everybody has to submit a game, or a simulation, or something, an interactive program that fits with the theme. And this year's theme was the Industrial Revolution. And I feel like simulating an old automated loom with punch cards would be the perfect fit for something that's small enough that I could build it in a week without spending 10 hours a day working on it. It fits within the theme, and it's still kind of fun. STEPHANIE: Wow, that would have been a really great idea. If there was an award for best fitting the theme, I think that would have won because then you're also tackling the history of computing. I was talking about earlier the loom obviously being...or the automated loom also really playing a big role in the Industrial Revolution. And, I don't know, maybe this is our future club, Joël, and we're going to get into video game development. [laughs] What's new in your world, Joël? JOËL: There are two things. One is that today former Bike Shed host, Stephanie Viccari, shared a video with me from Ian Anderson. This was made last December to the tune of All I Want For Christmas Is You. But it's all about the, at that time, upcoming Ruby 3.2 release. It is amazing. The lyrics talk about the different features that are upcoming. It rhymes. It's set to meter. I am just blown away by this. And I'm just really hyped [laughs] about this video. STEPHANIE: You sent it to me and I gave it a watch before we sat down to record, and I also loved this video. It was so fun. And I think Ruby has a bit of a tradition of releasing new versions around Christmas time. So if this became a tradition, that would be very fun, and maybe instead of singing Christmas carols, we'll be singing new Ruby version carols around the holidays. JOËL: I feel like if Ian wants to do another one next Christmas, now that you have the precedent, it'd be a great space to try something to the tune of Last Christmas because now you can reference back last year's song. STEPHANIE: Yeah. I might as well just go all in and create a whole Christmas album of Ruby anticipation carols. [laughter] JOËL: Yeah, really excited about that. Kudos to Ian. And for all of our listeners, we'll link the video on the show notes of the podcast. Go and check it out; it is worth the two and a half-minutes of your life. STEPHANIE: Agreed. JOËL: The other cool thing, for the past few episodes, we've been talking a lot about hexagons and how they show up in nature, and bees, and how they build their honeycombs and whether that is sort of by design or sort of just happens by nature through sort of external forces. And so this week, I went out to the store, and I bought some real honeycomb. And I'm going to try it on air. STEPHANIE: [laughs] Oh my gosh, I didn't realize that's what was happening. [laughter] Okay, I'm ready. JOËL: All right, I'm going to take a slice. STEPHANIE: Wow. For research. JOËL: For science. STEPHANIE: Wow, that is a big bite. [laughs] JOËL: Hmmm, it's basically crunchy honey. STEPHANIE: So I've enjoyed honeycomb in that raw form on ice cream. I really like it on there and oatmeal and stuff like that. I think it's a little bit waxy. Like, once you get to chewing the bits at the end, that part is a bit of a less pleasant mouth-feel [laughs] in my opinion. What are you experiencing right now? JOËL: Yeah, so like you're saying, the honey kind of dissolves away in your mouth. You had this really fun mix of textures. But then, in the end, you do end up with a ball of [laughter] beeswax in your mouth. STEPHANIE: Oh no. JOËL: Which I understand is completely safe to eat, so... STEPHANIE: Yeah, that's true. JOËL: I'm just going to eat the whole thing. STEPHANIE: I think it's kind of like swallowing gum. [laughs] JOËL: Which apparently does not last for seven years in your digestive system; that's a myth. STEPHANIE: Wow, debunking myths, trying honeycomb. You're welcome, to all The Bike Shed listeners out there. Investigating the important things. JOËL: What is interesting is that we're talking about the structural power of hexagons. I can cut a pretty thin slice of the comb, and it doesn't fall apart. It still has a lot of strength to it, which is nice because it means that the honey doesn't just go splashing everywhere. I can cut up a fairly thin slice, pick it up, it still holds the honey, put it in my mouth, and it doesn't make a mess. STEPHANIE: The bees know what they're doing. [laughs] Cool. Would you eat raw honeycomb again? JOËL: Well, I got a whole block, and I had one tiny slice. So, yes, I will be eating the rest of this. STEPHANIE: [laughs] JOËL: I don't think this will be a regular thing in my weekly groceries. But I would bring this out again for a special occasion. Or I can see this fitting nicely, like you said, on maybe certain breakfasts, even on a charcuterie board or something. STEPHANIE: Oh yeah, that's a really good use for it. JOËL: In some ways, it's nice because it's a way to have honey without having to have it on something else or having to eat it with a spoon. It's honey that comes with its own carrying vessel. STEPHANIE: That's great. Yeah, like a bread bowl for soup. [laughs] JOËL: Exactly. Bees make their own bread bowls for honey. STEPHANIE: [laughs] MID-ROLL AD: Debugging errors can be a developer's worst nightmare...but it doesn't have to be. Airbrake is an award-winning error monitoring, performance, and deployment tracking tool created by developers for developers that can actually help cut your debugging time in half. So why do developers love Airbrake? It has all of the information that web developers need to monitor their application - including error management, performance insights, and deploy tracking! 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You literally have nothing to lose. Head on over to airbrake.io/try/bikeshed to create your FREE developer account today! JOËL: So, for the last couple of weeks, we've been joking that this is turning into the Stephanie and Joël book club because we've been talking about a lot of articles and books. Today, I'd like to shift a little bit away from literature and lean into art. Writing code is a technical work, but in many ways, it's also an aesthetic work. It's a work of art. How do you feel about the idea of expressing yourself creatively through your code? STEPHANIE: So this is interesting to me because it's actually quite different from what we've been talking about in recent episodes around the idea of writing sustainable code, code for other people to read. Because if you are writing code purely for creative expression and just for yourself, that will look very different than what I think folks have kind of called boring technology, which is choosing the patterns, the tools, the frameworks that are tried and true, and just kind of sticking to the things that people have solved before. And so, in some ways, I don't know if I really get to express myself creatively in the code that I write, which I think is okay for me because I don't really consider myself someone who needs a creative outlet in my work. What about you? What thoughts do you have about this? JOËL: I think it's interesting the way you described it. I'm almost wondering if I'm making maybe a comparison to physical architecture; maybe you almost have a sort of brutalist perspective on the things you construct. STEPHANIE: [laughs] JOËL: So they're functional. They're minimal. They are not always the prettiest to look at, but they're solid. Does that metaphor sound about right to you? STEPHANIE: I feel like I have to make a pun about SOLID, the design patterns, and code. JOËL: Ooh. STEPHANIE: [laughs] But I think I like brutalist, I mean, the term itself. I don't know if I necessarily identify with it in terms of my work and output. But the idea that the code that I do is functional is, I think, particularly important to me as a developer. And I don't just mean, like, oh, the code works, so it's done, but functional for whatever need I'm solving and also for the people who are working with this code again in the future. I mentioned boring technology. There's a talk that I'm kind of referencing by Dan McKinley, and you can check out his slides at boringtechnology.club. And he talks about this idea of decision-making and how that relates to writing boring or creative code. And he also references Maslow's hierarchy of needs. And so, ideally, if you're working in an existing codebase, all the low-level decisions have been made for you. And then you can kind of traverse the hierarchy and focus your creativity on the high-level problems that you're trying to solve. So maybe you're not necessarily expressing your creativity in the syntax or whatever pattern you're using, again, because a lot of those things have been solved. But where the creativity comes from is the particular domain or business problem you have and the real-world constraints that you're faced with. And how do you figure out what to do given those constraints? JOËL: I think that lines up a lot with my own experience as well. I think as a newer developer, syntax is sort of the thing that's top of mind. And so, maybe trying to get clever with syntax is something that I would focus on more. Sometimes that's trying to get code really short and terse. Sometimes it's because I want to try. Can I do this thing with a particular piece of syntax, or even just does it look pretty? I think now, in my code, I am actually kind of boring with my syntax. I, probably when I write Ruby, mostly use a kind of slimmed-down set of syntax and don't use the full expressive power of the language for most of my day-to-day needs. So basic things with objects, and methods, and blocks, sort of the basic building blocks that we get from Ruby regular conditionals, if...else, and a few other nice things that the language gives us. But, in many ways, it almost feels like...I don't know if you've ever seen the simplified English Wikipedia. STEPHANIE: No, I haven't. What is that? JOËL: They're treating it, I think, like a separate language, but it is a version of Wikipedia in English with a more restricted vocabulary to try to make the content more accessible to those that might struggle with more standard English. So it's a sort of smaller subset of English. And, in many ways, I feel like a lot of the day-to-day Ruby code that I write is simplified, Ruby. STEPHANIE: Wow, that's really interesting. I think this also goes back to the specialized vocabulary episode we talked about. And is there value in keeping things accessible, and straightforward, and boring but at the cost of being able to express yourself with everything you have available to you? This is a bit of a tangent, I guess, but I grew up speaking Chinese with my parents, but since then, I have really lost a lot of that vocabulary. And, in some ways, I really struggle with communicating in Chinese because I feel like I'm not able to express myself exactly the way I want to in the way that I can in English. And when I'm talking to my parents, yeah, that's been a bit of a challenge for me because I do really value being able to say things the way that I mean, and I'm not able to have that with my limited vocabulary. So I can also see how people might not enjoy working within these confines of boring syntax and boring frameworks. JOËL: Sometimes it's nice to give yourself a sort of syntactical restriction, but they're very low-level when it comes to most of what we do for programming. And I think that's sort of what I've learned as my career has evolved is that programming is so much more than just learning syntax. So kind of like with art, maybe it's nice to restrict yourself to say, oh, can I do something with only a particular brushstroke technique, or restricting myself to a particular palette or a particular medium? And that can foster a lot of creativity. So, similarly, I think you could do some things like playing Code Golf, not on production code; please don't. STEPHANIE: [laughs] JOËL: But as an experiment in a side project or just almost as a piece of art, that can be a really interesting problem to solve and give you a deeper understanding of the language. And I'm sure there are plenty of other syntactical limitations you could put on yourself or maybe fancy things you would like to explore and say, "Well, this is over the top. We don't need to structure it in this way or use this syntax. But I want to sort of push the boundaries of what can be done with it. Let's see where I can take it." STEPHANIE: That's really fair. And I think it relates back to what I was saying earlier about perhaps creativity when writing software products comes from the constraints of the business of, in some ways, physical aspects of development. In the Dan McKinley talk, I mentioned about choosing boring technology. He generally recommends against bringing in a new language or framework because of the costs, the carrying cost of doing that, and the long-term maintenance to consider. But he instead suggests turning the question on its head and being like, how can we solve this problem with the current technology that we do have? And I think that relates to what you were saying about being able to push the boundaries of a particular medium or tool and in a way that you might not have considered before. JOËL: Exactly. And I think going back to the analogy with art; sometimes it is nice to restrict yourself to a particular brushstroke or something like that to try to foster creativity. But oftentimes, you want to explore creativity in much higher-level ways. So maybe you're not restricting things like brushstrokes and color, and, instead, you want to explore lighting. You want to explore maybe certain ways of mixing colors. There are all sorts of, I think, higher-level ways that you can be creative in art that's not just the mechanics of how you apply pigment to canvas. And we see the same thing like you were saying, in code where there's a lot of higher level business problems. Generally, how do we want to structure large chunks of the code? How do we want to build abstractions? Although that can also be a dangerous place to get too creative in. STEPHANIE: Yeah, absolutely. Do you consider yourself a creative person or need a creative outlet? And how does writing code or software development play a role in that for you? JOËL: I would say, yes, I consider myself a creative person. And I would consider coding, in general, to be a creative endeavor. I sometimes describe to people that writing code is like building something out of infinite legos. You're constrained only by the power of your imagination and the amount of time you're willing to put into constructing the thing that you're building. Of course, then you have all sorts of business constraints. And there are things you want to do on a work project that are probably not the same as what you would want to do on a client project or on a personal project. But there's still creativity, I think, at every level and sometimes even outside of the code itself. Just understanding and breaking down the business problem can require a ton of creativity before you even write a single line of code in your editor. I was reading a Twitter thread the other day by @GeePawHill that sort of proposes that there are sort of four steps in evolution of kind of the mindset that programmers go through over their career. And I'd be curious to hear your thoughts on this evolution if you kind of agree with it or disagree with it if that maybe lines up with some of your experience. So this Twitter thread proposes four levels of thinking that we go through. I think we can kind of jump between these levels at various points in our work. So we might do all of these in a day, but to a certain extent, they also follow a little bit of a progression in our career. So the first level is thinking in terms of syntax; that's just knowing the characters to type in the editor. The second level is thinking in terms of code, that's, thinking a little bit more semantically. So now, instead of thinking, oh, do I need if then curly brace, then closed curly brace? Now we're thinking more in terms of, okay, I need a branch in the flow of control for my logic here. And at that level, maybe you don't even need to think about the syntax quite so much because you're so comfortable with. It kind of just fades away. Building beyond that, now you're thinking in terms of your paradigm. So Ruby is an object-oriented language, so you might be thinking in terms of what objects do I need to represent this problem and how do they need to talk to each other? And the sort of underlying semantics of, oh, do I need a conditional here or not? Those might start fading away because now you're thinking at a slightly higher level. And then, finally, thinking in terms of change sets. Now you're thinking less in terms of the language itself and more in terms of the business problems and how the current behavior of the software is different and needs to change to get to where we want the behavior to be. STEPHANIE: I think I disagree a little bit with the idea that it's a progression. And I'm thinking about how when you have a beginner's mind, anything is possible. And in some ways, if you are new to coding, before you have that understanding of what is and isn't possible, anything is possible. And so, in some ways, I've worked with people who are super new to coding, and the ideas that they come up with for how to make a change at that highest level that you were just describing, in some ways, make sense. You can be like, oh yeah, that actually is something we can do and an idea that you might eventually get to from someone more experienced, having followed those different levels of progression and reaching a place where you're like, I know exactly what tools or the details about how to do this. But when you have that beginner's mind, and you don't have the details of the how, I think you can still think about those problems at a higher level, and that is valuable, and maybe they'll need help implementing along the way. And I think that that could be a really interesting area of collaboration that perhaps we don't do enough in this industry because it's very mentorship-focused where it's like, okay, I have more experience, and so I'm going to teach you what I know. Whereas if you bring someone with a totally fresh perspective along, what ideas can you generate from there? JOËL: I think we definitely exist in all of these layers every day as developers. I think, looking back at myself as a newer developer, I tended to maybe work bottom-up when I tried to solve a problem. And I think that now I probably tend to work sort of in the reverse order, start by thinking in terms of changes and then work my way down. And so syntax, at that point, is the last thing that I'm thinking about. It's really an implementation detail. Whereas I think as a new coder, syntax was super important. Was your experience similar to that, or did you have a very different journey? STEPHANIE: It's funny that you mentioned it because I think when I was new to development, there were so many syntactic things that I didn't understand that I just kind of like blurted out of my brain when I was reading code and was then trying to latch on to the important pieces of information that I needed to know, which often meant class names or method names. Pieces that I could grab onto and be like, okay, I'm seeing that this method then calls this other method or whatever. And, yeah, what you were saying about implementation details falling away, I kind of did that at the beginning of my career a little bit, at least at that syntactic level. So, yeah, I think I'm with you where we all exist at different parts of this framework, I suppose. And that journey could look different for everyone. JOËL: So we're talking about ways to be creative at higher levels. And one way that I find has been really fun for me but also really useful has been bringing in dependency graphs as a tool for design. You knew I had to mention dependency graphs. STEPHANIE: We got there in the end. [laughter] Cool, go on. JOËL: I think it's been really good sometimes in terms of modeling change sets because dependency graphs can be a great tool for that, but also sometimes in terms of trying to understand what the underlying business problem is and how it might translate into code structures where things might be tightly coupled versus not. And so, drawing it out visually is a really powerful design tool. And because now I can look at it in two-dimensional space, I can realize, oh, I see something that feels like it's maybe an anti-pattern or might be a problem here. There's a cycle in my graph; maybe we should find a way to break that. Maybe we need to introduce some dependency inversion and break that cycle, and now our graph is acyclic. And so I think that's where there can be a lot of creativity that happens, even when you're not writing code at that point. You're just sort of talking about how different pieces of the project or even different subproblems...you're not even talking about if they're implemented in code, but just saying this subproblem is related to this subproblem, and maybe I would like to find a way for them to not have a connection to each other. STEPHANIE: I'm glad we got back to this dependency graph topic because I stumbled upon something that I'm curious to hear your opinion on. I have been following Julia Evans' work for a little bit now. And she recently released a new zine about debugging. And at the end of the zine, she includes a link to these choose-your-own adventure puzzles that she has created, specifically to teach you about debugging and how to do it. And so it's basically a little detective game, and you kind of follow along with this bug. And she gives you some different options about how would you like to find a little bit more information about this bug? And what approach would you take? And you make some different selections, and then as you go, you get more information about the bug. And that helps inform what next steps you might take. And, one, I think this is a great example of a creative project about software development, even though it's not necessarily your day-to-day work. But then she also uses a tool called Twine, which is for creating non-linear stories, or puzzles, or games. And it got me really thinking about the multi-step wizard we've been talking about and this idea of looking at a problem in different mediums. It also reminds me of if you have a designer on your team and they're doing prototyping, they usually have some kind of user interactivity that they have to codify. And they are making those decisions about okay, like, if you are at this step, then where do you go next? And those are all things that you've talked about doing as a developer, I think, at a later point in the future lifecycle. And I'm now just kind of thinking about how to integrate some of that into our workflow. Do you have any thoughts about that? JOËL: I had one of the coolest experiences in my career when I was doing a front-end project where we were building a typeahead component that was pulling data from a remote server and then populating a drop-down. And the designer and I sat down and just started to look through all the different states that you could be and how you could move from one to another. So it looked like maybe you start the typeahead is empty; it's just a text box. And then as you start typing, maybe there's a spinner that shows up. And then maybe you have some results, or maybe you don't have results. And those are two different entirely states that you could be in. And then, if you backspace, what happens? And what if something goes wrong on the server? Like, we just kept finding all these edge cases. And we built out a diagram of all the possible journeys that someone could take, starting from that empty text box, all the way to either some sort of error state or a final state where you've selected an item. But, of course, these are not necessarily terminal because in an error state, maybe you can just start typing again, and you sort of jump back into the beginning of the flow. So we did this whole diagram that ended up looking very much like a finite-state machine. We didn't use the term, but that's kind of what it ended up being. And I think we both learned a lot about the problem we were trying to solve and the user experience we were trying to create through that. There was just a lot of back and forth of, like, oh, did you think about what would happen if we get no results here? Have we thought about that state? Or it's like, okay, so now we're in an error state. What do we do? Is there a way to get out of it, or are we just kind of stuck? Oh, you can backspace. Okay, what happens then? STEPHANIE: Yeah, I mean, we've been talking about creativity as a solitary process. But I think that that goes to show that when collaborating with other people, too, that process can also be very fun and creative and fulfill that need outside of the way the code is written. JOËL: In many ways, I think working with somebody else, and that gets made at the intersection of two or more people's work, is probably the most creative way to build software. STEPHANIE: That actually reminds me of a book I read last year called "Tomorrow, and Tomorrow, and Tomorrow." And it's about these two friends and their journey creating video games together. And it kind of follows several decades of their life and their relationship, and their creative and collaborative process. And I really loved that book. It was very good, especially if you like video games. There are a lot of great references to that too. But I think what you were saying about that fulfillment that you can get with working with other people, and that book does a really good job examining that and getting into our need as humans for that type of collaboration. So that's my little book rec. It goes back to our conversation about designing a game. Again, maybe this is [laughs] what we'll do next. Who knows? The world's our oyster. On that note, shall we wrap up? JOËL: Let's wrap up. STEPHANIE: Show notes for this episode can be found at bikeshed.fm. JOËL: This show has been produced and edited by Mandy Moore. STEPHANIE: If you enjoyed listening, one really easy way to support the show is to leave us a quick rating or even a review in iTunes. It really helps other folks find the show. JOËL: If you have any feedback for this or any of our other episodes, you can reach us @_bikeshed, or you can reach me @joelquen on Twitter. STEPHANIE: Or reach both of us at hosts@bikeshed.fm via email. JOËL: Thank you so much for listening to The Bike Shed, and we'll see you next week. ALL: Byeeeeeeeeee!!!!!!!! ANNOUNCER: This podcast is brought to you by thoughtbot, your expert strategy, design, development, and product management partner. We bring digital products from idea to success and teach you how because we care. Learn more at thoughtbot.com.
Stephanie talks about hosting a "Soup Group"! Joël got nerd-sniped during the last episode and dove deeper into Maggie Appleton's "Tools for Thought." Stephanie has been thinking a lot about Sustainable Web Development. What is sustainability? How does it relate to tech and what we do? This episode is brought to you by Airbrake (https://airbrake.io/?utm_campaign=Q3_2022%3A%20Bike%20Shed%20Podcast%20Ad&utm_source=Bike%20Shed&utm_medium=website). Visit Frictionless error monitoring and performance insight for your app stack. Maggie Appleton's Tools for Thought (https://maggieappleton.com/tools-for-thought) Tangrams (https://en.wikipedia.org/wiki/Tangram) Tessellation (https://en.wikipedia.org/wiki/Tessellation) Hexagons are the Bestagons (https://www.youtube.com/watch?v=thOifuHs6eY) Sustainable Web Development with Ruby on Rails (https://sustainable-rails.com/) Transcript: AD: thoughtbot is thrilled to announce our own incubator launching this year. If you are a non-technical founding team with a business idea that involves a web or mobile app, we encourage you to apply for our eight-week program. We'll help you move forward with confidence in your team, your product vision, and a roadmap for getting you there. Learn more and apply at tbot.io/incubator. JOËL: Hello and welcome to another episode of The Bike Shed, a weekly podcast from your friends at thoughtbot about developing great software. I'm Joël Quenneville. STEPHANIE: And I'm Stephanie Minn. And together, we're here to share a bit of what we've learned along the way. JOËL: So, Stephanie, what's new in your world? STEPHANIE: I'm excited to share a winter survival idea for folks out there who are, like me, in a very cold place where all your friends don't want to hang out [laughs] and bear the cold temperatures of deep winter in January. Because tonight, I'm hosting my first soup group where I'm basically just going to make a really big batch of soup and have my friends come over with bread, and we're going to eat soup and bread and be cozy. And I'm really excited because I was trying to figure out a way to combat the winter blues a little bit. And, yeah, I think this time of year can be really tough after the holidays to get people together again. At least for me, I was feeling like I haven't seen my friends in so long. And I was like, well, I could just be the person to take the initiative [laughs] and be like, "Come over to our place." And the goal is to eventually do this regularly and just have this low-stakes open invitation for anyone to come and show up however they want to. It doesn't have to be, like, big pressure or anything. And if they can't make it at any one time, then there will hopefully be one in the future where they can make it, so I'm excited. After this, I am going to make soup for ten people, and it's going to be great. [laughs] JOËL: I love this idea. Soup on a cold day is just the coziest thing. STEPHANIE: Yeah, exactly. I definitely wanted to just make people feel warm and cozy. And that's what I want, so I'm really doing this for myself. [laughs] JOËL: And you know the advantage of hosting is you don't have to go outside. STEPHANIE: Yeah, that's the real thing is I'm probably going to kick everyone out at like 11:00 p.m. and then go straight to bed, and it's going to be great. [laughs] JOËL: Have you been experimenting with a particular kind of soup recently? Are you going to bring out an old favorite? STEPHANIE: Yeah, I'm excited to make ribollita today, so kind of like a Tuscan style of veggie hearty soup. And I've just been bookmarking soup recipes left and right. [laughs] And I've outsourced the bread situation. So I'm excited to see what kind of bread people bring. And yeah, it'll be very fun and kind of surprising in a comforting way. JOËL: I'm not familiar with this soup. It's ribollita you said? STEPHANIE: Yeah, that's it. JOËL: You said it's a vegetable soup. STEPHANIE: Yeah, mostly veggies and beans. So I have this giant cabbage, a lot of kale, multiple cans of Great Northern white beans, and they're all going to get mixed together. And we'll see how it turns out. I'll update the podcast on how the soup group goes. It is the inaugural one. So I can't think of a time that I made that much soup before. So, hopefully, it goes well. We'll find out. So, Joël, what about you? What's new in your world? JOËL: So, in the previous episode, we talked a little bit about some of the things you had learned about note-taking. And you'd mentioned an article by, I think, Maggie Applebon -- STEPHANIE: Maggie Appleton. JOËL: Appleton...on tools for thought. It was linked in the show notes of that episode. And I went back and read that article, and it was so good, particularly the section, I think, on historical tools for thought and how they, over time, were sort of groundbreaking in helping us to either remember things or to think about problems or ideas in a different way, or to sort of interrogate those ideas and see if we think they're true or helpful. And these were things like writing or the number system but even some more fancy things like the scientific method for the Cartesian coordinate system. STEPHANIE: Yeah, I was really excited to share this with you because I think it was the intersection of a lot of your different interests, including note-taking, diagrams, history, and human cognition, so I'm glad that you found it interesting. JOËL: I definitely got nerd-sniped there. STEPHANIE: [laughs] JOËL: I think one thing that really struck me was the power of having multiple different representations for ideas. And one that jumped out at me was the Cartesian coordinate system, which, among other things, a really powerful tool that gave people...when this was invented, it allowed you to convert algebra problems into geometry problems. And so now, something that used to be an equation you can draw as a triangle or something. And we know how to find the area of a triangle. That's been known since the ancient Greeks and even earlier. And so now a problem that sounded hard is now easy, or at least we have a different way to think about that problem. Because if this equation is equivalent to a triangle, what does that mean? And vice versa, you can use this to convert geometry problems into algebra problems. And so sometimes the power of a new tool for thought might be in that it allows you to sort of convert between two other existing ways of representing things. And making those connections, all of a sudden gives you a whole new way of thinking about things. That blew my mind. STEPHANIE: Yeah, I agree. I think the other really cool thing is that a lot of these ideas that humans are discovering also already existed in the natural world. So when you are talking about math, you can see representations of math in plants and nature, and I was reminded of how honeycomb from bees is one of the strongest shapes. And yeah, it's really neat to draw inspiration from a lot of places and learn from things that, like, figured it out before we did. JOËL: Have you seen the video on YouTube called "Hexagons are the Bestagons?" STEPHANIE: No, I have not. Tell me more. JOËL: It's a video on YouTube. We can link it in the show notes. Basically, the hexagon shows up everywhere in nature in part because it has a lot of really fun mathematical properties. It's one of the few shapes that you can use to completely cover a surface. So if you want to subdivide a two-dimensional surface into smaller shapes without leaving any empty spaces between them, you really don't have that many options. I want to say it's like squares and triangles and hexagons are the only shapes that can do that. And hexagons have these really fun properties around strength. They also are one of the best balances between volume versus the amount of material that it takes to give you that volume and for strength and things like that. So it's good for honeycombs because you can store a lot of honey for very little amount of wax. But it's also good for all sorts of structural engineering because you can build things that are very strong yet light because they require very little metal or other material to create them. STEPHANIE: When you're saying hexagons filling a lot of space, I also thought about how they've become kind of popular in tiles or interior design in kitchens, and bathrooms, and stuff. [laughs] I've definitely seen that trend a bit. [laughs] So that's really cool just to see, like, yeah, this thing in the natural world that we have adopted for other uses. It's really fun. JOËL: I want to say this idea of taking a 2D space and being able to completely cover it without spaces with a shape is called tessellating a plane. It's a fancy term for it. And if you want to do it with just a single shape, I think there are only like three or four shapes that can do it. STEPHANIE: That's really interesting because it reminds me of those tessellation puzzles that I used to play with as a kid. Do you know what I'm talking about? JOËL: You're thinking like a tangram or something different. STEPHANIE: Yeah, yeah, tangram, that was...oh my gosh, those were fun. Wow, I was learning math as a young child, [laughs] just didn't even know it. JOËL: Another random fun fact: the logo for the Elm programming language is a tangram. STEPHANIE: [Gasps] JOËL: And the community is sort of encouraged to then remix it because the tangram is just a square tessellated out of a bunch of these shapes. But then, if you're building a library or you've got an event or something, the community will take those shapes and remix them into some other shapes that might fit your event. STEPHANIE: That's really cool. Is it a metaphor for how Elm can be used in different ways? [laughs] JOËL: I'm not sure about the story behind the logo. We'd have to look that up. STEPHANIE: That'll be a good adventure for later. [laughs] JOËL: In...I want to say Moroccan art, but I think it might be broader than just Moroccan. It might be more broadly North African or Moorish or whatever you want to call that. There's a long history of building these tessellations, I think, out of tiles, but maybe other things as well where you're doing it with a variety of shapes. So you might start...a classic one, I think is an eight-pointed...is it eight, or? I think it's an eight-pointed star, and then you sort of add other shapes around it. And those can create patterns that take a long time to repeat. And there are these beautiful geometric patterns that just keep on going and expanding without necessarily repeating over a lot of space. STEPHANIE: Whoa. That kind of blows my mind a little bit. It seems so counterintuitive, but then I feel like there are a lot of things in math that are like that as well. JOËL: So, yeah, I think a classic pattern you might start with something like an eight-pointed star. And then maybe to fill in the spaces around that central star, you might put some squares, and then maybe you put some triangles around that, and you sort of keep trying to fill in. And maybe eventually you get to another eight-pointed star, but it's not always perfectly symmetric. STEPHANIE: Someone should make a board game or something out of this idea. [laughs] JOËL: Oooh. STEPHANIE: I bet there's one that exists. But I'm just thinking about people who like jigsaw puzzles and that being the next level challenge of, like, can you figure out how things fit together without the confines of a little jigsaw shape? [laughs] JOËL: Right, right. You have a rectangle shape that you have to perfectly fill in with all of these other smaller shapes, and there is a single solution that will work. You have to figure it out. STEPHANIE: I personally would be very overwhelmed, [laughs] but it sounds fun at the same time. JOËL: So those are a lot of thoughts that I've been having inspiration reading that article that you shared on a previous episode. Have you been reading anything interesting recently? STEPHANIE: I have. I'm really excited to talk about this topic because during my investment time this past week, I've been thinking a lot about it, taking a lot of notes in Obsidian, which is a callback to the last episode, and yeah, I'm excited to kind of get into it. So what I've been reading is Sustainable Web Development with Ruby on Rails by David Bryant Copeland. And I think a lot of fellow thoughtboters have referenced this book or talked a little bit about ideas from this book; at least, I've seen discussion about it in Slack, so that's kind of why I wanted to pick it up. But what really blew my mind was honestly the first chapter where he talks about why he wrote this book and basically what sustainable web development is because it is a little bit, maybe, like a buzzy word. It's like, what is sustainability? How does it relate to tech and what we do? And he basically gets down to it by saying that the software that we write is sustainable if it continues to meet our needs years into the future or has longevity and continues to be something we can iterate and work on and not feel that pain or friction, and we feel like we want to, and we feel joyful working on this codebase. So that was kind of my interpretation of his definition about sustainability. JOËL: I love that definition of sustainability about code that can grow and live for a long time. And I feel like that's not a universal value in the tech industry. And on the extreme end of that, you'll have teams that promote the idea that maybe every few years, you should throw out your old codebase and rewrite. I want to say some teams at Google may have done that as a practice for a while, and, of course, then people quote that as a best practice. To a certain extent, I want to say that's kind of what happens with Basecamp in that there are multiple versions of Basecamp. And I want to say each of those is a fresh Rails app. So there's a sense in which those or that style of development is not sustainable in the definition that you were just giving there. How do you feel about that? STEPHANIE: I definitely think the industry has a bias towards newness and change. And a lot of people want to pick up the hot, new technology and, like you said, rewrite code, especially when it's become hard to work with. And honestly, I think that could be its whole own episode, rewrites because I think you and I have pretty strong opinions about it. But I genuinely think that most of our work is, at least, you and I on the Boost team, in particular here at thoughtbot, where we embed on existing client teams, and usually, that means legacy code as well, but I think that the work of development is mostly extending existing code and trying to sustain applications that have users and are working for users. And I think that that's certainly a value that I wish were highlighted more or were invested in more because sometimes that change or wanting to hop on to do something different or do something new has a lot of consequences that I'm not sure we talk about enough as an industry. 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Finally, Airbrake Deploy Tracking helps developers track trends, fix bad deploys, and improve code quality. Since 2008, Airbrake has been a staple in the Ruby community and has grown to cover all major programming languages. Airbrake seamlessly integrates with your favorite apps to include modern features like single sign-on and SDK-based installation. From testing to production, Airbrake notifiers have your back. Your time is valuable, so why waste it combing through logs, waiting for user reports, or retrofitting other tools to monitor your application? You literally have nothing to lose. Head on over to airbrake.io/try/bikeshed to create your FREE developer account today! JOËL: It's interesting you mentioned the types of projects that we tend to be on. I feel like there are a lot of projects that I've been brought on where my goal, specifically coming onto this project, was to make the software more sustainable for the team. It's very easy to sort of start moving very fast in the beginning with a greenfield app, and then eventually, a lot of your choices catch up to you. And then, as your team grows and your product grows, it becomes less and less sustainable. And that's often the point in the lifecycle of the product where I might join the team and try to help make things better for them. I love the keyword sustainable. I don't think that's one that I've used a lot, but it's a great label to put on that kind of work. STEPHANIE: Yeah, I agree. I think what you mentioned earlier, too, about values that, really stuck out to me in this book because it basically says, "This book is for you if you value these three things: sustainability, consistency, and quality." And all of the recommendations and techniques that he then presents in the rest of the book, using Rails, those decisions are recommended with those three values in mind. And I think, one, those values are personally important to me as a developer. But it also helped me develop some guiding principles around decision-making and provided a lot of clarity around times that I've been on teams where we were doing things that didn't quite align with my values, and I didn't enjoy it. And I couldn't really figure out why. But now I'm able to see that, oh, perhaps this team or organization was valuing something like speed, or profit, or change, or something like that that I just fundamentally value differently. And that was kind of where my internal friction or contentment or discontentment was coming from when working on these teams. So, yeah, that was really clarifying for me. JOËL: Would you say, for you, when you talk about these values, that these are fundamental or ultimate values for you when you write code? Or are they values that are a good way to sort of be a means to some other end? You know, for example, sustainability, do you care about sustainability just for its own sake? Or do you care about it because you want a product to be able to live for a long time? You're building for ten years or 20 years or however long you want this project to last. STEPHANIE: I think the thing with values is that they are really fundamental to a person's identity or belief system. In fact, the definition that I'm kind of working off of here is that values are those fundamental beliefs that drive our actions. And so when you say, like, are values driving how you write code? I think they drive everything. [laughs] But the point that he makes in this book is like, here's how they drive code and technical decisions. So the book is actually quite specific about technical recommendations that he has in the context of Rails. And it's funny because we're talking pretty abstractly and big picture about values and things like that. But then I think it's because he sets the stage to be like, everything I recommend here is what I believe to be sustainable, and good quality, and consistent. And just for an example, one of the recommendations he makes is to, when you're kind of setting up a greenfield application, is to use a SQL schema instead of the default ActiveRecord DSL, so using a structure .SQL file. Because, in his eyes, having the flexibility to write SQL and use the most you can with those tools when it comes to database work is more sustainable in the long term than using the DSL that might not have all the tools available to you that SQL does. And so he kind of gives his reasoning about, like, this is what I recommend, and here's why it contributes to sustainability, in my opinion. And so I have found myself, while I'm reading along, either agreeing, like, oh yeah, I can see his reasoning here, or maybe even disagreeing because I might think about things differently or have other considerations in mind that are more important to me and what sustainability means to me. But what I hopefully want to take away from the framework or understanding of values is evaluating technical decisions that I make based on my values as an individual but, more importantly, the values of the team or organization. JOËL: I love mental frameworks like that that give you clarity into your own thought processes or how you make decisions moving forward. Sometimes you can look at something that's very concrete. Somebody gives you some advice on maybe structuring your database schema, and that might be helpful in and of itself. But if you came away with a larger thought process, I think that's doubly valuable. As an aside here, I love this approach to writing where he sort of lays down almost like preconditions for this book. If you don't agree on these values, this book is not going to be very helpful for you. And then also, here are situations where this advice is not going to apply. Now that I've put down all these edge cases for the rest of this book, I'm going to be speaking very decisively; these are the things I recommend and not have to caveat myself all the time. It's like, yes, I know there are some edge cases where you might not want to do this if it's a one-off script or whatever it is. We've already dealt with all of those upfront. And now, I can be very confident and very direct for the whole rest of the book. And I feel like that's something I struggle with in some of my work sometimes is. I care a lot about nuance, and my audience probably cares about edge cases even more than I do. They probably care too much. Because I say something that's generally true most of the time, and I know somebody's already thinking about the one edge case where that's not true. And that doesn't matter for the main point I'm trying to make. So it's always a struggle to know when to caveat a statement that I'm making. But if you caveat too much, then you undermine your whole point. And so I like this idea of putting some caveats up front and then just saying, like, now we're in the 80% case. Within the 80% case, these are things I think are true. STEPHANIE: Yeah, that's a really good point. I agree he is very clear about the intended audience. And so when you read this book, you are either on board because you value the same things he does, or you're not because you are focused and your goals are things that are different from him. So I think it was really helpful to get on the same page, even in a piece of content or in a piece of writing. Because I want to use my time well as a reader, so I want to make sure that what I am consuming makes sense for me, and I will find it worthwhile. David takes a really strong stance on what quality means. And even though that is a pretty subjective value, he describes it as doing things right the first time and acknowledging the reality that we likely won't have the time to go back and clean things up after they've been shipped. So, on this client project, I found myself wanting to refactor things as part of my process, suggesting different implementations to do things the quote, unquote, "right way," or the best way we could, and not everyone shared that sentiment. I sometimes got pushback, and that was challenging for me to figure out how I wanted to navigate that situation and what I was willing to let go and what I wasn't. And so I'm curious if you've ever been in a consulting position like that where maybe the team and organization's values were a little bit different from your understanding, or if they just weren't clear at all, and you were driving towards something that seemed very nebulous. JOËL: I think I've been on both sides of that, both sometimes saying, "Look, we need to maybe slow down," or "Here's a thing that we need to do otherwise that's going to cost us on the longer term. Here's an area where we need to invest in quality today." And sort of on the other side where I'll feel like someone is really pushing an overengineered solution claiming it's going to make life a whole lot better, "If we invest three months upfront today, and maybe in three or four years, it'll pay off if certain things happen," that don't really necessarily line up with the immediate goals. A lot of this, I think, comes down to understanding the client, and their business, and their goals. Sometimes there is a really important deadline for something that has to happen based on an event in the real world. If you were building software for something that had to do with, let's say, the World Cup, you don't want it shipping in January 2023. That's just pointless. And so you've got to prioritize shipping things. And sometimes you say, "Okay, well, do we ship a few broken things? Or do we prefer to ship something that's a little bit smaller, more tightly scoped, but that holds well together?" That again, you have to really understand the client, their business, their needs. So I think for me those values of sustainability, quality...I forget what the third one was that you'd mentioned. STEPHANIE: Consistency. JOËL: Consistency, yes. They all sort of inform how it's going to mesh with the product I'm working on, the goals of that product. Where's it going in the next three months, six months, 12 months? Where's it coming from? Who's the team that I'm working with? Am I with a team of 300 people that are just committing to the main branch all the time with no tests, and we're constantly fighting regressions? Then sustainability looks very different there than a one other-person team, and we're trying to ship something for the World Cup. STEPHANIE: Oh yeah, I have a lot of thoughts there too. Because I do agree that it can look different and sometimes shift a little bit depending on the situation. What you were just describing about team makeup that is really interesting to me because, yeah, sustainability can look different for different teams. If you have, let's say, a lot of earlier career developers on your team, maybe you really want to focus on readability and making sure that they're able to navigate the codebase and figure things out over something like more advanced patterns and skills that will just cause them friction. But maybe you have a team where you all agree that that's what sustainability means to you is choosing those more advanced technical patterns and committing to them and figuring out how to maintain that because it's important to you. And the other thing that you brought up that is also mentioned in this book is that the more information developers have about the future and direction of the business, the better code we can write. For some reason, I've found myself in situations where I don't know all too much about what we are working towards or what the goals of the business are both in the short term and the long term. And I try to make the best guess I can. But I think in those scenarios, at least moving forward, I would really like to be better about pushing product folks or leadership to explain to me why we're doing what we're doing, kind of share the information that they have so that we can build the best product that we can. I think sometimes that information doesn't get shared for some reason. They kind of think that engineers are going to go do their engineer thing, and we'll focus on long-term strategy over here. But yeah, I truly believe that the more information we have, the better quality work we can produce. JOËL: I 100% agree. And I think that's what we see in a lot of classic agile literature talking about things like cross-functional teams or even the client or the product team should be integrated with the development team. You're all one team working together rather than someone has an idea, and then the technical team executes on it. We see that also in some of the domain-driven design literature as well, where oftentimes projects start, and you sit down with a subject matter expert, and they just walk you through all of the business aspects. And particularly for the purpose of domain-driven design, you talk about a lot of the terms that make sense for the business. You build up a glossary of terms. I think they call it a ubiquitous language of things that are specific to your business and how does that work on a day-to-day basis. STEPHANIE: Do you have any strategies for getting more clarity around the work and why you're building it if it's not yet available to you? JOËL: I think there are sort of two scenarios where you have to do that; one of them that comes up maybe more often for us as consultants is onboarding onto a new client. There's a whole new business that we may know nothing about, and we have to learn a lot of that. And so, as part of the onboarding process, I think it's really valuable to have conversations with people who are not part of the dev team to learn about the business side of things. On a per-feature basis, if you've already been onboarded on a project, you've been there for a while, it's often good to go back to the person who maybe created a ticket, a product person who's asking for a feature, and ask, "Why? Why do you want this?" Ideally, maybe that's even part of the ticket-creating process because the two teams are more integrated, and product team is like, here's a problem we're trying to solve. Here's what we think would be a solution. Or maybe even just "Here's a business problem. We need a technical solution. Can you do that for us?" But I've often followed up with people outside of the engineering team to ask follow-up questions. And why are we doing this? And sometimes it's even you have to do like five Whys where it's like, "Oh, we're doing this because we need to do this thing for this customer. They asked for it." And it's like, "Okay, well, why are they asking for that?" "Oh, it's because they have this problem." And why are they having this problem?" And eventually, like, "Oh, I see. Okay." The real solution has nothing to do with what was asked, and you come up with something that's maybe much tighter scoped or will better solve, and everybody's a winner in that case. But it does require following up. So I guess the short and boring answer is talk to people outside the engineering team. STEPHANIE: That's a great point. I think the questions that we as engineers ask can drive more clarity to product people as well if we continue to ask those five levels of why in ways that they maybe didn't think about either. We have the opportunity to do that if we want to do our work well, too. That's kind of exciting to me that it isn't just okay, we're handed some work to do, and they've done all of that strategic thinking separately. And having to implement those details, we can kind of start to chip away at what are we really doing here? And you mentioned talking to people outside of the engineering team. I just was thinking that pairing with non-developers would also be a really great task to do, especially when you get a ticket that's a bit ambiguous and you have questions. And you can always comment on the ticket or whatever and ask your questions. But perhaps there's also a good opportunity to work things through synchronously. In some ways, I think that is a more natural opportunity for that conversation to evolve rather than it being like, okay, I answered these questions, and now I'm going to move on to whatever else I have to do. JOËL: So you mentioned pairing. It's often good to have someone maybe outside the development team pair with you on a technical thing, but sometimes it's good to flip the script. If you're building especially software for an internal team, it can be really valuable to just shadow one of them for a couple of hours or a day. I did a project where we were building a tool for an internal sales team. And I had the privilege to shadow a couple of the sales members for a few hours as they're just doing their job. And I'm just asking all the questions like, "Oh, why do you do it that way? And what is the purpose behind this?" And I learned so much about the business by doing that. STEPHANIE: I love that we took this idea of sustainable development and went beyond just technical design decisions or aspects of how we do our jobs. Because there is so much more that we can do to foster the value of sustainability or whatever other values that you might have, and yeah, I feel really excited to try both these technical strategies from the book and also the collaborative aspects as well. JOËL: I'm really excited about some of these ideas that are coming up from the book. I think today we basically just talked about the introduction, the idea of sustainability. But I think as maybe you read more in the book, maybe we can do another episode later on talking about some of the more specific technical recommendations, how they relate to sustainability and maybe share some of our thoughts on that. STEPHANIE: Yeah, I definitely am excited to keep y'all updated on this journey. [laughs] JOËL: On that note, shall we wrap up? STEPHANIE: Let's wrap up. JOËL: Show notes for this episode can be found at bikeshed.fm. This show has been produced and edited by Mandy Moore. If you enjoyed listening, one really easy way to support the show is to leave us a quick rating or even a review in iTunes. It really helps other folks find the show. If you have any feedback, you can reach us at @_bikeshed or reach me at @joelquen on Twitter. Or at hosts@bikeshed.fm via email. Thank you so much for listening to The Bike Shed, and we'll see you next week. Byeeeeeeee!!!!!!!! ANNOUNCER: This podcast is brought to you by thoughtbot, your expert strategy, design, development, and product management partner. We bring digital products from idea to success and teach you how because we care. Learn more at thoughtbot.com.
For our final holiday special podcast episode, we want to help you feel as physically prepared as possible when going for your VBAC!Stephanie of My Essential Birth joins Meagan to share her wisdom from her own two VBAC births as well as what she has helped women learn through her many years as a birth worker. You will hear tips on how to choose and vet providers, three free exercises that might just make all the difference during your labor, and the secret lesson Stephanie has learned that she wants all of our listeners to know. Additional LinksStephanie's Website and CoursePregnancy and Birth Made Easy PodcastBebo Mia's WebinarHow to VBAC: The Ultimate Prep Course for ParentsFull Transcript under Episode DetailsFull TranscriptMeagan: Turn your love of babies and bellies into cash. If you love babies and bellies and want to provide care and support to families, then Bebo Mia's webinar is the right place for you. Get answers to those burning questions like how to be the voice you wish you had at your birth and how babies and families can be supported by doulas. Learn all about the different kinds of doulas. You can work in fertility, pregnancy, birth, postpartum, or just enjoy working with those squishy babies. Supporting families by becoming a birth worker, aka doula, is perhaps an option that hasn't even crossed your mind. That's why we want you to join this webinar. You can have great earning potential while doing something you love. Bebo Mia is the one-stop shop for education, community, and mentorship. Reserve your spot today at bebomia.com/freewebinar.Meagan: Hello, hello you guys. It is the end of the year. This is Meagan with The VBAC Link and I have another holiday edition for you. Today is one that I am so excited about because this is someone that I know personally. She's a dear friend of mine and we have taken similar journeys through our doula careers, so it's really fun to be with someone that I already know and that we have the same mindset and goals for all of you out there. This is Stephanie and she is amazing. So amazing. She is a mom and a doula. She's had a VBAC and she actually has an amazing course through My Essential Birth. That's correct, right? My Essential Birth? Stephanie: Yep. Meagan: It's a course on how to prepare and get ready for birth. She has the same drive, I feel like, and passion as I do to get the information out to all of you and to help you know what is best for you whether it be, again, scheduling a repeat Cesarean or having a VBAC or maybe you're a first-time mom and you just want to know how to go along the way, seriously, Stephanie is going to be that person for you. So I'm so excited today to have her on. Welcome, Steph. Stephanie: Thank you. That's quite an introduction. I love it. Come to my podcast. Do the same thing. Meagan: No, no seriously. I was going to say, she has a full-on introduction here too. But you are amazing. You are so amazing and I love what you have done with My Essential Birth. You're busy. You've got three kids. You've got three kids and something too that is really fun is every single birth has been so different which I think just broadens your knowledge and passion, even more, to do what you do because for me, my births were all so different and I don't know, I really don't know if I would be here today if I didn't have all of those births. Stephanie: Yeah, 100%. Yes. Meagan: Don't you feel like these experiences in our lives have brought us here today and have brought passion to our hearts? But yeah. On top of that, you homeschool. You do so many things. You wear so many hats, so I'm so grateful for you taking the time today to talk to us about all of the amazing things that you do. But I think one of the really cool things right off the bat is, let's talk about your VBACs and how you really got started in all of this. Stephanie: Yeah, I think you really hit the nail on the head because 100%, if I hadn't had the experiences with the births that I have had, I wouldn't have not only the passion but the knowledge from seeing things go wrong. It makes me think of when I was 16 and I got my first car and it was a piece of crap and everything broke down on it so I had to learn about things [inaudible]. Meagan: Yes. Stephanie: No, I'm not comparing my body to a car, but I will say that those experiences totally shaped the way that I do what I do today and the passion behind it. My first baby– now, mind you, in my head, this was my goal. I wanted to go unmedicated. It was what I wanted to do. I just wanted to have that experience for myself for no particular reason. That's just what I wanted to do. We got around 34-35 weeks and I was reading a birth story online. Mind you, this was 13, 14 years ago, so it was a little bit ago not like what we see today with birth stories and stuff, but I'm at work and bawling because I'm super pregnant. I'm like, “That's what I want my birth to be like,” so I researched the classes that kind of went along with this book and I reached out to some local birth educators. It was this 12-week series and I had four or five weeks left to go. There was this one lady that was like, “Okay, I'll do these intensive courses on the weekend if you could make it.” I'm over like, “My husband works every weekend. We're super broke.” She was going to do it for this bigger prize. I'm like, “It's fine. I'll wing it. It's going to be fine.”Fast forward to that birth and missing some red flags, things like my provider telling me when first of all, he didn't want to have the conversation until 36 weeks about what the birth was going to be like, so I told him early on, “I don't want to have an epidural. I want to go unmedicated.” He was like, “We don't talk about that until 36 weeks.” That was a red flag, but I didn't know any better. Meagan: Interesting, yeah. Because that's what they do. Stephanie: Uh-huh and I was like, “Okay. Sure.” Totally. He was super old school. There were a couple of things and just the way that he talked to me that I should have caught on, but when 36 weeks came and I said, “I really want to go unmedicated,” and whatever and he was talking about, “Well, I actually let my patients get their epidurals much earlier than others. Why be in pain?” And I'm like, “No, it's really important to me.” And then he continued with, “Well, women with size 5.5 shoes and smaller tend to have Cesarean births.” Now, mind you, I'm a small person. I'm 5'0”. My shoe size is 5.5 and I'm sitting there just, “You've got to be freaking kidding me,” because my grandmother who was 4'10”, and her grandmother. I'm just going down the line like, “Nobody would be here. What are we talking about?” But at the same time, I'm a new mom. It's my first birth. I'm scared, so I stayed with him, and anyways, the cascade of intervention that happened was my water broke with just a trickle. I didn't have contractions. The provider ended up telling me once I was at the hospital that I needed to have Pitocin and I say that because I remember asking the nurse, “Did he say that word need?”She was like, “I'll come back.” But she was like, “He said need.” So I said, “Okay, well then I must need Pitocin.” So we took Pitocin. That baby did not do well with it. He couldn't crank up the Pitocin enough to make the contraction strong enough to actually make labor progress because my baby's heart rate would drop. That was, in my opinion, a medically-caused Cesarean because yes, when I have a baby in distress, then there we are. So that was my first experience with birth. I didn't connect with my baby right away. On top of being a new mom and figuring out life, I had just had abdominal surgery. I was a mess of emotions and then the next two births are where I found some redemption and healing and passion and power for women's bodies and what we can do. During my second birth, we had moved overseas to Germany and I was meeting with a doctor. I'd met with an OB but it was actually midwives who you give birth with. I had taken a really good birth course and I had been practicing a lot of stuff. I did not understand a ton about positioning though for my baby and so I had two days of prodromal labor which is not that big of a deal. Two days of prodromal labor, then finally things kicked in and I was in full active labor, but then I had pushing contractions at 4 centimeters, so now, my doula brain goes, “Oh, it's a positional thing. I have all of these ideas,” but then, I was like, “Oh my gosh. I'm not going to make it.” And then too, the wonderful German nurse there– there was a little bit of a language barrier for sure, but I was like, “I really want to get into the water.” She was like, “Oh, later. And also, I have something, honey, that will take all of that away. You just let me know if you want a little bit. We'll just stick it in the bum. A little bit of pain meds.” At the time, I was like, “Yeah, that's a good idea. Let's try that.” But I had the pain meds. That ended up being like, I was comfortable before two contractions before my water broke. It took the edge off enough that my body was like, “Let's get things started,” but then the contractions were right back on. I did end up with an epidural for that birth. My baby did fine with the Pitocin. I pushed that baby out vaginally. I wasn't forced into another Cesarean or anything and that birth was amazing. I was very, very pleased with the way that that birth went. And then we were moving from Germany back to the United States, particularly to North Dakota. If you know anything about North Dakota, they don't even have– my midwife was not a licensed midwife on purpose. You cannot be a licensed midwife and deliver babies outside of a hospital setting. They can get arrested. Meagan: Yeah. Yeah. It's illegal. Stephanie: It's not the black market, but she's not licensed. She was a direct-entry midwife. So we were moving back from overseas to North Dakota and I called the hospital first before I met with a home birth midwife. They told me, “Well, we don't really care that you've had a vaginal birth after Cesarean. You had a Cesarean before, so you need to plan for another scheduled Cesarean birth,” so talk about my red flags now. Meagan: You're like, “Nope. Nope.” Stephanie: No way. I'm going to do whatever I have to do. So I did. I reached out to a home birth midwife. I found a doula and all of those things that I probably should have done with baby #1. We planned for me to have an unmedicated experience at home. I was really excited about that up until 35, 36 weeks. I had a breech baby for one and that breech baby, we were able to get him turned, so that part went away, but then it was the mental game of, “Can I actually do this? You've never not had an epidural.” All of that self-talk starts happening and it's not good. My doula was like, “Here's a list of affirmations. Take what you like. Leave the rest and start saying them out loud several times a day every day.” And so I did that and within a week or so, I was like, “Oh my gosh.” I went from being scared and nervous to confident and excited. I was like, “I can do this.” So that baby had a week of prodromal labor. It was about 5 or 6 days of prodromal labor and then things get moving and I have some active labor that hit, but my contractions never really got closer than about 6 minutes apart. They would last a minute to two minutes long, but they were never those super crazy close, consistent. Things kept going off in my head like, “If I was in the hospital, I definitely would have been offered a Cesarean birth.” It wouldn't have been a question, especially in that hospital. These contractions were coming. My midwife, we finally call her and I'm like, “Look. I've been in prodromal labor and now it's active labor, but they're not closer than 6 minutes.” She checks me and I'm 6 centimeters. I was like, “My labor is progressing on my own.” It was so cool. And then it was another 12 hours from that point and I had my baby. But it was incredible. Those contractions and just knowing that my body was doing what it was meant to do. There was a point where I was like, “Oh my gosh. I'm so tired. I need to sleep.” For sure, we went upstairs. I slept for 45 minutes. I had two contractions. It was another moment where I was like, “Yeah.” If I was at the hospital, somebody would say, “Oh, she's stalling. We've got to do something.” Whatever. But those two contractions and the second one, I woke up and I was like, “Oh my gosh, what is happening? I can't do this anymore.” Sure enough, I'm thinking, this better be transition. My midwife comes in. She had heard me. She was sleeping downstairs. She comes to the door. She's like, “Do you want me to check you?” I'm like, “Yes, please. Let's see where I'm at.” She's like, “You're 9.5 with a bouncy lip of cervix. You're good to go. Let's get you to go to the bathroom. You can get in the birth tub now.” So we did that and i can laugh about it now, but I went downstairs. I went to the bathroom and after I was done peeing, I had my first pushing contraction. I remember telling my husband, “I don't want to give birth on the toilet. I have to get out of here.” 4.5 hours later because of the mental blocks that I had– we can laugh about that now, but at the time, it was very serious. Like, “I'd better get to the birth tub.” Meagan: Yeah. I'd better get out of here. Stephanie: Yeah, but it was wonderful. I will tell you the differences. The major differences for me in the spaces that I was in for being able to give birth unmedicated and as a VBAC, my birth team made the biggest difference. When I was at home and feeling like, “Oh my gosh. I can't do this anymore. Oh my goodness. I've been pushing so long. I'm so tired,” everyone was like, “But you are doing it. You're doing great. Keep it up.” I'm like, “Oh. I can take that in and chill and feel supported.” So I did. We kind of joke about, first of all, I was making noises that my husband the next day told me, “You sound like the screaming goats.” I was like, “Oh my gosh. I do.”Meagan: I was called a cow. My husband was like, “You're a mooing cow in there.” I'm like, “Thank you so much.”Stephanie: Well, the best part of this story, I actually love this story, the next day, my husband is sitting at the table and showing our little boys the screaming goat video. His mom's walking down the stairs and goes, “You recorded her?!” Meagan: Uh-uh!Stephanie: So I'm like, “Okay, yeah. I get it. I get it. I really did sound like that.” Meagan: You really did sound like that. That is so funny. Stephanie: But anyways, I'm pushing all this time and I do remember hitting a point even during pushing, I'm like, “Oh my gosh. I can't do this.” I was scared. I had never pushed a baby out before. Instead of holding my breath and bearing down, I was purposely breathing through my nose and not leaning into that pushing. My husband was finally like or I told him, “You need to make the bed. I need to get out of the tub,” because in my head, all I'm thinking about was, “If I can't do this, then I'm going to have to go to the hospital. We're going to have to call an ambulance. The lights are going to be on. There's going to be people I don't know.” I had to walk myself through all of those things. Meagan: You were really deep in that space. Yeah. Stephanie: Yeah. I was like, “No. This has to happen here because I can't deal with all of that.” So I told my husband, “Go upstairs. Make the bed.” I was like, “Make sure you get the lining down so we don't mess up the mattress and all of that.” When he went upstairs, it was the first time that I paused and tuned into myself. I just said a quick prayer and for me, I call God Heavenly Father. “Heavenly Father, please. I can't do this alone. I'm scared.” My husband comes down the stairs. I'm just finishing that prayer. He's ready to lift me out of the water. He was like, “Come on. Let's go. Let's go now.” He went to lift me and I'm like, “No. It's happening.” Two pushes later, that baby was out. Meagan: Oh, that just gave me major chills. Stephanie: It was the most spiritual experience of my life. I love everything about it. Yes, it was probably one of the hardest things I've ever done physically. Mentally, how it pushes you to your limits, and then you feel like you are the strongest woman alive. You can do anything. You're a good mother. You're all of the things. It was that feeling and looking at what I had done through having good support that I was like, “No. We're lying to women. You know what? If I could do this, anyone can. So now I'm going to become a birth educator and now I”m going to work with women one-on-one. I know that you can do this.” So that's where the passion came from. Those were my birth stories. Meagan: I love it. I love it. Oh, that just gave me such chills. You know what's interesting is I don't think I've ever even heard all of your birth stories like that. Stephanie: Oh really? Meagan: I don't think I have. We have some similarities. We have some similarities. Stephanie: I know. I've read through some of yours too. I love it. Yeah. Meagan: Even more. I don't think I realized. Yeah, maybe I have and it was a long time ago and I forgot, but there are a lot of similarities. I love it. You've had these VBACs. You found this passion and here you are today. So in past episodes, we've talked about mentally preparing and mentally getting into that space. You just did that. You just talked about that which is so important. It is so crucial to be in that space because when we're out here, we can't dive into birth. I feel like I did the same thing. I wish that it was recorded so I could really show people how big of a tantrum I was throwing, but I was legitimately throwing a tantrum in my driveway pacing back and forth saying, “If my water wouldn't have just broken, this would be totally different. This is happening all over again.” I was really spiraling and everyone just sat there. My neighbor was seeing me. She was like, “Oh!” I'm like, “I'm in labor.” She stopped and was like, “Is she okay?” Rick was like, “She's just gonked or something right now.” I had her watching me. My mom was watching me. The kids were like, “Mom!” I'm throwing my hands and voicing everything that was in my head out loud getting it out there but I needed to do that. I needed to do that but as soon as I could get that out, I remember the drive. We were getting in the car to go to the birth center and meet my midwife. I had my baby later that night, but it was the morning before I had my baby and he was just like, “So, how did that feel?” I was like, “So good.” I just remember labor coming on so much stronger. You have to get in that head space. We know there is the headspace, but what about the physical? I feel like there is so much goodness that you talk about. The physical aspect of preparing for birth and not even just preparing to actually give birth, but preparing and creating that team and creating that environment. One of the first things is knowing your stuff. How can our listeners know their stuff? Right now, they are listening to this, so this is what you can do to know your stuff. But yeah. When you say ‘know your stuff', what would that all entail? What would you suggest?Stephanie: Yeah, this is kind of the tricky thing that I'm always weighing one thing against the other where it's knowing what you want for your birth and how to get there and then making sure that you're vetting your provider. They really do go hand in hand but it's really tricky because just depending on what order you take, you may have to change up one or the other. But when it comes to understanding what you need in order to have the birth that you desire, one of the things that I tell moms to do is, “Take a meditative moment. Close your eyes and take some deep breaths. Picture yourself from that very first contraction through to when you give birth. What does that look like? Where are you? Who is around you? What are the lights like? What do you smell? What do you see?”That will help you decide. It gives you some idea of how to get there or what you're going to need in order to get there. I'll do this exercise with moms and moms that were planning to give birth at a hospital but never make it there in their minds. They're at home. They don't ever get in the car to go to the hospital. They've had their baby at home. So I think really understanding what you are looking for. And even for a mom that has that experience, she's planning to give birth at a hospital, but she has this really calm, relaxing thing at home, it doesn't necessarily mean that she needs to be giving birth at home although it could, maybe it's more of, “So I need to have control over my body, control over the situation. I need to be in my own clothes,” and those sorts of things. Meagan: Oh, I love that you just said that. Stephanie: And really understanding what is creating that image in your mind. But of course, I'm going to talk about taking a good birth course because not only is that what I did that was so life-changing for me but that is what I help moms do today just like you have a birth course where you talk about preparing for VBAC. A good birth course is going to include all of those things like how to stay healthy and low-risk with nutrition, and good exercise that you can do not just moving your body and keeping your heart rate, but what are things positionally that you can do for yourself and your baby? How are you going to stretch the perineal area or use the specific muscles that are going to be used for birthing and labor time? That's going to be all the way through understanding each phase of labor, how to work with your birth partner, how they can support you, how relaxation can be so important and meditation, all the way through to birth and postpartum. That includes every situation that can happen on the way. When you walk into your birth space, are you going to have an IV or wear your own clothes? Do you want to have intermittent fetal monitoring or do you want to be on the monitor the whole time? If you're talking induction, what are your options? So I think really understanding what your options are, and some of that changes as your birth changes or as other options are provided whether or not you have gestational diabetes or if you're GBS positive. Those are different decisions you have to play with and make, but if you like listening to podcasts, taking a good birth course, watching birth videos, if you're gathering all of that information and coming together for yourself deciding what you want for yourself, then you can move into asking the right questions to help that provider because that really is the next step. You can have this wonderful birth that you have thought of and dreamed of in your mind and if your provider is not on the same page, if they are not supportive, you might not get it at all and it's not even your fault. Meagan: I know. That is so hard because sometimes we don't know what it looks like to have that supportive provider. We don't know what it looks like because for me, with my first birth, I went to my OB and he was really nice and welcoming, and charming. I was like, “Cool. He's rad. He's great,” and then there were the red flags but I didn't see those red flags. It's so hard to know how to find that provider and you say to vet your provider. What do you mean by vetting your provider and what tips would you give to start that process and know right away what you really want to look for? Stephanie: Yeah. I'm glad you asked that. I think probably one of the best things you can do is meet with more than one and different practices. Meagan: Yes. Yes. Different practices are such a big thing because even the one provider in the same practice, they're going to have similarities so it is so important to branch out. When I was going that with my VBAC baby, I did. I went to multiple people and I could physically feel the difference without even speaking to anybody. Stephanie: Yes. 100%. I always said that I didn't believe I was intuitive at all just as a person, I don't feel like I am in touch with myself. If that's you, you're wrong. Just like you explained right there, we do. You know when you have conversations with other people or you walk into a room. There's a feeling there and how you're treated matters. The problem is, I think and I mean, I'm guilty of it too. I think we put providers on this pedestal and they're kind of untouchable. They're above us in some way because they're gone to school and they've got knowledge about things that we don't. In some ways, maybe that's true. That's why we hire them because they have skills that we need that we can't meet while we are in our vulnerable state. The other side of that is that they are also a person and how they treat us matters. And so when you are asking questions and meeting with providers, how are you feeling? Were you respected? Were you rushed when you bring up something? Providers will actually eye roll or laugh at some of the things that you say. That's a red flag. Meagan: It's so true. Yes. Stephanie: I say too, you know what? Go meet with a birth center out-of-hospital provider. You don't have to plan on giving birth there at all. Pay attention to how you are treated. How does that feel for you? For people that are maybe interested in that and they are like, “Oh, that's so scary and my husband doesn't want to or my birth partner really doesn't want me out of the hospital,” great. Go take him and have a free interview with an out-of-hospital care provider and just see how you feel. If you hate it or it's not for you, then that's great but I think that you need to have the contrast. I think you deserve to have the contrast. It's the same with doulas. I'm like, “You don't know if you want a doula? Great. Go meet with one anyways. It's a free consult and then you can decide.” But vetting a provider, like I said, you have to have some questions going in. VBAC-specific moms, they're going to want to know things like, “Okay. For a mom like me, I'm healthy and low-risk. It's my second baby and I've only had one Cesarean birth. What does it look like for someone like me in your practice having a vaginal birth after a Cesarean? What are your percentage rates? Do you use the VBAC calculator or how do you decide? Do you induce? What are your reasons for induction and can I say no?” You always can but it's always fun to ask a provider, “Can I say no?” The answer should always be yes but it might not be. “We'll talk about it when we get there.” So you have to have some specific questions that you're bringing in to decide if this is somebody that you can handle and you are probably maybe not going to match up on every single thing. That's okay too, but are those big things being met? I think that's what helps you decide, “Is this going to be a good match for me or not?” Meagan: Yeah. I love that. And just tuning into your overall feeling. Like you said, providers can eye roll and they can be subtle. They can be subtle, really subtle, right? Even midwives can do that too. Stephanie: Oh totally, yes. Meagan: OBs, midwives, it's so important to really tune into that. I think it's so important to do that even before becoming pregnant too. Sometimes to find an OB—if you are thinking that you want to become pregnant soon and you have an OB or a midwife, start there. That's totally fine, but it's okay to branch out and say, “I'm not expecting yet. I'm preparing. I want to find that provider right from the beginning.” Sometimes that doesn't happen, but I think it's good to do if you can. I mean, I wasn't pregnant and I went to 12 providers. Stephanie: I love it. Meagan: 12 providers which were maybe excessive. Maybe, but that's what I needed. I needed to go and I needed to hear all of their things and feel all of that in those environments. I chose the provider that I thought was totally amazing. He still is. I'm not saying he's not, but for me, I thought he was perfect. He was exactly what I needed out of everybody and then I still changed at 24 weeks, right? And so a lot of people are like, “Why would you change? He's so supportive.” I'm like, “He is so supportive and I still feel all the good, but something is not resonating.” That's okay too. Even if you do find your provider. Say at your appointment, you find your provider and you're not feeling it or you're getting things like Stephanie where it's like, “Hey, this is what I want to do.” “We don't talk about that yet.” Those types of things, if they are not willing to hear you and they don't want to know how they can help you in this birth experience, are red flags. Don't feel like you have to stay like both Stephanie and I did because I felt like I had to stay too. I felt like I was cheating on my provider if I left him. He had gone this far with me. He had supported me this far, but at the same time, I truly believe I probably wouldn't have had that second Cesarean. I really don't believe that if I would have changed, but it's okay because it's my birth story and that's why I'm here, but it's okay. It's okay if you're feeling off and you want to change. It's okay to do that. Stephanie: Yeah. I think you can't shout that from the rooftops enough because it's true. You do feel like, “Oh, I'm going to hurt their feelings or something.” No, you're not and if you do, who cares? You're never going to see them again. Let it go. Meagan: Exactly. Stephanie: It's so important for you and your future. It's such an important moment for you. It doesn't matter. It should trump that. Meagan: It should trump that. Someone else's feelings. That's the hardest thing. We have so many people out there. If you are a people pleaser, you're not alone and it's easy to please your provider. You want to please your provider, but remember, they are working for you. They are there for you. If they're not pleasing you, it's okay to leave. It is okay to leave and so yeah. It's a hard thing to do, but I do encourage people to tune in, follow their hearts, tune into that and do what's best for them because if they don't truly vet their provider, it can make or break an experience. Stephanie: Yeah, it can. A good provider is going to help make it just like you said. My midwife and my doula who were in that third birth, oh my gosh. They are a part of my life forever whether they like it or not. You are bonded with those people forever and you need that kind of support in your life. Meagan: Right, yes. Yes. Okay, so we're talking about knowing your stuff and vetting your provider. Now, let's talk about putting in the work. We've got these things. Now, going for it. What things would you suggest? Stephanie: Yeah as far as putting in the work, I really recommend– and I have it on my website as well and you can tell me if you like these ideas or not, but I recommend these three exercises that you can do every day. First is the forward-leaning inversion. You're literally—you get up on a low-lying chair or couch probably with support. Put a pillow down in front of you. Get your elbows on the ground with your bum in the air and you hold that for three breaths. You do that once a day. If you're somebody who has heartburn or something, obviously, you're maybe going to want to not do that depending on how the heartburn is or there are a couple of people who shouldn't do that. Basically, that is really good because it releases certain ligaments. It allows more room for baby. It allows for really good positioning. That's something that you can do to make sure baby is in a good position. Meagan: Every day. Stephanie: Every day. An easier, more comfortable labor. The other thing you're going to do is pelvic tilts. You can choose to do how many you want, but I like to do them at least when I get up in the morning and before I go to bed. That's 20-40 tilts. That's in the hands-and-knees position. You're tilting your pelvis forward and into a flat back, forward and into a flat back. Again, that's strengthening certain areas. It's helping baby's position. Those are really, really good for you to be doing. The third one is the squat. This is a deep-seated squat. It's not like we are going to grab weights and do a weighted squat or anything like that. This is like how you see people in third-world countries who don't have chairs or new babies, toddlers when they go down to squat and play with something, look at that squat because that's the one that you are going for. The reason for that is because it stretches the perineal area. It strengthens the muscles in your legs. Chances are when it was pushing time, you're going to be in some kind of squat. Now maybe not, but chances are the majority of us are going to end up there. The other thing about squatting is that it shortens the birth canal, it makes it easier to be able to push baby out and that's why we end up in that position but if you're practicing that squat specifically, and this is where my husband was so good. “I'll tell you what, for every minute you squat for the day, I will give you a minute of massage at the end of the night.” I was like-- Meagan: Oh my gosh. Done. Done, done, done. Stephanie: An hour a night, I am not joking. So he was so good supporting me that way, but I'll tell you what, when I started squatting and it was probably later in my pregnancy like 34-35 weeks. When I started squatting, it was 1-2, maybe 3 minutes before my legs were numb, my feet hurt and I had to stand up. Everything was tingling, but a couple of weeks in, I could hold it for 15 minutes comfortably. So when I was telling you before that I was pushing for 4.5 hours, I was in a birth tub in a squatted position for that amount of time— Meagan: Wow. Stephanie: --and I remember thinking, “I'm so glad I practiced these squats because I wouldn't have had the stamina.” As far as physical prep, those are things that you can do every single day. Meagan: I love that. Stephanie: Thank you. I know and I'm like, you and I have taken some similar training and stuff. It's valid. It's real. Meagan: It really is. Stephanie: The other things that you can do are, let's stay healthy and low-risk. That means you're eating a high-protein diet. You're drinking a lot of water. You're taking your prenatals, well-balanced. That matters because it can keep things like preeclampsia at bay. It's also going to make you feel better and give you more energy, so there are a lot of benefits to that. But my favorite part of staying healthy and low-risk is that you remain in charge of your birth decisions. That's why it matters to me so much. It's not even just for the health of myself and my baby. It also comes down to, “I want to have a say as to how all of this goes.” So those are some of the physical things. Then we move into the, once I understand how birth works, what are the signs that I'm in labor? What are the signs I'm in active labor? How do I work with my body? Learning things like relaxation and I do that through relaxation practice. Even just a simple one, and you can do this with your birth partner or by yourself, but you set up this stage. So use your senses. You should be leaning back in a chair or in your bed lights dimmed with essential oil or a consistent smell that your body gets used to smell. You just practice breathing deep into your belly. Imagine how you breathe when you wake up in the morning. First thing, pay attention to how you breathe when your eyes first open. It's really deep belly breaths so try to aim for that. Do that for 10 minutes. Just go from your head to your toe and be like, “Okay. I'm going to feel the hairs on my head relax, and then my eyebrows, and then my jaw.” All the way down. The thing is, it's not easy to do when you're not used to relaxing but when you utilize all of those senses, then it becomes something called muscle memory. So if I know my body knows because I've been doing this for the last several months that every time the lights are dimmed and I smell lavender essential oil and I'm breathing into my belly, then when you do those things during labor, it's like, “Oh, lights are dimmed and lavender,” then you don't really have to think about it. Meagan: It's intuitive. Stephanie: Yes. “I'm supposed to relax now.” And then obviously you need to practice relaxation. Once you get good at that, you can practice it with the lights on, with the TV on, with your husband or kids walking through the room because that's the reality of birth and especially if you're in a hospital. Meagan: Yes, yes. Stephanie: But learning relaxation is really important. And then you move into—there's a lot more to do with that like meditation and the mental stuff and all of that. Labor rehearsal where you practice with ice and other things. There is plenty that you can do, but I would say relaxation, your three exercises, and staying healthy and low-risk are probably just top of the list things that you can do on a daily basis. Meagan: Oh my gosh. I love it. So good, so good. I love that you talked about preparing and then it becomes muscle memory. It's so true. It's so, so true. I encourage if you're ever in a moment where you're feeling stressed or overwhelmed to dive into that because there are going to be moments in labor and birth when you might feel stressed and overwhelmed. If you can practice doing that in those moments, oh my gosh. It's going to be so beneficial. So I know we're almost out of time, but I wanted to ask you what is a secret lesson or something no one really talks about that you wish you would have known ahead of time when preparing for time? Stephanie: That would be that you can say ‘no' to anything. I feel like I teach this all day long and I talk about it a lot. I don't know how often moms let that register because they will know that and then you'll get with their provider and they're doing non-stress tests or whatever and it's like, all of a sudden, oh crap. I need this and this and this. No. You can actually say ‘no' to literally anything. Meagan: Anything, yeah. Stephanie: Anything, yeah. They can't do anything. The best that they can do is make you sign, what is it? Meagan: An AMA. Stephanie: A medical release, yeah. AMA, against medical advice. Meagan: Against medical advice. Stephanie: Sign it. Sign it. It's your body. You get to choose. And then kind of like I talked about, when I talk about health and nutrition, I think a lot of times, moms don't register. “Okay, yeah. I get it. I'm supposed to be healthy.” But it's so you can be low-risk and in charge of your birth. I think that's a really important part of that. Meagan: Yes. I think so too. It's so hard. It's so hard to be in that moment and be like, “Uh, okay.” When you're like, “I really wanted to say no. I had a prenatal last night with a client and they were like, “One of the biggest things that we don't want to do is go in and just say yes to everything. That's one of their biggest goals is not to just say yes to everything. They're not saying, “We want to refuse everything,” they're just saying, “We want to be educated and we want to know what we're saying yes to.” It's so important to know. If you are saying yes, know why you are saying yes. And if not, it's okay to say no or “One moment. Let me think about it.” It's okay because there are times where things are going to be thrown at you and it is hard to say, “No” or actually, “I want more time” or “I'm not sure about that right now” but you can. You can. You have the right to say no. You have the right. So it's so important to know. I love that. Any last final tips for someone preparing for VBAC that you would like to give to our listeners? Stephanie: I think we've kind of touched on this before. It just really matters who you pick for your provider. I know we kind of talked about some things that warrant a red flag or time to interview somebody else or something, but really, if you've got that education and you've got that provider piece, you're setting yourself up for success. It should be somebody that supports you, not tolerates the opportunity to try for a VBAC, but somebody who believes in the natural process of birth and that having a vaginal birth after a Cesarean is more healthy and safer for mom and baby than having another abdominal surgery. I think that matters that you've got somebody that believes that way. Meagan: Totally. I love that. Oh, well thank you so much for being here with us today. I want you listeners to know that she has the three free, that's what you say, right? Stephanie: Yes, three free exercises. Meagan: Three free exercises. I'm having a hard time lately with tongue twisters. Three free exercises, so we are going to be providing that in our email. If you're not subscribed to our email, please check it out because we are going to be providing so many new things and some really exciting upcoming things with The VBAC Link are going to be happening. We are going to be providing that and then will you tell everybody where they can find you? Because everyone needs to know where you're at and follow you. Stephanie: Thank you, yes. So I too have a podcast. It is called Pregnancy and Birth Made Easy. Pregnancy and Birth Made Easy is the podcast so anywhere you listen to podcasts, you can take that in. I'm also on Instagram @myessentialbirth, Facebook, TikTok, all the things, and then if you are looking for information on the birth course or anything else in regards to where some of the podcast show notes and some of that live, it's myessentialbirth.com. Meagan: Yes and all of these will be listed in our show notes today so if you want to go follow her which I promise you that you do, go click that and give her a follow because her content is amazing. Her podcast is amazing and it's been such an honor to have you here today. Stephanie: Thank you, Meagan. I love what you do too and I love that we get to do this together. Meagan: Me too. Yeah, so before we let everyone go, I didn't really give a full, “Hey, we know each other,” but we actually were in the same doula course. We became doulas together which seems like forever ago, but it was so fun to be there and to learn. You had already had your VBACs, hadn't you? Stephanie: I did. Meagan: Yes and I hadn't yet. I had only had my two Cesareans and so I just remember you being so inspirational to me and motivating me. I was like, “Okay. She could do it. She's here. She is doing this too. We have the same interests,” and I just connected to you so much. Stephanie: Same, yeah. Well then, and now look at you with The VBAC Link. You just took off. I love it. Meagan: I love being here and I love being here with all of our listeners, so again, listeners, thank you so much for being here with us today, and thanks again, Steph. Stephanie: Thank you.ClosingWould you like to be a guest on the podcast? Tell us about your experience at thevbaclink.com/share. For more information on all things VBAC including online and in-person VBAC classes, The VBAC Link blog, and Meagan's bio, head over to thevbaclink.com. Congratulations on starting your journey of learning and discovery with The VBAC Link. Advertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy
In this episode, I have the opportunity to talk with a self made entrepreneur who's followed the footsteps of her amazing dad, and in the journey has discovered what the tips are that the wealthy use to invest to change your life. Grant Hey, everybody, welcome to another episode of Financial investing radio. So I have been trying to track down this person multiple times and admitted it was my fault. I could not get my calendar right to meet with Stephanie Walter. So glad to have her here with me today. I'm fascinated with her background, what she's done in terms of growing wealth. But before I go any further, Stephanie, welcome. Stephanie Thank you so much for having me. I appreciate it. Grant Yes, this is fun to have you here. Your journey is a fascinating one to me, because it's this journey as I reviewed it, of gathering some financial capabilities, but then not resting on that, but rather using it to leverage for future wealth. So I don't want to give that away because I want I want our listeners to hear this cool journey that you've gone on. But let's rewind. Okay, let's uh, we won't go back to where you were raised as a kid. But let's go back to you get out of school, and you're thinking I'm gonna go do some work. And that led you down a certain path? Would you talk about that? Yeah, I did what like most people do, I got it. I just got a regular job with a corporation. Stephanie I had some interest in insurance. So I became a claims adjuster. And, and I sort of moved up the ranks pretty pretty quickly to where I was working kind of as a liaison between the attorneys in that represented the insurance companies and, and the insurance company. So that was, that was really interesting, but just, you know, working in a corporate setting, I remember that, you know, my pivotal point was I was getting a 2% Raise after my superiors had said, what a fantastic job I was. You're welcome all 2% Did you get to keep all that 2%? Or did you know you got to keep? Grant That's impressive. Yeah. Stephanie And I went home to my Dad, I just bought a house and was like, Dad, I just, you know, look at how much gets taken out. But with taxes, it was a big learning experience. I mean, well, as you know, I did put, you know, seven years into it, but just realize that, you know, if I'm making these 2% races for the rest of my life, you know, what is that going to look like? And my dad was an entrepreneur, actually, he's a second generation entrepreneur. And he's like, Well, you know, what you're gonna get if you stay in this, but if you go out on your own, you know, really what you build will be up to you. And it's your choice to do what you want to do. And I gave my my two week notice probably the next day, did you really? Oh, wow. That's okay. Wow, a woman a decision and action. That's awesome. Grant So, all right, so you gave you gave the two week notice you left, and then you didn't go to the pool? That's for sure. What did you go though? Stephanie Well, I have a I have a lot of relatives and insurance. And that's kind of how I started in doing in claims to begin with. And so I just knew, you know, the company I was really familiar with, went and signed up with them, took all the classes to become an agent and and just, you know, started started working, you know, right off the bat, state and insurance agent for about 16 years. See, I started that I'm trying to think of like timeframes, I think it was 2004. And then right around that same time, I kind of decided, you know, with the when the bottom fell out to buy some real estate, single family homes, right in an area in Denver, I'm a native, as I mentioned, where I felt like if there would be growth, from Denver that, you know, over time, these would probably be good, good investments to have. And that was in the Sloan's Lake area if people are familiar. And so I became, you know, a untrained landlord, as well as a business owner at the same time, all in one shot. So quick question. So when you did this transition out of the corporate world, into the entrepreneur going to do myself. Grant How many entrepreneur books did you read before you got started? Stephanie You know, I? I didn't read that many. Grant Yeah, that's like I could tell you just jumped in and went after it. Right? You got going on. Stephanie I think also my my step up in that area was I'd see my dad growing up who had never, who had always had businesses and so to I never saw him work a nine to five job, you know, have a two week vacation or anything like that. So I had a very good example of what an entrepreneur looks like. And so that's probably why I didn't need to read books. I have since read a lot of books. Grant But yeah, yeah. But you had a role model, you had a mentor to follow after. Alright, so you go through this journey, you run your real, or excuse me, your insurance agency for 16 years. What happened? Stephanie I mean, as time went on, there was you know, also some distaff dissatisfaction. Because you, you know, you really like your clients, and they're doing business because of you. But then there's this big, you know, corporation behind you, mine was Farmers Insurance, who, you know, ultimately makes the decisions based on, you know, the claims and the the rate changes and things like that. So that became kind of frustrating. But then also, you know, again, my dad was, you know, pretty. He passed away, actually, shortly after I started my agency, but I'm sorry, yeah, thank you. But I had, I remembered a lot of things as time went on. I was like, Oh, I remember when Dad said that. And one of the things he always said was, don't put all your eggs in one basket. And that was for me, that meant just, you know, don't continue, farmers was very big on, take a loan out, to keep running your visit business, make it bigger, make it better, all these things, where I just sort of directed my money in my growth into real estate, because I felt like it wasn't so attached to to the business. And I loved real estate. I didn't know much about it. I certainly wasn't very educated about it. Oh, I think it was 2016 I had gotten an invitation to a boot camp and about buying apartments, which I had always been curious about, oh, cool. Went into there. And that's where I first heard the term syndication. And I was I was just blown away, I'd never heard that I loved the idea of a group of people buying something that no one could do on their own. And I from that point on, I was all in there. I did about three years thing me maybe it was only No, I think it was only two years of education, which, you know, was an investment, but you come out of that bait being able to be very knowledgeable about commercial real estate, which is very different than residential real estate residential. Grant So if I hear you, right, I think you said that this transition to real estate, it was a diversification strategy for you following your dad's counsel, right not to have all your eggs in one basket. You still had the insurance company at least for a while, right? And then then you started investing in the real estate, is that right? Stephanie Yeah. i And well, I had all I had invested, you know, in the single family homes and they're, you know, through the last crash and then wanted to do the apartments and then in 2016, that really was probably, I mean, I kept running my agency obviously, until actually last year when I Um, my investing had my income from investing had exceeded my, my business income. So I was able to retire, or in my case, just do do a different career for a while. Grant I love that when I saw that in your profile, I thought that was the ultimate, which was to sort of break away. It's that, hey, I'm no longer just going to be a business sort of operator, right? I'm actually going to step aside and let let your income or your assets generate that income for you, right. It's the money's working for you. And I saw that in your notes too, which was a, you said some interesting about the way the wealthy do it, which is the wealthy have their money working for them? Was that always at the forefront of your mind? Or did you sort of discover that along the way? Stephanie No, that's a that's a big, I think it was big, the aha moment for me. And how I describe it is that I believe most people, and I was one of those most people believed in an accumulation model of money, which meant for most people is I'm going to accumulate the money in my 401k. I never really, you know, went down that path from owning my own business, I wanted to accumulate my money in real estate. But yet my idea was the same, which is I'm going to buy this property and manage it for 30 years until the loan is paid off. And then I will live off of the rents or whatever at that time. But when I started raising money for the syndications, I started becoming friends and, you know, meeting really, very interesting, you know, wealthy people, and just notice that they were doing stuff differently than than I was, I couldn't quite put my finger on it. But after a while of working with them, I realized that they look at their money as a good word is utilization. They're always using their money. They're using their money to give them cash flow. And there was kind of the light bulb that came on for me. Later on. You know, I started doing syndications in 2018, and I think it was the end of 2019 that I started to sell my properties one by one, and invest them in syndications. Because I realized I had these this great big chunk just sitting in and it's really not doing much as far as you know, cash flow, helping me out at all. Whereas, you know, if I just shifted my focus and where I put my money, the returns as far as cash flow, were really significant. Yeah, Major. Grant Have you ever played that game called cashflow there? I've heard about the Robert Kiyosaki Robert Kiyosaki game. Yeah, I've never played it, you shouldn't play I have a feeling you do really well with it. Stephanie Yeah. Grant Excellent with cash flow is king, as you're as you're pointing out, and the ability to get that cash flow lined up and consistently look at money as a tool to deliver the cash flow is critical. So that 401k experience, I've had that same journey where I was putting money I was putting money in in a 401k. And then the first time the market in my career, you know, did this massive dive down, right, and I'm sitting there thinking, I know that there's someone on Wall Street's buying puts against my investment making a ton of money while I'm losing a ton, wait, who came up with this strategy, right? You know, also you could keep your you know, 2% Raise, it is it is a disservice to the working class for sure. So, did you did you ever get involved in the 401k strategy? Or, or did you ultimately just leave it wouldn't? What happened there? Stephanie Eight, actually, I have my series six, when to be a n 63. So for the audience, that just means that I was registered to sell products, you know, mutual funds and things like that to my database of clients. I never really like to that I never really, I felt the variability and that the training that I was given never seemed to give me a lot of anxiety. And so I never really did much with that. And inevitably let those those licenses go. But though the 401k Actually, I'm in the process of writing a book and there's going to be there's one chapter that's dedicated to the 401k, which I do a great deal, you know of research on and you you pit. You know some really good points on on that. And but it's just letting people question it because there are so many things about the 401 K that are, you know, you're giving you're giving your money to someone else to watch. And they're not doing it for free. And financial institutions want to hold on to your money for as long as they can and give it back, as you know, little as they can. And so you're you're using your money to subsidize things that you probably don't even know your money's doing. And I know, these are hard things to come to in this day and age when it's just like, can I just give my money to this person and have him manage it? Or have the 401k make those decisions? Why do I have to be involved with everything, it really is a significant amount of money that you pay to these financial institutions. And you can do much better on your own. But I won't go into that. That's a whole nother discussion. Grant That but that's your journey, though. I think your journey is you figured out Wait a minute, I can do something differently with this. And you took control of it right? You did the education you put in the work, you discovered cash flows. The secret to this, let my money work on just building even small incremental cash flow growth and how critical that is in the strategy. Stephanie One other point just quickly is I was watching something on TV last night, and there was several commercials that came on. And they were women. They were geared to women and there they were talking about, you know, women and finances are bad with finances. And the whole message in this commercial was save your money for retirement or whatever. And I was like, I want to just get out the message that it's not saving your money. It's investing your money and learn how to be a good investor, because those are the things that are going to allow you to retire early or retire in not a poverty situation. But in you know, invest and learn how to invest because it isn't as hard as people think it is, you know? Grant Yeah, absolutely. I love that and are good. I understand. You're right. Did you say the messaging in that TV ad was that women are bad with finances? Is that what you say? Stephanie Yeah, I think well, they were trying to you know, women were kind of trying to empower themselves by saying, I'm not bad with finances, even though you know, I've been told that women are bad with finances, but it seemed like the solution for them in that commercial was save. Save your money. You say? Like, no, no, no. Yeah. Yeah. Ah, good. Good. Debt should produce cashflow. Right. That's, that's actually that's actually the message right there. One of the things I noticed as I was looking at your background, and the things you've done, as you had made a comment if I if I've got this right. Grant Money myths, you talked about money myths, and I think you just touched on one of those. What other money myths? Have you learned that we hold on to that? Are these incorrect notions that actually hurt us financially? What have you found? Stephanie There's one very significant one, which is people will say, well, the wealthy people, you know, I've talked to people and they'll be like, Oh, but the reason the people you work with have so much money is because they're willing to take these crazy risks with their money, and stuff like that high risks. That's that's why they got where they are, they are and I say actually, nothing could be further from the truth. The majority of wealthy people invest in extremely conservative things. They, the other myth is, you know, put put your money into the stock market. Many people can't tell you in their mutual funds, what they're invested in, what even one company is that they're invested in, let alone who's who are the team members on that, you know, on board or who's the CEO of the company, they can't tell you anything. Whereas wealthy people they tend to invest if they do invest in businesses, they invest directly in a business, either for themselves or they understand the dynamics of the business and the business plan and they invest that way. If they invest in real estate, they largely do the syndications and they get to know the team that's running, running the syndication. They know what kind of experience they have, what kind of past returns they've done. They do their homework in that sense. But then once they've invested in the team, they tend to invest again and again. And these are very conservative things that they're investing in things that are tangible in value. That's another. That's right. Three things I'm hitting is wealthy people tend to invest in things that have tangible value, which means, you know, an apartment complex Well, let's say, for some reason, it's terribly mismanaged and it goes out of nobody wants to be in it anymore. Well, you still have the building and the land in which you can sell. So there's, there's tangible value there. Grant Okay, so the tangible piece, that's interesting, too, especially in today's world, where digital assets are becoming more and more of a thing, right. In fact, I saw recently, someone talking about digital real estate on one of the online ads, you know, doesn't feel tangible, right. Are all the NFT stuff going on? Right are the crypto so many intangibles today as well? It Do you have any position or thoughts when they do that? Stephanie I don't because I guess I always take the line if I if I don't understand it, or if it's not something that I want, you know, I guess it comes down to really understanding it. I've had a lot of people explain it to me, but I still don't, you know, the ups and downs, you know, lately, it's been a pretty big crash, you know, people are saying that's a good thing. Okay, I still don't really understand it. And I know that they're planning on, you know, digitizing, then that's, that's probably, you know, not too far away in real estate, you know, 10, I would hope it's going to be 1015 years in the future. I don't know what that looks like. But that's definitely something in the future. I don't think that is wrong. And when I say that the wealthy people invest in, they probably do have some investments in cryptocurrency, but that's probably less than 5% of their portfolio. Great majority of what they're invested in, probably 30% Every year. If you go on to the name of this group is called Tiger 21. And it's, it's for wealthy, wealthy people, I think they have to show a net worth of at least five or $10 million to get in the group. But every year, by agreeing to be in this group, they agreed to release as a group, kind of a asset allocation of all of their investments, and every year, there doesn't change that much. And over 30% is in real estate. Grant Really. Okay. All right. That's interesting. That's fascinating. One of the things that I noticed as I looked at it now Now the name your company, you're gonna have to help me because is it Erbe Wealth? This Erbe? Stephanie Well, Erbe Wealth, okay, everybody. Well, thank you Erbe Wealth. Grant Well, so I'm on your site, I was on your site. And I was checking out. This is really cool. erbewealth.com. And I went to the about page and told my listeners, you should check this out. Stephanie's got this thing called the 15% Plus community. Can you talk about that? Stephanie Yeah, well, I mean, my partner and I started working together in 2018. And we both realized, as many successful pairings go is that he had some skills in in this in the certain areas, and I had skills in certain areas. And together, we have really done very well together, and we just closed on our 12th deal about two weeks ago. And every single deal that we put together has returned over 15%. But truthfully, every every one that we've done up to this point has returned over 20%. So the person designing my website said, I don't know you might want to just put that down to 15%. But every deal that we have done has had an annualized rate of return of over 20%. So if you're we, our goal is when we hold the money for three to four years, then we'll double your investment in that time. And we have we've done that successfully, and we have a system and we're will we're continuing with it. Grant That's amazing and that's that's leveraging the syndicated real estate strategy. Stephanie Yep, that's we buy apartment complexes and a very specific market in the country, we have a very specific buying strategy that allows us to get in and make money when we purchase it, purchase the property. And then we just find areas where there's there's been a lot of growth, and there's been a lot of rent growth and population growth. And I think if anyone's been listening to the news is we know that there's a housing shortage. So we buy in areas where, you know, there's a great deal of population growth and not enough housing, Grant What is your what is your perfect client look like? What's their profile? Like? Stephanie I mean, I would like it to be more broad than than it is, it's usually, you know, well, to invest in our deals, you need to be accredited, which, you know, that means you need to have a net worth of a million, or you have a $200,000 salary. And so I love working with business owners, that's kind of my thought to I tend to attract a lot our business owners, because, well, one is, they're so busy trying to make their business work, and I'm talking more like smaller business owners, you know, and, you know, trying to manage their company, which they're very passionate about, but business owners tend to not really plan that well for their retirement, because they're just, you know, they're thinking all about this. Yeah. Run on the business constantly, right? Yep. Right. So those are, you know, those are the people I love to work with, just to you know, get them some cash flow, that that is nice, but as well as just having, you know, great returns that they don't have to manage, you know, at all. Grant So, okay, very good. While you've been very generous with your time, can you give our listeners a place to go to to learn more about you? Yeah, to your website? Stephanie Yep. That's my website, which is erbewealth.com. There's, I have I think, right now, it's not a lot, but it's about 15 articles that I've written, that just I try to really educate the newer investor that isn't familiar with this type of investing. And then there's a track record of of all of our Not, not cherry cherry pick deals closer, every single deal that we've done together, up until this point, and then you can join, you know, the list the email list to get notifications, I like to really educate my investors, as well as then they get the first, you know, chance of getting the new investment when it comes out. But air Bay, actually is the German word for legacy. And my dad was a second generation, my grandfather came over on the boat right from Germany. And he became an entrepreneur after he paid his dues and did everything he needed to do to become a citizen. And then my dad, you know, followed in his footsteps and was an entrepreneur. Grant So I was gonna ask you about the backstory on that name. I was trying to figure out Erbe. What is that? Yes, that's awesome. I appreciate that. Stephanie Yeah, not to my dad, who never you know, saw any of this, but definitely, it's because of him that this has happened. I can tell you have an awesome dad. Really cool. Grant That's awesome. Stephanie, any final comments that you want to share? Stephanie No, no, but I'd say you know, just just check on my website. I'm trying to, like I said, working on a book and that that'll be my next. I'm hoping to have it done by the end of summer. So when when it's available, it will be available on my website as well. Grant That's awesome. Stephanie, thank you so much for taking the time with us today, everyone. Thanks for listening to another episode of Financial Investing Radio. And until next time, check out erbewealth.com.
In this episode, I have the opportunity to talk with a self made entrepreneur who's followed the footsteps of her amazing dad, and in the journey has discovered what the tips are that the wealthy use to invest to change your life. Grant Hey, everybody, welcome to another episode of Financial investing radio. So I have been trying to track down this person multiple times and admitted it was my fault. I could not get my calendar right to meet with Stephanie Walter. So glad to have her here with me today. I'm fascinated with her background, what she's done in terms of growing wealth. But before I go any further, Stephanie, welcome. Stephanie Thank you so much for having me. I appreciate it. Grant Yes, this is fun to have you here. Your journey is a fascinating one to me, because it's this journey as I reviewed it, of gathering some financial capabilities, but then not resting on that, but rather using it to leverage for future wealth. So I don't want to give that away because I want I want our listeners to hear this cool journey that you've gone on. But let's rewind. Okay, let's uh, we won't go back to where you were raised as a kid. But let's go back to you get out of school, and you're thinking I'm gonna go do some work. And that led you down a certain path? Would you talk about that? Yeah, I did what like most people do, I got it. I just got a regular job with a corporation. Stephanie I had some interest in insurance. So I became a claims adjuster. And, and I sort of moved up the ranks pretty pretty quickly to where I was working kind of as a liaison between the attorneys in that represented the insurance companies and, and the insurance company. So that was, that was really interesting, but just, you know, working in a corporate setting, I remember that, you know, my pivotal point was I was getting a 2% Raise after my superiors had said, what a fantastic job I was. You're welcome all 2% Did you get to keep all that 2%? Or did you know you got to keep? Grant That's impressive. Yeah. Stephanie And I went home to my Dad, I just bought a house and was like, Dad, I just, you know, look at how much gets taken out. But with taxes, it was a big learning experience. I mean, well, as you know, I did put, you know, seven years into it, but just realize that, you know, if I'm making these 2% races for the rest of my life, you know, what is that going to look like? And my dad was an entrepreneur, actually, he's a second generation entrepreneur. And he's like, Well, you know, what you're gonna get if you stay in this, but if you go out on your own, you know, really what you build will be up to you. And it's your choice to do what you want to do. And I gave my my two week notice probably the next day, did you really? Oh, wow. That's okay. Wow, a woman a decision and action. That's awesome. Grant So, all right, so you gave you gave the two week notice you left, and then you didn't go to the pool? That's for sure. What did you go though? Stephanie Well, I have a I have a lot of relatives and insurance. And that's kind of how I started in doing in claims to begin with. And so I just knew, you know, the company I was really familiar with, went and signed up with them, took all the classes to become an agent and and just, you know, started started working, you know, right off the bat, state and insurance agent for about 16 years. See, I started that I'm trying to think of like timeframes, I think it was 2004. And then right around that same time, I kind of decided, you know, with the when the bottom fell out to buy some real estate, single family homes, right in an area in Denver, I'm a native, as I mentioned, where I felt like if there would be growth, from Denver that, you know, over time, these would probably be good, good investments to have. And that was in the Sloan's Lake area if people are familiar. And so I became, you know, a untrained landlord, as well as a business owner at the same time, all in one shot. So quick question. So when you did this transition out of the corporate world, into the entrepreneur going to do myself. Grant How many entrepreneur books did you read before you got started? Stephanie You know, I? I didn't read that many. Grant Yeah, that's like I could tell you just jumped in and went after it. Right? You got going on. Stephanie I think also my my step up in that area was I'd see my dad growing up who had never, who had always had businesses and so to I never saw him work a nine to five job, you know, have a two week vacation or anything like that. So I had a very good example of what an entrepreneur looks like. And so that's probably why I didn't need to read books. I have since read a lot of books. Grant But yeah, yeah. But you had a role model, you had a mentor to follow after. Alright, so you go through this journey, you run your real, or excuse me, your insurance agency for 16 years. What happened? Stephanie I mean, as time went on, there was you know, also some distaff dissatisfaction. Because you, you know, you really like your clients, and they're doing business because of you. But then there's this big, you know, corporation behind you, mine was Farmers Insurance, who, you know, ultimately makes the decisions based on, you know, the claims and the the rate changes and things like that. So that became kind of frustrating. But then also, you know, again, my dad was, you know, pretty. He passed away, actually, shortly after I started my agency, but I'm sorry, yeah, thank you. But I had, I remembered a lot of things as time went on. I was like, Oh, I remember when Dad said that. And one of the things he always said was, don't put all your eggs in one basket. And that was for me, that meant just, you know, don't continue, farmers was very big on, take a loan out, to keep running your visit business, make it bigger, make it better, all these things, where I just sort of directed my money in my growth into real estate, because I felt like it wasn't so attached to to the business. And I loved real estate. I didn't know much about it. I certainly wasn't very educated about it. Oh, I think it was 2016 I had gotten an invitation to a boot camp and about buying apartments, which I had always been curious about, oh, cool. Went into there. And that's where I first heard the term syndication. And I was I was just blown away, I'd never heard that I loved the idea of a group of people buying something that no one could do on their own. And I from that point on, I was all in there. I did about three years thing me maybe it was only No, I think it was only two years of education, which, you know, was an investment, but you come out of that bait being able to be very knowledgeable about commercial real estate, which is very different than residential real estate residential. Grant So if I hear you, right, I think you said that this transition to real estate, it was a diversification strategy for you following your dad's counsel, right not to have all your eggs in one basket. You still had the insurance company at least for a while, right? And then then you started investing in the real estate, is that right? Stephanie Yeah. i And well, I had all I had invested, you know, in the single family homes and they're, you know, through the last crash and then wanted to do the apartments and then in 2016, that really was probably, I mean, I kept running my agency obviously, until actually last year when I Um, my investing had my income from investing had exceeded my, my business income. So I was able to retire, or in my case, just do do a different career for a while. Grant I love that when I saw that in your profile, I thought that was the ultimate, which was to sort of break away. It's that, hey, I'm no longer just going to be a business sort of operator, right? I'm actually going to step aside and let let your income or your assets generate that income for you, right. It's the money's working for you. And I saw that in your notes too, which was a, you said some interesting about the way the wealthy do it, which is the wealthy have their money working for them? Was that always at the forefront of your mind? Or did you sort of discover that along the way? Stephanie No, that's a that's a big, I think it was big, the aha moment for me. And how I describe it is that I believe most people, and I was one of those most people believed in an accumulation model of money, which meant for most people is I'm going to accumulate the money in my 401k. I never really, you know, went down that path from owning my own business, I wanted to accumulate my money in real estate. But yet my idea was the same, which is I'm going to buy this property and manage it for 30 years until the loan is paid off. And then I will live off of the rents or whatever at that time. But when I started raising money for the syndications, I started becoming friends and, you know, meeting really, very interesting, you know, wealthy people, and just notice that they were doing stuff differently than than I was, I couldn't quite put my finger on it. But after a while of working with them, I realized that they look at their money as a good word is utilization. They're always using their money. They're using their money to give them cash flow. And there was kind of the light bulb that came on for me. Later on. You know, I started doing syndications in 2018, and I think it was the end of 2019 that I started to sell my properties one by one, and invest them in syndications. Because I realized I had these this great big chunk just sitting in and it's really not doing much as far as you know, cash flow, helping me out at all. Whereas, you know, if I just shifted my focus and where I put my money, the returns as far as cash flow, were really significant. Yeah, Major. Grant Have you ever played that game called cashflow there? I've heard about the Robert Kiyosaki Robert Kiyosaki game. Yeah, I've never played it, you shouldn't play I have a feeling you do really well with it. Stephanie Yeah. Grant Excellent with cash flow is king, as you're as you're pointing out, and the ability to get that cash flow lined up and consistently look at money as a tool to deliver the cash flow is critical. So that 401k experience, I've had that same journey where I was putting money I was putting money in in a 401k. And then the first time the market in my career, you know, did this massive dive down, right, and I'm sitting there thinking, I know that there's someone on Wall Street's buying puts against my investment making a ton of money while I'm losing a ton, wait, who came up with this strategy, right? You know, also you could keep your you know, 2% Raise, it is it is a disservice to the working class for sure. So, did you did you ever get involved in the 401k strategy? Or, or did you ultimately just leave it wouldn't? What happened there? Stephanie Eight, actually, I have my series six, when to be a n 63. So for the audience, that just means that I was registered to sell products, you know, mutual funds and things like that to my database of clients. I never really like to that I never really, I felt the variability and that the training that I was given never seemed to give me a lot of anxiety. And so I never really did much with that. And inevitably let those those licenses go. But though the 401k Actually, I'm in the process of writing a book and there's going to be there's one chapter that's dedicated to the 401k, which I do a great deal, you know of research on and you you pit. You know some really good points on on that. And but it's just letting people question it because there are so many things about the 401 K that are, you know, you're giving you're giving your money to someone else to watch. And they're not doing it for free. And financial institutions want to hold on to your money for as long as they can and give it back, as you know, little as they can. And so you're you're using your money to subsidize things that you probably don't even know your money's doing. And I know, these are hard things to come to in this day and age when it's just like, can I just give my money to this person and have him manage it? Or have the 401k make those decisions? Why do I have to be involved with everything, it really is a significant amount of money that you pay to these financial institutions. And you can do much better on your own. But I won't go into that. That's a whole nother discussion. Grant That but that's your journey, though. I think your journey is you figured out Wait a minute, I can do something differently with this. And you took control of it right? You did the education you put in the work, you discovered cash flows. The secret to this, let my money work on just building even small incremental cash flow growth and how critical that is in the strategy. Stephanie One other point just quickly is I was watching something on TV last night, and there was several commercials that came on. And they were women. They were geared to women and there they were talking about, you know, women and finances are bad with finances. And the whole message in this commercial was save your money for retirement or whatever. And I was like, I want to just get out the message that it's not saving your money. It's investing your money and learn how to be a good investor, because those are the things that are going to allow you to retire early or retire in not a poverty situation. But in you know, invest and learn how to invest because it isn't as hard as people think it is, you know? Grant Yeah, absolutely. I love that and are good. I understand. You're right. Did you say the messaging in that TV ad was that women are bad with finances? Is that what you say? Stephanie Yeah, I think well, they were trying to you know, women were kind of trying to empower themselves by saying, I'm not bad with finances, even though you know, I've been told that women are bad with finances, but it seemed like the solution for them in that commercial was save. Save your money. You say? Like, no, no, no. Yeah. Yeah. Ah, good. Good. Debt should produce cashflow. Right. That's, that's actually that's actually the message right there. One of the things I noticed as I was looking at your background, and the things you've done, as you had made a comment if I if I've got this right. Grant Money myths, you talked about money myths, and I think you just touched on one of those. What other money myths? Have you learned that we hold on to that? Are these incorrect notions that actually hurt us financially? What have you found? Stephanie There's one very significant one, which is people will say, well, the wealthy people, you know, I've talked to people and they'll be like, Oh, but the reason the people you work with have so much money is because they're willing to take these crazy risks with their money, and stuff like that high risks. That's that's why they got where they are, they are and I say actually, nothing could be further from the truth. The majority of wealthy people invest in extremely conservative things. They, the other myth is, you know, put put your money into the stock market. Many people can't tell you in their mutual funds, what they're invested in, what even one company is that they're invested in, let alone who's who are the team members on that, you know, on board or who's the CEO of the company, they can't tell you anything. Whereas wealthy people they tend to invest if they do invest in businesses, they invest directly in a business, either for themselves or they understand the dynamics of the business and the business plan and they invest that way. If they invest in real estate, they largely do the syndications and they get to know the team that's running, running the syndication. They know what kind of experience they have, what kind of past returns they've done. They do their homework in that sense. But then once they've invested in the team, they tend to invest again and again. And these are very conservative things that they're investing in things that are tangible in value. That's another. That's right. Three things I'm hitting is wealthy people tend to invest in things that have tangible value, which means, you know, an apartment complex Well, let's say, for some reason, it's terribly mismanaged and it goes out of nobody wants to be in it anymore. Well, you still have the building and the land in which you can sell. So there's, there's tangible value there. Grant Okay, so the tangible piece, that's interesting, too, especially in today's world, where digital assets are becoming more and more of a thing, right. In fact, I saw recently, someone talking about digital real estate on one of the online ads, you know, doesn't feel tangible, right. Are all the NFT stuff going on? Right are the crypto so many intangibles today as well? It Do you have any position or thoughts when they do that? Stephanie I don't because I guess I always take the line if I if I don't understand it, or if it's not something that I want, you know, I guess it comes down to really understanding it. I've had a lot of people explain it to me, but I still don't, you know, the ups and downs, you know, lately, it's been a pretty big crash, you know, people are saying that's a good thing. Okay, I still don't really understand it. And I know that they're planning on, you know, digitizing, then that's, that's probably, you know, not too far away in real estate, you know, 10, I would hope it's going to be 1015 years in the future. I don't know what that looks like. But that's definitely something in the future. I don't think that is wrong. And when I say that the wealthy people invest in, they probably do have some investments in cryptocurrency, but that's probably less than 5% of their portfolio. Great majority of what they're invested in, probably 30% Every year. If you go on to the name of this group is called Tiger 21. And it's, it's for wealthy, wealthy people, I think they have to show a net worth of at least five or $10 million to get in the group. But every year, by agreeing to be in this group, they agreed to release as a group, kind of a asset allocation of all of their investments, and every year, there doesn't change that much. And over 30% is in real estate. Grant Really. Okay. All right. That's interesting. That's fascinating. One of the things that I noticed as I looked at it now Now the name your company, you're gonna have to help me because is it Erbe Wealth? This Erbe? Stephanie Well, Erbe Wealth, okay, everybody. Well, thank you Erbe Wealth. Grant Well, so I'm on your site, I was on your site. And I was checking out. This is really cool. erbewealth.com. And I went to the about page and told my listeners, you should check this out. Stephanie's got this thing called the 15% Plus community. Can you talk about that? Stephanie Yeah, well, I mean, my partner and I started working together in 2018. And we both realized, as many successful pairings go is that he had some skills in in this in the certain areas, and I had skills in certain areas. And together, we have really done very well together, and we just closed on our 12th deal about two weeks ago. And every single deal that we put together has returned over 15%. But truthfully, every every one that we've done up to this point has returned over 20%. So the person designing my website said, I don't know you might want to just put that down to 15%. But every deal that we have done has had an annualized rate of return of over 20%. So if you're we, our goal is when we hold the money for three to four years, then we'll double your investment in that time. And we have we've done that successfully, and we have a system and we're will we're continuing with it. Grant That's amazing and that's that's leveraging the syndicated real estate strategy. Stephanie Yep, that's we buy apartment complexes and a very specific market in the country, we have a very specific buying strategy that allows us to get in and make money when we purchase it, purchase the property. And then we just find areas where there's there's been a lot of growth, and there's been a lot of rent growth and population growth. And I think if anyone's been listening to the news is we know that there's a housing shortage. So we buy in areas where, you know, there's a great deal of population growth and not enough housing, Grant What is your what is your perfect client look like? What's their profile? Like? Stephanie I mean, I would like it to be more broad than than it is, it's usually, you know, well, to invest in our deals, you need to be accredited, which, you know, that means you need to have a net worth of a million, or you have a $200,000 salary. And so I love working with business owners, that's kind of my thought to I tend to attract a lot our business owners, because, well, one is, they're so busy trying to make their business work, and I'm talking more like smaller business owners, you know, and, you know, trying to manage their company, which they're very passionate about, but business owners tend to not really plan that well for their retirement, because they're just, you know, they're thinking all about this. Yeah. Run on the business constantly, right? Yep. Right. So those are, you know, those are the people I love to work with, just to you know, get them some cash flow, that that is nice, but as well as just having, you know, great returns that they don't have to manage, you know, at all. Grant So, okay, very good. While you've been very generous with your time, can you give our listeners a place to go to to learn more about you? Yeah, to your website? Stephanie Yep. That's my website, which is erbewealth.com. There's, I have I think, right now, it's not a lot, but it's about 15 articles that I've written, that just I try to really educate the newer investor that isn't familiar with this type of investing. And then there's a track record of of all of our Not, not cherry cherry pick deals closer, every single deal that we've done together, up until this point, and then you can join, you know, the list the email list to get notifications, I like to really educate my investors, as well as then they get the first, you know, chance of getting the new investment when it comes out. But air Bay, actually is the German word for legacy. And my dad was a second generation, my grandfather came over on the boat right from Germany. And he became an entrepreneur after he paid his dues and did everything he needed to do to become a citizen. And then my dad, you know, followed in his footsteps and was an entrepreneur. Grant So I was gonna ask you about the backstory on that name. I was trying to figure out Erbe. What is that? Yes, that's awesome. I appreciate that. Stephanie Yeah, not to my dad, who never you know, saw any of this, but definitely, it's because of him that this has happened. I can tell you have an awesome dad. Really cool. Grant That's awesome. Stephanie, any final comments that you want to share? Stephanie No, no, but I'd say you know, just just check on my website. I'm trying to, like I said, working on a book and that that'll be my next. I'm hoping to have it done by the end of summer. So when when it's available, it will be available on my website as well. Grant That's awesome. Stephanie, thank you so much for taking the time with us today, everyone. Thanks for listening to another episode of Financial Investing Radio. And until next time, check out erbewealth.com.
Hello and welcome back to ArtBeat Radio! In this week's episode, the Service Users of AAW San Diego share their experiences starting back in-person full time through a collaborative peer interview, and an original parody of the song Feel This Moment, by Pitbull and Christina Aguilera titled, Finally Being in Person. The Service Users have been working long and hard and we hope you enjoy listening! Stephanie: Hello everyone, it's really exciting to be starting back up again! Jillian: It's been really tough being on zoom, but now that we're in person it's easier to work on things. Reid: I'm so happy to be back in person, we're here to tell you about getting back together in person. Renee: Yeah, and we're here to tell you about it by creating a song parody and interviewing each other about our experience. Liam: Let's start with the interview! Here we go! Reid: How does it feel to be back in person? Stephanie: Exciting! No more Zoom!! Reid: How about you Claire? Hey, how does it feel to be back in person? Claire: Happy Santi: Good, good and happy Sarah: Exciting, I get to meet and talk to new friends!Renee: Hmmm, really awesome and amazing. I mean, I love meeting amazing people and staff. Jillian: It's really exciting because we get to work on a lot of things with each other. Stephanie: What is the most exciting part about being back in person? Sarah: Getting out of the house every day and doing cool things Liam: I'm excited to do acting.Reid: I like to draw anything I want, have lunch, take lots of breaks, and get caliente for lunch Jillian: Being able to do a lot of stuff that I couldn't do on zoom Stephanie: Ooh yeah Claire: The Music Santi: I like the dancing Stephanie: Dancing! Renee: I really like the recording room, having the chance to record my own songs. Taking breaks all the time and getting to hang out with you guys during lunch. Reid: I think I like to draw, that's my most exciting part about being in person is drawing. Renee: I don't draw that much, but I like to sing. Max: We get to meet each other face to face and not just on a computer Renee: What's challenging about being in person? Jillian: Waking up extra early Daniel: Being next to a lot of people. Claire: Being here all day can be tiring. Santi: Having a new schedule. Juan Marcos: Having good behavior all the time. Reid: Yeah, I think we've been on zoom for a while, but what is challenging is being here in person. Mom dropped me off and I met all new friends. Jillian: Yeah, that can be overwhelming. Juan Marcos: How can we be patient in transitioning back to in person? Stephanie: No talking while others are talking, you have to raise your hand. Jillian: Have a fidget toy? Stephanie: Yeah, and don't keep asking when it's time to do something, be patient. Jillian: Yeah because people can get angry and frustrated Renee: I am usually polite, honest, and respectful to others. When someone is talking, you can't interrupt them, like when they're on the phone and textingMax: Take more precautions like wearing masks when we canDaniel: What can we do now that we couldn't do on zoom?Stephanie: Move together Renee: My laptop is at my house, not here at the center Jillian: We can now sit together, we can have conversations, we can use instruments, we can do a lot more than chatting on the zoom chat Santi: PaintClaire: We can color together Jillian: we can also sit in the same room Juan Marcos: I don't know, I can draw on real paper. Max: We can meet in person and do stuff not on a computer, like drawing, pitch ideas, and create stuff, work in spaces Santi: What are you excited to make Sarah: I am excited to record things, music videos, and make art togetherDaniel: I'm excited to make the arts and crafts For the rest of the transcription and lyrics, please request them from SanDiego@ableartswork.org
Subscribe to Reactionary Minds: Apple Podcasts | SpotifyThe following is a transcript of Reactionary Minds’ interview with Stephanie Muravchik and Jon A. Shields, authors of the book Trump’s Democrats. The transcript has been lightly edited and condensed for clarity.Aaron Ross Powell: I’m Aaron Ross Powell, and this is Reactionary Minds, a project of The UnPopulist. A good way to understand the appeal of Donald Trump is to talk to the people who voted for him. One of the most interesting ways to approach that is to talk to voters and counties that flipped, long voting for Democratic Party candidates until suddenly in 2016, they didn’t. That’s the background for Trump's Democrats, a book that looks at three communities that turned to Trumpism after having been solidly blue basically forever.I’m joined today by its authors, Professors Stephanie Muravchik and Jon A. Shields of Claremont McKenna College. Their fascinating book explores why Trump clicked with these voters and why many of the very things that turned so many of us off about him were the very things they found so appealing. We’ll discuss machine politics, political bosses, honor cultures, localism and what it means to identify strongly with a narrowly circumscribed place. The story that emerges is a good deal more complex and nuanced than the easy tales we sometimes tell ourselves about us and them.Stephanie, Jon, your book is part of a genre we have seen come out of the Trump years, with academics and journalists going to small towns that voted for Trump, sitting in diners and asking Trump voters why they believe what they believe. I think your book is the best example of that I have come across, the one that I certainly have learned the most from and the one that puts the most work into really getting at the ideas motivating Trump supporters. Can you tell us a bit about what prompted this and how you approached this project?Jon A. Shields: Yes. Thanks, Aaron, for having us, and thanks for the compliment. This is a book that really started on election night in 2016. Like lots of Americans, and, I’m sure, like yourself, we were up late that night watching the returns come in. It was really the most astonishing and surprising election in our lifetime, in our living memory. Immediately, we were eager to get outside of our little academic town and get a feel for what happened.In the weeks that followed, our sense of surprise really deepened. First, we discovered that there were all these Obama-Trump counties. There were all these places that had voted for Obama on two occasions—in fact, there were over 200-some counties that did this—and then flipped for Trump. That itself is very surprising and unusual, especially in this age of polarization, where partisan IDs and loyalties are especially sticky. But then, quickly, we not only discovered that there were all these Obama places that flipped for Trump; we also discovered that a lot of these places had voted Democratic for a very long time. Many of these places had a pretty unbroken record of voting for Democratic presidents, some stretching back to Reagan, some to Nixon, some much further back. In fact, one of the counties we ended up studying was a place that had never voted for a Republican president in its history. This is a county formed in the 19th century and—it’s really astonishing—had never voted for a Republican. In the Western world, that’s probably the longest streak of any polity voting for just one party.That was interesting. Of course, we’re accustomed to thinking and talking about the Nixon Democrats in ’72 or the Reagan Democrats in ’84. In some ways—in lots of ways, actually—the Trump Democrats were much more interesting. Nixon won in a huge landslide in ’72, as did Reagan in ’84, so it’s not so surprising that in those years, you get lots of Democratic places that flip. That’s not weird. In 2016, Trump lost the popular vote, and yet he managed to win some of the most loyal Democratic communities in the country despite that.So we got really interested in not just the red-blue divide, but a divide that had opened up in blue America. We were curious. We wanted to make sense of what had happened. In our college community, Trump is a loathed figure, a sort of proto-authoritarian, a dangerous person. We more or less agree with that point of view. I think there’s a lot to that, but then there are all these other Democratic communities that see him in a radically different way.They see him as one of the greatest presidents in American history, and so we were really deeply interested in that question. Then all these places we studied in 2016, I should add, remain loyal to Trump in 2020. These are places that are really drifting into the Republican Party. Trump is the character who shepherded all these communities into the Republican column, and so that’s quite interesting. That’s how we got interested in the project.Not Your Tea Party TypesAaron: You mentioned Nixon and Reagan and so on, and we have seen that Trumpism represents a populist movement. We have seen prior waves of things that look like populism, the most recent probably being the Tea Party movement. As you point out, the three communities that you looked at, they didn’t go Republican. They didn’t vote Tea Party candidates. What was different? Was it something that had happened to them—i.e., economic changes that hurt these communities and they said, “Now, it’s time to vote for a Republican”? Was it something about the community, or was there something that really set Trump apart from past populist candidates or waves?Stephanie Muravchik: Well, I think one piece of it is just how deeply blue these communities were. The Tea Party really emerged out of places that had some significant Republican organization movement identification, and there simply weren’t enough Republicans on the ground to get attention for that in most of the places—Iowa might have been a little different, but certainly in Rhode Island and Kentucky. We had one Democratic local-level party leader in Rhode Island—we were asking him about his relationship with Republicans—and he said: “I don’t know any Republicans in this town. I don’t think there are any.” There just weren’t enough even for the most knowledgeable Democratic leadership to know them. So I think part of it was that it would have been hard to get the attention of the local Democrats.Then the other piece that I think stands out is that there was a lot of libertarian rhetoric out of the Tea Party. There’s some controversy about how top-down that was, how “astroturf” that was, et cetera, but that libertarian rhetoric is really not at all resonant with the Democrats that we talked to. That was not the piece of the populism that appealed to them. I think that’s another piece of the answer. Jon?Jon: Well, I would just simply add—I guess this is really echoing what Stephanie said— you have to keep in mind that these are really one-party towns. The party, locally, for these folks is really the individuals who lead the party: the county-level or town-level elected officials. So these are mayors, city council people, county commissioners, and they’re really the face of the party. The other thing to add is that they really insulated these local communities from national politics in some ways. In a lot of ways, these places were pretty provincial. When they thought about the Democratic Party, they didn’t think about national leaders for the most part. They thought about people in their own community, and so Trump really shook these communities. It was a shock to them and really got them thinking about national politics and questions and controversies. It really took someone like a Trump to do that. The Tea Party was something that just didn't—it was a movement that was pretty remote from a lot of these places.Boss Politics and Honor CultureAaron: One of the really interesting parts of this book is when you’re talking about how politics worked or works in these small towns, and I’m reading it sitting inside the Beltway, having that as my frame of reference for politics. I’ve mostly lived in big cities and so on, where national politics is about—during the Trump years, he’s pushing against the guardrails, if not leaping right over them.We have our norms and institutions, and that’s the way that we tend to talk about these things. It was fascinating, the stories that the two of you tell about how different politics is in these small communities. Can you talk a bit about that? That also, you say, plays into a part of Trump's appeal.Jon: Yes, sure. One of the things that really struck us, Aaron, is that in these communities, politics is much more Trumpian in all kinds of ways. It was Trumpian before Trump, right? The local public officials reminded us of Trump in various ways. They were thin-skinned. They were brazen. They were tough. They were macho. They were the local daddies of their communities. They were there to take care of their flock—that is to say, they weren’t particularly ideological; rather, it was a sort of friends-and-neighbors politics. They were going to do particular favors or provide for particular constituents. It echoed back to a sort of machine politics, which has deep roots in the Democratic Party. Politics in these places weren’t very ideological really. They were much more boss-centered. They were really about providing for and taking care of local constituents. Political leaders were expected to do favors for their constituents. We saw all of this in all kinds of ways. Maybe Steph wants to jump in and give some examples, give some flavor and feel for some of these characters.Stephanie: In all three of the places in this town in Rhode Island, in this city in Iowa, in this county in Eastern Kentucky, there had been a strong-boss politics—perhaps most strong in Kentucky. These little rural counties are often dominated by these people called judges. They’re not judicial figures. They’re county executives essentially. There was a man in the county that I was looking at who had held office almost continually for about 30 years.When I arrived there during the Trump administration, he had been out of office due to the fact that he had been brought up on federal charges in a votes-for-gravel scheme. This was after about some 30 years in office. The county had fallen on hard times. The main way that he was able to show his friendship to voters was by providing loads of gravel to them at county expense. A lot of these people live on little far-flung farms in this rural district. They need to have little roads that connect their farmsteads to the main public arteries.The roads need to be constantly refreshed with gravel, and he was dumping loads of gravel in the months leading up to an election. The Feds came after him, and he pled. He had to deal with them basically so he would be free, but he pledged never again to run for office. The county’s political imagination had been very much shaped by this man’s long reign. He remained a very popular—although controversial—figure in the county when I was there.Jon: There were echoes of this, too, in another town we studied, which is Johnston, Rhode Island. On the surface, you might think it would be a place with a radically different politics than Appalachia, right? It’s in New England. It’s a suburb of Providence, but in many ways, actually, the politics was really similar. It’s a very Italian-American community, and they still practice old-style machine politics.The mayor there is Joe Polisena. He rules with an iron fist. Again, he’s like everyone’s daddy, right? People go to Joe. They need something done. They need a favor. Sometimes they ask for things he can’t deliver. When we asked Joe about this, he said, “Yes, sometimes they’ll come in, my constituents, and they’ll ask for something off the wall.” Joe would have to tell them, “Gee, I can’t do that. That’s illegal, but I can do something else.”Likewise, people in that community feel like if they don’t support the machine, if they don’t support Joe Polisena and other Democratic candidates, they’ll be basically shut out. They won’t be able to get any goods from the city, because they’ll be punished by the mayor, who can be very vindictive. Again, very different, seemingly, kinds of communities. They’re regionally different. One’s rural, one’s suburban, et cetera, but a very different style of politics. It’s a kind of politics that used to dominate the Democratic Party.We forget about it in college towns and big urban cities because we’ve cleaned up this kind of politics, right? We want a politics that’s more policy-oriented—politics without nepotism, without wheeling and dealing in this sort of favoritism—but it’s a kind of politics that survived in a lot of these Democratic communities. It survived in those places because there are fewer college-educated, good-government types who wanted to clean up this kind of politics and get rid of it. That’s one way in which the politics of these places was distinctive, but they also had a particular political culture, and we could talk about that if you like, Aaron.Aaron: Just briefly before we turn to that: I’m curious, do the people in those towns view this as a kind of politics that needs to be cleaned up but just can’t for various reasons, or do they think this is the right way to do politics, even if it sometimes is a little messy and looks corrupt?Stephanie: Yes, I think there’s definitely a view among some voters—and they’re all men; these men are all somewhat controversial and have their detractors—who don’t like how personalized the politics are. I spoke to one. Mayor Polisena in Johnston, Rhode Island, is very widely popular. He gets very high margins in elections, and lots of people had lots of good things to say about him, but he did have his detractors.I was trying to talk to one of them, and he was quite anxious about talking to me and said, “Well, you know how things are in this town.” Then he paused a beat, and then he said: “Well, you’re not from here. Maybe you don’t.” There was this sense that there were critics, and they would often say: “This is too personalized. There’s too much retribution for disloyalty. This is America. We should be able to express alternate opinions and not be personally penalized by the powers that be in our locality for this.”One colorful example from Elliott County was an executive who was no longer in office because of this federal deal and had one very outspoken opponent in the community. When they would be paving roads, like county roads, the new asphalt would stop at this man’s property line and then start up again at the next property line. Only in front of his farm would there be no paving. That kind of stuff rubbed some people the wrong way for sure.Jon: I would just echo that. I think it was somewhat mixed, but I think there was also a sort of sense in these places that this is just how one does politics. These are the main models of politics. It wasn’t clear to many, I think, what the alternative to this might look like. In many ways, it’s a sort of model that grows up out of their own community. It’s the kind of politics that grows out of a traditional family in some ways. It’s the sense that, “Well, there’s a patriarch who’s the head of the household but also the head of the community.” They should provide and take care of their community. In exchange, they should get the loyalty of their constituents and their supporters.There’s also a sense that their loyalty is the main way that they pay back their benefactors, those who have supported them. Even if they have some misgivings or grumblings, or they think the mayor can be a little too iron-fisted or whatever, there’s also a sense that they should be loyal to that person because they owe them something.Aaron: Given all of that, and given the personal and transactional nature of the politics and the politics as extended family, as you describe it, the initial motivation of this book and the ethnographies that you conducted was that there was something new about Trump or Trumpism, or Trump as a candidate. It attracted what had been historically very, very exclusively blue communities. These were Democratic strongholds.Given all of this, within this context, what does it mean for them to have been Democrat? You said this wasn’t really about policy per se, so were they meaningfully Democratic in the way that we would think about it, from the perspective of looking broadly in American politics? Democrats represent a set of policy preferences and a certain coalition. Do they even fit within that? Or was it more just that this was a label, but they could have had a different one slapped on, and it wouldn’t have been meaningfully distinct?Stephanie: Yes, I think one thing that became very clear was that because of the relationships with these party elites in their local community, what the party meant, meant relationships with these local party leaders. What they understood “Democrat” to mean had been very much reflected or filtered through these local party leaders. A lot of their, I would say, social-cultural ideas were quite conservative.Some of them made a point of saying, “I’m a Democrat and I’m a conservative.” For example, we met a woman in Rhode Island who was from a deeply political family herself and had been a low local-level political leader—so not someone who was out of touch or disengaged at all. She talked about the revelation that Democrats were pro-choice. For her, this was a shock.She had to wake up to this fact because she herself and her family were fierce Democrats. She had been told since she was a child that if the Republicans get into power, we’ll all starve. It was that kind of rhetoric we've heard from a lot of people. But she was also from this deeply Catholic, church-going, mass-going family. She said she would go to mass and see her elected local leaders also taking communion.It never crossed her mind that these people would not be pro-life. On a lot of the social-cultural issues in Elliott County, which was very rural, one big issue had to do, of course, with guns and the Second Amendment. All the Democrats were very pro-Second Amendment in Elliott County. They didn’t feel a sense of cognitive dissonance because their understanding was so local.Jon: And as Stephanie suggested, too, in some ways, they do have a sense that Republicans are the party of the rich. That resonates with what a lot of Democrats might say about the Republican Party and have said for a long time, but it’s a very class-bound, New Deal, Democratic sense of the parties. Indeed, in some of the restaurants in these towns, it’s not uncommon to find pictures of JFK or FDR.They had a sense that those were the patron saints of the party. They did have a sense that they were part of something larger than their own local, particular community. It’s like the culture wars were this thing that was blowing beyond their own local lives, and they didn’t have a sense of where the parties landed on guns or abortion or those kinds of questions. That surprised us. That was interesting.In lots of ways, of course, these people, on a lot of these issues, they’re kind of conservative. They’re pretty pro-Second Amendment. They’re fairly pro-life. Although on economic questions, they’re more moderate or even left-leaning. Ottumwa, Iowa, for example: It’s a place with a meat-packing plant. There’s a strong tradition of unionism there. Basically, it’s as if you froze the Democratic Party in the North in 1960 and took a peek at it; that’s more what these places are like. It almost felt like going back in time a little bit. We got to peer at the old Democratic Party, as it used to be. We were reminded that it didn’t all change overnight—that there are still these vestiges of this old party that have endured partly because they’re isolated and they have this strong localism. The local leads buffer them from some of the big changes that are happening at the national level.Indeed if you talk to local people, one of the major things they’re trying to do is create their own brand, because they know that there’s a big ideological divide between them and the national party. They want to keep the Democratic Party as localized as they can. Trump has made that a lot harder for them in all kinds of ways, because a lot of these folks are starting to become more aware of the national party and the ways in which it’s different from their local party.Localism versus CosmopolitanismAaron: One of the broad theses of your book is that Trump appealed to these communities in part because the very things that those of us in our coastal, rootless, cosmopolitan enclaves were often dramatically, viscerally turned off by about him were the very things that felt the most familiar about him to the voters in these communities. As just discussed, he looked like the politicians that they’re used to. What we saw as wild corruption and nepotism and so on was just business as usual—that’s of course how politicians operate.I want to move to another one that you discuss, which is honor cultures, because Trump for many of us was this famously belligerent but thin-skinned bully who couldn’t back down. Constantly, anytime anyone said anything, he needed to come back at them, even if he looked ridiculous doing it. It seemed very off-putting to all of us. As you point out, this is like a quintessential “honor culture.” What is an honor culture, and why do we see it in communities like this?Stephanie: Well, an honor culture is a way of understanding reputation and conflict that makes it imperative that a person, particularly a man, demonstrate his toughness, his willingness to meet any insult—or certainly an assault—but even just an insult with a kind of fierceness and a willingness to use violence to avenge his reputation, to reestablish his reputation.Men in all these communities have all kinds of personalities, just like in any other community, but they understand that they’re expected to do this. If they don’t, they risk really losing status in their communities, and they also risk inviting further insult and even violence. I think it was pervasive in all three communities. I think some of the most colorful examples probably come from Ottumwa, from Iowa. Jon: Well, there’s a lot of examples. I would just say by way of defining honor culture that on the one hand, it’s unfamiliar to a lot of folks who live in highly educated bubbles like college towns and blue urban centers, but it’s the default culture in a way, right? It exists around the world. It still exists in lots of places in the United States. It’s a much more common mode of conflict resolution than we often imagine.The play Hamilton reminds us that it used to exist in our national political culture, because, after all, Hamilton died in a duel defending his honor. But that play misleads us, too, because it suggests that this honor culture is some ancient, barbaric, strange cultural thing that existed in the past and that we’ve done away with it. In fact, as Steph said, it existed in all these communities.I guess we should give some examples. I guess before I get to Iowa, I would start with Rhode Island. The mayor, Polisena, very much practiced this honor culture. We really first saw this in action during a town council meeting, because every month or so, Joe Polisena holds court and various citizens come. They have various complaints and they want to give the mayor a hard time.Mayor Polisena doesn’t do what politicians might do in, say, a college town when they hear a complaint. When people come to complain to Polisena, he gives them hell. He starts calling them names, and it doesn’t matter who they are. In fact, this one old woman used to consistently go and complain to him, and he would just let her have it. Polisena would say, “You’re a malcontent.”Later, as the meeting spilled out into the parking lot, he even audibly called her a douchebag. He doesn’t mince words, and we asked him about this. We said, “Joe, what are you doing? Why are you so rough with these constituents? Why can’t you do what Michelle Obama suggests? She said, ‘When they go low, we go high.’ Why can’t you take the high road?” His response was very telling. He said, “No, I can’t do that. If I do that, they’re just going to roll over me. I’m just going to show my weakness. They’re going to take advantage of me.” He said, “Look, I have to be a street fighter when it comes to politics. I have to be tough, because that’s the only thing that people understand, is strength.” We saw this again, as Steph suggested, in Ottumwa. There, a fight nearly broke out at a local Democratic county meeting. This is back in 2016 during the primaries. The county commissioner was a guy named Jerry Parker. He supported Hillary Clinton. There was a guy named Alex Stroda, who was on the other side. They were fighting over who to endorse. It nearly came to blows. There was a belly bump, but not an actual fight. Again, those were two guys who couldn’t just talk it out. There was a sense that an insult had to be forcefully confronted. That was normal in these places and that’s also how Trump operates, right?For Trump, you’re either a strong person or you’re a weak person, and that’s how he divides the world. Nationally speaking, some of the candidates that gravitated toward Trump early also shared some of that honor culture. You think about guys like Rudy Giuliani or Chris Christie. They too have some of that in them. That’s a flavor for this culture. To sum up, I guess the final thing I would say is that Trump—I think you said this well, Aaron—but Trump to us, to people in our community, seems like he’s pathologically thin-skinned. And maybe he is, right? I’m sure Trump has all kinds of personality disorders, but that’s not how it’s necessarily read in the communities we studied. To them, his behavior is totally normal. Of course you punch back. Of course you don’t let things roll off your back. That’s not how politicians behave in their communities. He doesn’t seem weird even if he does have all kinds of personality disorders, which I’m sure he does. He doesn’t read quite that way in these places.Aaron: You’re conducting these interviews after Trump has been in office for a bit, so they’ve gotten to see him not just with the bluster of a candidate, but actually as the leader of the free world. Was there a sense of the disconnect between how they perceive him and how he is perceived elsewhere? For example, you quote a handful of people about this. One guy, and I’ll just read the quote, he says, “I think other countries are afraid of him, which I think is a good thing. I hate to say it, but with Bush and Obama, they were pushovers. With Trump, he’s not a pushover. You’re going to have to deal with him. There’s no playing games with him.” This is really striking because it became very clear in Trump’s presidency that other world leaders were just constantly playing games with him. They saw his thin skin, his reactivity, his susceptibility to flattery, and they just manipulated the hell out of him. They were maybe afraid of him in the sense that he was a loose cannon, but they weren’t afraid of him as a tough guy that they had to take seriously. Were the communities aware of that disconnect, of how he was perceived on a world stage?Stephanie: No, I think that the idea of a leader that might speak quietly and carry a big stick just doesn’t make a lot of sense to them. In their own sphere of understanding, the way that you make people understand that you will not be messed with is through this thin-skinned response. It’s this kind of machismo. I think that that was how they understood. I was at a church service in Kentucky and the minister there was trying to get the churchgoers to be more assertive in their faith.He said, “Growing up, my big brother always taught me”—basically, he meant in the context of working at a job site like a construction site—“don't back up. Never back up.” That was seen as a deep truth that had application in all realms of life. They heard Trump making those sounds. It’s a pretty policy-wonkish person who could then read and trace actually what the consequences might have been, which you were just alluding to. Jon: I think it’s important to bear in mind that what’s happening here is a kind of identity politics. When they see a candidate like Trump who behaves in ways that are familiar to them, in ways that they might behave, in ways that their leaders might behave, it signals to them that this candidate is one of them. That’s how most voters behave, right? They don’t think very systematically, for the most part, about politics or ideology. Really, they’re interested in candidates and the extent to which they feel some sort of a social proximity to them. The closer they feel to them, the more they feel like they can trust them. I think the people we talked to just have a sense that Trump, because he seems familiar, because he seems trustworthy, will do the right thing on the international stage in these contexts that are removed from their knowledge or expertise. In that way, they’re really different from the wonky people one might meet in Washington, D.C., who are pulling their hair out because Trump is getting rolled by China and Putin, et cetera.Class, Not RaceAaron: One of the other things that is characteristic of Trumpism—and it was certainly present throughout Trump’s campaign—was nationalism, and then what often looked like racist dog whistles, if not just quite audible whistles. What has seemed to be characteristic is that Trumpism and Trump’s supporters are intensely nationalistic and often have—let’s call them racially charged views. What you found pushes back on that, at least in some ways, and you argued that it has more to do with the sense of place. Can you talk about how sense of place plays out and what that says about nationalism as a Trumpist phenomenon?Stephanie: All three of these were places we chose precisely because they represented a larger group of counties mostly that had voted twice for Obama and then flipped. We were interested in part because that seemed to be complicating what seemed like a clear-cut story of the kind of bigoted appeal, the appeal of bigotry that the Trump campaign represented. Then spending time there, what really stuck out in all three of the places was the localism and we've talked about some facets of that.These were all places where the people who lived there felt deeply, deeply connected to their hometowns and even so much that in the Johnston Rhode Island community that we were in, they had long had a phrase that was Johnston First—long before Trump was on the political landscape, that there was a sense of belonging to each other and needing to help each other and work for the community. This sometimes then resonated out to a nationalistic commitment. For example, in Ottumwa, Iowa where there were these strong unions, where there had been the car industry, it was difficult to buy a non-American made car in Ottumwa.They linked Ottumwa to the nation in a sense. In all of these places, there was that intense localism. For example, I was asking some women in Elliott County, Kentucky early on. One of them mentioned that they had read Hillbilly Elegy by J.D. Vance and there was some other women at the conversation that I was having and the other women hadn't heard of the book, but they said, "Oh, was he from Elliot?" Then the response was, "No, because he's actually from another county that's an hour or two away, also part of Eastern Appalachia." Fairly indistinguishable from my eyes, but when they were told, "No, not from Elliot county, from this other county," they all laughed like, "Oh, okay, well that's a different county, we don't know about that county." Even the county boundaries of this tiny rural county really mattered to the civic imagination of the residents there.Jon: The other thing I'd say along these same lines is these are all places that are struggling to varying degrees and have been for quite some time. When Trump came around and said he was going to Make America Great Again, what they heard is not so much that he was going to make the nation writ large great again in some general way, what they heard rather is that he was going to make Ottumwa Great Again and Elliot Great Again and Johnston Great Again. That very nationalistic rhetoric, they heard in this very localized way. The fate of those communities matter to them partly because their social identities are so connected to those places.In these communities is where they're really socially known, where they really have reputations, where all their kin are, where all their kin are buried, and so to leave those places because they can't find the jobs or that they might need, for example, is a social death. Here it's a really a class-based difference. If Steph and I get offered a job at, say, Harvard and we go, our social reputation actually enhances because the nature of our communities is really different. It's not neighborhood-based, it's not especially place-based. Our communities are much more based in our professions. We're having this conversation with you across thousands of miles and that's the nature of our community.We don't know our neighbors all that well and it's certainly not the center, it's not really where our social identities are fundamentally based. The fate of these communities matters in a existential way to them in a way that I think it's sometimes hard for those of us who are part of the professional class to notice and to see. The other thing I'd say about race is, as we mentioned, these are places that voted for Obama twice. In that way, they're also different from places that were touched by the Tea Party. As soon as Obama's elected, you get the tea party, and I'm sure some of that was racially driven. He's our first black president but notably, it wasn't these communities. Obama really didn't create some massive counter mobilization in these places. These are places that voted for him twice, Obama was their president for eight years. Some of these places did grow disenchanted with him in the second term, and particularly in Elliot county where the policies of the Biden administration was particularly hard on the coal industry there. But for the most place, these weren't places that had some allergy to Obama. These were places that, in fact, voted for him and supported him.In general, I think we would say that to those studying Trump is that I think it is true on the one hand that these folks, they do think of Trump as a patron of the white working class in some ways. I think that's true. I do think, especially today, things have become more racialized. I'm sure if we went back into these communities in the wake of BLM and everything else, the racial politics has changed. Perhaps they think of themselves more fundamentally as white citizens and that's probably likely. But when we arrived there, I guess we were struck by the fact that they didn't particularly think in those terms and their social identities were much more class-based, they were much more place-based. I think we have to keep in mind that however much race plays a role, their politics aren't reducible to race either, that they have other social identities. I think that's hopeful in some ways.Stephanie: Just to put a point on the comment with one example that comes to mind in terms of Elliott County. Elliott county, Kentucky, is a particularly white area. There's very few people that are non-white.Jon: In fact, if I could just add, I think it's the whitest county that voted for Obama, which makes it interesting.Stephanie: All the political conflict there that sometimes can be racially charged in other places all happens within whites. For instance, when there's lots of grumbling about welfare and they're all looking at their white neighbors who are ethnically, religiously identical, racially identical to them. One thing I discovered among some of the older, this is not common among the younger, but the older people in Elliott County will sometimes complain about foreigners. When they talk about foreigners, they mean people from Ohio who are coming across the border or other counties, other white people.When there's lots of talk about invidious distinctions between us and them or between “othering” someone in the jargon of the academy, but in this case, they're “othering” white Ohioans, so the racial divisions aren't always the most important divisions to them.Jon: Just a quick footnote to that. It should remind us that, in some ways, their identities are much more provincial than whiteness. White America, that's a pretty big group of people. For the most part, it didn't seem like that was a community they felt especially close to. As Steph said, they feel like they're white neighbors and a neighboring county are, in some ways, outsiders and not part of their community.Aaron: The main issue of Trump's campaign, the thing that he ran on and drove home from early on his presidency was anti-immigration. That was his hobby horse. Is it then the case that for these communities, an anti-immigration view is less about race, ethnicity, nationality, immigrants with their weird languages and weird foods and more that if your community is intensely socially interconnected in a way that makes it look more like an extended family, then the immigrants look like the person who marries into that family and has a hard time fitting in because they didn't grow up in it, then they physically look different from us?Jon: Yes, you could see this in, I think, most notably actually in Ottumwa, Iowa, which of the three communities we studied has the highest level of immigration and they've come there really to work the meat packing plant. I do think there's something to what you're saying. There's a sense that these folks are outsiders who don't quite share our norms, and therefore, it's harder to have the tightly knit homogeneous community. We know from research on social capital that ethnic diversity, at least in the short and median term, undermines community and feelings of trust and belonging, and so diversity is a challenge to community.If your community is fundamentally neighborhood-based, then immigration can be a cost to those communities. Again, it's really quite a contrast from our college town. Here, we benefit from immigration on all kinds of ways. We pay immigrants in California, some in California, they cut our lawns, they clean our houses, they care for our children, they allow us to neglect our neighborhoods and tend to the communities that we care about, which is really our broader, professional, more diffuse, virtual kinds of communities. But in places like Ottumwa, those communities, again, are much more neighborhood-based.There is signs though that does sort of change over time as immigrants become part of the community. This is why I think it has more to do with culture than race. One Ottumwan, for example, told us about one of his neighbors, really about the Latinos in the community. Generally, he said, well, they're not even Mexican anymore because they don't speak Spanish. It was an interesting way of saying this was fundamentally about race. They may look a little different, but what matters is that they've socially and culturally integrated into the community.Policy Is Not the AnswerAaron: Looking forward then for those of us who are deeply worried about what Trumpism represents on the national stage, look back at the four years that he was in office and the real damage it did to American institutions and so on, and are worried about the continuing prevalence of this fundamentally illiberal views in the American electorate, what lessons should we draw from this? These people are speaking to genuine interests in cultural needs and affiliations. The book is very good at pointing out how much those of us in the cosmopolitan cities don't understand the way that class really works.There's a very nice line in it where you mention how much in colleges the future generations of progressive leaders are taught lots of courses in gender and race, but very little, if anything at all, in class and how important class is to this conversation. What lesson should we draw from what you've learned in these communities as far as understanding and preventing some of this from turning into the really dangerous illliberalism that we all fear?Jon: I think it is certainly heading that way. When we were in these communities at the time, it was still relatively early in their romance with Donald Trump, so they were not talking a lot of crazy conspiracy theory. Now we're really at a different place and I think partly what it highlights is the dangers of identity politics in some ways. There's a sort of cultishness that has really grown around Trump. Again, we were there and saw the beginnings of that, but we were just, in fact, at a rally in Wyoming, and Trump was there to officially nominate Harriet Hageman who's taking on Liz Chaney. It was everyone was in their Trump gear. Everyone had Trump T-shirts, lots of folks had Trump flags.If you've been to an NFL game, it had that feel to it like everyone's on the same team rooting together. Maybe that would be okay if Trump was less reckless. I think in many ways, we're in this moment because of Trump's bad character. Not so much that he appealed to people's place-based or class-based identities and mobilized this group of folks, but the power of that social connection has been so badly abused by him and so recklessly done, exploited. In a way, I think there'll be more responsible people. I hope there'll be more responsible people who will follow some of his example and leave other parts of it behind.I think there's responsible ways to appeal to these folks. I think it's important to remember, there's a decent part of this world. There's a decent morality there. Not all of it exports well up to the national level. I think honor culture, for example, for reasons we can explain, we think that maybe it's not great anywhere, but it works much better locally, and when it's exported up to the national level, it doesn't play out well. There are folks who I think are trying to take some of the Trump's playbook. One good example is this candidate for governor in Pennsylvania, Fetterman, who's a Democrat, and very Trumpy in all kinds of ways.If you haven't bothered to look, on one of his forearms, he has a huge tattoo of a ZIP code of his hometown. Talk about appealing to place-based identities. This guy's really figured it out. On his other arm, he has the names of all those who died in his community while he was mayor. Very personal concern about his own hometown and community. Look, I don't know what kind of governor he would be if he makes it that far, but it strikes me that's, particularly for Democrats or even really Republicans, who are thinking about how do you mobilize some of these social identities in a way that's less reckless than Trump, I think it can be done.Again, I think it'd be done responsibly and that's partly because there's something admirable and something to like about the localism of these folks.Stephanie: Yes, I think a lot of the things that we found that we highlight in our book, the moral vision behind them has to be understood. Even something like the boss nature of politics, which is often something that's considered very sleazy in the kind of communities that John and I have lived really has a lot to do with this ethic of friendship and loyalty. It's a way that voters understand friendship and loyalty more than any policy-minded way of assessing candidates. I had one woman tell me, actually, a few people say things like this, but one woman comes to mind in Kentucky who was a very disengaged voter and worked a minimum wage, a pretty crappy job.She was one of the defenders of this disgraced county executive and she said: "At least when David was in office, you could get a load of gravel when you needed one." It was her sense of this was a true mark of friendship. I think that certainly the boss style politics, which has to do with personal loyalty, which, of course, resonates very large with the unusually intense following that Trump has at the national level, the localism, again, is about community and loyalty. I think candidates that can speak that cultural jargon can signal that it's more important to signal that than it is to have policies. The policies aren't the draw I guess. I saw some Trump voters who said to me Trump Democrats in Kentucky who said, "Oh, we have great internet. We got that under the Obama administration," but there was no sense that they gave credit to the Obama administration for this policy that clearly helped them. They giggled about. Or the same with Obamacare. We saw people in Rhode Island say, "Oh, well, yes, I am dependent on Obamacare," but didn't give much credit. I think what they want is a feeling of being represented by someone they can identify with and trust and they're much more attuned to social-cultural clues, maybe all of us are, when picking candidates. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit theunpopulist.substack.com
It's our 150th episode, so to celebrate we opted to do an AMA. At least that was the plan at first… Intro Podchaser - Reviews4Good Thank yous to everyone AMA portion Scariest podcasting moment? - @MikeyGeek Have you read any IDW Transformers comics? What are your thoughts? - I Understood That Reference How has doing the podcast changed you? - Dr Goku from GuardiansMH If you could pick a fictional character to have on the couch, who would it be? - Patron Matt & Lissy What are your early comic memories/what sparked your love of comics? - Patron Matt & Lissy Since Anthony is a lawyer, would he represent you in court for a malpractice case? -Anonymous Is there any time when you recommend comics to your patients? -Anonymous Are there any episodes that you would recommend starting with besides the first one? -Anonymous Skit DOC: OK, so let's go to the next quest*buzz-phone call* oh, sorry, must've forgotten to turn it off. Lemme just check, it might be work. *beat* I don't recognize this number. Could be work? Hello? HANK: Hello Doctor Issues… DOC: Who is this? HANK: You tried to get me to move on, but all that did was cause me greater grief. So now I'm back to have my revenge. Not just on Superman, but on you. DOC: Hank Henshaw? I never tried to get you to move on from Terri, I simply told you to focus your energy, sorry, no pun intended, on a healthier way to honor her memory. HANK: I tried that. I worked on creating a permanent tribute to her online. I made that Instagram profile of her, and it worked for a while. I was going to use her internet fame to support organizations that she cared about. You know what happened? Crypto bros took her pictures, turned them into NFTs, and started selling them online. So I found every single one of them and killed them all. And then I turned my attention to you. DOC: Dear God, man. HANK: I thought about killing you, but that would be too easy. Plus there's a good chance that blue bastard would come and rescue you. So I opted to hurt you in another way. DOC: If you harm my family… HANK: Oh no, Doc, this is much worse than that. You know, it's funny how simple it is to break past encryption when you're living inside the system. All these patient files, each one tells a story. DOC: You can't do that! HANK: DON'T TELL ME WHAT I CAN'T DO! I'm Hank Henshaw, and I'm beholden to no man. Say, these files are so interesting, I think the rest of the world should have the opportunity to see what you wrote here… DOC: Don't you dare… HANK: Oh, you think this is a comic book where you can stop me? I already released the files online, Doc. Good luck trying to get the toothpaste back in the tube now… hahahaha ANTHONY: Everything ok, bro? DOC: No, definitely not. I need to get back to my office NOW. And I have to make a few phone calls… *dialing noise* c'mon, pick up pick up pick up… TONY STARK: Y'ello? DOC: Tony, thank goodness you picked up. TONY: Uh, who is this? DOC: It's Doctor Issues. We had a therapy session a few years ago, I don't know if you remember TONY: Oh I remember you. Kinda. We split the Glenlivet, right? DOC: We didn't really split it, so much as you drank it and then split. Anyway, listen, I need your help. One of my clients, a bad dude, he got into my patient files and released them all online. I need you to get them off the Internet and make sure no one has access to them again. TONY: Hoo boy, that is quite a quandary. So you're telling me that your files on every single one of your patients, including me, is now out there online? DOC: Yes, but- TONY: Interesting. Jarvis, bring up my file. JARVIS: I'm not sure that's a wise course of action, sir. TONY: If I'm going to help Doc, I need to know what I'm dealing with. DOC: Tony, please, just TONY: Uh-uh, hold on just a sec. Mmmmhmmm… DOC: We don't have time, the sooner we get started on this the sooner we can shut this down and stop anyone else from reading their files. TONY: Yes, because heaven forbid anyone learn that you think they're, what was it again, a narcissist who uses alcohol as a means of self-medication to avoid addressing past traumas? Did I have that right? DOC: Tony, you were drinking in the session and left because you got bored of things. It's not pretty to read, but I stand by my assessment. I also indicated you performed great things in spite of that. TONY: Well, in spite of your compliment, I'm going to tell you to kiss my ass, Doc. Find another lackey to help you clean up your mess. Now if you'll excuse me, I'm off to exercise my demons with a little racquetball. And the only drinking I'll be doing is my C4 energy drink. Happy? DOC: Not really, I mean TONY: Wasn't talking to you. Happy, bring the car around. And my gym bag better not smell like the insides of your shoes again, or so help me I'll *click* DOC: Dammit! OK, think, who else can I call? Oh, I know! UATU: DOCTOR ISSUES! DOC: What the? UATU: YOU HAVE BEEN SUMMONED. DOC: Uatu? Not now. UATU: THIS WAS NOT A REQUEST. *teleportation sound effect* DOC: NO! I need to get back to Earth! Do you know what I'm dealing with? UATU: OF COURSE I KNOW WHAT IS HAPPENING. I FORESAW THIS HAPPENING. DOC: I thought you couldn't see the future. UATU: I CANNOT. BUT I CAN SEE ALL ACTIONS HAPPENING ACROSS THE UNIVERSE AT ONCE, AND I CAN PREDICT WITH A HIGH RATE OF PROBABILITY WHAT WILL OCCUR. YOUR DISMISSAL OF HANK HENSHAW WAS LIKELY TO DRIVE HIM TO SEEK REVENGE. DOC: I didn't dismiss him, I simply… we're getting off topic. Why am I here? UATU: I AM FORBIDDEN FROM INTERFERING IN THE ACTIONS OF OTHERS, I AM MERELY AN OBSERVER. DOC: First off, that's ridiculous, you've interfered I don't know how many times. Secondly, bringing me here to the moon is interference by itself - if you wanted to observe, you could've just left me on Earth. UATU: OH, IS THIS UPSETTING TO YOU? DOES THIS MAKE YOU MAD? DOC: Yes it does! UATU: WELL NOW YOU HAVE A MILD INKLING OF HOW I FEEL. I BORE OF YOUR INCESSANT JOKES ABOUT WATCHING PEOPLE MASTURBATE AND ENGAGE IN VARIOUS SEXUAL ENCOUNTERS. DOC: So you dragged me up here, in the middle of the biggest professional and personal crisis I've ever encountered, just because you're mad I made jokes about you? UATU: YES. DOC: What the hell, man! You're an interdimensional being with the powers of a god, why are you so focused on being this petty? UATU: BECAUSE I CAN, THAT'S WHY. DOC: Can you just send me back, please? You made your point. UATU: FINE. BUT IF I HEAR YOU MAKING ONE MORE UATU IS WATCHING YOU JOKE, I WILL TELEPORT YOU TO A REGION OF SPACE WHERE YOU WILL NEVER BE FOUND. *teleportation sound* AND HERE'S A MIDDLE FINGER. I HOPE YOU CAN SEE THIS, BECAUSE I'M DOING IT AS HARD AS I CAN. DOC: Ugh, that was not fun. Also, why do I feel like he's flipping me off? Anyway, I need to get to the office. Lemme check Uber… 17 minutes? Nope, too long. Uhh… oh great, first bit of good luck today. TAXI! *tires squeal* JAKE: Where to, pal? DOC: The central office plaza downtown, and step on it! JAKE: Sure thing, buddy. *car door closes, drives off* DOC: Thanks. Say, you look kinda familiar. Do I know you? JAKE: Hmm… I don't remember you, and I'm pretty good with remembering folks. I just have one o'dem faces. DOC: Are you sure? I seem to recall meeting you at some point. Not too often you encounter folks with a Chicago accent here. JAKE: We're more common than you realize. We move all over da place. DOC: OK, that's fair, I grant you. STEVEN: Grant? Oh my, I detest when this occurs. DOC: What the… oh great, of all the taxis I hadda find… STEVEN: Rest assured, good sir, this is equally embarrassing to me as it is to you. DOC: Somehow I don't think that's the case. STEVEN: Ahh yes, you're referring to the incident with the patient files? DOC: You know about that already? STEVEN: Yes, the matter was brought to my attention earlier by my social media team. Got an alert when my name popped up in trending files. Had to send my PR staff into high alert to address some of the more… unsavory aspects. DOC: Jeez, and I don't even recall saying anything that bad. I guess it's just the specter of negativity that you have to deal with. MARC: Spector? Aww s**t, now I'm in charge. C'mon Jake, where are we supposed to be going? DOC: Wait, who am I talking to now? And what do you mean where are we going? Don't you share this info between identities? MARC: What would be most comforting for you to hear? DOC: If that's how you're asking the question, I have a feeling no answer is actually going to be comforting. MARC: Not gonna lie to you, Doc, you're not that wrong. Truth is, when this happens, I just kinda drive around in circles and hope that Jake sees something familiar enough that he takes the wheel again. Literally and figuratively. DOC: I don't have time for this. Stop the car. MARC: But what about DOC: Talk to Steven, I'm sure he can afford to pick up the tab. *car door opens & closes* Well, I'm not that far away, guess I can walk. In the meantime… *dialing sound* pick up, Bruce, pick up… BATMAN: (voicemail) If you feel the need to leave a voicemail, you're not using the proper channels. Contact the right people and they'll alert me accordingly. DOC: DAMMIT BRUCE! Ugh. OK, next one. C'mon Dick… DICK: (voicemail) This is Dick. If this is about business, leave your name and number. If you want to get back to business, I'll call you when I need you. DOC: How about neither… fine, let's try Jason? JASON: Hello: DOC: Jason? It's Doctor Issues. JASON: I was wondering if you'd call. DOC: Listen, I need help. JASON: I'm sure you do. So in your greatest moment of need, you reach out to someone, hoping they'll faithfully support you and assist you? DOC: Yes! JASON: Sure is a bitch when it doesn't work out in your favor, isn't it? *click* DOC: WHAT? No no no no… fine, I guess I'll try Tim. TIM: Hello? DOC: Oh, thank goodness, Tim, I TIM: Haha, gotcha. Thought I was answering the phone. Oh man, I'm sure you're probably pretty pissed at me. Which you would tell me, except I'm not available right now. So go ahead and leave me a message, and I'll call you back. DOC: Oh that is NOT COOL, Tim. *sigh* I guess now I'm up to Damian. VOICE: The number you have dialed has not established a voicemail service. DOC: OH COME ON!!! Umm… wait, do I have her number… YES! Oh please please please… STEPHANIE: Hello? DOC: Hello, Stephanie? STEPHANIE: Who is this? DOC: My name is Doctor Issues, I've worked with several of your… colleagues. STEPHANIE: Who? DOC: Dick, Jason, Tim… Bruce… they all STEPHANIE: No, I mean who are you? DOC: I'm… I'm Dr. Issues, I'm their psychiatrist. STEPHANIE: Never heard of you. DOC: Wait, what? STEPHANIE: And how did you get this number? DOC: Because they… I mean you… STEPHANIE: Please don't call me again. *click* DOC: So much for that angle… who else can I call… JOKER: It's so hard to find good help these days… DOC: Oh no. JOKER: What's the matter Doc, you look like you just watched a man die. Here, let me get you a mirror so you can see it up close. DOC: Nope, not sticking around for this one. *starts to run away* JOKER: *sound of net releasing and capturing Doc, who struggles* Oh, but we have a lot to talk about. I need to fill you in on the team of professionals you set up for me. They've been rotating around for quite some time. Or at least I imagine they have, who knows how much weight a ceiling fan can support. After the third body they tend to get a little dicey. DOC: Dear God… JOKER: The Korean doctor took it especially hard. All that time she thought fan death wasn't real. Right up until the end when the blades decapitated her… DOC: Come on, is there ANYONE around who can help me? JOKER: It's funny, you wrote in my notes that I needed to stay isolated because I'd be less of a threat. And yet who's the one who's all alone right now? It'd be funny if it wasn't so pathetic. But what the hell, I'll laugh anyway BWAHAHAHAHA*punch* ooooomph NORTHSTAR: Doctor, are you alright? DOC: Northstar, what are you doing here? NORTHSTAR: I read the report, and I decided to march over right away to talk to you about it. As I approached, I saw that insane clown man assaulting you, so I thought I'd take care of him first and ask questions later, la! DOC: Well I sure am glad to see you. I need to get back to my office right away, so I can *whooosh* … access my files. NORTHSTAR: Bienvenue. Now, about what you wrote… DOC: Not now, Northstar, this is a bad time. NORTHSTAR: NO, Doctor, you will not brush me off, ça prend tout mon petit change just to have this discussion. I thought I did the right things, said the right things, pi you write that I am self-absorbed, focused on image. Why would I come to you for help if not to get better, À cause tu fais simple de même? DOC: Look, Jean-Paul, I appreciate that you are fired up about this, and I'll be happy to talk this over with you at a later time. But clearly, I've got major problems to address right now, so can we table this discussion? NORTHSTAR: I'm not talking about this with you on a table, on a couch, or anywhere, esti! I know you get confused when I speak in French, so let me be clear: kiss my ass, Doctor. *whoosh* DOC: *sigh* Well, at least I'm in the office and I can focus on *phone rings* *sigh* hello? JJJ: I need to speak to Doctor Issues right away, this is urgent! DOC: This is he. JJJ: You answer your own phone? What kinda two-bit operation are you running? And to think I wasted good time, and worse yet, good money, talking to you. DOC: Who is this? JJJ: It's J. Jonah Jameson. DOC: What do you want, Jameson, I'm kind of in the middle of something. JJJ: Yes, I know. That's why I'm calling. This story is breaking news, and I'm asking, no DEMANDING, an exclusive interview for TNM. DOC: My professional life is falling apart around me, and you think I'm going to take time answering questions? JJJ: Of course! Gives you a chance to get your side of the story out before things go too far. Who cares about being right, what matters is being first. Remember: people read headlines, not retractions. DOC: That says an awful lot, both about you and the media business as a whole. But I'm not interested right now, I need to find someone who can stop this from spreading across the web. JJJ: I think I have someone in my office who can help with web stuff. ANALOG! Where the hell is Derick? I need someone to shut down the Internet. *That's not how this works, Jonah.* I don't pay you to argue with me, I pay you to get things done. And at the rate you're going, you're lucky I pay you at all. DOC: Goodbye, Jonah. JJJ: And another thing-*click* DOC: OK, now to look up how to take things off the Internet. Gonna DuckDuckGo this, last thing I need is more stuff getting traced back to *smash* WHAT THE TICK: Of all the unbelievable things I have to deal with on a daily basis. The unmitigated gall you must possess to disrespect me like this. I might not be the smartest hero, or the flashiest, or even the bluest, but I deserve better than this. DOC: Tick, what are you- TICK: It's like you don't even know who I am. After all this time we've known each other, I thought some common courtesy would have been established. Sure, people make mistakes here and there, and you brush them under the rug, because that's what good cleaners do. Not the expensive ones, obviously, but the quality cleaners who take a little extra time to spit on the washcloth before scrubbing your toilet to give it that extra sheen. But something like this, I feel personally insulted to even have received something like this associated with my good name. DOC: Tick, I promise you, what I wrote on your patient form was completely professional, and it was never intended to be read publicly. But my system was hacked, and all my confidential patient files are all over the Internet now, I sincerely apologize. TICK: I didn't see that when I filled out the section for pickup. What are you talking about? DOC: Wait… what are YOU talking about? TICK: I'm talking about my order. I specifically requested carnitas in my burrito, and you give me BARBACOA?!?! Do I LOOK Puerto Rican? DOC: WHAT THE HELL ARE YOU TALKING ABOUT?!?! TICK: I've been coming to this Chipotle every day for the past two years, and I sit in the same- DOC: THIS IS NOT A CHIPOTLE. TICK: Not with service like this, it isn't. DOC: Get. Out. TICK: Fine. But first I'll be leaving you a sternly worded review on Welp. DOC: That's… just GOOOOO. TICK: And your decor is appalling. It's like you don't even want my business. DOC: The door is over *smash* there…Oooookaaaayyy… now if I can PLEASE get back to work… HOMELANDER: How the F**K are you still alive? DOC: Homelander? Oh jeez, not you too… HOMELANDER: I punched your skull off your f**king neck. There's no goddamn way you should be living. DOC: I don't have the time or the patience to explain this to you. HOMELANDER: Is it because I'm a… what was the phrase you used… “completely unreachable sociopath”? DOC: No, but that's not inaccurate. Do you hear yourself when you speak? HOMELANDER: I have super hearing. But everyone will be able to hear you scream before you DIE! *tosses Doc out window* DOC: AHHHH SOMEONE HELP ME! ISAIAH: I'll catch you. DOC: AHH! AHH! AHH! ISAIAH: Why are you shouting? Are you hurt? Are you ok? DOC: Ahh… *calms down* I'm sorry, Isaiah, getting thrown out a window isn't something you get over quickly. ISAIAH: How do you know me? DOC: I talked to you a while ago. I guess you don't remember me? ISAIAH: Was it a nice talk? DOC: Yes, yes it was. ISAIAH: Good. HOMELANDER: Are you f**king s**tting me? I toss you out the goddamn window, and of all the things to happen, you end up getting caught by this big dumb n- ISAIAH: *punch* I don't like those words. You hurt my friend. DOC: Be careful, Isaiah, he's a very mean person, and very strong. ISAIAH: I can take care of bullies. You have a nice day now! HOMELANDER: Is that all you got, you stupid motherfu- ISAIAH: *punch* I said I don't like those words. DOC: I'm just going to take advantage of this and take off. *grabs phone* *starts dialing* C'mon Bruce, pick up pick up pick up… CARNAGE: Going somewhere, Doctor? DOC: *sigh* No, I guess I'm not. CARNAGE: Not like when you tried to send me back to Ravencroft, or the Vault, or any of the other places you tried to throw me away and forget about me. DOC: Cletus, you need help. More help than I can personally provide. CARNAGE: Yes, I know. I had such a wonderful talk with Victor last week about you. DOC: Victo… oh no. CARNAGE: Oh YES. Your name comes up an awful lot lately. Even before this little report of yours released. We all have our own ideas about ending you. Victor's was one of the more… colorful ones I've heard. And he's got a special place for you all saved up. DOC: Yes, he told me all about it. CARNAGE: Jim Jr., Roman, Waylon, Mr. Blake… we've had fantastic conversations about what we'd do if we ever got the chance to have a special session with you. And what with all the alone time I've had lately, I've been ruminating quite a bit about it. DOC: Lucky me… CARNAGE: But you know what the major difference is between me and them? DOC: Lemme guess, you're actually the one who's going to pull it off? CARNAGE: How dare you steal that opportunity from me? I was building up, it was a whole thing, it's like you don't even know how this is supposed to work out. The one time I decide I'm going to embrace the theatricality they talk about, and you steal my thunder. This is why I just kill people right away, no chance for backtalk. I should just stick to the basics… BOOSTER: *portals in* Yes, yes, it's me, Booster Gold. Hold your applause until I'm finished saving you, Doc. DOC: None to be had, Booster. CARNAGE: Who the hell is this clown? BOOSTER: The name's Booster Gold. You don't know it yet, but I'm about to make a big impact on you. Specifically my foot to your ass. DOC: Don't say that out loud… BOOSTER: Oh it's fine, Doc. I've already seen how this plays out. You're fine. DOC: If you saw this already, why didn't you stop it before it happened? CARNAGE: What is going on here? BOOSTER: I got caught up with some Justice League business. You know how it is, flying around the world, saving multiple timelines. It takes its toll. I needed some “me time”. DOC: You're a time traveler. LITERALLY ALL YOU HAVE IS ME TIME. BOOSTER: And yet I managed to take time out of my busy world saving schedule to come here and save the world for you. And before you say it, you're welcome. DOC: So please, do it. NOW. BOOSTER: What's the rush then? I mean, you just indicated I have all the time in the world, so theoretically I can leave and come back. DOC: Did you research this guy at all? BOOSTER: Who does research? DOC: Serial killer. BOOSTER: Like Count Chocula, or… DOC: Alien powered psychopath. BOOSTER: Oh, so like J'onn when we run out of Oreos in the Watchtower. DOC: WOULD YOU JUST HIT HIM ALREADY? BOOSTER: Jeez, you're in a hurry. OK. *ahem* STAND ASIDE, CITIZEN. BOOSTER GOLD IS HERE! I WILL NOW… wait, where's the camera? I want to make sure they get my good si- CARNAGE: RAAAAHHHH SHUT UP YOU BLOVIATING BUFFOON! *slash sound effect* Now where did the good doctor go? DOC: *running sound effects* Good thing I remembered to tie my shoes this morning… *sound of car pulls up* *window rolls down* FISK: Doctor Issues. Might I interest you in a ride? DOC: I see no rational alternative, Mr. Fisk. FISK: Nor do I. And yet here we are. Come in. DOC: If only to get away from another psychopath. *door opens & closes* FISK: So kind of you to join me. DOC: Is that blood on the floor? FISK: Remnants of the last person who chose to ignore a recommendation of mine. Unfortunately, given the circumstances I haven't had the opportunity for a full detailing yet. Regardless, that's not why we're here. DOC: Let me guess. You're mad about… Wait. Although we may have our differences, you already know about me, and you already saw your file. So what, then? FISK: I understand your hesitation to work with me, given the nature of our last conversation. Rest assured, as long as things remain cordial, no one's family members have to be involved. DOC: Then why even bring them up? FISK: Because in light of everything that's gone on, I felt it important to remind you of who I am. DOC: OK. FISK: As you know, I am a man of many resources. Resources that, in this instance, could provide useful in eliminating traces of these files from the internet and the computers of anyone who might possess them. DOC: You're rich. Got it. What's that got to do with me? FISK: Despite those resources, I am not without my limits. That is where you come in. DOC: What could I provide you that you can't buy yourself? FISK: Daredevil. DOC: If you saw my file on you, you definitely read my file on him. What more do you need from me? FISK: It's not the information I need, Doctor. You have access to him. A relationship. Trust. DOC: If you think that's the best level of trust possible, then you'll still have a REALLY hard time getting access to him. FISK: But his Catholic guilt can be manipulated quite easily to obtain a future session with him. All I need is for you to bend that to your will. Name the time and place, and I assure you everything else will be taken care of. DOC: And you're having me do this after an information breach that would mysteriously be cleaned up… Something tells me even a blind man could see the setup coming a mile away, and that's without all the other senses coming into play. FISK: I was under the impression you'd be more perceptive to this offer, given your current lack of allies or assistance. DOC: And you would become persona non grata for somehow changing this one opportunity that everyone had. And you stole it from them. Are you sure you want that? FISK: Are you suddenly concerning yourself with my welfare and the consequences that would come from me helping you? Even for a medical professional this seems beyond the norm. DOC: At this point, my preservation is paramount to anything else on my mind. FISK: I can see this was a waste of my time. *door opens* Consider this business offer rescinded. *throws Doc out* *door closes & car continues driving* DOC: *rolling sound effects & groans* Tuck and roll saves another life… and yet I'm still no closer to finding answers, or someone to help me. SQUIRREL GIRL: Is that you, Doc? DOC: Doreen? SG: Hey, how are you? DOC: Not so good… like literally, not good at all. SG: That's a bummer. Wanna talk about it? DOC: You mean you don't know? SG: Oh of course I know, it's the big story right now on Chitter. DOC: Chitter? SG: It's the social media network for squirrels. They actually came up with the name before Twitter, but no one will let squirrels own a trademark, and the bird lobbyists got involved, it got really messy. DOC: Riiiiiight. SG: Anyway, you're going through a pretty rough time, and I just wanted to tell you that I'm sorry you're hurting. Like you say, it's not your fault but it is your problem. DOC: Thanks. It's actually nice to talk to someone today who's not super pissed at me for what I said in their file. Assuming you read what I wrote… SG: I did. I have to say I understood why you said what you did, and I appreciate your honesty. DOC: Oh? SG: Yeah. I stepped back from the babysitting thing a bit. It was getting to be a bit much with everything else going on. DOC: I'm glad to hear it. SG: Cut back from 40 hours a week to 39. DOC: That's it? SG: Yeah, and let me tell you it was rough. Didn't know what to do with that hour, all that free time was crazy. So I opted to volunteer at a soup kitchen. DOC: I… SG: Feels good to give back. But enough about me. You're still struggling with the whole personal data leak thing. DOC: Yup. And I am so glad that I have your super powered support. Right? Right? SG: Oh I'd love to help, but I don't know the first thing about computers and stuff. I mean, I still have a flip phone. And my squirrel friends, well… there are a LOT of them, but they can't chew through all that fiber optic cable. You realize how much property damage that would cause? DOC: Thank you for the practicality. To be candid, I just don't know what in the hell I'm supposed to do. SPAWN: You know what they say, speak the Devil's name and he shall appear. DOC: What*gets sucked into hell* AAAAAHHHHHH SG: *yells after him* Sorry I couldn't be more helpful! SPAWN: Welcome to Hell, Doc. DOC: AHHH GET ME OUTTA HERE SPAWN: No sense screaming, no one down here can hear or help you. DOC: IT'S NOT FOR THEM, IT'S FOR ME. WHY DID YOU BRING ME HERE? SPAWN: I felt this place was actually less judgmental than being above right now. DOC: Much as I appreciate the gesture, I need to get out of here. SPAWN: What's that old chestnut of advice, when you're in a hole, the first thing to do is stop digging. DOC: That… actually makes a lot of sense. But I still have to find a way to address what's going on up there, and staying in Hell is making it worse. There's a sentence I never thought I'd have to say… SPAWN: I understand. Well, I tried. Hopefully that counts for something. Both with you and whoever else is keeping score. DOC: Appreciate it. SPAWN: So let me just *hit* *roar* AHH! DOC: What? SPAWN: Malebolgia is back. He's still pissed off after the last time I killed him. You need to go, now! DOC: So send me back up there! SPAWN: I can't right now, it's a lengthy process and I can't afford to keep myself vulnerable that long. You'll have to find another way. Now RUN! DOC: Oh my god oh my god oh my god… Eeeh… I just need to find a friendly face here… CONSTANTINE: How about a familiar one? DOC: JOHN? What are you doing here? CONSTANTINE: Oh, a little of this, little of that… bigger question is what are YOU doing here? DOC: Spawn dragged me down here and then he got attacked and I started running and I need to get out of here and PLEASE HELP. CONSTANTINE: And why should I help you? After all, you thought I sounded like a bad Beatle impersonator. DOC: What? How? That wasn't in the file. CONSTANTINE: Not every truth is written down, love. DOC: Whatever, I will wear a Liverpool jersey to my next session, I don't care. GET ME OUTTA HERE. CONSTANTINE: That's the spirit. Before you go, indulge me. When you walk through a storm… DOC: NOW! CONSTANTINE: Alright, we'll sing later. This'll just take a moment, love. Nicoreen siagos acasha… *magical sound effects* DOC: *gasp* *panting*... *to self* that was not fun. OK, Doc, what's the next step? Because I feel like I've been at this forever and I'm still no closer to finding an answer. CATWOMAN: Maybe I can help? DOC: Selina? Why? CATWOMAN: You know me, I like to whip up a solution to a problem. *cracks whip* DOC: As much as I love puns, this is NOT the time. So either help me, or get out of my way. CATWOMAN: Oh, so serious all of a sudden. You're almost as bad as Bruce. DOC: Look, if you're going to make jokes- CATWOMAN: Fine. I can hack into a couple of mainframes and shut down major Internet pathways. It's not a complete solution, but it will help stop the spread. DOC: That's… one of the first helpful ideas I've heard all day. CATWOMAN: You're very welcome. DOC: Why do I feel like there's a catch here? CATWOMAN: Why Doctor, you wound me with your implication. DOC: It's sore because it hits the spot. CATWOMAN: UGH. OK. Your office is directly above a financial trading company. They have extensive resources, but they're taking advantage of a local indigent community and forcing them out so they can build another bland high-rise. I need you to get me into the building so I can… obtain some leverage over them. DOC: So you take care of my immediate professional quandary and place me squarely in the middle of another one? I don't see how this works out in my favor. CATWOMAN: C'mon, I scratch your back, you scratch mine. And my claws know how to dig deep. SHE-HULK: If I didn't know any better, I'd say that sounds like a setup for blackmail, plus possible RICO charges for conspiracy. Not to mention the clear B&E, likely burglary… I mean the felony charges alone would eat up about 7 of those 9 lives you've got, right? DOC: I don't say this often, but I'm glad to see a lawyer hanging around. Thanks Jen. CATWOMAN: Goddamn lawyers ruin everything. You're no fun. SHE-HULK: You're calling ME no fun? That's a first. At least since Aaron stopped writing me. Also, that's a pretty rich statement coming from someone dressed like Judi Dench's body double. CATWOMAN: Such a low blow. I expected more from you. SHE-HULK: Sorry to disappoint. If you leave now, I'll make sure they drop the charges. Keep talking, though, and I'll be ethically bound to cooperate with the investigation. The ass-kicking will just be a bonus. CATWOMAN: This is why no one likes lawyers. You're all the same. SHE-HULK: All the same? I'm eight feet tall and green. Aside from my cousin, who else is even remotely close to me? DOC: OK, I think I'm gonna go and let you two sort this out. CATWOMAN: *Green Giant jingle* Ho ho ho… SHE-HULK: Oh, that is IT. The heels are coming off… DOC: Later, ladies. *sound of actual catfight in background* Let's try Bruce again… *dialing* *teleportation sound* WHAT? NO! MOJO: And here's the star of our show, ladies and gentlemen! Doctor Issues himself! DOC: MOJO! Are you fu- MOJO: Hey, watch the language, Doc, this is a primetime show. Gotta keep it family friendly. DOC: What show are you talking about? MOJO: Why, Doc on the Run, of course! It's the hottest new reality show in the Mojoverse! We've been watching you this whole time. Gotta say, loving all the twists and turns so far. But it's starting to feel a little stale at this point. I mean, how many times can you run into patients of yours who offer nothing but cliched phrases or try to kill you? You have to keep your audience guessing what's going to happen, but stunt casting only really works during sweeps. DOC: This isn't a reality show, this is real life! I don't give a damn about your ratings! MOJO: Of course you think it is. That's why your delivery is so great. But I'm not loving that last line. It's fine, we'll have the writers come up with something and you'll record an ADR session during editing. Gotta punch it up. Maybe curse a bit, we'll bleep you out and use it in the commercial. Oh, and speaking of punching, let's see what we can do about getting you involved in the fisticuffs. No sense in having everyone else fight around you, let's see how well you can hold your own in a fight. DOC: I don't have time for this. And I'm certainly not fighting for your amusement. MOJO: Oh, but don't you realize, Doc? EVERYTHING is for our amusement. Your fans adore you. Like this charming young fellow attached to his phone over here. Tell Doc how much you love his work. FAN: Pleeeasssee… killlll meeee… MOJO: Ungrateful whelp! I'll have you executed. But slowly, it'll be a miniseries. Anyway, back to Doc, let's knock down this fourth wall and see what you're made of. *shatter* Wait, that's not supposed to happen! Quick, get a camera over there and see what's going on! Camera 3, whip pan right now! SUPERBOY PRIME: This isn't Earth Prime… MOJO: Oh boy, ladies and germs, we've got an unexpected development here. Some jackass wearing a Superman costume has arrived. Say, lad, this is a closed set. PRIME: I don't know who the hell you are, but no one orders me around. MOJO: This is MY show, and I'm the one giving orders here. PRIME: What kinda world is this where people take orders from an overweight half cyborg spider thing? MOJO: THIS IS THE MOJOVERSE! And it's where you die! DOC: Lemme jump through this portal real quick. YOINK! *teleportation sound* OK. No fighting, no Mojo, no Superboy Prime, so this is already a plus. EEYORE: Hello there. DOC: GAH! EEYORE: You're awfully loud. DOC: Eeyore? EEYORE: Hi Doctor. DOC: How did I end up in the Hundred Acre Wood? And why don't you seem shocked? EEYORE: Don't know. I was just sitting here because I was supposed to have lunch with everyone. But it seems like they forgot me. Again. At least someone is here to talk to me. DOC: I'm very sorry. However, I have bigger things to deal with right now, so I need to find a way out of here. EEYORE: It's fine. Go ahead and leave. Everyone else has forgotten about me. You're no different. DOC: No, it's not that, it's just… *sigh*. Maybe this is all a test. Maybe I should be taking the time to help others, and that's how I'll end up getting helped myself. So, Eeyore, let's take a sec and chat. EEYORE: You mean it? DOC: I do. I could use a break from the insanity for a moment. Let's just talk about whatever you want. EEYORE: Thanks Doc. Well, yesterday I thought I'd lost my tail again. DOC: That sounds unfortunate. Did you find it? EEYORE: Yep. DOC: That's great. Where was it? EEYORE: Pinned to my hind end. DOC: Oh. EEYORE: Yup. Spent the whole day looking for it. DOC: I see. *beat* Is that it? EEYORE: Yup. DOC: You sure there's nothing else you want to talk about? EEYORE: Well, there is one other thing. You see, I *teleportation sound* DOC: NO NOT AGAIN! EEYORE: Well s**t. THANOS: Doctor Issues. You created a web of lies and pain, and thought you could escape it. And where did that bring you? Back to me. DOC: Thanos, I- THANOS: Spare me your pitiful speech. You have unleashed a power equal to that of the Infinity Gems. This places you on a level close to me, and this is something I cannot permit to stand. So I have no choice but to kill you. DOC: At this point, I barely have the desire to fight back. THANOS: Oh that's a shame, because I've been looking forward to this for a while, and hearing your cries for mercy would have made victory that much sweeter. As it is I will acknowledge your acceptance. Farewell, Doctor. NEBULA: Not so fast, father. THANOS: Nebula, your betrayal is disappointing but not surprising. NEBULA: YEAAAHHH! Doctor, I have brought you a ship. You can return to Earth. DOC: Great, so I can go back and face all the people who want to kill me. THANOS: I am happy to kill you right now. NEBULA: Hnngghhh… that's exactly why you have to go back. If Thanos kills you, it will give him pleasure. And I cannot allow that to happen. THANOS: This is not up to you, daughter. I have no qualms about killing you as a precursor to the doctor's death. NEBULA: Doctor, you must leave. NOW. I will deal with my father. He will be made to suffer, as he did to me. DOC: But I. NEBULA: This is not a request. You did me a favor. Allow me to return it to you. THANOS: You shall not leave, Doctor. I will obtain the Gems once again, and then I will bring you back here! NEBULA: DOCTOR! GO! DOC: Fine. But how do I even operate this thing? NEBULA: It is programmed to warp you back to Earth. Just press the big yellow button. THANOS: NO! I will not be denied! DOC: OK, here goes nothing. *button sound* spaceship takes off *warp sound* *spaceship door opens* I… Hello and welcome to Capes on the Couch, where comics get counseling. I'm Dr. Issues. I just wanted to say to everyone that's listened to all these episodes. Thank you, I love you all. Through no intention of my own, there have been many things that have happened, I'm sure you've heard of them. I want to issue an apology to anyone & everyone. I don't have the proper words for this. I just, I don't know what to do. I have no idea how I'm even going to broadcast this, because I'm probably banned from every source possible, and I don't know how to get this to my cohost. But if anyone hears… *breaks down* DOOM: CEASE YOUR INCESSANT AND UNNECESSARY TEARS, DOCTOR. YOUR PROBLEM HAS ALREADY BEEN RESOLVED THROUGH THE MIGHT OF DOOM. DOC: *sniffles* Huh? DOOM: DOOM HAS WIPED ALL TRACES OF THE FILES FROM THE WORLD. DOC: WhahuhwhyhowWHAT?!?! DOOM: YOU ARE NOW ALSO AN HONORARY CITIZEN OF LATVERIA AND WILL ALWAYS HAVE A PLACE TO RESIDE, SHOULD YOU CHOOSE. DOC: What's the catch? DOOM: THERE IS NO CATCH. THIS HAS ALREADY BEEN ACCOMPLISHED. DOOM SEEKS NOTHING FURTHER FROM YOU. DOC: I want to say thank you. And I will. But first, WHY? DOOM: MANY THINK DOOM AS TYRANNICAL, INCLUDING YOURSELF. BY THIS GESTURE, DOOM'S MAGNANIMITY WILL BE PRESERVED FOR ALL TIME. DOC: Well, I have to say that- DOOM: AND ALSO BECAUSE RICHARDS WAS UNABLE TO ARRIVE AT A SUPERIOR SOLUTION. DOC: Aaaaand there it is. DOOM: ONCE AGAIN PROVING THAT NONE ARE SUPERIOR TO DOOM. DOC: Of course not. DOOM: MOVING FORWARD, YOUR OPINION OF DOOM WILL BE ONE OF GRATITUDE AND APPRECIATION. WHATEVER PREVIOUS OPINION YOU HAD IS NOW IRRELEVANT. DOC: Honestly, at this point, I can't even disagree with you. But I have to ask, aren't you concerned about all the people who tried to kill me? I mean, the files are eliminated, but the memories aren't. People still remember what I said about them. And they'll know you're responsible for getting rid of them. They'll come for you. DOOM: LET THEM TRY. MANY HAVE ATTEMPTED TO USURP DOOM. AND YET DOOM REMAINS. DOC: *sigh* Yep. Definitely not tyrannical at all. DOOM: DOOM SENSES SOME SARCASM. THIS GESTURE CAN BE UNDONE JUST AS EASILY. DOC: Noted. As a humble citizen of Latveria. My deepest appreciation… my liege. DOOM: YOUR APPRECIATION IS NOTED, GOOD CITIZEN, AND- DOC: Can I just ask one favor? DOOM: YOU DARE ASK MORE OF DOOM THAN HAS ALREADY BEEN PROVIDED? DOC: It's just… I need to get back home. Surely a simple task like this will not tax the might of Doom. DOOM: FINE. BE GONE AND RETURN HOME. BUT BE SURE TO SPREAD THE WORD THAT DOOM IS THE ONE WHO DID THIS FOR YOU. DOC: Oh don't worry, I'm telling everybody. Thanks Doc! *warp sound effect* Hoo boy, that was strange. ANTHONY: WHAT THE HELL HAPPENED?!?! DOC: Oh man, it was nuts. I tried to call Batman, and then I was dragged to hell by Spawn, and Kingpin had me in his limo, and I was in- ANTHONY: No, I mean this burner phone Batman gave you has been sitting here ringing off the hook the whole time, but I didn't want to answer it because I figured it might explode, or it was wired to your DNA or something. You know how crafty Batman is. DOC: Are. You. F**king. Kidding. Me. Ending Thank yous: Dr. Goku from Guardians MH, Kate from IWB, Lisa from Comic Book Couples Counseling, my sister Angela, Doc's father, my wife Next episodes: Moon Knight 2, Elsa Bloodstone, Holding Out for a Hero Plugs for social Apple Podcasts: here Google Play: here Stitcher: here TuneIn: here iHeartRadio: here Twitter Facebook Patreon TeePublic Discord
Welcome back to Artbeat Radio! You're listening to our 100th episode! We started in 2012, posting about one episode a year. In September of 2020, quarantine inspired us to find a way to interact more with our greater community. Unable to go on community outings or leave our homes, we decided it was time to post on a weekly basis to maintain our connection. Listen in as we share our favorite moments, our hopes for the future, and interview one another on our accomplishments! Thanks for listening and tune in next time! For more information about our organization, please visit our website www.ableartswork.org Audio Transcription: (Please listen on Podomatic or Spotify to view the full transcript) *Intro music by Artbeat Radio staff* Music, stories, and more! You're listening to Artbeat Radio, a program of Able ARTS Work. Stephanie: Hello and welcome to Artbeat Radio! My name is Stephanie! This is our 100th podcast episode. Wow, that is crazy. Our 100th episode! Looks like we made it! Thank you for listening to our podcast. Hope you like the episode. Alison: Okay, now I remember there was one time when we were doing something and it didn't turn out right and somebody dropped a box. I don't know what was in the box but somebody accidentally dropped a box and then in class somebody got the words backwards. Like they accidentally screwed up the words and that was my favorite part. Brian: Well, I loved Katie Jo also. Interviewed her about her country music and she actually performed for us live. My favorite was interviewing the guy who played Spiderman. He was really interesting. Eric: Guess what folx, the interview with spiderman will be available as of next week! Brian: Stephanie. Stephanie: Yes? Brian: What podcast did you enjoy? Stephanie: I liked “Summer Sounds” because it was really upbeat and it was really nice and I also like that I have my professional headphones. I would like, in the future, to meet my goal, which is to be a person on the radio but talk about my play, which is going to be awesome. Hey Renee. Renee: Yes? Stephanie: What's your favorite part of the podcast? Renee: I loved interviewing Spider-man, Ricky because we have a lot in common and are the same age. Brian: Yeah, I really enjoyed the interview with Ricky Mena, who played Spiderman. Stephanie: I think the interview with Julianna and Matthew was my favorite. And I just like podcast because I just like it. I like it because I get to produce the episode about my play. That's why. My goal is to be on a radio station and be the head podcast talker and to talk about my musical and my jewelry business. And that's going to be fun. Go podcast class! Brian: What I love about working with KLBP a lot is getting my voice heard. Getting my thoughts across. To have some of my thoughts that I have not illustrated before and that's very important to me. It's a terrific radio station to air what we've learned. Tim: Well, I like the guests that we have and then talking about our program and sharing all our details. I enjoyed interviewing our staff and then others from- different staff from different sites and music instructors. I like the most about it how we come together as one. Alison: This is our 100th episode! Well, what do you think of it? Stephanie: I think that it's amazing so far. Alison: I didn't think we'd go this far. Stephanie: I know right? Brian: Aaron, what do you think about the 100th podcast episode? Aaron: I like it. Brian: Did you think that we would make it this far? Aaron: Yes. Brian: It's a real honor to interview you, Aaron. Stephanie? Stephanie: Yes, Brian? Brian: What do you think of the 100th episode? Stephanie: I think it's cool. Brian: Did you think that we would make it this far? Stephanie: No! That's crazy, Brian! Brian: Yeah! Stephanie: Wow. Brian: I'm-I'm with you. I can't imagine that we're up to the 100th. Stephanie: We gotta' keep going. It'll be 101! Brian: Yeah! *laughs* and maybe 102, 3, 4, 5 and so on. *laughter* Stephanie: How do you like this class? Brian: I love it. So much so that I took it last semester and I'm taking it this semester. I can't remember if I took it the semester before. Stephanie: Yeah. Brian: How do you like this podcast? Stephanie: I think it's great! I like- I like my first- I like my classes this year. They're fun! Renee: How long have you been on the podcast, Stephanie? Stephanie: Um...not very long but I think I like it. How long have you been in podcast? Renee: I'm not sure. I just started *laughs* Stephanie: Just started? Renee: Yeah. Stephanie: I wanna keep working on podcast! Renee: Me too! Stephanie: Sorry, I'm just stoked! I'm so sorry *laughter* Artbeat Radio was created in 2012 at the TAP II location in Gardena California. Brian: Here's a clip of our first podcast! *Dead Man's Bones cover plays softly behind voices* Alison: This was made in 2012. This was the first podcast of Artbeat Radio. it was posted on October 18th 2012. *Dead Man's Bones cover plays louder* *Song fades out* Stephanie: I thought it was awesome. The way that it was presented and the way that they were singing. Brian: I liked it! Alison: It was beautiful. I think the song was great considering it was our first one. Brian: Hope you enjoyed our 100th episode! Have a wonderful day and thank you for listening to our podcast. Stephanie: Thank you! Renee: Thank you for listening and thank you for coming. Have a beautiful and wonderful day. Brian: Here's to 100 more episodes! Thank you very much ladies and germs. *laughter* Renee: Gentlemen! Stephanie: That's so funny, Brian! Renee: I like that Brian: Thank you! Renee: “germs” that's so funny! I like that *laughter* *Outro music by Artbeat Radio staff* We hope you enjoyed this episode of Artbeat Radio. For more information, please go to our website. Ableartswork.org. Thanks for listening and tune in next time!
Most people probably know Cuisinart because of the company's kitchen appliances like the food processor, air fryer, or coffee maker. Cuisinart's products are everywhere — in kitchens around the world, in retail stores, and yes, online. In the last year or so, Cuisinart has put a much greater emphasis on the DTC part of the business -- walking the tightrope of being there for retail partners, while still making sure that there is enough inventory to meet the demand coming from online. On this episode of Up Next in Commerce, Mary Rodgers, the Director of Marketing Communications for Cuisinart, explains the steps the company took to make the pivot to DTC without leaving retail partners in the lurch. Mary also talked about how the marketing and online pushes for products went from being planned out months in advance to changing from one day to the next. Enjoy this episode!Main Takeaways:From Months To Weeks To Days: Sometimes, the world moves so fast that planning in months-long cycles places you at a disadvantage. When demand, retailer needs, and inventory is shifting at a rapid pace, you need to come up with a plan that allows you to stay ahead of the curve, even if that means changing strategies from one day to the next.Eyes On Your Own Paper: Some brands will look to their competitors to see what influencers they are working with or how they are running their campaigns, and then they will try to copy that approach. While this is tactical, it is not strategic because you are placing blind trust in another brand's team and vision without even knowing if what they did paid off. You have to do your own homework and think about your customers' needs and build a strategy around that rather than just trying to keep up with the Joneses.More Than Just A Product: Brands have to think beyond the products they sell and understand how the customers will be using those products. Often, especially in housewares, consumers will be using one product in concert with another or as part of a recipe. By understanding the life of the consumer beyond purchase and coming up with content to connect with consumers after the fact, brands can create a more fruitful and loyal relationship with their customers.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we're ready for what's next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome back to Up Next in Commerce. I'm your host, Stephanie Postles, CEO at Mission.org. Today on the show, we have Mary Rodgers who currently serves as the director of marketing communications at Cuisinart. Mary, welcome.Mary:Hi, I'm so glad to be here today and join you. I'm really excited about talking all things marketing.Stephanie:Yes. I can not wait. So I'd love to kind of, before we get into Cuisinart and your role there, I want to hear a bit about your background and how you even entered the world of housewares and cookware and all of that.Mary:So back in the day, I actually worked for a retailer and they worked in the housewares department and I went up through the ranks there getting to the level of assistant DM. And so that wasn't my favorite thing is, was involving a lot of scheduling people and logistics. And that was kind of my foray into the home goods' area. And then I also did work for publisher for short period of time because my background was basically literature and journalism up to that point when I was studying in college. And then I transitioned into marketing at that point in the publishing world.Stephanie:Okay, cool. And when did you get introduced to the role at Cuisinart?Mary:So I worked for a company who is much more of a legacy company. I work for a company called Farberware. They were really well known. They had a manufacturing facility in the Bronx. And they basically did everything there. We did product development, engineering. It was a really great learning experience. And my previous boss, I worked for another company called Dansk, who is now owned by Food52, they just bought them recently.Stephanie:Cool.Mary:And my boss there went to Farberware and he asked me to join him there. And then that got sold and dismantled in '96. And I had always had Cuisinart on my radar. I thought it was a really great up and coming young, kind of small organization that I felt had a lot of growth potential, which turned out to be true. And so I actually reached out to them. And I didn't know it at the time, but they were looking to fill a marketing communications position for quite a long time. Their previous person in the job had left. So I was the only candidate. But they loved my background and obviously my experience in housewares and also the fact that I had pretty deep product development experience. That wasn't the direction I wanted to go in permanently. I mean, I'm glad I know that process and I've done it, but my real expertise is marketing communications.Mary:So it's really interesting because when I joined in '96, as you can imagine was very, they really hadn't done any real marketing, not much advertising. They just really were just scrappy entrepreneurs. I think of ourselves, is that still today, but for different reasons. And it was like, the media channels then were like five channels unlike today. So obviously, as you can imagine over time, things have changed dramatically compared to when I first started, when we were so focused on things print advertising. And we matured into things like understanding the value of TV advertising. I actually built a model for the company to show them the impact of TV advertising on sales and trajectory that you can get from that.Mary:And so we forayed into that and really started building out, strengthen multiple channels and not just one. And so, today obviously it's like a whole new world. And I also like to say I consider myself a modern day marketer because there's so many things you have to be, not just aware of, but understand, now that you didn't then. It's kind of like, back in the day, you knew what the impact was on business, but now you really know what it is because you have hard data, where in the past you would rely on your retailers or sell through retailers. And so things are much, much more sophisticated now. And you also have many different avenues to test and learn too.Stephanie:Yeah. Seems like too, over the past couple of years, I mean, especially the past year, I'm sure everything's had to be rethought, replanned and planning cycles kind of go out the window. Annual plans turn into quarterly, turned into daily. And how did you guys adapt to that, the changing consumer preferences of all of a sudden people are at home, they're cooking, they need all the things to make the recipes? And I'm sure a lot of things had to change on your side as well to going to keep up with that.Mary:Yeah. One of the biggest challenges we had in the last, basically year and a half, the challenges are similar now, but for different reasons. So basically, we keep our eye very closely on trends. And when I get up in the morning, I'm reading all kinds of articles and information and just everything changes on a dime now. So you have to be on top of it all the time, but we also started to hear things from our retailers, like they were looking for goods that they maybe weren't looking for before, like bread makers, waffle makers, more coffee makers, coffee grinders because people during the time when lots of places were closed, they still wanted a great cup of coffee. They had to make it for themselves basically.Mary:So what happened for us was, and I'm really very proud of our team on this because it took a lot more effort because in the past we didn't have to worry about like, "We're out of inventory of this, we're out of inventory that. We sold out every last ice cream maker we had." In the past, we always knew we had stock and buffer stock and we never had to drill down. If we knew something was out of stock, it wasn't like 10 or 12 items, might be one-offs or something. So we ended up going from an annual planning phase to quarterly, to monthly, to weekly, to daily. And we spent a lot more time and effort on operational issues, just moving inventory to our D2C business, which became a whole hoo-ha.Mary:And then also just making sure that we had inventory. We at least had certain amount of retailers that had inventory of an item. And with every marketing program we did, we did that. So it took a lot of juggling. We had to push things out. We had to keep our eye on incoming inventory when it was going to be available, when retailers were going to have it. And so it became very tactical to be completely honest with you. Like something that you think is your strategic, but it doesn't matter, at the end of the day, you're going to have all the strategy you want if you don't have the goods, right?Stephanie:Yeah.Mary:And we also, I personally noticed this with some of our retail partners, because a lot of the retail partners in the very beginning went into complete shut down. They shut the stores down. But they can't easily turn things off. And so they were running campaigns for things they had no product, which is the one thing that makes me crazy is to know people are spending time, money, effort, and resources marketing something that you can't sell because you're not going to convert if you don't have it. So whatever data you do get is not going to be very valuable at all. And then it becomes no history. Right?Stephanie:Mm-hmm (affirmative). Mm-hmm (affirmative).Mary:So you look back at that program, and you're like, "Well, it didn't do well." And then you have to remember all the things around it that happened. The reason why it didn't do well. And then you just wasted a lot of effort for no-Stephanie:No return.Mary:... benefit.Stephanie:Yeah. So when thinking about a daily planning process, what were some of the key lessons when you look back, you're like, "Oh, this would have helped make it easier," and are you still doing that today right now? Because that sounds insane, looking every day at the trends and hearing from the market and being like, "Oh, people want this, and now it's shifting here and we need a marketing campaign around this." And also getting all the backend right and making sure that you've got the inventory and it's all tied together. How would you set it up today? And would you still advise on daily planning processes?Mary:Yeah. So I would say to you, it's not the way we like to do things. But it was just, we just didn't want to be spending time, money, and effort on something that wasn't going to produce for us. So we felt it was necessary. And I would still do it today because we were, I mean, we are nimble. So the fact that we could say, "Hey, bread makers are doing really well right now. Let's make sure we're making people aware that we have bread makers and we're selling them." And I mean, that was not that big of a challenge for us, but when we ran out of bread makers, I had to say to our team, I'm like, "Well, you know what? Even though you don't have a bread maker, you can still mix dough in a food processor or you can use one of our stand mixers." And so change the storyline basically and look at it from a different direction.Mary:Or the other thing we did is when there was a yeast shortage start giving people ideas on other things that you can make that don't have yeast without having to go into the whole sourdough trend which would have been, not exactly making bread today. Right?Stephanie:Yeah. I love that. That's like, making do with what you got and just shifting the storyline. I mean, because I think the amount of searches I've always put in to be the replacement for soy sauce, the replacement for eggs, and really leaning into that trend of being like, "We can't help you here, however, you don't even need that thing. And now maybe you do need it." How do you get your team thinking in that kind of mindset? Because I'm imagining when you come to daily planning processes, you really have to decentralize the entire team structure to let them make these quick moves and throwing campaigns and setting them free to do what they know is best.Mary:Yeah. So I mean, my style, my leadership style, I'm not a micromanager. I don't believe in micromanagement. My personal belief is that when you empower your team to own their business, they're more committed to it. And so that's the approach I take, but I'm definitely involved in all aspects of the business and guiding them in those ways. Trying to help them think a little bit differently about their approach. But at the end of the day, they're the ones coming up with the alternative content based on those comments. I'm not the one doing that. I'm definitely letting them own all of that themselves. And we work with a lot of external agency partners. So we work really, really closely with them and they are also working with each other.Mary:So it's not a siloed system, basically. All our agency partners know each other. We are really good at making sure that we're having constant lines of communication open based on whatever's happening in our business. And also down to any aspect of marketing that we're using to promote product. And then the only thing I would other say is that you had asked me earlier about what's changed compared to last year? So I'm sure you've heard that the marketplace, the supply chain marketplace is still highly disrupted, but for different reasons now. So the reasons now are basically raw material shortages, huge increases in the price of containers, cost of containers.Mary:And most people in the durable goods category, they are bringing goods into the country. And then a lot of people are spending time trying to diversify their supply chain in order that they're not heavily reliant on one point of reference for their goods. But that's also something that can't happen overnight. That's something that has to be, it's long-term. That's a longterm position. But we're already hearing in the marketplace that some competitors are basically not going to have inventory of certain items. It's not going to happen. So we also then look at those opportunities and try to capitalize on those opportunities because if we do have supply of similar product in the same category, we are going to try to help out our retailers and make sure that we get them supply to fill those holes for them. And so our team, we have a decent-sized planning team that work really closely with the division heads to make sure that they're focusing on the items that have the greatest need.Stephanie:So how do you create a open conversation with retailers or other partners to figure out what they're missing? Because it seems like in a way, once you would structure a partnership where they're like, "Oh, you always give me bread makers. That's what I know you for." I would think that they wouldn't think like, "Oh, I should share that I also need this isn't this," because they're so tunnel vision on like, "My partner does this with me." So how do you even go about developing that relationship? Or they will say, "Here's some gaps right now in inventory that we just can't get, can you help us?"Mary:Yeah. I mean, that happened last year. So those conversations were had over the last year and a half. And our sales team works very closely with their retail partners. And so they're having those conversations on an ongoing basis. And it also helps out our retailers and it also instills us as making sure that we're helping them protect their business too, because I'm sure you realize this, if you went around six months ago and you went into some of the retail establishments you would see empty shelves and you would see big places in the home goods' area, where there was not a lot to purchase in person.Mary:And so those are ongoing for us because we also work really close with them planning ahead because encouraging them to make sure that they get their forecasting done months in advance so that we can buy against that forecast and protect their orders so that they have good supplies, especially as we go into the back half of this year, which for us, my team calls it our Super Bowl because that's our peak season basically. And so we want to make sure that all the stars align. And our marketing is pushing the items that we can focus on, but we also make sure that, like I said, inventory is essential for us.Stephanie:Well, if that's so, is there anything, any big bets that you guys have made, or that you're implementing right now, especially around supply chain or something that's just totally different than how you used to do things, and you're not really sure about the outcome, but you think you're ahead of the game? Because I've heard a lot of people come on the show and talk about this as a big issue and there's room for disruption in the whole logistics and supply chain and warehousing and all of that, but I haven't heard many people be like, "We're doing it this way now and it's working." Or, "We're going to explore it this way. And we think there might be opportunity around adjusting these things."Mary:Yeah. I mean, I have those conversations all the time. It's like, "Okay, we need to get our fall marketing plan locked down," because, and you know this, it's not something you turn on in a day. It has to be those big campaigns, tent-pole type things are planned months in advance. And so I was already having those conversations a month ago, basically like, "These are the items I think we should focus on, but I also need to have confidence that we can have product." So we honed in on the items that we're pretty sure that we can generate demand, but also have appropriate supply of goods. And we're also making sure that we are doing some other things which involve our retailers, like aligning our retailers so that they are working in the same playbook we are because it's, I call it compounding interest. That's kind of how I look at it.Mary:I tell our sales team, "Look, if you were smart, you would take advantage of this. This is what we're working on. And we were very transparent about it with our retail partners and our sales team, because the more we're all pushing in the same direction, we are going to be more successful." And we're also doing a lot of other things like digital audits and making sure that our digital shelf, not just for ourselves, but for our retail partners are clean and tidy and neat and organized the right way and they have the right data specs and content and all of the things that they need to make sure that they're successful on their side. So it's not just about the marketing that we're doing, but it's the support that we provide to the sales team and the retail partners that extend basically.Mary:And like I said, I call it compounding because for every one of those partners I can get in line, the more powerful the campaigns are across the board.Stephanie:Yup. I mean, I definitely understand that. It's like, "Why wouldn't you all be kind of rowing towards the same end point? If you guys are having a big campaign push why wouldn't they also invest in the same thing instead of having diverse efforts?" What are some of the biggest gaps that you see on retailer websites when you're saying you want to make sure it's clean and tidy, they have all the right information. What are some big missing pieces that when you go in and you do your digital audits, you're like, "Ah, once again, you're missing this or you're doing it this way. And we know that it's best to do it this way." Because I'm sure you're not the only one who is struggling or finds those kind of things on the retailers websites.Mary:Yeah. So basically our focus has been along naming conventions and search. Those are the two things that we've put a lot of effort into. So on-site search for retailers, every retailer could be using a different partner for search or self-developed search, or however doing it, it's just that, it could be different for every retailer. So that has been a big focus for us. And then the other thing too is making sure that any content that we're developing much more. So in the lifestyle area, that we are making that content available for all of our retailers and sharing out because that's become a big, I don't want to say burden, but it's been, every retailer has different specifications. Like, "I want seven lifestyle images and I want this and I only take this size and only take that size." And just the whole logistics end of it because as retailers are not developing content for every product that they sell on their digital shelf. They're not doing that. They're repurposing content.Stephanie:Yeah. I mean, how do you know, first if they're using it, using it in the correct way? And also, do you see them putting their own spin on it? Because there's been a few times when I've seen, maybe I go to Cuisinart and I'm like, "Oh, that was an epic video product placement." I just associate it with you guys potentially. And then maybe I go to, I don't know, HomeGoods and same content. And I go to Macy's, same content. And then you start being like, "Wait, who started this content?" I've seen that happen a few times with brands where they're all reusing the same stuff. Are you encouraging your partners to repurpose it, put your own spin on it, put your own voice on it, use it how you see best fit, or are you just like, "Here's the box that you need to work within?"Mary:Yeah. So how we protect ourselves against that is we develop our own custom content for ourselves. So that's how we set ourselves apart.Stephanie:You're the original. You like [crosstalk]?Mary:Yeah, instead of... I mean, sure, you realize this is duplication of that, it doesn't necessarily help with SEO related things. But retailers have so many products and they're so big. When you think about, what one retailer, or how many SKUs they have online versus an in-store environment, they're heavily reliant on brands to use that content there. They're just not going to develop that themselves. The sheer amount of resources that they need to do that is, it's not going to happen basically. And obviously we've put more emphasis on it ourselves because not only, do they need the content, but we need more content ourselves because we're not just using the content on our website, we're developing it for social, for digital, for every avenue, for work that we do through our PR agency. It's used in every channel.Mary:But like I said, the way that we differentiate in that area is that we are also developing custom content for ourselves. And we do also have retailers that they will change up their hero copy and this and that. I mean, when we do those audits, we also make sure that the information is correct and they don't go off the deep end. Stephanie:Yup. Yup. I can imagine there being a lot of value in what they're seeing on their side around the kinds of content that's working. Maybe they're getting some kinds of content from you in one way, and then different styles from another brand. Is there any data sharing there where they give feedback of like, "Oh, we see this toothbrush brand doing this and it's working really well. Our customers like this." Do they ever share that feedback and then help you rethink the content that you all are headed or going to create?Mary:Yeah, interesting that has never happened, but what we have done ourselves is that we obviously keep our eye on what content performs best and then we produce more of that type of content. So like most brands, user-generated content tends to perform much better. We work with a lot of influencers who obviously built custom content for us. And that's the stuff that performs much better than... I'm not saying our stuff doesn't perform, but in comparison, that material. It's also, somebody, it's brand appropriate, it has the proper brand essence to it, but consumers like to see other people's material and they gravitate towards it. And they're more engaged in it. And so we put more of a focus.Stephanie:Yeah. Are there any big bets that you all are making in marketing campaigns or content that you're like, "This might not pay off or this could be taken the wrong way, but we're going for it?"Mary:I mean, not really in that sense, but in the sense of social shopping, we're putting more of a focus on social shopping and being able to track that. And we also just launched a campaign and we had positive ROI on it. So that's where everything's going. It's like making sure you have a positive ROI that you are testing and learning and being able to quantify. It's the benefit of the digital world. You can actually see the results of your efforts and what they produce.Stephanie:So earlier you mentioned influencers. And that's something on the show that I've heard a lot of mixed reviews around of what's an influencer? Who actually classifies as that? When does it deliver results? And how are you guys going about finding the right influencers and partnering the way that you get a long-term ROI?Mary:Yeah. So we've been working in this area for quite a long time. We don't focus on celebrity influencers. That's not our thing. We are most interested in aesthetic and brand alignment and also the fact that our consumers are very oriented around food and food is a big part of their life and they're very interested in recipe ideas and things like that. So we have a whole, we've developed an entire set of guidelines for influencers and also for any work that we're doing in social media for ourselves and for our licensed partners.Mary:And we have also over time found a few influencers that we've had ongoing partnerships with instead of one-offs. I'm sure a lot of people that you talk to talk about where this is going, where the influencer marketing field is going, because obviously there's a lot more brands using it in comparison to even one or two years ago. It also, when you get into that situation, you can be driving a pricing and a few other things. And those are all obviously concerns for everybody. And then also the fact that you also want to have separation with competitive brands which is a big concern. And we stay on top of all of that.Mary:We're not currently using a platform to vet influencers. We don't do that. We work with our PR agency Magrino, and they are basically doing the research and handpicking appropriate influencers. I mean, they know our guidelines and they know what we're looking for. And we also work with the influencer and also get their stats from them and making sure that they're in line. We also get contacted by a lot of people directly through our social channels, or even just through email wanting to partner with us and we explore all those opportunities, but at the end of the day, it also has to align with our needs and our guidelines and also the needs of our consumer.Stephanie:Yeah. We've heard quite a few brands saying, "Anyone can be an influencer essentially, and it's not the big celebrities of the world anymore. It's anyone who has even a couple of thousand followers, if those followers are engaged and ready to buy." Are you seeing those more, the micro influencers working better than just, like you said, you don't even go for celebrities? So what do you look for when you're trying to find someone who's going to be a good fit for the brand and also deliver good results?Mary:Yeah. I mean, our biggest thing is engagement. That's what we are interested in. We're interested in engagement. We also have a certain level of followers that we're interested in, not in the small thousands per se, but those are all key vetting points for us. And then also we check their handle, make sure that the work that they're doing is aligned with what our consumers want to see also. We don't want to see overly promotional. We want to see some separation. We also want to see, like I said, engagement is a key factor for us too.Stephanie:Yeah. And it seems like that's where the world as a whole is headed around organic content, authentic UGC, not the way that it used to be even just a couple of years ago around, you see a channel, wherever it was and being like, "Oh, obviously their whole goal here is just to sell, sell, sell." I rarely see that working anymore. And if you see people doing that, they quickly start falling down the ranks of, "Why am I even here if you're just selling this one haircare product the entire time, and there's no other content. I don't feel connected with that." So it seems like everything's kind of shifting in that direction.Mary:Yeah, it definitely is. And people want to be inspired. That's why they're on these channels. They want to be inspired, they want to educate themselves a lot of times. People are very visually inspired and they want to... I mean, I even know myself the types of things that I use social media for, it's education too. It's about, I happen to study Italian, so I'm very oriented. I follow a lot of people in Italy and cookbook authors and things like that. And I'm there to learn. I'm there to be inspired by their knowledge and the recipe ideas. And it doesn't matter, it just matters what the consumer's passionate about. And that's what you have to deliver to them. They don't want to be hammered over the head every day with, "Buy my blah, blah." I mean, that's not why they're there. And then, as you said, what happens is over time they tune out.Stephanie:Yup. Are there any, what maybe some would call competitors that you'd be open to being shown up against, because I see that being a world where you're like, "Oh, I really want this influencer. They're really big in the food scene, but they also use a semi-competitor products." Are you all okay with that? Or are you like, "Oh, it has to be semi-exclusive," or, "You can't feature other competitors on your channel as well."Mary:Yeah. We wouldn't do that.Stephanie:You wouldn't do that? That's hard no.Mary:We're too competitive.Stephanie:Yep. Hey, I like it. That's great.Mary:Yeah. I mean, we even go to the point where we, "When you're taking photos, we don't want to see competitive product in the photo." I mean, and I assume people over time also do the same thing. But yeah, we're very competitive. We want to see separation. We don't want to work with somebody who is like, been all over every competitor known to man. And hey, I know for a fact that people probably go on our channel and see who we're working with and use us as a free game for not having to find their own influencers for all I know, and we don't do that. We don't do that at all. I would not encourage that. That's kind of the lazy man's way out. But yeah, we don't do that.Stephanie:That's not a long game [crosstalk].Mary:No, it's a short game. And the thing is, it's like, if you're in this for the long haul, you're going to do it from a strategic perspective and not a tactical perspective. And to me, that's tactical because you're assuming whatever I'm doing is going to work for you. And your brand's, different brand. Your consumers have different needs and wants. That's what you need to focus on.Stephanie:Yeah. And it's putting way too much trust in another team that you don't even know what they're talking about. Why they're doing that. You don't even know what they're partnering with that person.Mary:And the other thing is, you don't even know what the stats are, how it produced, how it performed. I mean, now at the end of the day, you really don't. So we don't do that. It's not even in my mindset to be completely honest with you, but I'm not saying that other people don't take that tactic.Stephanie:Yeah. Yeah. Got it. Earlier you were talking about creating these shoppable experiences. And before the show, I mentioned also headless commerce and you're like, "Oh, I mean, is that even a term anymore? We've been doing that forever." I want to hear what you guys are seeing around what some would still say is a trend. And we've had some people be like, "That's not even a thing," or, "It's here to stay." And I'd love to hear your perspective since you guys are the maybe OGs in this. You've already been doing it.Mary:And it was one of those things where we did it for a different reason. Well, it was similar reason, but different. So this is like years ago, our shopping cart aspect of our website is completely separate from the web property and the reason it was done like that was that we were working with a fulfillment company. We've been selling direct-to-consumer for years and years. It's just that we use a fulfillment company. Consumer have this shopping experience on our website, but the orders were sent to a fulfillment organization. They fulfilled them. And we kept the consumer in our ecosystem because I wanted it to be able to own the data.Mary:So this was like more forward-thinking. Now, this is like all the trend. People are like, first-party data, first-party data, but that's how I protected my first-party data years ago. And so in a way, thank God I did it because when we wanted to bring the D2C business back in-house in late 2018, I didn't have to restructure my entire website. I basically just had to plug in a shopping cart basically at that point. And then last year in the middle of the year, we transitioned our entire web property to Episerver, it's a DXP, and still kept the shopping cart separate. And what we ended up doing, it was you made as much of the site [CMSable] as possible so that the marketing team can virtually do any day-to-day operation that we need to change a price, add a new product, build a landing page. We just finished building out blocks so that we can build custom landing pages. We can literally do anything ourselves.Mary:And so the idea was we wanted to be a masters of our own domain basically, because in our previous situation we used one web development company and they did everything for us. And unfortunately, over time as the brand became more mature, it didn't make sense for us anymore because we really needed experts. We needed experts in SEM, SEO. We needed experts in web development, in the latest best platform to use. And we also wanted to be more in control of our business. So we didn't have to open a ticket with IT. And the SDP emails me, is like, "Hey, I think we changed the price on blah, blah, blah, can you fix it on the website?" I'm like, "On the fly." Kids do it in 10 seconds, and not even... So this way we're in control of our destiny, basically. We're not heavily reliant on any one thing or any one agency. And this way also, if we decide to change agencies, we're not stuck.Mary:And that's one of the things that is really important for us and for our business. And not having to get in line at the deli stand. No seriously, I say I'm a point A to point B person. I don't want to have to go through five people to do something. I want to be able to control my destiny and the destiny of the company and the brand. And that's how I look at it. And that's how, it's more work for us because now instead of dealing with one agency, we're dealing with multiple agencies, but that's what's best for the company. And that's what's best for the brand because when you get to a certain level, you need to be reliant on experts in the field.Mary:And this is where vertical integration is not necessarily the best thing for your business. And so it depends. I know some people are all up for vertical integration, but what happens over time is when you're not continually developing those people and making sure they stay best in class and they only have one client, you get denigration over time, basically, in my opinion.Stephanie:Yeah. I mean, there's no incentives to keep doing better and better if you're getting paid the same amount to, essentially, if you can make it less work. And I mean, and they're not going out to the market and shopping it and doing our piece. They're like, "This is what we got right here. I'm doing a flat line thing for anyone." Obviously it's like, "Would have stepped in with our hand." But I mean, I also think about it's the company, the age of the company and where they're at in that life cycle. And it seems like it always starts with, you've got the founders and then it's very dispersed and you're hiring all these agencies and, "I need social, I need this, I need that." And it's all over the place. And then you start to bundle it back up again and bring things in-house.Stephanie:At what point do you think that companies should start considering pulling things back in-house, controlling their own destiny a bit more and not relying on just one or two agencies to control what's happening and where they have to wait in line at the deli stand, as you'd say?Mary:Yeah. I mean, I think it depends on your business because for where we are and where the brand is now, it's more important for us to be working with what I call best in class. And the thing is, unless your organization is continually investing in talent and adding head count and all those things that companies are not necessarily looking to do. The sheer amount of people you need to keep that train running is probably unreasonable. And so for me, I can't even imagine us bundling this all back and bringing it in-house. I just think our needs are greater than that at this point. But I'm not saying it'll never happen. Things change every day, but at the end of the day in my experience, when you have some of these in-house organizations, it slows down your business. It's slow. It's like, "Okay, here's a common service area. There's nine divisions. And we all have to use the same point, the entry and get in line."Mary:And it's like, things never happened. It's like the slow boat. It's not easy. And the other thing too, is what ends up happening sometimes with organizations is, "Let's have so-and-so do it." And they have no expertise, they have no experience, they have no knowledge. And so that person's not really the right one to be there, but they're handed the thing and it's not necessarily the best outcome. So for me right now, I'm not intending on rebundling and bringing anything back. And first of all, the sheer lift on that would be insane. And you're also talking-Stephanie:And you also let the team go and hire too, which I love. I mean, the team be on a find a cool vendor and find a cool agency to work with it, and maybe executives would have never had time to even stumble on. I mean, that's how we even got our start with Salesforce, was one team within Salesforce betting on us and being like, "Let's try this company. It's small, but they want to make a podcast. Let's go for it and partner with them." And just getting that one opportunity to then spread within the company and do a good job and prove yourself. I think that's how a lot of innovation can happen by just letting the teams go and source those cool opportunities or companies to partner with.Mary:And the other thing too, is you have to remember when you're working with agency partners, they have other clients that you learn from. They are bringing you ideas that they've seen possibly be successful with other clients in completely different industries. And so there's a lot of built-in advantage there. There's built in knowledge, there's built in advantage. I also think that they understand our business. We're teaching them over time, our business. And so they're invested in it. They're invested in making sure that we're successful and we're doing the same. I think sometimes when you vertically integrate, the motivations may be different. And there's maybe not necessarily that hunger over time. And so depending on what that situation is like internally depends on how successful that is.Stephanie:Yep. I totally agree. Love it. All right. Well, let's shift over to the lightning round. Lightning round is brought to you by Salesforce Commerce Cloud. This is where I ask a question and you have a minute or less to answer. Are you ready, Mary?Mary:I'm ready.Stephanie:Awesome. All right. So pull out your crystal ball, what one thing will have the biggest impact on e-commerce in the next year?Mary:I think social selling.Stephanie:Yeah? Tell a bit more. What are you thinking?Mary:Well, because it's a new channel. It's getting to the point where we have ways to prove it out. I believe that it's definitely a new area. When I look at statistics in social selling, it's like the last year, I think it's like 57% of the consumers bought something off social office, social channel. I mean, that's a big opportunity as far as I'm concerned.Stephanie:Yeah. That's where I source a lot of everything, by Instagram, TikTok, I'm like, "Oh, cute shirt, cute outfit. That makeup set, you said, that's good? Okay. I trust you." Yeah. I definitely agree on that. What is your favorite Cuisinart product outside of the air fryer? And me, I was like, "I know she's going to say that again."Mary:That is by far my favorite product, but I have several. So we have a product called the griddler which we've had in the line for a really long time. We have a couple of new versions of it. And so that's, now I'm going to go into the pitch, but-Stephanie:Do it. Do [crosstalk].Mary:It's an indoor grill. It has, basically, can take you from breakfast, lunch, and dinner. It has reversible plates. You can make a panini. And the great thing about it as the plates go right in the dishwasher. So you make a meal in minutes and there's little cleanup. So that's another one of my favorite products. And I couldn't start my day without my Cuisinart single-serve coffee maker. We have multiple coffee makers in this house, but don't judge me, I happen to work for a company that makes a lot of great ones, but we use the single-serve one when we're in hurry, but we also use a grind and brew when we want to linger over a pot. So definitely coffee would be, can't start my day without it.Stephanie:Wow. So many products you need to invest in. I don't even know where to start. Great. What is one brand that you watch that helps you stay creative or innovative, or you keep an eye on what they're doing? And it does not have to be in the cookware industry of course, it can be very different.Mary:Keep my eye on a lot of companies. So it's hard to distill down. And I would say, a lot of them are not in, I mean, not that I don't keep track of my competitors, believe me, I do, but they're several. I would say Peloton is one of them just because of, I mean, they've been in the news a lot lately, but that's not my reasons. The community aspect of it, I think that's what the product is really about. It's not really about the physical products. So I think that's really cool. Obviously, Apple, who doesn't keep their eye on Apple. I would also Amazon because they're into everything. There's every day I open the news and I'm like, "What don't they do basically."Mary:So let's say that's a few of them. Then I also keep my eye on a lot of startups, small startups, especially in the food industry right now. I really love what's going on in plant-based food and there're so many food startups out there. I really am very intrigued by the work that they're doing.Stephanie:Yeah. I love that. We just did a whole episode too on why your best ideas can come from looking outside your industry and how that's a lot of innovations happen, especially when you have a similar problem that maybe has already been solved. If you're thinking like, "Oh, I have something around employees in this and how to set it up. And I'm in the food industry. Let me go look at the, I don't know, space industry and see how they think about this or even military or something. How do they do team structures?" And yeah, it was very interesting to think about how other industries can influence creativity and solving problems.Mary:Yeah. The other thing too, what I think about is, there's so much work going on in the plant-based food business. There's so many competitors. The same thing with meal kits. At some point consolidation has to happen. But the other reason I keep my eye on that is, we have to be as people who make appliances, we have to be helping our consumers understand how to actually prepare those foods when they get at home and they're using our equipment and all those types of things. I mean, if you just look at conventional meats versus grass-fed versus organic, they all cook differently. So there's some work that has to be done there to educating the consumer.Mary:So that's another reason why I keep my eye on the food industry. And just food in general, it's changing so fast. And also people have much more, such interest in ethnic foods and discovering new foods. And there's an entire process of what happens to consumers when they travel somewhere and taste something new and try to recreate it at home. So I keep my eye on all those types of things.Stephanie:Yep. That just made me think about something that needs reinvention that maybe you guys can tap into, the microwave. Why does it still have presets that just say potato, popcorn. I'm like, "I don't use any of those. And this is 2021. People make many different things, not just baked potatoes and meat or whatever it has on there." So if you also helps with that.Mary:It's funny because, I'll tell you something about myself. So we have multiple air fryers, there's digital ones, which have a zillion options. I have the, this is going to make me sound analog instead of digital completely, but I actually like the dials because I like to decide myself how it should be cooked. But yeah, so I agree with you though, like, "How many cups of coffee do we need to reheat before we know that's what it is?"Stephanie:Yup. Yup. Man.Mary:Baked potato popcorn.Stephanie:Yep. [crosstalk].Mary:But they're also the most used functions, which is, kind of drives why they're there.Stephanie:Wow. Yeah. Okay. Maybe I'm just not their typical user.Mary:Maybe you're not making enough baked potatoes.Stephanie:I know. I guess, I need to get on that. What am I doing with my life? All right. And the last question, what one thing do you not understand today that you wish you did?Mary:Oh, Bitcoin, please.Stephanie:Yeah. I've had so many people say that on the show.Mary:Cryptocurrency, I don't get it in. And after watching Elon Musk on Saturday Night Live, I still don't know anything.Stephanie:Man, I think this is just going to push me to start a crypto podcast because so many e-commerce guests have said that and trying figure it out and how it's going to impact their work or their point of sale systems or payments or any of that, or even supply chain, which I think it's going to have a huge impact on.Mary:Yeah. It's interesting. Because I think I'm smarter than the average doc and I just cannot follow that at all. It's not that I haven't tried, but I definitely need an education there and I'd appreciate if you help me with that.Stephanie:All right. I will find a sponsor. Anyone come on in and sponsor the show, I'll get it going and Mary is going to be my first guest to ask all the questions.Mary:I'm there.Stephanie:Well, all right, Mary. Well, thank you so much for coming on the show. It's been a pleasure chatting. Where can people find out more about you and Cuisinart?Mary:So you can find out more about Cuisinart at cuisinart.com. So follow us on all the social channels under Cuisinart, except for on TikTok, it's cuisinart_official, which we're just starting that right now. So we're testing the waters as they say.Stephanie:It's going to be air frying all the things on there I bet. That'll do.Mary:Exactly.Stephanie:That'll be hot on that channel.Mary:Just started. So we're just getting our feet wet. And then you can follow me on LinkedIn, it's Mary Rodgers. Easy to find.Stephanie:Perfect. Thank you so much.Mary:Thank you. It's great being with you today. It was a lot of fun.Stephanie:Same, and I agree.
The stores of the future are being built today, and according to David Wilkinson, President & General Manager of NCR Retail, they will not be the types of stores that currently come to mind. We are living in a time that blurs the lines between digital and physical, and retailers are working with NCR to make every experience as seamless as possible. David explains how on this episode of Up Next in Commerce. He tells us how personalized shopping will be brought to the forefront through first-party branded apps that customize the shopping experience for you. And he details how retailers in all industries can start breaking free of the traditional shackles of standard point of sale technology and store designs. Plus, David and I nerd out about how cryptocurrency will be entering the mainstream sooner rather than later, and how retailers can prepare for what that will mean for their payments systems. Enjoy this episode!Main Takeaways:Tech First, Differentiation Later: Retailers in every industry are trying to find ways to differentiate themselves and create memorable experiences for customers. But in order to ensure quality customer experiences, the basics of how your store functions need to be flawless. Focus first on optimizing all point-of-sale technology and other digital or tech offerings so that however the customer wants to transact, they can without friction. Then, when that is running smoothly, you can begin to focus on the peripheral experiences that separate your store or brand from the rest.Freeform Future: Anyone looking to create a store or business today has more freedom than ever before. They are no longer locked into the old ways of doing things. Traditional points of sale can be rethought. The design of a grocery store can be revamped to cater to more personalized experiences. Fast food restaurants can completely forgo inside dining. So many new options are on the table because in 2020, consumers proved to be willing to adapt to all kinds of new experiences. Going Beyond The Loyalty Program: The days of trading your phone number for a discount code are long gone. These days, if a consumer is giving over personal information, they want something substantial in return. Brands have a chance to create loyalty experiences that are personalized and incentivize activities outside of the store, such as on social media, to give their consumers a unique reason to sign up. Crypto Checkout: Cryptocurrency is more than just a buzzword — it's likely to begin infiltrating daily life, particularly how people buy and sell goods. Majority of cryptocurrency holders would be willing to pay for their goods with their crypto, and retailers have to start figuring out now how to create systems that would make those transactions possible and secure.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we're ready for what's next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hello, and welcome back to Up Next In Commerce. I'm your host, Stephanie Postles, CEO at Mission.org. Today on the show, we have David Wilkinson, the president of NCR Retail. David, welcome to the show.David:Thank you, Stephanie. Glad to be here.Stephanie:I'm very excited to have you on. So before we start, I would love it if you could highlight what NCR Retail is for anyone who doesn't know, because you guys do a lot and I want the words to come from your mouth instead of ours.David:Yeah, I appreciate that. There's a lot of, depending on who you ask, a lot of misconceptions about what we are as a company and what we do. We think about it in pretty simple terms, we want to create technology that runs the store. And so when I think about that, that's really the software and services that would be creating the capabilities to do transactions and interact with customers in and around the store environment. People might traditionally think of us as an ATM or a cash register company, it's really quite different, it's a payment software and services company across the three primary businesses that we serve, banking, retail, and hospitality.David:We're experts in how consumers interact with technology for things like self-service or automated transactions, which is critical in what's happening around the world today with labor and reallocation of labor, and really just focused on creating great customer experiences and technology to enhance that.Stephanie:Okay, cool. So what are some of the newest projects that you've been embarking on over the past year or two that maybe you had to quickly roll out where you're like, "Okay, everyone wants touchless payments now, or everyone wants this capability"? What have you had to scramble to keep up with?David:Yeah. When you think about our business, we're in the retail side where 70% of our business is grocery, or in big box, I'll put big box in that, another 15% that would be convenience and fuel retail. And then the rest of the balance of that would be, think about a department and specialty. So there are a handful of different trends, as you know, that occur within each of those industries. I'll start with convenience and fuel for a second, as you described. There was a big race when the pandemic was early, everybody wanted to social distance, nobody wanted touch things that other people were touching, so it created the ability or the need to do things like touchless payments at the pump.David:So we've worked with several convenience and fuel retail companies, Kum & Go was one of them, where we created the ability to do stage transactions on your mobile device and reduce the number of touches that you would have to make to the pumps. So it's got store payment, it would allow you this to queue up the pump, initiate the pump activation through our point of sale application, and then you could get to the pump and you always got to touch the pumps to put the nozzle in the car for those of you that have to pump gas in the 48 states that require that. And then the other, you'd have to touch the pump, but it reduces the touch of the thin pads.David:So we're finding those kinds of applications in convenience and fuel. Convenience and fuel also, we're seeing a big rollout of self-checkout, which is one of our flagship... We are the market leader globally in self-checkout, and when I think about what's happening, we really understand how consumers interact with the technology. The hardware is interesting, the software is really interesting, but the understanding of the workflows, the process flow, how do you avoid unnecessary shrink? How do you avoid unnecessary interventions? We're seeing a lot of now, increased demand in the convenience and fuel space that hasn't traditionally had self-checkout, but makes a perfect fit, small basket size convenience shoppers don't want to stand in the line and want different interactions or maybe a less interaction with a person in that environment.David:So COVID is heightened that. So that's what's happening. Convenience and grocery, it's a similar thing. We saw some weird things happening early days with spatial awareness and everyone was focused on, "We've put plexiglass in the stores, we can't have any kind of human interaction, we've got to queue outside the grocery store before we come in and set appointments in different times." So we did a lot of things. We have a very large professional services team that can do custom applications, and we did a lot of that kind of stuff where we're building queuing apps and other things that probably aren't here to stay, but we'll have some longer-term applicability.David:But what we're seeing really is touchless payments with self-checkout, so paying on the mobile or mobile scan in the isles, and then a broader roll out of self-checkout and then getting deeper debt or more density within the store for self-checkout, meaning more lanes enabled for self-checkout so that customers have that capability. I'll take a breath after this, but then the other piece was ecommerce. Obviously ecommerce is growing. If you look at grocery, you can look at different numbers, but it's multi-hundreds of percent growth off of fairly small numbers. But in ecomm, that's being a large part up to anywhere between 15 and probably 25% of grocery quickly moved to ecommerce.David:So we invested, bought a company that has an ecomm engine to turn that experience back over to the retailer so they can have an app, a retailer branded application, allow you to do the list management, recipe management, order online pickup in the store, and then has a picking optimization app on the back end for the retailer. So those are some things that we're working on and deploying that would include payments, but it's a lot going on. Innovation has been compressed into a short amount of time with COVID. I think we're seeing that in a lot of different industries and probably none more impactful than retail.Stephanie:So kind of what things do you think won't stick now that we're a year plus past, and a lot of times when change is happening quick, people are like, "Let's just try everything and do everything new." Some things like ordering groceries online, it feels like it's here to stay, people are debating like, will the percentage fall back again? I think maybe it has this 2020, but then maybe the pie grew. So the numbers, I'm not really sure, but what things are here to stay and which ones were just like a fad and we tried it out and now it's like, no, we actually don't need that.David:Yeah, it's a good question. That's a question we get a lot. I'll start with the easy ones that are fun to joke about in light of the seriousness of the pandemic, but like plexiglass and a sticker on the store that you have to queue six feet or 12 feet or however many feet apart. Those are the things that I think will start to fall down a little bit. We learned that hoarding and stockpiling toilet paper was not a cure for anything. So I think some of those kind of applications or behaviors will go away. What we did find though in the joke in the toilet paper is really about the supply chain. And what we found is that brand loyalty across the consumer base shifted pretty significantly, that you no longer were loyal to a single brand, you were loyal to a brand that had what you wanted and we saw a supply chain shortage.David:And that may have introduced shoppers to where they were traditionally brand loyal for whatever reason, the ability to shop around. One of the trends that will see continue is retailers want more and more data about their consumers so that they can offer personalized experiences, and we all crave that. The social shopping phenomenon is here. And we see it in Asia is more prolific than in the US, but some form of that will start to take hold in the US. And so understanding the customers more deeply is a trend that's here to stay. I think you said online grocery shopping, even while we saw hypergrowth, 85% of the shopping was done in the store, so we think some blend of that will stick around.David:I've seen the same stats that say, "Hey, we've reached the peak of growth, it's going to plateau, maybe decline and then bump back up." So I think online shopping, if you think about it as a consumer, so personally if you think about it, the ability for me to create a list based on past purchases or find a recipe and click on a recipe and add those ingredients to my list or to my basket, have somebody pick those items but I still want to pick out fresh vegetables, fresh flowers, meats, whatever it may be, the things I want to look at, touch and feel, how do we create this hybrid shopping environment where I can do the, we'll call it the center of the store shop, dry other things, and allow me to do the edge of the store, the fresh foods and other things, I think there's there's a hybrid model that makes a lot of sense.David:Now, that's a big change because none of the retailers... We didn't design stores that way, we designed stores to, like I just said, center stores, all this stuff, the outsides are all fresh foods, all the checkout stands are right at the front, congregated. I think this notion of pervasive and flexible checkout will start to take hold. I think those are the trends, convenience, less touch, more choice, and knowing your consumers better are the things that we'll start to see that will stick and we'll see those trends either flatten and start to grow again, or just flatten, but become a bigger percentage of the overall.Stephanie:Yeah. It's funny you mentioned about like what things I want to pick out versus what things other people can. I mentioned this a couple episodes back like, I don't care about picking out the flowers, the cereal, that's all fine get what's there, but no one will ever pick out the avocados the way that I want them or the type of fruit that I want. So why isn't half the store just in inventory, just grab it out of inventory for me, and the other half, it actually want to be and see and touch and smell, that's the part that you can actually interact with. So we're thinking alike, which I like.David:Yeah. You're spot on. Are you a cantaloupe thumper?Stephanie:I am, yep. And the watermelon, I want the perfect little dark yellow spot on it. And my avocados, I hope it didn't get plucked from there and mold growing around the STEM. I'm very particular. And I always think when I order from Whole Foods, I'm like, "Should I write these in notes?" No, because they're going to think I'm crazy if like, "Pick out the avocado just like this, and look for this with your watermelon or cantaloupe."David:Yeah. But think about the opportunity there with what you described. So the application that we have allows us to do a lot of customer specific notes. And then if you have control, if you're the grocer and you have control of your experience, so forget about third-party intermediary picking apps. I'll use Instacart as an example Instacart, sends an Instacart shopper into the store, you may or may not have the same shopper. And the Instacart person doesn't may or may not care, I'll say on a relative scale, cares less about the brand itself where you're shopping. But if the retailer had control of that and knew that you, Stephanie, were a high value customer, you love to buy avocados and that was a real differentiator for you.David:If I knew that about when you shop, you could create an experience that you would actually enjoy buying all the products online, perhaps, or maybe they have an avocado cam specifically for you, but those are the connected experiences that we think getting more and more technology in the stores to deliver those experiences is going to be key.Stephanie:Yep. I think that also summarizes the next couple years, because this past year, year and a half or so, people were willing to try, try online ordering, try going through self-checkout, try all the new things. But then now I think we're in a phase where brands need to actually deliver. We were okay with hiccups as consumers for a while there, but now you go in and if self-checkout is not working, I know some stores I know I'm like, "I'm not even going to try it because every time that little light goes off, if I don't put my thing in the right area and I have to wait and whatever it may be." I remember the brands that it doesn't work with and I don't do it anymore, versus certain stores, I know every time I go in and out and it works perfectly.Stephanie:So I think now is the time when brands have to deliver and figure out, "How do we actually deliver that experience to them because they've been willing to be in beta for a little while now, and now we're popping out of that and we're ready for just like a good experience."David:Agree, agree. And to deliver that, if you think about where retail technology had been, anybody that's been in and around retail technology understands that the way we deploy technology in a retail store is antiquated, fairly antiquated. And the experiences that you described are ones that would say, "I have to have modern capabilities. I can't afford to rip and replace everything." And we're taking this run the store approach where we want to deliver outcomes to you. So as a retailer, we want to deliver all those outcomes that you just described. And the more technology you deploy into the store, as you said, the more it has to be available and working. And that sounds basic, but it it's not as basic as you would think. It's not as common sense as you think across the piece.David:Because I can't put a paper sign or a bag over a kiosk and say, "Hey, this isn't available," it has to be available because that's the way that we're interacting and transacting. And so when I look at that, I think we're investing to deliver at scale all the technology in the store. So think about like the dial tone where it just works. The ability for a consumer to come into your store, identify themselves, stand an item, get a total basket, or start a transaction online and finish it in the store, tender it, take payment. That's what we want to deliver to the store as an outcome, as a service. And then the store then, or the retailer brand can focus on, "How do I differentiate my brand? What experiences can I create? Can I create a store within a store or venues within my store? Or what am I trying to do?"David:Because that's really where the store will start to compete. The base technology is not where the store is going to compete, the technology has to be a foundation for creation of new experiences that will be enabled by technology, and a lot of it, we don't what will it be? I don't know. Most of them are likely to be consumer led technologies as they're bringing their own tech into the store, and we have to learn how to deal with it. That's what we're focused on, is getting down to a foundational level, providing that modern architecture without a rip and replace building the bridge, and allowing them to be cloud ready, cloud enabled to take advantage of all the cool things that are happening and all the investment that's going into all these interesting applications that are all consumer facing or social shopping or whatever you want to call it.Stephanie:Yep. That's, to me, the life cycle of technology, when it starts to work is when it's seamless behind the scenes, that's when you know you've made it to then start building on top of it. You don't even notice it's there. What do you see retail experiences looking like going forward to actually have an experience there? what are you seeing brands doing right now that's really cool? What should that look like?David:Yeah. Think about the experience, think about an online shopping experience overall and why you like it. I will say online shopping is horrible, online buying is a good experience. Shopping online, I have to know what I'm looking for, I don't get to see the selection. Maybe I know a little too much about how the content gets served up to me, but I'm not seeing the full selection or assortment I made. There may be something I like that they don't think I like. So there's all these things that happen. But why you think online buying is such a good experience is because you know who I am. I walk in, "walk in" to your store, and I say, "I'm David Wilkinson. I am here."David:Also, I'll give you permission to see everything I bought, and then you have the ability to say, "Oh, based on everything you bought, these are other things you might like," and serve all that, a package it in a way that makes it a good experience, put it in a cart, and then I also have given you a form of payment that I've told you that you can keep and use for anything that I shop in your store for digitally. And then I transact and then you deliver it to my home frictionlessly. Now, take that and say, "How do you create a great shopping experience?" Take a lot of those attributes of online buying and then physical as you described.David:Let me grab the avocado and make sure it's just soft enough but not too soft, let me thump my watermelon, let me look at the meat, let me look at the flowers. Let me take in the full cereal aisle to see what's going on. I love chocolate, but I don't know if I want milk or dark, but I want to experience that in the store, but allow me to see... If I put a box of Rice Krispies in my shopping cart you might ask me, "Do you want marshmallows?" Because maybe you want rice crispy treats, as a cross sell up. So, deliver that to me dynamically in the aisle on a mobile app.David:You've got my store payment form. I've got all these scanning items in my cart, real-time building that basket real time, and then allowing me to pick up some things that I had you pre-picked for me, that I ordered online, or I may just do pervasive checkout where I'm using computer vision RFID or some other form of sensory fusion to create a basket that always knows what I bought. So the notion of creating that online experience, but with all the goodness of what you could create as a brick and mortar retailer in the store and removing that friction is what the experience of the future looks like. We're not that far from that. That's not a, "Oh my gosh, that's a 10-year vision." We could deliver that tomorrow. It's a matter of breaking down some of the traditional thinking and some of the traditional barriers that occur within retail technology today and then getting the consumer engagement that would drive that.David:So that's the way I see the experience of the future, is a nice blend of all the convenience of online with the greatness of an experience in a store.Stephanie:Yeah. I love that. I think that's also why it's important to take a step back from your industry and look around at like what other tech companies are possibly doing and seeing how other things are being created and being experienced, because I think when you're thinking, this is what the store is, and here's my capabilities, it's hard to think outside the box. Whereas just when you were talking, I'm like, "Wow, how cool would it be to... " People go there to experience things, they go shopping to experience things, and maybe people still want to see shelves, but do you actually need a shelf? Can it be a virtual shelf? Can it be a mix of AR or VR where you just look and you can see all the new brands popping up, you can still feel like you're experiencing it.Stephanie:And then you just tap a bunch and you can have a little bit of both while also the productivity of like your car getting filled on the back end behind the scenes and you're ready to go, because you might not need to see the different types of bone broth on the shelf, but you won't actually see them, but you don't need to be collecting them yourself. And I think yeah, always thinking outside your industry is a way to start feeling that out and seeing new innovations and then rethinking the entire way that retail operates right now.David:Yeah, I agree. I agree. I think it's a lot fun. And you think about those experiences that you have to create and the state of the labor market, it requires more labor in the stores to deliver a lot of those experiences. And we're in a labor crisis where labor rates are going up, unemployment was at a low, but now it's hard to read the unemployment stats because it's more of a willingness or want to work at this point and more labor hours required in the store. I think technology will be the key in getting some of that back. I love the AR, VR. Allow me to build a list outside of the store, whether I'm going to buy clothing, go to a convenience store or to a grocery store.David:You could have a list and shop through your mobile device in the store and it points out where you go and it could point out other like items. There are so many fun things that we're going to be able to unlock with technology and data and the consumer willingness to opt into that if you're creating value for them.Stephanie:Yeah. I sometimes also like to look at the startups who don't have barriers to enter the markets, the ones that can just start a little guide shop type of maybe grocery store or whatever it may be and they're like, "I'm going to implement this store in like a tech-first approach. And it's going to be small, but it's going to be like this." Do you see anything like that right now where you're like, "Whoa, these companies are doing things in a very different way and it could either fail or be really cool"? And you don't have to name names if you don't want to.David:Yeah, we're seeing it on both. We do obviously a lot of research around what's happening on the tech side of retail, and I'll collage together a couple of sources and I'll tell you that there's $100 billion of investment going into retail tech startup is proclaimed to be retail tech startup. Forget about anything that might be on the periphery of that around could be any AI or ML or inventory. It could be some other things. So there's a lot of money and there's a lot of really interesting things happening. Yes, we're seeing that anywhere from retrofitting in-store lighting to create a platform for AI where you can do camera and tracking and you can do facial recognition or gait recognition, store tracking and close the loop with a point of sale system.David:Really interesting things happening there. On the other side, there are a lot of startup retailers. If you and I just sat in a room and brainstorm and said, what do we want to build as a store? We wouldn't be forced to this paradigm of what a convenience store or especially specialty retail store or a grocery store look like today. Why do I need a fixed point of sale? Why do I need these other things? And so we're working with a small startup out of South Carolina that's creating this concept of drive up grocery. They're looking around watching the pandemic, fast food and quick service restaurants do a great job, buy online, pickup in store. No inside shopping. And so we're helping them with the tech. We're going to run all the tech for these stores where they effectively have a dark store that they either order on an app or they drive up and you order on a tablet and they have to pick it quickly, so they have to know inventory.David:So I look at these things and it's fun to watch. They have no barriers, they have no paradigm that they're trying to break. They're just charging forward with a need in the market and how they're going to approach it. So, yeah, we see a lot of that. We see a lot of that around computer vision, we see it on the tech side, we see a lot of that around what's happening with a AI and ML. We're starting to see a little bit more of that around payments and alternative payments with things like crypto. So there's just a lot of interesting things that we see happening.Stephanie:I would think the one misconception a lot of people have too is that retail is dying or dead. And a lot of influential people have said that, and maybe they're retracting that statement now, but what I think is cool to watch is the type of retailers that are opening up. You see a lot of discounters opening up right now way more than maybe in the past, which is an interesting trend. And then you see these very luxury, maybe not too luxury, but B2C brands also only focusing on what experience do you get by coming here? So what do you think around those two types of industries opening up more retail locations this year than before?David:We serve those discounters all around the world and that's not just the US trend, we see that happening in all parts of the world. And I think convenience growth is also... I just this moved to convenience, smaller footprint is a big trend, and I really think it's about that last mile and accessibility. And so, all the discounters will tell you their growth numbers are off the charts. The way I think about that is they have a critical need for data because they have to understand, they're not obviously carrying a full assortment in that store, so they have to understand their demographics. They have to understand that past purchase history of that municipality or wherever they're located. And they have to have probably technology solutions to deploy potentially the order in the store.David:So I think there's a good blend there as the retailers are going to find the discounters that they're really all about location and proximity to their customer base and serving a need that people want either in between a big grocery shop or going to the big box retailer, the ability to just do quick top-up trips for certain items, I think is where they're going to make their names. And I think that they're seeing a tremendous success as evidenced by their growth and the industry. The luxury brands are interesting, or even maybe not the luxury brands, but you see other in a lot of sporting and fat sporting fashion, and other things where you have the home fitness craze or the virtual fitness craze is taking hold, but so many of those things are experiential again.David:So instead of a story, you think about just creating an experience center that allows you... We saw that, Apple started that with their Apple stores, they were very experiential, Tesla had done something very similar, no big surprise, the same person helped design and develop those two stores. But when do we think about that, if you look at what Kate Hudson did with her brand and partnering. So there a lot of interesting things that are happening around creating experiences around retail at those higher end, or call it more luxury brand goods, it's a blend of, "Hey, I have this subscription content and a complimentary set of retail items that you have to somehow bring together."David:And that's a hard thing to do online. I think that's what we're seeing. I think you'll see more of those pop up. And I think we're seeing more of the traditional retail, the older school, especially retail, either collapse or consolidate, and you're seeing a lot of those newer experiential brands pop up. So I think it's a trend that will at least be here for the next three to five years.Stephanie:Yeah. I agree. I'd love to start seeing case studies around these people, they came into the store, their experience is golf store, whatever it may be, they played on in this camping set with their kids, and then it attributed to this many sales. That's what I'm hoping to see over these next couple of years. I think the experience is where it's at, but I also know a lot of people do, maybe even myself who would just go in and have a good time and be all right, see you next week. And so it'll be interesting to dig into that data eventually and see, is the ROI there of having a full-on experiential store or is it more from a branding perspective or how do you even view that from a financial person?David:I think you said it, well, you have to be purposeful in how you do that. You can't just say, "I'm going to pop-up a traditional retail model, and it's going to be experiential." To your point, I think you have to set out to say, "I'm going to create this experiential store. It's got a different footprint, a different look and feel, a different set of technology capabilities." Because you may or may not be catering to the client that's going to buy online. If you look at a clothing store like Bonobos, who has a showroom store or showroom store, you don't buy anything. There you go in and you try things on for fit, feel, you can touch and feel everything. They have one of everything and they have a bunch of different sizes.David:And then when you go to order, all they're doing is ordering online and then they've got your account and you can order online. So I think that's a good example of somebody that has done a great job of creating an experience. And then that also solves the returns problem on the flip side of the econ equation.Stephanie:The other thing that I wanted to talk about with loyalty programs, because I think you've talked about this in the past and I know a lot of companies always try it, and I can think about the ones that actually, I remember that worked well for me, Nordstrom Rack is one of them, I think TJX one's sometimes hard to find where my dollars are, but at least I know that they're there. And then other ones that just don't work well, certain grocery stores where I'm like, "Why do I keep putting my number in here? What am I getting from this?" So how do you think about loyalty programs? How should they be created and how will they work over the next couple of years?David:This is going to get back to data and the ability to do personalized shopping. Some of the research that we look at, and I'll look at things that are 50, 60, 70% of consumers are willing to provide data or willing to give data if they get value in return. I know that seems like a loose equation because value is different to your point from the eyes of the beholder, but I think it has to be a more personalized program like you said, if I'm just going to enter a phone number in and that's going to drive a discount off a price, that's just not going to be good enough anymore.Stephanie:What if it's not clear, if you're like, "I put my phone number in, did I get anything?" You're looking at the little register and you're like, "I don't see any discounts, what am I even building up to? I don't get it."David:Or offering you something after the fact like, "Hey, you made these three purchases, here's something off your next visit." I think there's going to be such a competitive marketplace for people creating personalized experiences. Now, think about social, if you're on the clothing side, like you're talking to those high end brands, the ability to plug into social networking and create a loyalty program that either would reward somebody for expanding their network or influencing your products or the ability to buy through social channels when you see I want input from people that I would view as either my peers or people like me, how do they like reading reviews, other things, information's at their fingertips.David:So I think that kind of information with your personal data, with social interaction is going to be key. But again, I think loyalty programs are going to come down to more of what we talked about earlier around the online experience, creating more of that online experience, where I give you permission to create an experience because I don't want the friction. I want you to know who I am, I want you to know what I like, I want you to be able to recommend things that, and I want the best deal at the time of purchase. And I want you to respect my loyalty to your brand in the long term, and then I want to reduce all the friction.David:So to me, that's bigger than a points program or enter your phone number, and I'm going to track your purchases and may or may not give you a discount. That's creating that 360 full view of your consumer and really truly understanding them.Stephanie:Yeah. And I think it's also, it's okay to interact with them more than you think if it's done in a way that's purposeful. I think that's the interesting thing is you see the brands that you don't ever hear from and you're like, "What am I even doing here?" And then you hear from the brands that just give you random offers that maybe never incentivize you to do something. And so I think there's a sweet spot where a lot of brands now are leaning into that the more, becoming a media company, having their own content, creating this all-encompassing experience and figuring out how to do that in a way that actually drives the results, will be the way of the future.Stephanie:But I think still brands are having a little bit of a struggle around trying to figure out like what that looks and what incentivizes people to want to act and interact with your content or your texts or whatever they need.David:Right. And like we said, in Asia, it's probably a little more ahead with some of that social commerce and the gamification of both social and product recommendations and loyalty. So some form of that will take hold here. I was trying to think of an example of who is doing it really well, nothing just pops into my head. So we'll skip that.Stephanie:We can skip that then. Yeah, no worries. For anyone who listens to the show, they know that I love to always try and talk about crypto when I can, for whoever is willing to do that with me. And so I wanted to hear from you since I know you guys are obviously the payments space and you're probably watching what's happening in that realm all the time, I want to hear your thoughts on how crypto is going to impact retail and specifically around payments.David:Yeah. I love to talk about crypto too, so I appreciate you bringing it up. I think that it's obviously a very hot trend, there's a lot of trending news happening around crypto. Some of them good, some of them bad, whether it's the hype that Elon Musk creates around things those Dogecoin or Bitcoin on Saturday Night Live, you can follow the trials and tribulations of that. When you get to the underpinnings of the applicability of that and the desire of people to participate in alternative payment form that has less, we'll call it less fees or less cost or more direct access, or feel they have more control, I think that's where we're seeing a lot of uptake in cryptocurrency.David:I just read some studies this morning that talked about cryptocurrency holders, 51% of crypto holders are very likely to use cryptocurrency at retail if they would accept it. So you think about, okay, how do we accept cryptocurrency in a retail environment? We did a demo pre-COVID, whatever, I think that would have been 2020 January at the National Retail Federation, their big show that they have in New York at the Javits Center every year, we actually had a cryptocurrency demo where we said, "We're going to help serve unbanked or underbanked cash economy. How do they participate in the digital economy?" But we had our cash acceptance, think about a self-checkout that has the ability to accept cash.David:We could take that cash. We partnered with some companies to convert that cash to crypto that would be then stored on a cloud wallet or a mobile wallet, generate a QR code, and then we shared it. It was a short demo line, and then we effectively go to the point of sale and purchase something with cash that we had just turned to crypto, scan a QR code at the point of sale, a very simple execution of a lot of elegant and complex things behind the scenes and new thinking. So I think we will see more and more crypto applications come up in retail. And for us as NCR, whether it's moving from cash, to still some checks, to credit cards, debit cards, tap to pay, Apple Pay, mobile wallets, crypto, we want and need to, based on what our mission is, to be able to serve your payment needs from cash to crypto.David:So we are absolutely investing in both partnerships and organic technology that is around crypto, we think again, whether it's payment or some other disintermediation using the underpinnings of what distributed ledger would bring to just ease of payment and security of payment, and again, value stream of payment. There is a there there, either work to do to define exactly what that means, and then consumer adoption is a bit of a wild card, which of those will take off.Stephanie:Yeah. But I think once again, it highlights when tech goes behind the scenes, there will be a place when we are transacting and we don't even know really what's behind the scenes and operating that. Even for now, thinking about Venmo, what actually goes behind the scenes to make all of that work, I think there will be a place when people go in and transact, and maybe it is utilizing crypto, but you don't really know how it's really working, you just know that it's fast and you don't pay fees on it, and it just happens, and it just works. And same thing around financing, these companies that you need to finance things, there'll be a much easier way to do it, whereas you can enter into it quickly and you can see your contract quickly and get out of it when you need to.Stephanie:And right now it feels like a lot of friction around that still, and especially for developing countries, like you said, who don't have banks to rely on or can't rely on them because it is a little bit volatile or whatever it may be. A ton of opportunity that I see disrupting and getting to a place where you don't even know what's behind the scenes powering essentially everything.David:I think you're right, there's a broader education that has to be done because crypto is not about nefarious criminal activities and I'm a money launder or in some illegal trade that I don't want my cash to be seen by the government. That's not what it is. There a lot of regulations, a lot of usage around KYC and other ways that are protecting those assets there, a lot of backing that's being done, you see things stablecoin. The volatility of the value is obviously a big myth, we joked about at the beginning, it's up and down, up and down. But getting asset back, tokens and stablecoins will start to create the ability to leverage distributed ledger in the way that it was meant to be, where the chain of custody is always known, the assets itself hold their own chain of custody.David:You remove all the intermediaries and all the middle people, clearing houses and other... It's going to free up the world of payment in some way that we'll see that more, call it a democratization of the payments infrastructure that I think will be interesting, that would be part of it.Stephanie:Yeah. I like watching it. And the only time I get a little hesitant is when I see entities creating their own coins or governments being like, "We're going to be issuing crypto however," it's backed against, I'll just make it up the US dollar or gold or whatever, our currency in this country. And that's where I'm like, "Oh, I feel like you're taking idea of decentralized and you're completely doing the wrong thing with it and it's turning back into a centralized function." And that's the only point that makes me hesitant, but also I know that maybe consumers would hear that it's backed by the US dollar and be like, "Oh, that one is a better bet." Whereas if you actually understand where this tech, even maybe people don't know who created it, but where it even started and the ideology behind it, is not to tie it to a centralized in it, but we will see.David:Like do that then you just recreate the payment system. Probably not worth it.Stephanie:No. All right. Well, let's shift over to the Lightning Round. The Lightning Round is brought to you by Salesforce Commerce Cloud. This is where I ask a question and you have a minute or less to answer. Are you ready, David?David:I am ready.Stephanie:All right. Hard one first, what one thing will have the biggest impact on ecommerce in the next year?David:I think I'll call it ubiquity of buying online and picking up or delivery anywhere. And so solving, how do I get it to the home at a cost-effective way? How do I manage returns? Or how do I combine that experience of in-person and online? However we define that or whatever that looks is going to change the face of ecomm or commerce.Stephanie:Yup. If you had a podcast, what would it be about and who would your first guest be?David:Wow, It's going to be totally odd. If I had a podcast, it would be about fitness. And I love to do CrossFit, and so it'd be fitness podcast, and I'd have a CrossFit athlete like Travis Mayer or Mat Frazier or somebody on there.Stephanie:I like it. What are you secretly curious about?David:It's funny, it's not overly secret. I think about what the conversation we just had about cryptocurrency. I'm fascinated by cryptocurrency and the underlying applications of distributed ledger across everything from supply chain to the world of, call it finance or micro lending, or just the stock market. A physical stock certificate is no longer... In distributed ledger worlds, you no longer need a physical stock certificates. So I'm fascinated by that. So maybe more fascinated than secretly intrigued.Stephanie:Yeah. I love that. I always keep thinking about smart contracts and especially going through and buying a home and being like, "Why am I still trying to verify that no one from the 1920s or whatever owns this home, that's ridiculous. Why don't we just put this baby on Ethereum or Cardano and call the Dai." There's so many of this.David:The home knows it hasn't been owned.Stephanie:Yeah. It should know that we don't have, we don't need to ask and pay $3,300 in title insurance to make sure that no one else owns this title. That's crazy.David:It is. I agree with you. I agree with you. So I'm interested in how we unlock all that goodnessStephanie:Yeah. When you want to feel more joy, what do you do?David:I spend time with my wife and my daughter and our dog. So I just hang out with the fam.Stephanie:I like that. And then what one thing do you not understand today that you wish you did?David:Wow. That may be the same answer to what I'm intrigued with the cryptocurrency, but I'll go a different route. I don't understand why I can't hit a golf ball more straight, and I would love to understand that. I would love to understand that.Stephanie:I wish I could help you with that, but I just attempted mini-golf with my three-year-old the other day and it did not go well. And I was like, "I shouldn't be teaching you. I think you're doing better than me." So I hope you figure that out on your own.David:Yeah. I do too. I do too.Stephanie:The last one, what's up next on your reading list or on your podcast queue?David:It's funny I don't have it with me, but it is a book about, it's not a crypto book, but it is a distributed ledger of financial book. I don't remember the name of it, it's probably not overly interesting.Stephanie:Is it new?David:It is new. It's a 2020, 2021 book. Stephanie:Digital Finance: Security Tokens and Unlocking the Real Potential of Blockchain.David:That is it. That's sitting there waiting to read. And then it's funny, the other book that is next next on my list, and I'm old school so I have real books-David:a book called From Cotton Picker to Store Keeper. It's the story of the Brookshire's grocery company. So a Texas company at Tyler, Texas, but it's just a store. It's a family-run store that has a grocery chain that has survived and continues to thrive and grow. And so it's just an interesting read Stephanie:All right, David. Well, it's been really fun having you on the show. Thanks for sharing all your insights and hanging out with me for a bit. Where can people find out more about NCR retail and yourself?David:Yeah. I would just go to our website, ncr.com and you'll find about us. And then for me, I'm on the old school social media of LinkedIn. We do still a lot of posting through LinkedIn, it just works for us. So you'll see more thereStephanie:I'm on LinkedIn, it's not that old school. Cool. Well, thanks so much for coming on and joining us.David:Yeah, my pleasure. Thanks for having me.
Repeat customers are the heart and soul of just about every business. But when your product is something that you purchase maybe two or three times throughout your life, how do you create a repeat experience that will sustain your company long-term? That was one of the questions that Chip Malt had to answer when he co-founded Made In Cookware, a digitally-native kitchenware company that launched in September 2017 and is disrupting this $17B cookware industry.And the solution he came up with was a good one: produce the highest quality products possible, have a deep understanding of the industry you’re entering into, deliver an all-around experience that goes beyond those products, then keep scaling to bring more must-haves to market.This episode was such a fun one because we dove into the history of the cookware industry, long term partnerships they’ve set up in France (their knives are made from the great-great-great-granddaughter of a French knife maker who invented the modern chef knife in the middle of Central France), secret recipes for their cookware ingredients, the best cooking tip he ever learned, and more. Enjoy this episode.Main Takeaways:Make It Memorable: Customers today are looking for experiences. In order to secure a sale or differentiate your brand, bringing a next-level experience to the table is a proven tactic. Partner with the people you are connected to in your industry — influencers, celebrities, etc. — who are fans of your brand and create something special for potential customers.A Living Legacy: Connections are made constantly in personal and professional life. Smart business owners use those connections to their advantage. When you can tap into a reservoir of friends, friends of friends, family connections or business relationships of the past who can speak on your behalf or join you in a new venture, you immediately start to create a sense of legitimacy that can spread more easily to those you have yet to connect with.First Time, Best Time: There are many examples of brands that have launched products quickly because they thought it was better to get a product to market than wait for perfection. But the opposite approach is also worth consideration. Rushing a product to market that isn’t up to your brand standards might be what dooms you with new customers who find you for the first time through this subpar product and then judge the entire brand based solely on that experience.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome back to Up Next in Commerce. I'm your host, Stephanie Postles, CEO and Mission.org. Today on the show, we have Chip Malt, the co-founder and CEO at Made In Cookware. Chip, welcome to the show.Chip:Awesome. Thanks for having me, Stephanie.Stephanie:Yeah. I'm really excited to have you here. I might not be the biggest chef, but I feel like I'm still down to talk all things cookware and maybe you can train me up on what I should be doing, and I need all the help I can get. That's my caveat to start this show.Chip:Awesome. We're happy to do so.Stephanie:Yeah. I like that. So, I want to dive into the background of Made In Cookware because I think you have super interesting story where, correct me if I'm wrong, you started and co-founded the company with a childhood best friend and you guys have a lot of history in the industry with your family and family's family, and I would love to dive deep into all that background before we get into the actual company of where it is today.Chip:Absolutely. Yeah. So, we started the company, or officially launched it, in 2017. So, we're just over three years old, now entering our fourth year. But really, the story began a long time before that, as you mentioned. My co-founder, Jake Kalick, he comes from a hundred year old family that has experience with cookware. So, his great-grandfather in Boston where he grew up started a business that outfitted restaurants and hotels, their kitchens with everything from walk-in refrigerators to knives to cookware to a lot of stuff that we're selling today. So, he comes from almost 10 decades of experience in the cookware space, or his family does. Then Jake and I grew up together. We actually went to preschool together.Stephanie:Wow.Chip:We were in the yellow and blue room together, then we went to pre-kindergarten and went to a school that was the same all the way from pre-kindergarten through 12th grade when we left for college. So, our history goes back 28 years and we're 33. So, almost to the beginning of when you can even start to remember, and we've been best friends ever since. So, it's been a pretty incredible journey. We've been able to mesh his background, his family's background, his family's history into our childhood friendship into a business and have fun doing it. So, it's been a pretty cool journey so far.Stephanie:Yeah. Were there ever points when you guys veered apart, came back together? When did you know or even think, oh, we should do something together?Chip:Yeah. To be honest, and it's nice that he's not on this podcast because he can't defend himself, but I don't think growing up I would ever start a business with him. I was more of the studious one.Stephanie:I know too much about you.Chip:Yeah, exactly. I was more of the studious one. I would say he would copy off me in high school if we had to simplify it, and also that I remember me in the space, in the cookware space as well. That's his background and his journey. So, it's been really cool. To be honest, the startup world and starting a business, I feel like the public only gets to see the glamorous side of things. But it's a lot of hard work. It's a lot of ups and downs. For just as many amazing days and successful days we have, you have a really tough day as well. So, going through that with someone you're close with that at the end of the day, you can just have a beer and destress is a pretty incredible experience.Stephanie:Yeah. So, when taking best practices and lessons from maybe his family history and how they've been doing things, what did that feel like, taking this company and maybe bringing in new practices and new ideas? Was there any bit of a struggle behind that where they're like, "No, no, no. We've done this for a hundred years. We know what we're doing. Come on, Chip. Just follow the lead"?Chip:No, we get that a lot. At some point or at some level, we are cutting out his family business. His family is a distributor. They take some of the incumbents who we're competing with now and then they sell them to restaurants and act as the middle man. Ecommerce and direct to consumer in general is a cut out the middle man strategy, and so we get that question a lot. Are they mad we're displacing that to some degree? No, his family's been nothing but supportive. They're super happy we're maintaining the history into something new and just evolving it into the way that the world is moving. So, they've been awesome.Chip:His family and his knowledge of just the product and the industry has been absolutely crucial [inaudible] starting a business. When we walk into a kitchen and we're talking to a Grant Achatz, who is one of the best chefs in the world, he's able to talk about BTUs of the burner that Grant's using and the oven and why it's better, and he's able to talk the talk. It really gives us an air of authenticity and an air of just immediate warmth when we have ... Food in general is a very relationship driven business. It has a lot of credibility when we're approaching partners.Stephanie:Yeah. I saw that you're in crazy restaurants, really big ones. Top chefs use you guys. How did you even get in the door of those people? Because to me, I think you can be really smart around the product stuff and why you need it, like you're talking about the BTUs of the burner and all this stuff. You can have that, but if you can't even get your foot in the door or get in front of those people, you can't really go anywhere. So, how did you guys make those relationships and get in there?Chip:Yeah. I would love to tell you that we sat in a boardroom and whiteboarded out the perfect strategy and absolutely nailed it off the bat, but that was clearly not the case and that's not how it played out. The way the company came about, and taking a step back, what we do is we sell kitchen goods. So, knives, cookware, multiclad stainless steel, carbon steel frying pans, down to wine glasses and table top items, and really anything to outfit a new kitchen you're walking into, Made In will provide that.Chip:Our ethos to start and our launching hypothesis was that food is so emotional and people are spending so much money going to a Whole Foods or a farmer's market and getting super excited about a marvelous grass fed steak from a local rancher who is 30 miles away and it's beautiful cut and then they're coming home and they're cooking it on a frying pan that's a hand-me-down that they couldn't even name the brand of, and it's ruining that steak. So, there is this behavioral disconnect of the beginning part of a process and all the care that went into it with the actual cooking at the end of the day, which was delivering the final product.Chip:So, we wanted to make people care about their cookware in an emotional way as much as they did the ingredient they were grabbing at the farmer's market. For us, that was meshing Jake's family history, that a hundred year old family history, with the craftsmanship approach of the manufacturers and partners that we work with. So, a good example of that is our knives are made from the great-great-great-granddaughter of a French knife maker who invented the modern chef knife in the middle of Central France. This area is the birthplace of cutlery, has so much deep history.Chip:You walk through and everything about this town is dedicated around knives. There's still the old factories with the old windmills that would power the old forges and it's just pure and center all knives. What we wanted to do was make a product and go back to that source and resource and tell that story so that when you pull the knife out to cut the steak that you just fell in love with, you also know all the craftsmanship and all the story that went into that knives.Chip:So, it was this approach of blending love and care on both side, a product to ingredient. So, that was in launch approach, and we carry that ethos through all our product lines. Our bakeware we just launched is from a proprietary recipe that's over 200 years old from the center of France as well, and that's what carries through every single product we make. That actually attracted all these partners. So, most stuff in our industry comes off of a boat oversees in Asia and is nameless and faceless and has a name printed on it, all looks the same, and no one was putting this time and attention and care into the supply chain portion.Chip:As soon as that happened, Tom Colicchio approached us and he said, "Honestly, I've been working in this industry for decades waiting for a company like you guys to come along. I want to partner with you guys," and he invested in us. From there, it was a snowball effect. Tom is just an incredible human being. Everyone respects him. He was able to be the first stamp of approval, along with our supply chain store being the second stamp, that started to attract a lot of amazing shops from around the world to be part of our brand.Chip:I'd say the last point in that, these aren't traditional influencer or endorsement deals. So, every chef we work with, they're authentic customers of ours. They're buying for their restaurants. It's not a pay to play deal. This is a real authentic relationship.Stephanie:That's awesome. Yeah. That's a theme I always hear and I think even for our company as well, that first customer is like the stamp of approval. Once you get the one big whale, then you can just be like, "Well, look. So-and-so is using it," and you can find their network. Yeah. Once you get that first one, I think everything gets easier. How did Tom hear about you? Were you guys doing some marketing tactics to get in front of him?Chip:No, through the grapevine. We approached Danny Meyer's fund as an investment proposal and we were too small. It was too early for them. They write 20 and $30 million checks for growth stage businesses and we hadn't even launched really yet. So, he introduced us. He was like, "Would you like to meet our friend, Tom Colicchio? He writes angel checks, and would that be okay to make the intro?" Obviously, we were trying to play it cool. We were like, "Yeah. I think we'd be okay with that." But obviously, we were ecstatic and super excited.Chip:We emailed Tom and didn't hear back from him for months were like, "All right. That clearly is not going to happen." All of a sudden, we got an email from him two months later out of the blue that was just, "Hey, guys. Landed back from filming Top Chef for two months. So sorry for the delay. Can you meet in New York tomorrow?" I don't know if he thought we were in New York as well. But obviously, we're in Austin, Texas and we were like, "Sure," and booked an immediate flight and more or less had a handshake deal to partner with him and get an investment from him that day. He was just a super awesome guy, super genuine, and believed in what we were doing, most importantly.Stephanie:That's amazing. So, what did that initial startup look like? You have an infusion of cash. What were your next steps? Was it already mapped out, or now you're like, "Whoa. This is really getting us to that next level. We need to change how we were thinking about it"?Chip:I had come from the apparel space, which I was working at a company called Rhone, helping them with digital marketing. So, if you were saying, "Hey, Chip. I need to go buy some stuff right now. I don't even know where to start," is generally the refrain we hear, and that was different from the apparel space because no one is looking at a T-shirt and saying, "I don't know how to use that. I don't know what to use that T-shirt." I put it on my body. We know that, right?Chip:So, the first year is all about learning what people really cared about, how to market our product. Our product is a performance based product. It will fundamentally make the food you cook better tasting, but how to deliver that in a way that makes sense to the normal consumer and it's not too chef-y, especially when we have all the chefs behind us. That was a huge learning process.Stephanie:Yeah. Someone once gave me a really big cast iron skillet and I remember being like, "Thank you so much. What do I do with this? How do I clean it?" And she's telling me, do salt and this and that. I'm like, "Oh, my gosh. Can I cook my engineering in here?" I tried a couple times and it just was burning and, okay, education is key around stuff like that. The one thing I was reading that I thought was really interesting too was your post-purchase engagement of basically using that as a training funnel, because you were maybe having people come in and complaining because they didn't really know how to use the cookware, and so you used that as a channel to start training them right after they purchased and maybe were checking in on the shipping and trying to see where their product was, that instead you would guide them to the website to train them. I'd love to hear how you thought about that, and do you still do that today?Chip:Yeah. I think we're very lucky in the sense that we have some of the best chefs in the world that are, again, our authentic partners and using our cookware. So, we thought a lot about and we sat back and we're lucky enough that because we work with these people, we're able to go into a restaurant and then the chefs generally come out and explain exactly how they made the dish they're serving us and there's very personal experience that heightens the entire enjoyment of going to that restaurant.Chip:So, we're sitting there and we actually kind of have a duty as a company, we have this entire group of chef partners and this entire group of home consumers to be the bridge between those so everyone else can have that experience and heighten their enjoyment of the use of the products. So, we work with these chefs. Grant Achatz taught us how to make an omelet, and he's known for this crazy molecular gastronomy. But actually, Grant Achatz grew up cooking in his parents' diner making eggs, and now he can do it the best in the world.Chip:We talk a lot about what can Made In do that no one else can, and we have this two-sided relationship that no one else does. So, how can we bridge that gap between the consumer and the chef in a way that really values and adds value to the consumer's process, and to us, that's education. So, you buy a carbon steel frying pan or you buy a piece of bakeware. Nancy Silverton, the best baker in the world, is going to give you a recipe to enjoy that product. If you buy carbon steel, as you said, carbon steel to us is a better cast iron, but there's a learning curve. The chef [inaudible] in New York is going to teach you how to season it, teaching you how to ... Wait. What the hell is that salt thing that that person was talking about, what that is, and how to use it, and that's coming from a real expert in the space.Stephanie:Oh, that's a really unique and interesting strategy. You're using the chefs as your influencers to train, and I feel like a lot of these chefs know how to speak in a language that'll connect with me so you don't really have to be like, "Wait, wait, wait. You're going too intense here. Let's dumb it down a bit." It seems like a lot of the best chefs have learned how to be the, what's the one, the Chef Ramsays of the world. Or there's another one I follow that's really good too on Instagram. Anyways, he does things in a way where I'm like, "I can do that," and it's just like, it's only five steps, it looks beautiful, but here's the two things that'll really take it to the next level.Chip:Yeah. Tom Colicchio and my co-founder, Jake, they both have the same philosophy, which is that you really get to enjoy cooking once you can just do the fundamentals. As soon as you break free of the recipe, you can actually start to enjoy the creative process [inaudible]. We talked about that a lot too, right? It's like, it's never been easier to order Uber Eats and have any meal you want delivered to your door within 40 minutes at a pretty good price. But people are cooking more and more, and why is that? It's because people actually love the process of the creativity behind it, of the expression behind it, of just the sense of accomplishment, or people do it to destress, or they're doing it for a specific diet.Chip:People are doing it for a very personal reason, and if we can give them the fundamentals of, hey, this is just a technique of how to sear a steak correctly, we don't need to give you, okay, add salt at the end or add a [inaudible] on it. That becomes your personal sense of creativity and your enjoyment for it. So, I'm just taking that to heart as well. If we can give you technique and how-tos as opposed to step by step by step recipes with the chefs who have gone to culinary school, who have done all this technique work for you, then it'll be a really powerful experience for the home consumer.Stephanie:Yeah, that's cool. What are a few of the top maybe cooking tips or tricks where you're like, "Once I learn this one thing, it changed my whole worldview on cooking"?Chip:Yeah. Definitely heat control. I think that is where most home cooks get in trouble. You talked a lot about just burning your eggs, or something like that, and it's not a hard concept, but there's everything flying around the internet of you need high heat to sear, and that's just not true, and low and slow is the best way to cook, etc. It really becomes down to your personal preference and style. You can sear a steak on low heat if you just do it correctly and give it its proper time and you can still have the exact reaction you want.Chip:Tom Colicchio is a low and slow guy and Grant Achatz tends to cook on higher heat. Everyone is doing it in their own way. So, I think for me, and even in my personal journey, understanding heat control and learning it correctly was the biggest unlock because that applies to the most amount of dishes that you cook. I think a good example of that is Tom Colicchio talks a lot about listening to your meal. So, when you have a pan and you heat it up, no oil, because most people will heat it with oil and burn the oil on and have a lot of dishes to do. So, you put a stainless clad piece of cookware on the burner, heat it up to temperature, dumping cold oil, let that heat up quickly, and then put on a cold steak.Chip:What is that cold steak going to do? It's going to drop the temperature in the pan. So, at that point, you need to have more heat into the pan to get that sear. But once everything gets up to rise, if you leave that high heat on, it's going to overcook everything and burn that oil again. So, then lowering it down. Everything on that is done to just paying attention to heat control.Stephanie:Is there any pushback that you guys have felt? You're in an industry that, to me, feels like an older one where people are like, "Oh, I've always used nonstick and it's fine." Now, it does feel like thing are changing where people are like, "These pans are toxic. They're not the best for the environment. There's a lot of things that you should think about." What kind of education around just using the products, but what else are you encountering right now when you're trying to push into this industry?Chip:Yeah. People do have a preference towards nonstick. It's the biggest objective business market to attack, and I think that's why you get the most amount of entrance into the nonstick space. It's also the most just Wild West of marketing as well, which we try and stay out of. The big push right now is "ceramic". I put it in air quotes or visual quotes because it's not actually ceramic. It's a Sol-Gel coating that looks like ceramic, and so the GreenPans of the world a decade ago dubbed it ceramic because it sounded nicer and sounded more premium. But really, it's a Sol-Gel coating.Chip:This was back in the day when DuPont was dumping stuff in water and all this stuff. So, they created this decade long fearmonger marketing tactic that a lot of companies have latched onto over the decades, and now GreenPan's actually in a class action lawsuit about all their face claims.Stephanie:I used to have a GreenPan.Chip:Yeah, exactly.Stephanie:I had to throw it away because I'm like, "I don't this is good to cook on."Chip:The problem with those too is Sol-Gel and "ceramic", which is how the normal person listening to this would hear it as, it doesn't last long. By definition, it's called a self-sacrificing surface. Every time you use it, it removes some surface. It scores four out of 10 on a durability score.Stephanie:That goes in your food, doesn't it?Chip:It does. But it's made out of what makes hair conditioner. So, you can eat your hair conditioner [inaudible]. But whatever. But just in terms of business, we're making performance based tools. We're not making a marketing gimmick company. Our gold standard is would this hold up in a commercial kitchen and would Grant Achatz or Tom Colicchio or Mashama Bailey, would they want to use this piece of cookware in their restaurant? You will never see a ceramic pan, a GreenPan pan in kitchen because that would last one week in a commercial kitchen.Chip:So, then they're making all these claims about better for you, better for the environment. If that thing's ending up in a landfill a week later, two weeks later, a month later, whatever it is, it's up to you to determine if that's actually better for the environment. [crosstalk] Yeah. Exactly. So, we're not in that game. We don't play in that game. We're here to make great tools that the best chefs in the world and the best home cooks and people who love to cook can use.Stephanie:Yeah. So, what kind of marketing are you guys finding most effective right now? When you said a lot of the other cookware brands are maybe using the fearmongering and just making claims that maybe aren't always the most accurate, what are you guys finding success in?Chip:Yeah. So, we love to tell the manufacturing story and the craftsmanship story. So, I'm just talking a lot about bakeware right now because we just launched on April 8th, and we went out to the factory in France and watched ... It goes through 50 people's hands who touch and inspect this and have been doing it for 30 or 40 years and it's such a beautiful process and it's pouring this clay and porcelain that is proprietary to them. I think there's one person who actually only knows the recipe and we're sitting there being like, this seems like a single point of failure as a business owner. You should make sure this person doesn't [crosstalk]-Stephanie:Oh, you're good.Chip:... [crosstalk] something. Like put it on Google Drive with a password protect or something. I don't know. But it's such a intimate, unique process and our customers love to see that, and the customer that appreciates that is our customer. Everything we make in the bakeware space is hand painted, and so we have these white porcelain with blue rims and red rims and every single piece is literally hand painted by brush. That's just so different than a lot of our competitors and what they do where the coolness comes from applying some coating that's powder blue or something like that. It's just totally different.Chip:So, we want to express that and for us on the marketing side, showing that is really beneficial because one, it is all the work we're doing, like scaling and working with these artisans and craftsman, is tough. It's tough business. But it's also really rewarding and our customers see how much care and attention and time goes into each one of their pieces.Stephanie:Yeah. That's great. When I think about, it feels very exclusive, like you have direct access to the person doing this who know the recipe. How do you put a moat around that so maybe other brands can't just come in and be like, "Oh, we know this one style of copper cookware," which is beautiful. I was looking at that like, "Ooh, that would match my one Moscow mule I have." But how do you put a moat around it to make sure that other brands don't just come in and steal your one single person who has the recipe?Chip:Yeah, yeah. It just goes back to Jake's family history and being so authentic in the space. He was working with a lot of people who were friends of friends who connected us to the right people and really, the only reason why we got a foot in the door was because of being in the space for 100 years. Most of our, or all of our competitors do not have any family history or any reason to be in it, other than seeing a white space and a market to go attack kind of thing.Chip:We don't talk too much about moats. To be honest, we have a very familiar relationship with all of our manufacturers, craftsmanship partners, and everything. Go out, spend multiple weeks. Our knife manufacturer told us she loved us and felt like we were her children and kids and sons at the end of it. So, these are real relationships and it's less about, hey, can we sign and exclusive for 10 years to lock out competitors and more how can we treat them like family, how can they treat us like family, and so they wouldn't want to do exactly what you're talking about.Stephanie:Yeah. How do you go about doing that? How do you instill that trust and relationship, and other than just being a nice, friendly person, which obviously you are, what else do you do so they really feel that relationship and you're like, "Yep, I'm not even worried about it because we got that"?Chip:Yeah. Some of them have invested in us. Internally, we have a mantra of hospitality first, and that goes towards everything from treating every customer who walks through our door or walks through our website door, whether they're spent $19 or $900, like we are a three Michelin star restaurant. So, what can we do to make you feel better, to enjoy the experience better, to, if you're having a problem, fix it, to do service recovery if you've had an issue? If UPS failed to deliver, how can we help you get to the answer that you need? All that stuff.Chip:That extends from customers as well as buyers, vendors, and manufacturing partners as well. So, what does that mean? It's treating them fairly on terms. It's treating them fairly on our business growth and practices and being an open book for them and sharing information and in negotiations, dealing with them in a friendly manner, and getting to a result that [inaudible] zero sum game, but it's beneficial for both sides. For us, that is the name of the game because it gets out of a let's solve for the six month term, and this is going to be a business that'll be around for two decades, three decades, forever, we need to make sure that we're treating people correctly.Stephanie:Yeah. I love that. So, when thinking about your customer, like you said, they can come in and buy a $1,200 cookware set and it's going to last a long time. It's not something where it's like you'll be back in a month. I'll see you when you need a replacement. How do you think about garnering that passionate customer base where it's like you have a good LTV on them? You're like, "They're going to be around for 10 years," because I've seen that you also are able to get wait lists of 10,000+ people who sign up for new products that you're launching. So, I want to hear how you think about that and keep your customer engaged, even if they ... life cycle of when they need a new product might be a long time from when they buy their first one.Chip:Yeah. So, we've been fortunate enough to have really strong cohort and repeat customer behavior. We're only three years old at this point. Our earliest cohorts have repeated over, on blended average, over 100%. So, industry average is 20%. [inaudible] 5x industry average. It's, again, in a product category that, as you mentioned, our product should last you your entire life. So, that's something we had to solve for and think about. Our first belief is that product quality is the biggest driver of longevity and happiness in cohort behavior.Chip:So, if your product stinks and you're the best marketer in the world, that's a short term gain. [inaudible] you can have actually a subpar experience with an amazing product and that's actually the better trade. Again, we try to solve for a great experience with a great product. But if we have only one chip to put it in, we would always put it into the product category because we believe that is what drives behavior. So, when we're going out, and one of our early investors and main investors had a really great point, which was you don't know how someone's going to find you. It could be a blog article about some tail skew that you just launched or cutting board.Chip:It's not, of course, you, but if that is their first experience with Made In, they are going to believe that everything else is like that cutting board. Right? So, everything you launch needs to be okay in a great experience. Or sorry. No. Everything you launch needs to be a great experience if that is their first product they've ever bought. So, don't launch tail skews that aren't up to the quality standards that you want, that don't have the manufacturer and craftsmanship story that you want, that don't have a good unboxing experience.Chip:So, we've taken that to heart because I think you see a lot of ecommerce companies just launch a whole bunch of stuff really quickly without that thought and attention behind it. Again, you don't know how people are going to find you. You're going to Parachute Home and you need a candle. If that candle doesn't come in an amazing box that represents the Parachute Home brand well, then you're probably not going to come back and buy their sheets. So, when we think about a product line and our offerings and cohort behavior and [inaudible] to answer your question, it all starts with product experience and product quality, and then again, that hospitality first mantra, treating our customers correctly, giving them customer service if they need it, and that will drive longterm behavior.Stephanie:Yeah. Oh, that's great because I think, like you said, a lot of brands do think about what are the loss leaders that you can put out there and just get people in the door, the quick hits? Like you said, I've bought many things for the first time, starting off with smaller price points, just to see, dabble in it a bit, see what it's like, and then be like, "Nope. I'm so glad I didn't buy that expensive $100 item because I just bought a bracelet for $10 and it was horrible. And yes, it was $10, but I'm still mad about it."Chip:Yeah. When I was at the apparel company and I was running analytics for them, we did a lot of basket cart analysis on which product ... taking everyone's first cart and basing out the SKUs that made up that first cart and then which of those SKUs led to [inaudible] second carts. Then we found an interesting mantra, which we've taken to heart, which was the lowest price point product of the most premium category was included in the most baskets that drove the highest repeat. To your point exactly on that, it was people who were trying to figure out, hey, is this material worth this extra amount of money I'm about to spend on it? I'm going to test that out, buy the cheapest one in that category.Chip:So, it was that product that we hadn't spent a lot of time and attention on, and all of a sudden, you're like, "Wow. This actually is the most important product of our entire company," because it's everyone's gateway and it's showing the material, but it's not a tough price point to hit on a first basket, and if we can show well on this first basket with this product, then they'll be great customers over the longterm. So, I think exactly what you mentioned is interesting.Stephanie:That's a good one. It makes you think about maybe adjusting margins on that first lower priced item, give it higher quality, lower your margins if you need to to keep that price lower, get them in the door, and then they'll probably go up from there when they have a really good experience with that cheaper item. I don't know if all brands do that, though. We will find out. Interesting. So, when developing new product lines, you're talking about the quality piece of it. But how quickly can you guys develop products, or are you more slow paced, like we just want to make sure it's perfect and it could take us a year to come up with a new product line because we're working with these artisans in France or knife makers or whatever you're doing?Chip:Yeah. It's been a mixture of both. We've had products that came together very quickly and was a match made in heaven with the craftsman who we reached out to and it just got to market in the way we wanted very quickly. We had a product, cast iron product that we were trying to launch in 2019 that got to the one yard line and we had spent a year and a half on it. We invested $50,000 of tooling and a ton of research and time and effort and all this stuff. It just wasn't up to the quality that we felt represented the brand and we scrapped that project at the one yard line, and now it's been a three year project.Chip:So, I'd say it's very variable. We are very aware that once we put that product out, it reflects on the rest of the products. So, if we put out a bad line and it doesn't carry the same quality and care and attention that the rest of our line does, it could reflect on ... Are they doing everything else half-assed as well? So, I would it's been a mixture.Stephanie:Yeah. How do you ensure that you're going to have enough inventory, especially when it's being handcrafted? We've had quite a few people on this show who have similar stories around ... We had Yellow Leaf Hammocks on in the early days and the women in the villages there were the ones making the hammocks, and of course, that can cause maybe sometimes supply issues. How do you even plan for that when it's like, well, this is one person's recipe and there's 50 people who are touching this product to get it out there, and maybe Joe got sick, so there goes his recipe for a week, we don't know how to create it anymore? Even plan when it's so, yeah, custom, I guess?Chip:Yeah. To be honest, that's been one of the biggest challenges of this business is our unique moat and value prop and everything is also the biggest challenge in the business. I think those naturally go hand in hand together. But you hit the nail on the head. It's about finding these craftsmen that make these amazing products, and they've never seen a company scale 5x year over year. They've never seen a company go this fast and just attack the market in this way.Chip:So, it's about, again, going back to being good partners with them, sharing multiyear forecasts, helping them invest in new tooling and new lines and things like that and working with them directly. It's a huge, huge challenge. But we've seen companies who get to this point and then take it and move everything to an automation facility and hurt everything that they built in the first place. So, we're not doing that. It's more about being great partners and figuring out the challenges with those partners.Stephanie:Yeah. Cool. So, when it comes to an ecommerce perspective, I like your example earlier about how to think about certain metrics and what you use to analyze. What are some other things maybe you pulled in from your past marketing experience into this business where you're like, "We've always relied on these principles, or I always look at these metrics every day to make sure everything's going okay"?Chip:Yeah. We look at star ratings by product line. Those are obviously very important for us. It's what is the benefit of ecommerce? In the early days, it was the cut out the middle man story. That's gone away now. It's, okay, direct relationship with our customer, one to one management of that relationship, and we believe more of that mantra, right? So, it's, at the end of the day, we always say at the end of the day when you buy something from Williams-Sonoma and you walk out of that store, you're never going to hear from that salesperson ever again. Your relationship with Williams-Sonoma and that salesperson who just spent a half hour with you is over.Chip:For us, it always begins at the time of purchase. They've bought from us. We now have a direct line to them, we can provide them content, we can provide them customer service. Our relationship is just beginning, and a lot of that goes into product reviews, a lot of that goes into monitoring return rates and how many customers exchange or return products. For us, that's a proxy for product quality. Then cohort behavior is a huge one as well and those three together give us an idea of how the product into customers viewing the company full circle is behaving and is trending. Those are probably the three we focused on most.Stephanie:Yeah. What are some of the behaviors that you're looking for when you say the cohort behavior is one of the biggest ones? What are you guys looking for and how would you adjust it if it's not going the way that you want?Chip:Yeah. So, cohort behavior, you're looking for trends up and to the right, and home space. When we launched in the home space, what we tend to see in this space is a diminishing marginal curve on cohort behavior. So, after they've bought all the things from you, then they don't ever come back again. So, you see cohort behavior one to six months kicking up to the right and then six to 12, a little bit less, and then flat from 12 on, or whatever it is. Right?Chip:So, we wanted to make sure that we didn't follow that trend because that meant, all right, we no longer have a relationship after 12 months, just out of an example, with that customer. So, what can we do to maintain that customer within our relationship and what can we do to provide value to them, whether that's content and recipes and how to use things better, whether that's new products? So, again, we started with just stainless clad cookware, we've launched carbon steel cookware, knives, wine glasses, plates, silverware, copper bakeware, all from these amazing facilities and stories. If we can treat them right in the beginning, then obviously they'll continue to support us throughout that journey.Stephanie:Yeah. What's some of the most engaging content? Is it the educational stuff? Is it the stories around the artisans making the product? What really pulls people in and then keeps them coming, not just a one off hit of, "Oh, that was heartwarming. I like that," and then you don't see them anymore? What keeps them there longterm?Chip:Definitely the manufacturing and craftsmanship stories. Those get the highest feedback and results from us. To your point on inventory being an issue for companies like ours, have that be a portion of it and then have that portion go through a pandemic where demand is increasing and manufacturers are closed in Europe for months because of COVID outbreaks. It creates a tough dynamic, and with and around those stories, we've generally heard the refrain of, "I don't care when this stuff comes to me. Just make it in the right way," and I think what these videos and this content does is show you that were making it in the right way.Chip:It's not like we're delivering medication that needs to be ... If you don't have your oval baker on Monday, you're not going to be too upset about it. Obviously, we're striving for best in class delivery and fulfillment and have a great team who does so. But we're not delivering life needed items. We are delivering craft products that are going to last you a lifetime, and if that takes an extra week, by showing people that, the care and attention that goes into it, they generally have that refrain of, "Do it the right way and get it to me when you can."Stephanie:Yep. Yep. I definitely feel that. How do you feel about being shown up in marketplaces or Amazon? I know there's a couple artisan marketplaces where they highlight some of the best products. To me, letting someone else tell your story, or even on Amazon, you can only tell it in a certain way. How are you guys approaching that?Chip:Yeah. Amazon's interesting because I think the mentality on Amazon has shifted a bunch over the last five years. The ecommerce space in general five years ago, I think, would have said, "No way. Amazon dilutes my brand. Amazon doesn't let me tell my story. It's going to cannibalize all the marketing efforts I'm doing over here." [inaudible] we're seeing a shift away from that mentality and people and brands racing towards displaying on Amazon. I don't think it means Amazon is still doing a great job of letting brands tell their story. To me, it's still a search engine and people tend to not get to the brand page ever.Chip:So, I don't think it's necessarily an Amazon win and that they're helping perpetuate all this effort and craft that we're going towards. It's more, I think it's becoming just such a necessary evil in terms of [inaudible] and people are growing these brands to get scale and need to find the incremental sales, and where else to go but wholesale and Amazon? So, Amazon's been interesting. We're not on Amazon. Almost 100% of our sales come through our own dotcom. So, we're not really on marketplaces either.Chip:In general, we have a kind of anti view on all of those. I'm not saying that will be forever. Again, each channel has diminishing returns at some sort of scale. Fortunately, we're not at that point. But yeah. We tend to like to tell our own stories and craft a message and own the relationship and provide the value to the customer.Stephanie:So, what's on the radar for you guys for the next couple years? Where are you headed? What are you hoping to do in maybe one to two years?Chip:Yeah. So, we're at the point, and when we launched this, we wanted to "own the kitchen". I realize that's an overused, cheesy phrase and hopefully, all the listeners didn't just roll their eyeballs. I swear-Stephanie:I didn't. [crosstalk] Own it, Chip. They're going to own it, everyone. Come on.Chip:Exactly. But for us, everything comes down to the why and it's not just to sell more things. It's, okay, a kitchen is part of the home and people like aesthetic congruency within their home. So, it doesn't make sense to have a different bakeware company vs. different knives vs. different cookware and pull those all out and now you're serving them all on a table to a dinner party and they all look different and it's not a reflection of what you're trying to do for your home, which again, is very personal to you.Chip:So, with the launch of bakeware, we're actually at the point right now where if you're moving into a new home you can buy almost every main vertical you need off of madeincookware.com. It can all show up in one box and it can look the same and it can feel like part of the same system and you know that everything comes from an amazing backstory with amazing craftsmen.Chip:You don't have to go research do I want [inaudible] vs. Henko vs. Made In knives, then All-Clad vs. Made In Cookware. You don't have to do 500 different pieces of research. It's a seamless process for you to do so. So, that was our main brand goal, and we got there a little bit quicker than we thought we would with the launch of bakeware now. So, we're super excited about this being the first year where you can literally pull out a butcher block and cut a knife and prep your food and then cook it on Made In and then serve it on a Made In dish and serve it with wine and all that stuff and never touch anything but Made In, which is pretty cool.Stephanie:That's cool.Stephanie:Cool. Well, let's move over to the lightning round. The lightning round's brought to you by Salesforce Commerce Cloud. This is where I ask a question and you have [inaudible] or less to answer. Are you ready, Chip?Chip:Yes.Stephanie:All right. So, I'd say you're probably an adventurous guy, from what I've read about you. What's one thing that you would never do?Chip:One thing I would never do. Good question. As of interest, I am, I'm not a huge water lover in terms of ... I do scuba dive, but I would never kite surf [inaudible].Stephanie:No kite surfing?Chip:Yeah.Stephanie:Wow. Okay. But don't you fly planes?Chip:Yes. [crosstalk] I'd rather go up than down, and climb mountains ever.Stephanie:Okay. Okay. What's a crazy story from flying a plane where you're like, "I almost died this one time, but here I am"?Chip:Yeah. My 14th hour, so about a third of the way through the private pilot's license, we had an engine out failure. It was right outside DC and we were descending beneath the DCA airspace, the Reagan airspace to sail out of it. It was with my instructor. It's the first time in the training process that you go and land at a separate airport and come back. The first 10 to 12 hours are just all at your local home base airport doing takeoffs and landings. So, we had just crossed the Potomac. He asked me to descend below the airspace, pulled back the throttle, and the engine just quit.Chip:He said, "Give it more gas. Don't throttle back that much," and I [inaudible] and it didn't kick back in. We declared an emergency, to make a long story short. When you declare an emergency, this is the Reagan now, they give you a dedicated person to help monitor your situation and he told us, "Okay, there's an airport two miles to your left. Can you make it?" "No." We declared a mayday situation. It had just had snowed two feet in the DC area at that time, which was pretty rare and lucky for us, and ended up crashing in a snowbank in someone's backyard.Stephanie:Oh, my gosh. I heard about this. I lived in DC.Chip:Did you?Stephanie:I heard about this. Yeah.Chip:It was probably 9:00 AM maybe. This lady came out in her robe with a coffee cup and just was so confused that there was a plane in her backyard, and we were sitting there kind of dancing-Stephanie:[inaudible].Chip:... because [crosstalk] yeah, we did this. We were safe.Stephanie:Oh, my gosh.Chip:She took us in and gave us hot cocoa. I was in school. I was at Georgetown at the time and I was missing, I had an 11:00 AM exam and emailed the instructor and said, "Hey. I know you said no excuses for missing exams, but here's the story." I ended up making it back around 12:30, three hour exam, walked in the classroom, and he stood up, stopped everyone, and said, "I will never accept any other excuses ever again for missing a thing," except for I was in a plane crash and landed in someone's backyard two hours away from the city.Stephanie:Oh, god.Chip:Which was pretty crazy. He ended up being a former Navy pilot. So, kind of, I think-Stephanie:Felt that.Chip:... touched a good nerve with it. But it was definitely one of the crazier experiences in my life.Stephanie:Wow. What year was that?Chip:2009 or '10.Stephanie:Okay. Yeah. I remember when I lived in Potomac area and I remember hearing about this. I don't know if it was you or not, but I remember a plane landing in someone's backyard and it was in the newspaper for a week.Chip:Yeah.Stephanie:[crosstalk] was you. That's cool. So, you've done four or the seven summits. Which one's been your favorite and why?Chip:Denali in Alaska was by far the most wild experience. That's the only one that's totally unassisted, no porters, no mules, not anything. You take a plane that lands on a glacier with your backpack and a sled and they say, "See you in 14 to 21 days." It was also the toughest. That is 120 pound packs over 14 to 20 days. We got stuck. So, we actually were making amazing time. We got up to the 14,000 foot camp. The mountain's about 21,000. So, it's the last major camp before doing your ascent, and about 10 days of -40 degree weather came in. So, we were stuck there.Chip:It was kind of a weird experience because the days were sunny and nice, but it was absolutely freezing and anyone who left the camp, 100% of them got frostbite and had to be evacuated. So, we sat there. We were running out of food. If we got through the last day of food and things opened back up, then we did a rapid ascent and summited on the last day we were able to. But you're out there in the wilderness. It's absolutely stunning and beautiful. You're kind of with yourself for ... It's quite a different experience than some of the others, which are a lot of tour groups, a lot of assistants, a lot quicker. So, it was a wild experience.Stephanie:That's cool. I mean, below 40. Wow. No, thanks.Chip:Funny story is the kid who actually had a [inaudible] job, he was a friend from earlier, but he was working at Walmart ecommerce at the time. We actually received our first investment via satellite on that climb for Made In.Stephanie:Wow.Chip:He was like, "What is that?" Then two years later, he joined us as our head of logistics. So-Stephanie:Oh, that's cool.Chip:... a lot of things came from that journey.Stephanie:That's a fun story.Chip:Yeah.Stephanie:Man. So many things all coming together. Cool.Chip:Yeah.Stephanie:What's one thing that you don't understand that you wish you did?Chip:All this stuff that's happening with physics right now and how molecules can go through walls and power all that stuff. I don't know. It seems very cool and I wish I got it, and I've had a lot of conversations around it. Every time, I feel like I'm high or something and I don't quite get it. But other people seem to get it and I wish I did.Stephanie:I haven't even really heard about this, or maybe I just don't know what this even is. So, I guess I'm in that same camp of I don't understand and now I'm going to start looking into that.Chip:Yeah.Stephanie:The last thing, what one thing will have the biggest impact on ecommerce in the next year?Chip:Probably the mass move to 5G. Everyone is, I would say, still in the camp of mobile as the first touchpoint and then convert on desktop or desktop conversion rates and AOV are still [inaudible] out of mobile, development still is mobile, second in most cases, and even though [inaudible] about mobile first development for the last decade. I think obviously as the more widespread 5G world gets out there, the focus on mobile maybe finally will get through to people. That's the most important meeting of ecommerce.Stephanie:Yep. Cool. Well, thanks so much for joining the show. It's been fun learning about the world of cookware and seeing where you guys are headed. That's, yeah, amazing. Where can people find out more about you and Made In Cookware?Chip:Yeah. Everything is sold through madeincookware.com. That's M-A-D-E-I-N cookware.com. We have everything from full kits if you're moving and need to outfit a full kitchen down to everything is also sold a la carte if you just need to fill around an existing group of cookware. So, we're excited and we have a full team ready to help you out if you have any issues as well.Stephanie:How amazing. Thanks so much, Chip.Chip:Cool. Thank you for having me on.
Taking a company from $1 million to $100 million is no easy feat — especially when you have competition and copy cats coming at you from all angles. But Peak Design has fought off all those knock-offs — including a pretty blatant rip-off from AmazonBasics — and it has done it with humor and panache, which has only endeared the company more to its loyal customer base. Those customers are what took Peak Design from a simple camera utility bag company and turned it into a popular everyday bag and accessories outfitter for photography enthusiasts. Peak Design leaned into the idea of having a close relationship with its customers from the very beginning, by letting their customers have a say in their product line by way of crowdfunding and Kickstarter campaigns. And that, according to Elish Patel, the VP of Growth and Digital at Peak Design, has made all the difference. On this episode of Up Next in Commerce, Elish explains how building that loyal customer base has helped the company stave off the blatant and more subtle competitors. And Elish talks about how Peak Design is using unique marketing and content strategies to take people from browsing to buying. Enjoy this episode! Main Takeaways:It Speaks For Itself: Although Peak Design went toe-to-toe with Amazon after it knocked off a Peak Design product, more often than not, Peak Design lets its products speak for themselves against the competition. If your products are truly superior in quality and the value they offer, consumers will recognize that and make the investment. And when they buy the better product and see its superiority, they become more loyal to that brand long-term.Products Over People?: Hiring good talent is important, but you don’t want to prioritize growing your headcount over maintaining a laser focus on creating a good product. When you scale up your headcount, it’s easy to be distracted by the new focus on managing a large team and therefore your product design and development process can suffer. By relying on third parties and vendors or partners to do work you could otherwise hire internally, you are left with a core team who can focus on the part of your business that is truly important.More Than An Impression: With your marketing and content, the goal should be to achieve more than an impression or a like. Especially with a smaller or niche brand, being a part of the conversation your consumers are having on places like Reddit and TikTok is worth more than getting an influencer to post a picture with one of your products.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome everyone to Up Next in Commerce. I'm your host, Stephanie Postles, CEO at Mission.org. Today on the show, we have Elish, Patel who currently serves as the VP of Digital and Growth Strategy at Peak Design. Elish, welcome.Elish:Thank you. Nice to be here.Stephanie:Yeah. I'm really excited to catch you before you journey into the redwoods to get some content for your company. I was hoping we can just dive right into Peak Design because your story is super fascinating. Right before this, you were talking about how when you came in, it was a sub $1 million company. Now it's at almost 100 million?Elish:We definitely had a positive in that we did somewhere around 70 last year and we're hoping to grow to that the hundred soon. So yeah, we're coming right up against it.Stephanie:Okay. I mean, that's an amazing story. That's why I was like, "We need to start there. I don't want to run out of time." Can you tell me a bit about what is Peak Design and how long have you been there, and a little bit about that journey?Elish:Yeah. I've been with Peak Design for about six and a half years. I met Peter Dering, our founder and CEO in a bar in Berkeley after a concert. We just sort of hit it off. So it was one of those-Stephanie:What concert?Elish:It was an Alt-J concert at the Berkeley Greek. It was one of those classic Silicon Valley chance meetings. I was doing marketing consulting in the Bay Area at the time and he needed a little bit of help on the digital side. A little bit about Peak design. Peter Dering had this idea of a camera accessory basically to hold your camera on the outside of your body, usually on a backpack shop or your belt while you're doing some more strenuous activities, whether you're hiking, biking, stuff like that, so you could get to your camera easily instead of it being tucked inside your bag and you would miss that shot, as we say.Elish:He got lucky, if you will, the universe aligned in that was the early days in 2010 of Kickstarter. He was just going to find someone to make it and try to get it into stores. But someone was like, "Hey, why don't you do a Kickstarter?" Put it on Kickstarter. Some people found it, wrote a story on it. I think it was in Gadget or something like that, and it blew up. He did 300-something thousand dollars on Kickstarter that year. It was something the third biggest Kickstarter. Again, early days of Kickstarter. There's now crazy ones.Elish:That was the birth of Peak Design. From there, it deepened into the Kickstarter and photography product world. We became one of the first companies to do a second Kickstarter. That's how we started just launching products on Kickstarter. What we found with that is Kickstarter just has this base who became our evangelists. We created this really one-on-one relationship with our customers and do have a say in the design of our products. They feel invested in our brand. We continue to do that. In fact, we've done 10 Kickstarters to this point. We've raised over $37 million on the platform, fully crowdfunded, which means we've never taken investors, and we get to make decisions like being a part of 1% for the Planet. We founded a climate neutral nonprofit to help companies to offset their carbon. We basically chart our own path and that allows us also to make the best things. We don't cut corners on any of our products.Stephanie:Yeah, that's amazing. We haven't had too many companies on the show that went the Kickstarter route. I think I can only think of one or two. What were some of the lessons maybe when you launched the first time to the second to the 20th time, that maybe things that you started adjusting over time?Elish:Some of the biggest things we adjusted were... they came with just the changes in the world of marketing, with the rise of social media in the last few campaigns, the influencer became so much more part of our campaign, especially the last two YouTube. There was Facebook, then there was Instagram and then YouTube has been around for a long time. But then we layered on YouTube specific influencers and that's it's whole other own community, especially in the photography world. And then relearning that YouTube in and of itself is a great search engine place where you can put evergreen content. There's one piece of influencer content that I have up on YouTube that I placed two years ago that still brings in five grand a month.Stephanie:Wow. Okay. What's this content?Elish:Well, we sponsored a video for basically someone who... and we were pretty adamant to make sure that if you're going to review our product, then you want to leave a positive review. We're not just forcing you to do that. We give them the product. They love it. They're like, "I love this. I want to talk about it." Usually for the bigger influencers, they're like, "Oh, I love this product. I want to put it up." It usually costs 30 grand. We did that and it got up on YouTube. I don't want to say the name just to blow up his spot or not. But put up there, did a great review of it, talked about the pluses and minuses, linked to the campaign below in the comment. That video, which because it did so well, they keep on their page and still draws traffic when you're... especially the campaign was for our Peak Design tripod, our travel tripod.Elish:When you type into YouTube "tripod" especially who people who are searching for like "how to use a tripod, this and that," it's one of the top things that comes up. People will go watch that video and like, "Oh, this is a cool tripod." They'll click the link and it still brings in a lot of traffic and a lot of revenue.Stephanie:That's really cool. Are you still using Kickstarter today?Elish:We just did our last Kickstarter in December. We did it for our new mobile line of products. We went from photography thinking that this iPhone is literally the best camera that everyone carries around on a daily basis. So we wanted to create a line of products for that. We did that in December and that was our last one. Are we going to continue to do Kickstarters? Probably, but we've done 10 of them and it's got to end someday, maybe. I don't know. We'll see.Stephanie:Why? That's what I'm wondering. I'm like, "Man, it sounds like it's going so well." I haven't heard of enough brands probably utilizing that, but it does feel like maybe that market is pretty saturated and it just seems like there's a lot on there when you go in and start looking through products that are launching and what you can find. It just feels like a lot more than maybe when you guys started out.Elish:Well, it's also, we were a part of this cohort that proved the model and then now it's easier than ever to go and make and design a product in China, Vietnam, wherever you're producing. In fact, there's full factory cities where you show up with an idea and they'll help you make it. That also feeds into the system. It's a problem with knockoffs in our brand as well. People are copying our stuff. You can just go there and that's the other part that saturated Kickstarter and Indiegogo, are these half thought out brandless products. It's easy to get lost in the fray there as well.Stephanie:Yeah. Let's talk a little bit about knockoff that you just mentioned, because right before the interview, I was watching a very fun video that you guys put together because of Amazon knocking off your bag, and I was hoping you can touch on the inspiration behind that and how you think to approach companies who are knocking off your products.Elish:Yeah. It's a funny story, obviously. The backstory is that we make this bag called the Everyday Sling. Literally that's the name. We have a TM on the term everyday sling, and we do sell on Amazon. Before the pandemic, we had a large amount of our direct revenue on Amazon. And the rumors are true that Amazon will see a successful product on their platform and say, "Oh, we can make some money on that and create an Amazon basic version of it." What they did in this case was copy our bags, stitch for stitch, it looks exactly the same, even down to the point a design element is just this little hyper lawn patch where we put our logo. They kept that patch the exact same shape and the exact same location on the bag and wrote Amazon instead of Peak Design on it.Elish:We've seen knockoffs before, but we were like, "This is egregious, this is crazy." I guess internally I'm lucky enough, we've never been a brand that does the patent trolling thing or anything like that. We build our own moat as far as around our design process. It actually is extremely expensive to make our products because of how functional and quality they are. And that's part of our own moat as well, built into the brand. But because this looks so much like it, we were like, "This is insane." It's actually far cheaper, low quality product. Our bag one for $100, they put it on there for $20. And they called it the Amazon Basic's Everyday Sling. They didn't even change the name, which was insane. They called it [crosstalk].Stephanie:[crosstalk] already good name, might as well just [inaudible] that too.Elish:Exactly. I work with our marketing team, we're all jokes here. Adam Saraceno, our head of marketing has gotten really adept at writing our scripts or videos. He wrote the script for this video and just came up with the idea and we've got an in house video team and we were recording it and we had this plan, we're going to make that video, put it on YouTube, we'll send it on email. We put it up, we sent it out and it caught fire on some forums. It started making its rounds. Before we knew it, we had something like a half a million views. And then that took off even more. I think the video has over 4 million views at this point. But the idea was like, "Are we going to sue Amazon? We're a fly to them. What can we do? We can trust that our customers can laugh at this along with us, and we can poke a little fun at them. That's all we can do."Elish:That's what we did and point out. If you watched the video, we sort of point out that you have a choice when you buy stuff. You can buy our stuff where we're blue sign verified. We're now fair trade. We pay our factories workers far above the local wages in their local... we produce in Vietnam. We're very honest about that. We offset all of our carbon and we lifetime warranty everything. It's going to last you forever, if it doesn't, we'll replace it. Amazon, you get what you pay for. But that's our message. It's easy to get frustrated, but I think it's probably better for your brand just looking at the long-term. Just stick to your guns, trust your brand, trust your product.Stephanie:Yeah. I think that's what I loved about the video, because it was so masterfully done and it's always a good reminder of why, like you said, frustration, anger probably won't connect with many people because sometimes... I mean, I think anyways, people want to see funny stuff, happy stuff. And the video was perfect where it's like, "Oh, if you don't care about all the bells and whistles, all the stuff you just named [crosstalk]." It was just so well done, especially when they were drawing it out, drawing out the product and being like, "Oh, do we want something that's actually good quality, now take that out and take that out." It was just really well done, and I'm not surprised it took off. What else helps get it in front of people to really help spread it?Elish:I mean, it was mostly word of mouth. We definitely put a few advertising dollars behind it. When it took off, we amplified it, just cause it was resonating with so many people, and I think that's important. Especially in digital marketing, you're testing content all the time, you're like, "Is this working? Is that working?" This was obviously working. I didn't need to test it against anything else. Yeah, we put some ad dollars behind it on Facebook to get it out there as well. But after we had about a half a million views on it.Stephanie:I also saw you tagging Jeff Bezos and Amazon support team and all these other people. I'm like, "Oh, that's good." But also, once again, the way you were doing it was just funny. I can't remember the Twitter copy of what you guys were saying, but it was very funny.Elish:That was Joe Callander on our team and he was like... I remember him messaging Adam and I going like, "Hey, I'm writing these tweets back to these people. I'm putting this. It's a little edgy. Is that okay?" We're just like, "Dude, gloves off, man. Go for it." He really went for it and I think it turned out really well. I like a lot of the YouTube comments because there are definitely some people in there... YouTube has got the worst trolls, I think. YouTube, there's definitely a few people like, "Why am I going to spend 100. I'll just get this $20 one." And he would just write something like, "We'd love that for you."Stephanie:Oh, that's great.Elish:"Go for it."Stephanie:It kind of reminds me of morning Brew. I don't know if you've ever seen them respond to people. Or Wendy's Twitter channel where they reply to people and have it out with them. I'm like, "I love it because they stay so close to their brand and their voice and keep it funny." Hats off to your team for knowing how to keep it on brand and keep it engaging for people. When Amazon came out with the knockoff product, and I think you said you've had other companies as well knock off your product, what kind of result did you see on sale? Did you see a direct impact when they came out of like, "Oh shoot, our daily revenue just went down in half and now we need to figure out how to claw our way back in front of our customers."Elish:Luckily, the Amazon thing made buy our bag more. I'm sure it lifted their sales as well because we just got so much hoopla, and it got a lot of press attention. Pete, our CEO was doing the rounds on a bunch of the media channels. On the other ones, we really didn't notice. If anything, it riled up our customer base because they would see it and be like, "This is just like my Peak Design bag and this is just like this." Their claws would come out and they'd go after it. That's definitely... I attribute that to our Kickstarter base and how we formed as a company of like we created this place where people thought they were part of the brand, and so they'll step out the defend it as well.Stephanie:Oftentimes I don't see brands maybe highlighting all their differences. That's why I loved your video when you're like, "Here's the five or six things that we do that you'll never find with an Amazon Basic." Did you guys maybe change your strategy or how you were messaging that? Because maybe before you weren't as upfront about like, "Here's why you should buy with us."Elish:I'm glad you brought that up. We definitely started steering away from it because early on in our brand, we certainly did that. When we started making camera straps, we were like, "This is how the other people work. This is how ours works." Then we were just like, "Maybe the product can just stand on its own." And it did because the functionality of our product was so different for so long. But again, that was a unique scenario where our product was absolutely different than the competitors. Now the competitor is copying our product. So now we're forced to be like, "They copied it, but not very well." It's almost like we need to inform our consumer of the pitfalls of trying to buy something that's similar to ours, but probably fails on quality and functionality. They're getting duped by getting these cheaper made knockoffs.Stephanie:Yep. Yeah. Yeah. That's definitely important to come back to the roots of... you have to defend your ground and you might lose sight of that for a bit, but it's interesting to hear how it comes full circle with like, "Okay, lean back into our differences."Stephanie:The one thing I wanted to circle back to was going through what it looked like when you joined the company, when it was sub 1 million and then where it's at now, close to 100, and talking about... I know we were just talking about earlier, how you're going to go into the redwood forest, you're going to be creating your own content and thinking through your marketing tech stack, and I want to hear what that evolution has looked like, because I think you mentioned the team didn't scale up with that revenue as much as maybe other companies would have done. I just want to hear it behind the scenes of what that looked like.Elish:Yeah. Credit to Pete, our CEO, and he's been extremely protective of our company culture. We're a pretty tight knit group of people, we're close, I think 38, maybe close to 40 people. When I joined, we were 10 people and it was just me and one other marketing person. As I mentioned, a lot of that was to keep culture tight, but also, we try to prioritize what we need to do and not do too much more than that. One of our mission value statements is to prioritize happiness over growth. When you start adding too many people, sometimes you end up literally looking for work for them to do, and then you're managing all those people. Then the business becomes about managing people, which is a part of a brand, but more or less so than the product.Elish:We are definitely a product focused company and it's about letting the marketing stand on the quality of the product. What we've done to enable that is rely on creating a really good network of third parties. Our shipping is third party, our warehouses are third party. We have some in-house customer service, but we have a little bit of outsourced customer service as well. For marketing, we really rely both on my strategy and executional knowledge, but we amplify that with an external digital agency. What that allows us to do is remain really nimble. During the pandemic, we didn't have to lay off anybody. We didn't make any pay cuts. We've been profitable since day one because we haven't had to push scaling because of not having investors as well that say, "We need you to make this much profit in the next five years."Elish:That's been really stressful for sure, in some instances of hyper growth because we have been growing really quickly, but again, what it came down to, it was like, "What's important in this moment? Okay, we're launching this new product, let's put all eyes there, let's make the right content, get it in the right place." I think we're going through another little phase of growing pains where we now have a very large assortment of skews and we're feeling the pinch of trying to maintain the attention on them across the board and then also making sure that we're supporting our retail and wholesale accounts. Half our business is from places like BNH and REI and we're distributed around the world. They need tons of content as well. They need our help on making sure the brand is represented correctly.Elish:It's becoming a lot of work. We've been scaling on our design and creative side, but there's starting to be a pinch on the more technical stuff. We're trying to think through, does that mean a bigger agency? Do I need to start hiring more internal people? I think it's going to be a combination of the both. I think it's going to be a skeleton crew internally that is really good at handling or wearing a lot of different hats, but then managing some external help as well to make sure that it amplifies our abilities.Stephanie:Yeah. What's the best way to structure it when you're working with agencies to make sure that you can scale yourself? Like you said, you're one of the people who are... "here's the vision and go." How do you make sure that it scales in a way that is not totally going off course?Elish:Oh man. That's a really good question. And I can't honestly say I've figured it out. I'm really not sure. I got to be honest about that. I'm going through it right now, and I think... to be quite honest, I think I haven't been able to... there's only so many hours in a day [inaudible] that require attention and it's really hard to separate or to combine strategy, deep thinking and execution. You have to turn one off to do the other. I think that's been a hard lesson that I've learned over the last year and a half, which is I do need time to just sit and write and think while I'm not executing. I'm really thinking about making sure I separate those roles for sure.Stephanie:It's definitely a hard question and a good thing to figure out, but you have time, there's no rush.Elish:Yeah.Stephanie:What does new customer acquisition look like? How are you guys approaching finding new customers and maybe keeping your current ones?Elish:There's the classics, which we definitely continue to double down on, which is... it's funny PR is an age old thing, but it's still so important and making sure that you stay just in the conversation. For me, when I'm thinking about going for... we've been so getting into the gear reviews and top 10 lists, and I'll never trust the best 10 lists ever again after being in there initially, because it's not like-Stephanie:It's how much did you pay to get that spot.Elish:Oh, yeah. Or who do you know exactly. It's not like someone went looking for the best stuff and like, 'This is what I found." No, all that stuff was definitely put in there. But to me, it's about the conversations you're starting around your brand and industry as well. When it comes to our mobile product or trying to stir up the conversation of like, "What else do you do with your phone? How do you use it in your daily life? Is having just the skin on it that doesn't do anything useful?" Because we are using it elsewhere, in our car, on our desktop, we've made a function on our bike and how it works. Do you have to jus pound people with your product or can you talk to them about it and start the conversation?Elish:There's the whole... We started digital marketing in paper, Facebook, social media advertising, Instagram. TikTok obviously, Reddit, but man, that whole industry, I think, is going through an upheaval currently, obviously with the change in privacy data that Facebook and Google and everybody is facing, and is making everybody rethink about how they're stacking that in their marketing funnel. I think it's a good thing. I think people are starting to think about the intentions and nature of their message in their advertising again, as opposed to, "Oh, if we change this button to red instead of blue, that's going to..." what intention... is that excepted to drive conversion?Elish:I think people have been overthinking the data part for a really long time instead of trusting your marketing instincts/knowing that, or just not really paying attention to the marginal benefit of spending a week trying to figure out what color button needs to be... what else could you have done with that?Stephanie:What are you guys doing? Because, I mean, I think it's such a scary world for a lot of brands who have relied on that pixel tracking, and everything they've been used to, it feels you have to move quick, make decisions in an unknown world where you're like, "I don't really know how they should operate." How are you guys thinking about it moving forward?Elish:Well, you can still track the classics, which are engagement. Then layering in other strategies of making sure you're getting first party data: your email capture and the campaigns you're doing with that. Before we could track everything, we were still trusting things like how many people were seeing it impressions and the quality of someone's audience and so on, on an influencer campaign. But also again, being a part of the conversation in places like Reddit, TikTok and making sure that that is a constant stream of content as opposed to these big advertising things where people are just blind to them now. I don't remember the last ad... I definitely learn about people or a brand, and I'm like, "Oh, that's interesting," but it's pretty rare that I click, and we've seen that on Facebook's ROI and every number across the board has tanked over the last few years. You used to put an ad, it could have anything in it and you'd get a 10 X ROI. Now we struggle to get three.Stephanie:What channels and platforms are you trying out now? Because to me, TikTok sounds like the perfect area. I get so many photography tips on there. I don't know if you've seen all those videos.Elish:Absolutely.Stephanie:That seems like a perfect channel. If you can keep that content going though. But what are you guys betting on?Elish:Yeah. We're exploring TikTok. I don't know if we're betting big there, because our demographic is a little bit older. I do have a theory that there's a very active demographic in... we're in the 25 to 40 range. I think people 25 to 40 are still actually really active on TikTok. They're just not-Stephanie:I am. I'm flapped out in the middle. I'm on it.Elish:But they're consumers, they're not posters, they're not commenters, which is fine. I think that is going to be somewhere we'll probably spend a lot of energy. We're definitely doubling down on content pieces on YouTube and places again, where we can talk directly to the population. Email's still a really big thing in customizing that consumer journey on how we reach them on that. So when they reach our website, where are they seeing? Where are they looking? Where are we sending them? Those are big. Then I'm obviously looking at Reddit. Reddit has had a pretty big limelight over the last few months, just with the game stuff. But otherwise I'm open to suggestions. So send them my way.Stephanie:I mean, I haven't heard too many people talk about Reddit. Are you just thinking about going after Reddit influencers in a way who are talking about what kind of bags to use, or how are you thinking about that?Elish:Yeah, I think we're going to look at it from the social media manager perspective. Someone who's going to go in there and just start conversing. We do have... especially with the gear focused product line, people are like, "Oh, what do you use for your Canon camera? What do you use for your Nikon camera?" Then just inserting ourselves on an organic level there. I don't know about Reddit influencers yet, but certainly something to consider. But I want to keep that as organic as possible to start out withStephanie:Yeah. It always seems hard to scale those efforts when you want to go about it in an organic way, but then thinking, "Okay, one person can only comment and keep up with so many threads and then if they also have to do Facebook and Instagram and everywhere else, it seems hard unless you continually to hire more people."Elish:Yeah. The scaling part is hard. I'll be interested to see if there's ever a good agency that can figure out how to represent your brand Well.Stephanie:Let me know, because we have not found it and we've tried many. I keep trying and trying, I'm like, "One day we're going to find something perfect."Elish:Same.Stephanie:I also think there's something to the frictionless way of shopping on a lot of these platforms. I even think about TikTok. I'm the quiet consumer who's looking through all the stuff, enjoying it, but then I will go and open up a Chrome browser to find that product. I'm the worst kind of consumer. You have no attribution on me. You don't even know where I came from. But I think there's something there where because that platform still feels like there's a little bit of friction from that video. Sometimes it flips so quickly, you don't have time to click. Is there even something to click? It seems like there's a lot of room for growth around making it easy for the customer to buy.Elish:There's been a movement to do the specific app to app based experience. Allbirds did a really good job of it. I just downloaded the Nike app, just being like, "Oh, I need a new pair of shoes," and I saw on their website. I was on my phone and then they were like, "Get the Nike app." I downloaded it and I was... this at the airport, and I bought a pair of sneakers right there because I was like, "Those are cool because they..." I mean, this definitely works with someone with a much larger skew count, but they served me a product that they thought I would like. I don't know how they figured that out. But they figured it out somehow. Maybe they just have really good products. I was like, "That's cool." They had everything built in Apple Pay, all that stuff, made it super easy. It was kind of scary, it was one of those situations where I hit buy, and before I knew it, it was paid for and was shipping to... I was like, "Wait, did I mean to do that?" And I-Stephanie:"My finger just went there and it just happened, and now I have shoes coming."Elish:Exactly. I thought that was a really cool and something... We've done a lot of work on our mobile experience, but we have a lot of work to do. I think people have... most websites they go to have a big thing to figure out for the mobile experience.Stephanie:That's something I've thought about for a while now, because previously at SaaS I worked before, many people talked about going to an app free world, and apps were a thing of the past. I even noticed that in my own history, it's like, you get a phone early on, you get a billion apps, you run out of storage, you chill out a bit and you're like, "I don't need all these apps anymore. I don't want to try everything." Then storage gets easier. So then you're like, "Well, maybe I'll try a few more." But now I'm back in the stage where I'm like, "I'm good with just a couple of things. I don't want everything there." How do you see it? I mean, I think you mentioned Allbirds did this too. What do you see that future looking like and how should brands maybe try it out there?Elish:I think, to your point, we're trying to figure it out again. I liked that app experience for a couple of reasons, which was, when you become a fanatic or just really into a brand, you're okay having that because what Nike and Allbirds are also doing well is serving up really good content on those apps. I'm inclined to go into the Nike app because they've got something cool to send me, put me in, even if I'm not buying something, I'll go look and read about it. That's a big play. Earlier as the experiences on the other platforms. Shopping in feed on Instagram and stuff, which is becoming a much better utilized thing. I think we probably need to utilize a bit better as well.Elish:There's features in there, especially in influencer campaigns when you're able to link your account to other people's Instagram accounts so that they can tag your product feed. That's interesting to me and disseminating it in that way.Stephanie:Yeah, that's definitely an interesting world to think about. I also think if you bring in your tribe and a community and create an experience that you can't get elsewhere, then maybe I would open up the app. If it wasn't just product focused, like you said, if there's content there, if there's something that's going to draw me in and keep me engaged. But it does feel hard sometimes to keep me engaged on an app, unless I get that dopamine hit, open it up and get something new. That's a high bar to have, having something new every time.Elish:Definitely a high bar to have. Then I think Casper, I don't think they have an app, but I've been in the market for a mattress. Man, I sound like a real materialistic consumer these days, but-Stephanie:Probably get so many ads coming your way. They're going to hear you. They got the voice recognition and they're going to be [inaudible] you.Elish:I'm in the middle of trying to buy a mattress and they executed on the text game really well. We do text marketing and it works really well in getting people past the last decision point. They're like, "I don't know if I want this size or that size." I don't know if you've talked to a lot of people, but text is great. People are like, "I don't think people want to receive text messages." Surprise, surprise. They actually do. They don't care.Stephanie:If [inaudible] something they want. That's what I've heard, is texts can be great if you're not just pushing products all day. If it turns into a conversation and maybe giving them some kind of value, instead of just like, "10% off, 10% off, it's a sale happening." It needs to feel personal and give value.Elish:It does. But it's a balance. If you give them enough value and then when you need it, you can send that 10% off text. It still works and that's worked really swimmingly for us. But I think the stakes are the same, if not lower, maybe they're about the same of sending an email. Just like with anything, don't overdo any piece of marketing, you annoy people. But I don't think it's any less or more annoying than any other piece of marketing I get from people as long as it's not overdone. In Casper, if you go to their website, they just really did the text acquisition, the opt-in process really well. The 10% off if you sign up for the email and they figured out a good way to do it for text as well, "Oh, you want to get this coupon straight away?" Let us text you." I thought that was cool, a way of just activating someone very quickly.Stephanie:Yeah. Are there any other brands that you watch where you pulled some tricks from, and you're like, "I love watching Nike. I love watching Casper, and then actually trying that out within our own company?"Elish:Good question. I think I've listed the ones that I've noticed recently, and definitely Allbirds did a good job. I had a good post-purchase experience recently. I'll just give you the outline of what that was, where I needed to return something. Well, first of all, obviously, there's the way of tracking and making sure that you get in contact with what you bought and where it's coming and when it's coming. There's lots of good apps for that. We use one called Shipup. And then I needed to return something and, I'm forgetting the name of the service, but now they've set up places, you can just return something. Instead of shipping it back, you just drop off at the local location. It's usually a business. It's a win-win. You bring someone into your business, you can return it there. It was seamless. I remember in the store, the person... I think I was just in some random boutique dress store and I was returning a blender for Amazon.Stephanie:Oh, that's cool.Elish:I'm making those things up, but it was that sort of distinct, that sort of contrast of what I was doing. I remember then scanning the product and then I got a notification of my refund directly on my phone in that second. I was like, "That's awesome. Now I know when I buy from this person and I need to return, it's going to be seamless. I'm not going to worry about where my money is, where the product's going." It made me want to buy from them again. It was great.Stephanie:That's a good experience. I think that's such an important reminder too, about lifetime value of a customer. It's not always about those quick hits. Like you said, if I were to have an experience like that, I would buy many more things much more quickly, if I'm like, "Oh yeah, I can just go right next door and this boutique will take any of my returns for all my blenders that I buy."Elish:Yeah, exactly.Stephanie:That's awesome. What experimental things do you plan on doing over this next year or two that you're most excited about, but you don't know if it's going to work, or maybe that your team's even telling you like, "No, Elish, this is a bad idea."Elish:Really good question. I'd have to go into my notes. I ideate on this stuff for a while. But we tried some podcast stuff last year when money was a little bit more free flowing for us. We are a travel bag brand, so that's definitely taken a hit for us. And that was exciting at the time. We had a piece on Conan O'Brien show and I was like, "Oh, Brian said Peak Design. That was pretty cool." As far as I can tell, CPMs for podcasts are still relatively low compared to other things. I think that's great. I think there are some expansion in still are our email practices on how we're collecting emails and moving outside of that. What you mentioned just now, what we talked about, the being able to shop our product in social posts that aren't even our own, there are some technologies, video technologies out there where you're shopping in video when it's placed on someone else's website. I think that's really cool.Elish:Then partnering with our distributors more on how they're representing our brand and getting that more up-to-date message out quicker with them. Reddit, we mentioned. Forums.Stephanie:Well, I think it'll be interesting with all the pent up demand of people wanting to travel and get there.Elish:I hope so.Stephanie:It'll be fun to probably see a very different peak than maybe what you've seen over the past year or so, and you all just have to be ready for it, I guess.Elish:Yeah, exactly.Stephanie:Cool. All right. Well, let's jump over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I ask a question and you have a minute or less to answer.Elish:Okay.Stephanie:Are you read?Elish:I'm ready.Stephanie:You're adjusting your seat like, "Ooh, I got to get ready for this."Elish:Yeah. Ready.Stephanie:All right. First up, a few people know that I like to...Elish:Few people know that I like to play poker.Stephanie:Are you good at it?Elish:I was a professional for a year. Right after grad school, I was looking for a job and I played live poker for a year.Stephanie:Awesome. What one thing do you not understand that you wish you did?Elish:Oh, man. So many things. Probably... sorry, I have a minute or less. Is that right?Stephanie:Yeah.Elish:Give me a bell if I... Just topic of the times right now is definitely the Bitcoin market and different types and where, give me a glass ball of where that's going because I want in. Every time I think I've figured it out, I learn something new and I don't. Yeah, I'd love to understand the future of the economics of how that's going to work.Stephanie:If you were in the Austin area, I would tell you to come to our little crypto dinner that we do, where we go deep into futures and investing in that. It's a very interesting space. It's around here.Elish:Okay. I'll come visit it sometime, for sure.Stephanie:Yeah, that sounds good. A time when I made a powerful choice was when what?Elish:Oh man. I've quit a lot of jobs and taking that chance on myself. I did that when my last corporate job, if you will, I worked for American Express and I said, "I'm just going to go figure it out," and I've never looked back. I know that's a common story, especially in our worlds, but that was the most freeing choice I've ever made, is just I will never work for a large corporation where I can't be in control of my destiny.Stephanie:I love that and I agree. I think it's still always a good reminder though, because it's easy to get pulled in. A good reminder to be able to have that freedom to do what you want. If you were to have a podcast, what would it be about and who would your first guest be?Elish:I think it would be something about just the hilarity of the world, how it intersects... just how we all take ourselves so seriously, but then trying to basically pull back the layers of the onion on that, and then looking at how it's affected us as people when it comes to our depression, our nutrition, and how we live our lives. It's basically all of the loose things that you could think about for the millennial generation and make fun of it, but in a serious enough way to be like, "It's going to be okay, man." I think we all get so caught up in like, "How am I changing the world? What are we doing?" I think the message I'd like to tell most people is like, "This is..." the message of the movie Soul. Did you see Soul?Stephanie:Yeah. So good.Elish:It's like, "Oh man, I'm trying to do something big." "Actually you're doing the big thing. This is it."Stephanie:I like that. Who would your guests be then?Elish:I would get a combination of some... I think, going back to Conan O'Brien, I love Conan. He is one of the funniest people out there. I think he went through this crazy arc where he was supposed to take Jay Leno's spot and then they took it away from him. He got pretty angry about it and now he's still doing his own thing, and I'd love to talk to him about... people have talked to him about that, but where he thought he saw yourself going and now where he is now and if he's okay with it, and just what perspective that it gives him.Stephanie:Yeah. Well, I love that. That's a good one. All right. And the last one, what one thing will have the biggest impact on ecommerce in the next year?Elish:The climate and how we think about people and consumption. Fast fashion is going out of fashion. Absolutely. I hope anyway. But I actually don't know that because I don't know if I'm just in a bubble or I'm just in a bubble of people that care.Stephanie:No, I think I agree with that. There's such a big shift now to sustainability and how companies are creating things and paying their employees and all that. Yeah, I agree. That was a good forcing function this past year, too, to think differently about all that. Elish, it's been such a fun interview. Thanks for coming on the show. Where can people find out more about you and Peak Design.Elish:Peakdesign.com. I just had a contact button up, but you can go to elishpatel.com and email me if you have any questions.Stephanie:Amazing. Well, thanks so much for joining us. It's been a blast.Elish:Thank you.
Most people would think that a company in the Fortune 500 wouldn’t have much work to do to stay on top and compete against scrappy start-ups. But in the world of ecommerce, companies large, small, and in between are all on somewhat level playing fields, and oftentimes, the bigger, legacy companies are running behind the younger brands. For Stanley Black & Decker, this was the case when it came to the company’s ecommerce business, which is why SBD announced a goal to double its online sales in order to re-establish itself as a leader in all areas. Katherine Bahamonde Monasebian is the President and GM North America Commerce for Stanley Black & Decker, and she has been leading that charge since joining the company in early 2020. Katherine entered the world of retail, having cut her teeth at places such as Lululemon, Barney’s, and Juicy Couture, but she’s always loved a challenge, and going from the hardest-hit industry in the pandemic (apparel) to the top-performing vertical (DIY and home improvement goods), was one of the biggest career shifts she had ever made. On this episode of Up Next in Commerce, Katherine explains why she made the decision to role up her sleeves and join Stanley Black & Decker, and how she has grabbed the company’s lofty ecommerce goals by the horns and got to work. Katherine discusses what it takes for a large company to experiment with new platforms, and how she measures ROI and attribution to assess risk, and she looks into the crystal ball to predict how ecommerce will continue to change, especially in terms of B2B innovations. Plus, we have a really meaningful conversation about how women are being brought into the fold at Stanley Black & Decker and elsewhere, and she explains why it’s so important for a company to practice what it preaches when it comes to its values. Enjoy this episode!Main Takeaways:Higher Stakes: Larger companies have a lot to lose if they make a misstep, and as such, they have to be a bit more cautious with the risks they take. But they still have to break out of their shells and explore all of the options, trends, and channels that are dominating the ecommerce space. To toe that line, looking at the data and the ROI of any experiment is the best way forward.Knocking on the Door: Since early 2020, the ecommerce industry has seen massive growth and acceleration, but the jury is still out on how much of the shift online will stick. Most experts believe that at the very least, digital platforms will be the “front door” for customers to discover and learn about brands and products.Trickle Down: Everything has to start at the top — from company values to operations to business goals and expectations, the leaders of the organization have to set the tone. If they do, and they practice what they preach when it comes to things like gender parity, diversity and inclusion, KPIs, work expectations, etc., talented people will be more inclined to join your organization, and they are more likely to stay for a long time as well.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey there, and welcome back to Up Next In Commerce. This is your host, Stephanie Postles, CEO at Mission.org. Today on the show, we have Katherine Bahamonde Monasebian, the President and GM of North America Commerce at Stanley Black & Decker. Katherine, welcome to the show.Katherine:Thanks. Thanks for having me.Stephanie:I'm so excited to have you on. I was looking through your background, like I always do, and you've worked at some really great places. You've worked at Barneys, Juicy Couture, lululemon, ALEX AND ANI. I was going through the list and I was like, "Well, she is a VIP in this industry." I want to hear how you kind of got into those companies and what your journey in ecommerce looked like before getting to Stanley Black & Decker.Katherine:Yeah, sure. I'm always interested when I hear interview candidates and I always knew I wanted to have this career. For me, it was I really didn't sort of earlier on have much exposure really to the broader world or my place in it or even grasp what was possible really career-wise. After college, I actually started off in investment banking. It seemed like a good thing to do, and then that experience actually ended up giving me a great business foundation, but later in my career, I transitioned to ecommerce and worked in a wide range of mostly retail companies, both early stage and mature at sort of different times in their life cycle.Katherine:What I ended up loving about ecommerce is just that it really touches everything, yet really you have to think about the end-to-end experience, you have to be close to technology, you're driven by numbers. You have to execute and it's fast-paced and not the same job twice. I wouldn't give it up for the world. I found my calling, for sure.Stephanie:Yeah, I love that. How did you choose the companies that you worked for?Katherine:Yeah, so I've always been drawn to kind of change roles, so during inflection points in the company's sort of journey. Whether it was an early-stage startup or whether it was a company trying to transform, I was always drawn to brands with the customer at the center looking to grow across sort of new business models and such. It wasn't necessarily a particular affinity to a particular category. I did spend a lot of time in apparel, but it was more about the specific opportunity in terms of scope and ability to impact.Stephanie:Got it. Did you ever get to a company and you reflect back and you're like, "That was one of the most challenging times of like working and trying to either start ecommerce or do something new? Do any of these companies come to mind where you're like, "That was super challenging and hard and the best experience ever?"Katherine:Well, honestly, I would say they all were, whether it was sort of more in a build capacity or more of a turnaround. I think that the last 10 years, a lot has been written about the retail apocalypse, which was like 10 years in the making, but I was sort of living through just these really dramatic shifts in consumer behavior and values. Then, expectations just really rising and companies trying to meet these expectations, which was just really rough structurally. I think all of them were challenging in their own right.Stephanie:Yeah. That's awesome. All right, so Stanley Black & Decker, they are a Fortune 500. I think they're like number 250, 252, something around there, so big company, a lot of employees. They, of course, make industrial tools. You joined during the pandemic, right? Like in 2020, you joined. I want to hear a bit about what convinced you to join a company that also is, to me when I hear about them, like mostly male-dominated. Coming from apparel and a different kind of background, what was that driving force to join Stanley Black & Decker?Katherine:Yeah, so what drew me to the company was really just these incredible brands, so for those who don't know, like DeWalt, Craftsman, Black & Decker, Stanley, Lenox. I'm sure I'm missing some, but just this company that's just this powerhouse, number one in the industry. Been around for almost 200 years, which means you have to innovate to be around that long, global, 60 countries.Katherine:All of that, sort of the benefits of a very well-run, profitable kind of performance-driven organization, but also at the same time, and I didn't appreciate it as much outside-in at the beginning, but really looking to transform and at this scale. A lot of the skills that I picked up through retail, the hitting from consumers from every angle, sort of managing, again, the technology and the data and the marketing and sort of the consumerization that took place in retailers being able to apply that skill set to manufacturers who are now at the tip of the spear I thought was just really exciting for me.Katherine:One other thing that I think we're very proud of is just the company's focus on purpose and just diversity and sustainability and all of the things that you can put a list on the wall that are really embedded in the DNA and the culture of the company made it just really attractive. You mentioned the male-dominated and you're right, manufacturing and tools specifically are like being a pilot or being in technology. They're just not... The typical female representation isn't as high as other industries, but coming as a woman in a senior level from a different industry and I'd really not had any challenges. The tone is really set at the top and the company's consistently ranked as one of the best employers for women.Stephanie:Wow. That's awesome. Did you kind of have a handy background before you entered there? I heard all of the names that you were saying and I'm like, "I feel like I might know what that tool is," but I'm just imagining my Dad right now with a tool belt. I'm like, "I can't really figure out which one that is. Did you have a background in that? Or was it completely new coming from like the apparel scene before this?Katherine:No, it was actually completely new and to add to that, I live in the middle of Manhattan, so I don't really have a yard. The elves kind of... When something's broken, you call and the elves kind of fix it-Stephanie:Yeah [crosstalk]-Katherine:... so it was a steep learning curve, for sure, in terms of product, but having one two or three in every category that we're in, so that helps. Just being number one helps, but it was from a product perspective quite a leap from apparel.Stephanie:Yep. Yeah, I think my three-year-old knows more names of tools that I do and he'll correct me. Anything with trucks, he's like, "That one is not an excavator, Mom." I'm like, "Okay. All right, that's like some kind of ratchet. All right, thanks, Raisin." What did your first 90 days look like at the company? Did you go in with a plan? Were you like, "I've done this before", and then it went as planned? How did you think about when you first joined?Katherine:Well, I mean, the skill sets, as I mentioned, are highly, highly transferable, but my role was new to the organization and I definitely took the time my first few months to really define my scope and really understand our operations, dive into our business. Our goal, which we said publicly, is to more than double our online sales in just a couple of years, so it took a lot of sort of diving deep into our commercial accounts, marketplaces, just looking at our social and customer touchpoints, new business models, B2B transactions and such. It was a little bit of a sort of listen and learn at the beginning, and also just the way to go to market is very different from a retailer where you manage everything.Katherine:In my prior roles, I had technology, I had marketing, merchandise, I had the entire piece of the business, going from that to highly global and matrixed organization. Just a very different way of operating. The same sort of end experience, the customer at the core, and the same objectives, but a very different way of execution.Stephanie:Yeah, and I was looking through one of you guys' investor presentations where it's talking about the model for like, "We're focusing on B2B, B2C, and like C2C, and we're thinking about all of those as being where we want to head over this next year." How do you put on those different hats? How do you meet all of those customers where they want to buy it?Katherine:Yeah. You know, prioritization is a big one in terms of, how do we look at sort of all of the different potential value drivers? How do we prioritize against the high [inaudible] ones? We are definitely looking at basically doubling down with our retail partners and then also exploring kind of new business models, but there's a lot of like foundational work, which isn't the most glamorous or strategic. We're doing a lot of just capability building to enable the scale that we want to get to.Katherine:This is like our studio and our content, our analytics and reporting, demand planning, customer service. We just are putting in an entirely new martech stack, so there's a lot of... It's beyond just the stated intention. We're actively investing against that foundation that will then enable all of those different business models that you rattled off, B2B, B2C over the course of the next few years.Stephanie:Yep. What fell... Around all of the new things that you're implementing, it seems like all of that would be new, kind of like your role was new in this company. They didn't really have a big focus on this beforehand. Which parts do you think are going to be... I'm sure they're all very important, but which ones are you most excited about and you're like betting big on right now? You're like, "This is going to change the way the whole company operates," or, "This is going to see the biggest ROI when it comes to online sales and whatever it may be."Katherine:Well, we have, again, as I mentioned, a very broad scope that ranges from looking at things like content and dropship to some, again, social selling and distribution and, again, doubling down with our key partnerships in North America, which are exceptionally strong. The one that I'm very passionate about is content and I know that, again, it's sort of like just to play, but for us it's very important in that customers and the end consumer now looking to manufacturers just to really understand the product.Katherine:So much of the role of sort of digital influence with now post-COVID, it's estimated to be even higher the number of transactions that begin on digital channels, regardless of where the actual transactions is made. We have a very big investment in content. This includes sort of what samples we shoot off in the milestone process to how we deliver that content to all of our different distribution channels to more enhanced and experiential content. It's a very big undertaking for the last I would say five months, and we're expecting to start to see results in Q3 of this year.Stephanie:Oh, cool. We've had a lot of brands on here talk about content. We've got brands who are making their own branded content, like working on Netflix series. We've got brands that are building their entire content platforms, kind of like a Netflix, but they're using AI and ML and it's being trained and all of that. It feels like it's just kind of like Netflix. Other people just focusing on TikTok or Instagram. What do you think is going to be most impactful? You said you were going to start seeing results. What kind of content are you guys really leaning into? Who is it going after? Who is it targeting right now?Katherine:Our customer base spans professionals, the pros, to tradespeople to DIY makers, so we have diversity in terms of who that end user is, but as I mentioned, they're all looking for inspiration, education, product information, pre- and post-customer care. We are starting with the basics or sort of what our ecommerce core/ecommerce content is. We have a lot of A/B testing happening right now to really understand the true return. With our scale, it's less intuitive than you're being at a more early-stage company where you kind of have line of sight to the full business. We really have to look across all of our different distribution channels globally to really understand what the right investment is from sort of a sales lift perspective.Katherine:We are looking at enhanced content, which is more along the lines of what you were saying, sort of borrowing from some of the learnings we have in global markets, which are more advanced than we are progressive in terms of mobile and social and such. We're really looking to kind of disrupt ourselves and to take a fresh look at how we represent our brands online and how we go to market.Stephanie:Yeah. It seems like there could be such a big area for impact around partnering with all of the DIY kind of people, the Chip and Joanna Gaines, like all of the influencers. I mean, there's this one woman on TikTok that I watch where she'll redo someone's entire bedroom, and I watch her and I'm like, "What exactly were you using to get that? Just tell me exactly what it is and I'll just get that and I'll know it'll work." It seems like there is a lot of opportunities popping up now that are outside just the traditional TV ads, which still apparently work, at least from what I've heard on here. There's a lot of little micro opportunities that could probably have a lot of lift and reach people that maybe you wouldn't have otherwise.Katherine:Absolutely.Stephanie:Are you open to channels like TikTok and things like that? Or are you still kind of staying more traditional like Facebook or even like Super Bowl commercials, which apparently also have big lift?Katherine:The status quo, everything is up for debate. I think one thing that being in a large global, as you said, Fortune 250 company, the stakes are high. There's a lot to lose with sort of our appetite for risk, so it's a constant conversation that we're having. I'm sure other CPGs have the same. I'm just thinking about tolerance for risk like, if you think about it, manufacturing, I have a hundred percent of the information and I have kind of longer lead times and I am very efficient. That's like the opposite of what you're suggesting, which is, "Let's test something out. Let's see if it works, and if it doesn't, then we move to something else."Katherine:Let's work in... The return isn't necessarily there from an ROI perspective up front because we're basically understanding that maybe it's a data play. Maybe it's okay if it fails. All of these things are very, very intuitive for companies that are early stage or that have a different sort of origin and history or are new. I think when you're asking like, are we open to these channels? We're open definitely to the conversation and we are speaking internally and really getting a sense of what our appetite is for risk and how we mitigate against a risk and how we think about investments and how we think about speed as our business model shifts.Stephanie:Yeah, yeah. That's a whole different model and you've got so many eyes kind of watching it like, "How did that pay off? How did it pay off? Let me hear the ROI versus this marketing campaign?" Very different than like a new B2C company that can just move quick and break things and say, "Sorry, later," and no one will probably even-Katherine:Exactly.Stephanie:... notice. Well, the one thing that seems really tricky, too, with a company of Black & Decker's size is attribution around these campaigns. What are some good best practices when trying to measure the ROI of marketing efforts or ecommerce efforts or any of that?Katherine:Attribution is very top of mind. We have a big effort around data and insights, which then goes into AI and predictive analytics, so a very robust effort around data. We've recently, as I mentioned, invested around our martech backbone. This is a CDP, a PIM and DAM, looking at our ESP in our chat and social listening and all of those marketing automation that will help us get smarter about what the impact of our different efforts is. I think we're early in our journey and it is tricky.Katherine:Unlike retailers that you sort of have a lot of the data firsthand, there is a lot of our sales come through our retail partners, so building those relationships with the end user and really leveraging the POS data that we do get is just a little bit of a different exercise than it is in kind of more direct businesses. Attribution is something that we're very keen on understanding, and the goal is to be extremely data-driven and really, again, understand the value, even if it's not a pure revenue so we can prioritize our efforts.Stephanie:COVID obviously made a lot of people want to come home and work on things. Home improvement was spiking. Anything DIY was spiking. What kind of quick changes did you have to make? I'm assuming maybe you came in and you're like, "All right, here's kind of... I'm going to observe. I'm going to see the org. I'm going to talk to the people and then we're going to do this." Then, maybe have to be like, "And pivot again. Everything's up and to the right. Everyone wants to be home right now and fixing their house." What kind of quick changes were you able to possibly make around them? Maybe increase demand?Katherine:Yeah. I mean, you've seen the charts of like the biggest winners and losers in COVID. I think-Stephanie:Yeah.Katherine:... apparel was at the bottom and I think DIY was at the top, so definitely a huge boom and one that I don't think anyone could have really anticipated. We've disclosed publicly like ecom presented 18% of our business last year and went up five points just in that year-Stephanie:Wow, yeah [crosstalk]-Katherine:... so [crosstalk]-Stephanie:... I think I saw 8% back in 2019 was like the share, so that's awesome. Congrats.Katherine:Yeah. Yes, so to your point, it's about meeting that demand, so there's a lot of creative things when you have... With performance market, there's a lot of things you have to do to pivot, so to adjust to the commercial realities, but I think like more important than just meeting the demand, I think what COVID did for us was just like handed us permission to double down, so [crosstalk] an incredibly big base.Katherine:We now have set out to double our business within the next few years and we don't just want to take share. We want to grow the category, and because we are number one globally by a three-times factor in terms of tools and storage, we're in this phenomenal position to really seize the opportunity. We're well positioned. I think it's been shown by companies that act swiftly after a crisis like end up reaping the rewards, so we're not retrenching. We are definitely doubling down. It's one of the biggest commitments and priorities of the company.Stephanie:Yeah, and what about forecasting? I could imagine a lot of people get really excited about DIY. I even think about some of the things that I got and then I kind of was like, "Okay, this seems a little hard." Pinterest fails just running through my mind of like, "I probably shouldn't try this myself." How do you think about forecasting at a time when you have seen all of this really crazy increased demand? Everyone wants to do it now. Are you kind of like going to keep that trend going? Or do you have a point where you're kind of pulling back a bit of like, "Okay, things might normalize a bit?" Or, "We need to think of other ways to increase the lifetime value, reengage these people, bring them in in a different way? How are you thinking about the next year or two?Katherine:You know, I get asked that a lot. What is the future? How much of this is sort of permanent? What's going to stick and what's going to not? When do you kind of shift strategies to exactly along the lines that you're saying to more of inner retention, engagement, and loyalty and such? I wish I had a crystal ball because I do think I'm personally not going to be lining up for Black Friday deals ever again and I'll probably stay in yoga pants, but I personally believe that some of the changes that have been like in ecom, not just our category, but more broadly are really signaling an entirely new phase of growth. I really don't things will ever be the same even after mass vaccination.Katherine:I think we've very bullish internally, that while there may be some shifts like in terms of what we call ecommerce that's kind of hybrid selling. We've seen the curbside pickup and the focus in all of the payment. All of the innovation that's happened at the home centers, we've seen what it's prompted, but I really don't think that we're going to see... I think we're going to see some permanent shifts in terms of digital being that new front door for our category. We continue to remain very bullish.Stephanie:Yeah, yeah. I can see the retailers having to also think about especially around home improvement shifting their mindset. The other day, I was talking with someone who said that essentially contractors were doing buy online pickup on the curb similar to that and that I think it was like a Home Depot or something, all of their employees were trying to get stuff for these contractors where they were on the floor for two hours trying to gather this pretty large contractor's order. It was like, "Well, why would I ever go in or even send one of my employees in there to do that when I can just have the retailers working for me?"Stephanie:We've had some strong opinions both ways around like that's still going to say versus we had on [inaudible] which is like a big HVAC B2B-type company. She was essentially saying that she didn't see big home improvement stores needing to have as much inventory and warehouse anymore and kind of being more like guide shop placing orders online, like, "Why do you need to go in there and find the exact screws or plumbing pieces that you need? It should all just be ready when you get there." How do you view the world of retail when it comes to that?Katherine:When it comes to like B2B, which is that's what that is, like the pro and contractors and such, I think that it's like 70% of the workforce is going to be Millennial and Gen Z and these people that are making the purchasing decisions, they're not going to do it old ways. They want the experiences that they have in their personal life when they get things quick and convenient and have price transparency and can do it 24... All of the things that sort of B2C has sort of led the way.Katherine:I think the next frontier is B2B in that way, and so I think that maybe it's not that specifically, but I do think that retailers will have to continue to reinvent and meet these very difficult expectations. I think that what we've not kind of put in a box, like curbside versus... That is kind of going to get very, very, very blurry, and even the attribution of what we call ecommerce is getting very blurry, which makes determining investment return very, very difficult when you think about things like content, you know?Stephanie:Yeah.Katherine:It's not really the return on the ecom transaction, so I actually think that there will be continued kind of shifts in expectations and that a lot of this behavior will take on a form that we can't even envision now. I think the next five years are going to bring unprecedented change.Stephanie:Yeah. I always continue to think about the role of curation with these especially huge stores, like the Loweses, the Home Depots of I want to go in there and have an experience and I want to get something there that I can't get online. I can get online and order whatever tools my TikTok video told me to get, but what I can't get is if I go in there and there is like certain reviews or little maybe like scan this code and you can see a certain video that you wouldn't have seen otherwise, or just thinking of ways to keep me engaged and walk away with some kind of experience or having some kind of curation in retail that I couldn't get online.Stephanie:I think, why even go to the Pottery Barns or the West Elms? Even sometimes T.J. Maxxes because certain ones have certain kinds of curation. I think that could be big thing going forward, but feels really hard to crack that. I even think about the Amazon Bookstores when they had the little reviews from the individual employees that had picked the review off of Amazon's website. That to me was very engaging seeing which ones they picked, but then thinking about how to scale that and stay on top of it feels hard.Katherine:Yeah. You need something different, which is why I think there's going to be a lot more innovation, or there's going to be services. What is the new mall? You know?Stephanie:Yeah.Katherine:Is it a place you go with your family to feel like [inaudible] fun from the day? You see like precedents in China and other areas of what shopping really is, but I think what makes it hard, back to your comment about attribution, is now the consideration and the purchase are not linked, so it makes it even harder because you've got all of your inspiration and everything online, and then you're going in store not to sort of consider and browse and be hustled. You're going in with more intentionality potentially, so it's created these very strange journeys that are just, again, really hard to organize around structurally.Stephanie:Yeah. Oh, that's an interesting way to put it that your inspiration of when you find something is maybe not linked to when you're in the [crosstalk] store. I think about that all of the time, even with recipes and things. It's like I go in there and I'm like, "Oh yeah, I'm going to make this one Thai thing," and I get in there and I'm like, "What am I here for again? Where do I find my tab where my recipe was?"Stephanie:It's how do you keep that person engaged all of the way through to really push them past the finish line and not be like me where I'm like, "Oh, tomatoes. I need tomatoes. That's not part of my recipe, but I just am all the way over in a different aisle and I didn't come here for that. Yesterday, I walked out and I didn't have any of the stuff. I'm like, "This needs to be better, but I don't know how to improve on this."Katherine:Absolutely.Stephanie:It could be anything, though. The one thing I want to kind of circle back to, too, that I didn't touch on enough, but I was just thinking about the female engagement of the workforce, something that is so important, especially around certain fields that maybe are male-dominated. How do you think about bringing in great talent? How do you recruit great people? How do you encourage people to step up? Oftentimes, females... I think I've read a stat when I was back at Google where they said that females won't apply to a job unless they're like 90% qualified [crosstalk] where men will apply when they're like 60% qualified or something, so [crosstalk]-Katherine:Yeah, I know. I've driven past retail. I know retail-Stephanie:Yeah-Katherine:... the [crosstalk].Stephanie:... yeah, yeah, exactly. Like, "I think I've heard of that store before. Apply." How do you think about encouraging badass females to apply and work for you all and be the top place to work? I think you said that you guys are one of the top places to work for women. How do you even go about creating that culture?Katherine:Yeah. You know, this is one that really hits me hard just on the personal level just because I think everyone knows at this point the impact of the pandemic on women and that they could take a long time to get out of this and over like 2 million women just left their jobs.Stephanie:Yeah.Katherine:I think that it's very important half of the talent pool are women. We need those voices in that seat at the table and I really do think women might change the dynamic of Corporate America and was essentially designed pre-technology. When you think about when corporate even offices and sort of structures, patterns of interaction were designed. It was just a completely different point in time, so I think kind of blowing that up and kind of thinking with a fresh sheet of paper is one thing. We're taking a hard look at sort of the future of work and the office and that helps with attracting women who sometimes can't reload their family in order to take a GM role of a country or such.Katherine:I think that for attracting incredible talent, we have had a big effort and I think that the remote work has helped. We've now had access to just incredible talent. I think my team is in 15 states and one Canadian province, so time zones is a little difficult and there are some challenges with building culture and bringing in more junior people and getting them acclimated. There are some challenges, but I think that's a big piece of it. I think the tone just has to be set at the top. I don't know that you can like dictate a culture and you kind of have to live it. The fact that our leadership team has made it very, very clear unapologetically that we stand for nothing other than gender parity, than social justice. We had empathy principles.Katherine:I told my husband I thought it as the most... I told him, "You've got to be kidding. This is incredible work-life principles that the most senior leaders had made like very public pledges to really respect the folks who are bearing the brunt of the pandemic in many senses and so we don't lose that talent." I figure there are a lot of different sort of angles that we're pursuing as a company from flexibility to return to work after two years off to a lot of more formal programs, but I'm not sure that you can... I think a lot of it is just sort of cultural and the tone being set and the overcommunication about how the values that, I guess, we espouse as a company.Stephanie:Yeah, I love that. I think also, like you said earlier, empathy is such a big thing because you can have messages from the top about what's okay and flexibility and all of that, but a lot of times, it actually depends on your coworkers. If I were to say, "Hey," just like right now, "All three kids of mine are sick right now, all three of my kids are sick. I can't come in. What do you feel from them? How do you encourage empathy among all of your employees who want to lift you up and support you instead of being like, "Oh, Steph's kids are sick again, this is like the third time in a month?" Which it may be, you never know, and figuring out how to develop that among your entire team seems like a much more-Katherine:Yeah, and I think-Stephanie:... grassroots effort.Katherine:... what helps is the male ally, so we have something that we really want is to lead loudly. I historically, I have no problems balancing my personal life. "I just have a commitment. I can't make it. I have a conflict, but now I don't." I make an effort to say, "I have to take my daughter to the doctor," and that's okay. It's also like setting the example that your life is balanced with a lot of other commitments and we want you to be a whole person and that our job as leaders is to stop asking women to change, is to let us change make best tap into the diversity of thought and sort of life commitments.Katherine:I think that unless we figure this out, I fundamentally think you can't legislate to get out of the wage gap. You can't have policy... You really need to make real, meaningful changes within the place that we spend all of our time that gives us meaning to our lives. They've shown how important work is to identity and such and really create the space for true belonging.Stephanie:Yeah, yeah. I think also the best companies will be the ones who think long term around that. That's why I always look back at my time at Google and respect the teams that I worked for so much because I remember I was in at the Finance Group for Maps and I was switching over to like a PM type of role for Augmented Reality and Streetview. I was eight months pregnant when they were recruiting me and I was like, "Do you see this? I will only have a matter of, I mean, weeks, two weeks maybe to work with you guys. I'm really interested."Stephanie:They were trying to pull me over to their team, but I'm like, "But I'm only going to be here two weeks," and then we have a very good maternity policy and you get up maybe a couple of weeks off beforehand, is this okay?" They're like, "Yeah, of course it is. We want you long term. You being gone, the company will still run, things will be fine, but we're excited when you get back here and we want you to come back when you're ready and your spot will be here." I just remember being like-Katherine:Incredible.Stephanie:... "Whoa, like that's the kind of [inaudible] long-term thinking." It's not around like, "Oh, it's going to be hard for a couple of months." They give none of that. It's like, "Of course, everything will be fine, but we'll be here when you're ready to come back," which I respected [crosstalk]-Katherine:I do think those are the companies that will win.Stephanie:Yeah.Katherine:Employees will feel like they're a part of something. They'll be more engaged. I don't just think like it's fair and it's the right thing to do. It is a hundred percent of business advantage.Stephanie:Yeah, yeah. I agree. Love that. All right. Well, let's move it over to the lightning round. The lightning round's brought to you by Salesforce Commerce Cloud, our amazing sponsors. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Katherine?Katherine:Oh, the pressure. Yes.Stephanie:[inaudible]. All right. What's one thing you don't understand today that you wish you did?Katherine:Blockchain.Stephanie:Good one. I mean, yeah, so many opportunities there, I think anyways, but-Katherine:Yeah, and again, I understand it at like at a high level, but what are the practical applications in the short term? Same thing with 5G. I also throw that in there.Stephanie:Yeah, yeah. I don't understand 5G. I got a Blockchain [crosstalk] yeah [crosstalk]-Katherine:You're not like a [inaudible].Stephanie:No. I'll let you know. I'll be like, "Here's a TLVR," and make it short. If you had a podcast, what would it be about and who would your first guest be?Katherine:My goodness. It would be about just the topics of the day and I think my first guest would be Dolly Parton. The reason is is that here she was, she had like nothing, and then she became an icon. What propels someone to really... What kind of drive does it take to really leave her very, very humble origins and then sort of build an empire and really have this worldview that she has? I think just really picking the brains of people who have done incredible things.Stephanie:That sounds amazing. What's the nicest thing anyone's ever done for you? It can be life or work.Katherine:Life or work? I would say it would probably be something with... I would say my daughter. I have two daughters and I would say for... I think it was my birthday or Mother's Day, they made Mom Appreciation Day, so the whole day was devoted to me and I got my favorite breakfast. I got to do things that were really what she wanted to do, but that were under the guise of what I wanted to do. She's only four, but it was just very special that she kind of thought of this holiday that would be kind of in my honor.Stephanie:Oh, that's cute because they were getting ice cream. "Then, we're going to have candy, and then we're going to get pancakes [crosstalk] with the syrup [crosstalk]-Katherine:Exactly what I'm [crosstalk]-Stephanie:... "it's your day, Mom." That's so cute. What resources do you check in with each day or week to kind of stay on top of all of the ecommerce trends? What brands do you maybe watch to also kind of stay on top of it?Katherine:Yeah, so it's funny. I always ask people that because there's just so much content out there and I think the curation is the most difficult. I read The New York Times and I listen to podcasts. I like Pivot with Galloway and Kara Swisher. I live The Jason Scott Show. I mostly look to earlier stage brands and companies sort of for inspiration and innovation. I'm not sure what I think about the era of big retail and such, but I think that a lot of what the more progressive pure plays are doing can lend itself to the companies that are at a bigger scale. That's who I look to for more inspiration.Stephanie:Yep. Not bad. The last one, what one thing will have the biggest impact on ecommerce in the next year?Katherine:Okay, so what I think will have the biggest impact in the next year or so is on ecom is just the continued blurring of the lines with score and web. We've seen the proliferation of all of these delivery models. We've seen the impact of social commerce. I just think there's going to be a lot more. I think in the far future, there'll be more off-the-screen IoT. Voice will become more prevalent, all of those kind of... AI, AR, VR, all of that, but I think in the immediate term, we're just going to continue to see sort of these models blurring and the distinction between what is ecommerce and what is sort of brick and mortar continue to become more or less relevant.Stephanie:Yep. Yeah, so basically things start to kind of get bundled together a bit more. Right now, it feels like there's bunch of like tentacles everywhere and you have to keep track of everything, which is why we named the show Commerce and not Up Next In Ecommerce.Katherine:That's why my title is Commerce.Stephanie:Yeah, yep. Oh, I love it. That's-Katherine:Yeah [crosstalk] very progressive, though we're thinking that [crosstalk]-Stephanie:Very forward-thinking. We had our crystal ball. We're ahead of the game. Well, Katherine, this interview has been so fun. It's been great hearing about what you guys are up to at Stanley Black & Decker and all of the cool work that you're doing. Where can people find out more about you and the family Black & Decker and maybe even apply for you team? If I wasn't here, I would. It sounds epic.Katherine:Oh my goodness. Yeah, everyone should want to be a part of it. We're doing some amazing things together. You can reach me on LinkedIn and you can learn more about the company, stanleyblackanddecker.com, but thank you again for the opportunity. This is a really fun conversation.Stephanie:Yeah, thanks. It definitely was. I'll have to have you back for round two in the future. It'd be fun.Katherine:Absolutely. Will do.Stephanie:Thanks, Katherine.Katherine:Thanks.
Let’s be real, talking about sex makes people uncomfortable. But it shouldn’t! And that’s one of the driving principles behind Maude, a modern sexual wellness brand that is disrupting a taboo industry and making sexual health more a part of the overall health and wellness conversation. On this episode of Up Next in Commerce, I chatted with the founder of Maude, Éva Goicochea about how she built her company with a combination of excellent content, a growing and vibrant community, and a go-to-market strategy with patience and empathy top-of-mind. Éva also gave us some insight into the lessons she’s learned from bringing Maude into the retail market, and how she goes about assessing customer acquisition and community engagement. Enjoy this episode!Main Takeaways:Getting To Market: Ideate quickly, go to market strategically. Get to know who your customers are, what they want, and what problems they need solved before pushing a product to market. Not only do you need to take into account what your customers want, you also need to consider the associated logistics and cost that product will have to your business. You have to decide if your company is the one that should be creating it and whether the market size is big enough to jump through whatever hoops there are to actually bring that product to life.Content is King: Obviously, businesses want to sell goods on their websites. But it may actually be a better strategy to build a site that is less transactional and more content-driven and educational. In doing so, you can attract a casual audience, who are more likely to turn into buyers when they are already on your site.Bidding Wars: When wholesaling or working with retailers, a unique problem arises if those retailers try to outbid your brand for keywords and search terms in order to win more customers. Whether or not to fight to win those bidding wars comes down to assessing the value of the customer acquisition method. Is the customer more valuable as a native buyer or do you get the same or more value by having your wholesale partner see success selling your product?For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey, everyone, and welcome back to Up Next in Commerce. This is your host Stephanie Postles, CEO at mission.org. Today on the show, we have Eva Goicochea, the CEO and founder of maude.Éva:Hey, it's nice to be here.Stephanie:I'm excited to have you on. I feel like this is gonna be a very intimate fun conversation, the first of its kind, no puns intended. I would love that before we dive into maude and what it is, I always like to start with the beginning stories. Tell me a bit about what you did before founding maude.Éva:I'm going to try to tell the short version because I think it all connects.Stephanie:Perfect.Éva:I studied advertising in New York in the early 2000s, very analog time. I went back to California, became a legislative aide in healthcare, and then moved to LA and went back into marketing, and worked with a lot of brands, but then I was one of the early employees at Everlane. I think that those two experiences really shaped how I got to maude, and so I started working on maude in 2015 after leaving Everlane in 2013, and here we are.Stephanie:Awesome. What did the early days of maude feel like? Where did the inspiration come from? What is maude? Tell me about how the early days were back then.Éva:Maude was born out of this conversation I had with some friends of mine, who were also founders in a business with me called Tinker Watches. We started talking about sexual wellness and like, "What is the industry that has just never been changed?" This is one of them at least for the modern consumer. It's changed many times, but I think to the modern consumer. I was like, "This is the idea I've been waiting for between the healthcare background and what I thought I would pursue, which was a master's in public health and consumer brands. This is what I want to work on."Éva:Everyone's like... I can't tell my grandma that I sell condoms. I'm like, "I'm going to do this," and so I started working on it. The early days were very similar to COVID for most people, which was heads down at my house working on this idea, not ever feeling super connected to the outside world, and then here we are many years later. It's something that's just grown a lot.Stephanie:That's amazing. What kind of products do you offer now?Éva:We launched in 2018. We had condoms, lubricants, a vibe. Then later on that year, we had a massage candle. Now, the business is about 75% sex essentials, and 25% back and body products which are meant to be used with a partner or alone. That's the profile of the business now, but we launched with these four products saying, "Customers should be able to go to one place and find them," and that really resonated.Stephanie:That's amazing. I mean, how do you even view the landscape now? Has it changed since you've got into it, or is it till the same? What does that look like now?Éva:So much. I mean, on one hand, you see copycat brands, and that's always a little frustrating. But at the same time, I think it's indicative of what is happening in the space. I think it's indicative of what's happening in the space, which is that people are starting to ask for sexual wellness to be considered a part of personal care and reframe that way. They want to see products positioned in that way so that they can shop with the same comfort you can when you're dealing with something like beauty. That's what you're seeing.Éva:We're a brand that fits right there, because we have these products that are bath and body and then also sex. It's really interesting. I think you're going to start to see the products. I mean, I know you are because I know where we're going in terms of retail, but you're going to start to see the products in places that maybe you wouldn't expect.Stephanie:I mean, I'm thinking about even a couple years ago, it's like if you're going to get something, you're going to the back aisles of a CVS, and you're like, "Is anyone looking?" Ka pow. Grab it real quick, run, and check out. They'll look away while they're paying for it. There is this stigma around any items in the sexual wellness industry, but I like how you guys are changing that, especially around your content for the company.Éva:Thank you.Stephanie:You have these amazing products, and you have... It's nice because you don't have a ton of products. You can either have this, this, this, which I think is important especially in the early days of changing this industry. But how do you approach it from a content perspective that brings in new people like I was just describing who maybe would be like, "Well, I'm not going to buy this stuff online?"Éva:I think it was... It was really this choice that we made early on. We had the blog, which is called The Modern from day one. The idea was can you build a world around the product, because we knew we weren't going to have many products. We didn't want to be an over sorted brand, and people were reading it. They just kept consuming it. Then we started to get feedback, and then that turned into seeing what was working and what wasn't. Now, it's been built out into these three verticals. One's called the essentials, which is for an 18 to 25-year-old audience. The modernist is 25 to 45, and then the golden is 45 and up.Éva:It's grown so much. I think we get more traffic on the modern on the product side of the site to be quite honest with you. That's probably because we produce so much content, but it's been great. I think it really positions the brand in the right way, and we're showing content that we want to see in the world.Stephanie:How do you create content that resonates with people? How do you approach that and get in front of new people and know what's going to attract them to the blog to then eventually, hopefully, sell some of your products?Éva:I think, obviously, there's a bit of a science, right? You're looking at the search. What's happening in search, and what are people looking for? But then there's also, I guess, the pattern of behavior around what they've been looking at for the past three years, and what really resonates there and then asking them. That's where the art comes in, because you're really trying to be as empathetic as possible, and as you start to really decide and see who your audience is, then you think about all the things that they need. We try to think of it with both lenses, which I think is the only way to create content.Stephanie:What are your top performing content? What articles you got going on, where you're like, "These bring in the most traffic, or people really love this article?"Éva:It's funny, because for a very long time, it was sex in the wild west, which was one of our-Stephanie:The what? Like Oregon trail type of sex?Éva:Yes. It was sex in the wild west. I mean, it was the shortest piece of content ever, because when we first started, it was more like a Tumblr than it was a full blog. For a long time, that was one of the biggest traffic drivers. It was so funny.Stephanie:People are searching for that? I won't even know the keywords to type in to even think like, "What did they do back there?"Éva:I know. I don't know if it's because there's not many resources for this we were just getting, and it was making it easier for it to float to the top of the search. I'm not sure, but that works really well. We don't dig into it too much, but astrology and sex works really well. There are all of these funny topics where I think people are thinking. It's just these... I would say they're more cultural moments than they are just the WebMD version of content that resonates with our customer.Stephanie:That's pretty fun hearing about the kind of content that works. Now with COVID and everything, what have you seen with this market? I'm guessing, like we mentioned before, that you've had a crazy demand. People are all at home trying to have fun. What new trends are you seeing pop up this past year or two that maybe you weren't seeing before that?Éva:I definitely think that one of the biggest trends that we've seen which makes complete sense is when people are on the site. We used to see it more when it was a nine to five world at night on the weekends, and we still see that, but there is more of a consistent traffic on the site for the whole day, which is interesting. I think we're also just seeing a lot more. There's a lot more press around it being a part of your life and your holistic health, which I think is the right approach. That's how we should think about this.Éva:I like the fact that people are thinking about it, and they're more health related and psychologically. It's psychologically tied to your happiness too, so I think that's important, but we see that a lot. I feel like before, people talked about sex in this compartmentalized way, and now they're talking much more about intimacy. That's always the way that we've approached it anyway, so we were in the right place at the right time in terms of messaging.Stephanie:That's cool. The other thing I was reading about with your brand was that, I mean, you not only lead into content as a big part of even starting the company and less about paid ads maybe in the beginning, but you also focused on PR, and you partnered with a celebrity. I want to hear about how you... Who is it? How did you get that partnership, and how did all of that accelerate growth in the beginning?Éva:The PR was interesting because I was actually just looking at our first piece of press today for some reason, and that was in the beginning-Stephanie:Like ever.Éva:Like ever. That was in the beginning of 2017, which was interesting. The first thing that I did because my background in brand building is also in design, and so I threw up this website in 2015 for maude, even though we weren't anywhere close to being ready to go to market. We started getting inquiries about press, so I knew then that it was a topic people were going to want to talk about. Okay, cut to 2017, we actually had a real landing page, and we got our first piece of press. We use basically our renderings of our products, but that was an important piece in getting maude off the ground because the brand awareness happened so far in advance of launching that by the time it got there, we had built in community.Éva:We had captured those emails, and people were excited and ready. I think that that's a really interesting approach for people to take. I don't know that I would give your brand a year [inaudible] too long, but for us, that was about the amount of time was and then... The celebrity partnership, which is with Dakota Johnson, came about... Her team approached us and said that she was really interested in the brand. At first, I was very hesitant to take on any celebrity investment, because I'm not really interested in putting a name to the brand in that way.Éva:When we partnered with her, it's very much about being behind the scenes, so she's been working with us as a team behind the scenes, and that's been great.Éva:We'll work on products. We talked through what does the next year look like? Anything that we work on hasn't really come to market yet, because it takes a while for any of these things to happen, but it's a lot of just behind the scenes working on really what is the creative direction of the company.Stephanie:Okay, cool. I want to dive a bit into product development, because this is such an interesting area to me like, how do you go about creating products knowing what your customers want? What does that lifecycle look like, great sexual wellness company?Éva:I think for us, I mean, we started working on the product in 2017, which is why we knew what it was going to look like, and so we had about a year. Every product that we make essentially has a six month to a year cycle before it gets to market. We do that for a number of reasons. We don't just take products to market quickly. We definitely work with our customer. We survey them and ask them questions and look at feedback, and then we also look at really what's happening in the market.Éva:Are there products that we can make in a better way? Are there things that we should be... Are there problems we should be solving with our brand? It's this collaborative process with the team to look in this 360 view and say what's really happening, and should maude even be making it? Because I think there are brands-Stephanie:How do you decide? What parts should you be involved in, and which things have you said no to?Éva:I think it's mostly, "Could it be used..." All of our products are meant to be used by yourself or with a partner. How can we be the most inclusive whatever your status is, whatever your adult age is, whatever your gender? That's one way to look at it. I think the other way to look at it is does it make sense with the other products? Is it additive, or is it random?Éva:There's a lot of hurdles to get a product to market. Condoms are class two medical devices. Our lubricants are the same thing. When customers are like, "You're inclusive. You should make all of these things," we say, "There's a couple things. One, is there a regulatory hurdle, and then two, is there a minimum order quantity that we just can't as a small brand get to?" Then the third would be like, "If we could do both of those things, is there a market for it?" That's just real brass tax. Do you take a product to market?Stephanie:Interesting. The other thing I'm thinking about is your ecommerce strategy with your products. I mean, I think a lot of consumers are used to, like I said, buying things in a certain way not really thinking too much about it, definitely not probably standing in the aisle and be like, "Hmm, which one do I want? Let me read the back of everything and see the description." How do you think about developing that ecommerce strategy in a way that people know what it is, know the benefits and do want to hang out and look at it, but also understand it afterwards, especially for someone new coming in and being like, "I'm not from this world?"Éva:I think it's interesting that you asked this because I would say that we could do better in the ecomm strategy given the fact that all of our bottles are brown, so we-Stephanie:Wait. All your bottles are brown.Éva:We have two lubricants. They both look the same, so we've had the same challenges. Our thought was that we create these products that look great in your bathroom or on your bedside table that you wouldn't be embarrassed to have out. But I think in some ways, it's also like, "Okay, but do you know what they are?" What we found in terms of ecomm is to be really clear about how you're shopping for them. Our site is merchandised in a way that's pretty clear and that you can find things in a couple ways.Éva:One is by usage, so if it's before, during and after sex, or just buy the actual type of product. That seems to have been helpful, but I still think we have work to do on that front, because I do think you're right. People come to the site, and they might be uncomfortable, or they might not know what goes together. We're actively trying to make sure they don't just see a sea of brown bottles.Stephanie:That's interesting, trying to put two things together to be like, "This could be a package," and like... Do you have something that shows up on the side of your website that is like, "Here's something that pairs with it?" What kind of maybe tests have you done where you're like, "This one converts well. They add more things to the cart," versus, "When we had it this way, it didn't work out?" Any little findings there?Éva:I mean, there are some products that people just like adding to their cart. One of them is the massage candle, because I think it's something... Universally speaking, I don't know that everyone knows what a massage candle is, per se, but a candle is very easy to understand, so that works as an upsell. I think that if you're pairing a product, if you're getting the vibe, for instance, and you get suggested the lubricant to use, I think that makes sense to people. If it's a bath product, there are other bath products that go well with it like the wash, which is our body wash goes really well with the massage oil.Éva:There's ways for us to basically guide you through the journey, but I still think it's probably one of our biggest challenges is to make sure that people know what else we have.Stephanie:Do you study other brands to see how they're doing things, or are you like, "We're such a different unicorn that there's really no one else that we can look at when it comes to recommendations and trying to figure out who needs what it at what point?" How do you figure out good practices that you want to try and implement?Éva:Well, so it's a bit of a conundrum in a couple of ways. I think the first way is that if you look at a let's call it a skincare site, usually, those things are maybe it's shopping by system. Let's say that they just have one cream or one face wash. That's easy to understand. If it's by say problem, it's distinctively called out, so it's for oily skin or dry skin. We don't have... That's not how you shop the site. In one way, some of the products are a system, but they're not based on a problem.Éva:It's still something for us that we have to, I think, solve for. One of the things that we're really.... I wouldn't call us precious about it, but I do think that we try to be very kind and empathetic about is making the customer feel comfortable, so we don't want to scream anything on the site. I think there are times though that were to tone down. This is a good question.Stephanie:What about quizzes and things like that? If someone comes and they're not really informed on what you guys are selling, have you tried out any quizzes that guides people to what they might want and in a way where they're like, "I didn't get there myself. You told me to get there?"Éva:It's funny because originally, the site was just a quiz. When we first launched, it was like it walked you through, and you ended up with seven different kits basically. There was a couple things, learnings, all things that anyone listening should know. We named the kits one through seven. That's not really helpful. You don't know like... You're like, "I can't remember what number I am." I think also, we didn't have enough options. The only real difference between the kits was how many products were in them, and then if it was shine organic or shine silicone lubricant.Éva:We're still figuring out the best way to bundle. I think that customers... What's interesting, and I think it will happen and improve over time, is that people are starting to see it more as, like I said, something between sexual wellness and beauty, and so they browse the site. There's actually a pretty high conversion on the site. They're browsing the site because I don't think they feel uncomfortable, which was [inaudible].Stephanie:Cool. The one thing that we've talked about in previous episodes is around UGC. That's the best way to get people to buy things if it looks organic, and my friends would use it. I feel like that'd be really hard for your brand to get [inaudible]. I mean, you might get flagged on Instagram.Éva:We do get flagged on Instagram. I think for us, it's just been that's where the bath and body products come into play. We've started to introduce more UGC because we've been seating out more bath and body products for people to try, but it's a really interesting line to tow between messaging around like, "Here's this really soothing body care, and how does it relate to intimacy," but we can't be explicit on Instagram and Facebook, so navigating this category has been really interesting, challenging at times.Stephanie:Did you consciously develop something that you could use on Instagram to then try and get that traffic back? Were you thinking about that before you even developed the body wash type products?Éva:Yeah. It's interesting because the condoms and the lubricant technically can be sold. The ads can be posted on Facebook and Instagram, but the language starts to get tricky. The reality is that there are real people looking at your Facebook ads, making the decision if they should be shut down, which always gets into really funny territory. When we launched the burn massage candle, we're able to start really ramping up ads, but it's really amazing what's allowed on Instagram and what's not allowed.Stephanie:Yes. I mean, I could go down the entire wormhole of certain people who've been banned and other people where it's like, "That is definitely a very bad site, and there's a lot of bad things happening there. How are they still on here?" It's an interesting world. What kind of ads are you creating? I think a lot of times about humor can always be fun around certain topics, and get people in. Do you guys approach it that way, or are you strictly content, educational? How do you think about your ads?Éva:They're just really beautiful straightforward ads. I would say that, again, they always lean more towards beauty. The funny part is that we... I mean, not to use the word funny, because I'm about to say maude has a sense of humor. It's just typically in the captions or in the writing or in the quippy parts of the content, so that could be brought out more. The ads are generally just like how to use the product, and they're beautiful.Stephanie:That's cool. We were talking a bit before the show about retail and how you were thinking about it. Tell me a bit about what your plans look like when it comes to entering into retail.Éva:We are actually... Our business is about 20% retail. We're in a lot of-Stephanie:Oh, you're already there.Éva:We're already there, and it's growing. We're launching in a bunch of new retailers this year. The retail angle has been interesting. We first started out... I can't remember who our first retailer was, but back in 2018, we were definitely in a lot of smaller boutiques. We were in hotels, which makes sense, and started going into bigger retailers. What was happening and what we still see happen is that the merchandising teams would be fighting over where we should be in store.Éva:Now, it seems like the beauty teams are winning. We're seeing maude. It's going to get positioned in a lot of the beauty categories in retail, in these doors not just online. I'm very curious to see what it looks like there.Stephanie:How do you think about connecting the story and the brand and approaching that omni channel experience? What kind of things are you trying out and learning through all of that?Éva:The kinds of things that we're working on is really sticking to the script for the brand, because we see a lot of crossover audience that comes to us via Instagram, and then finds us out in the world in retail. Whereas I've definitely worked in brands that try to cater to each retail audience, and they've test a lot. We try to just really be very distinctively on brand all the time so that people remember us. I think when you're really a new brand or a younger brand, it's important for you to be memorable and top of mind.Stephanie:How do you stay memorable? What do you do especially now that you say there's people popping up like competitors or copycats? How do you differentiate yourself to make sure that you're not blending in with someone else who enters into a Urban Outfitters?Éva:I think it's more about what's the product assortment and then what's our creative strategy, which hasn't been copied quite yet. The other thing is... I've said this on other podcasts. I don't want to completely sound like a broken record, but I think there are really two types of companies. One is product, and one is mission-based companies, very appropriate to what you do.Stephanie:Perfect.Éva:I think that our company is a mission-based company, which means you can't expedite the process of growing community and brand equity. I think that that's what makes maude really ahead of other brands that are trying to do it. It's like they'll have to build their own communities and their own look and feel, and customers will either get it or resonate with it or not.Stephanie:I mean, do you find that you have the ability to stay connected with your customer afterwards? How do you keep the conversation going to then increase the lifetime value of that person and bring them back and stay within your community? What kind of things are you doing behind the scenes to ensure that happens?Éva:Our biggest KPI internally has always been NPS and customer reviews and satisfaction. We have really, really high NPS, and we focus on making sure that they are engaging with our emails, and whether or not they're coming back to buy from us is more a matter of do they need it? What do their sex lives look like? Can we even control that? We can't do any of that work for them, but we can be there. It's staying top of mind through the content, and then making sure that they're happy. We check on them often, and then try to listen when they're not happy.Stephanie:How do you encourage reviews for your product? I could see, like what we were saying earlier, people being hesitant to review something where their name's on there, and someone identifies them. How do you get people to come in and drop some valuable insights into your review system?Éva:They'll get a notification to review the products so many days after purchase, which people are pretty open to doing. Actually, that's all we do. We don't encourage. We don't give discounts for reviews. We're really purist in a lot of ways in terms of how we gather data and what we ask our customer only because we're really respectful of this category and what it means for them to be disclosing this kind of information, and so we want to be as thoughtful as possible. The reviews that we get are amazing, and they're amazing a number of ways.Éva:They're heartwarming and funny and maybe too raunchy. You're like, "Okay, thank you. I didn't need to know any of this," but I think getting people to feel like they can safely write that is what we're trying to do. We're a pretty respectful brand.Éva:I mean, there are other ones that I think are like... a lot of reviews where people will say like, "I lost my spouse, and I just didn't know if I can navigate this alone, and this has made me feel like I'm a person again or lovable," and these things you will just be crying in the office. It runs the range. There's lots of reviews.Stephanie:I mean, I feel like that authenticity is key, though, when people are especially exploring a market that they've maybe never looked into before. Reading reviews like that is, I think, what sells the product by itself, because there's probably many other people who've comment and like, "That's me. I'm in that position right now. I feel sad like that." Trying to get customers to speak like that, I think, is game changing if you can get them to do that, which is why I'm so impressed that you get reviews like that because to me, I can see a lot of people holding back and not wanting their name on something and just being nervous about that whole thing.Éva:I know. I'm like, "I wouldn't write a review like this," but you should read the reviews.Stephanie:No.Éva:After, you guys need to read the reviews because they're very funny. I do have one other funny review that I'll bring up. Somebody used the burn massage candle, which has this great scent. It's really an amazing scent. It took us a while to develop, but she was like, "It made me feel like I was going at it in the redwood forest instead of my dinky no ho apartment." I'm like, "Oh my God."Stephanie:These people are good copywriters. Can I hire them?Éva:One woman wrote about the vibe. She was a powerhouse, a workhorse, an icon. That got turned into an email.Stephanie:That could be the tagline of the product.Éva:I know.Stephanie:Your customers should be the ones putting in their ideas, and then you just take their names and their tagline.Éva:I know.Stephanie:Man, that's good.Éva:That was good.Stephanie:Where do you see maude heading over the next maybe one to three years? What are you guys excited for, planning for?Éva:We're planning to go into one or two other categories. I think we're really deepening the product categories we have, and then venturing into a couple others all around intimacy. If it can be in the before, during or after category, we'll make it. I'm really excited about that, because I envision this maude. We have one in the office, so I guess it's easy for me to do. But I envision a maude shelf, and I'm like, "Okay, what does that complete experience look like?" I'm so excited to build that and then to see it come to life on these end caps and then these retailers is just...Éva:It's incredible. Then to go back to the reviews for a second like how much these products have impacted people's life, I think that that's where I'm really excited to help continue to solve for their needs, and also create products they really like and that have made their lives better in a small or sometimes big way.Stephanie:When thinking about retail, I know I keep getting back to this. I'm just so impressed that you guys are going this route and having success in it. What kind of lessons did you learn when exploring the retail path? What would you do differently maybe if you were to do it over again?Éva:I would say that the biggest thing I would do differently is probably not have launched in a category or in a corner of a store that wasn't really where we should be placed. An example of this is within Urban Outfitters, which again, Urban Outfitters as a brand has been really a good partner to us. It's not our age demographic, but I think in terms of... They've always been good about building out beauty. At first, they wanted to put the vibe in tech and the other products in beauty. I'm like, "The problem with this is that it creates this sense of novelty," and we actually have something launching this week around why we don't call devices toys.Éva:It relates back to why this should not be a novelty in the electronics section of your store. That'd be one.Stephanie:I mean, that'd be weird if it's next to some key chain, cellphone cover, and there's a vibrator.Éva:There's a vibrator. Honestly, I don't know that anybody even bats an eyelash at that sort of positioning because they have been called toys, and they've been made to be these novelty items for so long, but our whole ethos is that we're a brand for all genders, but in particular women, cis women have not... The vibrator has been treated like it's this thing that's an add-on, and for many of them, it's not an add-on. Why can't it just be with the rest of the products?Stephanie:Did you have pushback when you told them like, "We want to have our products together?" Are you even able to tell them where you want your product to be?Éva:We can ask it and guide them. I think over time, they were like, "These products should be here," and then they built out sexual wellness as a part of their beauty both online and in store. Then it was an easy solve.Stephanie:Cool. That's a good tip. Any other lessons or experiences from getting into retail that were insightful?Éva:I mean, we've had conversations with retailers where we go down this long journey of they need certain testing or they need certain things, and we have all of these quality controls, and we have all of this testing on our own, but some retailers are so specific, and then you get to the PO. They're like, "And we want 10 units." You're like, "We've just gone through seven weeks of your editor testing, and you're 10 weeks of this, and you want 10 products." I think that's an interesting lesson is who's really the volume driver, and then who's really...Éva:It's about brand positioning, and what are the risks you should be taking for each.Stephanie:Now, do you go into it with a minimum quantity from the start of like, "We're not going to mess around with 10 units if you're going to make us spend six weeks doing this?" Could someone new do that? Can you only do that now because you've been doing this for a while? Could a newer brand come in with those expectations of like, "Tell me how many units you guys plan on ordering before I do the work," or you just have to go through that phase in the early days?Éva:I don't know that they would have told us. I do think that there are trade offs around. For instance, what we've learned now with retailers is a lot of them online will outbid you for your Google search terms. If you've made all of this effort, they've only bought 10 items, and guess what? They're putting a lot of search dollars behind it. Is it worth it? I'm not sure. Is it worth it to Sam in the xyz.com, whatever? I don't think it always is. It's just a trade off around how are you acquiring a customer? Where are they finding you, and does it really matter if you're in... I won't name names, but...Stephanie:I mean, that seems like a very important point that I actually not heard anyone bring up yet about the retailers outbidding you on your own keywords. It seems like there should be something in the contract that says, "These are my set of keywords I go after. You can't touch them if we're a partner."Éva:We're only learning that we can even push that now. I think there's a lot of things as a smaller company where you're just like, "Okay, sure. I'm so excited to be in blah, blah, blah," and then lessons learned.Stephanie:Oh man, that's a good lesson. I'm glad I'm pushing this. I feel like a lot of people could actually learn from the stuff and go into it with different expectations than... It is easy probably to be like, "I've got Urban Outfitters. I've got whoever," and then to be like, "Oh, maybe I should have asked for more upfront." Ask for what you actually think is fair.Éva:I think you're also like... We didn't put a stockist on our page, because, one, we couldn't keep up with where we were, especially when we were in these independent retailers. If you think about stockist, it's really for the benefit of the customer, right? At the same time, it's like, "Well, then why are we in some of these places, because we know they only ordered 10 products?" This is all up to you as a brand, but think about these things and really what is the value.Stephanie:That's great. Good tips. I love it. All right, well, let's shift over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question, and you have one minute or less to answer. Are you ready?Éva:I'm ready.Stephanie:All right. What one thing will have the biggest impact on ecommerce in the next year?Éva:This is interesting. I think probably to your point, it's content. It's building out a site that is less transactional and it's more about building a memorable brand, because I don't know about you, but I track brands. I'm like, "There are so many brands coming out." If I can't see a deeper story, or if I can't connect with something that I'm going to remember, it's just really hard for me to think about them.Stephanie:What do you think the world's going to look like in a couple years? Because like you said, it does feel like there's so many new DTC companies popping up, and it actually seems like it's hard to trust who's saying what and if that's their mission, and if they're doing what they're saying they're going to do, because now, anyone can launch really quickly, and then also go away really quickly if they need to. Where do you think the world's headed because of all that?Éva:I think it's in examining all of their channels, finding where they really are speaking to their community. When I mean content, you don't have to go to the site and find a blog per se. But if you can find a community, whether that's on Instagram or Tiktok or some channel where you can see evidence of them having a connection with their customer, I think that's really important, because I have been to a lot of sites where then I go check out their social channels, and they've been around for long enough, and there's just like no engagement. It's really interesting.Stephanie:That's working out really great. If you were to have a podcast, what would it be about, and who would your first guest be?Éva:Oh, this is a good one. I actually just started a podcast.Stephanie:Nice. What's it about, and who was your first guest?Éva:Well, so we haven't booked the first guest yet, but I will tell you who I want the first guest to be. The podcast is called The Una. It's about the first and the few females in a particular industry. It could be any industry, whether that's politics or finance or the spirit's industry. We want our first guest, although I think it's going to be much harder to land now, to be Deb Haaland. If you didn't know, she's now the first Native American Secretary of the Interior. She is from New Mexico, which is my home state, but I think because she's now the secretary of the Interior that it's going to be a little harder to land her, so wish me luck.Stephanie:Come on, Deb. Get on the show.Éva:I know.Stephanie:That's awesome. It sounds like a very cool show. I'll definitely be listening. When is it going to launch?Éva:Well, so we're starting to do the outreach because we did the trailer finally. If you go to theunapodcast.com, you can see or listen to the trailer.Stephanie:Very cool. What's Up next on your reading list?Éva:I just watched the Dieter Rams documentary, and I've been reading the book which is the 10 Principles of Good Design only because I think it's the way to bring me back to why we have maude, why we do what we do at maude. By the time this actually airs, the team will know, but I'm taking them to a screening of the Rams documentary, and we'll then talk through the book. That's what's up. I'm getting through the book.Stephanie:Very cool. What's one thing that you don't understand today that you wish you did?Éva:I mean, I don't know if I wish I did, but I really don't understand the allure of clubhouse. I'm like, "I don't understand. I don't get it."Stephanie:We've had a couple people say that, so you're not alone. Don't worry.Éva:I don't. I think that it's a pandemic phase, but I could be wrong.Stephanie:Well, we'll have to do a check back in six months or a year and be like, "Was Eva right or?"Éva:Although I have heard people like... They listen to this... For instance, our director of product listens to people talking about Sci Fi. I think that's a great use of clubhouse. Otherwise, when it's just talking heads about the same things, I don't know.Stephanie:I agree. All right. Then the last one, what's the nicest thing anyone's ever done for you?Éva:Oh, well, I mean, this is going to sound cliche, but my husband is actually a mechanical engineer. He's the one that's designed... He designed the vibe. He designed our second product drop.Stephanie:Wow.Éva:He doesn't work for maude full time. He really builds the business with me when needed as if he were a part of it. I think that's the nicest thing that anyone has done for me.Stephanie:That's pretty amazing and awesome. Go him for stepping in and helping like that. Was he unsure if he wanted to design sexual wellness [crosstalk]? Did you have to be like, "Come on?"Éva:No. His take on design and the usefulness of design, which I would actually joke goes back this Rams documentary is like, "These products are really everyday items, and they shouldn't be made to be used that way." I think he liked the fact that maude was turning it into an everyday object instead of making it phallic and loud and all these other things. I think he was just like, "Great. Let's make this product better."Stephanie:Oh, that's awesome. That's amazing. Well, Eva, this has been so fun having you on the show, such a different interview, which loved, and it's fun hearing about maude and the industry and all that. Where can people find out more about you and maude?Éva:Well, with me, it's if they follow me on Instagram. It's evagoicochea.com, which is really long, but I'm sure if you type in E-V-A-G-O-I, you probably will be able to find me. Then maude is getmaude.com, M-A-U-D-E, because we could not just get maude.com.Stephanie:Amazing. All right, everyone, go check it out. Thanks so much for joining us. It was a pleasure to have you.Éva:Thank you so much for having me.
Word of mouth is still the best marketing tool, even in today’s digital world. And in this time of the ecommerce boom, brands are constantly working to build buzz for their products. Whether that’s through ratings, reviews, social posts, or unique ad campaigns. But there’s one highly coveted strategy that’s been bubbling to the top of the stack, and every ecommerce leader knows it is the way of the future. User generated content. And a company called Yotpo is here to help with that. Yotpo is one of the top platforms that companies such as IKEA, 1-800-FLOWERS, Chubbies and more lean on to help them build communities, generate UGC, and create loyalty programs that yield the kind of engagement most brands only dream of. On this episode of Up Next in Commerce, I asked the co-founder and CEO of Yotpo, Tomer Tagrin to give us an inside look at how Yotpo is generating 5X more engagement and content creation than is typical. Plus, we also dove into the future of loyalty programs and personalization. My one-sentence takeaway: definitely start leaning heavily into loyalty and maybe let off the gas a bit on personalization. Why? Tune in to find out! Main Takeaways:Do What You Know: Success in ecommerce is becoming more about the community you can build to support you. So the question founders are asking themselves — and Yotpo — is how do you build that community? The answer is pretty simple actually, you just have to follow your own interests. A founder starts a company for a reason, and they typically personify the exact target customer their company is going after. So dig into that link and create content and strategies that would resonate with you, the founder. Long Live Loyalty Programs: Every brand should have a loyalty program, otherwise there are opportunities and dollars being left on the table. The only way to access those opportunities and cash, though, is through a very brand-specific program. There are no one-size-fits-all loyalty programs. Brands need to understand what they want to incentivize for in their loyalty programs, who they want to target, and how they will reward the behavior they are trying to generate through the loyalty program. Partial Personalization: By deploying personalization tools, you can sometimes open Pandora’s box of never-ending adjustments and adaptations in order to create individualized experiences. At a certain point, the return on that investment starts to diminish. Customers are all different, but they don’t all need to be treated as unicorns. Create segments of customer types, and personalize the experience to those subsets.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone, and welcome back to up next in commerce. This is your host, Stephanie Postles, CEO at Mission.org. Joining us today is Tomer Tagrin. The co-founder and CEO of Yotpo. Tomer, welcome.Tomer:Hey, thank you for having me.Stephanie:I'm excited to have you. You might not know this, but a couple of guests who've come on the show actually have mentioned you guys. We had the CEO of Live Tinted come on, and a couple more. They said your company-Tomer:In a good way or in a bad way?Stephanie:In an amazing way. They said it was game changing.Tomer:Thank you, thank you.Stephanie:Yeah. When I saw you coming on, I told our producer Hilary, I'm like, "This is awesome. So serendipitous." But in your words, I'd like to hear what is Yotpo, and why did you start Yotpo?Tomer:Yeah. You want the short version or the long version?Stephanie:Long if it has a lot of little interesting tangents.-Tomer:You got it, you got it. I'll give you maybe the opening gambit about your points, then I'll tell you maybe the story in a more detailed way.Stephanie:Yeah.Tomer:The best way to think about Yotpo if in retail, it was about location, location, location, online, it's about consumer attention. In a world where every brand is an ecommerce brand, right from Miss Stephanie in Tomer t-shirtcompany.com, up to PNG, everyone is fighting over consumer attention. That's what we do. We help ecommerce brand win over consumer attention by consolidating the marketing stack and really enable them to build great experiences for consumers, because that's the only way to win over consumer attention. We actually started as a reviews company, and we started from a very ... 10 years ago from a personal story that we had a friend in my group of friends that each year made fun of us, that we didn't buy him anything for his birthday.Tomer:11 years ago we decided to do something, and he was big on photography back then, so we bought him photography [inaudible] and because I'm the geek, I [inaudible] online and I find him a fancy SLR camera. We bought him that, he was super happy. But what happened is that the teacher, after the second lesson told him that we bought him the crappiest camera we could have bought him. And all of my friends made fun of me. Then I went back and we saw that my decision was based on reviewers name like Stephanie 123, and I don't know anything about it. That is okay. Let's do that. Very, very good, and basically find authenticity of reviews. So, we built our entire technology based on that, and making sure that whoever writes reviews is a real person that actually bought a product.Tomer:If she or he are an expert in the field, we'll also let you know. We really ... wherever to disrupt let's call it the reviews in ecommerce, especially on the SME, it was also a great time. We were much luckier than small. It was a great time to enter ecommerce, or ecommerce marketing. We grew with a lot of the Shopify, the B commerce. We were very focused on the lower end at the beginning, and now we have Ikea and PNG and 1-800-Flowers, but we were for years focused just on the lower end. I think five years ago, we understood that the bigger problem for ecommerce brands is that they're super busy, they're very small and nimble, and they have just too many point solutions to deal with, so we need to consolidate everything because the consumer experience actually flow through each one of them. I'll give you one example.Tomer:I remember one of our customers telling me a few years ago, he said, "Look, Tomer, when someone gives me a one star review, I still ask for a referral, and that's the dumbest thing I can do as a brand." Right? Of course, but they just weren't able to connect those dots together before [inaudible]. We completely re-architecture. We went through a lot of different things to make sure that it's one platform to really help you win over consumer attention. It was something very, very important. That's our mission in life today. Since then, we built two more products, we acquired two more companies, we completely re-architecture the platform itself. We changed the go-to market, we've been through a lot. Now we're in the face of adding a new product every let's say 18 months.Stephanie:Wow. That's a lot of new products, because yeah, I was looking through everything you did. I'm like, okay, you do reviews, you do referral programs, you do smart loyalty programs, and everything seems every time I talk to a commerce brand, I do always think, wow, you guys have so many tools and technologies you have to plug into. How do you keep track of it all? What does the marketing tech stack look for someone when they come to you? What things are they, "Hey, can you help us consolidate all these crazy processes?"Tomer:Yeah. Usually customers don't come with us to consolidate, it happens, but not a lot. We actually build the company that we commonly just ... we can have five different products in the market, use the general reviews, what we call VMS. It's a Visual Marketing Suite, a referral product, a loyalty product, and an SMS marketing product. Walking on two malls, one of them is going to be launched let's say in two quarters, another one in four quarters, and sorry. Basically you start with the ones that you can start with just loyalty, or actually SMS now is our fastest growing part of the business. Then we show you that through the synergies in the product, it actually makes sense for you too ... I'll give you an example. If you launch a loyalty program, the best way to communicate with your most loyal customer is through SMS.Tomer:We make it very easy for you. If you want to send a loyalty campaign for customers that are likely to buy in the next 90 days, and gave you a five star review, and referred a friend, to send them an SMS with a new loyalty offer, we make it very, very easy for you. Where in the other architecture, it literally use [inaudible] taking weeks to orchestrate all of that. For us, you can start with whatever product you want, it doesn't matter for us. That's how we build everything because we don't want to force the customer to consolidate. Once you start seeing the synergies and it makes sense, that's where the exponential value starts. Actually, in our high touch customers, we see now that more than 60% of the customers actually use buying and using two plus product, so they are multi product customers, and that's something super, super important for us. From time to time, customers come to us to consolidate, but not always.Stephanie:Yeah, awesome. Just to give a little context too, tell me about some of the recent news around funding that maybe you guys just went through. How big are you, and who are some of your clients. Name drop some people if you can. So our audience knows you all are legit, you're on the unicorn status. I'll call you that. You might be like, "Don't call me that." I just did.Tomer:I actually have a joke in the fundraising that we did. We just closed a $210 million round at a $1.4 billion valuation, from great investors and definitely on our path for the next stage to become a public company. I always had a slide actually in the fundraising deck that said that despite of the valuation, we are not a unicorn, we are Flamingo. We are building a Flamingo. Why is that? Because Flamingo is a real animal and we are building a real business to provide real value to customers over time. It's a very unique animal.n It's actually part of our culture. It's a joke, but it's actually something very, very ... that we take very seriously.Stephanie:I love that.Tomer:Some of our customers, Ikea, Unilever, 1-800-Flowers, we also have 30,000 paying customers. A lot of the cool brands, the Chubbies, the away, the movement, all of the poster Childs of D to C are as well usually choosing Yotpo, but also some of the largest brands in the world. I think they come to us usually because our products are really ... we like to call it easy to start, easier to scale, and really trying to think about merchant, and really trying not to use buzz words, not to use fancy things, just really helping those brands grow faster in a very direct way. We are 500 people, or a little bit less, and I don't know any other group of people that are so focused on helping brands win over consumer attention. That's literally what we think of every day.Tomer:Also, I think that ecommerce is one of the largest changes of our generation, and we believe that we have a real shot to become one of the most important companies in the history of commerce. I always tell the company telling me that ... I have two young boys, and one of the things that for me I want them to think about Yotpo is they were a huge driver forward for that something that called digitization of retail, or the shift to e-comm, or whatever you want to call it. Very much we are super, super passionate about helping those brands.Stephanie:That's amazing. Congratulations. That's awesome funding-Tomer:Thank you.Stephanie:...awesome investors. You're really cool. I love that Flamingo reference. I want to use that just for myself now.Tomer:We call it be a Flamingo in a flock of pigeons. That's our phrase internally.Stephanie:That's good. It seems like the perfect time right now too, because customer acquisition is getting really expensive. Everything I've heard on the show is that, organic, natural, UGC, that's what's working now. Tell me a bit about how you think about the customer acquisition world, and why organic natural content or reviews, helps more than anything else right now.Tomer:It's a great question. First of all, I'll maybe share a funny story. Let's say six months before COVID started, we actually had a customer advisory board. We meet customers and we ask them questions. One of the phrases I add that stuck with me is that one of our customers said that buying a Facebook ad is more expensive than a fifth Avenue store. Definitely you know Instagram, Facebook, Google are extremely, extremely expensive, and I don't think it's going to slow down. They want to be like a lot of other consumer fronts, at least in the near term horizon. When you add on top of that, Amazon, so the question is how do you win? You win by building a community. You win by giving your customers a great experience.Tomer:Part of that means social proof, part of it means making sure that you are very transparent, part of it means that you need to focus on customer lifetime value, because it's so hard to bring, and you need to make sure they're coming back. Loyalty, I can tell you it's really top of mind. Then for us, we entered loyalty in 2018, we are now the fastest growing loyalty platform for ecommerce brands, and we power some of the most sophisticated loyalty programs out there, and it's just amazing to see that even in the election, there were brands that giving points for customer to show that they voted, and there are customers that hate the point system because it's they lose their brand and they just have a VIP tier experience, which is super awesome. There's so much to do with that, which is fascinating to see how much brands are able to innovate.Tomer:I think we definitely live in a world to your question, I'll circle back that whatever walks, you cannot win just by being great in paid anymore. It doesn't scale. It can scale to a certain number but it won't forever. Now the question, how do you build your brand? You build your brand by your community. That's what we are very, very focused on as a company.Stephanie:What are the ways that you advise your brands to build that community? Especially if you come and you're like, I don't have a community. Where do I even start with that? I would think you need to acquire customers first, but then that's pricey. Then you're not even thinking about retention yet because you don't have anyone to retain. What are the maybe building blocks even get to that next level?Tomer:Yeah. I'll share a story. Are you familiar with Chubbies, the brand?Stephanie:Yeah.Tomer:Chubbies they have a great story on how they started. It started from an email that they used to send. I don't know if you ever saw one of those emails. Super straightforward, so targeted to the buyer persona because they will, the buyer persona. It's a really great group of founders that were just able to provide great content, and their customers actually want to buy Chubbies because they feel that this is the brand for them. You have movement that were very, very early on, very, very good on Instagram ads. I think today it probably means that you need to do everything well, there is not a hack, so you got to at least experiment with paid, you got to experiment with content, with organic. You have to invest, but in general, when you look at mission-driven brands, the founders are usually, they are the buyer persona, or they know the buyer persona very, very well.Tomer:Then it just become easy. Do stuff that are interesting for you. Do stuff that you would like to buy from. I think that's where we see the brands that are growing the fastest at the moment. I think there was also probably a year, a year and a half ago, there was a huge trend in drop shippers that's now actually declining, which is a good thing. I think it's easier for brands now to stand out. I think that the bad news is that you need to do good in multiple fronts, but the good news is there's so much demand at the moment for great brands that you just need to focus on your buyer persona.Stephanie:Yeah, that makes sense. Another interesting thing that I was reading about was how ads that have reviews in them are the highest converting ones. Which makes sense. I even think about, if I see someone's picture with a review on it, an organic picture, I don't want just the product picture, or even if that came on and she'll be five stars, check it out. I would go there all day versus a normal ad.Tomer:It's actually something we built a few years ago, and the hypothesis was, it was also based on our customer feedback that they think that social ads with social proof will work great on social media. That makes sense. Then what we did is we made it super easy and we work with Facebook and Instagram to make it easy to incorporate your user generated content, and then we started to experiment with that. We learned that, the studio photos that you have actually work like walls then real authentic and customers' photos, so, we really build a lot of technology to encourage customers, and how do you get more photos, and then make it just very, very easy for you to use it on your social ads. It works phenomenally well. I think in general, one of the key learnings that we learn as a company that we're established to establish trust between brands and consumers. That's what we founded the company.Tomer:I think that, especially if you're a newer brand and you're just now starting, you have to focus on how do you create trust? The best way to create trust is by what real people are saying. I can share with you endless amount of data showing you that products that just have five star reviews convert much worse than like 3.8. Which is insane, but it makes sense, because nobody believes everything is perfect. Authenticity, transparency are so key in a world where again, customer acquisition cost is super expensive because if you were able to bring a customer and she or he had a bad experience, it's bad unit economics. You cannot scale that business.Stephanie:Yeah. I think the interesting thing too, about organic reviews, even if they have a 3.8, is that you can oftentimes go in there and find, oh, this person's talking about something that I really don't care about. I'm even thinking about this and maybe Tomer you're in the same place where it's looking at daycare's, preschools, and all this. Some of them have a four-star and people are complaining about the wait list. I didn't want to pay a wait list fee, and you're, 'Okay." That shouldn't have brought it down, but that's real, and now I trust it a bit more, and now I'm interested in exploring it, and not just looking at a high level review. What I wonder is, how do you get people to review? How do you get them to submit photos? I don't have the time a lot of times, even though I love products, I just don't have time for it. How are you incentivizing customers to do that?Tomer:Yeah. I'll share a few stories that I think you'll find they're funny.Stephanie:We all have funny stories.Tomer:When we started, we didn't know a lot on the reviews industry. So what we did, Amazon, Amazon has a page called Amazon top reviewers. These are people that wrote, I don't even know how many reviews. We looked at their names or handlers, and we searched those people on Skype and Twitter, and we bombed them, and wanted to interview them. We spent hours and hours interviewing Amazon top reviewers, and I think it was eBay top reviewers, just trying to understand why people write reviews, what incentivize them to write reviews, and why other people are not writing reviews, and that's how we formed the new approach and the reviews industry. I think definitely we make it easy for you. You talked about, you don't have time. We build a technology called email review that you can leave the review inside the email.Tomer:It's one step, it's really easy to do. That's super, super important. The second thing that's really, really important is knowing when to ask for reviews. For example, when you buy a mattress, you need to experience with the product a little bit more before you will be willing to give a review versus a t-shirt. I think those are important. The last thing that I can tell you, which is really, really interesting, and this is why user generated content is so connected to loyalty, is once you identify who are customers that are likely to be loyal, those customers are much more likely to generate content for you, photos, video. After someone upload a photo, I can tell you now, if you're not a Yotpo customer, ask them to join your loyalty club. There's five X more chance that will happen. How do you take one interaction of the consumer with your brand, and translate it to the next step, and how do you take them in the customer journey step by step by step.Tomer:That's why we are big believers you need to consolidate the marketing stack because it is one customer, one journey, and it's not silo. I think it's a frictionless experience, is knowing when to ask, and knowing who to ask. It's super, super important. I think when we started Yotpo, we always heard the phrase of 1% of people write content, 9% of people reply to that comment, and 90% are just reading that content. Today we are more closer to five to 6% are generating content almost, which is a five X or six X improvements when we started. A lot of it is that consumer behavior, a lot of it is our technology, and a lot of it, I think is just brands are evolving and understanding the importance of that. But it's just fascinating when we ask about photos for example. There are brands that you would never imagine, never in your life, that people will ... I remember I was scrolling through one of our website, and they will say they are selling metals. Literally blocks of metals. That's what they said.Tomer:They have thousands of reviews, thousands of reviews. People write reviews and super passionate reviews. We also have an NLP engine, a natural language processing that can give us and the merchant, positive sentiment, negative sentiment, and show you the score. People are super passionate about it, and apparently people are passionate for ... Different people are passionate for different things. You just need to find those people that are passionate about what you build. That's what I always find super, super inspiring.Stephanie:That is a really interesting take though around how you just need to have that passionate audience and finding them. But what also is interesting is how you guys are ingesting the data in ways that, I think I've been there for a while, but you keep saying consolidating it. I've always thought okay, you get all these good reviews, but oftentimes, I might not want to see their review for 99% of the products that I'm not looking at. If I'm looking at stocks at a company that has a hundred skews, I really just want to be able to zoom in on the reviews of those stocks and not see everything else.Tomer:Even more than that, what we did now, if you go to Yotpo customers, is we build an NLP engine, Natural Language Processing that can pull up topics from the content. Let's say if you ... I don't want to take your pre-school example. If you want to just read about the waiting list, you can click waiting list and read just all the content talking about that. You want to read about the teacher, about the food, about whatever you want, you can. Especially on mobile, I can tell you that really, really increases conversion because who has the time to scroll through 300 reviews? No one. Once you have the relevant topic and a search bar, and the topics are actually accurate, then you start to really improve the quality of content that you are able to read, and you as a consumer really are able to get the information that you need in order to make a buying decision.Stephanie:Yeah. What do you think about curating reviews from other platforms? Do you guys also incorporate Amazon and walmart.com? How do you show in a holistic way? Or I also think a lot of those consumers are very different people who shop at Walmart, are different than Amazon versus on your website.Tomer:Yeah. In general, we are big believers that we need to authenticate. I mentioned how we started that these are real people that actually bought your product, so we just do it from the content we generated. I can tell you in our photos, we curate from Instagram or Pinterest, because we think that makes sense actually from specific hashtag, or specific accounts of the brand. I can tell you ... I'll give you another example that's been explosive for us. Let's say if you are a brand that want to increase your review count. Let's say you sell a lot on Amazon, you sell a lot direct, but you want to increase your review count on your direct SMS, the best example. Our integration, when you can send review quiz through SMS, amazing. Just amazing results.Tomer:I highly recommend it for anyone that wants to increase their social proof, is to leverage SMS and SMS marketing. This is why when for us it's you use our SMS marketing product and reviews under the same data platform. That's what we work. Our platform theme works on is to make that experiences literally a click of a button. Send review request, and that's it. I think in general, we are not a big believer from curation of content. It's more about generating that content and giving you more tools to generate authentic content that we can authenticate.Stephanie:Yeah, that's great. I think just thinking about making things frictionless for the end user. That's going to change everything. Especially with reviews, I'm thinking if you send me a text, an SMS, that just said, just review it and you don't pop me around a million other places-Tomer:Exactly.Stephanie:-I'll hit the start count. If I don't feel adding in words right now, I won't, but making it easy to where I'll actually interact quickly, I think is the way of the future. Even earlier on Amazon, it was asking me to review something on my homepage. I tried to click five stars then it shot me over to another page and wanted me to write stuff, and then I just exed out. I'm like, "No. It's too much work. I have two minutes before this interview." I was just trying to say, “I liked my pair of shorts I bought."Tomer:I can tell you it's the same thing in loyalty by the way. We see that loyalty, because loyalty you also see that in brand. But loyalty is a very complex problem. In order for a brand now to launch a loyalty program, they need to give it some thought. It's not a cookie cutter, because every brand has their own thing. On the flip side, if the experience won't be dead easy for the consumer, or frictionless for the consumer, consumers won't engage with the loyalty program. This is why we really focused on building an experience that it's going to be really easy for your consumers to understand what's in it for me, and how to engage with your loyalty program. Because if not, if it's like you said, a link to another page and then I need to ... it's not going to happen. They're not going to join your loyalty club. In general, in every product that we have, we are very, very focused on a very frictionless consumer experience, because we learned so many times, it won't work if it's complicated. It just won't.Stephanie:Yeah. How do you think about building up a good loyalty program? I'm sure a lot of your clients ask, what are some pitfalls that you've seen before, and how do I make it frictionless, and fun, and engaging? How would you advise them on creating one from scratch?Tomer:Yeah, there's a lot actually and it's a complex topic that we are super passionate about. But, if I need to summarize it, I'll say that one, like I mentioned complex problem, but it has to be an easy consumer experience. Second it's not one size fits all. You really need to understand, okay, why do you want to incentivize for? Let's take Chubbies, another example that we started. Chubbies has a great loyalty program across categories. Let's say if you buy shorts, they want you to buy a t-shirt, they will incentivize you with points to do that. That's super, super important. For Chubbies the point system it's basically a mechanism to incentivize certain behavior that you want, that works extremely well. You need to figure out what behaviors do you want to encourage. Another example is ThirdLove. I don't know if you're familiar with that brand.Stephanie:Yeah, I do know them.Tomer:They also use our loyalty program. For them it was all about the brand, meaning they didn't want to use a point system, they actually wanted to use a VIP tier system. You do a certain action or you spend a certain amount, and then you get certain VIP tiers level that you can get different parts from free shipping products, discounts, whatever you want. That's been working phenomenally well for them. I think early on just in 2021, you have to have a loyalty program. I think we are past the days that, yeah, I'm not sure. You are losing a lot of money, you're leaving a lot of money on the table, but you need to first figure out what do you want to incentivize for? What is the behavior you want to encourage?Tomer:That's super important. Then, what are you willing to give, and how do you make it easy for consumers to engage onsite? You can send different emails, you can run different social campaigns, or social contests. There's a bunch of things, but eventually it's all about how do you build a relationship with your most important customers? With the customer that you care the most on? It's a very emotional experience on one end, on the other end, it's that simple. You need to see ROI. It's all about customer lifetime value. The analytic needs to be if you're not sure if your loyalty program is not working or not, it's probably, it doesn't work, because it's very easy to understand that it's working, and it's about increasing customer lifetime value.Stephanie:I think that's a good point too, about knowing your customer and what they're going to want to see. For something like a ThirdLove, I can see why they want to be seen as it's more premium, you're part of the club. We're so much more higher end than a Victoria's Secret or whoever else they're competing with, versus the Chubbies, their client probably doesn't need to see that to feel like they're part of the club. They just want the product.Tomer:Exactly. It's such a strong brand that if you buy Chubbies you're already part of the club. It's one of the best ways definitely. I'll give you another example. Maybe I can give you also to share some light about the connectivity. Let's take another one of our customer that you probably know, Steve Madden. Let's say you are a junkie of sneakers, that's your thing in life, Stephanie. You are the number one in their VIP tier program. Literally number one. Then you get sneakers and you give them a negative review because the shoelace was off or whatever. They want to know about it.Stephanie:Sounds like me.Tomer:They want to know about it and they want to treat you a little bit differently. Taking that loyalty data, or the review data and injecting it back to loyalty and help desk, and doing all of that, is so, so important in order to provide a great consumer experience. That's the only way to do so. We see that time and time again, you can not live with silo. That's one of the biggest tips that I can give is that whenever if you're a Yotpo customer, you're not a Yotpo customer, it matters less. It's about the connected experience.Stephanie:Yeah. Personalizing it is huge, and having a customer not feel they're talking into a black box. If I say, “Hey, I'm not happy with something," and then like you said, they're like, "Here's some points to just buy some more of it," or something, that's probably-Tomer:I'll tell you another joke that we use internally. Personalization, I hate it when product managers come to me and talk about personalization because I won't call it the graveyard of ecommerce, but I think the problem with personalization, it's an endless problem. There is always something to improve, but eventually for the consumer, there is a diminishing value in keep on personally up until the point. For us, it's more about look at sub segments of your customers and how you treat them differently, and how do you help the marketer really test and try certain things, but trying to personalize it. You can do that all day long and it won't move the needle necessarily. It's just about understanding from that specific customer, what sub segment they belong to, and then how do you treat that sub segment differently?Stephanie:That's really interesting. I like that. It's not like everyone is a unique snowflake. However, they probably do fit in some buckets, and you can treat those segments pretty similar, and now we have methods for them. I liked that.Tomer:Exactly.Stephanie:I'm thinking about all this data that you guys are getting, and the way that you're reacting to it and making new products and helping these brands, what data is out there that I guess you could call it dark data, that you feel could be tapped into, but you're like, we just haven't gotten there yet, but there’s always data that's out there that you feel you're still not fully utilizing. What are brands usually have access to, but they're just not fully capitalizing on it?Tomer:From the brand or from Yotpo perspective?Stephanie:I say brand perspective.Tomer:Brand perspective, I think the most interesting thing is actually analyzing the content itself of the reviews. I can give you two examples. One of the best examples which I love. Are you familiar with [inaudible].Stephanie:No.Tomer:From these scores they're actually doing phenomenally well. A phenomenal brand. For them, we actually were able to analyze the content. We have a engine called insights from the natural language processing, and we learned something really interesting. That a lot of the content was written "I'm so happy. My boyfriend bought me that and that." "I'm so happy. My husband did..." We actually told them, "You know what? We think you should launch a couples line, because a lot of your buyer persona, it's not the sheets He buying for his girlfriend, for his wife, it doesn't matter." It's one of the most successful launches they ever had. Or we have another furniture brand that I won't mentioned their name, that we showed them that the number one reason for returns of the product is actually the smell of the sofa, and they need to fix that, because they have a real problem in that.Tomer:Actually looking at reviews as a let's call it [inaudible] and that your ability to analyze on scale, and have a really smart again NLP engine that can show you what customers are saying in slice and dice, it's fair. All the volumes per a customer behavior, per location, per segment is so, so important. You can get so much in product teams, marketing teams, service teams for sure. You can get to learn so much from it. I think that's a dataset that a lot of brands are not spending enough time looking at.Stephanie:Yeah. It makes me think gone are the days where you would have people come into a room, and they try out your product and you hear feedback. It's why. Now you can just get thousands of data points, use NLP, digest the data and figure out how to change your product going forward.Tomer:Exactly that.Stephanie:Makes it funny thinking about that. What about from a Yotpo perspective? What data do you want to get access to, to inform either your current products or new ones?Tomer:Something that we think about a lot is it's very clear that commerce is going to be like Omni channel. Or is. Some of it will be marketplaces. Most of it will be direct to consumers. Some of it, maybe it will be on social, some of it maybe will be on Google, who knows. Everyone is trying that transaction will happen now at Instagram, on Google shopping, or whatever. For us, it's how do you give more value when you sell on Amazon? How do we give more verdict? We just launched a partnership with Walmart that you can syndicate all your content with a click of a button. If you sell also on Walmart, all of your content will be there as well, so you'll sell more on watermark. For us, it's really about how do we take more data? We're now working with Facebook and Google on a bunch of really, really interesting stuff, and how do we just help you to be a better Omni channel brand? I think.Stephanie:What data then are you looking at to be a better omni-channel brand? What things are you tapping into that maybe you weren't able to a couple of years ago?Tomer:For us, with every new product that we add, there was a huge data injection. Just think about, let's take SMS and loyalty. It's so valuable that you have the two products under the same data platform that you can really for the first time send new SMS'es for just your loyal customers. Just your highest VIP tier, you want to send them an SMS because you know that SMS will convert the best because they are your most loyal customer. You can do that. I can tell you sending an SMS just saying, thank you, thank you, after someone referred a friend. You would be surprised how much that increased customer lifetime value. I always give our product team our ideal experience is let's say Stephanie, one store will start opening up again. Think about you going, buying at the store that you are one of the most loyal customers, buying a ThirdLove offline store once they'll have one, and then the second you walk out the door, you get an SMS, "Thank you for buying with us again. We really appreciate that."Tomer:How awesome is that? Who doesn't want to build that brand? I think from a data standpoint, the more products that we have, we really understand better the different segments of your customers, and make it easy for you to launch different campaigns. For us, SMS, for example, was a huge vision. That's something that we didn't have, a new execution layer. Loyalty was a huge addition. I think every product that we keep adding, we are learning much more on the brand. We're learning much more on the customers of the brand.Stephanie:I like that. It definitely seems there's a lot of room, especially for in-person retail experiences to complete that journey and to also be helpful as you walk into a store. But to a point where it doesn't get creepy where it's "I see you in the makeup aisle right now, and I would go with this one over that one," that's probably is taking it a little too far, but it still seems there's room for brands to interact more because I don't get many messages right now, and the ones that I do are very generic and not helpful. I sometimes wonder, why don't my, a customer service rep, take a picture and send it to me and be, Hope your day is going well." I think I would like something personal and funny like that, more than just come in and get 20% off today.Tomer:I can tell you what we're hearing now from brands is that they are sending so many generic SMS that they actually... an SMS is ... it's not a cheap channel. It's not like email. You need to actually pay for the message for the carrier. You really need to think carefully, “Okay, maybe for customers that gave me one star review, I need to ask a different SMS and send them, 'Hey, how can I change the experience? I'm sorry, what can we do?' versus customers that raved about the price, and maybe send them an SMS talking about a discount of customers that talk about the service, say send a picture of the customer service that helps them. That connectivity is I think what's really, really important.Stephanie:Yeah, I agree. Where do you see the world of UGC in general transforming to over the next couple of years?Tomer:I think UGC will definitely move towards a place that how do you take the content you're able to create, and leverage that in multiple places in your email marketing, in your SMS marketing, on your social ads, on Walmart, on Amazon, on Etsy, wherever you are as a brand, how you interact with consumers, that's where you need UGC to be at. I think that's super, super important. The second thing is that, what do you understand from that UGC? That's something that I feel that as a company, we are just at the tip of the iceberg. There's so much to be done there because these are the most important signals from your customers. That's something that we are very, very excited about. The question is, will there be a new form of UGC? Stories, voice.Tomer:There's a lot of things that we play around with in our hackathons to really trying to help pave the way of what's next in UGC. I can tell you it's very early, like videos actually for now for us now is a new format that's also been growing really, really quickly. Will there be a new format? That's also really, really interesting.Stephanie:How do you view influencers versus UGC? Because the way the market's headed right now, I wonder if the whole influencer scene will start to die off, because people will keep wanting more authentic interactions and relationships, and they want to buy from people that feel more like them. How do you see influencers playing out all that?Tomer:The influencer is another really interesting field. First of all, I think it depends. Again, it's not a one size fits all. It really depends on, what do you want to achieve with influencers? I think people understand today that just giving the Kardashian your product doesn't necessarily mean that you're going to increase sale. They can really, really help, and you can see Kylie cosmetic. But the top influencer was actually building their own brands because they understand that's where the vast majority of revenue is, and that's something we see a lot in. Now you see micro influencers. I think you probably need to do both, and different purposes. I think a UGC is more let's say the basics. You need to have social proof. For me, influencer it's more about another channel like paid.Tomer:Like a Google ads, you now have influencer ads, if you want to influence attacks, and it works, and you need to do it very, very well, but it's actually not related to UGC. UGC it's the foundation of your brand. You cannot do Google ads, you cannot do influencer ads without it. I think in general influencer is really interesting, but I also think that brands and influencer today, they see that in order for it to work, they need to be authentic. Stephanie:I completely agree. All right. The last question before we jump into the lightning round, do you integrate with awesome platforms like our sponsor, Salesforce Commerce Cloud?Tomer:Yes, definitely. We are a big partner of Salesforce Commerce Cloud. We're actually I think one of the fastest growing solution on Salesforce Commerce Cloud at the moment, and they've been great partners of ours. We have really amazing brands. We started with reviews, now with loyalty, SMS is coming in just a few weeks I think. Yes, definitely. I think it's one of the best platform for the enterprises that we see in the market.Stephanie:I completely agree with that. With that, let's jump into the lightning round, which is brought to you by Salesforce Commerce Cloud. This is where I ask a question, and you have 30 seconds or less to answer. Are you ready Tomer?Tomer:Of course. I was born ready.Stephanie:If you were to have a podcast, what would it be about, and who would your first guest be?Tomer:What a great question. I think if I need to do a podcast, it will be just some great ecommerce stories, and I think just like one of the best people I know from the industry, his name is Scott Perry. He's now the leading everything related to ecommerce in Jerome, before that he was involved with furniture, he's just freaking awesome. He's just really, really awesome. The other one that I really, really love is actually Lauren from Shopify. He's another really awesome person to spend time. He basically found the Shopify plus.Stephanie:I like that. It might be a little competitive with our podcast. However, competition is healthy, so I'll accept it.Tomer:No, I think what you're doing by the way is super, super cool. It's really, really interesting, and anyone in ecommerce should ... these are exactly the type of content that people should be listened to, if you care about ecommerce.Stephanie:Thank you. I love that. Man, it's good thing I brought you on. What is the nicest thing anyone's ever done for you?Tomer:The nicest thing that anyone ever done to me. I think definitely I'll say my wife. We have two young boys. She saw me in some really, really tough nights, and she was there to really help me pass through those tough nights. I would definitely give it to my wife.Stephanie:Shout out to your wife. I hope she listens to this. That's great.Tomer:Of course she will.Stephanie:Yeah, she will. What one thing do you not understand today that you wish you did?Tomer:I don't know. How do you get a crying baby to stop crying?Stephanie:I, after three boys, I still don't fully know that one. That's just a question that can't be answered.Stephanie:All right. The last one, what is the last ecommerce purchase you made that you're most excited about?Tomer:I'm actually super excited. I don't know if you can see my background, but I bought from a society six. It's one of our customers, and it's actually a great story to end with. I think I can share about the Yotpo culture. When we founded Yotpo, you know that how every startup is saying that they started at a basement and yada yada. Our office was a real basement, meaning it was an apartment building, you would go down, turn left. There was no lights, no nothing. Even for people that were willing to interview for two people start startup, we got some feedback that their office is too hardcore. We didn't have money for furniture, and we didn't know what to do. I stole for a different time. I had a bunch of Sesame street puppets at my apartment. So I brought them to the office and that started to be our vibes.Tomer:Then when we moved to a real office, we took them with us, and then when we started opening offices across the globe, people thought that they need to bring Sesame street stuff with them. Then when we moved to the home office in COVID, I said, "Okay, we need to bring Sesame street stuff." I bought from society six. We never forget where we coming from, where we came from. Sorry. I think that's maybe one of the things I'm most excited about, and I just bought ... Actually there's another one. Because I keep buying from our customers. That's my thing in life. I buy just from our customers. There's an Oura ring that helps you sleep better and analyze your sleep. I don't know if you're familiar with that.Stephanie:No. What's it called?Tomer:Oura ring. It's really, really ... I don't know if people can see, but it's-Stephanie:You can explain it to anyone who [inaudible].Tomer:It's a ring that basically tracks, with an app tracks, how you sleep, how you need to give you let's say guidance on how to better sleep. I'm super excited to test it. It just arrived today, and I'm going to test it. Excited about that.Stephanie:What things do you think it'll tell you? To sleep better, quarantine your kids off in a room where you can't hear them, or?Tomer:I wish. I wish someone would tell us that, yes, yes.Stephanie:You got that. Tell me how that works. That sounds awesome. Well, Tomer, thanks so much for joining the show. It's been a pleasure. Where can people find out more about you and Yotpo?Tomer:First of all, thank you for having me. It's a pleasure, and I think we in Yotpo are big fans of the podcast, by the way. We have a few episodes that we mentioned, it's actually a thing. You can just go to Yotpo if you want to meet personally. It's tomer@yotpo.com. It's nothing too special, and feel free to reach out.Stephanie:Amazing. Thanks so much.Tomer:Thank you for having me.
Bate-papo muito informativo com a nutricionista Dra. Angelica Stephanie, uma das três criadoras do nu.trinforma que tem a função de descomplicar e trazer dicas de nutrição para a popuçlação, muito obrigado pela rica entrevista e volte sempre ao nosso programa! --- Send in a voice message: https://anchor.fm/eduardo-freire0/message
If done correctly, a two-headed strategy of driving sales on Amazon and your native website could yield huge dividends. But what does that kind of strategy look like, and how can you create a scenario where one builds off of another?The answer lies in assortment and pathways into the brand experience. Ben Knox is a bit of an expert in this area and he’s here to share his expertise. Ben earned his stripes working on Red Bull’s ecommerce strategy, and now serves as the vice president of ecommerce and growth at Super Coffee. According to Ben, brands need to come up with an assortment strategy that allows customers to get what they want, when and where they want it, but also leads them back to the type of brand experience you want them to have. He also details how beneficial a subscription model can be, if done right. Plus, he gives some tips on how to get the most out of your texting strategies and what is going on in the wild west of customer acquisition.Main Takeaways:Assorted Assets: When you sell on Amazon, as well as natively on your website, you need to decide on an assortment strategy and how each site can build off each other. Whether that is only placing a select assortment of products on Amazon, or having a full assortment across channels, but offering more subscriptions and sales on your website, it’s crucial to have pathways back to your branded channels.Gotta Flex: If you offer subscriptions, you can only achieve true customer success if you offer flexibility. Even if it means that your customers can cancel a subscription ten minutes after they sign up, those are the kinds of options you need to offer. Doing so allows your customers to feel unburdened and that the experience is risk-free, which makes them more inclined to sign up.Text Me: There are benefits to separating your text strategies in order to maintain the relationship you want with your customers. Having separate text numbers for subscription management and branded content will help customers differentiate the experiences they are having and allow you to cultivate a true VIP experience with those who opt into the branded company channel.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone, and welcome back to Up Next In Commerce. This is your host Stephanie Postles, co-founder and CEO at Mission.org. Today on the show, we have Ben Knox joining us. He's the Vice President of ecommerce and growth at Super Coffee. Ben, welcome.Ben:Thanks so much for having me. I'm excited to be here.Stephanie:I'm really excited to have you on. So, you have a very long background in ecommerce. I feel like you're a veteran when I was looking through your profile. And I was hoping you can start there and go into where you've been and how you got here.Ben:Absolutely. I think that's a great foundational question. I started my career at Red Bull at the headquarters in Los Angeles. And looking back on it, couldn't be more thankful of a place to start my career. Obviously, one of the most exciting and powerful brands that CPG has seen in the United States, if not worldwide over the past several decades. So learned a lot there. Started in brand marketing, rotated into corporate strategy, eventually distribution, before finding my way into a special project on ecommerce and at Red Bull at the time And even today, the entirety of ecommerce really relates to Amazon.Ben:For one reason or another, Red Bull only wants to sell merchandise and things like that in a direct consumer way. Everything else is for retail and Amazon would be considered there. So, that was my first experience in ecommerce was leading global Amazon strategy for Red Bull starting in the United States and then, exporting that to Western Europe which was a really exciting opportunity. Great way to learn ecommerce from really the best and brightest, Amazon. Spent a lot of time in Seattle, working with the vendor team there and the related marketing teams. But eventually was really interested in going deeper in particular on direct consumer, paid media, things like that. And so, found my only real opportunity to do that was to leave that great brand, leave the company and join what ended up being several other startups and companies since where I've gotten deeper.Stephanie:Cool. So what does your day to day look like at Super Coffee and what is Super Coffee?Ben:Yeah, absolutely. Super Coffee is an enhanced Coffee Company playing really in almost all consumer packaged goods coffee categories. So, we have bottled coffees, can coffees that really tastes like delicious frappuccinos but don't have any of the calories sugar or carbs and other added positive ingredients, functional ingredients for health. And we also sell similar super espresso product. It's like a double shot espresso, more portable, more on the go, less liquid, same performance.Ben:But also, as of last year, we've moved into ground coffee with added vitamins and antioxidants, k-cup coffee pods and then, previous to that we had been selling creamer, super creamer, similar profile, very decadent, indulgent, but high on health, low on sugar and calories and all that working together as one stop coffee shop for the health minded consumer.Stephanie:That's awesome. And then I saw... so the company was started by three brothers. Right? Was it when you were in college?Ben:Yeah, Jordan as the youngest brother, Jordan DeCicco and his brothers Jake and Jim, his two older brothers, founded the company together. Jordan actually formulated the first Super Coffee in his dorm room and enjoyed it himself and then was sharing it with his former basketball team players. He was a college athlete and got an insight that there's really nothing like this out there.Ben:They didn't enjoy... they enjoyed the flavor and the taste of Starbucks drinks and cafe drinks, but not the way it made them feel, nor the sugar and the calories. And they also liked the idea of energy drinks, but again, not great ingredient profiles and tons of sugar and those things too. So they didn't want to put that in their body and that's really why they started Super Coffee. And, like mentioned, Jordan formulated it in his dorm room for the first time, and then, slowly but surely convinced his brothers to join in on his mission of disrupting the coffee industry. And now, five, if not six years later, here we are and and it's really amazing what they've accomplished.Stephanie:Yeah, it's definitely huge progress. I saw that they were on Shark Tank back in 2017 and then, now recently, they received investment from like big NBA stars and NFL quarterbacks. And then, I think most recently, the company is valued at like 200 million in June or something which blows my mind for something that started in a dorm room. That's amazing.Ben:Yeah, let's not forget J.Lo and A-Rod are our investors and partners in the company and it's no big deal.Stephanie:No big deal, J-Lo. What is up, girl? So, obviously, this company is awesome, which is why you're there, what does your day to day look like as the VP of ecommerce and growth? What do you do?Ben:Yeah, it's varied. So overseeing the sales division of ecommerce so, the actual divisional P&L for Shopify, Amazon, and then, that long tail of third party online retailers. Thrive Market is really awesome standout, actually a new partner of ours, early this year and really great partners so far. So really excited to go deeper on that relationship. Walmart.com is in the mix there as well. So, that's from a sales, divisional responsibility. That's what we're working with. But then, also responsible for the 3PL, whose services all of our ecommerce order fulfillment, the 3PL also services our Amazon business, so is basically, [inaudible] and inbound logistics to Amazon for FBA. And they also do some managed services for us. On top of that, also responsible for overseeing all of our acquisition or retention marketing efforts to really drive both of those two strong horses.Stephanie:Cool. So, what is the breakout between selling on Amazon, selling on your site, selling on other websites, what does that breakout look like? Are you favoring one area right now? Has it changed in the last year?Ben:No, it's the... the really interesting thing about it for us and it's funny now, having done this with a few different brands, it's so brand specific, where your consumers desire to shop from you and for us, we really maintain a very consistent mix so what you might often see is a brand, start strip consumer, then they start moving into Amazon and customers just shift in to Amazon, because everybody has a Prime account these days. It's very easy, very dependable, great return policies, all that so there's a lot of trust there. You're already doing a lot of shopping there. So oftentimes, you'll just find your customer base moving to Amazon in that somewhat uncontrollable way.Ben:There's definitely things that you can do to maintain a more healthy mix. And I would say a lot of those, factors and criteria are in place at Super Coffee and so as a result, we maintain a really healthy mix, let's call it 60%, Shopify, 40%, Amazon, and both both scaling pretty consistently against each other and maintaining that mix and we expect that to continue this year.Stephanie:So what are some neat tricks with selling with Amazon because we've had a lot of smaller brands on here, DTC players who... we've, of course, talked about Amazon creating a white label version of their product and we've also had a couple people be like, there's nothing to worry about as long as your product is strong. How do you guys think about selling on Amazon? And what opportunities are there that maybe people are missing?Ben:Yeah. So, there's many ways to skin a cat there and again, it's very brand dependent on what's right for us. Our context is we really are a retail brand first. So we're now, I think, in over 30,000 outlets across the United States, approaching 60 to 65% ACV so we're getting pretty ubiquitously available. But obviously, nothing compared to a Red Bull that, at the time I left the company over 300,000 outlets, so you can stumble and buy a Red Bull no matter where you are.Ben:Super Coffee is a bit earlier in that lifecycle, but still predominantly retail brand. I think in relative to our category, we really want the consumer to be able to have perfect availability of our products and to be able to purchase our products, when, where, how often, from whom they like. And so from, this is leading into an assortment strategy, from an assortment perspective, maybe another brand might have only select assortment on Amazon and then, to get the full brand experience, you have to go to the website. So, that's a natural path toward toward direct consumer.Ben:There's other ways that we do it. However, we provide the best subscription experience and discount on our website. So, we actually offer subscription on a limited basis. And when we do only the 5% funding amount on Amazon, whereas our website is 15% and so, naturally loyalists, people who are really engaged with the brand will come over to us. And there's other things like special bundles and different content and things like that the website offers that Amazon simply can't.Stephanie:Are you oftentimes finding your customers on Amazon and then, speaking to them in a way that brings them to your website afterwards, top of funnel, they come there and then, you pull them in to create a loyal customer base and retain them?Ben:Yeah, there's a master design for that to occur. It's almost though in practice a bit of pushing a boulder uphill, in that people are demonstrating an intent to purchase somewhere, and there's something there, right? And so, if they are starting to buy on Amazon, that's really an Amazon customer, most likely and then, the factors that would drive somebody from Amazon to our website are a bit more natural and gradual per se. That being said, we do nurture that behavior but it's not a really aggressive, offensive strategy that I would say we've unlocked. Even though I would like to say that we've unlocked that as a massive arbitrage opportunity on the platform, we do find that people tend to stay where they start.Stephanie:Yeah. I mean, what would the ideal state look like to you, if you were to make it into the perfect funnel? How would you have it work, if you could just choose?Ben:Semi-limited assortment on Amazon, full assortment, full experience on the direct consumer website. And then, different mechanics and communication strategies in between that Amazon experience, that trial opportunity into the direct consumer experience. Again, slightly different for us, since we're beverage and consumable, or really on the go and post product, retail product, but a brand that's maybe less oriented in that way, could more aggressively attack that type of opportunity.Stephanie:Yeah. Cool. And how do you guys think about subscriptions? Because that was a thing that I feel like everyone wanted everyone to have subscriptions to their products? And then, I feel like a lot of people realize, okay, that's actually not best for our customers, because they don't need a subscription for whenever we have t-shirts or something so we are going to drop that from their offering. And now, it seems like it's making a comeback, but only with certain products. So how did you guys think about that as part of your customer retention strategy?Ben:Yeah, subscriptions for us are paramount, I would say. So, again, a very consumable product. Ideally, we are 50 to 100% of your coffee consumption, obviously, when you're on the go on the weekends, you're out with friends, things like that, pop into coffee shops, you can't avoid that, of course, but relative to... especially, from being at home and through the pandemic in the last nine months, we really want to be that one source coffee solution for you at home, irrespective of your on the go behaviors. And so, for that, subscription, works perfectly on that repeat purchase behavior.Ben:And it's great because you don't have to recruit or remind that shopper to come back and buy every single time they're running low. It's actually right... it's going to happen anyways. But then, we give them the opportunity to say, Hey, not right now, I'm not quite through my last order or we give them the opportunity to say, Hey, I blazed through that order. Let me get my next one, ASAP. So there's that opportunity to modulate on the consumer side of things, that makes it an ideal situation.Ben:I think the technology is not quite there yet to make that a perfect experience, that 30 day cadence is not always perfect for the amount of units in a case and the amount of units in a case is going to last you longer or less time than it would, me. So it's not perfect, but we are working on communication strategies and software and technology to help improve that subscription experience for our customers.Stephanie:Yeah, I think that flexibility is key, I even think about something like Stitch Fix where they say you can pause the orders, you can start it up again, you can take a vacation from it, whatever you need to do. And, I think that feels very risk free like you mean, I can just try it once and then, pause it for three months, and then, try it again? And it's just so different from how it was, I would even say a year ago, where it felt very, cut and dried, you're in it or not. You can get six months in or you can't have it at all, which shows so much has changed a lot.Ben:You're committed. Yeah, we offer ultimate flexibility. You can add a subscription to cart, checkout and then, go and log into your account and cancel that subscription, five minutes later and while that's not ideal, it's okay. That's okay. And really, it's more modeling less than, in a way, the function of subscription itself, we're modeling a loyalty program, in a sense. And so, if our subscription customers get 15%, every order, don't really care if they're actually on a subscription that auto bills them, or they're managing that bill on their own. So, we find ways to incentivize and give rewards and give backs regardless of the way that they are actually going about that.Stephanie:Yeah. That's cool. So, what are some of the biggest driving forces with the program that work well? Is it just the cost savings that usually attracts people and then, something else, once they're in it or what do those incentives look like?Ben:Yeah, it's the cost savings and then, the stated flexibility, the money back guarantee, things like that get them in and interested. Thereafter, one of the things that we invested in six or nine months ago, was basically text message based subscription management. And so essentially, three days before re-bill, an automated text will go out and say, hey, your order of, fill in the blank, is set to ship in three days, would you like to make any changes? Gives the opportunity to opt out, cancel, gives the opportunity to say, ship it right away. Thank God, you messaged me. I'm ready for it now.Ben:They can add products that are not even subscribable. So, they can add season or one time products to try, things that might not even be subscribable. They can modify quantity. They can do all kinds of stuff. It's just as easy as a text message back and forth. So, that's the experience that we're trying to create both at managing and an automatic and dynamic concierge experience for the customer. To really make that experience carefree, really feel like they have as much control as they want over the experience and to steer away from what you were mentioning, which is the old history of you opt into a subscription, you get a deal. And then, you try to go log in and cancel, you can't even figure out how to cancel the dang thing and that's not-Stephanie:Call our customer service representatives and [inaudible].Ben:My gosh, yeah. Email us or okay, that's crazy. So that's not the business that we're in. We're in it to spread positivity, create a great connection with our consumers because now, they're not just buying from us on our website. They're buying from us in stores and they have family members and friends and that kind of experience goes a long way and, the opposite experience also goes a long way.Stephanie:Yeah, I agree. What did it look like after you implemented the SMS stuff? And then, all of a sudden, the customers can easily just be like, and cancel. What did the results look like? Was there anything surprising there?Ben:Yeah. So you'd think, okay, you're would go through the roof. And because you give somebody such an easy way to cancel, it's almost a fear mindset rather than an opportunity mindset and what it actually did for us is it didn't increase cancels, but it decreased cx inbound. So, it actually decreased our costs on the customer service, customer experience side of things, because customers could then, choose their own adventure, right? And self service.Ben:And, philosophically, we haven't gotten the data yet until a software, right? The customer has a great experience, doesn't have to email support, all of that back and forth, they're probably more likely to come back later because there's less thrash, less risk of a negative experience. So all in all, great from that perspective, and great from the perspective of allowing people to increase quantities, add new products, things like that. So AOB subscription has also increased.Stephanie:That's awesome. Is there anything else that you do in the text message arena where you're like, this is also working well, or another way that you communicate with your customers outside of just your orders coming up from a subscription standpoint?Ben:Yeah, we do. We do marketing blogs so to... the other part of our text message strategy, and I like calling it a text strategy, not an SMS strategy.Ben:It's pretty much what everybody calls it, but I even see it sometimes where companies or brands, call it that to consumers. And I see it printed on packaging or it's like, send us an SMS. I don't know if any consumer knows what an SMS is.Stephanie:Calling on a landline.Ben:Yeah. Exactly. So, relative to that, it's actually two separate softwares that power it, which we would like to synthesize over time. So two separate phone numbers that these communications come from. So, we let people know that this is your subscription phone number and then, this is the Super Coffee personality brand phone number. And on that second one, we really nurture that as a VIP audience and so, when we do a product launch, things like that, we let people know if they want early access to the new products or early access to, let's call it a Black Friday, Cyber Monday sale, or what have you, you're going to get a 24 hours heads up, to everybody else, to get that early access if you're opted into our text message database.Ben:And so, that's largely how we use it, get early access to things like that product launches, seasonal products and then, the occasional motivational marketing push, things like that that are more conversational, less, we're trying to sell you something. And, I think that's the direction that we want to continue to go deeper on, is driving personalization, driving value, as opposed to asking so much. I think that's something that the industry is striving for as well.Stephanie:Yeah. I agree. It definitely is a tricky channel to where you see a lot of people doing it wrong. And I can see brands being hesitant to even try it out because they probably have experienced something not so great themselves. And they're like, I just don't want to get it wrong. Because I mean, I'm sure you get the random text where you're like, I don't need that coupon right now. I'm in bed, watching Bachelor, which, Ben, I know, you're doing the same thing. I just don't need that right now. It's unhelpful.Ben:There's this... I don't know, who invented it is probably decades, if not 100 years old but this concept of, I think Gary Vaynerchuk might have popularized it, but this concept of give twice, or give three times or five times before you ask for anything. So, it's all about that, giving value and that can be modeled through social media, that can be modeled through email marketing, and that certainly, I think, should be modeled in text messaging but it's tough as marketers or as business owners, business operators, as soon as you stop being consumer, sometimes it's hard not to become incentivized as the business owner and want to sell, sell, sell.Ben:I think sometimes as the business owner or the operator, it's easy to forget what it's like being a consumer and slip into that sales mindset. But I think it's important for us to all, empathize as much as possible with being on the other end and really think about what you would like to receive from a brand as opposed to just another sort of promo?Stephanie:Yeah, I definitely agree that as a business owner, seeing all this data, it's easy to slip into that mindset to, you people like that and, especially, if you're being measured by certain KPIs, and you're like, well, if I send out three random poems or jokes and my boss sees that, they're going to wonder what I'm doing and I can explain it versus my marketing message, which is very kosher and by the books, might not perform as well, but less explaining, just-Ben:Yeah, exactly. So, I think depending on where you are in your organization, or who's listening to this, doing this correctly could require a lot of education upward or throughout the organization. And it's tough, because it's a long term thing. And it's building trust with the consumer, but you also have to build trust internally, to give yourself that runway to operate like this. So there's no silver bullet here, but something to strive for, for sure.Stephanie:Yeah, I agree. So what do you see right now, when it comes to the customer acquisition landscape. What has so far 2021 looked like? Is it very different than prior years?Ben:Yeah, it's interesting, I think... two things happened last year and people started spending more time on the Internet and on their devices as a result of the pandemic. So in a way, there's now more reach, more impressions, for sure. And then, there is definitely a surge of people buying more heavily online in certain categories than they ever were before. But I think, we're moving toward the back end of that and reverting to a new mean or a new normal. And, now we've also had nine months for advertisers and brands to catch up to starting to sell and advertise on the internet. And so, there's a crowding from the brand side of things and certainly over the last... [inaudible] always but even now, in starting the year, things are just continuing to escalate and get more expensive on CPM and CPR basis.Ben:So putting increasing pressures on cost per acquisition, and overall customer acquisition costs for a brand new business that might have been previously very reliant on paid digital advertising to find new customers. And so, at least what we're focusing on is diversifying, not only just in channel, so testing obviously, other advertising channels to acquire customers. But diversifying away from paid and more into owned and earned and shared, obviously, longer term investments, things like Content Marketing blog, or let's say, diving deep and building an organic presence on TikTok, which is a buzzword and everyone's very interested in right now.Ben:Pinterest is another area. Pinterest is really the third search engine of the internet, I would say, behind Amazon and Google. So that's something that's been hiding in plain sight for a long time and strategies like that to nurture a healthier upper funnel and then, Paid may be more of converting, retargeting remarketing engine, than a prospecting engine is probably the best way forward. from our perspective currently.Stephanie:Yeah, and I think that's a really good viewpoint, especially when you think about what's happening around the privacy rules and what people have relied on for a long time when it came to Facebook ads and like what IOS is coming out with, it seems like a lot is changing but brands are going to have to rethink how they find new customers just like you're mentioning.Ben:100%.Stephanie:Crazy. So, when you're talking about, right now, there's also a lot of crowding from the brands who popped up, who either came online that weren't or a lot of brand new DTC companies that all started last year, a lot of them did, how do you think about making sure that Super Coffee shows its value in a way when there's a lot of other coffee players popping up and keto brands and butters that you add to your coffee, it feels like the space is getting very saturated. How do you know keep showcasing your value and why you're so different than a lot of other brands?Ben:Yeah. 100%. We tested so many different creative strategies, and this is... we'll talk about paid advertising for a second. Ultimately, we've come down to a few key creative formats or messaging strategies on the paid side that work really well for us. One that we continue to own is is a comparison style ad, which is putting us up against a really sort of delicious looking, we'll call it a Starbucks or a Dunkin Donuts cafe drink with foam and cream and swirl and things like that. And then, putting our product directly next to it, and saying, hey, everything about this... these two things are the same, actually, except for and then we flashed through the nutritional profile, the calories, the sugar, the carbs, that works really well. And, that's not only driving value for us, from an ecommerce perspective, but that's driving global value for us all the way, through the omni channel environment. So we're really happy about that type of communication and that creative strategy, very hard working. That side of things-Stephanie:It's hard too because you're instantly anchoring yourself to a brand that everyone already knows about. So you don't even have to explain, it tastes like this, it's got its own, you don't even have to worry about that when you anchor yourself to a larger brand like that.Ben:Exactly. It's interesting. It's a strategy that has being successfully used by the Magic Spoons of the World, maybe a bit easier, right? Because we've all known for a long time now that cereal is not good for us but we love it, right? I grew up on cereal. I'm from the Midwest and I subsisted off the cereal. So when I learned Magic Spoon came out and Catalina Crunch and different brands like this, it was like, no brainer. I'm ready to try that because I've been dying to eat cereal for a decade and I told myself I couldn't anymore. That's a great comparison.Ben:Ours, we were comparing it against a bottled product in the past. But less household penetration on those types of products, what we really found success in is actually comparing it to the cafe drinks, actually looks like they get an indulgent frappuccino from Starbucks and maybe less people actually, these days are getting frappuccinos than they did so it's moving toward that sterile example, as opposed to bottled or canned coffee drinks, we might still in a way not know that those are super unhealthy for us.Stephanie:What are some other creatives like that that you guys are leaning into?Ben:Yeah, otherwise, we really lean into UGC style creative, raw stuff, really focused on the product this year. So our product, we do have packaging that really distinguishes ourselves from the category, a lot of white in our packaging, we have that Angular slash to our packaging that really stands out. And what we found is really just a standard iPhone style photo, tightly cropped bottle or can is oriented such that the user can actually read it, if they're scanning through the feed. And, with some situational context that could feel like it's a real person, right? It could actually be real UGC, could be manufactured, etc.Ben:Either way, it gives that sense of, okay, I learned that this product in comparison to this other drink is a lot healthier for me. And then, okay, on my second impression from the brand, I'm seeing that this is actually a real thing that exists in the world. I can see myself holding and consuming this product. Let me click through and give it a try. So, that's the funnel, oversimplified, how we think about things currently but both of those creative styles have been very hard working for us historically.Stephanie:That's such an important shift. I've even seen personally like when I'm on Instagram or Tiktok, and I see people using something or they have something in their room, where I'm like, it's like my living room right now. But I don't remember thinking that way, a couple years ago, where I was looking for that more, I really want something to look formal and official. It's already the real deal if you spend a lot of money on it, where now I mean, our best performing ads for Mission are, I'll be walking around with the iPhone, doing the ad and that movement, and organic look does way better than anything that we've actually produced in a formal fashion.Ben:Totally. Yeah. People are turning off the advertising these days. The more polished it looks, the worse it performs, in a way, which is so ironic.Stephanie:Yeah. I agree. So, what channels are you most excited to... I mean, I know you mentioned like TikTok and Pinterest but then, everyone's talking about TikTok, where are you guys zooming in on for this coming year that you're really excited about?Ben:Yeah, we started investing pretty heavily in podcast advertising, as of the start of the year. So we're advertising on shows like Armchair Expert and Pod Save America and Sibling Rivalry and a whole basket of great shows that have partners that represent our brand and are a great fit for our audience. So that's been going quite well. And that's exciting, because it's supportive of the total business, again, maybe moving from a singular ecommerce mindset to more of an omnichannel view on on the world and the market.Ben:So that's been great, we'll continue to invest there and work that into our ongoing marketing mix, a bit more upper funnel. And then, I think, yeah, as I mentioned, really thinking through a Content Marketing Strategy holistically as an upper funnel driver and obviously, there's different distribution channels, but really owning an editorial calendar, owning our perspective, leveraging our partners, and then, distributing that in the channels that are applicable, and really bringing all that to the world of Super Coffee to life, through our partners and through content, I think, is going to be our bleeding edge this year. And really write the ship relative to upper funnel, mid funnel, bottom funnel, and create that healthy balance that all of us are looking for in this industry.Stephanie:One thing I have been thinking about lately is how... in the next coming years, all these brands are turning into essentially, like media companies creating content, and everyone's going to be trying to pull the consumer back to their blogs, to their hubs, and it's like, instead of just going to Instagram feeds and seeing it on there, you're going to be pulling people back to your websites. I mean, how do you think about that landscape because it feels crazy, thinking about hundreds of brands going to be like, come back to my blog to see content that we're creating. And you have to kind of go in a million different places to find it.Ben:Yeah, I think it just puts an increasing pressure on, I will say quality, quality is in the eye of the beholder, right. So, it's, again, like we mentioned quality from designer or creative director of yesteryear is perfect, polished detail dialed whereas quality these days is on a YouTube channel or TikTok account and from a mobile phone and not really produced and published and polished. I think it's quality, it's relatability, it's authenticity and above and beyond all that, it's having something to say, that really speaks to somebody and makes them feel like they're engaging with a personality, engaging something that means something to them, that makes them feel a certain way. And so, it'll just put an increasing pressure on that confusing definition of quality for the consumer, to really create that connection and say, hey, it's worth subscribing to us directly, as opposed to all these other 100 brands that offer X, Y and Z to you. In order to do that, you're going to stay focused and attention on us and not the rest of them.Stephanie:Yeah, I think about the amount of newsletters that popped up last year where obviously, that whole industry is very much democratized. And now, anyone can make a newsletter and charge for it and I subscribed to quite a few of them. But then, now, I'm like, whoa, what'd I do? I mean, now they're coming in, I'm having to send them into different categories and filter them so you don't hit my inbox. And it makes me think that could be an eventual future for brands too, if you don't figure out how to write something, create something that someone is eager to open and actually wants to hear what you have to say and doesn't just drift over to a corporate create marketing message over time.Ben:Yes, exactly. It just all goes back to giving and creating value and it's dependent on the brand and the Tim Ferriss mindset, which is tools, tips, practices, all of that he gives his audience, that's why you go listen to Tim Ferriss. It's contextually different for a brand or for another personality in a podcast or what have you. So, it's all about knowing what you want to say, knowing what you have to give and share to the world and then, give it as much of that as possible.Stephanie:I agree. All right. Let's shift over to the Lightning Round and Lightning Round is brought to you by Salesforce Commerce Cloud. And, this is where I ask a question and you give an answer under 30 seconds.Ben:Wow. Okay. Exciting.Stephanie:What one thing from 2020 do you hope sticks around throughout 2021?Ben:Wow, not much.Stephanie:I know, that's a hard question.Ben:Well, I think, this is going to be a firm answer but a lot of people are of the belief that COVID accelerated transic technology, transic consumer behavior that would have otherwise taken 10 years to happen so, I think, as a digital marketer, as an ecommerce professional, I think thankful and excited for all the change relative to consumer behavior and online commerce that happened in 2020 and I don't think we are going backward on that so excited and thankful for it and excited for what's next.Stephanie:I like that. What's your favorite resource or resources to stay on top of, like the ecommerce industry as a whole?Ben:There's great podcast like yours. I'm not talking to other podcasts because I was on it, DTC podcasts, I think it's Pallet House labs and speaking to these others, they've got really great newsletters as well.Stephanie:Cool. Sounds good.Ben:[inaudible]. Yeah, they're killing it.Stephanie:What one thing do you not understand that you wish you did?Ben:I feel like I wish I understood almost...I don't feel like I understand anything, ever, in a way especially in this industry, everything is always changing and you would speak to somebody, you had such high confidence over something that you feel like you don't know anything about and that's just the constant feeling that you'll have and so, I think, always maintaining an extreme curiosity over things, continuous learning. You'll never know it all so I think that's in the DNA of somebody successful in this industry in ecommerce and digital is, that needs to be a big thing.Stephanie:Yeah. I agree. What's the last purchase you made online that you normally would not have, online prior to 2020?Ben:Well, I'm a new dog dad.Stephanie:Congrats. What's the dog's name and what kind of dog is it?Ben:Her name is Honey because she's so sweet and she's rescue pup, about six months old and we think she's a lab mixed with jindo which is a Korean breed.Stephanie:Okay. I'm like, I know what kind of dog that is.Ben:It's almost like a Siberian Husky that's more slender.Stephanie:Okay. So you bought that offline or you bought something for her online?Ben:I buy everything for her on the internet now. I never bought the pet category before in my life and certainly not online so that's opening me up to just a completely different world of industry and I think, the number one ecommerce category is vitamins and supplements, number two is pet supplies, number three might be pet food and over 50% of pet products are bought online so pet is the most endemic ecommerce category there is besides vitamins and supplements.Stephanie:Yeah. All right, Ben. Well, this whole conversation has been a blast, thanks so much for coming on and sharing your knowledge. Where can people find out more about you and Super Coffee?Ben:Yeah, Super Coffee is easy, drinksupercoffee.com or just type us in the search bar, Super Coffee in Google or Amazon, they'll find your way to us. Myself, really the only place I exist is on LinkedIn. That really means in any social profiles. I don't have a newsletter or a blog myself but feel free to find me on LinkedIn and make a connection and reach out and love to connect.Stephanie:Perfect. Thanks so much, Ben.Ben:No, thanks, Stephanie. It's been great.
When people scroll through Instagram these days, they can’t avoid the ads and the influencers pushing products. And that’s not a bad thing. In fact, more and more often, ecommerce is taking place in channels other than on a brand’s website, which is why so many companies are looking for ways to optimize how they execute commerce at the edge -- this means meeting customers where they are. Paloma has one way to do that, by turning messenger platforms into sales channels, which creates a more personalized shopping experience for customers, and a .5-to-10x higher conversion rate for brands.On this episode of Up Next in Commerce, I was joined by Kelsey Hunter, the Co-Founder and CEO of Paloma, to give us the inside scoop on why brands should be investing in conversational commerce. In the last year, Paloma has helped partners convert $9 million in sales, and she explains how that happened by simply diverting ad traffic away from a website and into a chat instead. Plus, she discusses the future of conversational commerce and how the low barrier to entry into the ecommerce industry is forcing everyone to adjust quicker than ever before. Enjoy this episode!Main Takeaways:Website Woes: Moving forward, a brand’s website will become more of a secondary piece of collateral when it comes to driving conversions. It will still be critical to have a fast, highly-efficient website experience, but more of the interactions and conversion efforts will be focused on other channels where customers are spending more time.Get To The Party: The worst thing a brand could be doing right now is not experimenting with and setting up processes in Facebook Messenger and other messaging apps. Customer service and the customer experience are two of the leading drivers of conversions, and ignoring a channel that allows you to provide a proactive and personalized experience is a huge wasted opportunity.Far Out Future: The future of commerce is being written right now with shops that are opening with simple Instagram product posts and telling customers interested to go to a PayPal link. More new brands are foregoing the traditional channels and website launches, so the barrier to entry is much lower. As more competition enters the market in this way, traditional brands will have to keep up with their own easy, personalized commerce options.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome to Up Next in Commerce. This is your host, Stephanie Postals, co-founder and CEO at mission.org. Today we have Kelsey Hunter joining us. The founder and CEO of Paloma. Kelsey, welcome to the show.Kelsey:Thank you, Stephanie. It's so good to be here.Stephanie:We're excited to have you on. I was just thinking I'm like, "How do I know I'm actually talking to Kelsey and not a chatbot?" She's put up a virtual screen and it might not even be Kelsey back there. I'm not sure.Kelsey:I have a history of pretending to be a bot, so.Stephanie:I actually, I read that. I read that you spent a little bit six weeks pretending to be a chatbot to learn how they worked.Kelsey:True.Stephanie:That's fun jumping off point. Tell me a bit about being a chatbot. What's that life like?Kelsey:It is wild. Let's see, I was working at a startup in New York that we offered mobile commerce solution for brands and publishers. So I was really deep in the mobile commerce space when the messenger API opened up. And as we're getting side projects, of course then, decided that messenger would be a good place to try to test things out.Kelsey:And before even building anything, I pretended to be a bot just to see how it would work. That's what sparked all of this. It was like, "Oh wait, if you can talk to people directly, people will talk to you about themselves." I'm asking people questions, they're telling me way too much information. That was really the spark for me. Then I said, "Oh, why are we making assumptions online? We can just ask people and they will very happily tell you things to help figure out what they should buy and why."Stephanie:That's cool. So you were doing this at another company. And then you're like, this is the business in and of itself. And that's how you went to create Paloma?Kelsey:Yeah. It was a totally side project outside of the company that I was working with. But all of the pieces tied together for me. That company is called Button, and when I left Button, I did a little bit of other experimentation in the channel. Actually, worked with a team to build a open-source software, to help people call Congress on Facebook Messenger, which was one of the first software tools that was like a MailChimp for the space, which is really cool. But brought it all the way back around to commerce and launched Paloma at the end of 2017.Stephanie:Cool. So tell me a bit more about Paloma. What is it? What does it do?Kelsey:Paloma helps brands turn Facebook Messenger into a sales channel. Essentially, we work with a lot of D2C and ecom brands across every product, category, audience, price point, and we help them drive traffic into messenger instead of their website where their customers get a more personalized shopping experience, that's powered by our software. So what that might look like for a furniture brand would be, they're running Instagram and Facebook ads and they can set them to open up a Messenger conversation instead of opening up a website landing page.Kelsey:And once in Messenger, our conversation, we'll ask them questions like what room do you want to design? What are the colors in that room? Do you have cats, dogs? Any other kind of style preferences. And then we'll dynamically route the customer to the right products based off of what they've shared. By helping the customer make the purchase decision, we're effectively seeing anywhere from two to 10X increases in conversion rates. And that's a little bit of very cap on, on how that works.Stephanie:That's awesome. I feel like just thinking about, I follow all these influencers on Instagram and they're always selling stuff, which normally I'm like, I want a lot of this. But if you respond to them, they definitely can't keep up. If you're like, does that size, would it fit me? Is that Off-White? Is that Real-White? It seems like there's a lot of opportunity everywhere to have a chatbot set up that personalizes the experience and also helps it scale.Kelsey:Exactly. And what you just described is one of the reasons that we see so much opportunity in that space. And the reason why customers messaged in the first place is because when it comes to online shopping people don't shop on websites. That's just where they transact now. But they're making decisions by what you're talking about, watching influencers, DMing folks, talking to friends, watching YouTube videos, TikToks.Kelsey:So you're basically piecing together all these different parties to figure out, should I buy this? What's the right thing for me? Whereas if you walk into a storefront, for example, you can get all of that figured out in a matter of minutes. You can talk to an associate, they're going to ask questions. Everything that you just described can happen there. There's nowhere like that online. And that's where messaging channels open up that opportunity for the brand to be part of that purchase decision process. So instead of leaving it up to all the third parties, the brand can do it themselves and they can scale it through these kinds of automated conversations.Stephanie:Very cool. And how do you go about setting up the responsive? Is it very custom based on the product? Like, do you work with a brand early on to be like, here's probably what they're going to ask you or they're telling you. What does that look like behind the scenes?Kelsey:We definitely curated a lot to the brand, a lot to the product type and to their customer demographic. So for example, Facebook recently published a case study of the work that we do with Wallow, which is a brand that sells titers, strollers. Basically goods for families and their kids. So they're really great products, but it's actually not so much about having a lot of skews. They don't have a ton of skews. It's more about why should somebody buy this Wallow stroller and how is it going to fit into their family and lifestyle?Kelsey:So essentially what we do is we'll work with them, look at the products that they sell and try to understand their customer type. In their case, a lot of their customers will buy for themselves, but there's a pretty good chunk that are gifting. So for example, the first question we ask is, is this for you and your family, or is this for a gift? Who are you gifting for? And then as customers answer these questions, we can speak to how it will fit into their lifestyle. How old is your little one? Are they eating solids yet or not?Kelsey:We don't actually need the customer to ask questions because by us asking questions first, we can preemptively answer how the value prop works for them. How it fits into their life. So we can say, "Well, they're eating solids is getting very messy. This high chair is very easy to clean." And so you're effectively accomplishing both along the way. It's basically just a really good sales conversation.Stephanie:Yeah. I mean, that's really smart and I think it's a different mindset where a lot of times, when you think about chatbots, the consumer has to initiate the conversation. Has to think of the questions. And it makes me even think about when I'm hiring... I'm trying to think what I was hiring. But they're like, "Oh, do you have any more questions?" And I'm like, "Well, what do people normally ask you? Like, what's the normal questions because I don't know what to ask you."Kelsey:What should I ask. Yeah.Stephanie:If I'm buying a house or whatever it is, what are the top 10 questions you get? And so that's great being like, we'll do all the work for you. Here's some of the questions that we know will start a conversation. So it's actually less work and less cognitive load. Where you can get to the end point and still leave being like, I know what I'm talking about now with this product.Kelsey:Exactly. That's 100% right. And it's actually a really classic UX design issue. Which is actually my original background. Basically, when it comes to any digital interface or any interface at all, if you don't know where you can go, you're not really likely to do it. You're not going to walk up to a pitch black tunnel and be like, "Yeah, I feel confident walking into that."Kelsey:That's like an open free from bot conversation or like you get on a customer support call and it's like, "What can we help with?" And you're like, "Well, depending on what I answer, what's the likelihood you'll have any idea what I'm asking?" It's not great. So we find that structuring and providing a really clear interface for the customers to navigate also makes a huge difference.Stephanie:We talked about this a lot on the show that shopping is moving to the edge. Everyone is shopping on Social, they're shopping on Amazon, Walmart it's everywhere and not always on the website anymore. Do you think that websites are going to become like a secondary thing, where it's like, yeah, it's a nice to have. But people are actually on TikTok, Instagram, Facebook. Going directly to Amazon, they're not really going to always go right to your website.Kelsey:That's exactly right. It's going the way of retail. And that's not to say it's going to go away. It's just that it's not the primary anymore. We see a website as like the catalog and it's a transacting location. In a lot of cases that's useful, but it's not necessary anymore. And we see that with how new sellers are starting today. Especially with COVID, everything accelerates so rapidly. But one of the really interesting trends is, you've got new shops opening up just with Instagram pages and saying, "Hey, DM me for this product and I'll send you a PayPal link."Kelsey:I think those kinds of very low tech indicators of the fact that that's where the market is heading. And, I think you're 100% right. The website's really not necessary. And there are tons of great antique shops I follow in New York that are doing just well without it.Stephanie:Yeah. That's cool. So what other trends are you seeing among sellers right now? Maybe anything new popping up and you're like, pre-COVID we actually weren't really seeing this and now there's a big trend to just opening an Instagram page and selling through DMs. What other things like that are you seeing?Kelsey:I think that's huge. I think that I'm really interested in these future QVC type of models. But that's just because I grew up watching those. I don't know, did you ever watched the knife show?Stephanie:I did not watch that, but.Kelsey:The show was wild.Stephanie:Well, there's a [crosstalk].Kelsey:I think it was on a lot when I was in college. We'd always end up like late night. The knife show would end up on at very late hour and it was just like, "Hey, here's some knives and we're just going to cut all sorts of stuff with these knives." Like the silliest thing. It was so funny, but-Stephanie:[crosstalk] the Blender show. It wasn't called the Blender show, but where they [crosstalk] random things in the blender and I'm like, [crosstalk].Kelsey:Exactly. The same kind of stuff.Stephanie:How much time do we have on our hands apparently?Kelsey:It was so silly. It was like cutting shoes and weird things like that. The humor of it, I think it was really fun. And I think that online, we're seeing a lot of that, like humor come into commerce in a way that I think it's really fun. And that's really what it should be. So I like things like that. But I do think that the new selling methods are probably what some of the most interesting things to me is just, what's the version of opening a store today versus before. And like the barrier to entry is just so low now. It's pretty phenomenal. So I'm excited for that.Stephanie:Yeah. Cool. And how do you advise brands to being proactive when it comes to starting conversations versus being reactive and just taking the inbound? Because if I'm thinking like, I'm a new brand, I don't have any inbound. What's the way to be proactive and like reach out to people with your product?Kelsey:What's really nice is that these channels are often first, which I think is really important for there to be a great customer experience. If we want these channels to succeed, if we want these brands to succeed, we need to make sure that we're being really mindful of the consumer. But what's really, really nice about Facebook Messenger while it is tough to work on another platform, play by someone else's rules sometimes, but there's a ton of great benefits there.Kelsey:And one of them is the acquisition funnel. So brands are currently running ads from Facebook and Instagram and stories, all those normal places. And all they have to do is set up the exact same ads, but they can change the destination of the ad click to open a messenger conversation instead of a website. And so we're able to say, "Hey, we're basically giving you a new ad type that you can leverage. It's going to drive to a higher converting destination." And there's no reason not to try that.Kelsey:Basically, it's a win-win from the standpoint of, it's really easy to test. We can guarantee traffic and make sure that we're properly vetting it and controlling the volume. And you can compare it one-to-one to your ads that go your website. So it makes it really easy for brands to get started. And it makes it easy for the consumers because they're doing what they don't normally do, which is click on ads. So that's the most common way to start.Kelsey:There are other ways of getting customers into the channel and you can do it with short links, with QR codes, we'll link from an email, a pop-up on your website. There's a lot of different methods there. And we have partners that do all of what I just described, but ads is a really common format because again, it's just a very seamless acquisition funnel.Stephanie:Cool. And is there anything that brands are doing right now in messenger or Instagram DMs, where you're like, that's actually the wrong way to do it? Anything that you would advise brands not to do or have seen things going wrong?Kelsey:Yeah, that's a great question. I think not doing anything at all is what I would say is the worst thing. Because, whether that's Instagram DMs and you're just not responding to the people that message you there, and that's a huge, lost opportunity. We understand that it's really hard to scale responding to people individually, which is why platforms like ours can help. But I'm just not doing anything, you're losing customers every time you don't respond to them because they want to engage with you directly for a reason.Kelsey:And every time they do that, there's an opportunity for that to become either a customer or a recurring customer. So let's say that's probably the worst, but in terms of actually doing things that are, are wrong, I don't like any of the spammy stuff and I don't like any of the things where it's not clear to the customer what's going to happen. Those are the things that I find frustrating, but in terms of how to do that, well, there's not as much going on with that anymore because Facebook really did crack down on some of it. So I'll say what I didn't like before was, there was a trend where there's an opt-in check box that you could put on your website that basically said, "I'm opting into Facebook Messenger with a business."Kelsey:And that's still something that you can use today, but at the time you could actually put it on your website pre-checked. Oftentimes customers wouldn't necessarily notice it or see that it was there or see that they had opted into something. But what was even worse was there were lots of sites that were putting them behind the scenes. So it wasn't actually visible on the page at all. So a customer would add something to their cart. And by submitting that add to cart, it was opting them into messages without them knowing it.Kelsey:And then they would get messages later if they abandoned their purchase that were like, "Hey, here's the 10% off. Here's a whatever go buy that thing you were looking at." Which inherently is not a bad workflow, but to do that without letting the customer know that's what's going to happen, really not great. I'd say that's the worst thing I've seen in this space, but you can't do that anymore. And I'm grateful for it.Stephanie:Yeah. Well, that's good. How do you keep up with the changes that Facebook's going through? Because it seems like they've been definitely on like a roller coaster where very popular. And then, I feel like they kind of went through a trough where it's like, does anyone use it anymore? And now I feel like it's growing again. Even among my friends, it's like people are using the groups now and Messenger.Kelsey:The groups are huge.Stephanie:That's the only reason I go on there for the most part, but how do you keep up with what they're even doing behind the scenes and how the buying groups on there just changing. And then coming back and then leaving, and then there on TikTok. How do you keep up with that?Kelsey:I think it could be really easy to get distracted or feel like that's very volatile. The approach that we've taken is actually just been to have our own point of view that is rooted in something just so fundamental that it doesn't matter what the policy changes are really. We won't be disturbed by them essentially. So we've looked at Facebook Messenger as a sales channel since day one of the business. And we've been around just over three years now. And of the platforms that were popping up at the time were MailChimps for Messenger, were abandoned cart notifications and things like that.Kelsey:And that is really easy to get disrupted by policy changes. But if you're fundamentally saying, this is a place where you can more effectively get a conversion from a customer and have a better experience for them. There's actually not a lot that that Facebook could do that would really interfere with that in a way. Unless they just fully said, "Hey, you can't actually use the API at all anymore." They just shut the API down. Then it'd be like, okay, fine. But even if that were to happen, the US market for messaging is inherently multi-channel.Kelsey:Messenger's not being first or last for us. It's going to be one of many. So, that's the way that we approach it as yes, we keep up with the trends. We are a platform partner, so we're pretty in tune with the roadmap and what's going to be happening there. And that's really important. The relationship is really important to make sure that you can prepare for your business. But at the end of the day, I think having a really just underlying fundamental platform approach to what we're doing, enables us to avoid a lot of the mishaps that we've seen affect other business models.Stephanie:Yeah. Cool. And you just mentioned like messaging is just the first, are there other areas that you feel like there's a lot of opportunity that brands can be selling in right now. Or maybe it's not even ready yet, but in the future it's coming down the pike.Kelsey:Yeah. I think anywhere where consumers and brands can have a direct conversation, you're going to see things evolve for that. And it might depend on the platform, if the platform is incentivized towards it or interested in it. Facebook supports this because they believe in messaging as the future of consumer behavior. It's something that's been around since the beginning of the internet, we've been chatting. I don't think that's going anywhere, but Facebook is also really highly motivated to monetize on it. And so, there's opportunity there.Kelsey:But would someone like discord do something like this? I'm not sure. I'm not sure if they're like motivated towards that or if that's part of the business that they want to be building. But I really do see that any messaging channel where you can have that kind of interaction, there's no reason not to produce a better shopping experience there and tried to scale that. It's kind of infinite, I think.Stephanie:I wonder if chatbots on websites, like native chatbots have muddied up a bit. Where it's like, we've all had that bad experience with a chatbot where they're talking and you're like, "Get away, get away. You're not going to be able to help me. I already know it Verizon, stop." [crosstalk]. I wonder if that has hindered the market, with certain people being open to buying via chat bot when they've had experiences that are subpar on maybe certain websites.Kelsey:At the start of these platforms opening up and these APIs opening up, you had people making bots left and right. And they were very low quality. It tarnished it a little bit. I think tarnished it a bit for the consumer and for the brands, because, when things opened up, brands started testing things and they weren't getting performance results. It wasn't their fault. It's really hard. It's like launching your first website and then not working super well. It's like, well, yeah, this is a totally new... It's where the start of websites existing. It's like, yeah, that's tough. It's tough to figure it out. It's a whole new learning curve.Kelsey:So I think that in terms of, what can happen there. It is very easy to tarnish their reputation, but again, it's not going anywhere. So as long as again, you have an opportunity to drive a better experience. You should keep iterating on that. And again, it's like if you have customers that are willing to do directly, it's always an opportunity to do better and to turn them into a better customer for you as well. There is also really huge difference between like the customer support experiences like that, and these types of sales experiences. I think there's a pretty clear line between the two and a lot of that depends on the customer's intent.Kelsey:If you're coming from an ad to shop driver, for example, you know that's what you're doing and you know that that's what you're being helped to do. And it's pretty straightforward. But if you're going in with any level of support need, there's a lot of opportunity to get that wrong. So it's really tough.Stephanie:Someone's already coming in with a heated mindset and one wrong word from chatbot. Ooh, I'm hot.Kelsey:Exactly.Stephanie:The one thing I think about too is the payment piece and how to make sure that customer journey is frictionless because even when I hear, Oh, some brands have a PayPal link, which I think is great. Or like an MVP, get something out there. And also, show there like, do I even know my PayPal login? Like, Oh, I don't know.Kelsey:Exactly.Stephanie:How do you think about, making the checkout experience frictionless where it's not a million different options and people know it's very be fast and easy.Kelsey:Currently we actually drive to check out on the brand site and we find that works really well because it's the trusted destination. You have all of the tooling and UI that you need to be able to have a good seamless checkout experience. And that works really well. Checkout is on our roadmap to be able to process that and manage that. And we won't be like a payment processor. We have partners we're talking to on end, but in terms of the checkout, there's a lot of ways to handle that.Kelsey:And I think that there's been so much best practice learned from mobile shopping as it is, that can be leveraged there. And there's also a ton of testing opportunities, but we really do look to... We're not trying to reinvent wheels here. Stephanie:That whole space is evolving so quick and just talking to the team at fast and continuing to be here and see what they're doing with the one-click checkout. I'm like, it seems like there's such an opportunity to have that right. In every form of like, you've got your cart already loaded in like your Instagram DM, and you can just hit checkout and all your payment information save and drop onto the next Instagram site.Kelsey:[crosstalk].Stephanie:There also seems like there's a good opportunity for Amazon there. I always look at all those Q&A sections, where it seems like how much time do I spend looking at toothpaste? Is it fluoride-free? It's for my kids, is it fluoride free? Does it not have this, that, that. All these questions, but I'm actually going through the whole product page for a thing of toothpaste so much time wasted. But it would be really nice to have a Messenger on there where you could just say, "Hey, does this have this and this?" Instead of me trying to zoom in on the ingredient list, or like, look at all the reviews for something that's like $6 or whatever it may be.Kelsey:Yeah, exactly. I hope Amazon's listening. They should come talk to us. We haven't seen anything quite like that, but we have talked to brands that sell on Amazon and we have done experiences in Messenger that link to Amazon product. That is something that we've experimented with before. And I think that you have to your point, why scroll through a million questions and answers that aren't necessarily relevant to you? And one might be, when you could just have the brand get to know you better and then tell you what you need to know.Stephanie:Yeah, exactly. So when you're first starting to work with brands who are implementing chatbots, what kind of metrics do you maybe advise them to look at to see if it's going well or not? Because a lot of people I could see being new to this, not even knowing like, well, what should I expect for conversion? Or like, what's good. What's bad. Like, how do you advise them around that?Kelsey:That's a great question. So first and foremost, and I think this is a little bit of what might have gotten wrong in the early days of the channel. Businesses care about performance. They care about conversions and CACs and return, and all those things. So, we want to make sure we're mapping to that because if you don't then at the end of the day, they're going to be worth your time if it's not performing on those metrics? Probably not. So first and foremost, we can own conversion rate. That's the KPI that we really truly measure against. Because essentially we're saying if you drive traffic here, instead of your website, it's more likely to convert. That's our thesis. And so if that's true, that's what we're going to start measuring against. And we'll do that by looking at what's your conversion rate from a standard click to site ad.Kelsey:So purchases you're getting out of link clicks. And then when you run a click to Messenger ad, we'll do the exact same thing. How many purchases are you getting out of those ad clicks? And that should be able to tell us if it's a higher converting channel for you. Fundamentally we've seen anywhere from 50% increases to 10X increases in one case and anywhere in between. So it's not abnormal for that to be the initial result. But then in terms of the other things like captain role, as they should benefit from that better conversion rate. It shouldn't be approached necessarily differently than any other conversion tests that you're running.Kelsey:That being said, we have a ton of insight into the full funnel that we can leverage to optimize. And so, all of our partners start with at least a three month program because we know it takes time to warm up and we want to make sure we can iterate. And we do that on a weekly basis. So you might start with X result in month one, by the end of month three, it should be much better. And so the way that we can do that is looking at everything from a customer clicks on an ad, they land into Messenger. Do they respond to the first message, which basically ops them into the channel?Kelsey:Are they completing like a quiz? If there's a quiz or personal shopper? Are they clicking on products back to the website? And then are they adding to cart? And then are they purchasing? So we have a slightly different funnel. You're going to get your ad performance from ads manager and see the link clicks and add to carts and purchases. Paloma is going to see everything in between. So we'll be able to know exactly where people are off and why. And be able to iterate on that much more efficiently than if it were traffic going to a website, where are they clicking? How are they browsing? There's like a ton of more opaque data from a website side. From our end we can literally just see, okay, you have too much drop-off on the first question. So let's not ask that question. Or, Hey, everybody is answering the same way to this one question, that doesn't need to be there.Kelsey:Or, people are clicking on the products. Maybe we need different product batches or whatever that may be. So we'll be able to get a lot more of a finer detail on that. And we have benchmarks for each. We expect our partners to get at least a 30% opt-in rate, maybe percent completion on any type of quiz or personal shopper experience. And then at least 50% of traffic clicking back to the website. And then from there add to carts and purchases depends on what they would normally expect to see. It's kind of a lengthy answer.Stephanie:It's good to know metrics like that to aim for. How do you plug into a brand's inventory system and then also make matches. That will be something that I want to look at. I can just imagine me going in there and not knowing what I ever want being like, "I want a picture." And then someone's showing me something and maybe like, "Oh, not that one." How do you guys personalize it and show something I want, but also make sure that you're not tapping into inventory, that's like out of stock.Kelsey:So we basically can ingest inventory into our system, keep that up to sync, keep that availability up to sync. And so anytime that we're building experiences, you're able to make sure that it's the right things getting shown. In terms of what to show customers based on their selections. We have this like start matching dynamic product matching system where basically the customer's responses get associated with the inventory.Kelsey:So all of your boots are associated with like a boot selection or all of your things that come and break colors would get associated with like bright colors. If you were asking about color preference. And some of these qualities are not things that would normally be tagged onto your inventory. So we're basically expanding on that. So we make the association between the two and as customers make the selections, we basically just filter down and display all the things that would then relate.Kelsey:So like Andy swimwear, for example, if you chose one pieces and some coverage and a lot of support, you're only going to see the products that, apply to all of those qualities. And it's really simple for us to create those. Something like that can take like 10 minutes to build, whereas a quiz to put on a website can cost thousands of dollars and take two months. And so, that's kind of part of the magic and secret sauce of our software.Stephanie:Yeah, that's cool. I was just thinking about, okay, to even create that kind of filtering and navigation options and all that can take a long time. And tagging it and making sure that it's actually can be searchable. And then if you can just have it in a DM or Messenger, that's great game changing.Kelsey:Yeah. It's really fun. It's a very simple, we have like own drag and drop interface to just jag product on to the selection options. They're tagged with that in the future. And then as customers answer, we just know what to show them.Stephanie:Cool. Where do you see the future of commerce headed or chatbots and commerce intersecting. What does that look like to you maybe three to five years down the road? Where do you hope it looks?Kelsey:Really, again, I like to look to what people are doing now when they're just starting out and also at other markets. So really in terms of the future of commerce, we believe very strongly that it's on messaging channels, that that is the next door front. And so, what does that look like? It's customers going to DMs, it's brands driving traffic to DMs and customers just getting much better shopping experiences there, converting there, checking out there. And new stores not having to even open up a website. Again, I don't think website's going to necessarily totally go away, but it's just going to be a smaller part of the puzzle. If you look at what's gone on in other markets like China with Weechat, they're way ahead of the game. And that works really, really well.Kelsey:And it's a huge chunk of the commerce ecosystem out there. So we've been a little bit slower to that, but it is happening. It's happening a little bit more multichannel, and I think that's really interesting and that's a really fun challenge is that, we don't have the monolith app that will do it all. We have a lot of [crosstalk] apps. I think it's great because everyone likes to have their own different way. We're always getting new social networks and apps out there and it's fun. It's really fun. So basically, I'm not sure how many different tools there will be in the future, but we very strongly believe that messaging is the next channel and destination for commerce to happen. And we're effectively building the platform to power that. Stephanie:That's great. It definitely begs the question about keeping things organized when you're selling on so many different channels. And there's probably going to be dozens of messaging platforms that people are using. I'm just imagining a brand, trying to keep up where, they go from selling on their website and then maybe dabbling in Amazon, maybe on Walmart. And then all of a sudden it's now, you can sell on Pinterest and Instagram and Facebook and TikTok. How do you think a brand would be able to keep up or do you see anything right now? Like any innovations that are allowing brands to organize everything in one central place that they can keep track of what they're doing?Kelsey:There are definitely a lot of interesting tools. I think that what comes before the tools are just the people, expertise. I think that's what we're seeing, services and agencies that will help with coordinating all of those things or know how to best launch on Amazon. And then once you've launched on Amazon and all these other places, then you go, okay, well now I have everything in too many places I need a more scalable system. And that's when you start seeing softwares get put in place. And I don't think any come to mind immediately, but I think there's some really great tools that are coming up to try to glue things together and basically to piece together, all the different supply chain and logistics issues.Kelsey:And there's some really great things out there for that. But we're also seeing new commerce platforms that are inherently taking those things in mind. So we have a lot of commerce players that exist that are trying to catch up and trying to add on these different channels. But then you have new players that are from day one saying, "We know it's not just about one place." So you've got things like, headless commerce and no code tools and platforms like Paloma that will from day one say, "Hey, this isn't just about a single source of shopping. It's about a lot of things."Stephanie:Yeah. I completely agree. All right, well, let's shift over to the lightning round. Lightning round is brought to you by Salesforce commerce cloud. I'll ask a question and you have a minute or less to answer. Are you ready? You look a little nervous. Wow.Kelsey:I don't know, that's scary. It's a little daunting.Stephanie:No, it'll be fun. It'll be fun. What one thing will have the biggest impact on e-commerce in the next year. I have a feeling you're say message shopping and Messsenger.Kelsey:Obviously messaging. I'll just be repeating myself a little bit, but I think messaging is a bit. It's already been exploding pretty quickly and it's growing faster than ever. We drove almost 9 million in partner revenue last year. And that's just as a small, early stage team, so there's a lot ahead of us.Stephanie:Yeah. That's cool. What, one thing do you not understand today that you wish you did?Kelsey:Just so many people things. I find people so fascinating. I'm constantly seeing how people chat, but I would just love to talk to people about their experiences with all of these experiences and with all these different kind of shopping channels. And, I think that it's not something that I don't understand. It's just something that I'm always eager to understand people's behaviors more. So that'd probably be it. [inaudible].Stephanie:What's up next on your Netflix queue?Kelsey:I am so behind, I need to watch Bridgeton and literally everything else. I've been doing a Buffy rewatch. So I'm just like living in a very different time.Stephanie:What is a book that has really left a very big impression on you? You're like, "I always think back to this book for either business or life."Kelsey:Oh, that is a great question. I'd say, well, what are the ones that comes to mind, it's Italo Calvino. [crosstalk] is the author. And basically, it's a person telling stories about visiting a lot of different cities. And when I was younger, I found that it was just... When you're reading, it's all about picturing what's going on. And as someone who, if you didn't grow up being able to travel a lot, it stuck with me. I was like, I want to be able to do that someday, but also just being able to picture it from a book is really, really nice. I still have like the images in my head of different passages from that.Stephanie:Oh, that's cool. All right. And then the last one, what's the nicest thing anyone's ever done for you?Kelsey:Oh my gosh. I feel like people are so nice. What is the nicest thing anyone's ever done to me? Oh gosh, there's too many things.Stephanie:Wow. You must be a very... People are sending all this nice stuff you way. [crosstalk] people around you, can I have some?Kelsey:When you run a business, or when you start a business, it's all about getting help. That's the best way to be able to succeed is knowing what you don't know and how to get help. So I will say I'm very good at getting help, but what's like the biggest part of that is having people be really nice and great. And so, there are just a lot of people that have helped along the way that I literally would not be where I am without that. From little things like making the introductions, not everyone has access to the networks that you need. And so, the people that believed in me more than the business or more than anything else, that's really huge.Kelsey:And so, I've just got like some really great, great people that helped along the way. I can't pick a single thing, but I'd say like some of our investors, some of just the people I've worked with in the past and they're really just root for you. And will be there when you say, "I have no idea what I'm doing. How does this work?" Or, "I need some help."Stephanie:I thought so. Good answer. All right, Kelsey. Well, it's been a blast having you on the show. I love learning about Paloma and your story. Where can people find out more about you and Paloma?Kelsey:You can learn more about Paloma, getpaloma.com, G-E-T-P-A-L-O-M-A. And me I'm on Twitter, LinkedIn at Kelsey Hunter. I think it's usually Kelsey AH. So feel free to message me, check out the site, chat with us. We're always around.Stephanie:Amazing. Thanks so much.
In 2008, the economy had tanked and John McDonald was left at a crossroads. Rather than withdraw into comfort, he took the opportunity to do something a bit crazy. John was a woodworker who spent time at trade shows, and someone once suggested that he make cabinet doors that fit with IKEA cabinets. With nothing to lose, John launched Semihandmade to do just that. Now, a decade later, Semihandmade has seen consistent double-digit growth year over year and has been featured in countless blogs, interior design social posts, on the feeds of influencers worldwide, and in the homes of tens of thousands of people. On this episode of Up Next in Commerce, John tells the story from start to finish, including how he built a successful ecommerce custom cabinet model on the backs of the IKEA brand, and how he’s now launching into the DTC space with the first US-made custom cabinet DTC offering, BOXI. From finding the right partners, to building an omnichannel approach that doesn’t handcuff your resources, to challenging yourself to strive for more, you’ll learn something from John and his story that just might help you level up your ecommerce business, too. Main Takeaways:Perfect Partners: For ecommerce brands taking on an omnichannel approach, there is no reason to tie up a lot of your resources into retail spaces and showrooms. Instead, exploring partnership opportunities with other brands in a similar category might be a mutually beneficial way to expand your brand, the brand you partner with, and offer an in-store experience to customers who seek one.Meeting the Moment: The world of home furnishings and interior design is changing rapidly, especially as A.I. and VR technology enter the marketplace. With that tech, users are gaining more flexibility to design their own spaces without leaving home, which means there is an opening for DTC companies that are tech-first. Step Up or Step Out: You can’t let competition scare you, let it inspire you to raise your game. By surrounding yourself with the best and forcing yourself to compete against them, you have to level up to simply survive, and succeed expectations to grow your business in a meaningful way.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey, everyone. Welcome back to Up Next In Commerce. This is your host, Stephanie Postles, Cofounder at Mission.org. Today, I had the pleasure of chatting with John McDonald, the Founder and CEO at Semihandmade and also Boxi. John, welcome.John:Thanks for having me. It's great to be here.Stephanie:I'm really excited to have you on. Before we get started, I was hoping you could give me a little background, and for anyone who doesn't know what Semihandmade is and also Boxi, how did you start it? What is it? How do I think about it?John:Sure. Semihandmade is a company that's been around, I guess, just over 10 years now. We're based in Southern California. We make doors that fit IKEA cabinets. What that means is, if you want to buy a kitchen, bathroom, closet media system, IKEA, for the most part, gives you the amazing flexibility of not buying their doors. For a kitchen, you'd buy the cabinets, you'd buy the interior components. Then we have over 40 different options from entry level doors to some really high-end, one-of-a-kind offerings.Stephanie:I love that. Do I think of it like white labeling? You take IKEA's [inaudible] and then you can add like rose gold fixtures on it, yeah?John:Yeah, absolutely. Yeah. The credit, obviously, goes back to IKEA. This is an ever expanding ecosystem that's been around probably for 15 years now. People that make amazing slipcovers that you can put on their sofas. People that make furniture legs, companies like us that make fantastic cabinet doors. It's a way to get a really high-end look for a really mid-level price.Stephanie:Cool.John:I'm even fortunate to grow quite a bit with that.Stephanie:That's great. How did you come to this idea?John:I'm always honest and clear that this was ... It's a spectacular idea that somebody gave to me.Stephanie:Who gave it to you?John:I think his name is David Stewart. I think he's a photographer. Look, I'm 53. I don't know if I'm older than a lot of the people you talk to.Stephanie:A little.John:I came to things a little bit later. I had moved to California from the East Coast when I was 21. Well, wanted to get rich and famous, work in the film business, didn't really have any kind of plan, bounced around with that, was writing, not making any money like everybody else I knew waiting tables. Then I woke up in my early 30s and said, I got to do something with my life. It was post 9/11, which is a wake-up call for a lot of people. I tried a bunch of different things. Then I somehow landed in woodworking and furniture making at first and cabinetry. I got good at it.John:Through the late '90s and early 2000s, that's what I was doing, Southern California based custom furniture and cabinetry company called Handmade. I worked hard. I approached it like a business into my late 30s, which was different than a lot of other people I knew, the craftspeople, spectacular artists, but just no head for business, no interest in business. I always looked at it like as a business like any other. That's what I was doing through, again, the early 2000s. I was networking and blogs just started to happen. I was doing a lot of woodworking shows but also design shows. At one of those design shows in 2008, I think somebody came up to me, this guy randomly and said, "Have you ever thought about making doors for IKEA cabinets?"Stephanie:Was that something that others were doing? Why did he have that idea? Then was like, I'm going to tell John to do that.John:It's interesting. Again, I always want to give credit where credit is due. On top of him, there was a company called Scherr's based in North Dakota that has been making doors for IKEA cabinets just a little bit prior to that. People are always making their own doors as well. It is because IKEA lets you not buy doors when you buy their kitchens. I don't know why he mentioned it. I think part of it was because when I did those shows, it was a show called Whelan Design, which is a great show in Southern California at the time and back when Dwell magazine was really in its heyday and just an iconic brand.John:I was always like the one off independent company. It was me and all the big brands. It would be like Kohler and Caesarstone and Sub-Zero. I was there alongside them with my little custom furniture setup. I don't know if he took a liking to me, but we just spent that day, the Friday and then the following day just talking about it. I had no idea what he was talking about at first.Stephanie:That's awesome. Then for people listening, I know when I first heard of your brand and was looking through it. I'm like, oh, it's just like a small thing, a big thing. Then I was looking through some of the stats and you've been named like the fastest growing private company every year by Inc. magazine [inaudible].John:Well, yeah, one of. Yeah, one of many. Inc. 500 originally, we've been on that list, I think, six or seven years now.Stephanie:You've had double digit growth for almost a decade, year every year.John:Yeah. It's exciting. It's, again, one of many things. I try to be candid and clear, but I never expected this. I never thought in a million years I'd be doing this. Every year that we were fortunate to grow, even my ambition or dreams, it got bigger. It's like get to a million, get to two million, get to five million. It's been exciting. Believe me, I don't take it for granted. That's why I enjoy doing things like this, because I always ... At 40, I was newly divorced. I didn't have any kids at the time. I have a son now. He was nine. I lived in my shop for a year, because I got divorced.John:I didn't have anywhere to live. I had options, but I wanted to hide. I lived in my woodworking shop. I lived on my sofa with my dog. I just said, I got to do something else. It was a huge wakeup call. Then that's when the conversation I had, I think, six to nine months prior. It was like, maybe I should try this. Again, in terms of the second acts in life, whatever, I was 40 and had no clue. 10 years later, more than 10 years later, it's different.Stephanie:Yeah, that's very inspirational. Cool to hear about and cool to see where you can start and where it can grow to. How did you grow the company? From starting out where you're woodworking, you're building stuff, and then you're like, okay, I'm going to buy IKEA stuff and make it better. How did you get in front of people and be found in general?John:Like anything, Stephanie, it's like you look back on it and as much as it was, a long journey at times were so challenging, whatever. You get through it, and you gloss over it. It's only when conversations like this that I do get an opportunity to look back. The reality was, again, I had a nice custom furniture cabinetry business. I had some really good clients. I work with some good architects and designers. Then in 2008, the market tanked. Everybody went in the dumpster. I had to do something else. Things had slowed down.John:I started saying to a couple designers and architects, "What if we try to do integrate some IKEA cabinetry into the custom project." Because at the end of the day, a box is a box, and you're just going to see the outside of the beautiful panels and the doors. There were a few people that took a chance on that. That's how it ... It's like anything. I was 100% custom in 2009. Then it's like, okay, you can start mixing it in and starting to organically ... I don't even know what kind of ... I wasn't doing advertising. Blogs had just taken off.John:Apartment therapy had seen see me at a design show and written about me, which was amazing. That was a really big deal. L.A. Times did a story on me, which is incredible. Yet it was always organic. Through 2010 and 2011, it became, okay, now we're doing half custom, half IKEA. Then every year, it's a little bit more headed towards full IKEA. The truth is, I don't know when it was, maybe 2013, when it was fully just making doors for IKEA. It was fun. It was always a steady progression, always growing every year.Stephanie:Yeah, sustainably growing, which is a lot different than a lot of the brand.John:Yeah, profitable every year. Beginning, doubling every year, which, again, was not what I expected. Part of that, what's funny too is I have a lot of incredibly supportive family, but also friends, guys that I grew up with. When I was in California at 21, or 22, or 29, or whatever, they were amazing. They love me. They were supportive, but they probably had no clue where I was headed. I didn't either. Now, it's fun. I gave them a hard time constantly about the fact that they probably gave up on me.John:Not in a bad way, but it's just ... I mean, I do think that there is a time to cash in your chips. It's great to have dreams. There was an interesting like Scott Galloway kind of thing recently about if you should follow your dream. His overly simplistic thing is definitely do not follow your dream. Because unless you're willing to pay your bills to start because following just exclusively your dream can be incredibly impractical. The people that you admire, suddenly, the people that I admire weren't these head up in the clouds kind of people. They worked really hard. I geek out on founder stories, things, podcasts like this. I'm fascinated by that. It's never an overnight thing, or at least it's rarely. Again, I'm 53 now. This is all house money.Stephanie:Wow, that's awesome. When you started, getting more money, you're doubling growth, more revenue, obviously. Where did you invest? How did you think about investing that? Because I'm sure you're like, woo-hoo! I'm going to go have fun now.John:No.Stephanie:No?John:It was never like that, no. It's interesting. I would say I like nice things like some people do. I'm pretty frugal. In terms of the business, everything lives inside the business. I had a partner at that point. Up until three years ago, we made everything in-house. I was the original guy making the doors and packing them up and then shipping them in New York or different places. Then my partner at the time, Ivan, came on board. He was the guy cutting the doors. Now, we were fortunate to grow.John:Eventually, we had close to 35, I think 35 or 40 people that were working in production. Up until three years ago, we topped out at 75 people and half of them were making products. Now I'm proud to say we don't make anything in-house. Everything, it's made around the US, some at the top manufacturers in the country. That was a huge shift. To answer your question, everything is in the business. That's why you see revenue numbers are different than other things.Stephanie:Yeah. What were some mistakes maybe that you remember where you're like, ooh, I would have avoided this if I were to do it again, or especially in the more maybe the past five years or something. Not early on when you're just ...John:Right. If we're going to say 10 years ago, the mistakes that I made were unavoidable in the sense that I was creating this out of thin air. Ivan and I were just making stuff up as we went along. We were two guys. He's a little bit younger than me. He came out from Boston. I came out from Philadelphia to be writers. In some ways, no business starting this kind of business. In the last five years, it's probably the mistakes that I've made are ... I don't know, maybe waiting too long to really build up the team, which is not to say that we didn't have good people, we did.John:Part of my job now is just looking at the next 12 months and 18 months and say, hopefully, where are we going to be? Where do we think we're going to be? What are we going to need then? As someone who is ... Again, I think pretty honest about their limitations or whatever, we only thrive with people that are smarter, better, or more experienced than me. That's one of the biggest changes in the last at least six months, where we really just hit the gas and brought in some really amazing complementary pieces.Stephanie:Yeah, cool. How do you think about building on top of another company? What if IKEA changes their cabinet line or does something different, did that ever worry you, building a business that's ... I mean, a lot of businesses are built on another businesses, obviously. How did you think about that?John:We've always been after market. With IKEA, it's pretty well documented. We've gone up and down with them. I think in most ways, they appreciate what we do. Certainly, it's undeniable that we sell kitchens that people wouldn't normally buy if we weren't available. They also, I think, hate a little bit that we're there. I don't know this is arrogant or anything to say. They're not going to change their model because of us. They're never going to not sell doors. Even if they did, I would say to people like, "Then just buy the doors that literally cost $2."John:Then we'll pay for them and recycle. Their model is that a la carte wide range of pricing. We've always been respectful. Again, I have immense respect for them and what they built. It's extraordinary. Even when my fiancé and I moved into a new house and it's like going there, buying the basics for the house, it's just nobody can beat it [inaudible].Stephanie:Yup. I'm doing that now as well. I think, like you said, you're opening up a market that they probably wouldn't have access, otherwise. When I'm about finishing this house now, I honestly would not have thought to go to IKEA to get cabinets. I don't know. Then when I saw you guys, I'm like, oh, well then you can have the finishings and the colors and the things that I actually want. I don't actually care what a cabinet is like inside or behind the scenes, but I care about how it looks. A lot of the IKEA stuff does look like you know sometimes.John:Yeah, it's understandable. Because at that scale, you can't get that fancy and creative. This is the part where I drop names, just in the sense that what I do love is we work with some really cool people that do make IKEA more accessible. It is people like Karlie Kloss and Coco Rocha and all kinds of celebrities and high end designers and influencers. They, more so than us, have normalized IKEA. That's good for everybody. If design is supposed to be democratic and accessible to everybody, there's nothing more accessible than IKEA. Obviously, Amazon, Wayfair, and things like that.Stephanie:Walmart? Walmart is coming back. I have bought rugs now, a little egg wicker chair. It's from following influencers. I'm like, Walmart is coming back.John:You're right. It's funny, because the same thing with my fiancé, Stephanie. Yesterday, she was looking at different coffee tables. She said, "This is ... " She showed me a thing. I was like, "That's awesome." She said, "Oh, it's like the Kelly Clarkson line." I was like, "This is great." It's true. Look, certainly, you can make the argument that some of that stuff is more disposable and it's going to go into a landfill and less sustainable. I understand that. The reality is, not everyone has the same access to disposable. If you can get cool stuff, it's reasonably priced and it lasts for a few years. I don't know. It's hard to turn that down.Stephanie:You mentioned that you partner with influencers and celebrities. How does that relationship work?John:Yeah. I think that's always been a huge differentiator for us, one of several things. From the start, I always felt no self-consciousness about reaching out to people. Whether it was blogs, I would say, "This is what we're doing. Here are some photos. I'd love for you to write about us." Or even influencers. The biggest one and the one that we worked with the most is Sarah Sherman Samuel. We've had a door line with Sarah for three years. That's a situation where, god, I think 2014 or 2015, she reached out and said, "Hey, I bought a bungalow in Venice. I love IKEA cabinets.John:I wonder if we could partner on some doors." We did a small collaboration, gave her a tiny discount. She painted the doors. She styled everything. She took photography. The kitchen went completely viral. It's one of those kitchens that is everywhere. I think a really cool Farrow & Ball paints, brass and mixture of this light green and white. That just opened the door to all these other relationships. People saw that and started reaching out to us. It's been an amazing thing. The truth is, we've gotten to a point where we've had to pull back on that because it's just a different way to market the brand. It can be expensive. It's definitely grown us, there's no doubt about it.Stephanie:Have you thought about Netflix series? I'm just thinking, wow, they should be on a home remodel type of show. How perfect is that? People always trying to do amazing things on a budget on like the HGTV [inaudible].John:Yeah. We've talked about that stuff in the past. I like that stuff. Again, I don't know. I do think it's interesting our growth. That's how I always look at things, behind the scenes of how businesses grow, especially within that. I do like someone we haven't worked with in a while, the Studio McGee, the Netflix series, which is great. That's really interesting, especially after listening to another podcast like our friends at Business of Home, where ... I left the podcast with so much more respect.John:Because my interaction with them was a long time ago, and then I just see the photos and the beautiful stuff. Just the growth that they've had and the behind the scenes, and again, hearing their story is really extraordinary. I enjoy watching that stuff. I don't know if I want to watch this. I get sick of hearing myself talk. Maybe if it's everybody else, that might work.Stephanie:Yeah. I was just thinking like, wow, that'd be a really good partnership strategy. I always bring up the Container Store partnership that they had on the Netflix series and just how much Container Store sales went up after that series.John:[inaudible]Stephanie:I can see why, same thing with cabinets and stuff.John:Yeah, it's interesting. Because even that, again, I'm a lot older than you, but in the early '90s, whenever Trading Spaces came on and that was huge like ...Stephanie:I watch Trading Spaces, just to be clear.John:I mean, even in the '80s, the godfather of that is like Bob Vila in this old house. That's definitely before your time. That was restoring amazing New England homes and stuff. It was master carpenter, Norm. I think Norm Abram is absolute craftsman. That was the start. Then you had Trading Spaces. Even now, you would have thought, after 10 years, that goes away, and it hasn't. That's the thing. Is it the ladies like Home Edit and stuff like that? I don't know. It hasn't evaded, it just only grown. Obviously, Chip and Joanna Gaines and the dynasty that they have built. It doesn't show any sign of stopping.Stephanie:Yeah. It seems like the world is now just moving to a more curated collections like I'm going to look for someone who knows my style, so I don't have to waste time looking at everything. Whereas before, it's like, oh, I'm going to go to Target to get this, and then I'm going to go to Dollar Tree to get this. I make it up. I think, 10 years ago is very much about DIY, but all over the place. Now, it's like, okay, I'm going to follow Chip and Joanna Gaines, their line at Target, whatever that is, and follow the people that I know are my style and be ready to immerge myself in that brand.John:Yeah. The interesting, whether it's the 180 to that is the amount of growth that Restoration Hardware has had, where it's just almost like meteoric, being a complete luxury brand and selling the whole experience. It is like the Ralph Lauren of today, and now as they move towards hospitality restaurants and sounds like hotels. Part of your brain thinks, man, you can't sustain that. How do you keep growing? There is a market for that. Even when you watch the Studio McGee, their services are not expensive. Amber Interiors, who we work with, people like that, incredibly talented, at the really high end of the market. They keep growing.Stephanie:Yup. Tell me a bit about your omnichannel approach. I saw that you had showrooms around the country. Then you're, obviously, online as well. Now you're moving into DTC. How do you think about keeping a cohesive story of your brand but also expanding and reaching a lot of people on different channels?John:I guess the biggest challenge, if it is the biggest, it's just the fact that what we're selling comes at a higher price point than the average online purchase. We sell certainly, if you're doing a GODMORGON bathroom vanity, that then may cost $150, $300, $400. We're selling cabinet doors and panels and complementary trim and things like that that can cost $3,000, $5,000, $20,000. Again, it's not buying a pair of Warby's or an Olay bag for a couple hundred bucks. There's a lot to it, a lot of back and forth. Excuse me.John:Showrooms we're always a part of we've got to show people our product, especially when we're asking them to spend that much. The benefit of IKEA is, even though they're still a privately held company, there are only, I think, less than 60 around the US. What I could say to people to say to you, Stephanie, or wherever, like you're in New York, go to one of the five local IKEAs. Then come into our mini ... I never want to call it a showroom, because it could be 200 square feet. It's got some cabinetry in it. It's got door samples, things like that. There would be a whole experience.John:I would always say, if you want to see a kitchen, go to IKEA and you can see 15 kitchens or see 20 kitchens. Want to see the doors? Come see us. We've had that in New York, in Brooklyn, in Chicago, obviously, in LA, Minneapolis, a bunch of different places. Again, trying to be reasonable about that. I don't want the overhead of signing leases if I don't have to. What we've typically done and we will continue to do even more so is partner with other great brands. It is like a multi-brand approach.John:With our lighting friends, with hardware companies like Rejuvenation, Fireclay Tile, upcoming collaboration with Caesarstone, it's partnering with Cambria in the past. It's just saying, let's do this collectively. Because the kitchen is, as someone said to me, "The base purchase, if you're fortunate to have him as a house, there's a car, and then maybe there's your kitchen." We're trying to grow the company that way. We started what I think is an amazing ... I got to [inaudible] blog anymore. It's that. [inaudible] stories that launched last summer.John:That was the idea that I wanted to bring together all these great writers, great content to help promote the brand, of course, but also expand us, again, to make that cliché to becoming a lifestyle brand. On the one hand, it would be enough to have a really successful cabinet door company. I just think we have the opportunity to do so much more. That's what something else we can talk about, is this brand Boxi, which is going to launch at the beginning of March. That really is direct to consumer. That's our own product, no IKEA. That's a whole different thing for us.Stephanie:Alright. Let's move there next after my one thought. I've many ideas when talking to you now.John:Awesome.Stephanie:What about having like partnering with IKEA on their AR app or developing your own AR app, instead of having to have a showroom, being going to IKEA, pull up your phone, and then you can swipe through the designs of ours, and you can see exactly what that trim would look like, what that doorknob or whatever, so then you eliminate showroom.John:It is interesting. Look, the thing with IKEA, they have partnered with people in the past. Obviously, places like Target have done an amazing job of that completely. As you said, Walmart too.. It always seem like the natural fit with us. If you were going to do it with anybody, it would be us. In terms of AI, yeah. IKEA has been slow and is put a huge push in the last couple years of their online presence and their economy. They have an app they launched last month. What we are doing with the new brand is working with a 3D AI company called Skip. It's going to launch in the next few months. That lets you basically not go in showrooms.John:There are ways to order this new line of cabinets, and one of them is to make an appointment and someone comes to your house and 3D scans your room. Then you design remotely. With 80 hours of AI and machine learning and everything else, it's compressing that and then presenting you with design options.Stephanie:That's cool.John:That's where we're headed. All has changed dramatically in the last year. COVID or not, it was headed towards that. The new iPhones have the camera technology where you can almost do that. Maybe in 12 to 15 months, you don't even need a guy to come to your house. You can do it with your iPhone. They're already pretty close.Stephanie:Yeah, I think it's fair. I have a little tape measure app on my phone and it says, okay, scan the whole room. You do that and then you can measure everything. The placeholders all around the room for you and [inaudible].John:Yeah, it's fascinating. Even brands like Primer that launched last year, which do the work with other brand partners, and you want to click on like the Hygge and West Wallpaper, you can hold it up to your wall. They'll show you different swatches and things like that. It's interesting. For us, yeah, that is part of what we think is a differentiator. IKEA is always going to have massive brick and mortar. Even though they move in some cities towards smaller footprints, it's still footprints that are 20,000 to 150,000, as opposed to 300,000. There's another cabinet line that's launching.John:It just launched, it's got a 30,000 square foot showroom on the East Coast and 100 kitchens. You go in and wear the AR or the VR goggles. That's completely different because you're looking at some space that has nothing to do with yours. It's kind of what you're saying. The point is, things are changing so fast. With Boxi, it is saying, can you make this as DTC as possible? The caveat being, it could cost $10,000 to $15,000, to $20,000. It's not like ...Stephanie:Okay. Tell me what is Boxi then since we [crosstalk].John:Boxi is the first American direct to consumer cabinet brand. It's a cabinet system for the entire home. It's basically taking the last 10, 11 years of everything we've learned from IKEA and saying, let's try and offer something. I don't know, if it's ... I don't want to say better than IKEA. Because again, I've huge respect for them. It's a more complete package. Certainly, the quality is there. The accessibility is there. One of many things that we're going to improve on is the fact that Semihandmade customers have to go to IKEA first.John:It's a two-part process where you've got to go to IKEA. You've got to order the cabinets and hardware. Then you've got to order the doors from us. Thank God that they do, but especially in the last year, IKEA, like a lot of people, has suffered horribly with supply chain issues. We have customers now, unfortunately, it's January, they're hearing, cabinet boxes might not be available for three, four, or five months because ...Stephanie:I ordered a couch from Pottery Barn and four months out. [crosstalk] order, I just didn't look, I guess.John:As a business, on a personal level, that annoys me because I want ... That's a whole thing. We have such ridiculous expectations because they're easily met or they have been up until now. Not to blame Amazon because that's too easy. I'm a hypocrite about Amazon too. With Boxi, we're saying, no big box stores. Somebody can come to you, things ship, leave the factory in a week. Part of what we're doing, you're from Palo Alto, I don't know if you're born there, but it's almost like an In-N-Out Burger West Coast approach. Meaning we're going to do a limited number of items, and we're going to do it great. If you want ...John:What they do is they're great. What's interesting about that is they ... I think just little background on burgers. I think the founder was best friends with Carl Karcher who started Carl's Jr., another big West Coast place. In the '50s, they open hamburger stands right next to each other. The In-N-Out guy's thing was always, I'm not worried about competition. You're welcome to open across the street from me, next door, or whatever, because I'm just going to bury you. I'll just be that much better. Not like in an obnoxious, overly competitive way. Just like, this is going to raise our game. With us, with Boxi, yeah, limited selection, fast turnaround ships in a week, never need to go to a big box store. It's built in the US at a really competitive price point. That's the idea.Stephanie:I love that it's built in the US. I think that a lot of companies right now are bringing things back into the US and some are struggling seeing how expensive things can be and what was happening overseas and maybe how it's just different here. What did you guys learn from IKEA that you're taking with you? Then what are you discarding where you're like, we're going to do this different though?John:Again, in some ways, I learned everything from IKEA. Look, I learned a couple things. One of them is you can't compete with them in terms of pricing. That's the most basic thing. I always say like, with Amazon, the same thing, you can't ... I mean, then the turnaround lead time. Up until recently, with COVID, you could buy a kitchen today and bring it home today. Nobody else could do that at a crazy price. Best of all, really high quality. IKEA, to their credit, pretty much every year, as long as I can remember, the last 10 years, is right at the top of like J.D. Power customer satisfaction in terms of quality, customer service, things like that.John:You could complain about certain products from IKEA and their quality, but their kitchens, I think, are inarguable. As much as I'm not affiliated with them directly, I always get defensive when people would slag them. Because it's also understanding that the product that they offer, and this blows some Americans minds, but it's a particleboard core with a melamine skin, a three-quarter melamine box. That standard in the entire world for kitchen cabinets. The most expensive cabinet brands in the world are constructed the same way.John:In the US, that's less the case because 70% of the market wants a frame around their cabinet. It's literally a face frame cabinet. The European style that IKEA is called frameless 32 millimeter. Again, I've learned everything. We're deeply indebted to them.Stephanie:Well, is there anything that you're changing though now that you are exploring DTC that's [crosstalk]?John:Yeah. We'll always have the ability. With Semihandmade, one of the differentiators were ... You'll always have this when you're smaller, we're microscopic compared to them. It's just being able to be nimble, to be able to get more custom, to be able to offer certain versatility that they could never do. Limited run doors, ability to do appliance panels for really anything. The Semihandmade, we could always do that. We can do upgrades with matching ... We used to do open cabinets that match your doors and things like that. We do less of that now.John:With Boxi, what will be interesting is because the hope is anybody to scale and to have short lead times, quick turnaround, we're not going to offer as much customization. We've learned like what ... In terms of people's taste. We have eight doors, which are basically the biggest sellers for Semihandmade. It's basic white, gray, black, and some wood tones. It's not saying like we have at Semihandmade of 45 choices. That's fun to me. Because if anything, you can have too many options and that is paralyzing.Stephanie:Yup. Just going to say that I appreciate when things are curated or you showed me something cute and I'm just like, "I'll have that." Whatever that is, the white, the gold, and the brown, perfect. That's what I want. Not choose every single piece of it. Which I think is for a lot of ecommerce, that's what I've heard throughout many interviews, is don't give so many choices, show people what you think or know that they're going to want based off of preferences or how they're interacting with your site or whatever it may be.John:That's part of if there'd been multiple challenges with getting Boxi off the ground understandably. I think the biggest one is like you said, with even a call today, there was seven of us on the screen and I said, "If the seven of us were the typical technology guys or girls that knew nothing about socks, but we're launching a socks brand, we wouldn't bring all this baggage to it about what we thought we knew." With Semihandmade, we have all this great knowledge, but some of it can get in the way with the new brand.John:Because the new brand, for it to really work, you can't do all the customization. There are certain things that Semihandmade where we'll make exceptions and we'll do things. Of course, you always want to service the customer, first and foremost. It's just recognizing that if the goal is for this really to take off and grow, which I think it will, we have to be a little stricter, a little more brand fidelity, like say, this is who we are, this is how we get to where we want to go, and then stick to that.Stephanie:Yeah, that seems tricky. Having two different hats where you and your team are like, we know what works, this is what works, we build a company that does this. Then having a slow creep where you turn the other brand into the same thing. Like you said, you have to really be strict about creating a whole new company with a new vision and making sure everyone's on board and not just let the old company creep in and [crosstalk].John:I think in some ways too, whether in a good way or a bad way, the fact that we've been fortunate to have growth and success for Semihandmade, it's either made it easier or harder to get the new venture off. Because it buys you certain time. If we were a startup, we raised funding. We've got 18 months to runway all these different things that will be different. Probably, things have taken longer. On the other hand, we wouldn't have been able to do it. When this launches, what we leverage is, yeah, it's 10 years of Semihandmade. It's 25,000 projects. It's incredible.John:We have 2,000 semipro designers around the country that are champing at the bit to offer this. It's relationships we've got with Rejuvination and Kaff appliances and Caesarstone that are going to be partners. I continue to remind people and even myself like if we were a startup, we'd never have this stuff. We wouldn't have five, six amazing influencer projects that you're going to roll out in the next six weeks with the new launch. You'd be launching and then keeping your fingers crossed.Stephanie:Yeah, yeah. Okay, cool. Alright, so let's move over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have one minute or less, prepare, get your water, [inaudible], shake it out, do what you got to do. Alright, are you ready, John?John:Yup.Stephanie:Alright. What one thing will have the biggest impact on ecommerce in the next year?John:That's great question. Do I have a minute for this?Stephanie:Yeah, a minute.John:I think it depends. I'm cynical about the fact that in some ways, yeah, a lot of companies have taken off, Instacart and things like that, but even like Wayfair. I was reading Bed Bath & Beyond today. I think the question is whether or not that'll be sustained. When life comes back to normal, which hopefully, inevitably will, certainly, people will be more inclined to shop online. There's no doubt about that. The world is changing. It's not going to go back. There are companies that have gotten a little frothier or whatever that I think that artificial is going to wear off. It's normalized.John:It's great. There's stuff I would have never done. Even with not ecomm, but with Zoom, we hired a new president, Beth and Molly, who runs marketing and stuff. I hired three of our highest people remotely. They're based in New York. I would have never done that. I would never trusted people or trusted myself. Now, it's normal.Stephanie:Yeah. I was slow with grocery delivery and curbside pickup. It forced me to do that because I was the one who always want to go to the grocery store, look around with my friends, whatever it maybe. Now, I'm like, oh, I don't really want to go there anymore. There's no point. I'll save my time and do other things.John:It is amazing. To me, it's more interesting to see how those people make money. That's the part where it's one thing to do great revenue. Obviously, profitability is a thing, unless it's not your money, unless you have a thing too. When it is your money, it's much more of a focus.Stephanie:Yeah. We just had someone from Intel on who was saying that they work with a hardware store and they're struggling because contractors were coming in and placing 40, 50 item orders for curbside pickup.John:All of it?Stephanie:Because they're like, why would I send in my contractor and paid him to be there for two to three hours when I could just have you all do it. They're struggling with trying to figure out the program because they weren't really expecting them.John:Yeah, that's interesting.Stephanie:I'm like, that's scary. What's the nicest thing anyone's ever done for you?John:Business wise or otherwise?Stephanie:Anything, whatever comes to mind.John:I guess the biggest cliché was my son's mom having my son. That's probably ...Stephanie:That's a good one. Having three kids, I appreciate that answer.John:I mean that from heart.Stephanie:Yeah, that's a good one. What's up next on your reading list?John:I constantly have five or six books I'm reading. That's interesting too, whether it's because I pursued writing for a long time. I haven't made the jump to eBooks. There are few writers that I correspond with on Twitter. Twitter is another thing that I didn't use that much before this. I've asked them like, "Well, what's the feeling on eBooks? Is it like cheating or whatever?" Of course, these guys and girls want to sell books. They're not considered cheating if you buy their eBook. The response I got from a bunch of them was, it's best in some ways for nonfiction.John:I read tons of nonfiction. I'm reading Say Nothing, which is a story about the troubles in Ireland. I'm finishing a great book on ecommerce called the Billion Dollar Brands book, something like that. That's spectacular. I've got so many. I'm reading a book on Chinatown, the making of the movie. I love a lot of different things. It is mainly. It's less fiction now. It is more nonfiction.Stephanie:Very cool. What is your favorite cabinet design? What's in your house?John:My house, it's interesting. Because in my house that I share with my son who I split custody with, we have a more contemporary kitchen. It's walnut. It's unique. We sell a fair amount of walnut and it is one of a kind. Every kitchen is different. That's a little more contemporary, even though it's wood. It's contemporary. In the house with my fiancé, where she lives, that's a more traditional. It's a shaker kitchen. It's got some really pretty hardware. I guess I'm very particular about what I like. In general, even when we she and I have arguments about furniture, I just say like, "Buy something quality and it'll fit with everything else." I know it's a copout, but that's where I'm landed. I love eclectic as long as it's nice quality.Stephanie:Yeah, cool. Alright and then the last one, if you were to have a podcast, what would it be about? Who would your first guest be?John:That's a great question. I like a lot of probably IKEA. I like a lot of different things. Even podcasts, same thing. I didn't listen to before, frankly, a year ago. I listened to one the other day. Marc Maron was really talented, funny guy who've been doing podcast for about 10 years. He had this guy, Daniel Lanois, who's a big time record producer, did U2 and all kinds of amazing people. I was amazed at the depth of Maron's knowledge of music. I don't have that. I don't know. I like diverse things. I don't know if I could do it.John:Because I like to think I'm a good listener, but I'm probably not because I'm always ready to say something. Obviously, like in your spot or whatever, to do it well, you should be listening to people. Again, I love screenwriting podcasts. I like anything. I like news, podcasts.Stephanie:Okay, so it'd be a little bit of everything. I like that. That's cool.John:I could do this kind of thing. If we're talking about remodeling, if anything, would always have an edge to it. If I were going to do a show, that's the thing. I gravitate less, maybe not towards Gordon Ramsay, but like Anthony Bourdain. There would be an edge to it. It wouldn't be ... Even when I was inside people's houses, I don't know if I was combative. I had very strong opinions about with architects and designers and homeowners and what I thought they should want. The one thing I don't like is when it's all sweet and sacristy and artificial. Totally with an edge.Stephanie:I like that. That sounds good. Alright, John, well, this has been a pleasure having you on. Where can people find out more about you and your work?John:Sure. Semihandmade, we can do semihandmade.com. Then Boxi, which launches March 1st, is at boxiliving, B-O-X-I-L-I-V-I-N-G.com.Stephanie:Okay, thanks.John:I appreciate the time. This has been great.Stephanie:Yeah. Thanks so much for coming on. It was fun.John:Thanks for having me, Stephanie.
We’ve all seen it — maybe some of us have even fallen for the trick — you’re on an ecommerce site and a big “Wheel of Savings” pops up. This innocent-seeming discount offer, though, isn’t what it seems, and it’s doing damage to the end-user spinning the wheel, and the site the wheel pops up on. The world of malvertising and browser extensions has been causing headaches in the ecommerce world for years and brands are constantly looking for ways to fight back and regain control of their websites. Matt Gillis is helping with that mission. Matt is the CEO of clean.io, which offers real-time protection against malicious actors and code for some of the most-trafficked websites in the world. On this episode of Up Next in Commerce, Matt takes us through some of the methods bad actors are using to install malicious code on ecommerce sites, and he gets into the nitty gritty of why browser extensions like Honey and Wikibuy are hurting brand bottom lines, and why those extensions are making marketing attribution nearly impossible. But he also offers some solutions, too, so that ecommerce brands can finally win back control of the user experience. Enjoy this episode!Main Takeaways:Good Guy or Bad Guy?: Traditionally, malvertising is done by bad actors who infiltrate websites and take over through ads. But in the world of ecommerce, the bad actors are actually manifesting in the form of Fortune 100 companies that profit from website extensions like Honey and Wikibuy, which disrupt the user experience of the customer on the original ecommerce site. Solving that problem is the challenge for ecommerce brands that want to take back control.Sneakily Effective: In the malvertising world, the bad actors are at the top of the marketing game. They can achieve a 100% click-through rate at little to no cost because they are using sly, untraceable strategies. Targeting and eliminating those malvertisers is critical in order to level the playing field for ecommerce marketers to have success moving forward.Last Line of Defense: Publishing platforms hold most of the responsibility for the end-user experience. Everybody has a role to play in minimizing the risk of malicious buyers or advertisers, but ultimately, the publisher is the last line of defense against malvertising moving into the user experience, and they should be held accountable.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone. And welcome back to Up Next In Commerce. This is your host, Stephanie Postles co-founder at mission.org. Today on the show we have Matt Gillis, the CEO at clean.io. Matt, welcome.Matt:Stephanie, thanks for having me. I'm excited.Stephanie:I am very excited to have you here. We were just talking about how cool your background is, and I think that's actually kind of a fun place to start of where you're at in the world. And tell me a bit about your background.Matt:Yeah. Hey, so I'm in Baltimore and we actually just took possession of this office in February, right before the pandemic. And so the irony is I've been here every day since the pandemic started pretty much.Stephanie:By yourself?Matt:But I'm by myself. So we have 4,000 square feet. We just did the mural right before the pandemic and no one on our team has been able to experience it pretty much. But yeah, cybersecurity company located in Baltimore, we're about 45 people, I guess you could say solving this problem of untrusted and malicious JavaScript that is ruining user experiences in revenue across the internet. That's us in a nutshell.Stephanie:Cool. Well, I am really excited to dive further into clean.io. Before we do that though, I was hoping you can kind of go through your background because I saw you've worked at places like AOL, you've been in publishing. You've been in ad space. Tell me a bit about what you did before you came to clean.io.Matt:So full disclosure, I'm old. And so I've been around a little bit. I've had some fun. But yeah, I think key things I've spent probably the last 20-ish or so years in a couple of different capacities. Right out of university, I started in the mobile industry and mobile at that time was just making phone calls, that's it. There wasn't even texting then.Matt:In fact, my job back in those days was I would stand on a golf course at a golf tournament and let people make free phone calls because that was the cool thing to do then. No one had cell phones and if they did, they were like those brick ones. You remember those ones that you couldn't fit in your pocket?Stephanie:Yeah. And you were the cool guy like, "I've got access to an awesome phone, anyone want in?"Matt:Yeah. And listen, men and women would come up to me and they'd be like, "Can I call back and check and see if I have any messages?" And so that was the cool thing to do then. I know it sounds so crazy that was a thing at some point, but yeah. So I worked at mobile operators in the early stages of my career.Matt:So I worked at Bell Mobility in Toronto, Canada. I'm from Toronto. And then I moved down here to work at Verizon Wireless. And at the end of my tenure at Bell Mobility and my tenure at Verizon, I was focused on some of the services that you live by on your cell phone today. So this was in kind of late '99 and then the early 2000s of things like video on demand on your phone, playing games on your phone, downloading ringtones on your phone, I'm sure you did that.Stephanie:Oh, ringtones, yeah [inaudible].Matt:They were, obviously a huge business at some point.Stephanie:Now if my phone rings I'm like, "Stop it, what are you doing? Who's calling me? Don't call me, text me."Matt:Put it on mute. Yes, exactly. So I was kind of part of the foundational days of things that you would do with your phone, before the iPhone. And then I went and took a swing at being an entrepreneur and joined a little small video game company. Our biggest game was Who Wants to Be a Millionaire? We did a lot of TV game shows. So we did, Are You Smarter than a 5th Grader? And things like that.Matt:So I kind of walked the mile as a publisher for a while and then Capcom, which is the Japanese video game company acquired us. So I ran their publishing business for a few years and I got to experience what it's like to be a publisher and how hard it is to make money.Matt:And that was kind of in those early days of the iPhone where I'd say to people, "You'll go and spend $5 on this latte, but you won't pay $5 for unlimited use of a game over a period of time." And this is back in 2008, 2009. And so we had a real struggle and people weren't wanting to pay for our games. They want them free and free became kind of the thing on the iPhone.Matt:And so recognizing that struggle, I actually joined this company called Millennial Media, which was one of the earliest mobile ads platforms for app developers, helping app developers make money with ads. Some of our biggest customers at the time were like Words with Friends, if you've played Words with Friends-Stephanie:Yes, I have.Matt:... ads in every game. So we were kind of one of the foundational tech partners with folks like Words with Friends and various other games across the internet and apps. Did that for eight years through an acquisition with Verizon and AOL. And then we acquired Yahoo. So I ran the publisher platforms business at the combined entity of those companies, which was awesome.Matt:And one of the biggest problems in my time over that period was this thing called malicious ads, or malvertising as they call it. You probably are familiar with when you're scrolling away on your phone and all of a sudden it redirects you and says, congratulations, you won an Amazon gift card. And you're like, "I didn't click anything." Or spin the wheel for your chance.Stephanie:Yeah. I did that once I fell for it. I was like, "Oh, I spun it." I couldn't help it.Matt:Never spin the wheel, Stephanie.Stephanie:I only did it once, but yeah, afterwards I'm like, "That was a bad call. Why did I do that?"Matt:Yeah. So it was a big problem in my past life. And there were a few folks that were solving this problem and two of them were folks that I had worked with at AOL. When I left, it was called Oath at the time, which is Verizon Media now.Matt:I went and had lunch with these guys and they told me that they were spinning up this company called Clean Creative and set to solve this problem of malvertising. And I didn't have a job and it was getting too cold to golf. And so I said, "Hey guys, can I be an intern?"Matt:And so I came and hung around for a couple of days a week. And I was like, "You guys are really onto something here because this was a massive problem in my prior life." And so I said, "Hey, can I have the keys?" And they obliged. And that's how I'm here, started as the CEO two years ago. And we've kind of been blowing it up ever since. That's awesome.Stephanie:Yeah, such a fun story. So what is your day to day look like now? And what's your best day in the office look like while you're there by yourself? Are you around skipping around bicycling around the big office? What is your days look like?Matt:I do pace and I get my steps in over there. Day-to-day, we're startup, so we're small. And so as any of your listeners would know at a startup you do everything, and you take the trash out and you sign big contracts, hopefully you raise money. You kind of do run the gamut. So it's a little bit of everything. If you've worked at a startup you know that generally speaking, there's epic highs and epic lows. And so you have those days where you are the king of the world and you and your team are high-fiving and celebrating. And that's a little different now because you got to do it all virtually.Matt:Part of being at a startup is you get that culture of everybody generally speaking, being in an office like this, but we're a widely distributed culture now. We were before the pandemic where we kind of had, I don't know, five or six or seven locations among all of our people, but now we have 40 locations. So it's just like any other gig except there's really no net underneath you. You're walking this tightrope and hopefully you get to the other side.Stephanie:Yes. I definitely feel that.Matt:It's fun though. Isn't that why you do it?Stephanie:I mean, yeah, it's definitely really fun. Other times you're like, "Oh my gosh, I'm responsible for so many lives." And then other days it's like, "This is fun." So it's a good balance.Matt:Yeah. I mean, I won't lie. I had months of sleepless nights when we were raising money. We most recently raised our series A and we started raising it in March, right at the beginning of the pandemic. And yeah, all these people's jobs, for me, the pressure was on me to make sure that we could raise money and continue on this mission.Matt:The reality is, is the people behind the scenes are the ones that actually made my job easy because they're the ones that enabled me to go and tell the story of our massive revenue growth and our massive traction and our product market fit and all of that sort of stuff.Matt:Startups are hard, but there's a reason that many people once you leave the big company and you actually go and take your swing, that becomes the thing that you keep doing and doing and doing because you like having that euphoric feeling.Stephanie:Yeah. No, I definitely agree. And I mean, I think it's a good reminder too, as the CEO at any company to kind of get out of your way and hire a team that can support you and do things, but then let you do the higher level things like selling, raising money, such is a good point for, I think a lot of business owners who want to kind of stay attached to, "I've always been coding." Or, "I always did this part of the business." You need to step away and find people who can step in for you so you can go on to the next thing.Matt:Yeah, and focus on your strengths. Don't try and overcompensate and really... We did this thing called StrengthsFinder with our leadership team. And it was really about figuring out what are the strengths across this group of people that are practically leading the company. And you go, "Okay, well, I'm really good at this, this and this. And you're really good at this, this and this. Wow. We compliment each other. I should continue to keep doing this stuff. And boy, we should just let you handle all of this sort of stuff." So yeah, hire a diverse team and hire people that are way smarter than you and you'll be successful.Stephanie:So how have you seen the digital security landscape change? Maybe even over just the past year or two, what new things are popping up, what should e-commerce owners be aware of right now that maybe wasn't happening last year or two years ago?Matt:I would say that where we cut our teeth was in this malvertising space and what it is, is malicious JavaScript that's kind of being injected into the user experience through ads. And what we've seen is that the bad actors, the people that are doing it, are getting even more sophisticated over time. They have figured out how to get around the systems. They've figured out how to get around the checks and balances.Matt:And we kind of stumbled into this e-commerce world where we were protecting, we're protecting some of the biggest websites on the internet. There's seven million websites that run our code. Probably many of the websites that you go to everyday either to get your news or to read entertainment gossip, or that sort of stuff if you do.Stephanie:No.Matt:I'm not saying you do Stephanie, but we protect all of those sites; every single page view on those pages, we make sure that the user experience is protected and revenue's protected. And by the way, in that world, it's folks that I would say, delivering malicious JavaScript. What we started seeing in the e-commerce world is there's this whole phenomenon of what I would call untrusted JavaScript.Matt:Now in either case, the premise is you own your website. You should be able to control everything that executes on your website. You should be able to protect your user experience. You should be able to dictate your user experience because it's your website. On the malvertising world, what we saw happening was if folks had ads on their website, they had lost control of the user experience. They had lost control of revenue because any bad actor could just buy an ad and take over the user experience and get you to spin the wheel.Stephanie:Only once, but yes.Matt:Only once, but it happened. And so in the e-commerce world, what we've noticed is there's a lot of stuff happening on e-commerce sites, just like there is in any website that is without the permission or without the authorization of the person who owns the site. The biggest problem that we kind of dug in and gone to solve for is, if you ever heard of these things called Honey or Wikibuy?Stephanie:Yeah.Matt:So these are Chrome extension, Safari extensions, Firefox extensions. They sit resident on the user's device and Stephanie, when you're out shopping on your computer and you get to check out, Honey will pop up and say, "Hey, I've got coupons for you. Do you want them?" You as the user you're probably like, "Yeah, I'd love to get a discount. I'd love a better price, if I can get it without having to do any work." Honey does all the hard work for you.Matt:We think that's not really in the best interest of the merchants because they own their website and now someone is injecting code in and disrupting the user experience, disrupting your revenue. So just like it is in this malvertising world, the same phenomenon is happening over here. The difference is Honey is owned by PayPal. Wikibuy is owned by Capital One.Matt:So the folks that I would call "bad actors" in this world are actually fortune 100 companies. They're folks that you would expect to be able to trust. And what they're doing is they're actually injecting code in to disrupt the user experience and disrupt revenue. And so that's the problem that we've gone out and solved.Matt:We just launched our product that's called cleanCART. And what it is is it's a Shopify app and it gives Shopify merchants the ability to protect their carts at checkout and make sure that they can prevent this sort of code from disrupting user experiences in revenue. So it really is giving control of the websites back to the merchants.Stephanie:Oh, interesting. So when you implement that you just can't get coupons or are there other pieces that it kind of protects as well, or the user can't see coupons from a Honey or something, or are there other things that your app is also protecting against?Matt:So we're in, I would say the second inning of the baseball game. So early stages. We're really focused on to start is blocking the automation of these coupons. So we don't want to block you as a user going in and manually inserting the coupon. We think that's the intended use case. But what we think is unfair is that someone is standing beside you at checkout and handing you a mitt full of coupons and actually not even handing them to you, they're actually giving them and just scanning them all to make sure that they all have a chance to work.Matt:If you think about this analogy, the grocery store would never let someone come and stand beside the checkout and save you 30% off your grocery order while you're already ready to pay. And I think that's the phenomenon that we're trying to solve for in the earliest days, which is, let's prevent the automation from happening. Let's not prevent people from manually inserting coupons. Let's give control back to the merchants because it impacts them in so many different ways. Obviously, it impacts them from a revenue loss perspective.Matt:I talk to merchants every day. Many merchants are complaining that these injections are literally scraping and pulling 30% off of their cart value at checkout. So someone who had $100 cart, they go to checkout, Honey runs and it knocks their cart value from $100 to $70. That's kind of bad for the merchant, especially if that person was going to convert anyway.Matt:The other key thing is Honey and Wikibuy and these other discount extensions have made it really hard for merchants to have discounting strategies that they can track. And so what's happening is that promo codes are ending up in the wrong hands. It's creating an attribution nightmare for merchants where they think that this social media influencer or this Instagrammer, or this YouTuber is driving tons of sales and lo and behold, Honey has grabbed that coupon and is injecting it.Matt:And now every order that comes through where Honey was present on the page is applying that person's code. And so now the merchant not only has bad data that is going to ultimately drive their marketing decisions but now, they're also losing revenue and they're paying out affiliate fees to folks that generally didn't deserve that affiliate fee. So I think it's created a bit of a nightmare.Matt:And so, we felt this kind of pent up demand for this product. And that's exactly what's happened is that no one has solved it. We think we're first to market. And we think it's important that people are fighting for the merchants. There's been 10 years of growth in e-commerce over the last year. The pandemic driving a lot of that.Matt:And we think it's important that merchants really get control of their websites, get control of their margins, get control of their revenue and really get the right data to make the right data-based decisions of how they're going to run their marketing programs.Stephanie:Yes. I think that's a really cool story. You were just talking about how you were looking at a problem that people were complaining about, and then now you guys are like, "Well, let's solve it." Because I've read, I'm trying to think where this was, where they're talking about going to Reddit and looking at some of the threads of people talking about problems that keep occurring and occurring and how you could build businesses just based off Reddit threads. And you guys did that, just looking at problems with what merchants were struggling with. So a really cool example of how to build a business is look at all the problems that are going on and jump at solving it.Matt:Well, and I think the other key thing here is as you know is solving the problem, but also during that process of your hypothesis that you're going to develop of what you're trying to prove, it's you also need to prove that people pay for it. And that's, I think part of the foundation of what we've built here, obviously on the malvertising side, but also on the e-commerce side is it's a big enough problem. People need to protect user experiences.Matt:If you think about just in the internet in general, it's very expensive to create content. It's very expensive to drive traffic. And once you've done those two things, why would you leave it to chance that someone might come to your website and have a crappy user experience? Protect your user experience.Matt:It happened last week on the Harvard Crimson on the crimson.com where somebody was on Crimson and they got one of these redirect ads that took them to this landing page that said, "Hey, you're a Verizon customer click here and take the survey and answer these nine questions and you'll have a chance to win." And this user actually took to Twitter and said, "Hey @thecrimson, which is, I think their Twitter handle, you've got a crappy user experience. Why are you letting this happen?"Matt:I never even saw a reply from the Crimson. But when we did some investigation on what was going on, they don't even have protection on their website. So it almost feels irresponsible at this day and age to not be protecting your asset because your asset generally speaking, isn't your website, your asset is your users.Matt:And so protect your users, make them feel confident that when they come to your site, they're going to have a great experience. And so that's really what we've focused on is just delivering technology that solves a problem that people are willing to pay for. Because obviously without that, we don't have a business.Stephanie:So when thinking about like the Crimson example, that's all from a bad ad being run on their website, correct?Matt:Mm-hmm (affirmative).Stephanie:Someone was able to buy that ad unit have bad JavaScript, and then that's when they were sent to that Verizon survey. I'm I thinking about that, right?Matt:You're totally thinking about that right. And what's interesting about the thread is that when this woman went on to Twitter and said, "Hey, this is what happened. And here's a screenshot," there were a whole bunch of people that piled onto the thread of like, "Oh, here's what I think is happening." "Oh, you have a virus on your computer." Or, "Oh, you have a bad extension on your computer or whatever." Everybody had a hypothesis of what's happening.Matt:And so we actually went and captured the threat and reverse engineered it and said like, "Here's exactly what's happening." And yeah, it's all coming through ads in that case. And there's so many great things of the open programmatic ecosystem.Matt:So programmatic media being able to buy a single oppression at a time by single user real humans, real devices, real networks, like you know I'm having a one-to-one engagement with this person and in the malvertising world, that's a feeding ground for bad actors because they get to do the same thing.Matt:And quite frankly, they're better at it than any other advertiser out there because they're the ones who know how to pay 20 cents CPM and buy an ad and actually get 100% click-through as opposed to the rest of the world that's just hoping that they get a half a percent click-through rate. And so they figured out how to buy that ad, that ad renders on your device.Matt:And then usually it's like an onTouchEvent. So when you actually just touch the device, they put a transparent overlay on your device. And that turns into a click or they'll auto click something on your behalf, or however they decide to inject their technology. But yeah, it's as simple as that. And I think it's lucrative, otherwise-Stephanie:They wouldn't be doing it, yeah.Matt:What they do is they try to do it at the lowest possible level without getting caught. So if you think about sophisticated marketers, what do you do? Well, you pick the right users, you maybe frequency caps so that you don't lambaste them with ads. You want to hit them at the right time with the right message and all that sort of stuff.Matt:And so these bad actors have figured out how to very elegantly and in a sophisticated fashion, they'll hit you with that ad. But the reality is they'll probably frequency cap you to one so you can't reproduce the experience and that's how they evade getting caught in most cases.Stephanie:Yeah. Very interesting. I didn't understand the whole backend of how that works. I mean, I do spend a lot of time thinking about building incentives for advertisers because we build up our own ad networks to advertise our podcast and we bring on partners all the time.Stephanie:And it's really funny thinking through how to build incentives for especially newer advertisers when you might say something like, "Oh, we'll incentivize you based on a download." Then all of a sudden you're getting all these fake downloads. No, not downloads. We'll incentivize you based on consumption. Like, does someone listen to the episode? They wanted to hear it.Stephanie:And then you see instead of actually having good people come through and consume the episode, the advertiser will say, "Okay, I'll pay you to review the ad or review the podcast, which makes it show that you were consuming it because you had to for maybe a minute to then be able to review."Stephanie:And it's always interesting trying to figure out, I mean, and these people are not good actors maybe, I'm not really sure. But it's always very interesting thinking, how do you incentivize people to do the right thing and actually deliver and not try and always get around the rules and just meet a number which I'm sure a lot of the platforms deal with the same kind of thing, but-Matt:It's interesting you use the word incentivized, and that was a dirty word in the early days where most advertisers didn't feel that the word incentivize was a good user because they didn't truly have the intent to do the thing that you want because they were being paid or a bounty or whatever the thing is.Matt:I saw the evolution of incentivized in my mobile career where it became really hard to get people to consume video commercials, like 15, six second whatever that metric was. And in the games world, they figured out this thing and they actually rebranded it instead of calling it incentivized video, they actually called it rewarded video. And-Stephanie:I feel like that's a little more, I don't know.Matt:Well, listen, and so I talk about one of the apps that I love is this app called Candy Crush. And I've been playing candy crush for almost 10 years now, I think. And when's the last time you played the same game for 10 years? Like never?Stephanie:Yeah. That's impressive.Matt:But they've artfully integrated video into their app. And I think if you run out of lives, you can watch a 30 second spot that is unskippable. So you have to watch the whole thing. And then if you, do you get rewarded with that extra life or whatever it is, maybe a lollypop, I don't know. But yeah, so I think there's different ways to approach it. But you're right, usually when you figure out the bounty, everyone else figures out how to capitalize on the bounty.Matt:And I think the interesting thing with Honey and Wikibuy is they've figured out how to get paid for the bounty or get credit for the bounty when lo and behold, they didn't really do anything. All they did was they had code that was resident on the machine that allows them to kind of get credit for that user purchasing when I think it's questionable whether they had any influence on that.Stephanie:Yeah. I've kind of thought that too, when seeing different Instagrammers with their promo codes for e-commerce site. And I always thought like, "Oh, how does that attribution work?" Because I mean, she's sharing it here, but I'm sure it's very easy for someone who doesn't follow her to also find that code outside of a Honey, but just be like, send it to my friend, "Hey, use this code." They never even followed her and now, they've got 25% off or something. So it does seem like attribution can be tricky, even if someone's not using Honey. How do you think that world's changing right now to make it easier for merchants to track where their sales are actually coming from? It feels very messy.Matt:Oh, I agree. I think it's a total mess. That's why we focused on the automation because I think that's one of those low hanging fruit, but big problems. Honey will tell the world that they have 17 million or so users. I don't know if Wikibuy which is now called Capital One Shopping, I don't think they announced how many users they have. But what I can tell you is both of those companies are spending a tremendous amount of money acquiring new users.Matt:Every time I log into Twitter, usually the first ad that I get is from Honey. All throughout the Christmas season, the holiday season just recently Capital One which owns Wikibuy Capital One Shopping, they were running TV commercials for this product with Samuel L. Jackson and John Travolta. So there's like a tremendous push for them to grow these user bases.Matt:In talking with merchants and we've got, I don't know, we've got maybe 25 merchants using our product right now. And we're in closed beta. That problem that you just mentioned, which is, "Hey, I worked with an Instagrammer and I gave them a code. And all of a sudden two days later, I've had a vitamin company tell me that story. I've had a sporting goods company tell me that story. I've had a toilet paper company tell me that story.Stephanie:They're using Instagrammers?Matt:They're using Instagrammers. They're using YouTubers. They're actually using podcasts as well.Stephanie:I mean, interesting to see how they're partnering on toilet paper.Matt:Because they're partnering for the audience on these podcasts and they're hoping that they can get that audience to find out about their product and again, then they're incentivizing them to come and become a customer. It's basically the same net story. The vitamin company told me they're like a supplement company. They partnered with one of the biggest triathletes in the world.Matt:Let's just say they had 50,000 or 100,000 followers, but you've got to imagine they're probably rabid followers. If you're into that, then that's probably the gold standard of who you would listen to. And that person did some blog posts and did some Instagram posts and posted their code and as soon as it happened, they saw a surge in sales attributed to that person.Matt:Now, the marketing person at the company was like, "Oh my gosh, we figured it out. We nailed this. We knew that people would be rabid about that person's content. We knew that person had so much influence to get people to come and buy." And then they're like, "Oh my God, it's Honey." Because literally they went from zero sales to 80% of their sales that had coupons was that person on Monday.Matt:I think it's a frustrating problem. And I think the sophisticated marketers have woken up and are like, "Man, we're bleeding money." One merchant told me that when they started kind of parsing out the attribution that Honey was costing them. They did about a million and a half in revenue online per month, so call it a $15 million business give or take. They believed that these promo code extensions were costing them about 150 grand a month, 10% their overall value.Stephanie:I mean, we just had a guest who they ranted about their hatred of Honey, I mean, even on the show. So I think it's maybe a couple episodes before maybe when yours is going to go out.Matt:Call me. We can help.Stephanie:Yeah, I'll send the link so you can hit him up.Matt:Absolutely.Stephanie:He was not a happy dude about Honey. But I guess when I think about promo codes, it kind of feels archaic to me. Maybe this is just a me thing, but it feels like where QR codes were where all of a sudden they're gone and you don't even think about them anymore. Promo codes kind of feel like that to me too of just, it feels like a manual old way of attributing things.Stephanie:How do you think about attribution when it comes to influencers and stuff or anyone, without having to use a code? Are you guys even thinking about a new way of doing things or do you hear of people trying new ways of attribution that isn't like I'm putting in a manual like Stephanie 20, to get my 20% off? Is there a new way of doing it?Matt:I mean, we're thinking through all those things. I think the challenge is specifically if you're using these one-to-many mediums. In a perfect world, I think you'd have a unique code for every user and so you'd have to authenticate. We'd know that that code went to you Stephanie and if you redeemed it, I would know that you actually bought something and you bought something because of this engagement that we had. I think in these one-to-many mediums it's, how else can you do it? And some of the challenges that the one-to-many mediums like think of YouTubers.Matt:One of the companies that we're working with has a problem where they have a very high dollar ticket item. Their item that they're selling is about 1,000 bucks. And obviously, if somebody grabs a code of 20% off that you're losing 200 bucks, it's a lot of money. Their problem was that they were doing YouTuber videos and they were publishing a code within the YouTube video to reach the audience. And for them, it was extreme sports, the audience that they were going after.Matt:Well, literally the next day, and I don't know if you know how Honey works. If you have a Honey on your machine, the very first thing that Honey does is it scrapes out anybody who manually puts a code in. So in order for Honey to be able to grab that code, it has to happen once where a real person saw the code and was motivated to go and type it in and buy.Matt:If that happened to me, if I got that code, I would go in and type it in. And if Honey were on my machine and then I hit okay, Honey will scrape that code out and now everybody who comes after me gets access to that code whether they saw that YouTube video or not.Matt:The problem for this company is spending a lot of money engaging with YouTubers and creating videos and obviously, doing the presentation layer of these offers. Well, once Honey gets a hold of the code... And what they've also found is that Honey and the other extensions, are not very merchant friendly. The relationship between Honey and these merchants is actually quite adversarial. And so it leaves them with no other option.Matt:I guess the two options: one, you just keep running your YouTube thing and you resign yourself that you're going to be paying out a 20% discount to everybody who comes and has Honey; which that stinks, that doesn't feel right or you need to reach out to the YouTuber. You need to recut the video. You need to recut the voiceover. You need to kill that code. You need to put a new code in. And so it's made this sort of marketing endeavor with YouTubers and Instagrammers and you name it very hard, because you're actually turning off codes.Matt:We saw one email which was interesting. I always say to people, let's remember we're all consumers too, you and I buy stuff on the internet, even though we're deeply entrenched in the businesses that we're running. I have Honey on my machine, so I can understand what that user behavior is, so that I can actually talk with merchants.Matt:One of the folks on our team bought a pair of shorts from one of these companies that advertises on Facebook and Instagram. And they were out of stock after he had ordered it, so they sent him an email. And they said, "Hey, listen, sorry you didn't have it but guess what, here's a code. You'll save X percent. But please, make sure you use it within the next 48 hours because Honey has been grabbing our codes and we're going to shut this code off."Matt:How can people market, if you constantly have to play whack-a-mole. And if you now think of the analogy, it's back to what we do in the malvertising side. If you aren't going to solve things with software, you're basically playing this long cat and mouse game that you won't win.Stephanie:I mean, that's why I think about merchants turning on and off codes.Matt:It's a nightmare.Stephanie:We were handing out swag and me just trying to... I had unique links that could work for more than one person and just thinking, "That could be tricky and go really bad." But I guess that's why I just think codes just feel, like I said, a little bit archaic. Why can't I just go to a YouTube video?Stephanie:I mean, the internet knows so much about me and where I'm at anyways. It should say, "Hey, Stephanie watched Matt's video where he was talking about this toilet paper." And then all of a sudden she's at our website, you can say, "Stephanie, a 20% coupon awaits you when you go here."Stephanie:And then when I get there it should know who I am and then be like, "Your coupons applied. And it will be applied for the next three days on this website or whatever, because I know where you've been and what you saw and where exactly you came from." Why can't it just work?Matt:I mean, I wish it was all that simple. Listen, we are taking obviously, technology solution to what we think is a longstanding and challenging problem. And in the malvertising world, the people in ad operations were literally playing whack-a-mole. Like, "Let's figure out where this bad ad came from." "Turn that demand source off." Or, "Turn that buyer off." And guess what, the bad actors, they just pop up again.Matt:And so we believe that, and I've seen and talked to merchants who are like, "Listen, here's how I solved the Honey problem." And they're like, "We actually created promo codes for 10% off, but the promo code was Honey is stealing your data."Matt:Because if you use Honey, you know that when Honey pops up it'll actually tell you the codes that it's implementing. They went on a mission to discredit and put the fear of God in their buyers that Honey was doing... They were like, "Honey is doing nefarious things with your data." And guess what, Honey D listed them as [inaudible].Stephanie:Well, there you go. Now, you know how to do it, I guess.Matt:The irony is, is that was three months ago that I talked to that merchant. And yesterday they cameback in and said, "Listen, we have a problem again."Stephanie:Honey added us again.Matt:No, this time they've got a Wikibuy problem. The problem is going to be never-ending, I think. Ultimately, we're hopefully going to give e-commerce companies the tools that they need to go out and be able to operate their business and focus their time on the things that really matter, in my mind, which is driving incremental revenue; not playing whack-a-mole with your promo codes and having to go recut YouTube videos. Hopefully, that's one of the big things that we help solve for.Stephanie:That's cool. I mean, I do like the idea of that one merchant you were mentioning where they said, "If you act within the next 48 hours or whatever, it'll only lasts this long." And I just had a guest yesterday who said that. I think it was either Burger King or McDonald's made it so if you're within 20 feet or something of a McDonald's they would send you a code and say, "You have five minutes to get to a burger King to get a free burger or something."Stephanie:And I'm like, "That's interesting." That's a good way to make people act quickly if you know something's expiring, I know I act a lot quicker. But I mean, of course, solve the problem that's number one. But I do think that's an interesting marketing tactic too.Matt:And make it measurable. I think that's the key thing is that... I often say, "What gets measured gets managed." And so hopefully, what we're doing is we're taking one of the things out of the equation that is making measurement really challenging for merchants. Again, using the triathlete example, yes, the marketer was high-fiving the rest of their team going, "We finally solved this." And then when they actually looked at the data they were like, "Damn it. I guess we got to go back to the drawing board."Stephanie:It's also just so tricky too, knowing how much of those people would have bought otherwise or not. So even looking and being like, wow, we have all this attributed to this one promo code and maybe it was because of Honey. But how many of those people would have bought if there wasn't some promo in there? It's just hard to know.Matt:We're solving that problem. We're giving merchants some deep analytics on exactly what's happening on their site, because we think there's a blind spot there where they don't know. For instance, how many users actually came to your site that actually had an injection capability? One of the extensions of Honey, Wikibuy, Piggy, Amazon Assistant, you name it. So we give them that lens.Matt:And then we give them the lens of, what were all the promo codes that they tried to inject? What was the most popular promo code? And stack rank those things and then going deeper down to conversion rate. And guess what, what we're seeing in these early days is that when you block Honey and Wikibuy at checkout, the vast majority of users actually still convert.Matt:And so that to me is the icing on the cake which is, guess what, you take control back of your website. You take control of your margins. You take control of your revenue. You now have the data you need to be able to go out and drive incremental sales. We think that's pretty powerful.Stephanie:I mean, that makes sense. I've heard a couple of times that also, discounts don't matter as much as you would think. I think they were talking about, they did a study between 10% off and 20% off. And actually, they were kind of the same when it came to consumer happiness. And what can be worse though, is if someone has the ability to go in and put a promo code in or something and then it doesn't work.Stephanie:I don't know if you remember those days of just going to the internet promo code for macys.com and trying out 10 different promo codes and all of them failing. I was way more unhappy then, than just not having one at all, just buying at full value.Matt:Let me tell you the opposite of that which is the worst-case scenario, in one of our merchants experience and that's why they're using our software. They're in the home interior space, so they do drapes and carpets and wallpaper and all that sort of stuff. And they were trying to build favor with interior designers because they wanted interior designers to know their site and know their stuff and all that sort of stuff. And so they did a very exclusive but unfortunately, a promo code that Honey got ahold of that gave interior designers 50% off.Matt:Well, lo and behold, as soon as one designer used that code and also had Honey on the machine, that code then got swept up in the Honey and everybody, every order that had Honey was now getting 50% off. Their customer service nightmare was that they couldn't afford to give every consumer 50% off, so they actually had to cancel orders; believe it or not.Matt:They called customers and said, "We can't honor your order with that coupon because that coupon was not intended for you." Created a customer service nightmare for them. And that's what they want to do is, they want to control their user experience. They want to control their revenue and their margins.Stephanie:Oh my gosh, that's horrible.Matt:Out of control. But think of that disaster of having to call someone and say, "Hey, I know you wanted to spend $500 with me, but only pay me 250 bucks. I can't give you 50 off but I can give you like 15 off, that's kind of what you were probably entitled to." So anyways, just trying to get control back in these merchants hands and let them control their destiny.Stephanie:I love that. When thinking about back to the now advertising piece, how much do you think it's on the publishing platforms? Is it their responsibility to make sure that they continue to increase their efforts to make sure bad actors aren't out there anymore?Stephanie:I mean, I know they're probably doing a lot. A lot of people like to hate on the publishing platforms and they want them to always do more and more and more. Is it maybe on them or maybe not on them anymore to continue to try and track those bad actors, who like you said are kind of popping up here and then they shut down and then open up a new account and do one off things and then shut down again. How should we think about leaning on the platforms like that?Matt:Well, I say to folks, the value chain in that industry is actually quite wide. And so from the bad actor who's putting their hands on the keyboards to the consumer, there's a whole bunch of players in the middle. I think it's on everybody to really have defenses in place and to make sure that they're protecting...Matt:So if you're at the front end, if you own the demand side platform that the bad actor's using, you need to have your own checks and balances to make sure that you're not bringing in malicious buyers. But all through that value chain, the onus is on everybody. But at the end of the day what I say is, the only person that can be responsible to that end user, is the publisher.Matt:Pick your publisher, if you are Fox News or you're the New York Post or you're the Washington Post, you're the one that has that ultimate relationship with Jenny or Johnny consumer who is surfing your site and consuming content. So you're the last line of defense. You're the one that created the site. You're the one that drove the traffic. You're the one that is using ads to monetize your traffic. It's really on you I think, ultimately.Matt:Now the publishers, all those folks that I named and there's millions of them, they all want to look upstream and they should. And they should hold everybody accountable upstream. But I think they're the ones that are really the that last line of defense.Matt:Because if you go to one of these sites and you have a crappy experience, you don't really care that it came through an ad. Like the woman at Harvard Crimson last week, she didn't know the origins of why it happened. And here's the other crazy thing, she knew that when she went to the Crimson, she was delivered a crappy experience.Matt:Now, the crazy part. First time we've ever done it, we actually did a private webinar with the end user because we wanted to explain to her here's exactly what's happening. She told us this story, she said, "Listen, I use ad block." And obviously, the risk to publishers are, if you don't create great experiences, your users are going to start using ad block.Matt:What she said was, in the desire to get real news and in the desire to really understand what's going on in the world and in the desire to actually make sure that real news publishers are actually getting compensated, she turned her ad block off and this is what happened.Matt:So shame on the Crimson for not delivering a great experience, because guess what? Now that user's like, "I'm not turning ad block off the next time I come to your site. You're not going to get paid for the traffic that I'm going to generate." So again, it really goes back to the publishers, the onus is on them.Stephanie:And thankfully, I think there is like new technologies popping up that maybe we'll be able to enable them or even just thinking about implementing. I mean, I've seen some advertisers looking into blockchain and having that as being kind of like a more source of truth to be able to know a one-to-one relationship and knowing who's behind... You don't know exactly who's behind what, but if you have it in a way where they sign up and they can't just start creating a million different accounts because they've got their one single one that they can go off of, it seems like there's a lot of ways that it can improve over the next couple of years that maybe hasn't been so easy the past decade or so.Matt:I agree. Obviously, there's industry bodies all trying to figure this out together. There's companies like us who are innovating and coming up with new and unique techniques to block these sorts of nefarious actors. I do think the biggest and most important thing is to recognize that the bad actors aren't just sitting still waiting for somebody to solve this problem. They're innovating honestly, a more rapid rate than many of the industry leaders that you would expect that have hundreds or thousands of people trying to solve this problem. Bad actors unfortunately, are innovating at quite a rapid pace.Matt:So the problem I think is going to evolve and change. We've seen it evolve to not just being ads but obviously, compromised Chrome extensions that just seems to be a great vector. And so I think you're going to see the problem move around and especially, if there's a lot of money in it. If there's ways for these guys to make money, you're going to see them salivate with... You're going to put up this defense and they're going to figure out this way to get around it.Matt:And there's so many different browser types. There's so many different machines. There's security flaws. There's zero-day. There's so many ways for these guys to actually buy and target, to only focus on iOS 13 and below and blah, blah, blah to reach their audience.Stephanie:So tricky. Hopefully, it'll get solved over the next decade. Cool. Well, with a couple minutes left, let's move over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Matt?Matt:I am ready.Stephanie:All right. First the harder one, what one thing will have the biggest impact on e-commerce in the next year?Matt:Listen, I think it's been the gold rush for e-commerce merchants over the last year. In many cases I talk to merchants, they're like, "It was raining money last year." Sales were up five X, 10 X, who knows. I think the next year is going to be that year where folks actually look to efficiency, and they look to figure out where there are holes in the boat that they haven't had to look before.Matt:And I think that plays to our product because I think in many cases when it's raining money, you almost turn a blind eye to some of these sorts of things. But I think now folks are like, "Listen, if I can be more efficient. If I can take control of my revenue and my margins, I'm going to do that."Matt:So I think that's probably, this is the year of people now are catching their breath and they've figured out their distribution and they've figured out their fulfillment and their warehousing and all that sort of stuff and the panic that they had to do to keep up with the pandemic growth. Now, I think it's a deep breath of like, "Okay. Now, let's look at the math."Stephanie:Yeah. I agree, that's a good one. What one thing do you not understand today that you wish you did?Matt:What one thing do I not understand. I think the affiliate landscape is complex. I think there are a lot of legacy ways in which people have calculated incrementality and I'm not sure if they're all believable. And I hear a lot of feedback from merchants where it's kind of like they just brush it under the rug and they're like, "I know I'm probably paying for stuff that I didn't really get, but let's just let it go." I think every percentage point matters. That ecosystem, because I hear there's good guys and there's bad guys and I'd love to really dig deeper on that. And I think that's a big opportunity for us as a company.Stephanie:That's a good one. What's the nicest thing anyone's ever done for you?Matt:Wow. The nicest thing that anyone's ever done for me.Stephanie:I like to go deep.Matt:Yeah. That's a deep question. I think I've been fortunate throughout my whole career in that, I have been given opportunities that I probably wasn't ready for. And by the way, I had never been a CEO before I was at this company. And so, who knew that I'd be able to do it.Matt:But I think it actually starts way back to when I first graduated and I was seeking my first job. And I had a mentor that took a risk on me and gave me my shot. And I worked my butt off and hopefully that translated and he and she felt great about what I was doing. So I think the nicest thing, I've just been given opportunities that I don't think I deserved and hopefully I earned that respect and trust over time.Stephanie:That's a good answer. If you were to have a podcast, what would it be about and who would your first guest be?Matt:Wow. This lightning round is hard.Stephanie:Good. Needs to be.Matt:If I were to have a podcast. I love gadgets. I'm one of those guys that buys the infomercial type stuff. I bought one of those Rotisserie Showtime girls 20 years ago, I still use it.Stephanie:Worth it.Matt:Maybe it could be interviewing people who've built made for TV products and really understanding the backstories behind how they came up with the idea and how successful they were and God knows how much money we all made them.Stephanie:That's good. We had Kevin Harrington on the show, he was the original OG shark in Shark Tank. He basically made the infomercial. And it was very interesting hearing his perspective of how it started, where it's at now and Shark Tank.Matt:I'm fascinated by that ecosystem, it's super cool. And by the way, I always do buy one of those stupid things for my wife for Christmas and she hates me for doing it because she's like, "You're just burning money."Stephanie:I had fun buying it and watching the infomercial today.Matt:Believe it or not, one of my coworkers gave me a Squatty Potty for Christmas.Stephanie:I actually feel like those have good value though, the science is there. It's just a weird thing to buy your wife, if you got that for her. Someone gave it to you, got it.Matt:I was given it, by one of my coworkers, "By the way it works."Stephanie:And their marketing, I think that's the Harmon Brothers who did their marketing with the whole unicorn and they did the Poo-Pourri thing.Matt:Oh yeah, it's super cool. I love those kind of gadgets.Stephanie:That's a good one. I would listen to that show. All right. And then the last one, what's up next on your Netflix queue?Matt:Well, on my Netflix queue, I think I've got three episodes left on the Queen's Gambit.Stephanie:Love that show. That was a good one.Matt:I'm a documentary guy. I actually will tell you that I've been kind of hooked on HBO Max for a little bit. And I just finished the Tiger Woods documentary last night, which was fascinating. Nothing that you hadn't been told before. This guy through adversity has come back multiple times; knee surgeries, winning on a broken leg. So I'm into those sorts of stories. One of my guilty pleasures is The Bachelor, so it's on my DVR. I'm playing catch up on that.Stephanie:That's great.Matt:I love reality TV and that sort of stuff.Stephanie:I like where your head's at, me too. Well, Matt, this has been a very fun interview. Where can people find out more about you and clean.io?Matt:So you can find me at matt@clean.io. So if you want to send me an email, obviously happy to help you guys in any of your challenges and would love to hear your challenges if they're similar or if they're different than ones that we're solving for. Hit me on LinkedIn, so you can find me there. And our company website is clean.io.Stephanie:Awesome. Thanks so much for joining us.Matt:Thanks Stephanie. Thanks for having me.
Convenience is king. Everyone wants the easiest experience possible, but, they also expect that experience to be seamless and delightful at the same time. When it comes to shopping, ecommerce has been able to bring all those elements together better than in-store retailers. But even though brick and mortar retailers are facing an uphill battle, Joe Jensen believes that they aren’t going anywhere, and there are still massive innovations to be seen to make a more cohesive experience. Joe is a vice president in the Internet of Things Group and the general manager of the Retail, Banking, Hospitality and Education Group at Intel. He is helping brands across all industries and of all sizes become more nimble and data-centric. According to Joe, there are simple changes retailers can implement to solve big problems so long as you’re asking the right questions.. Like, what if you could solve all of your inventory issues with a simple technology that has already been in existence for years? And how can brands leverage in-store experiences as more of an enhancement to customers who typically enjoy online shopping but crave something more in-person?On this episode of Up Next in Commerce, Joe answers those questions and more. Plus, he explains how and why traditional retailers should be utilizing more data just like their ecommerce competitors, and he gives a first look into the technologies that will be making an impact on the future of retail. Main Takeaways:Curation is the Cure: The role of retail is changing, and the retailers who lean into curated experiences will be able to better meet the new expectations of consumers. Rather than offering a little bit of everything, stores will want to give customers a deep dive into a specific brand experience, because that is what they crave when they are shopping offline.Bring On The Data: When digitally-native businesses start to open brick-and-mortar locations, they insist on having as much data captured as possible about the customers who enter their stores. Traditional retailers don’t want or feel they need the data simply because they’ve never used it before. But the nimble retailers that use all the data at their disposal will be the ones to win even against their data-heavy, digitally-native competition.Incoming Technology: From computer vision to full RFID implementation, technology is going to change the way shopping happens for both the customer and the business. But, don’t expect these changes too quickly. Despite the fact that using RFID technology would solve nearly all inventory issues, many brands are hesitant to implement that wholesale change. Why is that? And what will be the catalyst to finally change? Tune in to find out.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone and welcome back to Up Next in Commerce. This is your host, Stephanie Postles, co-founder at Mission.org. Today on the show we have Joe Jensen, vice president and general manager of Retail Banking, Hospitality and Education Business at Intel. Joe, how's it going?Joe:Oh, fantastic. Beautiful day here in Phoenix.Stephanie:Good. Yeah, I'm glad to hear it. That is a mouth full title, but I feel like you deserve it when you've been somewhere for 36 years, I saw?Joe:Isn't that scary. I didn't even think I'm 36 years old, so it's weird.Stephanie:That's amazing, actually. I want to just start there. Tell me how did your journey begin at Intel and what are you doing today? What's your day to day look like now versus 36 years ago?Joe:Well, I started as a product development engineer at Intel, and I worked in a bunch of different product disciplines as an engineer. My original life plan was really to leave Intel at about year 10 and go to a startup, but by year 10, Intel stock options were so attractive that I ended up being so that fully handcuffed into the company.Stephanie:Yeah. As with most tech companies, I was this close to staying at Google for the same reason. I'm like, "Oh, it's hard to leave. I see my options vesting in year three and five and seven," and you can just extrapolate it out and it'll keep you there. But it's good-Joe:I shifted from engineering to the business side in about year seven, and I've done a ton of different business startups in the company. I think one of the things I'm most proud of, I've started three businesses that were at zero and have hit over 500 million a year.Stephanie:Oh, wow. So what are the businesses that you've worked on?Joe:Two different ones in an embedded space, and then now the Retail Banking, Hospitality. Education is added into that, but that business started, gosh, it started at single digit millions and we grew it to, well, we're the largest business within the IoT space in Intel I can say.Stephanie:That's cool. So tell me a bit about when you're saying IoT, and then retail banking, now education, how do I imagine what you guys are doing for your partners? What are you providing them? What does that look like?Joe:In our space, the IoT space for Intel is really where IT for an enterprise meets the real world. So in the case of retail, it could be digital signs, point of sales systems, inventory management, building management, time clocks, any system that might be connecting into IT. If you go into the manufacturing side, which is in my space, the manufacturing units, it's where equipment data flows in off of manufacturing side flows into the enterprise.Stephanie:And how many opportunities are being missed right now by not implementing? I would say data analytics like you're talking about. When it comes to inventory I know that Walmart for a while was trying to figure out how to track out of stock issues and it was really hard even when they had the cameras going around the lanes because they couldn't see behind what was in front of it. I don't know if they figured it out yet, maybe you know better than me, but what opportunities are being missed by not having this implemented into retail stores?Joe:As an engineer, I really think about root cause and what's the underlying problem, and we really believe that inventory inaccuracy is one of the underlying problems in physical retail. The problem we have is if customer can't find it in the store, it's out of stock. It doesn't matter if it's in the backroom, doesn't matter if it's hidden behind some items on the shelf, it doesn't matter if it's misplaced. If the customer can't find it, it's out of stock. We have data and research that shows that 1% of customers who experience an out of stock will go through the whole journey of they search on the shelf for it, they go track down a staff person to go find it, they dig through the rack or they don't find it. They say, "Hey, hold on. Let me go check in the back." They go look in the back and then come out and then maybe they go to the POS and they look to see if another store has it, or they'll ship it to your house. 1% of the shoppers are that patient.Stephanie:That's me. I'm that 1%. I did that the other day at Pottery Barn. But then I was very upset at the end because I was like, just like what you said, let me look in the back. Not there. Let me look at our partner stores. Not there. Let me look online. Ooh, it's not the size you want. And at the end I'm like, "Ugh. Okay, goodbye. I never want to come back again." I love Pottery Barn, but.Joe:Talk about a study that showed that if a customer experiences that out of stock frustration five times in a store, they stopped going.Stephanie:Yeah, I can see that. So how do you go about solving something like that to get all your systems on top?Joe:It's really tough. I still think RFID is going to play a key role. Japan has a huge labor shortage problem. They just said because of the aging of their population, they don't have enough labor, and the government decided four or five years ago to put a big push on RFID, and they're mandating by 2025, all consumer goods that are sold in China have to come from the manufacturer RFID tagged. They've also funded a kind of research-Stephanie:And that essentially keeps everything inventoried, right? Then you don't have staff to work.Joe:Yes. What happens is you don't even need staff to check out now because consumers will put their items in a basket, step the basket on the checkouts, and it'll read all the tags and then we'll just pay and go.Stephanie:So it's like the Amazon Go store where they're experimenting with, but I don't know whatever actually happened to that. I went into one in Seattle maybe two years ago, but are they still around? What happened with the Amazon stores like that?Joe:They're still running. They do a tremendous amount of business. I don't know how much of it's because of convenience and how much of it is the novelty. I suspect that they're augmenting a lot of that with human capital behind the scenes. I do think that you're going to find retail bifurcating into two types of retail. You're going to see the hyper-convenient side, which is you just want to take all the friction out. How do I take all the hassle? How do I take all the friction out for the shopper? And I think for staples day to day things, you want to go pick up fast food, fast food should be fast. I won't throw the chain under the bus, but there's a new location near our house, and I swear there's a three-hour wait all day, every day.Stephanie:Oh my gosh.Joe:Fast food just isn't that good for me. I'm not going to wait in line for three hours to get my fast food. And so I think on the hyper-convenient side, that's a big part of retail. Then on the other side, we're calling hyper experience. With hyper experience, shopping is an enjoyment and a pastime for a lot of people. And during the pandemic, obviously you can't go to the mall. You can't go shopping like you used to, but that will come back, and that you want to go and get experiences. You don't want to go to department store A and then walk down the mall to the department store B. And if you close your eyes when you walked in, you wouldn't know which store you're in.Joe:Now, if they all have the same assortment, they all have the same brands, they all have the same brand micro stores inside their department store, what's the experience that you're delivering to the consumer? If you go try to find a piece of clothing and it's out of stock, how's that experience? That's not a very good experience. So yeah, it's funny. I had one of my engineers in China explaining how he really has everything delivered. All his groceries, all his food. China is just hyper convenient from that perspective. It's cool and I love it.Stephanie:But they're used to it. They grew up like that, though. I feel like here, if you try and introduce some of those conveniences, it'd be like everything should be done this way. I don't know. I think Americans are a little bit more like, "Oh, that's weird," because we just know we have to do like this.Joe:It's really cultural differences, but I love this quote from him. And he said, "If I'm going to bother to put pants on and leave my apartment, it'd better be worth it."Stephanie:That's pretty great, and true. I feel that.Joe:It's like if I need batteries, do I want to get in the car and drive and go buy batteries? Well, if I do that and go to the store and they don't have that special battery, then it's really disappointing because now I spent 20, 30 minutes going out of my house to go get something because I wanted it right now and then they don't have it. This is why consumers do it a few times, they just start ordering online.Stephanie:Yeah. And I think the product, like you said, has to be worth it. How are you guys thinking about the experiences piece? Because we've had quite a few guests come on the show who've talked about their retail locations and turning them more into an experiential place, where you go there and you've got the certain music, and the vibes, and maybe you've got a yoga class going on over here and you're going there, not just to maybe pick up your product that you did order online during this time period, but you're also going there to maybe experience something that you wouldn't get elsewhere.Stephanie:A lot of people are saying retail's dead and I definitely do not see that happening. I'm like there is pent up demand to go in person and to go into stores, but I do think now there's going to be a new level of expectations of the consumers, not just going to want to go and shop around, they're going to want something else. How do you do that?Joe:I think that the role for retail is changing in terms of what experience means. If you go back 30 years ago, 40 years ago, shoppers didn't know what the new fashions were until they went to their favorite store and they saw what the new fashions were. So you went to your favorite store whether you're a Neiman Marcus shopper or Macy's shopper or a Target shopper, you went to the store to see what's available, what's in now. And there was that discovery and learning and value proposition that that store was giving you by bringing you things that fit your demographic. Today people know what's current as the store learns what's current. It's what the celebrities are wearing between social media and how quick things are in internet time. There is really no discovery value proposition for mass merchandise things.Joe:Where we see real success is curation. So you go to a store that's not a little bit of everything. It's a store that dives deep into a lifestyle or deep into a fashion style or deep into a demographic, and you go there and you immerse yourself in that brand, and then you immerse yourself in what that brand is about. That's the discovery. If you're someone who likes West Elm, and the style that West Elm delivers, you go to West Elm to see things that would be hard to find on your own elsewhere. If you wanted to go find your own curation, it would take you months of time on the internet trying to go discover all that stuff. But you can go to a store where their buyers have pulled that look together for you.Joe:If you're a Pottery Barn shopper, same kind of thing. You go to Pottery Barn and they've curated a set of things that fit a certain demographic and the lifestyle that they're looking for. So I think you're going to see a lot more of that curation. We did tour in New York City a couple of years ago, and the stores that were really doing amazing well were really deep into that curation idea.Stephanie:Yeah. I love that. I completely agree. I'm thinking right now about going into a Crate and Barrel or something like that, and I'm looking to find new things of a similar style, instead of going somewhere that's exactly the same that I can just find online. That's a really interesting take. How are you viewing the omni-channel experience of making sure that's frictionless when someone's looking online and then going into the store and having a good experience online and offline?Joe:I think a few retailers are starting to really get it right. I think in the beginning, omni-channel was a poor band-aid for I'm out of stock in the store, and I think most customers didn't see that as a good solution. I think the right way to think of omni-channel is there used to be a really consistent funnel for how shoppers and the shopper journey went from just initial discovery all the way through purchase, and that funnel, I think, no longer exists. I think people find out about products all over the place. You might see it on a television show. You might hear about it from a friend, you might see it on social media, and your discovery happens in your life. Omni-channel really ought to enable you to easily find something you're interested in whenever you see it, or whenever you want to. There was an old Burger King commercial Have It Your Way, I think 30 years ago.Stephanie:I remember that.Joe:I think the omni-channel today really means that shoppers ought to be able to engage with a brand or engage with a product wherever and however they want to.Stephanie:And I like the idea too of picking up where you left off. Like if I'm shopping online and then I enter the store or get near it, a subtle reminder of, "Oh, hey. You were looking at this and it's actually here on aisle seven," or whatever it is, directing me to complete the consumer journey. But I don't feel like it's there yet. I know we've got beacons and ability to see when people are entering your store and track that, but it seems like not a lot of retailers have fully leaned into that method to make sure that the full experience is cohesive.Joe:Yeah. I think that we're coming from the early days of that. One of my favorite stories years ago, we were shopping for a Tiffany lamp years ago, a couple of years ago, Tiffany lamp. And I searched online one night, looked at some options. We went to a store and we bought a Tiffany lamp. And for the next two months, every banner ad I had on the internet was for Tiffany lamps.Stephanie:Yeah. It's like I'm past Tiffany now. I'm onto the next kind of lamp.Joe:I think that what's happened is there's been too much of trying to use algorithms and online searches and data to try to target individuals with things that you think they might be interested in and not enough focus on helping people build a cart of things that you are interested in. So, for example, imagine if you turn it around for a minute and the brand for an item that you're interested in has an ability for you to put something that you're interested in, in a basket. And then when you pass a store that carries that item, that has it in stock, they flag you that this thing you're interested is in this store, and it's almost turning it all the way around from the store or the brand pushing to having the brand help guide you to where you find things.Stephanie:Yeah, that's really good. That's the kind of world I would like to live in where it actually is helpful and not annoying. I was just speaking with another guest about text messages and how certain retail locations will be like, "Come on in for 20% off," and I'm like, it's not helpful when I'm sitting on my couch, watching The Bachelor. It's helpful when I'm walking into the store and they're like, "Hey, you better make sure you buy that rug from World Market because here's a coupon now. So make sure you finish the journey and you don't just walk in and out." But yeah-Joe:You're reaching to the point that's one of the things I think the retailers especially are missing, and I don't know what a good analogy is, but I think that discounts and sales and coupons are an overused tool and they influence a lot of people, but not everybody. I think that for some people being first is more important than getting it on sale. For other people something scarce and having access to it before it runs out. So I think there's a lot of opportunity, even just convenience. Take a grocery store, nearly every grocery store I've ever been in, they put all the staples in the back, and they run with 19th century's retail logic of, oh, if I make people walk all the way through the store, they might buy some more stuff.Stephanie:Not me, I got blinders on. I'm like I need my milk and goodbye.Joe:It turns out that the convenience stores like 7-Eleven sell a ton of milk. I don't know if you've ever bought a gallon of milk at 7-Eleven.Stephanie:I have, yeah. Hey, my two year old, desperate times desperate measures.Joe:And it's about convenience. So if I were in a grocery chain, in fact, I talked to one about this big chain recently and said, "Why don't you take your house brands of the staples and put them in a section in the front of the store where they're super convenient and mark them up, make them the same price or maybe even a little bit more than the branded stuff." And the answer was, "Well, we tried that and it didn't work." I'm like, "Oh, when did you do that?" "It was like 10 years ago." I'm like, "People have changed a lot in 10 years."Stephanie:Yeah. I'd rather pay more to get right to it. So what are some maybe interesting stories like that, where they have listened to your advice and they've seen good results? Or anything where you're like, "Oh, I remember this one customer did this and they increased revenue a bunch because of this one subtle tweak in the store layout or how they did their products or inventory," or whatever it may be.Joe:We'll start a little bit maybe with I think that pretty much in every case when we've helped a retailer test or try a technology, the results always exceed the indicators that they put forward. And the very be wilderness thing to us is that even though these solutions look to deliver tremendous results and impact, they still don't scale them.Stephanie:I don't think.Joe:Years ago we had a partner that was putting cameras in the ceiling to measure shopper engagement, how long does it take for a staff to engage a customer? And they happen to have as an artifact of that, I won't say the brand, but they had a brand of popular, very popular Cola was in the camera view on the shelf. And they observed that this diet version, this Cola was out of stock almost all the time. So they went to the head of all stores for this giant grocery chain and said, "Hey, I think that there's an opportunity for you to..." Actually it was, I'm sorry, the brand, they went to the brand and said, "You got a not at stock problem in this grocery chain." The guy they talked to said, "Oh, there's no way. I was head of merchandising in Southern California. We have people in that store twice a day checking inventory. Its inventory are stocked twice a week. We are never out of product."Joe:And I'm like, "Oh, really? Here's some video of how much you're out of stock." And it turned out that within a half a day that they stocked, they would sell out and they would be out of stock all day, for two days. The problem we run into is you put process in place and you tell people to follow the process and it may or may not happen. So they look at this and they're like, "Well, there's tremendous value in having this product in stock. It's a driver product for the store." If they're out of stock, and the store cares that they're out of stock. The cost of deploying the solution was probably $30 a month per store, not a huge thing for one of their top 70 driver products, and yet it never scaled.Stephanie:Interesting.Joe:And you feel this thing. There was another one where the labor, they showed this 30% increase in tool sales in a major chain by tracking the staff and shopper engagement and improving that. It was really simple solution. Almost never scales. Now one that we have seen scale, Theatro makes a Voice over IP ear piece set up for staff. So if you go to, I think, well Bass Pro Shops, as an example, who's the one that does jeans and apparel for teams? They all have an ear piece and a radio.Stephanie:Oh, Alister? Gap.Joe:Anyway, it doesn't matter. A lot of retailers use radios, and there's a cost in the radios, and for a parody, they can switch over to this Voice over IP, and this is one where we're seeing people test it, and then in a matter of weeks completely changed all their devices over. The value in that if you look at it, if you're on a radio network, everybody that has an ear piece in their ear hears all the chatter from everybody all day. With this new solution, you can address a message to an individual person. So only the person you want to talk to gets the message. Then there's the ability to ask for stock and deliveries and things like that. So they've also built the ability, some of their customers, if somebody drives up to do a pickup, you order online, pick up at the curb, you don't want there to be a high friction experience. You want to be able to pull up, very quickly have somebody bring your item and leave.Stephanie:So where do you think then the future of retail? What does it look like with all these new... Some of them feel like little tweaks, a radio where you just talk to who you want. To me, some of those things feel little. Are there not enough incentives for these retail stores to change? I know you had mentioned Wall Street maybe beating up on retailers a little bit when it comes to wanting to try new and innovative things. What do you think is holding back retail right now?Joe:I think a big part of it is Wall Street, again, back to that root cause problem. There's a set of retailers that we think of as digital media, and these are brands that started as a purely online brand, and now they're going to open up stores and they realize once they get to about a billion dollars or so in revenue to get to the next level, they've got to go physically open stores or expand their reach.Stephanie:Yeah, like Warby Parkers of the world.Joe:Yeah, exactly. And these digital native retailers, when they come into the physical world, they expect access to the same kind of insights that they've been getting with their online entity. They want to understand how many shoppers are coming in and when? What's the dwell? When people are picking things up and putting them down and not buying them, it's like something in your cart that you took back out. And they come in with a long list of insights that they'd like to be able to get in the retail operation. The question in Intel is how can you help me find people that can bring these solutions or help me deploy these solutions? And when I go to more traditional brick and mortar retail, the conversation is trying to convince them they should have these insights.Joe:So I think that a part of it is the digital natives come from a world of when you're online only, the only insights you have into your shopper is through the data trail they leave behind them. I think if you go to brick and mortar, they're not used to capitalizing and utilizing that data. Talked to one partner recently, they haven't validated this, but they said that the amount of data that Walmart generates in a day would take 26 years to upload to the cloud, being given traditional techniques.Stephanie:Wow.Joe:So there's a tremendous amount of data created in the enterprise of retail every day. And we think with IoT and the cost of compute coming down so much, and the ability to use AI to get insights, you can utilize a lot of this data at the edge without incurring the costs of moving it to the cloud and trying to process it there. I think that if you imagine that you're moving petabytes of data to the cloud, and you're trying to find the needles in the haystack, it's a really big haystack. How about if I just try to sift through the insights real time as they're occurring in the store?Joe:We talked to a major fast food chain who prides themselves on fresh product, and one of their major problems, I won't say what the product is, but they were throwing away 40% of their product to maintain the freshness, and they wanted to have a short wait because they understood freshness was important, and freshness was important for the brand, but they were having a huge product waste problem, and they wanted to use predictive analytics to understand what's happening in the parking lot? What's happening in the drive through and what's my queue look like in the store so they could predict when to put product in the cooker versus cooking it always, and then having it there just in case.Stephanie:Were you guys able to help with that?Joe:Absolutely. That kind of change drives tremendous business cost savings, but also ensures that your product is fresh and that your customers are satisfied in having to wait for product. So when done well, we think these insights deliver not only customer satisfaction, but also tremendous business impact.Stephanie:I mean, that also makes sense for why a lot of the more Legacy Retailers are scooping up all these DTC brands and keeping them separate and learning from them to see like, oh, what are you guys doing over there? And then starting to integrate them into the org to maybe be brought up to speed a bit with how maybe retail should operate from a digital perspective and what are the expectations coming in from someone who's used to that? And how can it get implemented into the org? We had someone on from Kellogg's who said just that. They would acquire different DTC brands, but then keep them off on their own so they didn't get too mixed into the Kellogg's culture because they wanted the DTC brands to stay as their own brand. So they didn't, I guess, turn too corporate if it happens. I don't know.Joe:Maybe not say corporate. I think you don't want to turn them old school.Stephanie:Yeah, exactly.Joe:[crosstalk] We see that same thing, and you mentioned the expectations. One of the ways we explained this consumer expectations, every time you have a better consumer experience on your mobile, better app experience, in the back of your mind, you wonder why every experience isn't that good. I'm old enough that I used to travel where you had to go to the ticket counter to get your boarding passes before you could print it at home, and then they went to kiosk where you could print them at the airport and it was an amazing improvement, and then they went to actually really pretty good apps. So airline apps, you can see if there's a meal on the plane, you can pick your seat. You can do quite a few things, check the status of the incoming flight, et cetera. Airline apps are really pretty good, and I travel a ton and I stay in hotels all the time. Why are the hotel apps worse than the airline apps? Why can't I pick my room?Stephanie:That's true. Why? I'm sure you probably asked them before.Joe:Well, and actually it's interesting. It turns out that the most hotel chains are using a third party service to assign and block rooms.Stephanie:Got it.Joe:So they don't actually have control over that, which is kind of crazy.Joe:And so I think what happens is anytime you have this better experience as a consumer, then it raises the bar on your expectations for every other experience. Cabs were, I've never enjoyed a cab ride. Not once in my life, I think.Stephanie:No, never.Joe:Uber realized early that there was a huge amount of friction in getting ride and people hated cabs. You'd call for a cab, all they would do is throw it on the radio network and maybe a cab responds, maybe not. You didn't have any predictability. When you get to your location, the last thing you want to do is sit there in the cab on the street corner and spend two or three minutes paying the cab driver.Stephanie:Yeah, awkward.Joe:And they understood that there was this huge friction. Well, now that Uber has taken the friction out of getting a ride, consumers see friction elsewhere in their life, and like why do I have this friction? Why is this not as good as an Uber?Stephanie:So what areas do you think are the biggest friction points when it comes to retail locations right now? And what do you wish things were looking like maybe over the next couple of years? What are you guys planning for? Where are you hoping the world will be in like three to five years?Joe:Well, we think that you're going to see a lot more delivery. I think that grocery delivery was very slowly ramping, pick up at the curb or delivery, and with the pandemic, a ton of people jumped in and tried it that probably wouldn't have tried it for a long time. So the adoption curve for that took a real steep spike up, and we don't think that that adoption is going to slow down. So I think that the grocery, and the grocery business is tough. They run really slim margins, and we talked to one major chain and they said, if you pick up at the curb, that they lose $5. And if they deliver, they lose 10 to 15. So the chains have to figure out how they're going to deal with that. There are a bunch of startups that are building essentially dark store technology. So instead of having a retail location with a giant parking lot and a big square footage and employees, they'll end up with a small industrial space with all the same inventory, but some robotics that will pull stuff off the shelf and pack totes.Stephanie:We actually just talked to a company called Wolseley who talked about how they see the future being... They're B2B also for plumbing and HVAC and things like that, but they're like, "I'm not so sure if retail for us anyways is the way to go anymore," instead of just having a small guide shop out front, and then just having a micro fulfillment center or a warehouse in the back, and then they get your stuff and give it to you on the curb. But why do you need to come in for their business anyways and shop around when a lot of times these contractors already know what they want. They don't need to walk around like they would at Home Depot.Joe:It's funny, I was at a home improvement store recently, and I'm waiting in customer service to make a return, and they're on the phone with a customer who very wisely placed an order for like 50 things, probably contractor, but he did an online pickup at the curb order. They were on hold with this guy and they're talking to each other saying, "We don't have the labor to have somebody spend an hour running around the store to pick all these stuff." What a smart contractor? Why not have the home improvement staff eat that labor versus him send somebody? And he said, "Hey, can you please call me once it's all picked?"Stephanie:That's smart. I mean, how can-Joe:And of course they had to say, "Sure." The manager's like, "Yeah, absolutely." So I think what's going to happen is these expectations are going to keep rising from consumers, and the retailers are going to have to figure out how to adapt.Stephanie:Yeah. It seems it's the pricing thing, though. Right now everyone is expecting a curbside delivery or something to be free because it's new and that's the expectation now, but I could see eventually being like, if you want someone to shop for you, just like you would with any of these grocery delivery shopping apps, you're going to have to pay a little bit to have them go and-Joe:But look at it this way. We talked, again, one of these companies building these systems and we talked to a big chain that's testing it. If you go to the normal financial model for a grocery store, big piece of real estate, prime location, huge parking lot, a lot of physical assets tied up. And if you go to a dark store, really cheap, industrial space real estate, so the real estate model's completely different, the staffing model's completely different, and the financials could be such that, and again, I don't know, but it actually might be cheaper to deliver groceries that way. Now, it's a new build add, it's a new approach, but again it's a huge change, but it doesn't necessarily have to mean higher prices for consumers. And I think what's going to happen is some will try to charge more and others will figure out how to go do it in a way that doesn't cost more.Stephanie:That's a good point. I like that. So how do you think about-Joe:It's competitiveness, right?Stephanie:Yeah. Hey, that's economics right there. Someone will figure it out and put the other one out of business possibly, or not. But how are you thinking about new technology right now? I know we were talking a bit about AI and how it's impacting retail and retail workers. What are your thoughts around that or other technologies that are maybe going to disrupt retail?Joe:Well, still really believe a lot in computer vision, and I think one of the things I'm really proud of for Intel is we've always been huge advocates and protectors of consumer privacy, personal privacy. So as a company, our core culture, our philosophy, our lobbying efforts are all around protecting privacy. Our point of view in using cameras in retail, and we've been helping people do this for many years, we only want to do it in a way that's totally anonymous. So it's not like I'm trying to detect Joe when Joe walks in the store. I want to look at the pattern of behavior that this shopper has anonymously, and what have people in the past that had that similar pattern of behavior been interested in, and how might I go send some staff over to do the right thing there. So take me, for example, if we go to the mall and I'm with my wife or daughters, I'm probably hanging out with him and I'm not really shopping. So I'm wandering in the store-Stephanie:You're that personally couch just chilling.Joe:Yeah, or I might be wandering around in the men's department, but I'm kind of killing time, but I'm probably open for somebody to come show me something, because I'm browsing and you could observe that, oh, this person is slowly walking around and looking at stuff. There's other times when I need another white dress shirt for a business trip, and I know exactly which door to park at, that's the shortest distance to the white dress shirts. And I'm walking in a direct line to a section. Computer vision and AI could detect that this shopper's not browsing, don't bother him. Don't send them a discount coupon or don't send him alert to some new item they might be interested in.Stephanie:Do you have retailers right now who are implementing that? Because that sounds awesome and a really good way to personalize to the shoppers coming in. Do you have anyone who's trying anything out yet?Joe:There've been lots of things to experiment and test, a lot of partners building solutions like that. I think the world of privacy right now is way too fragmented. Too many different points of view, too many different state perspectives on it. You've got some places where cameras are banned. You can't use a camera at all. And I think that the governments really need to get their act together and understand how is the data going to be used? How is the technologies? How can it be done in a way to protect privacy? In the implementations, we advocate no data ever leaves the edge, the system. The only thing that ever leaves the system it's account. This kind of shopper did this kind of pattern of behavior. Everything's fully anonymous. Back in the early days, we actually went and talked to governments across Europe where the privacy is even more simple, and every government entity we talked to was totally comfortable with the approach we were advocating.Joe:I think the computer vision that we think is really going to be profound, and it'll be used for mundane things like trying to understand out of stocks or inventory situation. Years ago, I won't say the name of the chain, but there was a study where they're comparing Amazon to a giant big-box retailer. They went to 25 locations of the big-box retailer and bought these 40 items and then they priced it out on Amazon. The headline for the story was Amazon was more expensive than the physical retail location, which was big news at the time because everybody thought Amazon is just winning on price. But the subtitle of the article, the second message was, but 25% of the items on average were out of stock at the brick and mortar retailer.Joe:We happened to be meeting with the executives in that company about a week after that, story came out and their heads were exploding because they thought they had a 5% out of stock problem. And it turns out that they did in terms of it was in the store, but it had a huge congestion of stuff in the back room that wasn't on the shelf yet. And as we dug into it further, we did a lot of work with them using computer vision and whatnot, this is years ago, and it turned out that one of the behaviors they had that they had to try to break is the people stocking the shelves would bring a box of say large size mint shampoo out and they needed to have the small and the large, but they didn't have the small, so they just filled the shelf up in the large.Joe:So when somebody came to look for the small, it's out of stock, and the shelf looked full because they would face it all out so that every front was full of product, but they didn't have all the products on the shelf. It was really because the people stocking the shelves were not following the process and they're being lazy, and that's where we thought to-Stephanie:Use robots then. Robots aren't lazy and they listen to whatever you tell them. So that must just be the way to fix things.Joe:Yeah, maybe. I guess as a tech company maybe that's a good thing for us, but I think that, again, if it's a staple, you just want it to be convenient, and convenient means the fastest, easiest way possible. To me it's like when I run out a catch-up, wouldn't it be amazing if it was just at my door automatically the moment I needed it? Well, we're not there yet, but at some point, somebody's going to figure out how to make my running out of ketchup something that won't happen.Stephanie:Yeah. I thought there were brands or companies working on that to track what's in your refrigerator and then reorder it if it's out. Maybe that never came to fruition and that was more just that [inaudible 00:36:00].Joe:They've been a lot. We actually had some partners who were doing that years ago as well. The challenge ran into it I think is how do you know what's in your fridge? Does the consumer scan all the barcodes? Do you have the discipline to scan a barcode when you run out. These problems certainly aren't easy to solve. We mentioned earlier out of stock, so I'm working at that problem. We worked with probably, I don't know, more than 20 big retailers on trying to see how RFID could help solve their inventory accuracy. Then we would always start with taking one of their stores and we would do a really deep physical inventory. We never found any retailer that had better than 65% of their skews correctly counted.Stephanie:Wow. That's sad.Joe:Then if you want to be able to compete with an online-only retailer who gives free shipping, you probably have to give free shipping, but wouldn't it be ideal if you could deliver all of your stuff from a local store so that you minimize the shipping time, you minimize the shipping cost. But if you don't know what your inventory is, then you take an order assuming you've got really close delivery, but then it's out of stock in the store. We talked to the department store who was really aggressively trying to do this fulfill from store, and they were spending on average 20 minutes per item to find it on the floor.Stephanie:Jeez, if they're taking 20 minutes-Joe:That's [crosstalk 00:37:26], right?Stephanie:Yeah, that's wild.Joe:So they were looking at RFID to try to be able to help with that as well. With RFID, you would know where things are in the store. This is another one too. We talked to, gosh, I'm try to really keep people anonymous here, a head of stores executive who came from a large brand who had a lot of stores, and they deployed RFID in all their products in the branded stores, and they've got their sales go up like 60%.Stephanie:So why wouldn't everyone do RFID? We're talking about Japan's doing it with all their stores now, brands who are implementing it, are taking off when it comes to sales. Why wouldn't people? What's the holdup? Why are more people-Joe:That's the big mystery? So if you can figure this out through your interview, please share.Stephanie:I will have to start asking around. I'm like it seems like a no brainer. Is it hard to get your manufacturers to do it?Joe:I think there's a lot of processes that get touched, is one of the problems. There's your supply chain, there's your distribution center, there's all the staff in the distribution center, there's process changes at the store. So there's a lot of pieces of this that end up getting touched. We talked to one retailer, big retailer, who they made the change on the POS. It was a touchscreen checkout for the staff. They had to do a training class to train people on this change, and it was a two hour training class for like 170,000 employees. And they said it was all extra time. You couldn't do it on the floor. So now you've got 340,000 extra hours of labor to make a simple change on a user interface.Joe:I think when it gets to doing these kinds of changes, what happens when there's a return? What happens when there's a return but the RFID tag is no longer in the item? So there's a lot of things that have to change. I think what's going to happen is we're going to see branded retail do this first because they control the supply chain, and you're going to see some really tremendous results. The example I gave you when they were head of brand and retail at one brand, and then went to another one, the challenge with the second one is they had a lot more suppliers, so they had to manage a lot of factories to supply their stores, even though they were all their own brand. It was still a supply chain challenge.Stephanie:Well, it seems like Whole Foods and Amazon are going to be the first ones that can do it. They've got the ability to, especially with Amazon's operations and processes, and they've got the Whole Foods brand going on. They control all their supply chain.Joe:And the Amazon could decide to spend a gigantic amount of cash modernizing Whole Foods infrastructure and Wall Street wouldn't blink an eye. Kroger could never do that because Wall Street wouldn't let them.Stephanie:That's sad, and also just shows how there's, I don't know. It makes you wonder about how a lot of companies right now aren't going the IPO route, and I get it. I get it hearing and seeing the incentives like that, or lack of incentives of wanting to... They talk about destroy your business to make an even better one and how some of the best companies had to do that, whether it be the Netflix of the worlds. But yeah, it seems like a lot is held back.Joe:What do you mean? Private equity, we're seeing more and more where private equity will come in and the leadership of the company will be in favor of a private equity takeover because it can pull themselves off the Wall Street treadmill for a bit to make these fundamental changes.Stephanie:But isn't it usually a bad sign when PE comes in? Don't most of those companies end up going bankrupt when this happens?Joe:I think there's a couple kinds of private equity. Look at Dell. Not a retail case, but Dell they needed to retool Dell and they needed to not be under the scrutiny of Wall Street for a while, and Dell has done amazing things through the use of private equity. I think if the company is fundamentally unsound, private equity might be vulture capital, where they come in and strip things down to the bones and get rid of it. But I think fundamentally sound business that needs to make changes that aren't really possible to Wall Street, I think this is going to be one of the areas where I think there's going to be a lot of money made where private equity is going to go look at some of these really good retailers that fundamentally have to change. And if wall street doesn't change the model P&L expectations, I think private equity will become a much bigger factor.Stephanie:That's a hot take. I like that. That's very interesting. So if there was some data right now that brands should be collecting at their retail locations, that's not really hard to implement, but they should be doing from the start, what comes to mind? Where you're like, "Right away, you should be collecting at least these five attributes on your customers as they come in and you don't need computer vision. You don't need beacons or RFID, but you should at least have this to be able to give a better experience to your consumer." Anything come to mind?Joe:I think that the thing that is most fundamental, and it's still shocking that all retailers don't do this, and that's just counting your traffic. Not counting it daily, but knowing what's happening with your traffic every minute.Joe:But I think understanding your traffic, that's the most important thing for an online business. What's my traffic? Dwell. How long was this shopper in the store? How long was this shopper on my site? What things did the shopper browse? What was their click path for my online? What was their path in the store? For me, if I were going to leave tech and move into retail, I would start with how does an online retailer excel? And how would I try to get all those same insights for brick and mortar? One of the things to me that... There's a tremendous amount of demand created real time in retail. So we saw one study that says 60% of purchases in stores in the US and Europe are for things people didn't know they were going to buy when they went to the store. So a huge amount of real-time demand. You see something, you like it, and you decide you want to buy it. Well, how disappointing is it when you see something you like and then it's out of stock in your size?Stephanie:That's worse sometimes.Joe:That goes from being a point of excitement. You got a little bit of excitement to buy something and then you're let down. What we would say is rather than having mannequins displaying items that the brand is paying you to show this week. We talked to retail after retailer after two or three days of something on the mannequin that sold out, but they're paid to run it for a week. So they're creating demand for something that's sold out because the contract of the brand said you need to show this item for a week. It's funny. If you talk to a giant apparel brand about this problem, honestly, one of the C-suite executive was like, "Oh my God, that's why stuff's always out of stock in the store." I'm like, "Yeah, you have some flexibility and freedom to the staff to put what they have too much of."Joe:We talked to one major department store chain that made that change a few years ago where they said, "Instead of getting paid to run things on the mannequins, we're going to have our staff every evening look at inventory and whatever they have too much of, put that on the mannequin for the next day." And it's amazing how much they were able to sell through inventory before they had the market down. We would advocate that at the front of the store where you've got posters and prints, maybe it's a department store and it's prom dress season, so you're showing prom dresses on the poster, that isn't really relevant to most of your shoppers. Most girls are not prom dress age. Most moms are not at the age of having daughters that are prom dress age. Most dads don't buy the prom dress.Joe:Put a more simple thing in it. Put a digital sign at the front of the store with a camera that will anonymously look at age and gender. And then if you're really sophisticated, you could say, "Okay, well now I'm going try in inventory system and I have too many of something." Phoenix it was a really dry winter. We have too many raincoats. I see a guy coming in and I've got too many men's raincoats. Throw a men's raincoat on the screen. And even the next step, we can estimate the size of the shopper. So I've got a really big guy coming in, but I'm out of extra large raincoats. Don't show them a raincoat. These subtle things, and it's not like every shopper is going to buy a raincoat, but suddenly putting something that's possibly more relevant on the screen than a prom dress is a great way to use that valuable real estate. That's the kind of thing that an online retailer will do. Like Zulily, they introduce thousands of new products every day.Stephanie:Zulily? Yeah.Joe:We met with them one day at one point, and they said in the morning, early in the morning, they have one landing page, and by 8:00 AM, they have 280 unique landing pages. Then they know what demographic, what bucket you fall in for them as a shopper. So when you go to their landing page at 10 in the morning, you're going to see something that's full of things likely to be relevant to you.Stephanie:We were talking with Lenovo way early on in the show and they were saying they have 85,000 different landing pages going on at any one point. I'm like, "Oh my gosh, how do you keep track of that?" But he's like, "Oh yeah, that's just how you test and know what people want." So it's just very interesting. But I think Zulily though, when they say how many landing pages they have, they are all about talking about being personalized and stuff, but I think a lot of times they just think having a new name isn't being personalized and they count that towards a new landing page. That does not count just saying, "Hi, Stephanie," or, "Hi, Joe."Joe:The way they were explaining to us is if you shop for baby clothes, you often are buying baby clothes, your landing page would have baby clothes on it. If you don't buy baby clothes, your landing page would not have baby clothes.Stephanie:Yeah. That's more personalized. I like that. Very cool.Joe:The key thing here is that this is a journey. I don't think anybody's going to go make all these changes overnight, but there's the ability to start using this information. I think one starting, know your shoppers. It's amazing how many retailers when we talk to them about what are your shopper's pain points? What are your shoppers not happy with? They don't have a good answer, which is really surprising. For me, when we're out trying to define solutions for the market, the first thing we look for is what's a business problem. And if I go into education, what is the problem that educators are having right now that they're worried about? We go into hospitality, what problem do they need help solving? I often tell people at Intel, we have 3,200 PhDs. If we understand your problem, we can figure out how to solve it. And it's amazing how many retailers don't spend time really understanding what friction or what pain points do their shoppers have.Stephanie:Yeah. I think they're going to have to now. I think now with everything that's happened and you had the acceleration of ecommerce, there will be, like you said, new expectations. And yeah, I think the theme is now there's also all these new technology to use and utilize, and maybe implement if it's allowed, but then putting that extra level of human curation on top of it when needed is going to be the way of the future. So use the tech, but also have it curated and have the human feel to it that people are going to miss over this next year, especially with how much we've been at home all by ourselves.Joe:And after people have really radically modified their behavior for a year. A few months it was one thing, but we're coming up on a year where people have had to change pretty fundamentally how they shop and live. How much of that's going to stick permanently? Like I said, I think grocery, and some of those things are going to way more people will be doing that post pandemic than did pre pandemic and they'll stick with it. What else is going to fundamentally change?Stephanie:Yeah, I agree. All right. Well, I know we're running up on time, so I want to shift over to the lightning round brought to you by our friends at Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Joe?Joe:I am ready.Stephanie:All right. What's the nicest thing anyone's ever done for you?Joe:Oh my gosh. Our twin daughters were born three months premature, and the amount of help and leaning in that we had as relatively young and new to Arizona couple was just staggering. Probably 80 families leaned in to help us, which is amazing,Stephanie:Man, I'm going to come to Arizona. That sounds like a nice spot to be. How old are your twins?Joe:They're 30 today. That was a long time ago.Stephanie:Nice. I also have twin boys, and I'm a twin.Joe:That's awesome.Stephanie:What's up next on your reading list?Joe:I'm really actually studying more around AI and frameworks and trying to get a bit smarter around the nerdy geek stuff. So I don't have any grade to casual reading. For me it's more about the tech.Stephanie:Hey, that's good. Well, I was just going to ask you what one thing do you not understand today that you wish you did? Is it AI, or are there other things that you wish you understood?Joe:I grew up as a silicon engineer and so I'm a hardware person and I'm not a software developer, I never have been. And so I'm really trying to understand the worldview of a software developer more than a hardware person. At least I think I know I don't know everything. So it's almost like the first step of the 12 step program, acknowledging that I don't know everything, I'm there.Stephanie:Well then maybe you want to check out the book I'm just starting to read. I think it's called Ask your Developer by the Twilio CEO. I just started reading it.Joe:That sounds good.Stephanie:Yeah, there you go. If you were to have a podcast, what would it be about? And who would your first guest be?Joe:My podcast would be on how technology is going to fundamentally transform shoppers' lives.Stephanie:I love that. Who would your first guest be?Joe:And my first guest, I would actually like to have Bezos.Stephanie:As do I. Let's go get him. Jeff, where are you at?Joe:See if he can help you with that.Stephanie:Yeah, I know. Is Moore's law dead?Joe:Moore's law, if you think about it purely as Silicon, which is when Gordon created that, it was really a silicon construct. We're no longer on that same track, but at a system level in terms of what a system does for you, we're on a similar curve. One of my favorite ways to explain this is, if you hold up your smartphone, the amount of compute in your smartphone 10 years ago was 100X the volume and the same thing's going to be true. So if you look at this amount of compute today is going to be one-100th the size in 10 years. Or you could say, "Hey, what would 100X?" It'd be a giant server room could be in your phone. And so if you think about it, it's not a matter of if I have enough compute to do something, it's a matter of when I have enough compute to do something.Stephanie:Got it.Joe:And I think that's probably to me the magic of Moore's law and some people really get it, and they really understand that it's just a matter of a few years until the compute is cheap enough to do what you want. We're talking about AI for a minute, if we go back 10 years ago at Intel, we had $100,000 computer workstation on every one of our factory tools and these are $50 million tools. Workstation and a huge number of engineers creating algorithms to optimize our manufacturing. So we were doing AI that was very expensive 10 years ago. Very few manufacturing processes can afford that. You jump forward to today and it's simple and cheap and easy to have that amount of compute, and the maturity of this AI computer environment is so much improved that anybody can really deploy what took an army of engineers and very expensive compute 10 years ago.Stephanie:Oh, I love that. I forget what show podcast I was listening to where they were talking about AI and saying a lot of the stuff that we have today, we had access to 10 years ago. We just didn't have the compute power and the ability to do it, but people knew it was coming. And I'd always be interested to hear from those people who could see the vision and be like, "I just need another five or 10 years of acceleration and then my product will work." It's very interesting.Joe:If you imagine the amount of compute that you can afford, whatever that number is, $1000, $100, whatever, but the amount of compute you can afford is going to double in performance every 18 months. Okay, double, you can imagine that, but you don't realize it's 10X in five years and 10X is really hard to comprehend.Stephanie:Yeah, it's hard to extrapolate things like that. Well, I appreciate you answering that question. I was like, "Hmm, I know Joe will have a good answer for this one, even though it's very maybe off of ecommerce." But Joe, thank you so much for coming on the show. Where can people find out more about you and your work?Joe:Well, I work for Intel, obviously. We do have a retail landing page at Intel. We actually don't sell anything to retailers. All of our work is done enabling suppliers to retail to build better solutions, and I try to spend all my time, if possible, talking to retailers to better understand the business problems they have so I can help guide my partners in building better solutions.Stephanie:Cool. Sounds good. Well, people will go and find you if they have any questions I'm sure then. Thanks so much.Joe:Thanks, Stephanie.
It doesn’t matter how great your product is if no one knows it exists. That’s why marketing matters. But not every company has the resources to go all out on a big-name CMO or to commit a large yearly budget to specific marketing efforts — especially when the digital world is changing so quickly. So what’s an ecommerce brand to do in order to get its message across to the right people?Erik Huberman founded Hawke Media to answer that question, and for more than seven years he and his team have been making marketing more accessible to businesses of all shapes, sizes and stages. On the episode of Up Next in Commerce, Erik explains how companies should be planning their marketing budgets and what the revenue threshold is that companies need to aim for before they can even think about scaling. Plus, he digs into his entrepreneurial and investor roots to give some advice to those out there who are just getting started, including the hard truth about what it means to be an entrepreneur, and some tips on new and emerging platforms where you can grow your personal and professional brands. (And yes, we are talking about Clubhouse!)Main Takeaways:Same Problems, Different Speeds: Even the biggest brands in the world face the same key struggles as the new start-up making waves: access to talent. The difference is the speed at which the companies at both ends of the spectrum can move. With more decision-makers involved and more stakeholders to answer to, bigger companies have to be more methodical and intentional about who they bring in to help, whereas smaller companies can make decisions fast, but there is more volatility with every choice. Join The Club: New platforms like Clubhouse are on the rise, and finding a way to capitalize on them is the biggest challenge currently facing businesses competing for market share. Listen in to hear Erik and Stephanie dive into the Clubhouse wormhole and the opportunities that await.I Get So Emotional: Marketing is about eliciting emotion from the person you’re selling to, whether it is B2B or B2C. By establishing an emotional connection and presenting a value proposition that a buyer can clearly see as a solution to a problem, a level of trust is created that will lead to a long-lasting relationship.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey, everyone. Welcome back to Up Next In Commerce. This is your host, Stephanie Postles, Co-Founder at Mission.org. Today, on the show, we have Erik Huberman, the Founder and CEO at Hawke Media. Erik, welcome to the show.Erik:Thanks for having me.Stephanie:I am excited to have you on. I was just chatting up a bit before telling you how we are actually a client of Hawke Media, full disclosure to anyone listening. It's been amazing. But I would love it if you could go through what is Hawke Media for anyone who doesn't know?Erik:Yeah, sure. We're an outsourced CMO and marketing team to companies. So, what that means is we basically go into companies, identify what the holes are in their marketing, organization, or strategy. And then we can spin up different experts on an ala carte month-to-month basis, whether it's a Facebook marketer, an email marketer, a fractional CMO, et cetera. We've got about almost 200 full time people. We manage marketing for about 500 different companies from small startups to Fortune 100.Erik:Our mission, for lack of a better word, is to create accessibility to great marketing. So, the idea is we really saw that it was really hard to, for most companies, get access to great marketers. We wanted to make a place where we had amazing marketers, amazing talent, people that were top of their game, but it was super easy to work with them. That was a challenge we saw on the market that didn't exist, a solution didn't exist. That's how we got started.Stephanie:That's awesome. Yeah, it's been really fun. We did the CMO thing first. It was cool, because you do get access to people who have been CMOs at big companies before and they have all this expertise. But we had them for three months. And then they transitioned us on to the next stage of implementation of social and other things. It was just really fun to be able to have access to talent like that without actually having to hire them as an FTE or something.Erik:Yeah, that's exactly the model. I came from building and selling a couple ecommerce companies and just wish this existed. My last ecommerce company, we were heavily funded. So, I had a 10-person marketing team of talented people, but they all worked or they could have all worked half time or less and gotten what I needed to be done. So, we had toyed with the idea of, "Could we hire these guys out to other companies? Because they're a great team, but we don't need them all full time. But we need all their expertise." So, that's part of where it came from, the idea was born.Stephanie:Okay, cool. What ecommerce companies did you have before this?Erik:I had a company called Fame Wizard first, which was online music business coaching for musicians. Then a company called Swag of the Month. It was a T-shirt subscription company, long before Dollar Shave and all that. And then an activewear brand called Ellie that's still around, the E-L-L-I-E.Stephanie:That's awesome. So, what things did you learn at those companies that maybe you brought either to Hawke Media or to how you're maybe advising brands today?Erik:Yeah, really quick bullet points. Fame Wizard have a customer that has money. Having independent artists as your customer is really hard to build a business off of. Swag of the Month, the need for working capital and financing, which funny enough, we just launched our financing and working capital arm of Hawke Media a couple months ago. And then the third one, Ellie, don't overcomplicate it. If it's working, double down on it. Also, that I don't like having other people make decisions for me, because that's when I was working with a committee and I was not the main decision maker. They screwed up a lot.Stephanie:I like that you have bullet points. You're like, "I already got it covered. I already know."Erik:Yeah. I've definitely walked away with very specific, "Don't do that again."Stephanie:Yup. Yeah, that's great. So, are you able to share some brands that you work with? So, we can get the scope of who-Erik:Yeah.Stephanie:... that you guys are learning from and working with right now and teaching.Erik:Yeah, I mean, it's the full scale in terms of small startups, most people haven't heard of, and hopefully, we change that. Tamara Mellon, we started with it when they were a tiny business and skyrocketed them for a couple years. GREATS, the sneaker company, we built for three years with them and they sold to private equity. Incase, the phone case, until they sold to Incipio. It's ironic. We get a lot of companies to scale and then we get fired, but it's par for the course.Erik:And then we also work with big brands, Nike, Unilever, Estee Lauder, Red Bull, et cetera, as well. And then a lot of small brands that don't necessarily want to be the next big VC-backed company that are $3-, $4-, $5-, $10-million companies while we're working with them. That's what they want to be. They slowly grow and run a lifestyle business that pays them a couple million bucks a year and do great.Stephanie:Yup. Do you see the big brands having the same type of struggles as the smaller ones, or is it very separate where you have to put very different skill sets depending on the company size?Erik:No, the expertise are similar and the struggle is similar in the sense of access to talent is really one of the biggest... True knowledgeable, experienced talent is what everyone's struggling with. The way we have to operate is different, because when you're dealing with a small business, a lot of times you're dealing with the owner, CEO. They can do whatever they want. There's no one they're reporting to, even if they have investors who usually have control. When you're dealing with bigger companies, you're dealing with publicly traded companies, a lot more processes, a lot more checkboxes, a lot longer time to make decisions. So, it's a lot slower. So, that's why I look at our client base like a distributed portfolio.Erik:The startups are super fun, because you can do whatever you want, you can get going quickly, et cetera. But they're also super volatile on the other end, where they'll fire you overnight for one small thing. Whereas big companies, they take forever to sign, take forever to make changes, but they also stick with you forever. So, we've worked with a lot of these bigger companies for years and years and years, because they're used to signing three-, four-, five-year contracts, even if we are month to month.Stephanie:That's good. So, what are some challenges you're hearing right now around either marketing challenges or business challenges that you guys are tackling that's maybe different than what you were hearing in 2020 or 2019?Erik:Yeah, I mean, 2020 was all COVID, but the silver lining was the market share of spending online almost over doubled. So, our clients on average doubled their revenue on what we were operating for them. So, that was really good. What we saw what changed towards the later end of the year and now into this year, so, now that market share hasn't diminished that much. Instead of 13% of consumer spending, being online pre-COVID, it went up to 30. Now, I think it's at 27%. So, it's still massive increase.Erik:So, we are seeing that now, all the big CPG companies and all these bigger companies that back to the point can't make quick decisions, unless the world's falling apart, cut everything. They usually do that and then they slowly roll back. They're all really coming back strong into digital, because they're seeing so much more market share there. So, what happened was the cost to advertise on Facebook and Google during Q2 and part of Q3 dropped about 30%, because there was less competition on it. Q4, October and November were insane, October because of the election and then November, holidays hit. December, they carry over a little bit, but they do lessen.Erik:And then I think now, I am anticipating advertising continuing to get more costly, because now, again, 13% of these big companies marketing online is now 27, they're going to spend more to capture that market, which means you're going to compete with them. So, if you're a small or medium business competing, there's a good chance that cost to advertise online increases significantly. So, not necessary what companies are looking for but what they should be is ways to increase their ownership of their customers, because if it costs you more to get a customer, the way to combat that is to increase your lifetime value to a customer. It's a math equation. It's that simple.Erik:So, how do you do that? You find ways to increase your lifetime through merchandising, through retention, through customer experience. When I say merchandising, having other products and services you can sell to the same customer. There's just a lot of things you can do, and then just continuing the communication like email marketing, SMS, chatbots, ongoing content, just all the ways you can create a walled garden around your existing customer base for them to buy more from you. The companies are going to win, which is why you see Amazon just skyrocketing. They were a book company at one point. Now, they sell you anything.Stephanie:Yeah, I love The Everything Store talking about how he and his wife are going and dropping off books to try and ship them out. That was a good book for anyone who hasn't read it yet. So, I mean, I'm thinking about myself as a smaller company right now. We're talking about ad costs are going up. It's going to be harder to compete against bigger brands. If you haven't acquired those customers yet and you don't have anyone to talk to, it seems like there's definitely an opportunity to be more strategic of finding new channels, whether it's the TikToks of the world or the Clubhouse.Stephanie:Shout out to Hillary, you just got me onto Clubhouse. But it feels like there's a bunch of new channels popping up that could help democratize community building a bit more or yeah, finding your audience in different channels that bigger brands maybe won't hop on as quickly.Erik:That's funny. I just got accused of being addicted to Clubhouse. So, my wife has actually had to say, "When we're eating, put that thing away." It's just the past week, but that platform is taking off. Yeah, it's always about working for diversifying. The problem is Facebook and Google still perform so much better than these other platforms that they need to catch up. TikTok will absolutely compete as they build out their ad platform.Erik:I think it's a no brainer in the way that the platform's built, but they need to do a better job of their targeting and everything, which when I say that, no one's spamming. It's just too early. Snapchat seems to be getting their legs under on Twitter. Hopefully, we'll figure it out. Stephanie:Yup, yup. I agree. Are there any new places that maybe are lesser known, where you're like, "We're trying out this one little thing in the back alley here that no one else knows about"?Erik:I mean, your know about Clubhouse. Clubhouse doesn't plan on monetizing through advertising, but as a community builder, it's crazy. I've been on it one week. I've 11,000 followers. I'm not an influencer. Twitter, I have a bunch of followers, but that's unusual for me.Stephanie:What are you doing on Clubhouse then? Because I get on there, and I'm like, "Hi." For anyone who can't see this, my awkward waving in Zoom. I don't know what I'm doing on there.Erik:Yeah, I've been fortunate enough to spend the past decade building a pretty solid network. So, when I got on there, a bunch of my friends were the people on stage that people want to hear from. So, guys like Daymond John and Lewis Howes and [inaudible] were all pulling me up to talk with them. And then other guys, like Grant Cardone, who I never knew before this now, start pulling me around with them. So, it's been a week, but all of a sudden, I've connected with a bunch of these heavy hitters that I've never knew before, that now we're also jumping on calls offline and connecting. So, for me, basically, I was on two flights a week almost in 2019. So, I spent most of my time traveling to shows and conferences and meeting people. This is scratching that itch.Erik:So, for the people that really want to network and build that network and learn from other people, this is the perfect platform for someone like me. It's not for everyone. So, I've gotten on stage. I've talked a lot. I mean, there's millions of people on it. Thankfully, I've been very lucky to build what I've built. A lot of them are looking for advice on how to build their businesses. So, now at this point, this is my fifth business I built. We've bootstrapped it. I've invested in, I think, 30 other companies. I've had a few exits, had some successes there. So, a lot of times, I can give some quick guidance to someone on there. So, I've done a lot of that, which has been fun.Stephanie:Yeah. So, since no one else has talked about this, this is why I'm diving even deeper into this. So, someone that can listen and be like, "Okay, I'm going to try that out too," are you speaking on there when you're saying you're on stage? Are you getting invited from someone? Are you just creating a room yourself? Tell me a bit about how that's working.Erik:Yeah. So, I mean, just to recap the platform, basically, it's super simple. All you see is a person's headshot, their little icon. It's all voice. So, you just talk. So, there's the stage and then there's the audience. Whoever's on stage can talk and you can mute your mic and talk. You got as many people on stage as you want, like a panel, and then anyone can come in and listen. So, as mentioned before we started this, I like to talk. So, me sitting in a room and talking and I've been in rooms with 20 people on stage, 30 people on stage, where I chime in once every 30 minutes.Erik:A lot of the habits that are starting to come on there are just people rotating on the stage asking questions of the panelists and just doing Q&A for hours, but it's people asking about, "How do I build my business? I'm struggling with this. What do I do here?" And then what I've seen is a lot of altruism, which has been fun. I've opened up my direct messages on Instagram through that. So, it's like, "If anyone needs help, just hit me up." So, making connections to VCs, to funding, to whoever could be a good distributor or a partner, give them advice, trying to help people.Erik:What I've seen also is a lot of people that aren't in L.A., New York, Austin, or Silicon Valley, that don't have access to these networks are all of a sudden... There was a whole world of amazing entrepreneurs I didn't even know until I got on this thing. It's a lot of the BIPOC community is getting on there and really helping each other. Not that I am one of them, I tried to help and very passionate about diversity and inclusion. So, we do a lot of charity work around bridging the opportunity gap. So, I've seen this as an amazing tool for that, because there's so many people that don't have access to... I've grown up around entrepreneurs. My dad's successful frankly. I grew up around people that have started businesses. I had a pretty easy path of role models.Erik:Most of these people don't or a lot of these people don't and that are coming from inner cities, et cetera. They are now on this. I do get pinged maybe 100 times a day actually on that thing, asking to be their mentor. I'm like, "You don't have to make anything official here. What can I help with? Let me answer your questions," that kind of stuff. So, that's been super rewarding, but I do see this as we're all stuck at home right now, where you are means nothing.Erik:So, this is a way for everyone to be connecting. But without having to be on video, it also makes a lot more people comfortable having a conversation. With voice, people are not as rude, demeaning. Social media has a problem on the tech side. We all know it, where it's like when you can just text whatever you want... We deal with it all the time with clients. If we have an angry client and we're on email, we'll get hate mail. Then I pick up the phone and call them and they're like, "Hey, how are you?" It's like, "What?" Same thing, I really think there's something there.Erik:The curiosity I have is as a social media platform... I'm sorry, this is all going to Clubhouse. But just as a social media platform, on Facebook, you might spend 3 minutes, 5 minutes, 10 minutes at a time scrolling through Facebook. Clubhouse, I'm watching people spend 12 straight hours in a day. I've never seen a social platform that people just zoom in and go. So, I'm really curious what that turns into. I think they'll end up monetizing by adding tips to panels, so you can actually tip the panelists or paid speakers, I think that's what we're going to see. Because they said they want to make money for their content creators, and they don't plan on adding ads.Erik:So, I think that's going to be interesting. But for brands to answer your question, I think for personal brands, it's massive. You're a CEO or whoever you are, building your brand on there and starting to talk. I mean, we had a channel the other day, where it was a bunch of beauty entrepreneurs from the south, bunch of women that had built beauty brands bringing up young beauty brands to talk to them. There were women coming on stage to talk about their brand and then going, "I've made $300 in the past two months on my website. The audience just bought $7,000 worth of items."Stephanie:Wow.Erik:That's happening. It's an eight-month old platform, but really got popularity two weeks ago. So, it's interesting to see where that can go.Stephanie:Yeah, I mean, that makes sense, especially around the theme too of, I mean, bigger brands too leaning into becoming their own media companies and getting on there and leading not just from their brand perspective but being thought leaders. Their brand is behind the scenes. If you offer value, someone won't mind if it's coming from someone at a large company that's like, "Well, sounds so smart. So, I'm sure they work at whatever big company that is," but they're the one on there offering the best tips.Erik:Yup. That's the other thing is there's no BS-ing it. When you talk enough, people are going to know whether you know what you're talking about or not. I've seen it. The rest of the two people on the stage are like, "Wait, what?" People call each other out, because I think people feel responsible, including myself. The audience is taking this advice. I jumped into a panel yesterday that was talking about Bitcoin. Some guys said, "There's absolutely no risk in investing in Bitcoin. You just put as much money as you can." I was like, "Hold on for a fucking second. Excuse me." Yeah, so there's that too.Erik:And then I do think there's a whole community and personal aspects that were like 21 Savage is one of the biggest followed people on. He does DJ sets every night with Sir Mix-a-Lot and all sorts of other people. It's not just business. There is a lot of other fun conversations. Overheard LA did a whole thing where they were saying, "What's the weirdest story you've had in COVID around dating?" There's comedy shows. There's all sorts of fun stuff.Stephanie:Yeah, that's awesome. So, when you're on there giving tips to businesses and people who are trying to learn, what are the top questions that you're asked or what things do you talk about that resonate most with business owners?Erik:So everybody wants funding. These are all early, early businesses. Everybody goes, "How do I get funding? How do I get a grant or a loan or funding?" If you need money to get started, that's a bad sign. Don't get me wrong. There's high tech companies and certain companies that you can't get around it. But most of the initial funding for businesses comes from friends and family if you need it. If you need a heavy amount of funding and it's not something high tech, you have to be real if you're the right person to start that business. That's one. There's a lot of people that pitch for that while starting with the hardships story, something that's like, "This is what I'm struggling with." I've noticed that it doesn't get the reaction you'd hoped for.Erik:Compassion is a big thing. I think for help, people do, but if you lead with that to try to get someone to be part of you in business, it shows the wrong focus. It's not to diminish what people are going through. A lot of people have had a really hard time recently and in general, but I do notice that when you lead with that versus excitement and optimism, you're going to attract a lot more people with optimism.Stephanie:That's a good one. Yeah, I've definitely seen a lot of people who come with the story where you're like, "I should feel bad, but also as a businessperson who maybe is either going to invest or partner with you, we'd be in this together. I need to know that you have another reason to want to push this forward. It's not just this." So, that's a good point. All right, give me more.Erik:The COVID excuse, I'm not very nice about this one, but I have too many friends that have done well in spite of COVID. Not because they got lucky. Someone came on the other night as like, "I've launched my ecommerce company last a year ago, but because of COVID, we've had a really hard time." It was like, "Take a beat. Because of COVID, your ecommerce company has had a tough time." We just went over the stats of ecommerce. I was like, "Explain that." It wasn't ecommerce. It was the person couldn't get out of their way. So, that's generally the advice I end up giving to, because again, there's a lot of people trying to get started. It's just go.Erik:My biggest learning in entrepreneurship in general is no one's that smart. It's just people that went for it and got lucky. I really believe that, including myself. I don't think that I'm not impressive. I think I went for it. I timed it right, meaning I got lucky. Meaning, because of the way the world worked, I knew about ecommerce right when the world wanted to build all the ecommerce and I was one of the only free agents in LA with a reputation of being successful. So, that's a big one.Erik:So, with COVID, I have a friend that owns 20 gyms across Canada that got shut down overnight, done. He's been doing it for 20 years. He three days later decided to launch a virtual training platform and has done millions in revenue in 2020 as a gym owner and was able to keep his entire staff, pivot, not lose money, and now have a whole new revenue stream that when things do reopen, he's got both.Erik:So, I have a friend that owns a chain of restaurants in L.A. He's not thriving, but his businesses are all still open. He's making money. He's made a living. There's ways to operate that you can actually get through this. I watch some of our clients, ecommerce brands. They're like, "Cut everything." I'm like, "What do you mean cut everything? The numbers are good. I get that the news is scary, but you're doing well. Do not cut." The companies that cut, I don't know if any of them recovered, the companies that I know that cut with us. And then we had a whole bunch of other companies that stuck with us, our average client in Q2 doubled their revenue.Erik:So, interesting if you think about what happened in Q2 of 2020. So, yeah, getting back to it, the biggest one is like don't give yourself excuses, go for it. That's a lot of what we're talking about. And then we get into sometimes deeper marketing conversations like, "What do I do to get started in marketing? If I don't have a budget yet, where should I spend my money? Should I run Facebook ads right away?", those kind of questions.Stephanie:Yeah, I love that. It reminds me too of doing things in haste, there's a good quote. That was around investing, but it's like the person who's scrambling to themselves when the news sounds bad or something, they're never the ones who do well or find a good ROI. I thought I'd be the person sitting and waiting most times and play the long game, instead of reacting to the news or quickly stopping or starting something really quickly. It's probably never that necessary to jump on something.Erik:Correct. You have to give yourself that luxury, so to speak. So, what I learned myself out of this was I'm keeping more money in the bank going forward, so that I can take a beat. Even if I see my business losing money, I can go, "Deep breath. What's the right long term plan here?" Not just react because I got to stay in business tomorrow. That's where a lot of businesses got stuck is we're in such a great economy. People are just spending all their money on growth. All of a sudden, it cut off. So, you have no money in the bank, that can be a bad situation.Stephanie:Yeah, I agree. So, you're talking about many of them don't have budgets and they're trying to start marketing or launched an ecommerce shop or something. How would you go about that? Because I used to read quite a few books that talked about scrappy ways to do it, whether it was just putting up a landing page and then maybe linking to products, reselling them. There's so many things that we've been taught when it comes to being scrappy and starting something without having to invest money, but how would you do it now in 2021?Erik:Yeah. Everybody loves to throw around the MVP model, minimum viable product. The problem with it is people go to minimal and not viable. Meaning, you make a product that gets out there, but it's not really viable. It's not really what somebody's going to buy from. It's a landing page that sends you to a site that says you can check out but you can't or whatever it is. People think that just getting up and running is good. You got to commit.Erik:If you're just getting started, keep the day job, make money along the way. If you can't work a day job, then you get started on midnights and weekends, you're not going to be a good entrepreneur, because welcome to entrepreneurial life. So, that's actually a good way to get used to it in my opinion.Erik:Also, it never happens as fast as you want it to or almost never. So, it buys you time. You're not under some ultimatum that if this doesn't work in six months, I can go back to work. It's like well, just give yourself as much time as you need. Switch over when it can support your lifestyle. So, to get started, I mean, there's a few ways. If you're trying to launch a new product, you might need to put in 10, 20, 30, 50 grand to get started. That's actually a thing. That's where the friends and family come in if you're launching a new shoe line or something, but start small. Sell out. It's okay. Meaning, sell your product, not sell out as a jab or anything. It's okay to have a small run in the beginning.Erik:And then in terms of marketing, I've really honed in on this focus, actually, through a lot of answering these questions on Clubhouse is where we invest our investment threshold and where we like to look at companies is 20 grand a month in revenue. Because honestly, that's when you've been able to get over the scrappy period and you started to build a sustainable business. Still small, but there's something there. That's traction to us. To me, it's like get to that point without spending too much money.Erik:Partnerships, get someone that has your audience that you're trying to reach and find a way to make them talk about you to their audience. That could be press. That could be influencers. That could be other brands that collaborate with you. That could be many different ways. But start there, start building that organic reach groups. If you're selling shoes, not in COVID, but in general, sell them out of your trunk. Don't make it so it just has to be through your website either.Erik:My view is focus on one thing, and don't narrow yourself in other ways. The idea of being direct consumer and not opening up every other distribution channel for your brand is crazy to me. Go omni-channel, open up retail, open up everything else, and build a model that makes sense for all of those, and then see where the least path of resistance is. Maybe Nordstrom decides you got the coolest sneaker ever and you get a $5-million order. You're able to ask the right people, so you can protect yourself, because a lot of those big box will return the entire order when they don't put it on the shelves.Stephanie:Oh, wow.Erik:So, there's ways of that-Stephanie:[inaudible 00:25:50].Erik:That's why retail is hard. Walmart, they charge you for the products that don't sell and send it back to you. So, you got to be careful on those agreements and what you take on, but listen, it can also set you up for the rest of your life getting a deal like that. So, open it up to do all those things and be scrappy about it. Instead of throwing other people's money and trying to grow and hoping it works, find ways to make money right away. As someone that has bootstrapped a business and owns it with my partner, but the two of us, it's awesome. We tell our team all the time, "Anything you want to do, we can do it. Just ask." We're not reporting to anyone. We don't have people on our board or investors that we have to report to that are going, "I don't agree. I'm worried about the risk of my money." Not all investors do that, but some do. So, yeah, if you can keep ownership, it's a lot of fun. It's stressful at times too, because there's no one else backing me up. It all falls on you. But once you get through those hardships and get used to that challenge, because it never ends, it actually becomes pretty fun.Stephanie:Yeah, yeah, that's definitely my viewpoint on investors too. Unless they're very strategic, they're going to open up a network for you. They're going to give you something that you can't get otherwise. If you're just going after money, you probably needed to look elsewhere. I mean, my friends and family, not so much. I would have never been able to raise any money from them properly. But, thinking about it more strategically, instead of just, "Here's some dollars," because we had a guest on the show, who I forget who they were.Stephanie:Maybe Hillary can remind me in our prep doc here, but they're talking about how they built their company based off a Kickstarter Indiegogo type of thing, because they had this whole quote that was, "Don't rely on friends and family." Because if that's how you think you're going to fund your product, you're already going to fail. Account for them to maybe only be 3% of what you need or something like that. Only 3% of your product will be bought from them. The rest, you need to go out and form those email newsletters. Find your audience elsewhere, or else, there's no point in you trying if that's your only goal.Erik:Yeah, I would say that with smart money, which I agree with, if you're going to take money, take smart money that knows what they're doing and can help you. But a lot of times you can get that help without even taking their money. That's the other part. There's an anecdote about call someone for advice and they'll give you money. Call someone for money and they'll give you advice. So, if you want connections, most people that have been successful, most not all, but most are really willing to pay it forward, I've noticed. They want to help. They can't help everyone, but when you catch them at the right time... And then for anybody, it's a game of numbers. If you're looking for help, reach out to as many people as possible. Someone's going to say yes.Stephanie:Yup, I agree. So, the one area that we sometimes neglect on this show is B2B commerce, because of course, everyone's focused on B2C. But I saw that you put out a list of tips for B2B ecommerce companies. I was hoping you could walk through, what are you guys seeing for B2B companies? Do you work with B2B companies? How are you advising and marketing for them right now?Erik:Yeah, I mean, in the nutshell, B2B marketing is actually very similar to B2C, except for the end goal with B2C is a transaction. B2B generally is to drive a qualified lead, but you're still marketing to an individual. That's the part that I think people really forget. When I'm marketing to B2B, I'm not marketing to a business. I'm marketing to the decision maker at that business. So, it's still a person. So, instead of marketing to someone that likes dogs and biking, I'm marketing to someone that has this title at this type of company, who's a marketing manager at a Fortune 500, whatever it is. So, it's just a different targeting methodology.Erik:And then the way you position the company is still value proposition. You still want to get an emotional reaction. That doesn't mean like go crazy with it. So, don't take that too verbatim, but people justify emotion with logic. So, if you can hit the emotional reptilian side of the brain and get with any type of marketing and get them to feel like you're going to do something for them, that's the best way to get someone. So, Hawke Media is all B2B obviously. We don't use it that much now, but we're about to ramp it back up. Have you seen our commercial with the lemonade stand?Stephanie:No.Erik:Super fun. We filmed this less than a year into business, I think. I sat with my business partner. Again, we're marketing to business owners. That was our main target. They were like, "What do people like?" I'm like, "Puppies and kids." It was just when GoDaddy got banned from the Super Bowl for putting a puppy mill as a joke commercial. I was like, "No, let's not do that. So, let's go with kids." So, we basically created the commercial about a bunch of kids in a really corporate office.Erik:But when I say kids, eight, nine year old's running around, skateboarding, throwing paper airplanes, freaking out. The owner, this little blonde girl going like, "I can't take this. Who's handling our Facebook ads? Who's doing this?", and just freaking out. And then we come in and we got you. I was in the commercial too. We explained that. It shows them at the end, a bunch of kids making it rain with cash and dancing and having fun.Stephanie:That's cute.Erik:It was fun. It got people's attention, but the whole point was, "We got you. I know you're freaking out, but we're not and we got you." That's how it came off. That emotional connection, even though we're talking about B2B, which you'd think is super logical. How much do you cost? How much money you're going to make me? No. Why people hire us, the logic reason is bandwidth's our expertise. The emotional reason is, "Please someone just handle this. I don't know what's going on here. I just want to grow and I need someone to take it off my plate," or "I don't know what I'm doing." We need someone to just come in calmly and help us.Erik:Understanding that in B2B is super important, because then everything you do with positioning yourself is like, "We're here. We got you. We know what we're doing." You can sleep easy at night is our positioning. Now, you change that. And then how you execute on that, same channels, Facebook, search, email marketing, press, all the things we use for our clients, creating your own content is the stuff we use for ourselves.Erik:I'd say any marketing is aspirational. Not meaning I aspire to be like something great, but more like, "I'm currently at this state, and I want to be here." It's as simple as my socks have holes in them. I want comfortable socks and you go buy socks. This aspiration doesn't have to be something groundbreaking. So, understanding that you need to position yourself as that aspiration, the solution to getting the person from where they are to where they want to be, no matter what you're selling, B2C, B2B, is the most important part.Stephanie:That's really good. Yeah, I mean, I think about the ads to B2B and they're so lame. A lot of times, they make things so corporate. It's like, "I'm pretty sure any corporate citizen will not want to watch another corporate style ad." They want something new and different and love to just connect with the person. Even if it's a title that you're connecting with, there's someone behind that title. If you wouldn't like it, they probably won't either.Erik:Yes, exactly. That's been the awesome thing about Hawke and its marketing specifically is I'm the customer, literally, who would be buying from us. That's why I created it. So, I get to make things that I didn't want to see. You just nailed it. I hate the boring, stodgy, men and women in suits. We've been trusted for 25 years. Who cares? That's not why I'm hiring you.Stephanie:It's like the stock photography, where you go on there. It's like all these people in offices and business suits. I'm like, "Who's buying this stock photography? This is horrible."Erik:My favorite, I used it again recently. So, that's why it reminded me. Remember that photo shoot they did with the baboon doing stock photos in an office. I just found it. My brother-in-law asked me what I was up to this weekend, I sent him the baboon banging on the keyboard. I'm like, "Just working." That was a great shoot. That was so perfect. Yet so many people did not get the point of that, which is this is ridiculous. Why are we taking office stock photos?Stephanie:Yeah, yeah, that's funny, but I mean, a lot of people use them for a while. I guess it worked for probably a solid week, and then everyone realized it's not working anymore.Erik:No, no, a lot of people still use the office photos. Listen, that's not going to be the only driver of your business. You don't have to be perfect in marketing. If you have a good product or service, marketing helps, but it's not critical. So, a lot of people get away with really bad marketing and still have a really good business.Stephanie:Yeah, the one theme that I've heard from quite a few people on the show is that the organic videos and natural things are all performing way better than stock photography or anything that seems like it was built out of the box. Are you seeing that as well?Erik:It depends. It depends on what type of product it is. If it's a product that needs a lot of trust, you need production value. Meaning, a supplement or something that people are looking to solve a problem. They don't want to see that you threw something together. If it's like fashion or lifestyle products that people aren't really worried, you can get away with that a lot more.Stephanie:Yeah, I like that. So, one other thing, I don't know how much do you guys experiment with TV, because I was listening to a good episode. I forgot what podcast it was, but I think it was Gary Vaynerchuk, where he was essentially saying, "All TV is dead except for Super Bowl ads." That's the only ads that actually work. Every other TV commercial, they don't work anymore. They're dead.Erik:Gary's a friend and I think he has nailed what he's doing. He's a super bright guy, but I think a lot of times, he speaks in hyperbola. Nobody ever gets held to these big grandiose claims. I called a friend out for claiming that Bitcoin will be at 50 grand by Sunday. And then Sunday came around, I screenshot it and I sent it back. I'm like, "What the hell, man?" He's like, "Whatever, it'll happen in the next month." It's a habit that a lot of people got into, making these giant claims. I'll be real, TV does work. You got to buy it, right? Yeah, we do some TV, some radio. It's not a big part of our business. I'm not trying to hype it up.Erik:But once you have an amazing funnel and you really know who your customer is and you're really good at nurturing leads... Meaning, not just letting them come to your site and hopefully, they buy, but capturing email, capturing their phone number to text them and follow up and really nursing them. Again, you know your audience and you know your messaging. So, you know how to attract your audience and get them to buy. TV is still one of the cheapest places to get a 30-second impression from a massive audience. So, both TV and radio are still very viable options as you scale, but you can do a lot of digital before you have to go there.Stephanie:Yeah, yeah. Yeah, I agree. We had one of our podcasts aired on radio. They took it and turned into a one-hour special for Veterans Day. It's called The Story. Some people were like, "Radio is dead. Why would you want radio?" I'm like, "Do you know how many people still listen to radio?" Actually, it's still very legit if you can get on radio. I mean, it's huge.Erik:Most people are sitting in their car. They're not going anywhere. They're not changing the station either, because, frankly, there's not that many options. You can get a lot of people that are doing nothing. The hard part is to get them to remember things, but it works. We've had a lot of luck, especially event sales. When we're doing big events like TED and stuff like that and trying to sell tickets, DutyCon was a good one, radio works really well.Stephanie:Yup. Yeah, like you said, getting that CTA, where it's not something that's distracting or they crash, but seriously, going by what I just talked about.Erik:Yeah, exactly.Stephanie:All right, only couple minutes left. Let's move over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready?Erik:I'm ready.Stephanie:All right. What's up next on your podcast list?Erik:Who is or what?Stephanie:Either, who or what? What are you listening to?Erik:Oh, well, we have our own. So, who would be Rachel Zoe.Stephanie:You have her coming up?Erik:Yeah, we've worked with her for years. She's awesome. Yeah, so that's the next one. And then after that is Rob Dyrdek, I think. I want to get more into How I Built This. He's awesome. I just think that that's always an interesting story. My podcast is more about their life story. His is really about how they built their company. So, I like the life story too. My podcast was I wish someone did this. So, I'm just going to do it and hit up cool people and find out how they got where they are. Yeah, so my podcast is Hawke Talk.Stephanie:Awesome. Yeah, I will be checking it out. What's up next on your reading list?Erik:Whatever my business partner assigns me. I am not a voracious reader, and my partner is. So, he's decided-Stephanie:He assigns it to you?Erik:He's decided as of last month that he's going to give the executive team including me a book a month that he wants us to read and be on the same page on. I'm all about it, because I don't have any motivation on my own to really do it. I'll pick up a book now and then probably a couple a year. Most of the time, I end up listening to it on Audible. I'll buy the book. I buy all my friends' books. My wife rolls her eyes every time. I got to support, but I don't read any of them. Sorry, guys. We're coming out with our own book towards the end of the year called The Hawke Method. It's how we grow companies, basically.Stephanie:That's awesome. I love that. What one thing do you not understand today that you wish you did?Erik:I wish I understood the public markets more. I've put money in it now and started to try to learn it, but I've surface level things I understand. But when we started getting into derivatives and the complicated side of finance, I'm still not completely clear. I've also shied away in some ways, but I think when you overcomplicate it, it's too complicated for everyone. That's when we get into the housing crisis and things like that, but I also would love to understand it so that I can call bullshit on it sometimes, because I realized in my entire career, no one's that smart. If it's complicated, it's probably a problem.Stephanie:Yup, that's a good one. What favorite piece of tech are you enjoying right now? It can be new or something you've used for a long time. It can be an app or anything.Erik:Yeah, I will say the one that surprised me the most is the Oculus, because I've been a naysayer of VR. I'm like, "VR is too isolating. It's stupid, blah, blah, blah." But once I got one and I ended up helping an organization called YPO do an event with Oculus and got one, and I'm like, "Oh, wow, no, this is interesting." There's actually something to VR and the experience you can have. Most people can only use it for 45 minutes at a time, but I think it's really cool. I think there's something coming down the pike with that that I think will be really cool.Stephanie:Yup, yeah, we wrote a 2021 Trends Report. That was something I'm keeping an eye on is how to use that when it comes to not only following influencers, but shopping from feeds and watching live events, but also being able to get it while watching it and stuff. I think there's a little work to be done, like you said. I know a lot of people especially myself still get dizzy and not feeling very good after, for me, 10 minutes, but it seems like once that gets a bit better, there's a lot of opportunity, especially for ecommerce companies if they can figure out how to make it an event and something fun that people want to attend.Stephanie:Plus, also, it's like The Container Store in Netflix series. You want to buy with the Netflix series ad, even though they don't really slap you over the head with Container Store stuff, but you're like, "But I need that specific box to put my scarves in."Erik:Yes, exactly. No, I think that's exactly it is. The business model needs to be fixed around the content for VR, because it's just not good enough yet to track enough content and things to do. But once that turns into a much more prolific platform, I think that you'll see it hockey stick quick.Stephanie:Yup. All right, last one, what is the nicest thing someone has ever done for you?Erik:Oh, I have to think of a nice thing, because I feel like if I'm going to say the nicest, it's going to be...Stephanie:Or you can say the meanest too. You're like, "Oh, this person was really mean to me."Erik:I had a business partner that really screwed me up, but I don't need to give it any credence. Not my term.Stephanie:Nicest then.Erik:I'm trying to think of nicest. I mean, the fortunate thing is many, many people have done a lot of nice things for me. A lot of people taking bets on me before I had any reason to deserve them. My parents were always great to me. My wife's great to me. I'm surrounded by people that do nice things for me. So, I will say a nice thing that stands out that I never give enough credence to is when I graduated college, I went into real estate a week before the whole banking industry collapsed. I made $350 that year.Erik:Six months in, a friend of mine's dad called me. I was a guitarist growing up. My drummer in my band's dad called me and said, "Hey, I've been watching you. You seem to be like a young, aspiring entrepreneur. I like your grind and your spirit here. I want to help people like my son, who is still pursuing music, figure out how to do the business side of things. So, they can actually at least make a living being a musician. I think there's a thing we could do here." I spent a couple months putting a business plan together, showed it to him. He not quite disappeared but went MIA for three months.Erik:Called me July of 2009 and said, "Hey, I'm putting in a quarter million dollars. I think I can raise this another $750,000. You're going to run it. Let's go." That became my first online company. So, that guy put in his own quarter million dollars, got his friends to put in $750,000 million invested in an online music company in 2009. And then put me in charge of it, gave me 5% of the company and paid me minimum wage, which I was grinding.Erik:It was a bet. Don't be wrong. It could have really worked out for him, but I also think of that as that guy set me up as an entrepreneur in a lot of ways too. I don't know what I would have been doing without that opportunity. I'd probably still have grinded through real estate unless something else popped up for something. That put me into digital. That did a lot of things for me. I'm still in touch with them, but that was a big one.Stephanie:That's a good story. I'm glad I asked. Yeah, that's really good. Cool. Well, Erik, this has been a very fun interview. I want to bring you back for another round in the future to hear how 2021 is going. Where can people find out more about you and Hawke Media?Erik:Definitely, Clubhouse.Stephanie:I'll see you there.Erik:Yeah, [erikhuberman on any social platform's fine. And then Hawke Media, if you ever want to reach out, is just hawkemedia.com. We do free consultations. Always happy to help.Stephanie:Cool. All right. Thanks so much for joining us.Erik:Yeah. Thanks for having me.
Brands large and small are all fighting the same battle of customer acquisition. How you reach customers, and how much that effort costs, is in constant flux, which is why Nik Sharma is a big fan of constantly running micro experiments. Nik is the CEO of Sharma Brands, a company that remains one of the best-kept secrets among the DTC community and which helps brands scale into the tens of millions. On this episode of Up Next in Commerce, Nik takes us behind the scenes of what that scaling process looks like, including his strategies around customer acquisition. Nik explains how important constant testing is, and he shares some micro-experiments he recommends running regularly. Plus, he tells us why reading every review and every comment associated with your brand is the best leaping-off point for your creative process. Main Takeaways:Please Rate And Review: Reviews really do matter, and you should look at every single one to have a better understanding of what customers are saying, what they see as the value props and what isn’t working. You can then work backward with that information and create content that matches what your customers want. Mo Money, Same Problems: Regardless of how big a company gets, the main problem any brand faces is that of customer acquisition. Bigger brands can throw more money toward getting their message to customers, but ultimately it’s about getting the right content to the right people.The Mom Test: Your website experience needs to be seamless and frictionless that even the most technically challenged, or busy, can make it through without issue. It also needs to deliver the message that you want to send right up front. No one is going to search for the thing you want them to see, so put it front and center.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey, everyone. Welcome back to Up Next In Commerce. This is your host, Stephanie Postles, co-founder at mission.org. Today, we're hanging out with Nik Sharma, the CEO of Sharma Brands. Nik, welcome to the show.Nik:Thank you for having me. I'm excited to be here.Stephanie:Yeah. Me, too. If we had video on, I would be trying to look at your whiteboard that you had on with probably 1,000 notes on it.Nik:All the secrets. It's got all the secrets.Stephanie:Yeah. What kind of secrets are on that board? I was really trying to zoom in like what's going on back there?Nik:It's got all the goals for the week, starting with nine hours of sleep, all the way to-Stephanie:That's a good goal.Nik:... how we plan to combat Facebook and Apple's big fight that's going to start January 15th.Stephanie:Oh, tell me a little bit about the big fight. I'm obviously not up to date on that. What's going on?Nik:Yeah. So basically in the new iOS update, Apple is going to give pretty much everybody multiple opportunities to block tracking. And so it's really going to hurt attribution for a lot of these ad platforms, especially for small business ad platforms like Facebook ads, Snapchat, et cetera. And so we're basically starting to think through how we combat that going into the new year because a lot of the businesses we work with, they're either brands that are just starting. And obviously, those are small businesses, but there's also some mid-sized businesses doing anywhere from 200 to 800 million in revenue, but they're also going to be just as effective. And so we're trying to think through how we go about combating that going into the New Year, basically making sure that there's not a ton of drop-off as it relates to the client.Stephanie:Yeah, I didn't realize this was happening so soon. I was paying attention a bit to the taking away cookies and tracking and all that kind of stuff. I didn't realize the iOS update was happening January 15th. So what are you guys thinking? What's your strategy? What are you advising your brands to do? I know I just jumped right into it, but this is really interesting.Nik:Yeah. Well, as of right now, it's a little bit up in the air. We have a few ideas going of how to combat it. But to be honest, there's not a ton of information out that we have to work with. We're trying to work with multiple different ad tech partners to understand how they view the impact happening. But at the same time, we're trying to think through how do we basically start creating our first party audience ads much faster than running ads when we need them, so whether that's by creating what I would call a prospecting CRM versus just a customer-centric CRM post-purchase, or trying to think through how do we still drive lower funnel conversion and attribute those sales properly, even though they might not be last click purchases. Yeah, it's a big cluster of unknowns right now.Stephanie:Yeah, that's tricky. I also wonder to what extent will a user maybe turn that feature off and then start to realize maybe how helpful that feature was when it comes to showcasing you the information that you want to see, or maybe ads that actually are helpful because I think right now, a lot of times people are like, "Oh, I want privacy and I want this and I want that"? But if you were to turn off a lot of the features that you're talking about, then you wouldn't really get the customized experience that people will do oftentimes appreciate in Google and other places. They wonder what that would look like.Nik:Yeah. Most of the people I've talked to have basically said a similar thing that they like the personalization and whatnot that comes with it. But there is definitely a pretty big group of people who would rather prefer that they never get targeted with an ad. Unfortunately, that's the threat to a lot of the small business advertisers out there.Stephanie:Yep, interesting. Well, when you guys have a little more insight into that, I'll just bring you back in here, how you guys are approaching it and what happens in January 15th.Nik:Yeah, definitely. Definitely.Stephanie:Cool. Give me a little background on Sharma Brands. I was seeing that you guys work with a lot of brands, some of which we've actually had on the show before, which is really cool to see. We've had [inaudible] and I think I saw two others. But tell me a bit about what is Sharma Brands and what do you guys do for the brands that you work with?Nik:Sharma Brands is like the secret of the internet. We don't really talk about it much publicly. But basically, what we do is we work with brands that are either just launching or have just launched. We either guide them through the launch or we pick them up right after launch. We work with brands that are midsize, brands that are doing really well and ideally want to do better, or we work with brands that are pretty big retail businesses that want to get their ecommerce business set up and on track. And so we come in and handle everything from strategy to execution, to implementation. A lot of it is testing, a lot of it is focused on creative and messaging and offer testing merchandising. We also do everything all the way to producing national TV spots, satellite radio, like basically helping brands venture out from the more traditional just Facebook ads or building a website.Stephanie:Got it. What inspired you to create Sharma Brands? I saw you had a lot of roles. You were the head of D2C for a couple of companies. I think you worked at Hint. Is that what led you to creating Sharma Brands, or tell me a little bit about that journey?Nik:Yeah. I've always had a knack for wanting to work on multiple brands, which is probably why Sharma Brands works. But separate from that, I don't know if we are even the perfect solution. I don't think we aren't because we don't really do everything. But there's not really a proper growth partner for a lot of these brands. There are media agencies, there's media companies, there are creative agencies, there are product development agencies, but there's really not many when it comes to true growth and helping them in things like scaling, going from 1 million to 10 million or 10 million to 60 million. And so we created this little niche where we help brands do just that. We try to stay on for no longer than six months per project. Our goal is to basically get in and do just an insane amount of testing so that by the time we leave, that brand knows exactly what's going to scale and what's not going to scale.Stephanie:Interesting. What kind of testing do you mean? What do you do throughout those six months to figure that out?Nik:It can be anything from copy, creative, landing pages, long form content. When I say creative, there's a whole variety of creative. There's the things like... We might test UGC, we might test influencers, we might test studio stuff, we might test just a whole variety of different types of content. We do the same thing when it comes to page experiences, so whether they're landing pages, whether they're listicles, articles, partnerships with companies like Morning Brew.Nik:And then of course, the last piece of it is the merchandising, so everything from offers and pricing to products, to what gets people in the door, what's the best product to sell them after that. And subsequent to that, how do we optimize for brands that are high consumption? How do we focus on subscription? How do we keep customer lifetime value high? How do we bring back repeat purchase rate without having to spend money to reacquire that customer? The goal is to figure an overwhelming majority of those types of things out so that by the time we're done, there's a very clear playbook that they can operate on for the next few months or a few years.Stephanie:Yep. I'm assuming that when you were working at Hint and other places, you started seeing similar things that were working and weren't working. Can you tell me a bit about what it was like working at those companies, or maybe you started uncovering a few universal truths around D2C?Nik:Yeah, working at Hint was great. It was a lot of fun. We grew really fast, which led us to a lot of challenges that we were able to overcome. But it gave me a lot of insight into the challenges that a lot of the brands face. Obviously, I think customer acquisition is one of the biggest things that brands don't necessarily understand or distribution, which is, I think, one thing we're really good at. But then after that, after you get to a point where you're able to acquire 1,000 customers a day sustainably and at reasonable prices, then how do you take those customers and service them further? How do you come up with products that feed those customers after what they've already bought if it's not a high consumption product? How do you think through unique partnerships that attract eyeballs that then give you the opportunity to sell those customers onto your brand? There's so many things. Basically, it all stems down to distribution. Good brands are really good at product and brand building. But then the idea of then getting that in front of other people is where the tough part comes in.Stephanie:And so how do you approach customer acquisition now, where maybe it was different than prior to 2020 because it feels like there's so many new companies in the space? Maybe not all of which will be here in a couple of years. There's a lot of companies. I think more businesses launched in 2020 than in 2019 and prior years. So how do you approach trying to compete and get the eyeballs and find new customers for your brands in a pretty competitive market right now?Nik:To be honest, we don't really take competitive brands into account. What we try to do is just be really innovative with the way that we message and get in front of people. For example, something as simple as like Judy, which is emergency kit you know, being able to really hone in on understanding whether it be by surveys or by looking at what types of messaging has better click through rates and conversion rates, understanding the types of messaging that people are reacting to, and then going really deep on it, all the way to coming up with funky partnership ideas like putting Poo-Pourri and Judy together because both brands service emergency situations.Stephanie:That's a really good partnership.Nik:Yeah, no, it's great. It's really just about like how do we stay ahead of competition? Most brands today probably run a very similar playbook of like, "Let's create some... text some images, put some ads up and run them to our homepage." We put that on steroids. We're testing maybe 17 different versions of creative or testing 7 different versions of landing pages or homepages or sites that they're leading to along with 37 different audiences that we're going after to understand which type of messaging converts better with which audiences.Stephanie:That's great. So how do you think about creating all those different types of messaging? How do you stay creative? I know when I'm thinking through ad copy, even for our company, once I create one or two or three, then I'm like, "That's all I got. I'm out." How do you guys stay creative and create like, what'd you say, 17 different landing pages? I mean, like a lot.Nik:Well, I have a team that's insanely creative, so that helps.Stephanie:That's helpful.Nik:But outside of that, I think one thing we do, which is honestly something anybody can do, is we try to look at every single review. So if we work with a brand, we try to read every single review and we will literally use a whiteboard and make a tally of the different value props and how many times they're mentioned and then use that to basically work backwards and understand messaging. So things like that to things like looking at comments on ads, to customer service emails and messages, to how are other people tweeting about it, how are other people taking press about a brand and then tweeting about the press or talking about that specific article. So we try to take in a variety of things. And then if all else fails, have a little glass of whiskey and take an approach with some fresh eyes.Stephanie:That's good. When it comes to large brands and small brands, we've been going through some of these challenges, but are the challenges the same for both big and small, or do you see completely different challenges depending on the size of the brand?Nik:I think that a lot of the challenges on the macro side are the same, but on the micro... On the macro side, for example, customer acquisition, right? A company that's doing 800 million versus a company that's just launched, both are going to be focused on how do we acquire customers smarter, better, faster, cheaper with higher lifetime value? But on the micro side, it's a little different because a company that's doing even 50 million in revenue has a lot more awareness to play off of. They have a lot more scale to go leverage things like partnerships with other brands, they have budgets to go to places like The Skimm and Morning Brew and other places like that versus a company that's just starting.Nik:They still have the same problem with customer acquisition, but they need to figure out even if they raised a little bit of money or if they did it, they need to figure out, "Okay, what is the fastest way for us to get 100 customers and then 1,000 customers and then 10,000 customers and then 50,000 customers." And obviously every time you hit that milestone, it gets easier and easier, but it's still the same. That's the challenge of how do you get in front of as many eyeballs as possible and also relevant eyeballs. You don't want to get in front of just eyeballs that are not going to convert for you.Stephanie:Yep. Are there any tools that you use to stay on top of maybe trends or what people are searching for, or even staying on top of like different kinds of audiences to reach and how to reach them in new ways, like new things you're doing maybe this year that you weren't utilizing in the past?Nik:One thing that we have started doing a lot more this year versus years in the past is really not taking creative too seriously. So, for example, like running memes as ads insanely outperforms things like really beautiful $30,000 photo shoots, or the way like... Do you use TikTok?Stephanie:Yes, I do. I love TikTok.Nik:I'm addicted to TikTok.Nik:With TikTok, I think if you look at the way TikTok has impacted culture or pop culture, I should say this year, it's pretty fascinating. Like when Instagram was big and there were Instagram models or even you could even say like... yeah, you could probably say even like big YouTubers, they don't really make news or make headlines, nor do they get, for example, flown out to fashion shows internationally to come walk in a runway. But TikTok has just completely taken 2020. And whether it's like TikTok is being flown out to Rome for fashion week or it's the fact that all of Snapchat discovers tabloid garbage is all influencers, there's something about TikTok that resonates really well with the masses.Nik:And so one thing we've been doing is testing, not only just testing TikTok's style videos, but also even the way... If you look in the comments of TikTok, I think the comment section is where the memes of tomorrow, or the memes of next month live. And so we've been [crosstalk] doing a lot of things where we test those. Those have been having really interesting results too. Just really like, again-Stephanie:All right, so give me some examples.Nik:... just a bunch of testing and fun stuff. My favorite is the... For example, if you were like this podcast is the perfect podcast for ecommerce operators, you would put the word operators in between the sparkles emoji, or just like random silly things that you see on TikTok. Yeah. It's hard to explain, but it just works so well.Stephanie:No, yeah, I know what you mean. Yeah. Well, tell me some of the most interesting comments that you've seen on TikTok that you've turned into memes.Nik:Well, the sparkles one is probably the easiest. Let's see. Outside of that, the eye mouth eye I think is hilarious. What else? What else? The concept of like it's the blank for me. There's just so many little inside jokes on TikTok that becomes so... Not only relevant on the outside world, but also people see it and they relate to it because they think they're the only ones that know about it because TikTok is such a one-to-one thing, you know?Stephanie:Yep, yeah. And then when you were talking about creating TikTok style ads, I'm assuming you're saying that you're creating an ad like you would create a video on TikTok and then you're actually putting it on other channels and platforms. Is that what you meant by that?Nik:Yeah.Stephanie:Yep. I was just thinking about that actually a couple of days ago. My head of growth is like, "Oh, can you create some audio ads and video ads and all this to help promote the shows or whatever?" And I was like, "Well, what's the easiest way for me to do that?" Honestly, creating it on TikTok, even if it's an unlisted video-Nik:Oh, 100%.Stephanie:Yeah, so much easier than trying to do anything else.Nik:The best ads in ecommerce are ones that do not look like billboards on the street. That's where a lot of brands go wrong is that when it comes to ads, they try to create this unique experience or this look that doesn't resonate with the common person. It's like no wonder they don't work because they look like if you see an ad, there's no chance you're going to sit there and be like, "Oh, an ad, let me watch this whole ad." All your ads have to feel like they're not ads. They have to feel like content that somebody maybe not wants to watch or needs to watch, but something that's intriguing enough where they're going to watch the first little bit, and then it's your job as the brand to hook them to watch the rest of it.Stephanie:Yep. Yeah, I love that. The other thing, now that we're talking about influencers and spreading things, I heard that your fridge is famous. You tell me a bit more about this because when I heard that, I'm like, "Isn't Nik an influencer? Why is his fridge famous and you're known for your fridge?" So give me the deets on this.Nik:Yeah, the fridge racks up impressions. That's for sure.Stephanie:Why? What is up with your fridge? Is it a fancy one?Nik:I'm just trying to look up real quick how many impressions the last one got. But no, it's funny because obviously I worked at Hint and I've worked with a bunch of different beverage brands. Yeah. So the last tweet about my fridge has 151,000 impressions.Stephanie:Why? What'd you say?Nik:It's nothing special. It's just the fact that a lot of people know me as a beverage marketer or beverage person. I'm just looking at this tweet from September 14th and my fridge has Taika, has Empathy Wines, it has Jock Coffee, it has Dose, which is like a new wellness shot, it has JuneShine, which is hard kombucha, it's got Sanzo, it's got OLIPOP, Red Bull, Orgain protein elements, which is a adaptogens beverage, and then a bunch of Hint Water.Stephanie:Close to D2C fridge. You're stacking it up.Nik:It's basically a D2C fridge. Yeah. And then depending on when you open it, you might see different drinks. There's another picture of the fridge I'm looking at. It's all RISE cold brew. It's got Lemon Perfect and it's got Cha Cha Matcha's ice tea lemonades.Stephanie:Interesting, interesting. And then so how are people engaging with this? How did it even start of you posted this picture and realizing people like to see what you were trying out, or what you were investing in, or what made them excited?Nik:Well, it started because a friend of mine, David Perell, basically posted a picture of my fridge, I want to say when I first moved to New York last year, or I think he might've done it when I lived in San Francisco. But then he posted about it and how like my fridge is basically a vending machine. And then all these beverage companies started responding. And then whenever I tweet about my fridge, I just get a flood of packages over the next 10 days from different beverage brands that want to be included in the next round of the fridge.Stephanie:That's really funny. But I also feel like it's helpful to see how to share things that get shared, that go viral because the best way to advise brands and other people is by doing it yourself.Nik:100%. That's always been the thesis behind any kind of public account that I have. Whether it's my community number, whether it's my email newsletter, whether it's my Twitter account, everything that I try to do is like, "Okay, I'm basically just testing it so that we can hopefully do this on a brand and it makes a big impact because maybe it's something that they haven't done before or just people in general haven't done before."Stephanie:Yep, yeah. That's very, very cool. So when you're working with all these brands, one thing that we've been discussing here at Mission lately is just about all these new users who are now online, a new demographic group is online shopping. They're getting used to it, they're going to be here probably for the long haul now that they have maybe ordered groceries or gone on Amazon for the first time. How are you working with your brands to ensure that their messaging and their interaction and that they may be personalizing things in a way that also connects with this new demographic of shoppers that weren't here prior to 2020?Nik:So basically, how should brands prepare for-Stephanie:Yeah, having like an older generation now who are ready to shop. And I'm sure the messaging or the way that brands are personalizing is usually towards millennials or 18 to 35 or 18 to 40. Everyone seems to focus on that same two generations, but the older generation are the ones that have the money. They're the ones who are ready to spend. They just haven't brought it really online until recently. But it seems like a lot of things have to change for it to also work well with them.Nik:Yeah. I think tactically, there's different things you can do, whether it's the channels that you choose to advertise on. So whether that's shifting budget out of Facebook and onto platforms like TV and satellite radio and connected TV even, or it's... One thing that I've found at a previous brand I worked with was that the creative we would put out that has, let's say, models or talent that looks like they're in their late 20s, early 30s is what resonated best with the audience groups over 45.Stephanie:Oh, interesting.Nik:So it might just even be something as simple as a shift in your creative to reach [crosstalk 00:27:11].Stephanie:Yeah. I wonder why that would be the case.Nik:Everybody aspires to be better looking or younger or smoother skin or whatever it may be. And that might be a reason. I think another way though too is thinking through just the ease of how something as simple like your website functions. How easy is it for somebody to come in and shop? I always send landing pages or websites to my mom. She'll look through it and be like, "This is confusing," or she'll be like, "This is perfect. It was one click and I was in the cart." And so we always go for the ladder as the goal. But the other thing too is like... One thing I always say is you got to treat your customers like Kim Kardashian on the red carpet and you're her assistant, right? The brand is the assistant. So you can't expect your customer, you can't expect them to go browse around your site and learn about your brand and learn why they need your brand, or how your brand is going to make their life better, or the deal that they might be able to get, or the coupon.Nik:There's so many brands that they clearly offer coupons when you Google, for example, like... I don't know. If you Google like... we'll say Jetblack because they're not a business. If you Google Jetblack coupon, there's probably 17 coupon sites that have a 10% or a 20% off coupon. But what you do is you now create an opportunity for somebody to leave the experience of checking out to go find that coupon. There's a good chance to just get distracted and never come back versus something as simple as like... Basically, what I'm trying to say is you want to create everything or you want to put everything in one simple experience so that somebody who has no time, somebody who has no patience, somebody you could assume they don't have the knowledge of how to navigate a site can basically come to your site and get what they need and they know why they're getting it and just create something really easy to use.Stephanie:Yep, yeah. I think frictionless shopping is the way of the future. The one thing about coupons though, I feel like they're just dangerous. Like you said, you leave the site... I know I used to back in the day, go through all these coupon codes and then I'd really get annoyed because none of them are working, all of them were expired. And yeah, it's still feels like there's room even on a website to be like, "You will never find coupons outside of our website. So don't try. Don't go looking around, don't go testing like 1,000 different codes. You'll find nothing. It's only here."Nik:Totally. The other thing too is like then you have companies like Honey, the browser extension, which are basically fraud companies, in my opinion, or scammy companies. And if you don't create something of an offer for let's say you run a... let's just say a beverage brand called Three Stars, and somebody comes to the Three Stars' site and they want to buy a variety pack because they're a new customer and they want to try the flavors. When they get to the checkout and they see, "Oh, there is no discount. Oh, but Honey says..." The Honey thing pops up and you click it because you're hopeful that there's a discount. Even if Honey generates no discount, Honey is going to refresh the page and now that becomes a 10% affiliate cut. The brand is paying the Honey without them even realizing it. The customer is not getting any value out of it. But because you didn't create the opportunity for them to check out without having to use Honey, you're now going to end up paying Honey 10% if they have it installed.Stephanie:Interesting. I hadn't realized that's how it [crosstalk 00:31:03].Nik:Yeah. Honey is a really scammy business. It's really scammy for brands.Stephanie:Oh, geez.Nik:I hate Honey with a passion.Stephanie:Oh my goodness. I actually think we had someone from Honey the long time ago before our commerce show was even live in the world. We had, I think, their COO on one of our other shows, Mission Daily. So if anyone's interested, go check out [inaudible 00:31:24].Nik:Yeah. It's a genius business model for them. Basically without showing the customer or without really showing the brand, they're just ripping 10% off of every purchase. And if you're selling like a $400 emergency kit, that's 40 bucks that they're making for everybody who just has an extension installed, but it's-Stephanie:And the brands can't control that, or they can't say-Nik:No, they can now. When I saw it, I went to them and said, "You guys, you're basically just taking credit for everything you're not driving." And they're like, "Oh, well, it's just the way that Honey works. We drive a lot of traffic." And I'm like, "No, you don't." So then we just shut them off. They just don't get paid now, even though they can still be used.Stephanie:Oh, interesting. So when thinking about outside of coupons, but more ways to connect with different users, what do you think about catalogs? Because we had a good discussion, I think, many episodes ago with one of the execs at Marine Layer, and she was talking about how great catalogs work for them. I haven't heard many people talk about it. So it seems like there's still an opportunity there though with so many people now working from home. I know I get excited about mail that's actually fun to look at and helpful. So how do you advise your brands on connecting with an audience through catalogs or paper mail?Nik:Personally, I'm a fan. I think it's a sign of luxury when I get a catalog, whether it's from a company like Buck Mason or Todd Snyder or [inaudible 00:33:06], like it's definitely a sign of luxury. The catalogs themselves are printed on very nice and chic paper. I think it just adds to the overall experience of being a customer at those brands. At the same time, if you're a brand that's just starting and you don't have the capital means to do it, I think there's ways you can create digital catalogs for fairly cheap and have them be digital experiences.Stephanie:Yep. When you have a catalog, I've heard some brands optimize for experience and fun and more of like a branding play versus others are focused on send them back to the website, get the conversion. How do you think about optimizing a catalog to work well?Nik:Well, I think it's two ways. One, you got to feature products that I think people want. So if your spring collection is 250 pieces of clothing or 250 different SKUs, maybe you feature the 27 that people really want. But then secondly, I think from a messaging standpoint, it's got to really make you salivate when you're going through it. That was [crosstalk 00:34:36].Stephanie:Like Trader Joe's catalog.Nik:Yeah. That was one of my favorite things about... Do you remember SkyMall?Stephanie:Yeah, yup.Nik:SkyMall just made you want to buy everything in that magazine because everything was like, "Oh, a random flashlight for under my desk chair. Sure. That now seems like something I totally need."Stephanie:Yep, yep, I agree. I just saw something in a catalog that I actually ended up buying. It's a... What is it? A candle lighter, but it's not like a big flame thing. It's operated by battery. It has this really long stick on the end and it's intense, it's awesome. Everyone should check it out. We'll link it up in our show notes. But I bought that from a catalog because it was showing it going inside a really deep candle. I was convinced. And it's amazing.Nik:Yeah, no, totally. It's all about like building... You want to build a use case for somebody to go tell their friends why they bought what they bought from you. That's like the best way to market.Stephanie:I think you also have to have good paper quality though.Nik:100%.Stephanie:I hate the catalogs that come with just like icky, thin paper, and it's just 1,000 pages and I'm like, "It doesn't feel curated. Just every thing is here. I don't even know how to look through this in a way that makes sense for me," versus the ones that are just 10 pages. It's what you want to look at, or just the best thing that feels like it's personalized, even though it's probably not. I'm okay with that as long as it feels high quality.Nik:Totally.Stephanie:Let's jump over to a little bit higher level ecommerce question of where do you guys think ecommerce as a whole and D2C is headed over the next couple of years? What are you preparing for right now, or what big thing?Nik:Well, I think that ecommerce, as a whole, is going... There's been a ton of innovation this past year and the year prior, both on the side of operations, things like understanding you can't blow cash on acquiring customers, all the way to understanding how to optimize shipping costs or manufacturing costs or even using tools like Settle, which let you basically hack your cash flow. I think, to be honest, over the next year or two, it's just going to be a lot of growth in the category across many different categories that maybe thought they weren't going to be ecommerce. Everything from sitting at a restaurant and now... Obviously, we see QR codes everywhere, at least in major cities, at restaurants for scanning and getting the menu.Nik:I think we're going to see that you're going to start paying your bill through Apple Pay after you order your meal, all the way to things like better experiences with packaging and unboxing or just how you learn about a brand for the first time after you buy it. But I think there's also going to be a rise in things like marketplaces. There's a company that I just joined called The Fascination. And basically, the entire idea behind The Fascination is to take a lot of these cream of the crop direct to consumer CPG brands that are independently trying to acquire the same customer and basically put them together, create content around it, and create shoppable content.Nik:So, for example, if you have a daughter who's moving to... I don't even know if people are going to be going to college next year. But let's say she's going to college next year, and it's like the ultimate list of things you need for your dorm, it's got your mattress topper, it's got your pillows, your comforter, it's got your desk lamp, it's got organizers. You would be able to basically shop all of this in one page with one checkout through The Fascination. And on the back end, all these brands are getting orders basically pushed into their order queues. The Fascination basically just takes a tiny cut, like an affiliate. But the brands own the customer, they own the relationship with their customers, they have the ability to remarket to those customers. And The Fascination acts as a front of acquiring the customer and now selling maybe eight things at once.Stephanie:Oh, that sounds really cool. I think that's much needed with so many new brands popping up right now too. It just feels like sometimes I don't even know who to trust and who's actually got their back end filled out. Is this just the landing page that they're testing out to see if people actually want a product that they haven't even developed yet? So it seems like it's needed to have a trusting source like that to say, "These are some of the best brands and we've verified them and you've got customer service here and we're reputable and blah, blah, blah."Nik:Yeah. And that's another thing too is there are a lot of sketchy brands that have launched because the barrier to entry is so low. What The Fascination is trying to do is basically the same way you have like a kosher sticker on food items or a gluten-free sticker that's very universally known. I think they're going to basically try to do the same thing, but for four brands.Stephanie:That's awesome. Yeah. I will have to check that company out, maybe bring them on the show. Sounds like [crosstalk 00:42:39].Nik:Yeah, yeah. They would be a great one to bring on.Stephanie:Yep. The other trend I'm excited to watch this next year is last mile and see how that evolves, especially with the food delivery companies and the DoorDash and Grubhubs of the world starting to actually just work with local retailers to fulfill last mile deliveries. And I think that whole industry is about to have a big evolution. So that'll be an interesting one to watch.Nik:Yeah, I couldn't agree more. I mean companies like Ohi or even FastAF, they're doing some pretty awesome things when it comes to last mile delivery.Stephanie:Mm-hmm (affirmative). Yep, yeah. I agree. All right. Well, let's move over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Nik?Nik:I'm ready.Stephanie:All right. What's up next on your reading list?Nik:Ooh, I would say the book Supermaker by Jaime Schmidt.Stephanie:Oh, that's a good one. Yep, sounds good. What is your favorite business book that you refer back to?Nik:Atomic Habits.Stephanie:And you're on it. You're like, "Are you top of mind? I got this great." Sounds great. What topic or trend do you not understand today that you wish you did?Nik:Bitcoin.Stephanie:I've had a couple of people say that. What's the nicest thing anyone's ever done for you.Nik:The nicest thing anybody's ever done for me is-Stephanie:I had to stump you. You were too on it. You were too lightning.Nik:Yeah, that's a good question. Honestly, my favorite is when just people just reach out randomly and say, "Hey, how's your day?"Stephanie:You like that? Sometimes I'm like-Nik:I love it.Stephanie:... "What do you want? Get to the point."Nik:Yeah. Well, sometimes you can tell when people have a reason for asking. But when a genuine friend just texts you out of the blue and just says, "Hey, how's your day going?" It's always nice to know.Stephanie:Yep, yep. Okay, a friend. I thought you meant just like a random Twitter person.Nik:Oh, no, no, no.Stephanie:I'll get messages on Twitter like-Nik:No, no, no, a good friend.Stephanie:... "Hi, how are you?" I'm like, "What? Who are you? Why are you asking me how I am?" That's weird. Ah, 2020. What's up next in your travel destinations when you can travel again? Where do you want to go?Nik:I want to go to Jamaica actually with a friend of mine, Chris Hall, and a few of his friends. He's got a pretty good setup there in Jamaica for quick trips out there. So I'm looking forward to hopefully in February maybe go there for a few days and just unplug from work.Stephanie:Oh, that sounds fun. Chris, bring me out there as well. That'd be great. What's up next on your Netflix queue?Nik:Ooh, actually there was... I forget the name of the comedian, Andrew Schulz maybe. He just launched a stand up. I saw it yesterday and I added it to my list. So that's next up on my queue.Stephanie:Oh, that sounds good. I'll have to check it out. If you like it, I'll check it out. What are you most excited about to add to your fridge next?Nik:Ooh, that's a good question. There's a beverage that we are launching called Barcode in-Stephanie:Barcode.Nik:... Q1 next year. It's with the former head trainer of the New York Knicks, who's also a big celebrity trainer, as well as with Kyle Kuzma, who's a championship Lakers player. It's basically a healthier version of Gatorade and it tastes incredible and it's got everything. It's like everything he would prescribe or give to his athletes, but bottled up in one drink.Stephanie:Oh, that sounds good because I do like Gatorade. But then when I'm drinking, I'm like, "I know this isn't good for me."Nik:It's horrible for you.Stephanie:Yeah, it is delightful though.Nik:It is.Stephanie:All right. And then the last one, if you were to have a podcast, what would it be about and who would your first guest be?Nik:I've actually been thinking about this recently. It would probably be about the struggles of commerce that people go through. So it would only be focused on problems people have had in their business, not the successes and not focused on people who've successfully exited. It is strictly focused on people who have, for example, not figured out how something works or how they're going to get through something. I don't know why, but I always keep thinking my first guest is going to be Paul, who's the founder of Prose, which is a haircare brand.Stephanie:Okay. I think that sounds great. I love stories like that, where people can actually learn something and because there's so many... Any media article is always like, "Oh, here's the end result. And now, they're a billion dollar company. Oh, and they exited, Oh, they got acquired." It's like, well, what actually happened where they failed because I don't want to fail too and I know they have some kind of knowledge of things that I could avoid, that's why I love biographies and stuff because you can read it and essentially accelerate your knowledge through that person's life and hopefully avoid some of the pitfalls they went through.Nik:Totally. And not only that, but also then for all the people listening who might be starting a business, or might be getting themselves into a position where they're not really sure what to do, it almost becomes an encyclopedia where, "Oh, Paul had no clue where to get you pumps at low MOQs for his shampoo bottles. How did he figure out what they were and where he could find them and not get ripped off?"Stephanie:Yep, yep, yeah, or I always love the stories when people are going overseas to find manufacturers and hearing things that they encounter. I forget what brand we were talking to on the show where they... I went into one of the warehouses and they were selling apparel and they were like... and all of the employees were smoking and all the stuff smelled like smoke. It's like I would have never realized that unless I actually went over there and was doing an audit before moving forward with one of them.Nik:Yeah, totally.Stephanie:Very cool. Well, Nik, thanks so much for coming on the show and sharing all your knowledge. Where can people find out more about you and Sharma Brands?Nik:The easiest is my website, which is just nsharma.co, or the second easiest which I read every tweet, every message is my Twitter @mrsharma.Stephanie:Awesome. Yeah, just go to Nik and say, "Hi, how are you?"Nik:Exactly.Stephanie:All right. Thanks so much, Nik.Nik:Thank you.
The ecommerce industry has historically been dominated by some familiar verticals: apparel, footwear, home goods. In 2020, the world of ecommerce exploded to include a few more at the top of the list, including grocery and fitness. One industry, though, hasn’t necessarily emerged as a leader in the ecommerce zeitgeist: home security. But just because you don’t always think about an industry as a part of ecommerce doesn’t mean that it isn’t making waves among its digital peers. The perfect example of this is Ring. Ring was founded in 2013 as a company called Doorbot, which failed to get the investment of any Shark Tank sharks, yet persevered to become a leader in home security before being acquired by Amazon in 2018. Today, Ring is valued at more than one billion dollars and, through its website sales, is bringing home security to customers everywhere. Robin Choe is the Head of Ecommerce at Ring, and on this episode of Up Next in Commerce, he explains how Ring has built a successful business through creating a community of neighbors and what it means to be driven by a shared goal. Plus, Robin touches on his past experience working in ecommerce overseas and what the differences are between the Asian market and what’s happening stateside. Robin also details why he believes that companies that are able to foster a sense of community and safety are the ones that will rise above the fray in the business world. Main Takeaways:United Nations: China has been ahead of the curve in its ability to build a digital landscape that permeates throughout its society. The country is more adept at creating social connections via technology, building direct, dynamic marketplace models, and optimizing the supply chain. But other countries, including the U.S. are starting to close the gap and create more widespread access to those same experiences.If You Stand for Nothing, What Will You Fall For?: Leadership is critical in any organization, but it is even more important in one like Ring, which was acquired by Amazon, one of the biggest companies on the planet. Creating specific team-by-team missions that all ladder up to the top of the organization and then also falls in line with your parent company is a difficult task, but a necessary one if you want to have long-term success and buy-in from all parts of the company. Having those shared missions also sets up the possibility of setting measurable goals and a true north to strive for and build toward.Avoiding the Upsell: Customers don’t want to be sold to, they want to be offered solutions to real problems. Rather than trying to push products on people, a better approach would be to understand each customer’s specific use case and deliver personalized solutions to meet those needs. That technique is much more likely to lead to a sale than simply shoving the newest and coolest products at potential customers.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Everyone, this is the Up Next In Commerce Podcast. I'm your host, Stephanie Postles, Co-Founder at Mission.org. Today, we're chatting with Robin Choe, the Head of Ecommerce at Ring. Robin, thanks for joining us.Robin:Thanks for having me.Stephanie:So, I was looking through your background a bit. I wanted to start there, because I saw that you had worked previously at Mattel for a while. I think it's a good starting point. Then we go through your background in the world of ecommerce before coming back to Ring.Robin:Sure. Yeah, so I started in Mattel in 2008. My first role there was customer strategic planning, so everything around retail strategies and working closely with retailers to try and drive share of voice, market share, and ultimately, sales and brand growth at the retailers. What was unique around the starting point there was I had a hodgepodge of different channels and accounts. So, everything from Kmart, believe it or not back in the day, which is a much bigger retailer back then.Stephanie:Wow, bringing it back.Robin:Exactly. Also, working across what they call the emerging channels. Part of that emerging channel group, everything from grocery and department stores, drug channel, tried to grow our leadership share there. But Amazon was the one that really stood out to me back then, because it was still evolving, it was still smaller, but it was one that was growing substantially year over year and starting to catch the attention of our leadership and obviously something that I was preaching about internally to make sure that we're aligning and prepping ourselves to grow with them.Robin:From there, for about five years in the US, I moved to Hong Kong. I became the Head of Shopper Marketing or Customer Marketing for the Asia Pacific region. So, did that for about two years, and was also playing a hybrid role where I was the ecommerce excellence, best practice lead for the region, working closely with our regional accounts, our specific local accounts that are a lot bigger today like the Tmalls of the world, Lazadas, which are growing and ultimately trying to drive greater ecommerce best practices across the region.Robin:From there, I pivoted to a general manager role. So, I've had an unconventional career, where I was asked to take on the Country Manager role for Korea. So, everything from leadership across all the various functions, supply chain, finance, accounting to marketing and sales. And then my role expanded from Korea to North Asia. So, I had Japan, Korea, Hong Kong and Taiwan, which are all the best food markets, still residing in Korea. My role expanded to the North Asia cluster, again, driving all the sales and marketing commercial activities and leadership there.Robin:And then in 2018, decided to come back after being five years in Asia, and take on the role of Head of ecommerce for Mattel, which was quite unique. It was a newly formed role, where they consolidated a lot of different functions under one leader. Four different pillars that I would say we focused on, the first one was our direct-to-consumer site. So, think about Hot Wheels collector and Barbiecollector.com and trying to drive our sales and our engagement with them. Also, all websites across the world was under the first pillar. The second pillar was CRM acquisition, analytics and design to everything regarding fueling the acquisition efforts, engagement, and also the experiences on our sites. Also, even our retailer sites, believe it or not.Robin:Third one was digital operation. So, this is a team that really was sourcing the best-in-class assets and copy, everything that really fuels a great merchandising experience on our own sites, but also on our third-party retailer sites. So, we are basically managing all the PDPs, the brand stores for our bigger retailers like Amazon and Target and Walmart, and syndicating and deploying assets there. And then the last pillar was around digital customer marketing and digital shopper marketing, where we have a team that was specifically focused on growing our share of voice, our leadership share with Amazon.com, Target.com or Walmart.com.Robin:So, we had this full end-to-end scope of responsibilities where they were all connected. They were all in need of similar assets and strategies. Obviously, there was nuances between what we were doing internally and externally. But overall, it was a challenging experience but a great one, because it was broad, but also, we could see how things were lifting each other up as we're going through the process.Robin:And then about a year ago, made the move to Ring. Really the objective behind that was to go deeper into this ecommerce in general. I think I had a pretty broad role at Mattel. Even in my previous experience, I worked a lot with digital retailers. But being able to just dive into a brand that I love and that I was able to use as well before I even came to the company, just the mission around the brand of making neighborhoods safer, it was just one where everything just made sense for me to go in.Robin:It's pretty clear, and I made this clear with my boss back then. I'm not the most technical savvy guy. I'm not the guy that's going to be doing your coding and development. But I'm a guy that can come in and really drive some vision and strategy in terms of, "What are our immediate needs? How do we serve them? At the same time, how do we identify a vision for the mid- to long-term, so that we can be ready and planful and execute against what we believe to be the evolving changes that will happen and we can embrace them and ultimately deliver upon them in terms of customer expectations?" So, it's been quite a ride. Happy that I'm still here and that things are relatively going well.Stephanie:That's awesome. Yeah. So, I have Ring cameras around my house. Specifically, the one I love is the front camera with the floodlight on it, because it would blast people if they walk by and I think they're a little bit shady. But yeah, I really like Ring. It seems like a very different transition, going from Mattel to Ring, especially when you were for a little bit there focused in Asia, which in a lot of ways, I think Asia is actually very ahead when it comes to ecommerce and social stuff and community building. Were there any best practices that you learned throughout that journey that you're maybe bringing to Ring now?Robin:Sure, I think there is a ton to learn. Like you said, you had a variety of different business models out in Asia. For example, you had the direct model, which was unique. It wasn't normal like it is here in the US with Amazon, for example. But it's one where it's more of a marketplace model, where you're basically the manufacturer that's selling on a respective third-party platform. So, whether it's Timo, whether it's sites in Rakuten, in Japan or even in Korea, where you have coupon, you have such a dynamic and a different approach as it relates to how to connect with a customer.Robin:So, I would say some of the things that I was able to carry over here is you're right, it's very digitally connected in most of Asia. They are well advanced in terms of just being able to stay connected from a digital platform perspective, but also connecting with consumers in unique ways. So, I feel like maybe what they've done in terms of social commerce, for example, or being able to find ways to navigate supply chain challenges or complexities, they've done a great job to accelerate that. I think they've been ahead of the curve in terms of the US for probably another... They're probably ahead by one or two years, but I think the US has been catching up.Robin:So, I would say best practices, back to your question, it's basically how do you connect with the consumer in a way that is relevant for what they're looking for? For example, PDP pages in Asia are very long and extensive, meaning you could scroll for miles. That's what they're expecting there, because they want to make sure that they know what they're buying, that it's quality, that it's a trusted brand.Robin:Here in the US, it's not as long, obviously. You do have some scrolls to get to the bottom of the page, but you're not looking for as much. Maybe ratings and reviews are more important here in the US. It's also important there, but they're also featuring, "Is this the best seller? What's the ranking on the skew versus the category?" So, that's a good question. I think, for me, it's connecting with communities and also just best practices in terms of merchandising and how they do it differently and how we can take some of those and deploy that here in the US.Stephanie:Yes, yeah, I love that. I always think it's something good to watch, because I mean, they are much more mobile first. Whereas a lot of people here-Robin:Sure.Stephanie:... grew up on desktop. All those people actually just leapfrogged past desktop and have just been used to doing everything on mobile. I know especially around the podcasting space, it's an area that we also keep an eye on, because they have so many social functions that they're just used to. That I'm like, "Why don't we have that here?" So, it's always good to keep an eye on what other markets are doing.Robin:For sure.Stephanie:So, let's get back to Ring a little bit. So, Ring's owned by Amazon now, right?Robin:That's correct.Stephanie:So, I think that would be really good to talk about how that relationship is working, specifically around earlier you mentioned leadership. I want to touch on what that transition looked like from Ring being its own separate company to then being acquired. I'm sure you had new teams that you're working with. You had to really distill your mission and the shared values and everything that you had, the influence with the new team or company in general. So, I want to hear a little bit about how you led that or how you're leading it now.Robin:Sure, yeah. I think the beauty of Amazon and Ring is you're taking the strengths of each company and you're marrying them together. I've worked for big companies like Mattel. I've also worked for small companies and startups as well. So, I love the mash up between the two where you're able to be entrepreneurial. You're able to really be nimble and agile in this small setting of what Ring actually started off as, as a startup.Robin:And then taking the successes of a startup and then marrying that up with this successful company, Amazon, the biggest ecommerce company, at least in the US. In the world, I would say at least a leader. It's one where you're able to leverage the infrastructure, the resources, the mechanisms and the processes that they've been able to deploy, and they've been so successful with. So, that's something that I find to be very interesting.Robin:I think with Ring, we still are led by our founder today. He's our CEO and our Chief Inventor. It's one where he does drive a lot of vision and strategy in terms of not only the mission of establishing that, but also everything around products and services. That continues to grow as we speak. In terms of team and leadership, I apply the same model that I do in every circumstance that I've been in. It's like I spoke on earlier, I've moved to three countries in a matter of five years. That's not easy with-Stephanie:That's crazy.Robin:... a family of kids. Being able to embrace change and being able to pivot and establish yourself amongst different cultures and teams and environments and business models is quite hard, even with language barriers as well. So, I think coming into Ring, I applied a similar approach in terms of leadership. It's one where we have to pause as a team, because the team could be in any sort of condition in terms of their history. Whether they were without a leader in the past or they have gone through significant changes where they we're acquired, whatever the case may be, what I typically do is I come in. I spent some time, just parking time with the team and our leadership to say, "Hey, look, how do we get focused on what matters most?"Robin:The first thing I want to do is, "Let's establish a shared mission. Why do we exist? What's our purpose? Why are we here? Why do we get up every morning?" As an ecommerce Team at Ring, it's something that is really critical, because we're moving so fast. There's constant updates and changes and features and functions and migrations and transitions and new product launches, you name it. It's one where we got to slow down and establish, "Why are we here? Why do we exist?" I think that's even more important today, especially as we're navigating this pandemic.Robin:The second thing I also do is look at, "What's the shared vision look like? Where are we going? Where do we want to be three to five years from now?" Also, establishing values. So, we typically pick three values, whether it's trust, whether it's communication, whether it's collaboration. That's really what we center on. We'll spend time and it doesn't take a one-hour session. It takes multiple days and hours and dedication to really grind through and work through the rigor and discipline of saying, "Okay, this is why we exist. This is how it ladders up to Ring's mission of making neighborhoods safer. This is how it ladders up to Amazon's mission of being the Earth's most customer centric company." So that's really important.Robin:I think, because we did that and we do have an ecommerce Ring-specific shared mission, which is something that we identified and we have not just put on a wall, but it's really something that needs to live in our hearts. But I'll share that with you. So, our ecommerce group at Ring exists to communicate to our current and future neighbors, how we provide products and services that protect what is important to them. We do this by building strong relationships with our partners to deliver the best digital experiences for our neighbors. We call our neighbors, our customers, because it's just that important. So, that's really something that I do.Robin:I think what's been great is not only is it the shared mission and vision and values that you build upon and that you live by and you keep each other accountable to in terms of the way we behave and operate day to day, but it also helps to step back and say, "What are our key priorities? What are those big rocks that we need to move in the mid- to long-term? What are those things that we need to do in the short term to address the business needs and the evolving changes that are happening?"Robin:So, I would say that it starts with the team. It starts with having an aligned and a shared... It's not just my mission. It's a shared mission and vision and values. And then being able to build on processes like mechanisms, whether it's quarterly, weekly business reviews and roadmaps, and align that across not only the internal team, but across the organization. So, that you can drive success and make sure that your communication, your execution is as consistent and aligned to all objectives, at least the key priorities, that we deliver on a day-to-day basis.Stephanie:Yeah, yeah, I love that. I've definitely seen and heard of quite a few experiences that are full of friction when companies are getting acquired and on both sides. So, how do you work to garner trust from the employees who are getting acquired, where some people might not really want to go to a big corporation? They might want to stay at that startup vibe. On the other side as well, what do you do to actually get them to be on your side, be ready to move forward with the mission? Because I could see some people being not really on board with it, not really caring about the vision, being like, "Oh, that's just all words." How do you get in the weeds with them to really get them on the same page?Robin:Yeah, back to just leadership, I think it's really important that we stay in... This is my philosophy as well. It's servant leadership. It's also compassionate leadership. So, being empathetic, right? So, there's people that have come from all backgrounds and different experiences. Whether they were at the company before they got acquired, whether they joined afterwards, even for those that we haven't even seen in person post-COVID, it's empathy. It's about caring for people. People are people at the end of the day. They're not machines. They need to be cared for. They're not human doings. They're human beings.Robin:So, my philosophy and approach has always been around empathy and just trying to put myself in their shoes and understanding, "What are their goals? Are they aligned to our goals? How do I listen to them in ways that can really make them feel that they're heard?" That anything that may conflict or go against the mission or the goals or values, let's talk about it. If it's something that you feel differently and you're not aligned to this, maybe you don't belong here. Maybe this is not the right place for you.Robin:But in general, I would say the majority of the team and I guess the team overall, they are bought into the mission. I mean, we defined it together, which makes it powerful. I think that's where you nip that bud up front. You're able to just journey with each other through the ups and downs and challenges, but ultimately, the successes as well.Stephanie:Awesome. So, I was looking through Ring's website before this. I didn't even realize how many products you guys had, because like I was mentioning, I only have these two. I want to hear a little bit about, "What is the customer journey look like on the Ring website? How has it evolved, especially over the past maybe six months?"Robin:Sure, I would say the Ring website is quite unique, where Ring is not just the doorbell. Ring is a multitude of products that have continued to expand to meet and deliver that mission. So, if you look across our products, we have not only doorbells. We have security cameras. We have alarms. We have accessories too that attach to these various devices. We also got the Smart Lighting. We have third-party partnerships. I don't know if you recently heard about the announcement that we made, but we're coming out with even new categories, whether it's Always Home Cam, which is an autonomous drone that flies across the inside of your house.Stephanie:Wow.Robin:You can basically train it to go to certain parts of your house to check on whether your stove is on or your pet food has been eaten or any other areas where you may not have a camera setup. So, I think it's again innovation and evolving to a customer need or pain point that we're trying to deliver on.Stephanie:Okay, I need one of those.Robin:Yeah.Stephanie:Does it stay flying or does it go back to its little nest and then like get up-Robin:Yeah. So, it stays in the nest. And then based on whether if it's alarm, trigger or notification, it'll basically come out of the nest. There's obviously a sound so that you can hear it. We think about privacy always and security and keeping that in mind. It'll go to specific places of your house that you trained it to. So, you have to map that out-Stephanie:Got it.Robin:... and then ultimately, come back to its nest. So, I think it's going to be-Stephanie:Can it go outside?Robin:... amazing. Right now, we're not building it to go outside. I think it's one where it's not an actual design drone to go outside, but for now, we're keeping it in the house. We're calling it Always Home Cam.Robin:But yeah, so new categories, even car security. So, we're starting to expand there, because we're hearing a lot of times from our neighbors as well feedback around, "I wish you guys had car security that connected with my Ring app and my overall Ring ecosystem." So, that's really exciting as well. Whether it's your Tesla or card dash cam to even just the 99% of cars that are out there, just being able to have a peace of mind around bumps or doors opening are areas where you're not feeling as safe. So, that's another cool category we're entering into.Robin:Also, my favorite, which maybe is not everybody's favorite, but I love it, is like our mailbox sensor. So, imagine when you open your mailbox, you get a notification. That's also could be connected to your devices, whether your camera turns on in a specific area where your mailbox may be or your Alexa Echo Show 5 also is all integrated as well. So, that turns on. You can watch it and say, "Hey, Alexa, show me my front door. Show me my mailbox," whatever the case may be. It's one where you can again see and review and just make sure that you have a total sense of peace of mind.Robin:I would say also, to add to that, we also have our subscription plans as well, which you can view, record, share out, and also do professional monitoring. So, I think that's a really big benefit. We've heard countless stories. I also have my own use cases as well where neighbors are feeling so thankful that they had their alarm on at home. So, that they weren't going to show up when the burglar shows up or they're able to record specific event that leads to finding somebody or something or whatever the case may be. There's countless stories that you could find and you can hear about I'm sure when you talk to your friends and neighbors that do have some of our products that just really speak to the power of the brand and products and just the services that we provide.Robin:And then we also have our Neighbors app, which is great as well. That also lives within the ecosystem of being able to connect with your neighbors and understanding who they are and any notifications or alerts around the community and even also partnering with those in your community, especially in a time like this. So, I love the brand. I love the products, but I also love that it lives within this ecosystem that connects us to each other and gives us a peace of mind like never before.Stephanie:Yeah, so that was actually a perfect point where I wanted to touch on, the neighbors piece to it, because I think it's brilliant from a UGC perspective of your neighbors are generating this content that you don't even know them. I mean, I am addicted to watching what's happening to my neighbors. Like the other day, some dude was trying to break into their storage locker, someone's bike got stolen. I sit there. I will watch the video and see if I know the person. Obviously, I never do. But it's really good from a content generation perspective.Stephanie:I mean, I see you guys are using some of those videos on your website, which is very fun. And then also from, like you said, a community building perspective. So, I want to hear a bit more about, "How you guys are pursuing that UGC perspective? Is it mainly just for security, or do you see a community building aspect and actually turning into a social network is how it feels to me?"Robin:Yeah, I think it ladders back up to our mission, making the neighborhoods safer. It's one where it plays a role there. So, whether it's like public announcements around COVID to fires in your area or different ways to have safety preparations around different use cases. Yeah. So, I think it's a combination of trying to serve solutions for specific needs or things that may come up that we want to make sure that we are prepared for and also just connecting us with our neighbors.Robin:As people are home more than ever, whether it's working or school from home or shopping at home, it's one where our neighbors are critical for connection and also a peace of mind and watching out for each other. So, I would say that the Neighbor app definitely is a point of connection and also sharing relevant and pertinent information that can help to make neighborhoods safer.Stephanie:What's the craziest video you've ever seen? I guess that'd be real crazy.Robin:I think the fun ones for me are around animals. When a bear comes and just starts to get on top of a car and wants to get in there to eat some food. Where I live, there are a lot of coyotes. So, I get a lot of neighborhood posts and notifications that there's a coyote roaming around early in the morning. They're all in these different pockets and areas and just make sure I'm not jogging or walking that area during that early time in the morning.Stephanie:That's great. I've also seen little neighborhood tips breakout on my app anyways, where neighbors will argue about whether it was real or not. I don't know if you guys have seen that. It's pretty entertaining. Like I said, it feels like a social network sometimes.Robin:It does. I mean, it just shows you the reality of what people have to deal with and navigate every day. I think, if anything, it's like making neighborhoods safer. That's important to everybody. I have a family. I have kids. Especially as everybody's home more, it's like, "How do we help each other? How do we make sure that we can create a community that is in support of each other and ultimately safer neighborhoods?" So, I find that to be really powerful. It's one where I'll do everything in my power and I'm sure my neighbors will to help each other out during these times.Stephanie:So, maybe let's touch on the subscription model a little bit. So, a lot of people right now are interested, of course, in subscriptions. Everyone is thinking about trying it if it's right for their business. Tell me how you guys are exploring it and maybe any hiccups you've experienced and things that you've pivoted or changed, anything that other people could learn from?Robin:Today, we have two different subscription programs. Robin:I think as we continue to expand in various categories, we're constantly thinking about, "How do we offer a similar experience and that peace of mind, so that you can access and even store?" So, thinking about the car category, I'm sure they're thinking through what that could look like as well there. As we expand our categories and services, subscription will definitely be top of mind as part of the services that we'll look to offer.Stephanie:Yup, how do you position it in a way that a customer will sign up for a subscription before something bad happens? Because I know I've experienced this, before I had Ring, I had a bunch of cameras. I didn't feel the need to store things really until one day when I was like, "Oh, I actually wish I would have access to that." So how do you position maybe the language or the sell to actually get someone to sign up for that subscription before there's a catastrophe?Robin:Sure, I mean, the benefit is like when you buy device and you activate it, you'll get 30 days of free, call it, subscription. That's the Basic Plan. And then you get the choice after that to opt in or opt up to a Plus Plan. So, it's one where we try and make it as user friendly and in the control of the user, ultimately, to make that decision.Robin:I would say also that the benefit of the Ring subscription plan is that you're not locked into some contract. So, you get to basically opt in and opt out in any time of the month. Again, we're trying to create flexibility and user control, ultimately; versus locking them into an annual account where you pay hundreds of dollars, but you're frustrated because you're not being able to use it in a way that's easy and intuitive and also beneficial for your needs. Stephanie:Yeah. During that trial period, the one thing that I oftentimes see happening is that a user isn't interacting with the services until they're done. And then they're like, "Oh, I never got a chance to try it." Are there certain methods that you're trying to get the user to interact and learn and figure out the platform to see the benefits of it before these 30 days are done?Robin:Oh, for sure. I mean, that's really the efforts around different marketing levers that we're trying to deploy to make sure that they see the benefit of turning it on and the different features available. Whether it's a nudge here or email there or different types of messaging, that we're trying to make sure that they are not only purchasing the device, but they're utilizing it in its full capacity.Stephanie:Yup, got it. So, for your guys' website, specifically, tell me a little bit about how you guys think about selling on there? Are you selling mostly on desktop? How are you finding customers? How are you bringing them in? What does that process look like?Robin:Sure, sure. So, obviously, you have direct where they're showing up. I think Ring today is a very prominent brand, or at least, top of mind brand that has awareness, especially in a category that our Founder created, the video doorbell. Obviously, there's other folks that are in this space, but I would say Ring to me would be... That's the first thing I think about is Ring when I think about home security and starting at the doorbell and being across different parts inside and outside your house, for example. But I would say yeah, it starts with the direct.Robin:Also, there's a lot of obviously acquisition efforts to try and be on top of mind in terms of whether it's people searching for our products to different types of campaigns to drive traffic to our site, whether they're social related, UGC, like you said. We do a lot of social care types of activities to make sure that whether it's responding to different posts or things like that will point them to solutions that are being offered on our ecommerce site.Robin:And then as they come to the site, we want to make it as easy and seamless. I think this is the goal of every ecommerce company. As your portfolio grows, how do you make sure that you can train... Not train, so that's probably the wrong word. It's more around, "How do you help them find what they need?" That's the easy question to ask, but a hard question to answer. So, that's one where we're constantly thinking through user research and test.Robin:Yeah, I think what's different today is that a lot of companies are always trying to attach this or grow a market basket. It's all about increasing EOB. Those are all important. But to me, I think what's most important is that you're not just trying to upsell, but you're really trying to deliver on a solution. So, meaning, having a camera at your front door, for example, a video doorbell at your front door, that might be good for the first three months and then you may move to a bigger house. You'll need, for example, a floodlight cam like you have. So, that you feel a greater peace of mind that surrounds your house. So, you have this whole home solution, security solution that you could leverage and apply across different parts of your home as you continue to evolve and potentially move, or you want to just expand.Robin:So, it's one where we're thinking about, "How do we recommend the right products for you? How do we surface the right recommendations for you? How do we help you differentiate which doorbell to buy?" Because we do have quite a number of doorbells now. What's right for you basically, based on your use case? Or even the alarm, how big is your house? We have a quiz on our Alarm page, for example, that people engage with that they want to know like, "This is my square footage. This is how many windows I have. This is how many doors I have." How do we make sure that we get them to a place where we offer up a package solution that they can feel confident about and then purchase and ultimately experience the peace of mind that they were looking for?Stephanie:Cool. So, to talk a little bit more on Ring before we move into general ecommerce, I want to hear how you guys are staying ahead of the competition? Because there are other security companies out there, how do you really show that you're the best?Robin:Yeah, I mean, I can't really speak on the competition. I would say that our priority is to constantly push ourselves to empower users with affordable, effective ways to monitor and secure their home. So, back to the making neighborhoods safer, everything ladders up to that. I think about companies that offer a product or a specific service, and it's just that one thing. They're all about to selling that product.Robin:I think the mental model and the approach that we have is quite different at Ring, which I love, and I totally respect. It's one where we're constantly thinking about the mission. So, everything ladders up to that mission. So, whether it's a new product, whether it's a new service, whether it's a new feature on the site, or whether it's a new experience that we want to deliver that's thinking outside the box, that we're constantly trying to think outside the box, so that we can deliver upon that mission.Robin:That's the way that I would frame it up for you. That's different than just looking at the competition and saying, "What are they doing?" I'm sure we can learn a lot, but it's one where we're really focused on our customers and working backwards from them and ultimately inventing and delivering effective, affordable, easy-to-use products, all in pursuit of delivering on our mission.Stephanie:Cool. Yeah, I'm sure you guys get a lot of customer feedback. Do you implement that as you hear what customers are looking for? Does that have an influence on maybe products or the subscription model or the app or anything?Robin:Yes, we do get a lot of customer feedback. I think what's unique about Ring just even in my past year is our Founder's email is on every product. It's even on our websites. He is probably one of the most customer obsessed individuals that I know. I really respect that about him. It's one where he wants to hear feedback.Robin:We also get feedback internally that we can share and a way for us to facilitate that and hear it, because ultimately, our goal is we want to make the customers feel safer. Whether it's buying our products, calling into our customer service line, whether it's a recommendation on, "Hey, I didn't know that this product was featured with your subscription plan. You had this rich notification that comes with it," how do we surface that up in a way that's clear and transparent on our website, so that people don't have to ask a lot of questions that they can get everything they need in one place?Stephanie:Yup, cool. All right. So, you've been in the world of ecommerce for a while. So, I think you should have a good answer to this. What does the future of online commerce look like to you, maybe in the next five years or so? What does that world look like?Robin:Yeah, that's a great question. I think the reality is, is ecommerce and digital adoption has been accelerating rapidly. I hear all the time from colleagues in the industry, "The past six months, eight months, basically, we're able to accomplish what we would have in five years." A lot of that is just based on the times-Stephanie:Yup, a lot of guests have said that too.Robin:Yeah. I agree with that. It's one where, obviously, to lead in this environment, like in any environment, we need to embrace change. But I would say overall, the ecommerce future is bright. There's capabilities that continue to just wow me. It could be simple things to complex things, whether it's complex things like personalization.Robin:With all the millions of customers that are coming on your site, how do you make it as frictionless and just a great experience for them to get the checkout and personalizing that experience for them based on who they are as a cohort to even simple things. I see the simple things, especially in the area of digital retailing, meaning a lot of folks aren't going to stores as much, obviously. It's one where they're constantly thinking about how to pivot and embrace the change.Robin:I love recently what I saw with Target and how they were able to create this Halloween activation, where they are taking select stores. They're able to convert it into a Halloween environment and pass out some goodies and basically doing it all through the comfort of your car. So, imagine, Halloween is going to look very different this year. So, they're able to provide something that is going to be a memory and a delightful experience for users. But at the same time, they're directing traffic back to the site to say, "Hey, if you can't come to this event, maybe we're not featuring in your hometown. We got everything you need from a Halloween perspective."Robin:So, I think it's one where you can get very innovative and capabilities are there. The times today have forced us to really think bigger and to embrace the change and to pivot and be flexible and agile. No idea is a bad idea. I think any idea is relevant, just because we're trying to figure out how to address customer pain points and needs, especially as the times have evolved.Stephanie:Yup. Yeah, I completely agree. It's been fun seeing the levels of creativity that have come into some of these campaigns. Like you said, people now have to think on their feet and think of new ways to do things that they've never had to before. So, it seems like there's a lot of opportunity coming out not just in marketing, but just the way of doing business in general.Robin:I agree. The other thing I think there is boomers and how they're obviously being forced to shop online. I had my mother call me the other day, because she doesn't shop online as much. She was like, "Can I put my name and credit card number in there and shop?" I'm like, "Of course."Stephanie:No, mom. No.Robin:Yeah, exactly. So, it's one where they're not as digitally savvy, but they're being forced to be. It's one where how do you take the traditional models today, whether it's direct mail or whether it's phone calls or just the ways that are comfortable with the past and deliver that mixed with the digital experience?Robin:So, I'm thinking of things like virtual consultation. For example, the doctor, the hospitals, they call you now and they do a virtual consultation before coming in. It's one where how do you bridge the gap between folks that are coming on to the side for maybe some of them the first time, but getting them comfortable in ways that can help them transition into being fully digitally capable? So, those are things I think that are exciting as well in terms of getting back to a mix of the past but also the future.Stephanie:Yeah, that's exactly what I was going to say is that you've got this whole new group of people who never would have been your customers, probably at least not in five years. They're here. So, now, you have to adapt to that. But then I also think what's old is new. I mean, I've had quite a few people talk about direct mail. I think they'd have done some surveys of younger individuals who say they love direct mail, because they're not used to it. It feels very personal. It's fun to get something in the mail. Maybe older generations would be like, "What? That's normal. I'm used to getting catalogs, I'm used to that stuff." But maybe bringing that back might be a way of the future. It's a more personal things than maybe everything digital all day.Robin:I agree. I mean, I think some folks, especially parents, are probably limiting screen time for kids these days. Maybe there's some fatigue behind that, even for the younger generation, but it's one where I think companies are being forced to really think outside the box. Direct mail may be the way to go for certain categories.Robin:I just think about what Amazon has been doing. I was in the toy business before. Everything was digital, whether it was a holiday toy book. When Toys R Us and even the toy industry was disrupted with Toys R Us going bankrupt, that business model being gone from the overall environment, it's one where Amazon started doing physical holiday toy books along with the digital experience. They're trying to make it as they want to have the physical touch to the toy, because kids like writing down what they want for Christmas. They want to flip through the pages. At the same time, Amazon has a PDF toy book where you click on an item, and then it takes you directly to the PDP. You can purchase and add your products there.Robin:So, I just love seeing how things continue to evolve over the years based on the shifting of consumer demands. Also, it's staying true to what the patterns are in terms of behaviors around people using toy books and still wanting the physical touch and also providing it digitally. So, that you can transact and get it in your household in two days or one to two days.Stephanie:Yup. Yeah, completely agree. All right, let's jump over to the lightning round brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question. You have a minute or so to answer.Robin:Okay.Stephanie:Are you ready?Robin:I'm ready.Stephanie:All right, the first one, what one thing will have the biggest impact on ecommerce in the next year?Robin:I would say, the supply. What I mean by that is we're always going to have Christmas holiday, which is very big for respective categories. But it's one where the demand has shifted throughout the years based on people or companies being able to pivot and offer up Black Friday in October, for example, and starting early and trying to manage the flow of traffic to the stores and being cognizant of that. So, I would say supply. The second one just to add to that is contactless and touchless experiences, I think that'll disrupt the ecommerce industry.Stephanie:Yes, completely agree. What do you not understand today that you wish you did? It can be an ecommerce or at Ring, whatever comes to mind.Robin:There's a lot of things from that list. I think we're all a work in progress in terms of learning and growing. I have a ton to continue to learn and build on. So, I don't think there's one particular thing I can put my finger on, on that question.Stephanie:All right. What's next on your Netflix queue?Robin:My Netflix is controlled by my kids. So, the next one is The Octopus Teacher.Stephanie:Sounds intriguing.Robin:Yes.Stephanie:All right. If you were to have a podcast, what would it be about and who would your first guest be?Robin:I value leadership. I have mentors across different areas that I reach out to. So, to me, I love leadership, because companies are about people and not profit in my opinion. This is why I love Ring. It's one where leadership is really what helps you to emerge and helps you to navigate whether it's crazy times or great times. I think that's what holds true and keeps you grounded and successful.Stephanie:Cool, love that. The last one, what piece of tech are you playing around with right now that you're loving? It can be just personally, or it can be ecommerce tools that you're trying out or having success with.Robin:Yeah, I would say that one that I'm being forced to use nowadays is chat bots, just because of the inability to connect with the customer service agents at different companies. I mean, some of that is obviously trying to drive efficiency and automation, but it's one where it is pretty fascinating in terms of being able to try and address your question or your request, for example, into chat bots. And then having this AI, back machine powered on the back end that try and answer and address solutions.Robin:Sometimes it works. Sometimes it doesn't. Some people prefer just the person on the other side of the phone. But I think the chat bots and that area in terms of automation is something that I've been looking at. That's been pretty fascinating, but also at the same time, thinking through, "What would somebody really need that they want to just call the customer service line?" That's even great as well.Stephanie:Yeah, that's definitely an interesting area. I think I was just reading a research report that was talking about how most consumers would prefer a chatbot, if nothing. If it's no chatbot or having one, they want one, but then also make sure that you get it right where I feel like there's definitely still room to grow to make sure you can at least answer a few questions, especially if they keep coming up. And then if not, okay, go to a human or call or something. So, that is an interesting area. All right, Robin. Well, thanks for joining the show today. Where can people find out more about you and Ring?Robin:Yeah, so you can look me up on LinkedIn. You can go to our website, ring.com.Stephanie:All right. Awesome. Thanks so much, and we'll see you next time.Robin:Thank you.
Keepsakes, momentos, treasures, heirlooms — whatever you call them, everyone has certain things that they hold dear. For many people, hand-written notes fall into that category. In a world filled with 240-character tweets, rapid-fire text messages, and a stuffed email inbox, getting a hand-written note means more than ever. Even if it comes from a brand. Personalization is one of the buzziest words in ecommerce, and every business is trying to find a way to give its customers the best, most personal experience possible. David Wachs is helping them with that.David is the CEO of Handwrytten, which uses robots to send personal, hand-written notes, which have a 300% higher open rate than other types of communication. On this episode of Up Next in Commerce, David explains why personalization is the way of the future. Plus, he dives into the thinking behind subscription-based services and what it takes for your subscription to stand out to investors. David also shares the advice that he received from Conan O’Brien that has stayed with him his entire life. Main Takeaways:This is Getting Personal: Over the last few years, consumers have started seeking more personalized experiences. There are many ways to create those experiences in-store and online, but ecomm businesses have a personalization advantage due to the data they have access to. Brands that can tap into that data and then follow through are the ones that stand out. Subscribe Here: Subscription services are popping up everywhere. When done correctly, subscription services provide a recurring revenue model, which is something most investors look for. However, creating the right model takes time, effort, and experimentation, and it’s important to be willing to put in that work to find the model that is best for you and your customers. Here’s Some Advice: When one piece of advice sticks with you 20 years later, that’s something worth paying attention to. Tune in to hear what words of wisdom from Conan O’Brien have inspired David every step of his journey.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome back to Up Next In Commerce. This is your host, Stephanie Postles, co-founder of mission.org. Today on the show, we have David Wachs, the CEO of Handwrytten, spelled with a Y. David, welcome.David:Thank you so much for having me.Stephanie:Yeah, I'm really excited to have you on the show. I just went down a great wormhole of watching your robots write letters. I think that's a great starting point to hear how you came to be at Handwrytten. What brought you to found it?David:Yeah, so this is actually my second venture. My first one was in the text messaging space. So, I started that one before the iPhone came out. We rode the wave of mobile technology with the iPhone and all that. By the end, we were sending millions of messages a day on behalf of major brands, like Toys R Us, a lot of brands that are now bankrupt, but no fault of ours, but Toys R Us, Sam's Club, OfficeMax, Abercrombie & Fitch, etc.David:What we did was we helped them connect with their customers through text messages. And then we also did iPhone apps and Android apps and all that, but our core was really text messages. What we found was, it really, really worked. I mean, these were not spam messages. These were people opted in, so they actually wanted to receive Abercrombie & Fitch offers, etc, straight to their cell phone. When we sent out those offers, they'd have literally lines out the door.David:We worked with Tropical Smoothie Cafe, which is a big smoothie shop chain. Every time they sent out an offer, I'd walk into a Tropical Smoothie. I'd say, "How's this mobile thing working?" They didn't know who I was, and they'd say, "Oh, my gosh. Every time we do it, we have to staff up, because we sell so many smoothies." So, I knew we had something good. But at the same time, I helped create a monster, because everybody nowadays is getting inundated with probably 50 text messages a day from family and commercial texts and right now, political texts, several hundred emails a day.David:I think the average office workers receives about 150 emails a day and spends 28% of their time sorting through all that email. And then you add stuff like Twitter and Facebook and Slack and all the Instagram, all these other electronic forms of communication. Maybe I'm just old, but for me, it all just becomes noise.Stephanie:It's very noisy right now, especially with the political texts that I'm getting.David:Oh, my God.Stephanie:I'm getting like five a day. Stop it. I don't want that anywhere.David:I know, I know. It all just becomes noise. The average 35 to 44-year-old receives nearly 1,600 texts a month. The average 18 to 24-year-old receives 4,000 a month. So, what I know and what you know is no matter how personalized that email or that text looks... Hey, David, thank you so much for your purchase of this coffee grinder or whatever. ... that text was automated or that email was automated. We immediately discount the value of it, right?David:Half of them or way more than half, I never even read, because you just know it's automated junk. And then junk mail, the slick stuff that comes in your mailbox goes directly to your trash can. But what I realized right before leaving, my last company, is handwritten notes not only do they get opened, but they get treasured. I have a bookshelf behind me at my last job that had the handwritten notes I received. My salespeople had all the handwritten notes they received. What I wanted to do was when I sold my last company is I wanted to send handwritten thank you notes to my employees and send handwritten thank you notes to my best clients, thanking them for helping me build up this company and sell it and all the rest.David:I started doing that. I sat down with the best intentions. Very quickly, my hand got sore or I ran out of stamps or I screwed up a card and I had to get another one. I just realized there had to be a better way. So, that's a long explanation on how I ended up with Handwrytten, which is what we have today. What Handwrytten is a combination of software on the front end and then robots on the back end. So, you visit handwrytten.com or use our iPhone app, Android app, Zapier, Salesforce.com Integration, which is a big integration for us, and I know a sponsor of the show, HubSpot integration, all these ways to get your handwritten notes into the system.David:And then we use robots, real robots that we have a patent pending on and I can get into how we develop those, but they're custom robots we built, robots holding real ballpoint pens that actually then write out the notes and mail them on your behalf. The end result is completely indistinguishable from a human.David:We're doing this for large brands and small brands and individuals. Consumers can go on and send their mother a birthday card, for example, all the way up to major brands.Stephanie:Though your mom might know. She'd be like, "That's not your handwriting, Stephanie." Do you guys have any tech that maybe could mimic handwriting, where I could go in there and write up a couple words, and then your robots come in and write it similar to my handwriting?David:So, not exactly. What we do is if you really want your handwriting recreated, we have worksheets for you. It's like you're back in middle school. You have to fill in all the letters and all the numbers multiple times, because we need multiple variations, and we need ligature combinations. So, like two Os together, two Ls together. Do you cross your two Ts with one crossbar or two? We take all that into account. We create a very robust handwriting just for you, but it's an expensive onetime thing. So, pay for it once, it's yours. It's in the system. You can use it as much as you want, no additional charge. So, yeah, but most of our clients or businesses not you sending to your mother. So, for them, it doesn't really matter as much.David:Honestly, I dissuade people from creating their handwriting style, because it is so expensive.Stephanie:Very cool. So, tell me a little bit about maybe some case studies or the ROI that some of your clients are seeing when they send out a note that looks personalized versus just a typical letter, something that's written up by a computer and is very obvious?David:Yeah, absolutely. Well, I have a bunch of stats here, but I don't want to constantly give you footnotes on the stats. So, if I say any stats that are of interest to any of your listeners, just visit Handwrytten.com. That's Handwrytten with a Y. You can pull up all the resources and double check, be a fact checker, etc. But handwritten on envelopes, just the envelopes, have a 300% or a three-time greater open rate than printed envelopes. You just Google that stat and that pops up everywhere. And then also response rates are anywhere from 20 to 50% higher.David:We work with a bespoke suit company based in Canada. They send out coupons every year around the holidays. Those coupons come with a handwritten note from their CEO and his handwriting style with his signature. Those coupons have an 18% redemption rate when usually the company's coupon redemption rate is closer to the 3 to 5% rate. So, it's been very effective for them.David:We have other clients... Let me see here. We have some retention improvements. So, we have a client that does meal box or actually snack boxes for offices. Basically, they'll send you a huge box of snacks every two weeks with like beef jerky or crackers and cookies and all that. What they do is if they accidentally send your office the wrong snack box, they'll follow up with a handwritten note and the right snacks. Now, obviously, the additional snacks help increase retention, but the handwritten note doesn't hurt.David:What they find is if they screw up a client and they send them this snack box, that customer ends up having a greater lifetime value than if they never screwed up in the first place.Stephanie:That's smart. I mean, not only are you getting more times to get in front of that customer, but then you can show them how great the customer experience is even when things go wrong. Yeah, it seems like you'd be a lot more memorable by actually messing up. That's pretty smart.David:Yeah, and then we have some side effects of these, because most people just get one or two handwritten notes a month now, not like the good old days when they receive a bunch. People literally Instagram and tweet these things. So, we work with a company called VNYL.David:What they are is they are a vinyl record subscription service. So, if you're really into old school vinyl, they will look at your Spotify account and your other... I don't know about Pandora, but your other music services. They'll see what you listen to. And then they'll send you vinyl records that they recommend based on your habits. With those vinyl records, they'll include a handwritten note written by us. So, every day we'll write up a whole bunch of their handwritten notes, send them back to VNYL. They'll get inserted with these orders. Not only people love those notes, they then post them on Instagram and on Twitter. That creates a viral aspect that then helps drive more business back to VNYL.David:We've seen the same thing with a morning YouTube show. It's one of the largest morning YouTube shows on the planet. They're a client of ours. They were launching a fan club, where you'd pay 5 or 25 bucks a month or whatever to be a part of their fan club. The first thing they'd send you was this handwritten note from the two hosts of the morning show.David:What's funny is they didn't change up the language on that note at all. Everybody got the same note with the exception of dear Stephanie or whatever, but the rest of the note was identical. All these people are posting these photos of this note to Twitter over and over again. I mean, it's the same note just different names over and over. People were so upset if their note did not arrive within a few days. You know what I mean? They were so looking forward to receiving a note from these two YouTube guys.Stephanie:Are there any backlash on that? Because I could see some people feeling like maybe they were tricked, or especially earlier, when you're talking about retention. If someone is sending out a set of vinyl records every month and see similar handwriting or the exact same one every single time, it seems like there could be a risk of someone saying, "Hey, this isn't actually authentic. You tricked me." Have you seen that backlash, or how do you guys approach that when it comes to a subscription model with someone who's maybe sending out a same snack box every month with a note in it that people will eventually be like, "Oh, yeah, this is obviously not a person writing it. It's the same every single time"?David:Yeah, that's a great question. So, with VNYL, they've got a number of personalities that are the box curators. So, there's like 10 some odd people that are responsible for making these recommendations. Each one of those people was assigned one of our handwriting styles. So, if you get a note from Cody, it'll be in Tenacious Nick. Our handwriting style is called Tenacious Nick this month. And then next month, you get a message from Suzy, it might be in Chill Charity. The following month if you get one from Cody again, it'll be back in Tenacious Nick. So, you'll associate Tenacious Nick with Cody. And then that's how that works.David:We have not seen a backlash. With the morning YouTube show, I was shocked that they didn't see it because they weren't... We vary stuff on the notes. So, in fact, we worked with a home fitness gym thing. They wanted a note from their founder included with every one of their products. They were annoyed with us that there was variation in the writing. We said, "Well, this is-Stephanie:A good thing.David:"... this isn't a print product. Every line's not supposed to identically look like the other card." They were just not a great client for us, because of that. They wanted everything to be exactly... That's not how people write.Stephanie:Yeah, that's actually the exact question I was going to ask. Do you incorporate errors or smudges? How do you think about building the technology behind the scenes to make it more real?David:Yeah, for sure. So, we actually built our own font engine for one, leveraging some best of class technologies underneath it all. But we do stuff like the left margin of the card is not straight. So, it's not like every letter of every line starts on the same exposition as the line above it. There's what we call jitter. It moves in or moves out very subtly, but a couple of points. A point is a 72nd of an inch for those that don't know, but yeah. So, we move those letters in and out, so that there's some variation there. We also do the same thing with interline or intraline, I always screw that up, but the spacing between lines.David:So, one line might be slightly closer to the line above it and slightly farther from the line below it than the next one and vice versa. So, there is some line spacing stuff going on there. Then, like I said, the letters themselves alter quite a bit. We've got at least four or five copies of every letter plus ligature combos. So, you might have three copies of an L, but then we also have three copies of two L's together. So, there's a lot of variation in going into our handwriting. We get this a lot. We don't curve the text. So, there is a little bit of maybe over precision on the text is fairly straight.David:Now, the page might be slightly rotated, so that the text runs up the page ever so slightly or down the page ever so slightly, but it's not like the text is going to be on a roller coaster and go up and then down and back again. It's relatively consistent. We are working on that, but it has not been a problem. It's still very much passes most people's internal Turing tests of what looks human versus what looks robotic. So, yeah, we don't want to overdo it. The line jittering and the left margin jittering is all very, very subtle. So, that it's not like creating some uncanny valley that looks totally bogus. You know what I mean? So, those are some of the things we do there. We work with a mattress company. In every mattress box, there's, "Thank you so much for buying our mattress."David:And then there was what I call a doodle. So, they made I think like eight of these little pieces of art. So, the words, "Thank you for your mattress," were not in one of our handwriting styles. It's a direct replica of somebody writing that. And then below that, the doodle is a direct replica of somebody drawing a doodle. So, it could be moon in the stars or there's one of somebody sleeping in a bed with a little thought cloud showing what they're dreaming of, a little cat.David:What was cool about that is with eight variations, if you buy two mattresses from them, one might have one little note from one guy in it and then the next mattress might have a note from somebody else in it. So, it looks really, really real. And then you post those to Twitter. It really shows up well there. So, that's what I recommend doing. If you're doing the same note over and over in volume, let's just mix it up a little bit. It doesn't cost you really anything more after you get going. You have some great variation.Stephanie:I saw you guys moved to having a subscription model, which a lot of guests who come on the show, they talk about thinking about doing that or some of them have recently. How did you guys know it was the right time to move into a subscription model?David:That's a great question. You're the first person to ask me that.Stephanie:Good.David:Yeah, so there's a number of reasons we did that. I will be bluntly honest, because I think it's of most value to everybody. Number one, I've self-funded Handwrytten to date for the last six years. I intend to continue doing that. However, we were just written up in the Inc 500. We had a good placement in the Inc 500. That created a lot of interest by investors. One thing investors are looking for is a recurring revenue model. While most of our clients recur every month, we have like solar panel installers that send thousands of messages a month. It's not structured as a recurring revenue model. It's just whatever you do, you pay for the next month, you don't do anything, you don't pay anything for it. So, we wanted to come up with a structure for a subscription model that would work.David:This is more the PR-friendly answer, but they're both totally true. On the flip side, we have customers that wanted to send a lot of notes a month but didn't want to do them all at once and didn't want to do a huge pre-pay buy. So, before this, there were two ways to get discounts. One was to do a huge pre-pay, where you say, "Okay, I'm going to send 10,000 notes for the next couple months, and I'll pay for that at a discount;" or go on our website and bulk upload a spreadsheet of 10,000 notes. For a lot of people, those two models don't work. What if I'm sending 10 cards a month, but they're spread out over the course of a month? I mean, I'm still sending 10 cards, can't they get a little bit of a discount on that?David:So, we tried to come up with a model that serves them. It's tough, because unlike an email provider or a CRM provider or anybody else, we have hard costs. Forget about the cardstock and the labor that goes into every card and all that, we have a 55¢ stamp on every card. That's expensive. You know what I mean? So, it took us years to think of a way that would make this work. What we decided was you prepay for credit. That credit, it goes on your account. So, you pre-pay 35 bucks, you get 35 bucks of credit on your account. But that credit also gets you a 15% discount on all orders for the month, so not just on the orders you spend the $35 on. After you exhaust that 35 bucks, you still get that discount moving forward for the rest of the month.David:So, that was the model that we came up with, because we wanted to provide value, we don't want to rip anybody off, but we needed a recurring revenue option. It is strictly an option. You can use our service for the rest of your life without ever using one of these subscription models.Stephanie:I think the one thing that came to mind was I've been listening to a lot of different interviews of SaaS founders, talking about how the subscription model, the future is not as much about getting into a long-term contract. It's more actually pulling back to where you only pay for what you use. It's not actually locking you into a contract anymore, because a lot of people are nervous about that or maybe prepaying. So, were there any surprises that maybe you guys have seen within the last week and a half as you implement this or pushback from customers or anything where you're like, "Oh, we weren't expecting that"? The consumer maybe thought this one thing, but actually, our plan was different. We adjusted it. Anything that you had to change after launching?David:Yeah, there's a few things. Nothing that was a got you and nothing we're really changing. It was more interesting. Okay, so we had somebody cancel their plan today. They signed up and then immediately canceled. So, if you sign up and you get the 15% off, that's 15% off the cards. That's not 15% off gift cards, which should go without saying, but maybe we have to add some language to the FAQ and all that, because I mean, that would be an arbitrage opportunity for somebody. You go on our website. You buy a Visa card for 15% off. You then take that Visa card and buy more Visa cards for... You know what I mean? So, that's just crazy town.Stephanie:It's good you didn't figure that out the hard way.David:No, no, this pre-pay for a while has always locked you out. I mean, when you pre-pay for something, you're pre-paying for the service, not for gift cards. It clearly does not work. I mean, it could be a huge issue. So, that was one. We had a woman that was very upset that she didn't get a discount on her gift cards, and we refunded her. We have a money back guarantee. So, if anybody uses our service and they don't like the service, they don't like the handwriting, they don't like the card quality. They don't like the subscription, whatever, we'll just give you your money back.David:I think more companies need to broadcast their money back guarantee, because even if they don't think they have one, they have one. On our website, we have our money back guarantee. Before that, if anybody called and complained, we still gave them their money back. We just didn't advertise that we had a money back guarantee. So, we gave the service without getting the benefit, if you know what I mean. Side point. So, point number one was people were shocked that you don't get a discount on gift cards creating an arbitrage.Stephanie:One person, but yes.David:Yeah. Point number two, I'm surprised that... So, we have a 10% plan, a 15% off Plan and a 20% off Plan. We might go 25%. But I'm actually surprised so many people subscribed for 10% off. I didn't realize 10% off would move the needle where people would be willing to subscribe. But if you're in that area where you send that many cards, why not subscribe? So, that's great. I'm glad people are using it. In fact, it's our most popular plan right now.David:So, that was two, and then three, which I expected. But my expectation was realized was people we have a cancel at any time type offer. So, we have a lot of people signing up for the 10% off plan, sending five cards, and then canceling the plan. That's fine. If they want to do that, I'm not going to stop people from doing it. It's more important to us to be transparent and create a plan that has no lock in and deal with the people that are just trying to take advantage of it. If they want to do that, fine.Stephanie:Yeah, I mean, it also seems like that you're still getting that sale and you'll probably be remembered in the future. They're like, "Oh, that was a good experience. Okay, I'm going to go back again.” So, maybe it's not as harmful as... Even though initially, you might be like, "Oh, that's annoying," but maybe the future customer that you wouldn't have otherwise had.David:Oh, yeah. No, I mean, it's totally fine. I've still sold them five cards or whatever it is. So, it's no big deal. It's funny how people will go out of their way to save 10%, 10% for me doesn't really move the needle but whatever.Stephanie:I know. Yeah, that's very interesting that, 10% moves people to act like that. I think the biggest thing that you are also saying is like the clarity in the subscription model, which I think is really important and that a lot of companies don't get right from the start, because they can make really confusing ones.Stephanie:So right now, it also seems like there could be... Well, twofold, either a big opportunity in direct mail or it's noisier than ever, because brands know that people are home and they're starting to do direct mail where maybe they weren't doing that a year ago. So, how are you thinking about direct mail right now and making sure that your notes are getting opened? Is there still an opportunity, or is that dried up with where we're at right now?David:So, I will say we are the largest handwriting provider in the world. Based on our volume, I will tell you there is room for improvement. We have very large brands using us, but it's still just a drop in the bucket of everybody that could use us. I think a lot of brands just don't even know it's an option.David:There's the BCG matrix, which is like the hardest thing to sell is a new product to a new customer. If you're an office supplier and you start selling your existing customer a different type of pen, well, they're an existing customer and they've already bought a pen from you. So, that's an easy sell. If you're selling a new customer a pen, people know about pens do an easy sell. But if you're selling Joe on the street that you've never met a handwriting service, it's very hard. So, there is a bunch of that. We're doing our best to raise awareness. That's been targeting quite frankly, a lot of Facebook advertising. We used to just go after Google and SEO, SEO, that type of stuff. But now, we're trying to drive awareness through Facebook and LinkedIn and all the rest.David:But yeah, I think there's a huge opportunity for brands to do this, because nobody is doing it or very few are doing it in a consistent, structured manner where some of our clients come to us and do a one-off campaign or one-off promotion, and then they'll say, "Oh, that was the greatest promotion we've ever done. We'll reconsider it again next year." You're thinking, "Why is it a promotion in the first place?" That should be an ongoing part of your CRM outreach strategy." Right now, we're developing a whole program just for automotive dealers to do just that, where you buy a car, you immediately receive a handwritten thank you. A couple weeks later, you receive a service offer, birthday card, happy holidays card, etc. It just repeats without the dealer even having to think about it. I think that model of moving it away from being a promotion to being a part of your CRM strategy is really what needs to happen.David:But a lot of other online brands actually have the advantage over traditional retail, because they have the home addresses of the clients where the retailers may or may not depending on if they're in the loyalty program. So, online brands have this huge benefit of creating a one-to-one personalization opportunity through handwritten notes that brick and mortars might not. So, there's that. And then also right now, it's at the disservice of large B2B brands, because they might have your work address, but then they don't have your home address. So, they're left out of the shuffle too. But even before this COVID crisis, we were seeing online brands take much better advantage of this than in-store.David:I can give you a perfect example here. We work with a very high-end perfumery that makes a very expensive cologne and very expensive perfume. Everybody that's buys this cologne and perfume from their website, they received a very beautiful handwritten note, thanking them for their purchase, etc. But if you walk into a department store, I walked in there with my wife and kids. We're walking through the mall, and we walked into this department store prior to COVID. I found the product and I was showing it to my wife. A store rep came over and said, "This is the product." I said, "Oh, yes, thank you. I'm just showing to my wife because we send out your handwritten notes." She said, "No, you don't, I have to send my own handwritten notes." I explained what I meant.David:She said, "As a store rep, we're supposed to send handwritten notes, but we're too busy talking to customers like you, finishing up a sale, cleaning up the merchandising of the department, doing whatever else is required. We never get around to it. So, even though we have the best intentions in place, because it's not automated for us, we don't get to it." We've been pushing this perfumery to offer the same service to their in-store experience, which would create a much better personal one-to-one experience than the online only.David:Where we've done a really good job of this or really the client that we have... It's all about the client. It's a high-end luxury leather goods company. They make handbags, purses, shoes, that type of thing. Every time you make any purchase whatsoever in one of their retail outlets, a handwritten note goes out from our service. But it's signed by the store clerk that you worked with or it has their name and their phone number at the bottom of the note. So, we automated what this perfumery didn't, basically. We tied it to the end. But short answer your question is I still think there's a huge opportunity here. Quite frankly, people are very lonely right now. Any handwritten mail I think will get savored and opened and really showing that-Stephanie:They need a good handwritten note.David:They really do.Stephanie:Now's the timeDavid:Yeah, people have the time for it. I think at an abstract level, so two things. One, maybe they might not believe it's actually handwritten if they start getting thousands of these a day or something, which will never happen. But they might say, "Oh, gee, this is not actually handwritten." But that doesn't stop people when they get their Christmas card from the president, depending on what election year it is. But if they get their Christmas card from the president, they probably realize the president didn't sit down and sign a Christmas card to them. But it almost doesn't matter. It's the thought that counts and there is that they went above and beyond just laser printing a note. They figured out a way to send me something that seems really personal.Stephanie:So, I wanted to circle back to what we were talking about earlier about investors and how you were self-funded for the last six years. I want to hear a little bit about why you're thinking about bringing on investors now and what that thought process is like.David:So, this really has more to do with David Wachs than Handwrytten. So, this is my second venture. My first company, that text messaging company, also was self-funded. I built that up and I was able to sell that off and do pretty well. That was a true startup. There were a lot of nights where it was just me in an empty room with a two-liter diet Mountain Dew sitting by my side as I program.Stephanie:Nice, healthy.David:Classic, stereotypical startup image, I lived that. But that company actually took off a lot faster than Handwrytten. This time, I decided, "Okay, well, I'm just going to invest my own money, I'm going to build it up." I never really considered venture until this year when we got on the Inc 500. The problem is or the problem I see is we're in a bit of a doughnut hole. Had we gone for venture early on, we would have been great, because then we would have had an idea and no track record. We would have built up this company.David:We would have taken up an S ton of cash, garbage truck cash. We would have invested all of this advertising and built it up really fast. But instead of doing that, I grew profitably and organically, I reinvested profits back into the company, so our growth trajectory is much slower. Because of that, now venture capitalists don't even really want to talk to us. Oh, you've only grown at this rate, not 50 times. I'm like, "Well, yeah, because I've grown smartly and profitably."Stephanie:That seems to be a focus, the tides are turning a bit. I mean, there was, for a long time, just grow as quick as you can, we'll give you a bunch of money. You don't even have to figure out the business model. Do you even have a business? If you want to pivot halfway through spending all the money, it's fine, but I am starting to see a shift now, where, yeah, they're looking for companies actually grow sustainably, at least some VC firms around here. So, I don't know if you experienced that yet.David:Honestly, I've been so busy. So, we entertained a few VC phone calls. They were very, very nice people and very, very big firms. They basically said, "Oh, well, you haven't grown enough this year." I said, "Well, COVID has been going on. So, there's that." Because not a lot of our clients were retailers, so we lost that business, etc. So, to answer your question, part of it was I've actually worked in VC. I've worked for two different VC firms, but I've never taken VC.David:I thought it would be good for me personally to go through that experience of receiving VC, having somebody else to report to from a funding perspective. And then potentially down the road, really working for a VC firm as a partner or something like that. I thought that would be my next transition, because this is company number two. I don't see myself going through this process again. So, that was the thought process of, "Well, if I take VC now, we could really blow this up, because I've got a well-oiled machine here that just needs money to scale, that needs to scale advertising."David:The technology is pretty much done, although we're doing some really innovative stuff in machine vision, machine learning, which I can talk about. The idea was, "I haven't done it before. Let me give this a go, if anybody's interested." I had a handful of conversations, they all went the same way. I'm short on time these days. So, I was just like, "Well, let me get back to the grindstone and maybe worry about that later."Stephanie:Got it. Cool. Yeah, thanks for answering that. I was wondering where you left off with that. All right. So, we only have 10 minutes left. So, I was going to shift over to the lightning round brought to you by our friends at Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, David?David:I will do my best.Stephanie:All right. That's all I ask for. What one thing will have the biggest impact on ecommerce in the next year?David:Personalization. Whether it's a handwritten note or an experience that's personalized when you visit a website or anything else, I think standing out through personalization, there's been study after study by companies like Segment that say that's a huge opportunity.Stephanie:Do you name your robots?David:No, we name our handwriting. The robots are numbered. So, it's 1 through whatever, 95 right now. We used to have an animated robot, and he still is on our website. If you buy a card, you'll see this little animated robot at the end. His name is Pinbot 2000, because when I was growing up, things that ended in 2000 sounded very futuristic even though [crosstalk 00:44:47].Stephanie:Yeah.David:His name is Pinbot 2000.Stephanie:I like it. What's your favorite handwriting?David:I like Tenacious Nick. If you visit our website, it's a very sweeping block print.Stephanie:[inaudible] check it out. What's up next on your reading list?David:It's funny. I've got a bunch of books here. This one is by the head of sales for HubSpot, Mark Roberge? I hope I'm pronouncing that right. It's called the Sales Acceleration Formula. It was recommended to me. So, I figured I'd read it tomorrow when I have to fly to Chicago.Stephanie:Very cool. What's up next on your Netflix queue?David:My brother actually is a bigwig at Netflix, but what I'm watching right now is on Amazon. It's The Boys. I'm trying to finish season two.Stephanie:Oh, is it good?David:Yeah. It's a dark superhero tale. The one I liked on Netflix... It was 40 minutes and was great. I think it's called Cubers. It's great. If you don't care about Rubik's Cubes at all, which I really don't, it was still wonderful. It's the story of two Rubik's Cube masters. One of them is autistic, and the other Rubik's Cube master, who is just a really nice guy in Australia. The friendship that evolves through these two Rubik's Cube masters. That's really good.Stephanie:That's interesting. If you were to have a podcast, what would the podcast be about and who would your first guest be?David:That is a great-Stephanie:It can't be about handwritten notes.David:No, no, I think it would be about one-to-one marketing though, which is very much in the same vein and probably a sucker answer that I'm giving you. But it would be how do you market to people on a personal level that doesn't come across as junk, because everything's looking like junk?Stephanie:Yup, I like that.David:That would be what it is, and I apologize in advance for that answer.Stephanie:No, I like that one. I mean, I think it's much needed now. Who would you bring on as a guest?David:Joe Polish, who's a marketing expert. He's quite good. Dean Jackson who he works with would be a good guest for that. There's probably somebody from Segment as they have a lot of data that backs it up. So, I'd want to talk with them.Stephanie:Cool. All right. And then the last one, since you've started a company before and you've sold it and started another one, what piece of advice would you give to a new entrepreneur who's starting up a new commerce company?David:Commerce or not, the one piece of advice that I give to everybody was told to me in person over dinner. So, this is a little bit of a humble brag by Conan O'Brien. So, when I was in college, I used to be in this group that would bring speakers to campus and we brought Conan O'Brien. So, the guys that organized got to sit down and do dinner with him. This is a long time ago. So, he was relatively starting out on having his own talk show back then.David:But the advice he gave us was, "Always get in over your head." That has stuck with me for 20 some odd years now, always get in over your head. I mean, people give you advice every day, but how much of it sticks for 20 years. The way I interpret that is if you don't get in over your head, you're never going to grow. You're just never going to pull yourself out of your comfort zone and really do something bigger than you thought you could do. So, I think about it all the time.Stephanie:I like it. Okay, Conan, coming in with some good wise words, pretty good. All right, David. Well, thanks so much for coming on the show. Where can people find out more about you and Handwrytten with a Y?David:Handwrytten with Y, so you can visit Handwrytten with a Y, H-A-N-D-W-R-Y-T-T-E-N.com. We have @handwrytten on Twitter, Handwrytten on Facebook. Personally, I'm @DavidB, as in boy, Wachs, W-A-C-H-S on Twitter. You can find me there, although I don't tweet very much. If anybody wants to try the service, there's two things I'd say. If you go to the business page, you can actually request a samples kit for free. That samples kit will have all sorts of different handwriting styles for you, including Tenacious Nick, my favorite, but they're all good.David:The other thing is if you sign up and you sign up with an email and password, you can enter a discount code. Enter discount code 'podcast', and you'll get $5 in credit that you can then use to send yourself a card or somebody else's card or send your first card, whatever. So, that's available for you too.Stephanie:Awesome. All right. Well, thanks so much, David. It's been fun. We will have to have you back in the future once you can see more about your subscription service and all that. So, thanks for coming on.David:Awesome. Thanks, Stephanie.
Haven’t had a chance to listen to our first 50 episodes yet? Never fear, you’ve got time and they’re not going anywhere. In the meantime, we’ve created an epic recap episode to keep you up to date with this ever-changing world. Throughout the first 50 episodes of Up Next in Commerce, we’ve chatted with some of the fastest-growing startups - like Thrive Market and Haus - to the more well-known companies like Puma, Rosetta Stone, Bombas, and HP. Our guests have shared everything from their toughest lessons, to their secrets to success, to the must-know advice for every ecomm leader. And while every company is different and every story unique, over the last 50 episodes, several common themes have emerged. On today’s special episode of Up Next in Commerce, host Stephanie Postles is joined by Albert Chou, the VP of Operations at Mission.org, to dive into some of these top trends.The two discuss the supply chain shakeups companies have had to face this year, and they do a deep dive into the world of influencers and how brands can work with them in a way that leads to lasting ROI. Plus, they look into their crystal balls to try to predict how DTC companies will work with and compete against Amazon, debate on how voice search will impact shopping, and discuss what the future of shoppable worlds might look like. Main Takeaways:Supply Chain Shakeups: Everyone is competing against the hard-to-match expectations set by Amazon — but it’s not all about fast shipping. Processing returns effectively and managing every step of the supply chain so you are left with margins that actually allow you to grow are the main areas that all retailers are, and will continue to be, focused on. I’ll Take One Order of Influencers: Because influencer marketing has become so in demand, there are more strategies than ever to try to get the most ROI out of influencers. What is likely to happen in the future is the creation of a marketplace where brands can buy verified influencers, who are themselves driving the demand for more upfront payment. Make It Worth It: Building an omnichannel strategy is about more than just offering a brick and mortar location for people to buy your products. Today’s shoppers are looking for experiences that are memorable and entertaining. But it’s important that while brands create those memorable experiences, they don’t forget that little goal of converting potential customers into real buyers.Turning Virtual Into Reality: Shoppable video and the increased offerings of digital products is going to set the stage for future commerce. The next generation is already using real cash to buy virtual products for their avatars in various games. In years to come, not only will you have the option for your avatar to have that virtual product, the real-life version will be offered in tandem for the user behind the screen.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone, and welcome back to Up Next in Commerce. This is your host, Stephanie Postles, co-founder of mission.org. Today, it's a new and interesting episode where I have our VP of ops, Albert Chou on the show, where we're going to go through the previous 50 episodes and talk about highlights, and then talk about future trends that maybe no one has talked about on the show so far. Albert, welcome.Albert:Yeah, thanks for having me. But to be clear, we're not going to go by the 50 episodes one by one because-Stephanie:We're doing one by one.Albert:No, that's terrible. We can't do it. Cannot do it.Stephanie:So, Albert, tell our listeners why did I invite you on the show?Albert:Well, I do have my own ecommerce business, www.[inaudible 00:00:41].com, I've also helped out on a couple others. The biggest one got to 10 million a year. And I worked for an ecommerce startup. One of the co-founders was a guest on the show AddShoppers. So, been working in the game of ecommerce probably since 2016 and still operating today, so learned from painful mistakes, as well as seeing other people have great success.Stephanie:Yeah, you always have some really good feedback and comments on our prep docs. Our amazing producer, Hilary, will put together an awesome prep doc for every episode for me, and then you come in along with all your other job responsibilities at mission, with the VP of ops, you do everything here, but you also come in and add some good questions and comments, and that's why I thought it would be fun to bring you on. So, thanks for hopping on here with me.Albert:Yeah, let's do it.Stephanie:So, to start, I thought we could kind of go through just some high level trends, because through all the episodes that I've had and all the guests we've had on the show so far, there's actually quite a bit of similarities that I heard. And starting with the first one, I think talking about supply chains is really interesting, because so many of the guests who've come on have talked about the shake up in supply chains that they've seen and how they're kind of pivoting and what they're experiencing, and I think that might be a good place to start.Albert:Well, when they talk about supply chain, everyone's competing against what Amazon has created, right? Amazon has created this expectation that you can get what you want, when you want it pretty darn fast. And so if you're any direct consumer brand, or any brand out there, if you're a retailer, that's what's becoming the now norm, right? Can you send it to your customer really fast, and can you take it back? That's like probably the most painful part of ecommerce is the fact that you do have a percentage of tolerance for returns. So, the tighter your supply chain is, the more margins you can create in the process, the more able you can take a return without losing everything. So, it makes total sense that every business is trying to figure this out, how to get closer to the consumer, how to make things closer to the customer, how to make sure that they can take back whatever is being sent back. So, it's just matching what the new customer expectation is.Stephanie:Yeah. I think it was also very interesting, talking to the ShipBob guy where he was talking about how you can basically tap into different fulfillment centers by using them, whereas before, everything with COVID, a lot of people actually were shipping all the way across the country and not really looking at maybe location based ordering. Maybe some people were, but I found that kind of a good shake up that now people are starting to think about how to do things more efficiently and how also not just to rely on one supply chain, because a lot of them maybe are going out of business right now, a lot of the warehouses are having issues, there's a lot of inventory issues. So, it's good to have not all your eggs in one basket.Albert:So, it's not just that. So, there's companies out there that are investing into logistics infrastructure specifically for other people to share. So, similar to ShipBob, there's other competitors in that field. But it goes further than that. If you take a look at some of the publicly traded companies, one of the larger ecommerce platforms, they have invested heavily in infrastructure and warehousing. I know that ChannelAdvisor did the same exact thing. They literally bought a warehousing logistics company. And ChannelAdvisor, for the longest time, has been a company that helps you as a merchant, list your products across the different marketplaces. So, if Stephanie's t-shirt company wants to list their product across Amazon, they want to list it across Rakuten, they want to list it across eBay, and maybe some others, she would still have to ship and fulfill from her own store.Albert:Now, why did ChannelAdvisor build that tool so you can list one product and get it plugged in everywhere? So, why did they invest in all these warehousing companies? Now, it hasn't come to full service yet but you can kind of see it down the road like the supply chain is where the innovation is going to occur. And I think you're going to continue to see that, you're going to see more entrance in it, and it's just non stop, that race will never stop. Basically, a customer can never get something fast enough. You know what I mean? There's always going to be this push to get it there faster.Stephanie:Yeah. It's also interesting hearing about certain companies trying to compete with shipping models against Amazon and trying to have one in two day shipping. It feels like such a hard thing to create from scratch now, but if you can figure that out, you're going to win.Albert:So, I don't know if you know this, Steph. I've also sold through FBA Amazon.Stephanie:I think you told me that?Albert:Do you know [crosstalk 00:05:37]?Stephanie:What did you sell, first of all?Albert:It was an adult card game.Stephanie:I don't want to hear anymore. This is a kid friendly show.Albert:It was not kid friendly. But how it worked is, so I got my order in China, and I had 5,000 pieces, literally shipped it to an FBA Center in New Jersey, never touched the product, and then Amazon automatically redistributed it across as its fulfillment network. And I would get updates like, "Oh, we're moving two boxes to Texas." "Why?" Because we predict, in Texas, someone will buy this, and therefore by moving it closer to the customer, we can reduce the shipping with our internal [crosstalk 00:06:20]."Stephanie:Do you have an influence over that prediction model.Albert:No.Stephanie:Because now more than ever, I'm like, how can anyone predict anything? I mean, there was a really good quote about like, should we be preparing for more people to buy Inkjet printers because they're all working from home, or extra freezers to prepare for the worst? It feels like there's no way to predict for that, so how do they even know that there's a couple in Texas who might want that?Albert:So, add to cart. I think add to cart is what they're doing, right? They're looking at how many people are adding to cart and then they're also looking at the percentage of conversion over time of people who do add to cart. So, if you see a bunch of cart adds for this product or a bunch of search volume increasing for a product in a specific area, you can automatically assume that that product is going to be in demand in that area. They've probably gotten it down to a super exact science.Stephanie:Yeah, I'm not going to question them. I'm sure they got it.Albert:Yeah. And since they're always moving products within their own fulfillment network everywhere, they see that there's a probability that this is going to happen, they just move it closer to you so that when they finally rely on last mile logistics, they've got it as close as possible so that they don't have to pay so much.Stephanie:Yeah, that makes sense. All right. So, the next one I want to kind of move into is influencers. So, first, we did a survey of our audience and a lot of people wanted to hear about influencers. How do I use influencers? What's a good way to actually get a good ROI on it? And a lot of our guests actually mentioned influencers as well. Some people were trying it out and were like, "I don't actually know if this is even working." Other people were having great success but were trying different models. So, I don't know if you've listened to the fancy.com CEO, Greg Spillane episode.Albert:I did.Stephanie:Okay. Well, first of all, that guy's a badass. I mean, making that company his stories. Like did you hear about how he went into a warehouse or a storage locker and found a bunch of credit cards that the founders were giving away with like $1,000 on it, and they were just giving it away to influencers just to try and get them to use fancy.com? Did you hear some of the stories that he was going through about what he experienced when coming into the company to try and turn it around?Albert:I mean, it's the classic, right? It's the classic problem in marketing, right? You're pretty sure some of it is going to work, some people say it's up to half, you just don't know which half, right? And so you're just blowing money trying to get more movement, but I get what they were originally trying to do makes total sense. I mean, you read about the stories of businesses like Gymshark, which built their whole business model off of influencers, and I think they just got a private equity valuation into the billions, so everyone wants to jump on that train.Albert:The problem is influencers themselves have created this marketplace, right? So, if you claim you're an influencer, and you have hundreds of thousands of followers on Instagram, now influencers, they don't want to work on commission, they want to work on upfront fees. So, there's this new network which you're now going to see tools come into place of helping merchants buy influence. And so that's the next wave, right? Because I mean, there's a lot of influencers that are frauds or they have no influence on their audience whatsoever, they just have a big Instagram following for whatever reason.Stephanie:Yeah. They just [crosstalk 00:09:30].Albert:That's why the merchants are so frustrated.Stephanie:Oh, yeah. I mean, it's hard to know. You can see someone with a million followers, and something that I saw that was actually a good reminder for anyone with a small business was they're talking about how you can see if those followers have an intent to buy. So, if you have some influencer on there and they're showcasing some purse, or some lipstick, or whatever it might be, and the people in the comments are like, "Oh cute," or, "Pretty" or just liking it, they actually don't have followers who have an intent to buy. Versus you might see more micro influencers, like people that follow from around the area or something, and the people in those comments are like, "Where do I get that jacket from?" Like, "Please link up your shirt."Stephanie:And those are the kind of influences you want to go after because you actually know that if you're in front of their audience, they're ready to buy because they trust that person, which seems like it's kind of shifting, whereas before it was like just get the big name, the big followers, and now it's more like, "Let's make sure we get an ROI. How do we make sure to track this stuff and see some good conversions from it?"Albert:Yeah. I mean, you don't know what you don't know, so all you're looking at is what you assume is a big audience. And so that's the biggest misconception in social media, it doesn't determine their purchasing behaviors. It's just, "I like this person because I think she looks good, or I think he looks good, or I think he's funny. I'm not going to buy anything.Stephanie:Yeah, I can definitely see tools coming out soon, or maybe they're already out in the world, showing like here are kind of the demographics of this person's followers. So, you can sign up with an influencer and also see the income level, the job title, so you know that what you're getting with that influencer is going to have good results because you can see the profile of their followers.Albert:So, interesting, right? Platforms now that are creating marketplaces of influencers. So, I'll name one. We have not had their CEO on the show, but grin.co, you should join the show.Stephanie:[crosstalk] here.Albert:Yeah. GRIN is pretty fascinating, because they've built this marketplace where you as a merchant can then log in and you can see all the influencers, you can search by category. Let's say I want surfing, or you want food, or you want outdoor, whatever it is you want, it'll pull up a list of influencers and then it'll show the basic vanity metrics. But it also has ratings of probability of sale, because they've already maybe done a campaign for another brand, so you as a brand kind of see those numbers. Now, the problem always is, as a consumer is, you kind of always get drawn to the big numbers, right? So, you'll see like, let's say, the superstar TikToker, girl Charli D'Amelio. How do you pronounce her last name? D'Amelio?Stephanie:I don't know, and I'm surprised you know anyone on TikTok.Albert:But Charli D'Amelio, you'll see her name and it'll show you significant likelihood to influence dollars, it'll be significant, right? But then as a brand, you have to determine can you afford her, because she doesn't tweet or TikTok for you for nothing, right? It'll be hilarious. It'll say her agency, and of course, she's repped by a huge agency. So, that's where even tools like that, the problem is, let's say, the signal to noise ratio is still overwhelmingly noise and the ones that have tremendous signal, well, the problem is you can't afford it. So, I think the tools have to try to figure out by budget, almost, like how much ROI are you going to get per $1,000 of spend or something like that? That's probably going to be the next wave of measurement.Stephanie:Yeah, I agree. I mean, I think also the platforms are trying to catch up to be able to actually attribute sales to these influencers. I know TikTok is trying to do that right now. Instagram's been trying to do that, but I think they are still implementing a lot of features to actually allow the influencers to get paid. So, I think with that, you'll see a whole new wave of new influencers and micro influencers as well because now they can actually get paid.Stephanie:I mean, I saw someone, they were talking about some... I think it was some coffee mug or, I don't know, a cup or something on TikTok, and it was on Amazon, but didn't have any links or anything, and it sold out on Amazon because this one girl was talking about the functionality of it and how much she liked it, and people were like, "Oh, how do I buy through your link? I want to make sure you get a cut of it." And she was like, "I don't need that. I just review stuff because it's fun." And so it's interesting seeing how you have influencers who really do care about that attribution and won't work without it versus the people who maybe are big influencers but aren't actually looking for that, at least not right off the bat, or maybe because there's friction right now, with setting up that model.Albert:Well, I think the bigger you get as an influencer, the more you could charge for your time than results. So, if you're a superstar, like, let's go with professional athletes, the original influencers, right? If you're LeBron James, you're Michael Jordan and someone wants to buy your name, you just charge them for the name. Like you're like, "I don't know if you'll get $1 of sales, I'm just telling you right now that I'm not repping your product unless you pay me this much money." Right?Albert:So, it's still this push and pull where brands want all this information, they want to know your audience, they want to know all that stuff, and then influencers themselves are getting so big. Like, we're reading about how these people on TikTok, kids, I call them kids, I'm old, but they're making 100 grand a month, and that's considered an average influencer. What are talking about? 100 grand a month to make TikTok dance videos, and yeah. So, I can see a brand wanting to be like, "Well, how much will I get for sales," and I can just see how tough it is when the kid on the other end says, "Well, I won't TikTok dance for you for under 100,000."Stephanie:I just read that the next generation is getting paid more than ever right now, not just for being influencers but just for a lot of things. They're demanding higher payment than any other generation before them. That's good, good intense though.Albert:Yeah. Listen, ask for whatever you want. If you can get it, you might as well ask for it. Why not?Stephanie:Very, very true. So, I think the high level summary for that one then it's just that most brands should be exploring influencers in your market, but also making sure that you're setting up the ROI and tracking it correctly, and maybe looking for those new tools that are coming out or that are already out to make sure that wherever you're devoting your budget to you actually can track it, where in the past maybe it wasn't as required by your company or yourself to have that many metrics behind it, but now you actually can, so I think it's worthwhile.Albert:Yeah. I actually think some of our other guests that really talked about investing significantly into the product and making sure that the customer experience from the moment that they sign up, to buy it, to they receive it, that that experience is airtight, because that's where you're going to find your influencers, right? I think a couple of the men's shaving companies like Supply and Beard Brand talked about how they built a community of people who move these products. Well, that's the ultimate influence right there, right? Constant good reviews of your products. And if you get lucky enough to find a Dogface 208, then you win. Albert:Dogface is the guy that skateboarded while singing Fleetwood Mac and drinking cranberry juice.Albert:Well, cranberry juice sales, all time high. So, this wasn't a paid campaign or paid activation, sales are at an all time high. They're talking about it might see Wisconsin cranberry farming industry. That's how much in demand cranberry juice is right now. So, if you have a great product, your likelihood of catching a wave I think is much greater than if you're just constantly paying influencers.Stephanie:Yeah. And I like that idea of make sure all your other ducks are in a row first before you start going after influencers. I think we've had a couple of guests who talked about you really need to make sure everything from start to finish, to unboxing, to follow up, that needs to be airtight before you start trying a bunch of other things, because then you are at risk of getting distracted and actually not being able to focus on, not only your core product, but also your customer experience.Albert:You got it.Stephanie:All right. So, the other thing that I think was interesting that a lot of people have talked about is, of course, like omnichannel, and one of our guests is talking about the reinvention of brick and mortar stores, and talking about how it's now turning to be more about experiential experiences instead of just going there to buy something, because so many people now are shifting to a place where they're actually very comfortable buying online, even if they never did before, and going into the store is more about having a good experience and something to draw them in there versus actually making a purchase in store. I think it's all about experiences now and people are going to expect something very different going forward than they ever expected before.Albert:Yeah. I mean, that's the magic question, right? People are trying to... I've read articles about re-envisioning the mall of the future. If I think about current present retailers that are doing a pretty good job, I mean, obviously, Apple Store seems to be like one of the leaders where I had not admittedly walked by an apple store recently, but I do remember back when I did, six months ago, there were a lot of people in there, a lot of people in there touching the products, getting a feel of the products, they made it a very hands-on experience. I can think of other businesses that have done a really good job. Like, why does every Bass Pro Shops have a giant aquarium in the middle of the store? Because they want you to go and look at it. You know what I mean? To pull you in. They know you're a hobbyist. So, I don't know how good businesses are going to be at doing that, but I know that they're all trying. I mean, they have to.Stephanie:Yeah, yeah. I mean, when we had little burgundy shoes on, they were talking about how they were actually partnering with other people, other shops or people that are on the same street as them, even if it was a bank they're partnering with, and they were kind of doing giveaways or doing just different social business events or things like that, to make sure to get people in the store because they're like, "We don't really mind if you buy, but just coming in and getting that customer experience that we have, and being able to get in the vibe of the music, and actually experiencing our brand, even if it's only for a moment, is worth so much more than... Buying online is important, but we also want you to know who we are, and if that means partnering with other brands around us to give you an added benefit..." I mean, that's where I can see a lot of other brands doing that partnership strategy to try and get different customers that you would maybe never touch before in the same place.Albert:Yeah. Really, it remains to be seen that it'll work, because I always think, when I hear about the people with the rain experience, I don't question it at all, but I think also to Borders Books or Barnes and Nobles books, I felt like those are really inviting places. They got nice couches, good coffee, it smelled great, there's always baked goods there, you can read whatever magazine you wanted, or check out books, and they never kicked you out or nothing if you're hanging out there, but it didn't work. There weren't enough people buying the books, they were just chilling, I guess. So, I guess that's the real delicate balance, which is how do you educate, entertain and inform but also do it so much in a way that a person purchases the product versus, I don't know, coming in there and staying all day long?Stephanie:Yeah. That makes me wonder just about the business model, though, of like, are you encouraging people to buy, because... I mean, I don't know how the Amazon bookstores are doing now, but when I went in to them when we were in Seattle, it was just a very different experience because what you could get in the store was not what you can get online, not what you would get at any other bookstore, because there was actually, "Here's a review that we picked out," so you can kind of get a feel for this book, or, "Here's some of our top charting books right in front of you."Stephanie:So, it was kind of like it was bringing an online experience offline as well but in a very different way where I wanted to go in there, I wanted to hang out, but then I also found myself buying online afterwards. I was taking pictures of books and then I was just going on Amazon and buying. So, it seems like they figured it out there, and they don't have too much inventory to where they're holding a bunch of books and expecting them to sell, but it seems like it needs to move more to that model instead of thousands of books hoping someone comes in and buys.Albert:I can see that in a more curated... I know Amazon's experimenting with their five star stores where it's only physical products that have earned an average of four and a half, five stars. So, it's more of a curated experience, which is what we're more used to online, instead of looking at your whole catalog of crap, we see exactly what we're looking at what we want to see or the best stuff right up front.Stephanie:Yeah. And that's also something a lot of guests have mentioned, it's about that personalized experience and making sure that what you're showing the new customers, what they want to see. And I think the idea of curation too. I mean, people are trusting, not only these influencers, but also just people that they trust in general, where it's like, "Oh, my friend likes this." So, making sure that you can kind of show that or have that curated experience I think will be important going forward.Albert:Yeah. So, this is interesting, because I think this is actually a self-fulfilling prophecy of what's happening with consumer behavior and curation, which is, the more curated things become, the more likely or the lower the tolerance a person's patience becomes for browsing. Because I've read stats about how the average web browser, or consumer, whatever, spending less time on pages, clicking through less links, because they're constantly being served, let's say, what they want sooner, faster, so then they react that way. So, it's like feeding itself, right?Stephanie:Feeding the beast.Albert:Yeah. The consumer expectations. Like, if you don't know what I want within two clicks, I'm bouncing.Stephanie:You're done.Albert:I don't got time for those three clicks. I'm out.Stephanie:Yeah. That's tricky. I mean, it is kind of like building up a monster in a way where everyone's going to have to keep leveling up their game with how their new customers or current customers experience their shops.Albert:Yeah, it's going to be painful for merchants to do this, I think, it's going to be very painful. Or they can look at it the other way. There's an opportunity for a technology vendor that can do it. You know what I mean?Stephanie:Oh, yeah. Anyone who's got those good recommendations, yeah, they're already ahead of the game if they're implementing that.Stephanie:All right. So, the next trend, which actually no one really talked about, but it's more around partnerships, but I saw a very interesting partnership. I don't know if you have heard of that show on Netflix called Get Organized. Have you? Where they were going into homes, Reese Witherspoon, and they're organizing her house, and it's very popular now. Maybe your wife watched it. Have you heard of that?Albert:I can conceptualize what it is but I have not seen it or heard of it.Stephanie:Okay. So, they partnered with a Container Store, and they did it in a really good organic way where, of course, they're putting everything in containers and organizing it, and it made the container sales jumped by like 17% after this series went out, and I thought that's a really good example of not just product placement, but doing it in a way that wasn't annoying, and having, not only a partnership from the product perspective, but they also partnered with Netflix in the marketing aspect.Stephanie:So, it's like a good, well-rounded approach, but it also didn't make the content suffer. And I haven't seen a lot of companies do it that well. You always can think of other companies... I mean, there's product placement in almost everything, but you don't walk away being like, "Oh, I really need that to complete my experience." And I can just see a lot of more or a lot more unique partnerships forming like that in the future, where people are thinking outside the box and are not just doing the typical like, "Oh, let's just try this and see how it works." I can see more people experimenting with this, maybe not on that large of a level, but I thought that was a really unique partnership, and especially being able to see the sales jump right afterwards, it shows that it paid off.Albert:Do you think that was because they were actively solving a problem? Right? You're disorganized. I'm going to show you how to get organized. So, inherently the audience that watches it is looking to solve that problem, so inherently they then go purchase those products, or source those products.Stephanie:Yeah. I mean, they definitely, of course, nailed the perfect person who would have an intent to buy as someone who's also trying to get organized, but I think the way they did it just wasn't like hitting you over the head with it, it was kind of like, "Well, here's what we use." It was like, "No big deal, if you want to use it too, this is what we use."Stephanie:And I think that's actually the perfect strategy of like, "We're not going to push this on you, and we're not going to be annoying about it, this isn't an ad, but this is just exactly what we use to make this look perfect." And I think there's a lot of opportunity for other brands to think about that, like, how do you do it in a way where the content is still good? It's not making you feel pressured, but it's in the back of your mind of like, "Oh, this is what I could use to be like Reese Witherspoon," which she's the best.Albert:It's the classic, like, is this a threat or is this an opportunity, right? Because it just depends on the eye of the beholder. But one of the things, to your point, that makes it a threat to existing brands is if they're not good at it. One of the opportunities influencer see is that it's now easier than ever to make and source their own products under their own brand labels, right? Think of the power that Chip and Joanna Gaines have gained, right?Albert:Now it's to the point where it's like they're going to be almost impossible to buy because Magnolia products is coming, and it's already here, and it's going to keep getting bigger and bigger, where they're going to... You already know they know how to organically insert their products into all their content of you already think their style is the best, you already think their builds are the best, you already think their personalities are the best, now they're not even doing the partnership deal, right? Now it's not like, "Oh, go to Target to get the Magnolia collection?" No, go to Magnolia to get the Magnolia collection, right? They're going to cut the distribution network out and just be like, "We're the distributors of this." And that's always a challenge, I think. I do think that's something that the brands get nervous about is because like, if you sponsor somebody and they do a really great job, well, what stops them from cutting you out of the equation?Stephanie:Yep. Which is also what a lot of brands are scared about with Amazon. I mean, we heard mixed messages about that where some people were very excited about partnering with them, they were getting championed on that platform, Amazon was promoting them, and they weren't really worried too much about it, they're like, "Why wouldn't you be on Amazon, because that's where everyone said you should be selling on there?" And then we heard quite a few other ecommerce leaders who were like, "No way would I get on there. You're not going to make as much money. You can't control the experience. You can't control where it's being seen. And I want to make sure my DTC company is being portrayed how I want it and I don't want it to be knocked off on Amazon." So, the same kind of thing there.Albert:Yeah, that's it, and that's never going to stop. Constant threat market share takeover.Stephanie:Oh, I know. Constant battle, but interesting to watch. I think those people should be on Amazon, though, because I do think that is where so many people are. It seems like, yeah, it's where you need to be.Albert:Yeah. Here's what's interesting. The biggest players have kind of stepped off, but like Nike, Nike has got so much... Nike has enough power, I think, to step off that platform, but if you're trying to be discovered, I mean, it just does seem overwhelmingly hard to do it without that distribution network. I think it's just tough.Stephanie:Yeah. When we were talking about ShoppableTV, I'm also thinking about... I mean, you might know this better since your kids are on some of these gaming type of platforms, but having Shoppable worlds, whatever that may be, seems like something that could be coming in the future but we're not there yet, probably. I mean, I know we are when it comes to virtually shopping for things, that like, "Oh, I want to make sure to get this. Whatever this is in this world, I want to buy it," but it seems like there could be an opportunity as well for implementing your products into those worlds that are being built up right now.Albert:Yeah. Personally, I'm not as bullish on that because I still think people want to... I don't know. I don't really know, maybe because I just don't do it myself, because I definitely see my kids being drawn in when they're playing games, like they recognize products. What's weird is, when kids. To me, it's what's weird. So, for anyone who has kids that play Roblox, my kids see things on Roblox and they want to buy them, and they're digital products.Stephanie:Yeah. What are they? What are they buying?Albert:Like the new sword? They're like, "I want this sword." It's like, "What sword?" It's like, "The digital sword." It's like, "What do you mean digital sword." It's like, "My character can carry this sword if I buy this with real cash." And that makes no sense to me. What are you talking about?Stephanie:Exactly. I think it could be transitioning eventually. I mean, yes, people will always want those digital swords, I heard that people are buying t-shirts in there. I want to make sure my little avatar guy is wearing the coolest t-shirt. I don't really understand that, but then I don't know if you heard about Fortnight had Travis Scott do a virtual concert and was watched by millions of people.Albert:Yep.Stephanie:There's a very big reason why people would be like, "Whatever he was wearing, I want to wear."Albert:Now, did you hear about Travis Scott's McDonald's deal?Stephanie:No. What's that?Albert:It was like the number one selling meal for the last couple months.Stephanie:Just McDonald's in in general or what's his meal?Albert:The Travis Scott meal. I don't know. It's literally his meal. You know what I mean? You can have a number one, you can have a number two, you can have a Travis Scott.Stephanie:It says the Travis Scott meal is a quarter pounder with cheese, lettuce, and bacon.Albert:I'm just saying that's the power of you talking about a digital world. Yeah. There's the power of influence too, but he's already a mega celebrity, right? But I view it as this, it's like, what people are into, and this is why, like I was saying before, I feel like I age out of this stuff very quickly, and we're talking about ever evolving change. I came from a time where if I didn't have a physical product in my hand, I didn't think was real. I remember when mp3s first came out, I was like, "Why would I buy an mp3?" It's like, "It's a digital version of your songs." "What if I lose it?" They would be like, "What if you use your CDs?" "But at least I'm in control of my CD." You know what I mean? Like, that's my CD. I know where it is. I take responsibility for it. I was slow to convert there.Albert:And I feel for me, I'm always slow to convert to digital products, but when I watch my kids, it's just unbelievable. I don't even think they're interested in physical products. They keep wanting digital things. They want more games, they want more currency for their players, they just want this stuff. So, that's why I kind of didn't answer that because I was thinking simultaneously in my head, this is never going to work, but I think I mean this is not going to work on me but this is going to work on my kids, because it's happening right now. I get things all the time on my Google Play app, iTunes account, like, "What is this?"Stephanie:Why don't you buy one more virtual sword?Albert:So, will company start integrating like t-shirt... All right. So, let's take one of our t-shirt clients, right? We've kind of asked our guests on Up Next in Commerce, we've asked this to all of them. How do you convey that your product is soft, silky, whatever their product descriptors are, to someone without them touching it? And so it makes you wonder, in the future, is someone going to see a yellow hammock in their virtual world and be like, "Huh," and it'll pop up a ding like, bing. "Not only can your character have a yellow hammock, you can have one too." It's like, "Oh, okay, cool."Stephanie:Yeah. Especially if you can kind of see it blowing in the wind, or you can see that shirt like, oh, that's form fitting on this person in my virtual world that I really like. If you can kind of see things and details about it that mimic it. I mean, it seems like there's an opportunity there, it might not be here just yet, and you definitely have to figure out the demographics behind it, because, yeah, I mean, like you said, you might not be interested in that.Stephanie:However, I was listening to a pretty good interview with this guy, Matthew Ball, he was the former head of strategy at Amazon Studios, and he had a really good episode talking about how he was the same as you like, "Oh, this just isn't my world, however, I see actually a lot of companies, they will start being able to adapt these same types of technologies to where the older generation will actually start adopting as well, they just are trying to figure that out right now like, what will they feel comfortable with and what are they looking for? Like, what problems can you solve to get them there?"Albert:It's going to be pretty fascinating when someone's upsell customer journey path is actually get the digital avatar to consume this product first and then offer the physical. You know what I mean? When we talk about the hammock, can you imagine that, like, "Oh, my avatar really likes this hammock. He seems great. I think I might get one for myself in real life." What?Stephanie:I mean, I kind of would. I would do it. You need to get in these worlds to really experience it, but I mean, it does just seem like that is where the world is trending right now, around these games. I mean, a company I follow really closely is Epic Games, I think they're-Albert:They're in out neighborhood. [crosstalk 00:35:26].Stephanie:I think their leadership team is brilliant around what they're doing with their platform and how they're essentially giving away almost all the underlying technology that other companies have been charging for for a really long time, and they're kind of building this really big moat to be able to expand in a bunch of different ways. So, I kind of keep tabs on them, and that also, of course, influences my commerce hat when I'm thinking about too like, "Oh, wow, these two worlds could blend together in a really unique way and whoever gets there first..." Usually, the first movers are the ones that can get that arbitrage. So, seems like an interesting spot to watch.Albert:Yes, the Unreal Engine, for our listeners that are not familiar. Epic built a platform called the Unreal Engine of which you can build your gaming world on so that you could use... think of it as less code, you had less code, less character development, it's all built for you, you just add your characters and they can build worlds for you. How they do it is they charge you a royalty fee, I believe it's like 5%, but only if your sales are over a specific number.Stephanie:Yeah, it's very beneficial to creators, and that's why a lot of people are moving to that platform now because they're used to having these apps where certain stores, they're taking like 30 and 40%, and if you move to Unreal, you're essentially keeping the majority of your sales.Albert:Yeah, and you don't have to pay until you reach a certain number. So, by the time you're paying Epic, you've already made it, and then you're fine with it, I guess. The number is tolerable. By the way, if you follow Epic Games founder, Tim Sweeney, on Twitter right now, he's in a constant fight with Apple over [crosstalk 00:36:56].Stephanie:Oh, I know.Albert:He does not like it.Stephanie:I wouldn't either.Albert:It's a fun follow, though. It's a great follow.Stephanie:Go, Tim. I'm going to follow you right now.Stephanie:All right. So, the last one that I want to talk about is... I think this is interesting. You might be like, "That's weird." But I think there's such a big opportunity for optimizing, not only your website for voice searches, but also potentially building out custom Alexa skills to solve a problem. I see people doing that right now, but not really in ecommerce as much, but think about having an Alexa where you're like, "Hey, Alexa, tell me what wine goes best with this kind of recipe." Or, "Hey, Alexa, suggest some outfit for me based on the weather today." And you kind of build a tool that's actually helpful that's also you know, of course, very close to your brand. And so you can become top of mind by building out those skills or just implementing voice search in general. I just think the world is headed in that way because the technology is starting to get better, but I don't see a lot of brands jumping on that right now.Albert:I think the ability for AI to understand intent and meaning isn't quite there yet. I'm trying to think of myself using my own consumer behavior, right? Do I use voice to text right now to enter searches? Yeah, because it's a lot easier than typing it in or swiping it in, right? So, if I want to ask Google a question, I will just click the mic button and talk. Would I do that to solve problems? I don't know, but I think I haven't yet because contextually, it's very difficult, but it won't be far, right. So, right now, I think a lot of people Google best. Do you know what I mean? Like you said, best way to do X for Y, right? And then the next level is going to be can NLP technology, AI technology, whatever it is going to be that understands the nuance and intent and meaning start making it super personalized recommendations?Albert:So, can you imagine if you went to Home Depot, because what you're talking about would be super cool, if you go to Home Depot and say, "Hey, my garbage disposal broke. How do I replace it?" And it just comes up with like, boom, "You're going to need this, this, this, this," and then it gives me a how-to guide of how I buy a garbage disposal, I'm going to need these tools, I'm gonna need the sealants, and getting them-Stephanie:Can you imagine saying that, like, "Here's exactly how you're going to fix it. Let me send you a video to your phone." And like, "You need like Albert's brand of screws." Like, they're literally dropping your own products in there like, "This is how I would fix it, and also, here's a how-to video," and you walk away being like, "Wow, I not only bought that brand stuff, maybe, or I didn't, but they're top of mind now. They actually helped me fix my garbage disposal." How cool would that be?Albert:So, speaking of this, there was a while ago where I believe it was the president of O'Reilly, I'm pretty sure it was. The O'Reilly Auto Parts basically came out and said that Amazon was not a threat because buying car parts is very complicated. I'm not saying he's wrong, right? Right now car parts really aren't bought on Amazon because you have to know what model you have, you have to know the year, the make, the model, you actually have to know something about fixing cars to even begin to find the part. But can you imagine a future where you can ask it a question like, you go to O'Reilly or wherever you go and you say, "My air conditioner is not cold," and it remembers your car models, "Oh, you're going to need X, Y, Z. Would you like me to book you an appointment if you can't do this yourself?" Like, "Yeah, book me one. I don't want to do this?"Stephanie:Yes, please. Yeah. No, I mean, that's where I think the world is headed. And I mean, we did have a good interview, it wasn't our first 50, it was one of our more recent ones, talking about the world of identity and how you should be able to go places and you shouldn't always have to refill in your info, it should know maybe what's your brand of car if you put it somewhere else before. I'm trying to think of what episode that was.Albert:Fast.Stephanie:Oh, yeah, Fast. Yeah, that was such an interesting episode. I mean, now it's coming up right after this one drops, but [inaudible 00:41:10], so interesting where he was going through. Not only are they doing payments and identity, but where the world was headed around you should always have a Buy Now button on every single one of your products and that you shouldn't just make people add stuff to cart and then do the shipping and all that, you should let them buy when they want to buy it. And he was talking about the conversions behind that. But all that gets back to the identity piece, which is what you're talking about, going into an auto part store, you should be able to say, "Here's what I'm looking for," and it should know, "Okay, based on the information I have about you, here's what I'm going to recommend for you," and make it seamless and frictionless.Albert:Yeah, everyone wants that.Stephanie:My future. I don't know what yours is, Albert?Albert:Well, I think it's going to get there. It's not a matter of if, but when, but I still know that NLP... for anyone that's used an AI chat bot yet and been frustrated because you asked a simple question and it's like, "I don't know what you're saying," it's like we're not there yet, but I think it's coming, for sure it's coming. The technology providers, though, are going to be the ones focusing on that the most. I don't know when the merchants can start tapping into that resource.Stephanie:Yeah. That's why it's interesting to kind of keep an eye on these new startups and new tech companies that are launching around this stuff, like Fast, or even like the technologies like GPT-3. When that came out, I was just reading a whole article about how this guy created a program where you essentially can just talk and it'll build a website for you. So, you can say, "Create a red button, have the drop down say this, have the picture do this, grab the picture from here." And it is no code. You are speaking and it is coding for you in the background.Stephanie:I think the world is headed there but you just have to try and stay on top of those trends or the companies and try things out, honestly, experiment with it and see if it could work without bogging things down. I know you have been the first to say that the amount of plugins that you add on your website are just going to bog it down, and website speed is number one, so there is that balance, but I think it's interesting to stay on top of the trends outside of just your current industry.Albert:Yeah. Are we going to get to the part where we all have our own Jarvis? I don't know. But if that happens, it will be cool. Jarvis from Iron Man, for anyone that's not familiar with what I'm talking about, right?Stephanie:I was actually familiar with that one.Albert:Yeah? There you go. Look at you watching movies and stuff.Stephanie:I know. Look at me. I'm so trendy.Albert:It's not trendy. It's definitely very old. I think it's like a decade old now.Stephanie:Yeah. Still great, though.Albert:Yeah.Stephanie:All right. Are there any other forward looking trends that you think are interesting right now. So, we essentially covered the things that were in the 50 episodes, which were awesome and really cool, high level themes, but all the episodes had really good, juicy nuggets in each one. And then we looked at some of the forward thinking themes that maybe weren't covered, but I just think are interesting. But anything else you can think of where you're like, "I think a lot of people aren't thinking about this or aren't paying enough attention to this world that could help an ecommerce store owner"?Albert:Well, we got to do a big shout out to my awesome producer, Hillary, who loves Peloton.Stephanie:She does.Albert:Because Peloton is a very fascinating-Stephanie:[crosstalk 00:44:23].Albert:So, I bought stock in Peloton, and here's the reason why. I've never encountered a brand that I can think of where people so emphatically talk about it. Peloton and maybe CrossFit. Everyone says, "The first rule of CrossFit is you can't stop talking about CrossFit," I think that's also applicable to Peloton, because people who have Peloton love Peloton. So, I think this concept of building community so that your product extends beyond the purchase of the product, meaning like you buy a physical bike but you would stay subscribed to Peloton services. Because I think every brand, or not every brand, because could you do it with a ball? I don't know.Albert:But brands and products companies are probably trying to figure out how do I create a subscription community? I think that is going to be a trend that you can capitalize on now because it doesn't require, I don't think, as much technology that doesn't exist, but it's more like how do you build ongoing services at a price point where customers never want to leave you? So, like, I don't know. Let's use my example of kitchenware. Should fork, and knife, and bowl companies have active cooking communities? I think they should.Stephanie:Yeah. I mean, that was our interview with Food52, Amanda Hesser, that's exactly what they did. They built up this huge online community first and then they started reselling other people's products, drop shipping them, and then they created their own brand, and they did it in a way where they're like, "By then we had this huge community that we were doing cooking things together."Albert:Yeah. They could already forecast their sales. They were like, "Oh, we can automatically assume how many people are going to buy this."Stephanie:I know. And that was a long haul for them. I mean, she was the first to say that, however, I'm like, you essentially are launching to an audience that trust you, trust your content, you have this love for just anything that you're doing after you build this community, but trying to figure out how to do that right or figuring out what actually keeps people coming back and how to keep them engaged I think is really difficult without being annoying and without pushing your product too much. When you start in a more content focused way, it seems like it can be a lot more organic to build up those followers to then shift into a product where you have that trust. But it does seem hard when you're launching a new like DTC company and also trying to do content at the same time, it seems hard to figure that piece out.Albert:Yeah. And if we go back in time, right, Michelin figured this out. Michelin figured out that people weren't driving enough, so they created their star review system because they wanted people to drive and experience things all over the world, to the point now where here we are today, people still talk about Michelin star ratings for restaurants. It's still that important. People can't put two together and say, "Why would a tire company create that?"Albert:So, if you have that today, I think that's probably the next biggest trend, and you can already kind of see it happening. I think more products are going to try to create worlds or problems that their products and services solve, or whether it's exploratory or problem solving, I don't know. But when it comes to Peloton, I just think about the community that they've built, the fact that people just rave about the product. We got our buddy Hillary here, she's got a bike, it's not broken. She says, "They launched a new bike. The screen tilts so I can do yoga and then get back on the bike." It had a price point, a really high price point. I mean, Hillary was considering getting a loan to get this thing, which, by the way, they offer, they offer financing.Stephanie:We're going to put Hillary's... her like affiliate code, I don't know if she one. She needs one.Albert:Well, I'm telling you, the brand love that she has... But it's not just her. I say Hillary because, Hillary, we obviously work with her, but people love this product.Stephanie:There you go. Are you looking at our prep doc? She says h_tag24. Peloton all the time.Albert:Okay. If you want to buy, h_tag24. If you want to follow our buddy Hillary on Peloton, not only will she kick your ass in all these calories, or I don't even know what you guys measure.Albert:However you score points, she's scoring all the points.Stephanie:I don't know if that's a thing.Albert:Outputs. I don't know.Stephanie:Okay, outputs got it. This has gone into a bad hole. I'm not sure what we're talking about here.Albert:Well, we were saying like, what's the next thing to be aware of? I mean, I think that is closer than all those voice searches and things like that that you talked about, which I think are coming, I think you're going to see more companies build communities, and I also think you're going to see more companies burning out customers by trying to make everything like SaaS. Because one of my favorite Twitter handle to follow, everyone check it out, it's called the Internet of Shit, it's just non stop products that don't work if you aren't subscribed to their services. So, businesses out there that try to make me subscribe to make my refrigerator work, I'm anti-you. All right? Definitely anti-you, don't want to hear about it. So, follow the Internet of Shit, if you guys are curious.Stephanie:I have follow that one.Albert:But that's the delicate balance, right? How do you build a community of value that you charge for versus, I don't know, putting someone in entrapment where you're forcing funds out of them every month just to use your product?Stephanie:Yeah. I especially think after everything with COVID, people are also going to be dying for that community, even if it has to be online, I think it's going to be bigger now than it ever was before, because people have been cooped up and haven't been able to have that community like they may have been used to or they're actually maybe cherishing it in a different way now and they're trying to look for that. So, I think it'll be a big opportunity.Albert:There you go.Stephanie:All right. Anything else on your mind? If not, I think this was a fun episode. It was a good one.Albert:I hope so. I can never tell.Stephanie:You're really not, yeah. You're almost like, "I'm not sure." But yeah, I think this episode was awesome, it's really fun just kind of reminiscing through all the episodes we did. I can't believe we've already had 50. If you have not given us a review and a rating and subscribed, please do, because that helps spread the word, and we would love to hear how we're doing. We also have some really good interviews coming up, like we were mentioning earlier, the CEO Fast is coming on, we have a really cool company, Handwrytten coming on with [inaudible 00:51:04], Sheets and Giggles, Ring. We've got some big names coming up here, and yeah, I'm excited to do this next recap after the next 50.Albert:Until then.Stephanie:Right. Thanks, Albert.
Brand loyalty is something that every company wants but few actually attain. To build a loyal customer base, you need to provide the best experiences possible, offer unique products or services, and deliver on quality and in a timely fashion. It’s a tough ask, and for those in the grocery industry, it’s even more difficult since differentiation between product selection is not as easy as it might be in other verticals. But when it comes to customer loyalty, there are ways to separate yourself from the pack. And that’s where Rachel Stephens comes in. As the Vice President of Marketing, Digital and Loyalty for Stop & Shop, a major grocery chain with more than 400 stores, she thinks about this every day. Thanks to a new online platform and through a loyalty program that customers actually want to engage in, Rachel explains that Stop & Shop is finally gaining access to some of the dark data it couldn’t access in the past. On this episode of Up Next in Commerce, Rachel explains why that kind of data is a true game-changer for any brand. Plus she reveals some of the consumer psychology that she looks at when building loyalty programs, and she peers into the future at how the use of A.I., machine learning and natural language processing will further advance not just Stop & Shop’s ecommerce experience, but the entire ecommerce industry. Main Takeaways: Is it Actually on the Grocery List?: When building or improving loyalty programs, having an understanding of data is critical. Everyone has to take on the role of data scientist and look at the data analytically, especially as it relates to consumer behavior. Just because a customer says they want something or they intend to make a purchase, does not mean the data will always show that. Word for advice: trust the data and build a program around what is actually happening instead of what customers are saying. Accessing Dark Data: For too long, grocery stores have asked only for customer phone numbers in order for them to have access to loyalty cards. But if that phone number isn’t linked to a real name or address, and is changing hands faster than an email address would, there is a huge amount of data left in the dark, which makes it impossible to build a meaningful database of customer information. To access that critical data, companies need to build programs that are truly enticing that customers want to share their data with that helps not only the brand but also the consumer. The Psychology of a Discount: Tune in to hear what Rachel saw in the data when reviewing their sales and discounts. Hint: higher is not always better. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to Up Next in Commerce, I'm your host Stephanie Postals, co-founder of Mission.org. Today we have Rachel Stevens on the show, vice president of marketing, digital and loyalty at Stop & Shop. Rachel, welcome. Rachel: Thank you very much for having me. Stephanie: Yeah, I'm really excited to have you on. I saw a little bit of your background before hopping on here and I got very excited when I saw that you have worked at the TJX companies, which I was hoping we could start there with your background. Rachel: Are you a brand fan? Stephanie: Oh, yes. I mean, I love TJ Maxx and when I saw that I'm like, "Ooh, this is my interview. This is the one." Rachel: Yeah, I was actually the assistant vice president of CRM Loyalty [inaudible] within TJX. And that really matched the TJX rewards program ... was a program that fell under my group and my responsibilities included the day to days and ensuring that our customers really wanted to participate in our program, our loyalty program so that we had clean data at the end of the day. And we were able to provide additional value in savings on top of what customers were already saving with the strong value that TJX stores provide. Stephanie: Very cool. How did you first get interested in the world of loyalty marketing, what lead you there? Rachel: I started actually in loyalty marketing at Pet Smart in their corporate headquarters in Phoenix and I think the thing that really appealed to me was marriage of data and customer communications, so understanding what customers say and what customers actually do is vital, I think, to the success of an organization because customers can say, "Yes, I have intent to purchase X,Y,Z." But when you look at the actual data, the data doesn't lie. Rachel: So, loyalty programs give you a vital tool for success within your organization to take a look at consumer data and then apply your marketing tactics really that are from acquisition, retention or reactivation perspective based on what that consumer is doing in a particular moment. So it's really, to me, such a great marriage of a lot of different areas within marketing and it just was something that I developed an immediate passion for. When I started there on the Pet Perks Program and then went to TJX to work on the loyalty program for TJ Maxx, Marshalls, Home Goods, [inaudible] Trading Post, and HomeSense, I feel like when I was there honed in on my skills within the loyalty space, so the position at Stop & Shop to really develop the role and develop what the new program was going to look like was incredibly appealing just because of my passion for this space and for retail. Stephanie: That's so much good experience to be able to bring to Stop & Shop. How have you seen consumer behaviors or loyalty programs having to change since you started? Rachel: Since I started in loyalty or since I started at Stop & Shop? Stephanie: I'd say in loyalty program, in loyalty overall. Since you started back in the pets days. Rachel: Yeah, I think there was a transactional nature to loyalty programs in the past. I think it was you give and get and that was usually based in points programs whereas today obviously I think more experiential programs have come about and providing more omni-channel experience, which wasn't really the case back when I first started within the loyalty space. I'd say that there's a number of people that really do a great job at this. I think Sephora's loyalty program is top notch. They do an excellent job at marrying the in-store and the online experience, really making it truly omni-channel tied in with their loyalty program. Rachel: I think that a lot of retailers have caught up and are doing a good job and I still think there's a lot of room to grow. And I think grocery retail was stuck in the loyalty stage of two tier pricing and I think we have a to model grocery loyalty programs more after what a lot of other retailers are doing in the loyalty space and even hotels. Airlines, I think that soft benefits and providing experiential benefits are really critical to the success of a program. Stephanie: Yep, yeah completely agree. Now that we're touching on grocery a bit I would love for you to explain what Stop & Shop is for anyone who doesn't know. Rachel: Sure, Stop & Shop is actually a grocery retailer with over 100 years in the industry. It started out as a very small grocery in the east coast and now we have over 400 stores and of course our online experience at Stop&Shop.com and the Stop & Shop app. Stephanie: That's great. And Stop & Shop, you guys just started moving into e-commerce, right? I think I saw that you launched a new platform just in a couple months ago, am I right? Rachel: We did actually, on July 28th in fact. We launched ... we had Peapod with a partner company. Peapod actually was owned by Ahold Delhaize, which is the parent company that owns Stop & Shop and we have integrated Peapod into Stop & Shop now. So, within Stop & Shop's footprint to order grocery delivery or to get pickup you actually now go to the Stop & Shop website or the Stop & Shop app versus Peapod. That integration occurred again at the end of July, and it's been going incredibly well so far. Stephanie: What was that transition ... what did that look like behind the scenes of not only integrating a current path that people are using but also I'm sure adding on additional functionalities that maybe weren't already there. What was the process behind the scenes or any maybe hiccups that you guys experienced when you were going through all this because it sounds like a big project. Rachel: Yes, yes. In fact, huge project. And all of our sister brands went through the same scope of work at the same time. We work with an internal agency who actually is responsible for all of that development work. And the agency actually had to develop the platform for all the brands. There was Giant Martin's out of Carlisle, Pennsylvania and Giant Foods in Maryland, also went through the same transition. Rachel: And there was obviously ... it requires a lot of work to marry the database, really marry those platforms. There was a Stop & Shop website, a Peapod website and H Brands app, so marrying those together was a huge, enormous undertaking that has taken approximately two years. And when I first started two and a half years ago actually that was really when we had worked on all the business requirements for this project. And it just takes a significant amount of time to match up all the data on our customers and combine those platforms and ensure that everything is running smoothly because if you think about the number of transactions that the Peapod site had going through it before and the number of customers that were going to the Stop & Shop site, you can imagine that there's just a tremendous amount of customers that we wanted to ensure were not left behind in this transition. Rachel: So, there's definitely a lot of work that went into this project and in terms of hiccups, of course there was a lot of those. But I think you try and block out all of the things that went wrong during the launch and you just only remember the good, right? Stephanie: Yep, that's great. And I'm also very familiar with Giant. I'm from Maryland. I'm sure everyone else is like, "What's that?" I know very well what that is. Rachel: Oh, great. That's great. Stephanie: Yeah, so when you guys are thinking about launching this new e-commerce platform, what kind of opportunities were you excited that it would open up? I'm sure you get access to new kind of data and you can have new offerings and you can send that data maybe to your other partners and maybe they can give you deals. What things were you most excited about that you didn't have access to before? Rachel: I think that what I'm most excited about is omni-channel data access. We did not, again, have that before because it was Peapod who really had all of the data for delivery and pickup and Stop & Shop who had all the brick & mortar data. The combination and looking at a consumer from an omni-channel, to me, is what's most exciting. Rachel: If I'm going to do a marketing campaign using digital tactics or any sort of in-store tactics I really need to know what you do as a customer. You could channel switch, you could go from pick-up to in-store to delivery all within a very short period of time. And so, I think the efficiency in marketing, by having that data to me is really what's most exciting. And being able to actually accurately talk to our customers is something that really interests me because how many time have you received communications from a company where you're like, "Wait, I was just in there. I just bought X, Y, Z and now they're sending me an offer for something," or the communication just seems out of left field. Rachel: And I think of years past when Starbucks didn't have a fully integrated data solution. If I was a coffee drinker and I always drank coffee once in a while I'd get tea offers and it just didn't make any sense to me. I think it was just bad use of data. Stephanie: Yeah, I still get that right now. I'll get things marketed to me around pregnancy. I'm like, "I am not pregnant and haven't been for a while." Rachel: You're not pregnant. Stephanie: In a while. Come on, about six months ago, stop that. Rachel: Right, exactly. Stephanie: That's smart. So, what are you excited for omni-channel in general outside of Stop & Shop. What do you think that landscape's going to look like in the next couple of years? Rachel: I think that COVID has certainly advanced a lot of, specifically in retail, advanced a lot of retailers. I think their technology and their offerings, I think omni-channel, to me, has to be that seamless experience in-store, online. And it has to be being able to look at you from a customer lens and understanding that you may channel switch and your experience or the offers that you're given or you're customer service shouldn't change. There shouldn't everybody anything remarkably different about whatever channel you're in. Rachel: So, for me I think that the omni-channel landscape is going to continue improving and COVID has definitely advanced that. Stephanie: To dive back into the loyalty program conversation, because I'm very interested in that, we haven't had a ton of people on the show who've talked about that, so I'll probably keep circling around that for a little bit. Rachel: Sure. Stephanie: I want to hear how you think about developing a successful loyalty program now. How do you get people to engage? How do you get them to be excited about it? Rachel: The most important thing is research. You have to understand what customers want first and foremost of course. That's the first step in any real loyalty program whether you're launching a loyalty program or enhancing a loyalty program or just completely transforming a loyalty program. You have to understand what research, what customers want. You have to look at the data and understand what they actually do. Rachel: So, it's the this is what I say I want and then this is what I actually do. And you rally have to be a data scientist and understand what it is that is bubbling to the top. If I know my to customers are coming in and I'm looking at the data that tells me they come in X amount of times per week and they shop for key products, then I can understand and I can translate that back into transactional offers. I can say, "Okay, these are the top products that I need to make sure are relevant to that consumer base on a regular basis." Rachel: But it doesn't get at really what drives them and motivates them to be loyal to the brand. So, I think that that research is such a critical step in really understanding how consumers really feel about your brand. You don't want to be the brand that customers just feel like you're on the corner and you're convenient so they have to shop you. You want to be the brand that they want to shop at. Loyalty isn't just about the program, it has to be about the total solution that retailer provides and your feelings about that retailer. Stephanie: It seems like there would be a lot dark data out there, especially for maybe grocery stores because I'm thinking, would my local grocery store even know that I go in and out because I don't interact with them online right now. I sometimes put my phone number in, sometimes don't. How would you make sure you have a good sample size of people to use for your research when building that out if maybe you still have quite a few of your customers that you don't even know yet. Rachel: No, I think that's a great question. I think you have to ... There are panels that you can go, usually your consumer insights team has access to panels of customers who volunteer to participate in research studies, so that's typically the first place that I go if we don't have enough data within the database. If there's enough data in the database to start with, usually that does require an e-mail address or a physical mailing address and not just phone number. Rachel: So, if your local grocery store only requires phone number and ... I'll say actually that was the case for Stop & Shop prior to the transformation of our new loyalty program where we really just ask for phone number point of sale. And that gave customers access to that two tier pricing. That doesn't do anything for a company, just having phone numbers and actually going to build off your database of course. Then you don't have a way to really round out that customer experience and understand. You got to be able to tap into that customer and ask them what they want. Rachel: It is really important that you're coming up with a program or if you have a program that it's enticing enough that customers want to give their data, they want to give you the right e-mail address or they want to give you the right mailing address so that they do participate in the program but they also are willing to give your opinion when you ask it. Stephanie: Yep. It also seems like making sure you have a seamless experience when asking for that data is really important because I can think of a number of times different stores have been like, "Oh, can you type in your e-mail?" Or just, "Read it off to me and I'll type it in very slowly." I'm like, "Ugh, just don't worry about it," or "I don't want to use your old type pad that's not really working and I'm going to have to delete it 10 times to get it right." Rachel: Right, exactly. Yeah, you're absolutely right it has to be simple, seamless. I think digital cards is a great way to make it simple and seamless. It's easy enough for a POS to scan a digital barcode that ties back to your loyalty card or phone number, provided the fact that the number actually is tied to a valid e-mail address or valid mailing address. Any way that you can provide convenience for consumers to access their program seamlessly, quickly is really important. Stephanie: Yeah, I completely agree. When you're setting this up, even If you don't have access to maybe huge amounts of data, are there any unifying themes that people just generally when it comes to loyalty or rewards programs where you're like, no matter where I've been it seems to always get someone to sign up if we have this or this offering. Rachel: Well, I think a based program, it has to be about savings, right? Every program is at it's core about saving, so hotel, airline, you're earning points to get free something or to save on something. And so, at it's core you have to have a savings in the value proposition. And then I think everything else that goes on top of that whether you have a tiered program where you're providing your top tier customers with more of those experiential benefits or more of those softer benefits is really, it's dependent on the industry and your ability to provide different levels of benefits to customers. Rachel: I think in the supermarket industry you don't see a lot of tiered programs. I think that that's mostly because there's not a lot of experiential benefits that you can provide that consumers really are interested in. I think a lot of customers look at grocery shopping as a chore. There are, there's certainly a core of customers who really enjoy it but for the most part a lot busy consumers today do look at it as a chore and I think that lingering in a store is not something that a lot of people are really interested in. Stephanie: Yep, yeah I completely agree. Is there any research that y'all have done when to what really matters from a savings perspective? What percent actually drives someone to purchase something they maybe wouldn't have purchased prior to seeing that savings? Maybe 5% eh, maybe not, 20% probably so. Anything that you've seen around that? Rachel: It's funny that the higher up you go in savings, a lot of times customers say they don't believe that. When you say save 20% or 25% or whatever, it seems somewhat unbelievable and I think a lot of customers question it. With our go rewards program we actually know that customers saved 15% or more. We did a lot of research because the and more was actually the savings is more like an average of 20% but customers really felt like, "That seems high, that seems really unbelievable." So, 15% we're like okay, let's just actually take that down because that seemed to be more palatable percent for customers for some reason. Stephanie: That's really interesting. Rachel: Isn't it? Stephanie: I know. I mean, when you see these shopping sites when it's like 75% off it actually makes you just one be like, "Well, was it ever worth the price that you listed it at?" And then are you going to get a 90% off. So I do question brands that have huge sales like that more than I do with someone who's consistently like, "You get 15 or 20% off no matter what promo code or coupon or anything that you get, it's never going to be higher than that. Rachel: Right, yeah. You start to question the quality and you say, "Oh, geez." I mean I'm sure the average consumer doesn't think in terms of margin but I start thinking about margin. Stephanie: I do too. Like minds, very like minds. [crosstalk 00:22:05]. "How much were you making before this?" Okay. Rachel: Exactly. Stephanie: That's great. How do you think about metrics when it comes to these loyalty programs. Are they unique and very different than maybe metrics for other e-commerce business or other programs that you might set up? Rachel: Well, I think first and foremost most companies will look at sales as a huge metric within their loyalty program because it's an investment for the organizations, so ROI is going to be important. But the ROI actually comes from retention and in some cases reactivation. You know that a lot of times it's true, the cost of getting a customer is equivalent to retaining eight. Rachel: So, I think if you can look at ... most organizations look at sales from the program and incremental sales from the program. I think that that is the real true metric. Engagement of course is also important. And customer satisfaction is vital. Stephanie: Yep, that makes sense. Are there any memorable campaigns that come to mind. You're like, this one was my favorite marketing or any other kind of campaign hat I've done that you want to share? I'm always interested in stories around that. Rachel: Yeah, no I think that I worked on so many great campaigns but the ones that are truly, fully integrated across every channel is that's what's really exciting. When you see a campaign, for example right now this might sound silly or small but we have this pizza campaign. We've got a commercial on air about the best pizza is your own pizza and we've got that campaign in every other channel, so digital, e-mail, social media, through my go rewards program, we throw in extra points when you buy certain products within the category. That's really what excites me is I think when you see it come to life and you see really the full ecosystem within marketing utilized to support something. That's when you really see the power of marketing come to life and you see how it actually makes sense obviously to have one point of view and to be more customer centric in your campaigns. Stephanie: Mm-hmm (affirmative). And it's like a better way to measure things as well if there's this one initiative going across many channels and you can look at it without having a bunch of other players messing the data up. Rachel: Right, right, exactly, exactly. I see some marketing campaigns right now and [inaudible] there's some big players out there that did all of these back to school campaigns and it drove me nuts because it's like we are not back in and it showed all the kids walking down the hall and of course I know that they had all these commercials shot in the can well before a lot of this happened but I feel like you're talking to a consumer base that is in a very different place right now. I think that obviously understanding what consumers are looking for and really being relevant like that pizza campaign. There's so many people who are at home cooking together right now. I feel like that's really where I get most excited is when I see obviously that relevance and then more of that omni-channel and cross channel campaign. I think that that's really where you see some good results from marketing. Stephanie: Yeah, that's as good point about people still running their commercials that they maybe shot a long time ago. The only one that I think has done really well in my mind that I've seen recently is either Trader Joe's or Target that had grab your back to school supplies and it was at a line rack. I'm like, "That's good, that's relevant and I'm going to get some [inaudible] now." Rachel: That's perfect. Stephanie: Yeah, really good. We had someone on this show who was also mentioning you should have different scenarios, especially at a time right now where you don't really know what's going to happen and you should be ready to pull your campaigns and slot something in really quickly. And it seems like a lot of larger brands or especially older brands just didn't think that way or maybe just thought, "Okay, let's just release this and see how it goes anyways." Why do you think that's the case? Why do they still put this out into the world when many of them probably knew it was not a good fit? Rachel: No, and I think it does more harm to your brand than anything to be honest because obviously if you're not relevant and you're not listening to what's going on in the world then I think that it does more home. At the beginning of COVID we did a lot of work around providing at-home solutions. We had a chef who actually did a cooking show within social media. I worked with this chef to come up with a series of cooking shows within Facebook and we did a number of other just activities to do with the kids at home and there was more relevance to our campaigns and it really resonated. Customers really appreciated the fact that we were giving them content that actually was valuable, interesting and just relevant to what was going on in the world. Rachel: You can't be deaf to what's happening and you have to really just make sure you're always paying attention and listening to what customers are saying. Stephanie: Yeah, completely agree. Earlier you were talking about the pizza campaign and how you put on many, many channels. Which channels are you finding are most successful or are there any new ones that you're experimenting with that you're finding some early success in. Rachel: I think that we do a lot within social media and I think that the channels in social media that we're finding some early success in would be Next Door and TikTok to some degree. I think with TikTok, youth are still clear we haven't done a whole lot there but I think that the brands that have been on TikTok and have done some really good work and have seen some great results. And I think the social media channels are probably the ones that give me the most excitement because I think there's such a great way. Rachel: We're working towards integrating commerce into social media. That's a big project that my team is working on right now and it's such a great way to capture an audience when they're just in their downtime. They're in a different kind of mindset and they're more open to maybe looking at inspirational content, recipes, things like that within Pinterest or within Facebook or Instagram. And they may want to buy it right then and there and they may want to say, "I want this recipe, I want it delivered to my house. This is great." So, I think that any of the campaigns that we've done in social have really been my favorites. Stephanie: You mentioned integrating commerce into social media. Are you all taking that initiative on yourself or are you more relying on the platforms to develop the solutions to tap into? What does that look like? Rachel: Yeah, we are relying on platforms. Obviously we have to, there's a lot of work that needs to be done still in this area. And I think that's a little trickier just for a supermarket because you're not going to buy just a tomato. Stephanie: [crosstalk] tomato from Stop & Shop. Rachel: Right, it's not like when you see a pair of shoes on Instagram and you have to have them. You don't really have to have that tomato on Instagram but you may want that full recipe so making sure that there's enough content that is actually worthwhile to the customer I think is the challenge and that's what my team is trying to figure out right now. Stephanie: Got it. When I'm thinking about commerce or social media, has Stop & Shop explored ... or maybe you guys already have this like your own products where it's like you can only get it from here. It's not a generic brand it's actually like ... I mean, that reminds me a lot of what Trader Joe's does. It's like if I want this one, well they discontinued this prune juice I really loved. [inaudible 00:32:00], yep. I love their prune juice, they discontinued it. Anyways, I knew that they were the only ones that I liked it, that's the only one I wanted to have. And so, have you explored something like that of creating certain things that will be top of mind where it's like Stop & Shop is the only one that actually has this kind of recipe of whatever it may be, prune juice. Rachel: Yes, actually in fact we have our own line, Nature's Promise is a proprietary line across the Ahold Delhaize brand. And we have our private label brand of course and then we have Taste of Inspirations which is a really nice higher end private label brand for us. And we are definitely doing more within that space, integrating with go rewards with our new program. When you buy a recipe that is all Nature's Promise ingredients you earn extra go points. Rachel: We have these recipes called take five that were featured within social media and we've got them in our circular and in other areas. And if it's all our Taste of Inspiration products you earn X amount of go points. We have a lot of those types of promotions that we're doing now and that's definitely what we'll be integration into our social media commerce platforms in the future. Stephanie: Very cool. And I feel like there's a lot of interesting opportunities too as you now explore ... you're going to have this new e-commerce platform to get new data and to see what people are really like and what's maybe swaying them to buy one thing versus the other. It seems like there's a lot of opportunity that'll come up around building new offerings that maybe you wouldn't have thought of otherwise. Rachel: Yeah, absolutely, absolutely. And I think if you look at solutions that's definitely really important to our customers right now. There's so many families that are just so busy and providing meal solutions, even a night, a couple nights or a week of meal solutions is such a huge time savings for a lot of families. Stephanie: Yes, I feel that with three boys now. I'm like anything to not have to cook from scratch would be appreciated. [inaudible] it's frozen, whatever it is. If it's edible it's cool. Where does personalization come into play or you guys? How do you think about showing offerings throughout your e-commerce experience or your apps that really connects with the person who's looking there? Rachel: Well, personalization [inaudible] success, so I think whether or not we get it right 100% of the time I think is something that remains to be seen. I think we have made some huge advances in personalization with the new platform, with our program. The more data we have about a consumer's shopping behavior, what they like, the better the offerings that we'll be able to give them. Rachel: So, if I purchase Doritos all of the time, hopefully I'm not getting a offer for something else, Lays potato chips, I should be getting offers for Doritos. So, that relevancy is really, really important. And that's something with this new program that we're providing customers whether it's through product coupons, which today now that I look in my coupon gallery on my app, I have six products that are relevant to what I purchase every week which is really great, so I know the algorithm is working correctly. Rachel: Then on top of that we also have more of those category offers. So, if I'm somebody that always buys fresh produce now we're actually doing more of the $5 off your purchase when you add a fresh produce. More of those category offers that are relevant to what I purchase every day. I think it's incredibly important. And then through the e-commerce journey this is really where I'd like to see us make some improvements. It's on recommendation engine type of logic, so if I'm putting a pizza dough in my basket on my e-commerce platform then hopefully somebody's going to be recommending some mozzarella and pizza sauce to me. Rachel: That type of a level of personalization is something that we strive for and want in the future. We have some degree of that today but that's certainly where I expect we will be going in the near future. Stephanie: Radical. When it comes to those recommendations are there any tools that you're relying on to build that out or is it everything you did in custom or how is that working behind the scenes? Rachel: Yeah, the recommendation actually is homegrown, so that's where our internal partner actually has been using all of the data from the loyalty program and understanding what customers buy, and there's propensity models that we have in place. So, somebody who has the same profile, who typically purchase X, Y, Z. "We actually build a model to say here are look alike customers and here's what we should recommend to them because it looks like that customer is similar so they may be interested in these types of products." And that's something that our internal data scientists have been able to build out for us. Stephanie: That's great. Is there anything when it comes to machine learning or the world of data that you guys have access to that you're maybe preparing for or different capabilities that you're building out right now that may be other grocers or other e-commerce stores are maybe a little bit behind on? Rachel: Yes, there definitely at the Ahold Delhaize level. I think that AI and certainly machine learning is something that everybody is going to have to be prepared to work on in the near future and be prepared to have teams working on that in the near future. And Ahold Delhaize does. Stop & Shop as a brand doesn't but at the Ahold Delhaize level we do. Stephanie: Very cool. And do they usually come up with something at the higher level and implement it within all of their stores or do they test it out and say, "Okay Stop & Shop you're going to pilot this and we'll learn from you and then we'll have our other brands try it as well," or how does that work? Rachel: That's exactly what it is, yeah exactly. And I see a big trend in experimentation and learning done with artificial intelligence, natural language processing. The first steps into conversational commerce and customer service. I think individually each of those is interesting but when you string it together it becomes really compelling and AI is now being given enough transactional information. And when combined with data science can match and predict customer behavior at a level not previously possible. So, natural language, processing and conversational tools really make it possible to help customers during the purchase journey and even more importantly in many aspects of customer service. Rachel: So, these previously somewhat academic technologies are being put in the hands of digital commerce managers and we begin to see the results. So, I fully expect that within the next couple of years what we're testing at a Ahold Delhaize level will be brought down to each of the brands. Stephanie: Yeah, it seems like there could be an interesting ... that you would get interesting results from the different brands because I can see very different consumers who are maybe shopping at Good old Giant back in Maryland. Rachel: Yes, you're absolutely right. Stephanie: How do you approach that when you're trying out different things and maybe you're like, "Oh, we see this with our customers at Stop & Shop, let's try this at another brand." And you're like womp womp that actually failed at that [inaudible] are so different. Rachel: Yeah, no it's a great call out and I say that all the time. I say what matters to somebody in the food [inaudible 00:40:18], so what matters to somebody maybe in North Carolina is different what matters to somebody in New York City. So, we have probably the toughest competitive market not only from a grocery retail perspective but even just from a media perspective and trying to ensure that our voice is heard within these difficult tough media markets. Rachel: So, for Stop & Shop really it's a little bit tricky and we do have to take a look at every single opportunity that comes our way and say, "Does this resonate with our consumer base?" Because a lot of times it won't. I think that there were a couple of examples of trying out even just a walk-up pickup service. In a city location you can walk to get your groceries handed to you. There've already been shop for you versus the traditional pickup where we load it to your car. That doesn't work everywhere obviously. [inaudible] work in the suburbs, it really only works at urban locations. That's one thing that comes to mind, there's a number of them that come to mind but each brand does have an option to opt out if it's not something that resonates within their base. Stephanie: Yeah, it makes sense. Try and implement that in New York city and all of a sudden these cars are being towed and then they're mad. Rachel: Right. Stephanie: [inaudible 00:41:48]. So, to go a little higher level I want to talk about general e-commerce themes and trends. I wanted to hear what kind of disruptions do you see coming to commerce that are not just from COVID or not just COVID because I think a lot people on here are like, "Oh, COVID's the big disruption." What else do you see happening in the world of e-commerce that's maybe coming down the pipe right now? Rachel: I mean one that's already here really is one stop shopping like Amazon. So, the retailers who adapt and constantly expand their options, shorten the supply chain, enhance customer service and develop great options for delivery and pick-up have the most success. So, I think that the model that Amazon has and Wayfair, the direct to consumer shipping is not as much as a disruption to e-commerce. That's here to stay and I think we have to learn from that and we have to adapt in order to stay competitive. And I think a lot of retailers are going to have to adapt in this new world. Everybody's going to have to be able to figure out how to provide that one stop shop because it's similar to brick & mortar shopping. You don't want to go to multiple locations on a Saturday afternoon. Rachel: It's the same thing, if you're going to pay for shipping you're going to pay for it once from one retailer or get free shipping, of course with a subscription service or promotion. And I think that's definitely here to stay. I think that convenience and the ease of finding everything in one place is that it's that big box retail mentality from back in the 80s when the big box retailers really exploded. Stephanie: Yep. Figuring out delivery and trying to compete with Amazon, man that seems very, very tough. Rachel: Very tough. Stephanie: Consumers have very high expectations now of what they want and yeah, it seems like they are quick to get upset if it's not one, two day shipping and, "Oh, it can't be here within two hours? Okay, I'm going to have to cancel the order." Rachel: Right, exactly. And "Oh, you don't have all the other things I need to? I need my face lotion and my bread. Wait, you don't have that?" Stephanie: Yeah, "Why would you not have that right next to each other?" Rachel: Right, exactly. Stephanie: Yeah, this has been awesome. Is there anything that I missed that you wanted to highlight before we jump into the lightning round? Rachel: No, I don't think so. Stephanie: Okay, cool. Well, I will pull us into the lightning round brought to you by SalesForce Commerce Cloud. This is where I'm going to ask a question and you have a minute or less to answer. Are you ready Rachel? Rachel: Oh, boy. Stephanie: All right, first one, what does the best day in the office look like for you? Rachel: Best day in the office today is at home. Stephanie: There you go. What does your virtual best day look like? Rachel: My virtual best day is when I actually have time between meetings to go get something to eat [inaudible 00:45:01]. Stephanie: That is actually a big problem I've heard from a lot of my old coworkers and talking about their whole day is now filled with meetings that maybe would've taken just a couple minutes to have a quick catch up and instead it's like, "Okay, 30 minute slots to discuss maybe one question." Rachel: Absolutely and you use your hour to the fullest extent and you're not moving around from meeting room to meeting room anymore. You're literally just sitting at your desk all day, so my best day is when I actually have a break to get up and go get something to eat because food is important to me. Stephanie: That seems like a crucial part of the day, so what's up next on your Netflix Queue. Rachel: That's a great question. I've actually blown through almost everything. Stephanie: And what was your most recent then? Rachel: I just watched the Enola Holmes. Stephanie: I'm watching that now, it's so cute. Rachel: Oh, it was excellent, I loved it, it was really great. I love Millie Bobby Brown, I think she's fantastic. Stephanie: Yeah, she was really good. Highly recommend that one. What's up next on your travel destinations when you can travel again? Rachel: Oh, gosh I want to go to Scotland so bad. Stephanie: Oh, fun. What do you want to go there for? Rachel: I want to golf. I love the countryside, just looks amazing, beautiful. I want to go hiking there. I have a lot of grand plans for Scotland and Ireland too as well. Stephanie: If you were to have a podcast what would it be about and who would your first guest be? Rachel: It would definitely be about true crime because I'm obsessed with true crime, which I know everybody is right now but I really do find it fascinating and I always have. This isn't just a fab for me, I always really liked it. Stephanie: Mm-hmm (affirmative). You started it, everyone else followed. Rachel: Yeah, exactly. I'm a trendsetter of course. Stephanie: Yes. And who would your guest be then? Will it be a serial killer? Rachel: Yeah, absolutely. I would love to interview a serial killer. I just want to know what goes on. I want to get deep for sure with a serial killer, name any one. Stephanie: All right, I mean I would listen to that. I hope they're behind bars when that happens. Rachel: Yes, yeah. I could do the interview behind bars for sure. Stephanie: There you go. And if you were to pick a virtual event right now for your team or if you already had one that you've done recently, what would it be that you think is engaging in these times? Rachel: I think there's a women's conference coming up in Boston that I would love for my team to attend. I just attended a women's leadership conference that was really amazing. It was very inspirational, even virtually I was really surprised at how well done it was and how just thought provoking the virtual conference could be. It was really fantastic. Stephanie: That sounds awesome. All right, and then the last one, what is a favorite app on your phone right now that you're loving? Rachel: This is bad but I have the CARROT app, which I don't know if you know, CARROT is the weather app. Stephanie: No, I actually don't. Rachel: It's a weather app that actually gives you a really sarcastic, snarky message every day when you open it up, so ... Stephanie: Oh, my gosh. That's great. I like that, that's really good. Well, Rachel this has been such a fun interview. Where can people find out more about you and Stop & Shop? Rachel: So, Stop&Shop.com Stop & Shop app and me, my LinkedIn profile, so Rachel Stephens, S-T-E-P-H-E-N-S. Stephanie: Awesome, well thanks so much for joining the show. Rachel: Thank you very much for having me.
When it comes to decisions brand leaders have to make, choosing the typeface that will live across your website and on all of your products is a pretty big one. Customers are going to see and interact with your copy throughout the life of your brand — and making a change to your design style will cause a ripple effect with lasting impacts. Monotype is the largest company that is dedicated to typefaces. According to Jonathan Zsittnik, the Vice President of Commerce Channels at Monotype, the company has the world's largest library of typefaces, and thousands of type families, many of which are the backbone of key brands. On this episode of Up Next in Commerce, Jonathan explains the intricacies that go into running and selling that massive inventory of fonts. Plus, he dives into the importance of choosing and properly licensing a font style and how it can impact a brand. Main Takeaways: Would You Like To Update? — A brand is a living, breathing thing, and needs to change with the times. But updating a brand’s typeface may require more careful thought and planning than some may anticipate. How do you pick or create a typeface that works for both mobile and desktop, speaks to your brand’s identity, works in multiple languages, and meets different users' needs? Tune in to find out! It All Adds Up — The Ecommerce experience does not begin and end with a customer putting an item in a cart and then completing a transaction. That experience needs to carry on after the purchase has occurred, because in order to turn a one-time purchase into a repeat customer, brands need to stay top of mind for their customers. Every part of your brand — including the typeface you choose — makes up the Ecommerce experience and should be taken into consideration. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to Up Next In Commerce. I'm your host, Stephanie Postles, co-founder of mission.org. Today on the show, we have Jonathan Zitnik the Vice President of commerce channels at Monotype. How's it going, Jonathan? Jonathan: Very good. Thanks so much for having me, Stephanie. Stephanie: Yeah, thanks for coming on. We were just mentioning that today's a special day. It's your 19th anniversary. And how lucky are we to have you on the show? Jonathan: Oh, man. It's crazy to have been here so long, but I've enjoyed the ride. And what better way to kind of celebrate that anniversary by talking about Monotype and all the things that I've done and see coming, than being here with you today. So thanks for having me. Stephanie: Yeah, it's going to be really fun. I think you're the first person we've had on the show that's been somewhere this long. So I think it'll be a really good conversation where you've actually been able to see a company evolve, and grow, and change. So I'm excited to dive into it. Jonathan: Awesome. Stephanie: I was hoping we can first start at Monotype. So I was reading a bit about it. But then I saw that you employ, I think it was somewhere around like 700 people and had really high revenue numbers. And I was wondering, what do you guys actually do? What is Monotype? And how do I think about the company? Jonathan: Sure. So I think probably your audience is largely not familiar with Monotype, but would recognize many of our flagship products. So if you've ever worked with the fonts Helvetica, Arial or Times New Roman, then you've worked with some of our key offerings. Monotype is the largest company that's dedicated to type. And we have the world's largest library of typefaces, where you'll find thousands of type families, many of which are the backbone of key brands. So the list of typefaces goes on quite a bit that that brands rely on every day. Stephanie: That's awesome. So are you guys purely a typeface design company or do you do other things as well? Jonathan: So type is really at the core of what we do, but we do have some other supporting businesses that all relate to helping brands express themselves and make sure that their digital expression is on point and translates across their various mediums that they communicate over. Stephanie: Very cool. So when I'm thinking about fonts, I guess maybe I'm a newbie when it's coming, or when I'm thinking about fonts, but oftentimes, I'll maybe go and look for free fonts or trying to see like what's out there. So how does Monotype make money and monetize these fonts? Jonathan: Sure. So the majority of our revenue comes from creative professionals that are working with type and those creative professionals could be internal, so working on behalf of the brands, at the brands, at those enterprises, or working at agencies, or even individual creative professionals that are in freeline design spaces. So we're really supporting the creative space and these are the people that know about type, care about type and know how to leverage it within their design projects. And understand that it can really be the backbone of a brand. So these are the people that are willing to spend the value in a typeface. Stephanie: Awesome. And I saw I think you guys developed some fonts I know like Times New Roman, huh, that's a favorite. Is that you guys who created that one? Jonathan: It is, that was a custom typeface at the turn of the century for the London Times. And so it's gone through many, many iterations over the years to catch up with digital times to make the progression that the type has gone from over the years from metal type through phototype and now it's a digital type. Stephanie: That's cool. So how do we think about types transforming over time? Like, what are the levers that make you guys want to change a font, or typeface, or edit it, or make a new one? Like, how are you staying on top of these trends and actually deciding like, "Ah, this would be a new way to maybe shift the fonts or create something new or even transition an old font into something more relevant." Jonathan: Yeah, that's a great question. A lot of our successful typeface releases come from either new opportunities based on the way that type needs to be used or updates to existing typefaces to make sure that they're catching up with the digital needs of today, right? So take Helvetica as an example. Last year we released Helvetica Now, and it was an update for Helvetica, which cleaned up some of the idiosyncrasies that had caught up with the typeface over the years and make sure that it has all the necessary characters that are used today, some adjustments so that the type looks great on screens versus some of the way the characters were drawn originally, and which didn't translate as well. Jonathan: So those types of updates are really common. And as I said, previously, when you're thinking about a new typeface, you want to think about the challenges that designers are having today and make sure that you're designing it for those needs. Stephanie: So what are some of those challenges, if a brand is thinking right now about I mean, what first comes to mind is maybe creating a logo or something like that? And I think for us, we're pretty, like easy standard. I think we just use like Futura or something like that. But for people who are looking to actually develop their own typeface, what are some challenges they might encounter down the road when it comes to maybe designers trying to use that? Jonathan: Yeah. So if you want to think about all the places where the brand needs to be represented, right? So if you are going to be using your type in an application, like a mobile application, you're going to make sure that the type performs its small sizes, that it looks great on screen and that the readability remains strong when it's presented that way. And you also want to think about your audience, right? Jonathan: So if you're selecting a typeface, and you know that you're going to be communicating with an audience that's global, you have to make sure that you have the necessary characters to ensure that you can communicate in all the languages your audience uses. So those are just a couple of the considerations, but those are big ones. Stephanie: No, that's some good things to keep in mind. So when I'm like... what are some of the maybe top typefaces right now that you see a lot of brands going with? Like, is there anything new that's happening or shifts happening in the world of fonts that maybe hasn't happened up until now? Jonathan: So I mentioned the remaking of typefaces and updating them and that's a big trend. A lot of the big name typeface families like Helvetica and you mentioned Futura are used by these major brands because they know them, they're familiar with them. They know they perform well. They're versatile typefaces, and they're just beautiful designs. And so these updates that are happening, it's a trend that you're seeing more and more of, and what the audience is getting is a broader range of typeface suites which can be exciting so you can extend the family to include more decorative designs so that you can extend the family designs to be more creative with your work. Jonathan: You're getting broader character ranges, which is excellent for taking your brand to different places and geographies. And also some visual adjustments to make sure the performance is there, regardless of what the typeface is. So that's a big one. Stephanie: All right, cool. So I wanted to get into your role a bit. Being at the company for 19 years. I want to hear how it's evolved and what your day to day looks like right now. Jonathan: Sure. So when I started back in the day, it was still really at the dawn of Ecommerce. It was kind of an exciting place to begin, certainly for Ecommerce marketing. Pay per click advertising was just emerging. So I don't think even Google had introduced AdSense at that point. So it was kind of an exciting time and we used all of those things really to establish our Ecommerce business, which when I started, had really just launched. Jonathan: And so at that point, we developed myfonts.com and through my time we've gone through numerous acquisitions. So we have a host of commerce properties, myfonts.com the largest of those today. And so it really went from an Ecommerce marketing roll up into managing operations for an Ecommerce business and took a brief turn in that to focus on a subscription offering and then helped build out a customer success and support organization to help the greater Monotype business grow and ensure that our customers including our enterprise, customers, really have the support that they needed. Jonathan: And more recently kind of turned my focus back over to the Ecommerce world. So now the role is managing the global digital commerce business, which includes our font sites, some of which I just mentioned, a little bit of our indirect business and a relatively new business that's fun and growing, which is called flip font. And it's an application that runs on a mobile phone unless you've changed the UI typeface to one that you purchase from a store. Stephanie: Oh, very cool. Jonathan: Yeah. Stephanie: So what does that look like overseeing the different Ecommerce channels? Like are there different maybe learnings that you're getting from having different websites to be able to like see trends on or see like which ones are doing things successfully, and which ones maybe need to have a little help. What kind of things are you seeing by having that oversight of multiple websites? Jonathan: Yeah, well, that's certainly one of the challenges right? Because it's a lot of businesses rolled up into one business. But there's advantages of that too, right? Because you can test out different techniques on one website. And then if it works out, you can roll it out to others. And one of the challenges is that they all have slightly different audiences, the customers coming from different places, like if you look at the different customer segments, they're not identical. They have different preferences and so you have to act and think in the interest of these different audience segments. Stephanie: Got it. So where are these customers coming from right now? Like, what kind of acquisition channels are you guys using to find new customers and then how are you treating them differently depending on the source of where they came? Jonathan: Yeah. So most of our customers, one of the advantages that we have is that a lot of our typefaces have been in use for many years. And so when a typeface gets, it's purchased and sees used within a project, and that project will spurn additional use, right? Especially if it's in the hands of an agency and an agency might use it with multiple clients. Jonathan: So a lot of people will come to the channels already knowing exactly what they need. And so a lot of the focus is on making sure that we can get that customer who already knows that they need to use this particular font, get them the font, get them in the cart, make sure that they know what license they need, so they can get back to designing as quickly as possible. So that's a lot of the emphasis there. Jonathan: And then the other point of emphasis is really on the discovery phase, and this is for the designer that knows that they need a particular type of typeface, they might have a classification in mind or a couple of different qualities in mind that will suit the needs of their project. So what are the tools that we can provide them, how can we help them filter down the inventory of a hundred thousand plus fonts so they can get down to the one that's really going to be the perfect design, perfect choice for their design. Stephanie: How do you go about personalizing that because I could see it being quite a bit of consulting and education depending on maybe the industry and I could see people also coming in with quite a few wild ideas where when I was looking at design recently it's like, "Okay, don't go too crazy. Don't go too designery or too out there because that stuff will probably got out of style soon." And like, how would someone go about recommending what kind of font a brand should use? Jonathan: Yeah, so I think there's a couple things you can focus on. One is just the making sure that you provide enough tools to help someone navigate the inventory. And so if you understand the attributes of your inventory, you can make it easy to filter down. And also you can go take a look at just the Sans Serif fonts. And then you can look at the Humanistic Sans, not to geek out too much on type here. No, but you can kind of narrow down your selections by the various characteristics of the typefaces for the person that has an idea of what they're looking for. Jonathan: But I think the more fun thing that we do is making sure that we give our customers a sense of how the typeface is going to perform before they purchase, right? So you need a lot of tools that allows the designer to experiment with the typeface before they purchase it. So before they lay their money down, make sure they understand what it's going to look like. And the visuals that we supply are critically important. So making sure that we have the images that don't just show the range of the typeface that's important, but also some fun examples of what it might look like when it's designed. So really just show off the characteristics of the type. Stephanie: Yeah, that's really important. I was just thinking when we're going through making website changes and stuff, I always wish they could just be an easy, quick switch of like, what does it look like with this font, this font, and maybe you guys have this functionality, and I just never knew it. But oftentimes, it's me like trying to preview and going back and changing again, previewing again. And after maybe changing it a couple times, I'm like, "Oh, I'm kind of done." So do you guys have that functionality? I think you mentioned it with the app earlier. But do you have that for desktop as well? Jonathan: Yeah, there's different ways that you can do that. And depending on what tool or what subscription you might have, there's different ways that you can experiment with typefaces. And that's always been a huge problem for the type industry, right? It is sort of, how do you allow someone to experiment with your product, but make sure that you're not cannibalizing your sale? So that's kind of the trade off that we have to work through. Stephanie: So I'm interested in thinking about metrics when it comes to changing typefaces. I mean, I'm sure you guys have case studies where different fonts produce different results, can you speak through some of that? Jonathan: Well, it's difficult to predict. So unless you're working with a typeface that has a track record, and you're doing a new version, you're actually not certain what you're going to get, right? So typefaces are a lot like music where there will never be enough created to satisfy the creative needs, both on part of the person that's doing the creation and the designers that are consuming what's created. So a lot of it is strategic, right? Jonathan: So we know that there are certain needs that need to be served so we'll do a release there. And some of it is creative expression. Stephanie: Got it. And you mentioned that a lot of people come to you knowing what they already want. Do you also do paid acquisition for getting customers to find out about you. Like if it was someone like me and I'm looking for a brand redesign, how would you go about targeting someone who maybe I don't really know much about fonts or for me if I wanted the font I might open up maybe Adobe Photoshop and get it in there and like I wouldn't actually know the process of maybe even buying one and licensing and stuff like that. Stephanie: So how would you go about maybe pulling in a new customer like me with very low awareness? Jonathan: Yeah, sure. So for targeting individual creative professionals, paid search of course is huge and all the typical advertising methods and affiliate programs, which bring people in and will, on the paid search side will also invest in terms where that are not product specific unless there's someone that's looking for a particular style of typeface we can bid on those terms or using terms like something that's more broad like font or by fonts as well. And for the larger customers that we work with those might come in to the agencies that we partner with as well. Jonathan: So if we doing a, involved in a big brand design, it's not uncommon for us to partner with the agency that's working with the brand. So some business comes in through that way. And in other cases, we might see that a brand has started to work with one of our typefaces, and we'll get to know them a little bit better and see if we can expand the relationship and then help them with the next steps in their brands. And maybe there's different ways that we can help them as they prepare to make that move further down the digital path. Stephanie: Got it. So you mentioned partnerships earlier, and I wanted to maybe touch on that a bit because I think maybe in our prep notes you'd mentioned partnering with other technology providers to basically have a more creative and collaborative approach when it comes to design and the whole ecosystem in general. I was hoping you could talk about what those partnerships look like and how you guys are thinking about the design and not just typeface, but the industry as a whole. Jonathan: Yeah, so I think on a more practical level, there are lots of Ecommerce providers that we partner with to put great quality type in the hands of their end users, right? So if it's an Ecommerce platform that has their own templates, you might find Monotype typefaces built in there. So when you're doing your design, you don't have to choose from the standard website, web safe typefaces that you know, are going to be resident on just about everybody's machine, right? So you have a nice variety of selections to choose from. So that's one way that we partner with which puts our type in the hands of more end users. Jonathan: But I think that like when you're thinking more broadly about collaborations with Ecommerce, the industry has just evolved so much. And today Ecommerce when you're thinking about your Ecommerce experience, it's not really just about those few precious minutes that the customer spends on the website, right? To do it right, you really have to be thinking about how that Ecommerce site supports the brand and what are the key elements of a brand that you want to inject into that Ecommerce experience. And then that Ecommerce experience really broadens beyond just shopping. Jonathan: It's all the things that you're going to do to retain that customer and get them to think about you and create that positive sentiment when they're not shopping. So when the need arrives, they're right there going back to your site to purchase something new. Stephanie: Yeah, that makes sense. So talking about retaining customers, a bit and what came to mind was actually licensing for some reason, because that's also an arena that I don't fully understand. And it sometimes scares me of like, "Oh, is there certain licenses we should have around this? And like, how do you protect yourself and your company?" So I was hoping you could touch on what are some of the failures a new Ecommerce company might be making right now, when it comes to typefaces and licensing and not having the right licenses. What do you see happening right now that could be prevented that a lot of people might not know about? Jonathan: Yeah, font licensing is complex, and it's always been complex. And I think that's something that the industry Monotype included, needs to work on to simplify that and make it easier on our customers. And so a traditional font license, the traditional found license that we've been selling forever is a desktop license. So that allows someone to use a particular font on their machine, possibly multiple machines depending on the license. They do vary. And that's one of the bits of complexity right there is that... so take my fonts, for example, we have thousands of partner foundries that sell their products on our site. Many of which have their own licenses. Jonathan: So that puts a lot on the customer to look through and actually read the license and understand what they're getting. So one of our strategies there is to consolidate on fair industry standard terms there. So that the user is going to be more familiar with the license that they're purchasing. But even looking beyond that, it gets more complicated when you look at different use cases for the type, right? So if you want to use a font on the web, that's going to require slightly different font file as well as a different EULA, excuse me a license agreement and you have to pay attention to the amount of distribution with the font as well. So, are there limitations on the page views associated with the font? Jonathan: And, so really additional use cases oftentimes are tied to additional license types. So if you want to use a font in a mobile application, or you want to use it in digital ad, you might require a different license to go along with that. So there's a lot of different formats there that they have to pay attention to. And it's our job as a marketplace to make sure that we educate our customers when they come to the site and help them find the right license. Especially people that are looking to be compliant with that. [crosstalk 00:24:46]. Stephanie: Yeah, licensing is definitely tricky. I mean, how do you... like if I'm using photoshop, for example, and they have all the fonts in there, and maybe I'm using that to build my own logo, or build a page or something or some kind of like PDF, or if you're using a website builder tool that already has a bunch of fonts like is very different type of licensing thing you should think through, or are you kind of already covered because maybe Adobe already has like an unlimited forever license? Jonathan: Sure. Speaking in generalities here, right, because there are different font license agreements. But typically, a font license for a desktop font license is going to cover use on your machine. And as long as that font file isn't traveling to another user, you're good, right? So the output of that font as long as it's static text that is no longer leveraging the font file can be distributed. And that's the case with most, not all, but most font licenses. Stephanie: So I want to kind of touch on some higher level Ecommerce trends because you've been in the industry for a while. I think you could have some fun answers for them. First one is what kind of trends or patterns are you excited about right now in the world of Ecommerce? Jonathan: I think the thing I'm most excited about right now is machine learning. And it's application for recommendations. So recommendations within Ecommerce has been a problem that we've tried to solve collectively for 10s of years now. And I feel like it's really turned the corner in the past few years. The recommendations you get on store and your music service or other places where it's being leveraged have really gotten good, it's impressive, and it's exciting. So you can go from a place where you're making recommendations that maybe weren't well informed, and just come across as noise to recommendations that are personalized and accurate and are really helping your customers solve a problem. So it's interpreted really well and I think there's a lot of potential there. Stephanie: Yep. I completely agree. What about COVID? Have you guys experienced any kind of impact from COVID right now? And how do you see the industry moving forward after this? Jonathan: Yeah. So I think everybody's feeling some sort of impact. I think the companies that have really seen the most positive effects of it are the companies that have the brick and mortar locations where their Ecommerce businesses is taking off, because that's where the activity is moving. And we have digital goods and digital delivery. Jonathan: So we didn't see that. We saw some initial impact and as our customers spend is really tied to marketing and the agency world which was hit pretty hard. But we've since seen a lot of recovery, which is great. We're seeing a lot of positive signs. And when you look at the various products that we sell, we're seeing some really encouraging and some growth signs, particularly on the use of type on the web which makes sense that kind of speaks to the broader industry of Ecommerce. So that's been a strong point. Stephanie: Yeah, that's really interesting. Are there any other surprises that you've seen through all this where you're like, "Oh, now there's all of a sudden an industry around this, or people popping up asking for this that we didn't have before." Jonathan: The ripple effects of this are huge, right? And so, I think initially, it was kind of hard to put two and two together and see what the impact would be. But you think about it, it makes sense when you see companies like Zoom or DocuSign having success that they are and all of this and so we've kind of seen the effects of that as well and are just trying to cope with it like a lot of companies. Jonathan: And I think in some regard, it's been easier than then we anticipated. I'm very thankful that we're here today and not in 2010, right? If you can imagine trying to do the things that you go through on a daily basis, without the collaboration and communication tools that we have today, it would be incredibly challenging. Stephanie: Yep. Are there any challenges that you guys are facing? Of course, it wouldn't be 2010 levels challenges, but is there anything right now where it's kind of like, feeling a little tough to do X, Y, or Z based on the changes in the market or the increased demand? Jonathan: I don't think that they're market driven. I think if you look at the things that we need to do, everything is totally accomplishable. But that doesn't mean it's not without challenges, right? So you have a team and you work together. There's just something. It's difficult to put your finger on, but I don't know if it's the morale of the group or just that whatever you get from being able to socialize in person, so you feel the effects of that when you can't meet in person and just have that initial catch up. But you know, you can kind of do that informally but it's definitely missing something. Jonathan: And so I think everybody kind of has to find different ways to make sure they get that in their life, in their day to day. The other thing that I think is more challenging is when you're trying to solve a difficult problem, and you can't collaborate the same way. So like I said, Zoom is great, but there's really no substitute for getting five people in a room together with a whiteboard and just working through a problem with everybody's undivided attention. So I do long for those days. And hope that we can do those types of things again soon. Stephanie: Yep, I long for the happy hour day where you can just get together again and not worry and catch up on all things work or not work if you don't feel like talking about it. Jonathan: Absolutely. Stephanie: So I want to hear a little bit about more about Monotype and the successes behind your guys brand. What do you see is working? Like how do you portray your company in a design oriented, beautiful way. Jonathan: One of the things that we've had success with is putting emphasis and attention into our communication materials. And if you look at the newsletters, they're very heavy with imagery that shows the type, shows it off, shows how it can be used. And it's really gratifying when our customers tell us that they find these materials which are ultimately marketing materials that are designed to sell, and inform, and educate that they're inspirational to them. Now, so it checks a lot of boxes there and I definitely perceive that as a victory. Stephanie: How do you go about building those materials? Like how do you know what's going to connect with the customer? How do you know... what one person might think is beautiful another one might be like, "Urgh." So how do you build something that connects with the majority of your customers or prospects? Jonathan: Sure, well, you certainly aren't going to please everyone. You need to rely on talented people that are great with type and see the unique value in an individual typeface and know how to use it and design that shows off its characteristics and present it in a way that shows how it might likely be used by a typical project that would work well for. Stephanie: Got it. Do you ever have to educate new customers in a way of like, "Well, here's what we did with this font, like look at that little curlicue there, that's newer," like showing people why something special? Jonathan: Yeah, so I think, readability, legibility might be a good example. And you could read all day on the various aspects of a typeface that can aid or hinder readability. And so we'll put a lot of time into the generalities of what makes a typeface more legible, more readable. And then certainly, if there's an individual typeface that has some of those characters or those properties we would point those out. Stephanie: Yeah, there's a email newsletter, I can't remember who it is, but they essentially show just how subtle design tweaks and fonts make a big difference in like portraying whatever you're talking about. And it was displayed in such a way that made it be like, "Oh, of course, this one looks better," or, "Oh, we're talking about food in this one." Like you can kind of get a feeling depending on the type of font and I just thought that was a really nice way to just show two things up against each other and it'd be general accepted like which one looks better, which one connects with the brand depending on what the product was. Jonathan: Yeah, that's a great way to present it because great typographic often goes unnoticed. Stephanie: Yep. I think that was kind of their point is like, you wouldn't think anything if you just saw this by itself. But if you saw a random font next to it, or a font that was just like so off brand, it would be very obvious and you would not feel disconnected with it. So I like that. Jonathan: Right. Stephanie: All right, let's jump into the lightning round brought to you by our friends at Salesforce Commerce Cloud. This is where I'm going to throw a question your way and you have a minute or less to answer. Are you ready, Jonathan? Jonathan: I am ready. Stephanie: All right, what's up next on your Netflix queue? Jonathan: Cobra Kai, high recommendation from my wife. So she's jumped in and I'm trailing her. But that's gotten her through the pandemic. Stephanie: I like it. I saw that being the trailer playing and I was just about to watch it. So I'm glad that it has good recommendations from your wife. What's up next on your reading list? Jonathan: It's a book I think it's called Writing Down The Bones. And it's a practical guide to doing more writing and getting more practice at it and ultimately improving your writing skills. Stephanie: All right, cool, I like that. I thought it was going to be A Practical Guide To Typography. And I would say, "Man, Jonathan, you are a lover of typography." Jonathan: I'm all in. Stephanie: I like it. Where are you traveling to when you're able to go out and about again? Jonathan: Oh, Cocoa Beach, Florida is my happy place. And I'm looking forward to getting back down there again. Stephanie: I love Florida. And the last one, if you were to have a podcast, what would it be about and who would your first guest be? Jonathan: Oh, wow. Let's see. Well, I guess I can't steal your idea and talk about Ecommerce. Stephanie: You can just keep coming on the show. Jonathan: I might have the chops to talk about fonts with an Ecommerce audience, but I don't think I could handle it there. So let's see, I might do something just on creativity in general, because I love the arts. I love expression. And so it'd be fascinating to pull in different people from different genres and have them speak about their art form. And who would my first guests be? Stephanie: Yeah. Jonathan: Let's see, I'll probably pull in a musician. And let's see. I'm really excited about the new Deep Sea Diver album that's coming out next month. So Jessica Bazzi. Stephanie: Cool. That sounds great. All right, Jonathan, well, thank you for coming on the show and teaching our audience about all things fonts. Where can people find out more about you and Monotype? Jonathan: So you can follow me on twitter @Zitnik and for Monotype, it's just monotype.com. And you can learn more than you ever wanted to know about fonts from there or you can go to our flagship Ecommerce store myfonts.com. Stephanie: Awesome. Thanks so much.
Why don’t more companies offer affordable international shipping? The answer is because navigating the world of VAT, customs, international duties, and other intricacies make this too much of a headache for most eCommerce operators. Additionally, technical components, payment options, logistics and, yes, varying holiday calendars are all variables that a company needs to consider when it is expanding globally. It’s nearly impossible to do without some sort of help. So the question becomes how do you face this nightmare ready and prepared? That’s where Matthew Merrilees comes in. Matthew is the CEO, North America for Global-e, and they solve these problems. On this episode of Up Next in Commerce, Matthew shares the ins and outs of what it takes to equip your ecommerce brand for international expansion. Whether you need to address currency concerns or want to understand the data that drives your competitors to success in the market, Matthew shares those secrets and more on today’s episode. Main Takeaways: Is It a Holiday? — When brands expand internationally, it’s important to know and plan for holidays that affect customers in every single market. There are opportunities being missed by companies who are too focused on the big international holidays and not enough on local strategy. Pay With Ease — Customers want transactions to be simple. Anything that makes a transaction hard, or confusing, will almost certainly result in an abandoned purchase. Implementing an integrated, hyper-localized payment and taxation strategy is one of the first things companies need to consider when expanding internationally. Plan B — Companies and individuals are currently experiencing many unexpected disruptions in life and business. Being able to navigate through those disruptions is necessary in order to continue providing the best possible customer experience. Creating contingency plans and backup systems to deploy if there is a disruption in your logistics or backend operations will take you a long way. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to another episode of Up Next in Commerce. I'm your host, Stephanie Postles, co-founder of Mission.org. And today on the show, we have Matthew Merrilees, the CEO of North America at Global-e. Matthew, Welcome. Matthew: Hey, pleasure to be here Stephanie. Thanks so much for having me. Stephanie: So, I want to dive in a bit into your background. It looks like you've worked at a lot of different logistics companies. Before we touch on Global-e, I was hoping we could go over your background a bit and how you got to where you are. Matthew: Yeah, for sure. It gets a bit about me, and my background, definitely started, I would say from call it my family history, just the family history of fathers and brothers. And call it family members who grew up in operations logistics, and obviously [inaudible] Ecommerce. So, I think as I followed the family tree and fell into place, I think all in all it definitely did kick off and start my career at DHL Express, where I spent quite a number of years in various different positions, leadership roles, and such. And then made the transition to FedEx where I definitely did a lot of the same. And obviously, now here at Global-e. I think when you look at the background, straight from university into the logistics arena, was quite exciting. Stephanie: Yep. Very cool. So tell me a little bit about Global-e. What is the company? And what kind of customers do you guys have? And how do you interact with them? Matthew: Yeah, for sure. What we are is a cross border enablement platform, right? We focus primarily in three different arenas that support our brands, which is in boosting international conversion rates, which is boosting overall sales and revenue of course. And then most importantly, boosting customer satisfaction for an international transaction. Right? So I think when you look at the vast portfolio of brands that we work with from a global perspective... I mean, we worked with over 350 enterprise global brands, right? Matthew: So when you look at some of the likes of, let's just call it Forever 21, Reformation and Anastasia Beverly Hills, Marc Jacobs, Hugo boss, Versace. But, I think when you look at the broad gamut of brands, I mean it is something that is, for me, always eye opening. Just how we're able to help take an international transaction and really, truly localize it to a way that consumer in that individual market would really expect to buy online. And I think there's a lot of barriers when you look at the international market and how we help these brands really position that data, that knowledge, that insight, and that expertise is really I'd say where we come in and help. Stephanie: Cool. And what stage does a company need to be at to partner with Global-e? Do they need to be as big as Forever 21, or could a new DTC company also utilize your great services? Matthew: Really it's any size, shape or brand. I would say just over I think seven years ago now we deployed the business, right? And I think we came out of the gate with a very strong enterprise focus. But, I think as we evolved we saw the demand in market for small medium enterprise type brands. Really it's any size, shape or brand who has let's just call it an Ecommerce platform running an online digital storefront. And it is someone that obviously has an Ecommerce strategy in place today. So it's not just the Bigs that I think you see in the market that we continue to focus on and then come into the portfolio. I think it's also those brands that are digitally native, that are really looking to capture revenue outside of their home market. So I think it's really any size, shape or size customer that could lead to that discussion. Stephanie: Cool. I was hoping we could kind of start the episode there around what are maybe some international fails you see happening with brands right now, or hiccups that maybe new companies would encounter if they don't use a solution that figures out all the different challenges when selling across borders. Matthew: Yeah, for sure. I think sales are important. Obviously, I think brands all have different approaches to sale, right? There are some heavy sale brands by design. There are some flash sale businesses out there that really drive high, heavy traffic to a limited amount of inventory. And then I think there's your typical sale holidays where everyone's on sale, which is typically your Black Friday type periods that we recognize here in the North American market. But, I think as brands start to think internationally and think what sales exists outside of just this US home market. For us, we start to really get into the education process, which is number one; what are the holidays that are happening outside of the USA? Is it Singles Day? Is it Boxing Day? Is it Click Frenzy in Australia, for example? Which I think is the beginning part for a lot of the brands that we tend to work with. Matthew: I'd say number one, what are the holidays? What and where do these holidays exist? And then number two, how do you get prepared in order to approach that consumer? Is it a similar approach that we have to a domestic customer here in the US? They're going to need to be spoken to and treated in a unique way that more relates to them in that market. So I think sales are critically important. But, I think with branding awareness of when they're happening, why they're happening, and how to really give that consumer, let's just say the customer satisfaction experience that they would expect, is important. Stephanie: Yep. Are there any holidays that come to mind that you've seen a bunch of brands missing? Because I've heard of a couple of them like Singles Day. I think especially more recently, we started hearing about these other sales that go on around the world. But, is there any big opportunities or a time when you say, "Hey, there's a sale happening." And a lot of brands are like, "Oh, I've never heard of that." Or, "That's never come across my radar before." But, it's like a big important one? Matthew: Honestly, the three I listed, and the reason for listing them is because they are the most important, that typically I would say a lot of brands are just not aware of. And believe it or not, don't have strategies planned around. They used to be sales, and I think that specifically the two in both Boxing Day, and I'd say most importantly, Click Frenzy, is probably the one that is most highly missed out of the portfolio of brands. Just saying, "Wow! Click Frenzy, I didn't realize how large it was." And it's something that we absolutely want to help tailor to our market, which is such a key focus market for a lot of US brands in Australia. Stephanie: Got it. So what kind of strategies are you maybe suggesting to them? Maybe we'll focus on those two. How would you walk a brand through these holidays and maybe how to approach it to get into that market? Matthew: I think it all begins with the communication. So number one, we talked about the education, the awareness, which is obviously going to be key. And then I think with the brand. Every brand, as I mentioned earlier, the approach sale differently. So I think when you look at whether it be a flash sale business, whether it be a traditionally just natively sale business, who's very highly discounted down to high luxury brands that like to go on sale at certain times per year, typically two times or so per year, I think it all begins with their engagement. And obviously a lot of the brands, they free up their time for these marketing efforts. And we help break down a lot of barriers to get them to focus their time on the strategy. But, I think it begins with a setting strategy for each one of these markets. Matthew: And it begins with communication. How are you going to touch that consumer? How are you going to touch that consumer in a way that relates locally to them? And then obviously making sure that you have all the tools in place to execute on that sale so that when that consumer hits for an Australian day like Frenzy, they're seeing their currency in Australian dollars. They're aware of GST and the 10% that has to be captured on every single order that is being built in your product price. These are things that you need to communicate, "Hey, we've got a great sale going on. But, hey, also we accept your local currency. You can come buy with confidence." So I think as long as the marketing strategies within the brands are executing them the way they typically do, I think the next step there is to make sure that they've got the tools and the site in place to then obviously relate to that customer. Stephanie: Got it. And are you helping them implement those technologies? Or are you more giving avenues of like, "You couldn't implement this tech stack or you could go with this one." Matthew: So we typically implement it. Right? So all of our brands, even all of the ones that I've spoken about in the entire portfolio, basically what Global-e is doing is helping, let's just say arm and equip their site to be able to speak to an international consumer. And I'd say a lot of brands, come to us and say, "Hey, we view you as our international outsource Ecommerce team." Because we need to understand not only that I need to equip my US site to be able to speak to a consumer in China versus Singapore, versus Thailand and Canada and Australia and so on but, I also need to know what's the right proposition. How do I take insights and data and duty and tax? And what do I do with all of these different elements that are barriers to that customer buying? And how do we break it down so it's local to that consumer and market? And these are when I say quick to site and be ready for that type of volume to be hitting your site so that you're able to convert that customer, that's where Global-e comes into play. Stephanie: Got it. It seems like, you mentioned data earlier, it seems like you would have access to a ton of data from working with all these brands and seeing what works and what doesn't work. Tell us a little bit about some of the insights that you guys are seeing and also teaching your brands when it comes to selling internationally. Matthew: Sure. So I think the first thing that in an engagement with a brand that we have, right? Because there's brands of all different verticals, as you can imagine whether it be fashion and retail, whether it be beauty, whether it be footwear, streetwear and so on and so forth. So I think the one biggest insight in a lot of brands I would say, come to us for is, we want to understand what the rest of our vertical's doing. How are they being successful? What are they doing to target consumers? And let's just say all these parts of the world. So we really, I think from a data perspective, we consolidate it. And we sit on mountains of data that we can then drive from an insight's perspective to the brand that, "Hey, based off of where you're selling today and based off of where you should be selling tomorrow, we're going to help you build a strategy on let's just say end to end perspective. Right? Matthew: So it all starts from when the consumer hits the site, right? Currency, how are you going to show it? How are you going to also locally round that currency to make sure that it's a number that that consumer can relate to in that market. Down to duty and tax strategies, shipping propositions, and all of the elements that we know are going to have an impact to a consumer buying. And as an example of that for a few key markets that we can at least relate to, Canada. Canada is a market that acts very much like the US. And I'd say far too many US brands that we tend to see will typically treat, let's just say a Canadian shopper as they would a shopper within Singapore. And basically just take that product that they're selling and sell it at the same experience worldwide and say, "Okay. But, did I think that a Canadian customer is used to paying tax when they hit a local shop to buy the shirt?" They never ever see the term duty in market experience. Matthew: So on your site, you should never ever display duty and taxes as part of an overall transaction. Otherwise, that consumer's going to be shocked to see extra costs and abandon. And there's other elements to, how do we factor in duty into the product price? Because that's typically going to be a conversion driver for that Canadian consumer. And that goes even into markets like Europe and the UK, where it's that inclusive. The typical buying experience for a European consumer. So the second that a US brand now puts at the point of checkout duty and tax and breaks it out, it's going to cut their conversion in half. So these are the insights on a market by market basis where every country is and has to be looked at independently. And as far as too many times when we come into these conversations, our brand's just taking a single strategy for the world. And I think that's kind of one of the biggest opportunities to help our brand succeed. Stephanie: Got it. Yeah. That's great. How are you all staying on top of consumer preferences or making sure that you're staying on top of what's hot? You can think of WeChat, it came up pretty quickly. And how people are using it changes all the time it seems. How is you guys' company able to stay up with what people are expecting in different markets, and how they're buying? Matthew: Yes. I think honestly it has evolved over the years. I think as a mature business with a lot of mature brands that obviously we rely on and rely on us. Depending on which aspect you're looking out of the business, we've got a lot of robust technology internally that will help with that. So from a payment perspective, this is not going to be a single payment provider that's going to be able to take it to offering every single payment method that you need in your arsenal to be able to let's just say, service the world. I mean, enabling WeChat, Alipay, UnionPay into China's is critically important. But, to be able to enable that is a big challenge. So I think typically what we do to stay ahead of let's just say that front is we work very closely with our brands. Matthew: Like I said, there is a knowledge base out there with our brands that we've built up over these seven years that really drive and are a piece of driving our overall roadmap. So I think the voice of our customer is so critical that we continue to evolve, to adapt and definitely change. And then I think also internally with our focus only being cross border and international, we've built out the expertise, the knowledge and the data to understand that. And I think between the combination of the two, I think what we tend to do is always stay multiple steps ahead where a US brand can then focus their efforts on marketing on their US domestic market. And so for European brands, which is also no different. Stephanie: Yep. Makes sense. When I'm thinking about everything that's happening right now, it seems like there is a lot of buying shifts happening. But, I haven't really thought about maybe internationally, how the buying behaviors are changing. So I was hoping you could maybe touch on any trends or opportunities that you're seeing overseas right now that maybe other people can't spot because they don't have access to all the data that you do. Matthew: Where I was heading with it a minute ago is having a chat with myself. I think when we look at the brands, I think there's a lot of elements that we do bring from an insight's perspective. So when you look at the data, it's really a methodology around duty and tax we talked about. That's one very big element. How and what to do with duty and tax in every single market to showcase it. I think when you look at payments, another very big element like Alipay, you mentioned WeChat pay, UnionPay, all very important into China. But, then into other markets like Germany, where Klarna is a highly adopted installment type pay methods on all throughout the Nordics, it's critical and key. And you have to have that there in your arsenal to be able to convert a consumer or even acquire a consumer within that region. Matthew: And then I think we even get into let's just say the Netherlands, over 58% that as we see through our platform of all odors or within the Netherlands are paid with ideal. I think these are the elements when you look at duty and tax strategy, when you look at payment strategy, when you look at overall shipping strategy, right? You mentioned logistics carriers and the challenges that they're having today. Matthew: I think another element of that is from a logistics suite, offered your consumer a checkout, you need to make sure that that multi carrier approach is ready, equipped, and able to handle the volume that is going to be coming their way, especially as on a daily basis that can tell you our operations team is keeping up with the overall feedback from every single carrier from lane closures to lane impacted. Even just down to value, limitations and free ship thresholds and when to offer what. So I think as you look at the price strategy, the payment strategy, the duty and tax strategy, and you bring literally all of this together from a full end to end solution, that's really what obviously makes this a successful approach to brands. Stephanie: Cool. And are there any opportunities you see right now that are popping up? Or you're like, "I see a lot of maybe consumers internationally looking for this type of product." Or there's an unmet need here that could be solved. Any secrets that you have about these international markets? Matthew: I think for me, and typically what we tend to see in our market here is yes, brands come out of the gate saying, "Okay, I'm going to go international." What does that mean? That to a lot of our brands ends up meaning I want to focus my efforts on English speaking countries, such as Canada, UK, and Australia. And I think that's a good approach for brands to splash with. But, I think when you look at our business globally and we start to look at markets and regions, and then you call it... Any insights of secrets, I think right now what we've seen is the Gulf region. The Gulf region through COVID is a region that really has not decreased at all. And only seen a positive growth trends since, call it January of this year. Matthew: So when we let's just call it, are reaching like the peak of April, we saw over a 575% growth in year and year sales [inaudible 00:19:48], which basically the trend has only continued and accelerated May through June. So I think for me and a lot of what we're seeing, even specifically in that Gulf region with luxury with the UAE really accelerating with Saudi Arabia, with Kuwait, with Qatar. These are markets that brands never think in the US markets to put a strategy behind them. We're seeing such a huge growth globally that I think they're starting to rethink their strategies. Stephanie: Oh, that's a good one. And have they always been part of your arsenal or is that something also that you guys are pivoting a bit more into that area? Matthew: So, I think the beauty of what Global-e does with our brands is literally with a single integration, whether it be the currency, the hundred plus currencies that we enable. Or whether it be the 150 different payment methods that we offer, the duty and tax guarantee for limiting risk and liability to our brands, all of that pulled together in single integration, opens them up to the world. So the first thing is, make sure your site is set up for success. So that should a consumer from a certain market hit your site, then they're able to convert. And that is what Global-e does. And that enables let's just say, even the Gulf region out of the box. Matthew: And then it becomes, "Okay, now we've got a proper offering. Now conversion and sales is accelerated where we want it to be." And I think those second level conversations begin with the brands, their digital marketing teams, and how do I start acquiring new customers? How do I start really pushing my efforts to markets where I know that the demand is there and that I should not just waste my time trying to cover off all 220 countries and territories out there. Let's focus in major and majors. And let's really get a strategy together. This can have an impact to our overall celebration for business. Stephanie: Cool. So I'm thinking when it comes to international sales, the metrics that maybe you're providing back to your customers, or that you guys are looking at frequently, maybe differ a bit than US centric sales. What kind of metrics do you guys look at to see if things are going well? Matthew: So I think from our perspective that the major metrics that we tend to focus on with our brands is always going to be conversion rate. Conversion rate is something that as a hosted checkout solution, Global-e has a full impact on. So our brand's checkout is powered by Global-e as simply put. Meaning that we have hyper localized every element of that overall checkout. Which means if they're going to put in all of the effort from a marketing perspective to get that consumer to a point of checkout, we are going to make sure that they are going to buy. And I think when you look at the ability and the approach of that let's just say localization, conversion rate is always a forefront of what we look at with our brands. Matthew: And then I think sales growth, right? Sales growth as revenue is always going to be a second team metric that we 100% I would say, study and operate, and look at with our brands. And just full circle rounding it off as customer satisfaction. Even down to NPS scores with our brands that we share. And we look at down to the market level to make sure that if we're getting from some negative feedback in a certain market, why? How do we help better equip that experience from an Ecommerce perspective, to make sure that we're not just seeing and hearing that feedback but, we're actually it. Stephanie: Cool. When talking about negative feedback, I was just thinking about when launching a new product, it might be easier to think like, "Oh, I should go international." But, oftentimes people internationally don't like the same things maybe as the things that we like here. So, is there any advice or guiding that you do for these brands who maybe are like, "We want to go international, we want to go everywhere." Is there ever a time when you're like, "Actually, I'm pretty sure people in Asia would never use that." Like they don't like that. Matthew: No, I think from a brand perspective our approach is typically always going to be as a brand, it's the continuing drive to say the way that you've invested and looked at the domestic market. Not just from a fragmented perspective but, from a full end to end perspective, from the way that you talk to your customer, the way that you show them products, the way that you position products, the way that you promote products or free ship thresholds or show tax into certain markets. You can't do anything differently when it comes to international. The way that your strategies are built here domestically are not different than that of international. And when we really interact with our brand, it's specifically to help educate them on that overall fact because you're right, consumers expect different things in different markets. Matthew: And if you're not setting up your site for success to complete that, which is obviously what our biggest value add is, is that when our platform sits on top of your website, you don't have to worry about that anymore. Right? And you can now focus your effort on acquiring new business and new customers, which is really where brands want to be spending their time, especially the small and midsize ones who don't have these robust teams as some of the larger brands out there. You're talking to owners, you're talking to founders, you're talking to literally the folks that built this business from the ground up. Matthew: So they're involved on every single ticket that every single consumer puts through the site and they're reacting to it. That's why I think for them to not have the burden of thinking about currency, thinking about, "Hey, I have to now register my business in Australia or Norway, or Switzerland." Or what's happening in the UK with Brexit and how are duty in that threshold changing in a market like Canada, which is so important. This is stuff that they no longer have to think about. That's typically where we see the brands heading and we opened them up to the world so that they're truly giving an amazing experience for their consumers the first time it ever hits their site. Stephanie: Got it. Yeah. So it's essentially on the brands to make sure that they have a product that's good and that will sell internationally. Then you guys come in and take care of everything else. But, it's kind of up to them to do that due diligence and make sure that the product that they're about to bring internationally is actually a good fit for that market. Matthew: Absolutely. And I think when you look at the brands, obviously, product placement performance, they own and control the brand, right? At the end of the day the customer is the brand's customer. It's their data. They have access to all of this data. It's not ours, it's not our approach with the brands. It's always "Listen, we're going to push and give you all the bits of information that you need in order to market to that consumer." And then we also help through partnerships and other marketing channels, even let's just say bringing eyeballs to their site. And I think those are elements when you look at how can you help brands and how can you obviously look to convert that brand, it's super important. Stephanie: Cool. So you just mentioned bringing eyeballs to their site and that piqued my interest in what kind of effective channels are you guys seeing right now to bring new international customers to these brands? Matthew: Yeah. I'll give you one example that I think is a relevant one. And we mentioned because it kind of ties into the overall payment perspective that we mentioned with offering Klarna in Germany and the Nordic region. And Klarna is getting very active in the payment space, which we've just been following very, very closely. But, I think Klarna has done a very nice job of securing some dominance in that European market. So one of the elements that we've done is we've partnered with them. We said, "What can we do from a payment perspective to outreach to consumers?" How can we take our brands and put their products within the Klarna network of consumers that exist out there to let them know that this small little mid sized brand in the US exists? And that is something that we've done to help the brands just as an example, that is super important. And we've seen a lot of value and a lot of return from that where this is something in a market that just typically these brands have not even thought about putting dollars into. Stephanie: That's really interesting. It reminds me of earlier, when I was talking about products and may be opportunities. I mean, you hear that stuff happening, of people going on a vacation to Thailand, or like the guy who created red bull. They're oftentimes overseas, when they see something happening, they're like, "Oh, I see a method of doing this." Or I see something that people really enjoy. And they may sometimes bring it back to the US. But, that's also really interesting, kind of creating in a way an exchange that says, "Hey, here's a bunch of brands that you may not know about." And these overseas brands actually might want to tap into them as well. Matthew: Precisely. And then I think you get into a whole digital marketing effort that the brand really at that point takes a strong hold on, which we even sometimes will help them with. And I think when you look at it as, what are you doing from a marketing perspective? Is it Facebook? Is it Instagram? And how are you taking it from that digital perspective? And a lot of the brands that we market are specially through the times that we've had now, just really focusing hugely on Ecommerce. And how to tap into Ecommerce in two ways, either domestic or international. Because that's the world we're living in at this time which is supposed to really push the brands that had not had a firm strategy in Ecommerce to get there even quicker. Stephanie: Do you see any successful marketing efforts that are going on, that are similar themes among brands where they've shifted their marketing to this effort or another effort? And you see traction happening that maybe wouldn't have happened before COVID? Matthew: I think just more of the adoption of digital marketing efforts and spend into more markets outside of the US, Canada, Australia, and the UK. I think the first thing is really getting that digital marketing effort through whether it be Google, whether it be Instagram, whether it be Facebook. I mean, that is the traditional trend that I see as highly adopted right now across the brands that we work with. Each of them do it very differently. That's for sure. But, all in a unique way that's unique to their brand, where they build a personalized approach to build that trust with the consumer to get them to return. Matthew: So, I think for me, the channels have been pretty consistent in the adoption, like the ones I just mentioned. And then I think it's more about how do I now start focusing on where to do this next? And that is traditionally what I spend a decent amount of time with our brands, just talking about what is your strategy? What's the next market that you're going to push money into, where you can get a return? And here are some that we see as focus markets for your industry, leveraging what we've seen globally across the vast portfolio brands that it is that we work with. Stephanie: Cool. So when thinking about some of the challenges with cross border shipping, I'm thinking about the high shipping rates and maybe local return options. And like you mentioned earlier, duties and taxes, how would you go about stack ranking these priorities for a new Ecommerce shop? And starting to think about this, what are the things that you just need to have as number one priority because if you miss that you're done, whereas the other ones can get figured out along the way? Matthew: Yeah. So for me, I think the biggest aspect is having a full end to end approach. I know we talked about it a bit earlier where the customers from a US perspective are not going to miss a single instance of the way that the customer needs to be communicated to, talk to. And even down to the element of shipping checked out with. But, I think when you look at the backends and prioritization of what's most important internationally, I'd probably put a duty and tax pricing strategy first. I think when you look at the overall elements and barriers that may differ between that of a domestic transaction and that have an international one, duty is not something that many brands are equipped to handle. Matthew: And I think duty is something that brands can most likely understand how to find a solution to calculate. But, then I think the question comes into, how do I calculate duty and tax into every single market throughout the world? But, then most importantly, how, and what do I do through being taxed to make sure that the consumer see it in a way that they will buy. And we mentioned Europe being a really key market for that. If you're in Germany and you want to buy a sweater, you go into your sweater store and you buy that sweater, the experience that you're going to receive is that sweater will be valued at a hundred euros. And you're going to have nothing more to pay outside of that a hundred euro, call it VAT inclusive experience. Matthew: So, if you now try to talk to that German consumer in a way where you're saying, "Hey, check out my website. And I'm going to go ahead and I'm going to break out duty for you. I'm going to break out tax and another line item for you." That consumer's not going to relate to it. So I think if I had to stack rank them all, even though I think pulling the full end to end is necessary to truly make it work from payments to currency, to communication, to customer satisfaction, all of those elements, even down through checkout and translation of checkout. And the ability to recognize city where there is a city, or recognized state where there is a state, or province where there is a province. These are all elements that should be pulled together. But, I would put the duty and price strategy first because I think it is the biggest barrier that brands struggle with. Stephanie: Cool. Yeah. That's great. It's always good to know where to start. But, agree on having an end to end solution. So this is a little bit of a higher level question. But, I know there's been obviously a lot of shakeups when it comes to logistics, like we mentioned early on. Is there any new ways that you hear brands or that you're advising brands to prepare for? If there's another pandemic, if there's something else that happens that maybe interrupts the logistics and supply chain and all that kind of stuff, do you hear anything behind the scenes of like, okay, going forward, we have this new kind of model or strategy to kind of future-proof us a bit more? Matthew: That's a good question. I would say through COVID, what it's taught me and where I spent a lot more, let's just say time conversing than I thought I would have with brands was building contingency plans, when I came to realize that a lot of portfolio brands out there heavily reliant on a single logistics fulfillment center to manage their DTC business. And I think that as COVID hit and volumes doubled because stores closed and then fulfillment centers' staff had to be cut in half, I think that posed for a huge logistics challenge that not many brands retailers or 3PL fulfillment centers were quick to handle. Basically double peak volume in a non peak period, completely unannounced. So I think when you bring that all together, I spent a lot of time with our global brands specifically, who really came to us and said, "Hey, we have some opportunity here. Meaning we've got product in many different markets throughout the world." Matthew: So, if in fact, my facility in New Jersey shutdown tomorrow, obviously Global-e controls the technology elements of it but, the fulfillment piece they still own. So can we point our website for every single transaction, not change a thing for the consumer so that they're not impacted. Let's start pulling that product out of Hong Kong. And the answer is yes. I mean, it's something that we could have easily done and we did do. And I've built more contingency plans than I ever thought I would have had to with our brands to support them should this have happened. But, as I landed my plane, I think the biggest kind of lesson learned here for me, if I'm sitting in on the brand side is to say, what is my contingency plan? Should something like this come up again. And do I have... Or can I turn inventory, or one in another market or another destination or location should my facility in New Jersey get shut down? Stephanie: Yeah, that's great. So are there any disruptions that you see coming maybe to Ecommerce after all this kind of settles down a bit, that you've built contingency plans around? Matthew: I think for me, the acceleration that's going to continue, that started the second COVID hit to continuing to let's just say accelerate as each one of these markets, typically that got hit hard. Six to eight weeks post that time, really, we saw the recovery. And it's almost like the far East started and then Europe happened and then the US was kind of the latest to the table, which was super interesting. But, I think for me, what I'm seeing a lot of now is I speak to all of our brands on a regular basis, is we're seeing a lot more brands now equip their business to be more digitally native. I think the old model of taking product and putting it in inventory, in market next to that consumer and having a very highly driven brick and mortar strategy, has changed. Matthew: And I think that the more personalized brands that are equipped to continue to accelerate their digital strategy, is either doubling down or it's accelerating. And I think that that is to me, the biggest disruptor that I see coming in this landscape, which is the digitally native brands that exist out there that are highly emotional and personalized to their consumer, are really thriving during these times. And I think that we're seeing a lot of the larger, more complex brands that are out there start to really build accelerated strategies to make sure that they keep up. Stephanie: Very cool. So, if I'm a newbie with, I'm building my new Ecommerce company and I'm starting to think about going international, where can I actually look to find out what's happening behind the scenes at some of these brands? Maybe to see how are they operating their logistics or what is their playbook? Is there anywhere or communities or anything like that, that I can learn from other brands or see the behind the scenes of how it's working? Matthew: Yeah. I think typically there's going to be, from an education perspective, we see a lot of brands adopting different cross-border publications, different cross-border strategies through a lot of the conferences that have now become digital and more I would say highly even access. It's in the past, these trade shows and all these things that used to really thrive on required a lot of time, a lot of dedication, a lot of effort, a lot of money to be able to access. Matthew: And I think now what I'm seeing with these all go virtual is you're starting to see a lot more of adoption into these channels which is a lot easier to access. And I think when brands typically come and they're looking in the enabled arena, they learn quite a bit. And I think that is one of the things every time we do talk to a brand it's the first thing that they ask us. How is our peer group performing today? And are you happy with our conversion? And what changes can I make to be able to improve? And I think that's just one of the biggest I'd say value adds from a data and an insight perspective that brands look for. Stephanie: That's great. Yeah. I really liked the idea behind the virtual events are leveling the playing field. So now everyone can get access for either cheaper or free and not have to travel. And that's a really good point and a great place to start. Matthew: Yeah. For sure. Stephanie: Before we move on to the lightning round, is there any topic that you really wanted me to touch on or cover that you were hoping I would bring up? Matthew: No. I think a very wide gamut of everything, which is great. No, I am fine. Stephanie: Okay, cool. Yeah. I do like to go in different areas of the conversation. Matthew: All good. Stephanie: Yup. The lightening round, which is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Matthew, are you ready to go? Matthew: I am as ready as I will be. Stephanie: Alright. What's up next on your reading list? Matthew: Poof! My reading list, I would have to say Peppa Pig is one of the next books because my daughter is begging me to read it to her. So I will be most likely reading that this evening with her. It's between either Peppa pig or Star Wars books. I'm trying to twist one way, I'm not going to say which way. Stephanie: Peppa Pig. Matthew: Exactly. Peppa's super popular right now. Stephanie: Oh, I know. Matthew: That is the next step on my reading list. I have to be very honest. Stephanie: That is probably mine too. I like it. Yup. My son is obsessed with that as well. Alright. What's up next on your Netflix queue? Matthew: Netflix queue? Stephanie: No kid stuff. Matthew: No kid's stuff. Right now, I would say Dexter has been recommended highly to me and seems to get a lot of good ratings. So I think that with COVID now in place, my wife and I will saddle in and watch. And begin to accelerate the number of views that it seems [inaudible 00:42:42]. Stephanie: That's cool. Stephanie: So, if you were to have a podcast, what would it be about and who was your first guest to be? Matthew: I think if I were to have a podcast, I would say my podcast will probably focus something around sustainability. I think that right now with everything that's happening in the world today, and when you look at just the impacts of COVID, and everything else that has happened in the world, I think that you're going to see a lot of brands really adopt sustainable activities and life in general. Even down to our arena, which is call it shipping and how to package materials and stuff. So I think when you look at it, that would be for sure my approach. Who would my first guest be? I think my first guest would probably be my mentor and my father. I would give him the opportunity to be the first guest on my show and at least jump in and be able to share that memory should that podcast take off. And I know that I could say that I started with a family member. Stephanie: Well, I like that. Yeah. We have been actually talking about starting a sustainability podcast. So now I have a perfect host. You're it. Matthew: You let me know. Stephanie: We'll call you up. Alright. One more. What is A, your favorite piece of tech or a new Ecommerce tool that makes you more efficient, or you're having success with? Matthew: What is the most? I would say right now for me there is a tool called Monday that we had used that has brought us a lot of efficiency in the overall arena of project management. So I think managing the level and the amounts of projects at a single time can be at times overwhelming. So within our project group it is a tool that we've adopted that I actually find very insightful because it really gives me a nicer view and a view and a clean view of the overall working structure of what we currently have to deploy and make sure that we continue to support each one of the brands in the queue, whether it be small, whether it be large. And get them out on time to hit their overall deadline to celebrate their Christmas. Stephanie: That is great. I will have to check that out. Well, Matthew, this has been an awesome conversation. We really did go all over the place. And I think our listeners will love it. Where can people find out more about you and Global-e? Matthew: So for me, I would say Global-e obviously hit our website, www.global-e.com. I think you'll learn a lot, right? I think a lot of the statistics, a lot of case studies, a lot of country market reports, a lot of different case studies and things that we've done is going to be there. You can engage us there. And obviously, we are happy to help any brand of any shape and size. So, if this becomes something that you'd love to engage us on, hit the website, submit your information, and we've got a team member in pretty much any part of the world that's going to be able to help you. This is an incredible thing to be part of at such a cool global brand that we are. Stephanie: Amazing. Cool. Well, thanks for effort. Thanks for listening everyone. And we will see you next time.
As 2020 continues to throw curveballs left and right, the only thing we know for sure is that we have no idea what is coming next. That’s a tough pill to swallow, especially if you are a business owner trying to plan for the next quarter, or even the next week. Consumer behavior continues to shift in varying directions, and every industry in the world seems to be in a constant state of flux. With so much volatility, what is an entrepreneur to do? Taylor Holiday has some ideas. Taylor is the Managing Partner of Common Thread Collective, an agency that helps eCommerce companies grow from zero to millions. Recently, the companies he works with have been forced to change the way they operate. On this episode of Up Next in Commerce, Taylor takes us through what it means to build an antifragile business, and how that mentality can lead to a thriving business despite what the market or current environment has in store. Because, as Taylor says, there’s no point in trying to predict what the future holds, and instead, founders should be creating many different models so you can prevail even during volatile times. So what does that mean for your Q4 strategy? How should you be preparing for Black Friday and Cyber Monday? And what data should you really be looking at when developing a Facebook ad strategy? Find out all of that and more in this interview. Main Takeaways: Never-Ending Qs for Q4: 2020 has been the year of uncertainty, and Q4 will be no different. Traditional planning for end of year events like Black Friday and Cyber Monday have to be approached with a new mindset, one that can adapt and pivot quickly. Companies need to put systems and plans in place so that they are prepared to take on any and all scenarios that might arise. Building Something That Works in Spite of You: Modeling and forecasting are tools that every business uses to help guide strategy, but neither are ever 100% accurate. Because humans are wrong more often than they are right, it is critical to set up systems that can survive not only when you’re right, but also when you’re wrong. That is the fundamental practice of being antifragile. How The Past Predicts The Future: Drawing insights from historical ad campaigns is a double-edged sword. When it comes to analyzing data, you can’t look too far back or too far forward. Yesterday’s ad data can help inform your decision for what to do tomorrow, but it can’t help you make a month or year-long ad strategy. What can be beneficial, however, is poking through the creative assets of campaigns from companies decades ago, pre-internet. Those are timeless sources of inspiration that can help you stand out from the uniform ad campaigns of today. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome to another episode of Up Next in Commerce. This is your host, Stephanie Postles, co-founder of mission.org. Today, we have Taylor Holiday join the show, the Managing Partner of Common Thread Collective. Taylor, welcome. Taylor: Thank you so much for having me. I am excited to be here. Stephanie: Yeah, I'm really excited to have you here as well. I have followed your Twitter threads and I think we're going to have a lot to talk about today. Taylor: Okay. That's good. Now I feel accountable to everything I've ever said. So here we go. Let's see what I can dig up. Stephanie: Yep. I've looked at everything back to 2008, so we're going to cover all of it. Stephanie: I wanted to start with your background a little bit. I saw that you were in the world of sports. Taylor: Yeah, I did many [crosstalk 00:00:50]. Stephanie: And I wanted to hear how you evolved. Taylor: Another lifetime ago, I was a professional athlete. I played baseball in the Yankees organization for a couple of years, and that was my life for the first 25 years of my life, was committed to that pursuit. Then one day I got a call and they told me that they were no longer interested in my services and I had to figure out what on earth I was going to do from there. That sort of set me off onto the second phase of life. I'd like to think I'm breaking my life in this sort of 25 year chunks. I'm about halfway through the second quarter. Stephanie: That's awesome. What did you decide to do after that? Taylor: Well, I didn't really decide much. I was finishing up, so I got drafted when I was a junior in college, so I had some school to finish. I was sort of in the off season. I would go back to school and take them at a semester at a time. When I got released, I started trying to figure out, okay, well, what was I going to do? And I was a political science major with a minor in psychology, and I loved to argue, and so I figured, well, I'll try and be a lawyer. That was sort of what I was prepping to do. I was prepping to take the LSAT and head off to be a lawyer. Then I had a good friend that had been a childhood friend, and is still now my business partner named Josh, who was starting a company. In between class, he would let me come to their office, which was him and his brother in a garage, and print the orders off the website and take them to the post office, and that was my job part-time. Stephanie: Sweet. Taylor: One day, day one, there was one order, and then within a year and a half we had done 60 million in revenue and that became my business school, and how I got into entrepreneurship. Stephanie: Wow. That is crazy. That's really good growth, and I'm sure you learned a ton while working there. Taylor: It was wild. But it sort of met everything in me that being an athlete did. There was a team of people that I love, working towards a common goal, every day you showed up and had something to do intentionally to be better. I was single, I was young, I had nothing else to do. We just lived at the office, and it was everything. As the business was sort of growing, we got asked this question of like, "Well, this is a real company. What's your job going to be?" And they went, "Well, you're the young person. Why don't we figure out Ecommerce, social media, and you know some famous people, so how about influencer marketing?" And I was like, "Okay." Then I started Googling, how do you set up a Facebook page. And just had no idea what I was doing, but learned, got to play in a sandbox, where suddenly I developed a skill that mattered in the world. I got really lucky in that sense that they entrusted me with that responsibility. Stephanie: That's great. What kind of famous people do you know? Now I'm intrigued? Taylor: Oh, so many famous people. No, not really. I had played professional sports, so I had a lot of relationships with athletes and agents and people like that. Our product was built for that community, and so it was just literally Facebook messaging friends and being like, "Hey, can I send you this product? Would you wear it?" That snowballed really quickly. We ended up building an incredible athlete team with ... at one point, we had all four MVPs of the major sports. We were brokering deals with Kobe Bryant and China, Shaquille O'Neal was a business partner. It was wild. We got involved in so many things in that first business that we had no business doing as 26, 27 year old kids, and made every mistake you could possibly make, but just learned so much that has sort of been the foundation for what we get the chance to do today. Stephanie: That's great. Yeah, that's a really good story. So fast forward to today. Tell me a bit about Common Thread Collective. What is it and what is your role there? What's your day to day look like? Taylor: Yeah. Common Thread Collective is an Ecommerce growth agency. We help consumer product Ecom businesses grow from zero to $30 million. That's sort of the range that we focus on, and we do that through a combination of paid acquisition services, email, SMS retention and landing page development, and then creative for that whole customer journey. So, we really see our role as the guide for our clients along that growth trajectory that we've lived ourselves and are currently living alongside them with the brands that we own and operate. So, we sort of approach growth from an operator's mindset, which we think really sets us apart from a lot of marketing agencies. My job is to be the CEO of that organization. It is certainly a very different job than when I started where I was doing the work. I spend much more of my time now thinking about organizational structure and culture and hiring than I do about marketing. That has just sort of been my own personal evolution, which I'm learning to love. But yeah, that's what it does. Stephanie: That's cool. So how do you go about picking who you want to partner with, which companies you want to? Taylor: In terms of the clients? Stephanie: Yeah, clients. Taylor: Yeah, so our mission for Common Thread Collective and really for our whole ecosystem, and I think Andrew talked a little bit about this on your podcast, is to help entrepreneurs achieve their dreams. That is our heartbeat. It's what drives us because we ourselves have experienced the transformation that comes from being a successful entrepreneur, what it offers you in life. So, we love to partner specifically with founders and entrepreneurs who are in that range of business. Usually, when clients come to us, they're somewhere between two to 10 million in revenue, and we're helping them sort of reach that next phase of growth along the way. That connection to the person who is passionately committed to the product or idea that they have is what motivates us. It's what keeps us engaged, because the reality is, when you work at an agency, you're not going to love every product that you're working on. Taylor: You're not going to care as deeply as the founder about hair care and sports wear and fitness equipment and beauty products and vitamins. There's just no way, but what we learn is that, what really works is when we care about the people. That's when our people internally are the most inspired, that's when they wake up in the middle of the night and think about ideas for the product, is that when they fall in love with the humans on the other side of it. Stephanie: Yeah, that's great. I want to jump right into something I've been following. You were discussing a little bit about how brands should be approaching holiday season, Black Friday, Cyber Monday, and how they should be thinking about their marketing and advertising efforts. I think it was on Twitter, maybe as an email thread, but I was hoping we could dive right into that, because we hadn't actually talked about that on the podcast so far, and I think it's a perfect time to kind of discuss how you think brands should be prepping for Black Friday and Cyber Monday and how it's different than in the past. Taylor: Yeah, absolutely. This is a crazy time, right? It's never been a more volatile moment in the history of Ecommerce, which is not necessarily the longest history in the world. I would put it right up there with every business season in our country's history, certainly in terms of the volatility of the moment. When you think about trying to forecast into an environment that is this volatile, there's huge error bars on any prediction that you're going to make as a business owner. If you think about some of the things that we're looking at, as we think about Q4, is retail going to be open? Are people going to be able to shop in stores? We have no idea? Is the USPS going to be able to handle the influx of demand on the infrastructure? We have no idea. Taylor: What is the social position of our country going to be after this election? We have no idea. As you think about that, what you have to sort of agree or accept is the idea that whatever you think is going to happen is likely going to be wrong. What that means is that, unlike years before, where we were in a more stable environment, you need to have plans that account for different possibilities. As you think about something like your Black Friday promotion, which in years past, maybe a very simple exercise of just going well, we're going to try and bundle some products and do a discount, you need to consider the possibility, well, what happens, what would our discount be if USPS doubled their rates? Would we still be able to offer and afford free shipping? Taylor: I would start to have multiple plans. The same is true for the tone of your messaging. If we come out of an incredibly hostile election on November 4th, and three weeks later we're in holiday season, and the country's significant unrest, what is the right message for your brand to have to sell products into that environment? Rather than trying to guess which one is going to be accurate, I would begin to have a multitude of plans for this moment in ways that we've never really had to consider that level of volatility before. That's one of the big things we're talking with our clients about, is this idea of how do you deal with the idea that you are most likely going to be wrong about whatever you think is going to happen in the future? Stephanie: Yeah, that's really good. I like the idea of making scenarios so you don't have to predict the future. How are you thinking about advertising? I think you were mentioning that you can actually prep in a way that you know it's going to be expensive to advertise during those times, and so how brands can actually start prepping early so maybe they're not being met with these really high costs. Taylor: Yeah. I would just contend that I don't actually know that it's going to be expensive. I think that's a theory that people have, is this idea that big retailers are going to be allocating a bunch of money into the platform and CPMs are going to be through the roof. But we have seen really dramatic things happen where like, last time when the pandemic got peaked in April, all of a sudden cell phone usage goes through the roof, the inventory allotment for ads goes really high, CPMs plummet. The idea that we know for sure, this is, again, sort of that idea of the contingency planning, I think is really hard. What that means, and I think what you're driving me towards is this idea that, how do I build revenue in a more predictable fashion when the ad environment could be incredibly volatile? Taylor: What I would say is that, when I think about forecasting, we described Ecommerce forecasting like a layer cake. The base layer, the foundation with the least variability is your existing customer set. You know that when you acquire a customer, they're going to produce future revenue for you as well as present revenue, and they do that really predictably. It's not subject to CPMs, it's not subject to the levels of volatility based on any sort of thing. So you can always start by my existing customer side is going to produce future revenue, and you can look at cohort specific LTV data and figure out exactly how much future revenue. That's the foundation of your forecast. Then the next layer is owned audiences. If I think about like organic SEO, my keyword rank of position two on keyword, CrossFit sports bra is going to produce for me a certain volume of traffic that will lead to revenue. Taylor: That's more predictable, even than advertising CPMs. The same thing with my remarketing traffic is going to be more predictable than my prospecting traffic. My email database that I've collected ahead of the moment that aren't yet customers, but they're people that I can speak to for free is subject to less volatility than those environments. The more that ahead of this Black Friday, Cyber Monday, you can develop owned audiences of communication that allow you to forecast more accurately your future revenue, the better position you're going to be in, and the less subject to that crazy volatility you're going to be. The end tactic there, out of that sort of ideology, is that right now you should be accumulating as many emails and YouTube subscribers and Instagram followers and website visitors that you possibly can to help you build a foundation for that future revenue in a way that's less volatile. Stephanie: Oh, I love that. Are there any specific examples of creative campaigns that you're working on with your brands right now, or that you know of? Taylor: Yeah. So, one of the big things that we love as a vehicle for this is quiz funnels. A lot of our brands are running these quiz funnels, and what I mean by that is you come to the website and there's like, hey, let me ask you some questions to help make a perfect product recommendation to you. And it's email gated. So, you're saying, hey, give us your email, and at the end of this, we'll send you a specific product recommendation. So, what that does, what we've been able to see is that, with many of these quiz funnels, you're able to prospect at virtually the same return as your general campaigns, but you're collecting emails at four to five to six X the rate. In those examples, what you're doing is you're almost able to match your present value, but you're banking a lot more future revenue off of all of those owned audience emails that you're capturing. Taylor: That's one example of the way that we think about this, of like, not just like the singularity of how much revenue I'm making now, but what additional assets are being accumulated to drive future value. Another example I would use, and this is something we talked a lot about last year, is that website traffic. So, when you go to do remarketing, which most of your revenue in the holiday period, specifically Black Friday Cyber Monday, is going to be driven out of your remarketing audiences. What that means is that website traffic today has a high future value. The more website traffic you can generate now, the better. Let's say you have two Facebook ad campaigns, and one has a 50 cent CPC, and one has a dollar CPC, but the ROAS is the same, I'm going to give preferential treatment in scale to the campaign with the lower CPC, even if the ROAS is the same or slightly less, because that traffic is going to yield future revenue in a way that's really important. Those kinds of thoughts around, what is the incremental value of the audience creation, is a really important consideration. Stephanie: Oh, I like that. How often are you checking in with those ... when you're starting to do that prospecting, in a way, early, how often are you checking back with them so you stay top of mind? Taylor: The window that I think about, so we have our general campaign set up, which is that we look at our time lag report, which in Google is basically the average window that a customer will make a purchase in. You can look at and see, like, what percentage of your customers make a purchase within 24 hours, within 48 hours? Usually, almost 80% of your are making a purchase within seven days. For the initial consideration, our primary remarketing funnels usually attempt to encapsulate the primary consideration phase, which is usually somewhere around seven to 10 days. But in terms of this strategy, what we're doing is we're building an audience that, ultimately, when it comes to Black Friday, Cyber Monday, the widest Facebook audience you can look at is 180 days. Taylor: The second you get within six months, which just happened for us a couple of weeks ago, we got within that six month window of this. Now, you've got an audience that you're going to speak to again at Black Friday. I don't know that we have an intentional strategy to speak to them again at a 45 day window or a 90 day window. We don't. But I think that one, that's a good idea. I think that it might be worthwhile to just sort of warm them up again, but as long as they're within that 180 day window, I have the capacity to speak to them at Black Friday, Cyber Monday. Stephanie: Got it. That makes sense. So, what kind of mistakes do you see companies making when it comes to these growth strategies? Taylor: Oh man, that's a broad question. One of the primary ones is what we call the single account ROAS problem, which is this idea that most people are running their ad accounts on the idea that every purchase is the same just based on the cost to acquire the customer. Let's say I have a target of a two to one ROAS, which basically means that I'm paying 50% of the purchase price in acquisition. Well, the reality is that not all customers are equal to you, and not all product sales net you the same amount of dollars in your pocket. One of the things that we work really hard to get really clear with our clients on is the value of customers by different cohorts, so by first product purchases an example. If you think about every skew that you have in your store, every skew has a different margin and has a different return rate and has a different shipping cost. Taylor: Each of these three variables mean that, even at a fixed ROAS, so if you applied a two to one ROAS across every skew that you have, the net dollars in your pocket is different for every skew. Really understanding which products net you the most dollars as a business owner is a critical data element that I do not see enough people consider, and they don't design their ad accounts to reflect the variable value of the product. Stephanie: That's a good one. I haven't heard anyone talk about that as a mistake yet, so that must mean a lot of companies are making it. Taylor: Yeah. It's because it's hard. The information is hard to access, and it's hard to get granular visibility too. It's a much simpler decision-making mechanism to go, "Well, my blended cogs are 30%, and so if I get a two to one I'm making 20% generally across my business." That's a much easier consideration to make than to try and actually break it down by individual skew and get really specific on the decisions. Stephanie: Yep. Are there any best practices when it comes to developing spreadsheets or dashboards or something that can give you easy access to that information that you've seen your brands or yourself develop? Taylor: Yeah. We've built a tool to do this, to calculate cohort specific LTV data, to ultimately give us a view that we care a lot about, which is your 60 day LTV by specific cohorts. The reason we look at that time window is because most early stage Ecommerce businesses can't really wait much longer than 60 days to really realize the value. They just don't have the cash position to be able to wait longer than that, nor do I think it's really wise to wait longer than that. We've built something internally to do it, so I wish I could say like, hey, just go copy this spreadsheet and set it up, but it is difficult information to access, but you can do it. You can build cohort models for your business, but beyond just the LTV, the easiest thing to do is to really deeply understand that you did economics by every skew that you have. Taylor: What I would do to start is I would export every product that you have, I would mark the MSRP, so the retail sales price. Then next to that, I would put the cost to you as a business. Then I would put the return rate of the product, and then I would put the shipping cost of the product, and then I would calculate the net value of every skew. Just being aware of that for your merchandise set, like for the entirety of your product catalog will give you the kind of information that you need to then think more specifically about your ad account. Stephanie: That's great. To shift a bit into, we were just talking about how to grow a company, then track metrics and all that. I know you also have just been recently talking about an anti-fragile Ecommerce playbook. I was hoping you could kind of detail what that means, how are you setting up the anti-fragile Ecommerce companies, and what does that playbook look like? Taylor: Yeah. This goes back to this idea that we are bad at predicting the future. When I think about how I want to build a business, I want to build a business that thrives when I'm wrong. I actually want to accept the fact that I am not going to be able to determine the future, and I want to set up the business to be able to survive in almost any environment. That's sort of the idea of anti-fragile, is not just that I'm resistant to negative, but actually the negatives can be in an environment in which I succeed. The way in which I think that you're afforded the opportunity to do that is by having a specific set of attributes related to your business that allow you to sort of thrive in variability. Some of those are ... now you're going to make me try and quote my exact tweet to see if I can remember all of them, but one of them is high margin, right? Taylor: This is seemingly obvious, but this idea, the more room for error that you have to still be profitable, the more that the variability on your CAC, as an example, still does it affect you, and it allows you to potentially win when others can't. So, high margin is one. Another is, and this is a really underrated one, is great payment terms with your manufacturing supplier. One of the biggest things that destroys cashflow for Ecommerce businesses is obligation to front the cash for inventory. One of the best skills I think an entrepreneur can have is relational development and negotiation skills with their supplier to develop trust, to get to net 30 terms on delivery, where you're actually realizing the revenue of your product before you have to pay for it. That allows your cash conversion cycle to speed up tremendously in a way that's super, super helpful. Another one [crosstalk 00:21:19]. Stephanie: When I saw that, I'm like, that's huge. We have the same thing in media. People will start coming and be like, "Oh, we have net 60 or net 90 payment terms." You just can't take no for an answer sometimes, and just keep trying to build up the relationship and be like, "We really can't do that." Oftentimes, you'll be able to get down to net 30, just like you're mentioning here. So I thought that one was a really good point. Sorry, keep going. Taylor: Yeah, that's exactly right. You just got to think about your cash conversion cycle and how you're going to not be in a position where you have to sort or seek outside capitalization to fund when you're winning. That happens in Ecom because of the cost of inventory upfront, which makes it a complex cash management business. Another one, and again, these seem obvious, but I think we don't consider them enough is low OPEX as a percentage of your revenue. We have this principle, we call the four quarter accounting principle, which gives you sort of a directional guide to where you want your revenue to go. So, if you think about your top line revenues of business, we break it into four quarters. The idea is, if you want 25% profit, then your costs need to exist in these quadrants. Taylor: You need to have 25% CAC, so a four to one, what we would call marketing efficiency rating, so total revenue divided by total sales is 25%. 25% cost of delivery, which is basically the cost of the product from wherever you're manufacturing it all the way to the customer. Then 25% of OPEX, and that's your payroll, your rent and all of those things. If you look at your P&L and you look at it relative to each of those four quarters, you can figure out where your profit gets eaten up and where you need to go make improvements. So, the lower your OPEX is, so you can do this by not having a really expensive office by controlling your overhead in an employee count in smart ways. Really, just looking at how do I run this business as clean as necessary or as possible in order to give myself opportunity again, because there's going to be variability in my other places. Taylor: The shipping thing is a good example, where it's like, maybe my cost of delivery is normally 23%, but because of the shipping thing, maybe it's going to go to 27% of my revenue. If that destroys your profit, because your OPEX is too high, then it gives you a lack of options. That's a really important one to consider. Gosh, what else did I say in there? Stephanie: You also said diverse traffic mix, which I like. Taylor: Okay. Yeah, so this goes back to the point that we're talking about. Just like an investment portfolio, if you're over-indexed on any single channel, if that channel deteriorates in value, your business is in real trouble, but if you have a diverse traffic sourcing, and I think, so the question is, what's a diverse traffic sourcing? A good baseline metric is 50% paid, 50% organic. You're going to be able to survive volatility in any one of those channels, because you have a good amount of traffic from other sources. All of these things, make it so that when the inevitable problem strikes, your business is set up for it. Taylor: I think that we under consider how important it is to get into these positions of strong foundations of anti-fragility before we pursue further growth. Especially in this crazy environment where we're in now, where basically every forecast that I see every business make is wrong. The question is, what do you do? A lot of people want to try and think about like, well, how do I forecast better? I just go like, I think that's a fool's errand. I think attempting to predict the future, there are just too many inputs to do it well. So, instead, how do you build a business that when you're wrong, you still win? Stephanie: Yep. Yeah, I love that. I think it's such a bad mindset to think that like, you have to be perfect. I think that that's how companies do it. Even when I worked at other finance groups within companies, we were usually not right, which is why we did scenarios because you usually are wrong. Taylor: Well, that's exactly it. The quote that I always come back to is that, all models are wrong, some are useful. They're useful in their ability to understand where you're importantly wrong. When you have a detailed model, let's say I have a prediction that shows me what I'm expecting my traffic to be by every channel next month. Okay, so for direct organic search paid, search paid social, I have a prediction. Well, the reason that model is so important is not because it's going to be right, but because it allows me, as I'm actualizing the data, to understand where I am importantly wrong. As the data's coming in, I can start to see, Ooh, I'm missing my prediction in email by a lot, and it allows you to then think about strategies to go and solve that problem, where if you don't have that model, if you don't have that prediction, it's really hard to determine where the problem comes from. Stephanie: Yep, exactly. It's like the pandemic too, who would have predicted that? It's straight out of Missing, Taleb's book. That's a black swan event, you never would have predicted it, so why try? Just different scenarios, and a worst case scenario like now. Taylor: It seems a lot like I'm reading Antifragile as I'm thinking about the application of Ecommerce. It's like, well, how do you think about a business like that? What I see is I see frustration from our entrepreneur partners about their forecast being wrong, and they get really upset about it. I get it. It's really hard. You have to make decisions about this. So, it is an important exercise and you want to reduce the margin of error as much as possible going forward, but you have to begin to expect that. That's one of the things I think about being a more seasoned entrepreneur who have seen thousands and thousands of forecasts be wrong is I'm no longer surprised when they are. So, it just gives me a different frame of the problem. Stephanie: Yup. When people are trying to think of those black swan events or scenarios, how can someone go about building a scenario if they don't even really know how to anticipate it? They don't even know what to prepare for. Taylor: I like the idea of, rather than trying to predict the future, you should extrapolate the present. That's the Nassim Taleb idea, which is that, where are you now, and where do you believe you will be in the next month based on the present? If you extrapolate the present versus predict the future, then what it allows you to do is to think about, okay, my organic search is currently at 20,000 visits a month, and it has grown by 5% a month. If that continues, I'll be at 21,000 visitors next month. You put that into place, and then as you actualize it in real time, then you can understand what's happening. What you need to understand is that, the further out you go, the wider the margin of error becomes. Predicting tomorrow is a lot easier than predicting a week from now, which is a lot easier than predicting a year from now, because the number of inputs and variables just increase as you move out. Taylor: That idea of constantly re-forecasting and constantly actualizing your prediction and making adjustments, that's the skill, that's the exercise to continually get in the habit of doing and understanding where you were wrong. Then, doing your best to understand why, I think sorting out causality can often be sort of this thing that we chase and we make assumptions around. I think it's sometimes useful, but more importantly, it allows you to make adjustments in your next forecast, and then do it again and then do it again and then do it again. But again, no matter how many times you do it, you're always going to be wrong, and that wrongness is the thing that I think is really informative, and it allows you to ask the question, how do I make sure I'm okay when I'm wrong? That becomes the important thing to then go build. Stephanie: Yup. I love that. Yeah, it reminds me back in my Fannie Mae days, I used to do with a housing forecast, and we would literally be forecasting for like the next month, and we would have data almost halfway through that month and we would still be wrong. I think it boggled my mind how we'd be wrong, but even thinking of that, I'm like, there's just no way, once you get past a certain point, you just have to keep re forecasting, even if you're halfway through the month sometimes again. Taylor: This is such an important understanding about how we as humans process information. My favorite example is something I call the roulette run problem, where if you've ever been to Vegas, there is a reason that at the roulette table, they display all of the recent numbers for you. The reason is, is because what your brain does, when you see a bunch of reds in a row is you go, uh, well, the next one has to be black. And you build this relationship between past data and future data that is not real. We do this all the time with information as humans. We're just really bad at computating things in a statistically rigorous way about the future. This is also why humans are actually really bad media buyers, and why we try and train all of our internal media buyers to make as few of decisions as possible inside of the ad account. Taylor: Because if you think about what most people are doing inside of a Facebook ad account, is they're loading up a dashboard. They're looking at past data. So, they're looking at historical data and making inferences about the future without using a computer, without using a calculator, without so much as writing down chicken scratch. They're trying to make predictive decisions about how things like CTR and CPC and ROAS are going to relate to the future, and they're almost always wrong in those decisions. This is just like, it's really important to understand what the biases are that affect us as humans in our decision-making. Stephanie: That's great. Talk a little bit more about humans being bad media buyers, how are you all going about buying media? What are some best practices? Other than just saying like, "Okay, just rely on the platform, let it do its job." What kind of things are you guys trying out and doing and seeing success with right now? Taylor: What I'm going to push back on is that language that you use, I think diminishes the right idea, which is people love to say like, "Oh, well, yeah, just let the algorithm do it." They say that in a way that reflects that that's the simplistic decision. What I'll tell you is it's not. It actually takes incredible discipline to be thoughtful about allowing the computer to do what the computer does best and focus on what you do best. With our media buyers, their job, if you think about any machine learning tool, the key to a great machine learning tool is the inputs. Machine learning tool is just taking a set of inputs and understanding them to generate future outputs. Well, the key to being a great media buyer is you set a good structure of inputs. I'll give you an example. Taylor: Let's go back to this idea of different product values and different average order values by purchase types. If you were to export your last 30 days of orders and you were to build a scatter plot, where across every day, every dot was an order by AOV, you would have a variation of different order values. If you think about one of the most common mistakes I see in an ad account is you have a campaign that's bidding for lowest cost, which is the conversion objective, where you're basically saying to Facebook, give me the lowest CPA that you can inside of this ad set. Then in that ad set, what they will do is they will sell a bunch of different products with different prices. Let's imagine I have five different skews. I'm a jewelry brand, and they range in price from $50 to $500. Well, what product is Facebook going to favor if the structural setup is lowest cost and you give it those options? Stephanie: Yeah, the cheapest one. Taylor: So, you're building a structure where the computer output is going to be focused on the skew that likely doesn't generate you the best net outcome. That is a tactical media buying error that has to do with poor structural setup and understanding of the tool, that has nothing to do with the decision making of which ad you should allocate the budget to. That's the kind of thing we teach our people to think about over and over and over again is, am I setting up the right structure for the output that I want? Stephanie: That makes sense. You would instead maybe have like similar price products so they can all actually see the performance, instead of teaching the algorithm to, of course, always showcase the cheapest one because you don't have a budget? Taylor: That's right. Or I'm going to bid for highest value instead of lowest cost. Facebook has different conversion objectives I can set up relative to the thing that I want. The question is, and we play this game at our company every Friday morning called [inaudible 00:33:36], where I pull up an ad account and we go through campaigns and I make the media buyers tell me, what are you intending to accomplish with this campaign? What were you trying to do? Then let's discuss of whether the structural setup and inputs were right for that outcome. Did you design the system accurately to generate the thing that you want? Because Facebook's tool is incredibly good at getting you what you want, but over and over and over again, I see people design systems that will never, ever generate the outcome they want. So they're setting up games where the rules mean they will never win. Stephanie: Yup. That's really good lessons. Any other things that you've seen, like similar themes of ad buying, where you were like, I've seen quite a few people do it this way and it's wrong. Anything else that has come on your radar? Taylor: Yeah. The big other thing is just the relationship of budget to number of variables. One of the things, again, this all comes back to some basic statistical ideas, where if you think about ... have you ever seen a graph of how long it takes to normalize the data for flipping a coin? Like how many coin flips it takes before you basically get to 50% outcomes? Have you ever seen a graph that looks like that? What it is, is that like, when it's a two sided coin, the amount of flips that it takes to normalize the data, so in other words, the time at which it will reach the predicted outcome of 50%, it's somewhere, usually in the range, by the time you get to 100 flips, it's almost always going to be at 50%. Now, if you take a six sided die, okay, do you think it takes more or less rolls to get there? Taylor: It takes substantially more, because there's more possible outcomes, so the amount of time that it takes for the data to normalize is a lot more rolls than if there's only two possible outcomes. Taylor: So the same is true of the way that you build a campaign. The more end nodes in your structure, so think of an end node as an ad set or a campaign to an ad set to an ad. The number of variables in your campaign is going to determine the amount of budget that is required to get to statistical significance, to get to accurate outcomes. The other big mistake I see people make is they build these campaigns with all these end nodes, all of these ad sets, all of these ads and a very tiny budget. You might as well check back in three years and then you'll actually get a definitive result. What they do is they build campaigns like that, and then they make decisions on insufficient data. What that is, is it's basically looking at four flips of a coin and then saying, "Oh, it's 70, 30 heads. The truth here must be this coin yield 70% heads." Taylor: Instead, you have to build structures that allow you to get to accurate information quickly by having an appropriate amount of budget against the number of nodes in your test, if that makes. Stephanie: Yeah, that makes complete sense. Is there any ratio where you're like, for every 10 ads, you need $1,000, or is there any ranges like that? Taylor: Facebook gives you this information. They tell you that they want 50 conversions per ad set per week. That's what they need to get you out of the learning phase. There's a lot of people that are these Facebook truthers, that think like Facebook has all these ulterior motives to attempt to get you to spend money. I get it. They are rationally self-interested, but your success is actually in their interest. So, they will give you directional understanding of how to use their tool best. So, part of what they tell you is that they designed this thing called the learning phase, which is basically their way of declaring that the data that you're seeing is not trustworthy yet. When you are still learning, you should not act on this data because it's not actually predictive of the future. Taylor: But then when you get out of learning phase, now you're in an actual set of outcomes that are more predictive, they're more accurate, they're more deep, they're more true about the set of inputs that are there. So, the way to get out of that is this idea of ensuring that, based on your budget and based on your target CPA, you can get to 50 conversions per week per ad set. Because campaigns use a daily budget, if you take 50 and you divide it by seven, the formula that we give people is 7.14, which is just 50 divided by seven, so for your daily budget. 7.14 times your target CPA. Again, that's the payment that you want for the objective times the number of ad sets in the campaign, that needs to be your daily budget in order to get through optimization as fast as possible. Stephanie: Ooh, that's good. I'm writing down the formula now, so we can put it in our show notes. Taylor: Yup. Stephanie: Okay, cool. Awesome. That's really good tips around Facebook ads. I agree about the, like when you were mentioning the learning phase, we have our own ad network, and it's just the same thing. Our growth team's always like, "Hey, we need about $1,000 just to learn and then we'll let you know what the cost per click is." It's not just Facebook, it's other platforms as well. Taylor: That's right. People get frustrated by that because it's a media buyer, especially if you're a company that's charging on a percentage of ad spend, it's really hard for that to feel like anything, but a self serving piece of information. But the reality is, it just goes back to an understanding of how data happens. It's like, again, if you wanted me to tell you the results of flipping a coin, give me a hundred flips, not five, and it's the same thing. That's the understanding that we need to get to about how you get to statistical significance. Stephanie: Yep. So, are there any surprising campaigns that your team has initiated or certain kinds of ads that you were like, "That's not going to work", and they actually performed well? Taylor: Oh man, all the time. I'm so horrible at predicting what will work well, creatively in particular. Man, anything that I think is like a really interesting format right now. Stephanie: I feel like the formats right now are ... they have to be kind of different. There's a lot happening with the ad platforms because of brands pulling back and other brands dipping in on those ad platforms, but also just with the styles of ads that are going out. With the whole world, it just seems like things are different. So, I'm wondering how you guys are approaching that. Taylor: Yeah. Different is a good thing. The hardest thing is actually to avoid ruts. Because there's this horrible habit that we have in the media buying world. I'll lump us into this. We fall guilty to it too, which is the way that you generate ad creative is you go to Facebook ad library, you look up your favorite brand and you copy the styling of their ads, because you're making an assumption that they're working. But I'm a big believer in sort of the purple cow principle from Seth Godin, which is this idea that, the value of an ad deteriorates in repetition of its use. Every time that an ad goes out into the world and every time it's replicated, it becomes less valuable. That same thing happens with ad formats. We've seen it with influencer ads and UGC and the Mashable style, and these formats that have become really popular, eventually their impact is reduced as people encounter them. Taylor: I think that the key thing, and this is the biggest challenge inside of an organization like ours, is how do you produce a system that constantly generates novel ideas? That's what I would think a lot about. Again, I know this isn't the simple answer, where I can say to you, just use an ID story squared, whatever format, but I would be lying to you if I said that. Instead, I would really take space to challenge yourself to think like, one think a lot about the beginning of the ad. I know this is cliche, but it's just so true, is that video average watch times on Facebook are like four seconds for great ads. You just don't have as much time to say the thing that you're intending to say. It's sort of the David Ogilvy quote, "If you're selling a fire extinguisher, lead with the fire." That is just fundamentally true. Taylor: I would think about that as a core principle, but beyond that, you've got to break the feed. You've got to be novel, and you've got to figure out a way to differentiate yourself. People are scrolling a mile a day on their phone. If you plan to stop them and break them, then you've got to figure out a way to be compelling right off the bat, and a great metric for tracking this, so we have this principle that we sort of developed off of AIDA, which is a sort of legendary advertising hierarchy of effects model, and we've sort of applied modern metrics to it. So, if you think about the first one, the most important one before ... so with the hierarchy of effects model, they happen in sequence. The second one can't happen until the first one happens. I think this is really true of Facebook ads, which is you don't get a chance to communicate your message until you stop them and capture their attention. Taylor: A metric we focus on a ton is three second views divided by impressions. In other words, what percentage of your served ad impressions result in a three-second consumption? You want to see that number get close to a north of 40%. Otherwise, you are paying for a lot of people to scroll past your ad. Stephanie: Yep. I like that. I like having specific metrics set up for the AIDA format, which for anyone who's like, "What's AIDA?" Attention, interest, desire, action retailers. Taylor: That's right. That's exactly right. We assign a metric to each of those variables, so attention is this three-second views divided by impressions. Interest is video average watch time. Desire is outbound CTR. Then action is ultimately CPA or ROAS or whatever you use there. But the important thing again, with these models, is to think about them happening, they have to happen in sequence. What that does, what I love about using that as a feedback loop for our creatives is that the worst feedback that you can give to a designer or a creative is your ad's not working. That is so not helpful, because what do you do with feedback that says it's not working? What you can do is if, instead of thinking about the ad as a single unit, I think about it as component parts. If I say to them, "Hey, your three-second view to impression ratio is really low." Taylor: Well, now I can think about what's happening at the beginning of the ad. Or if I say, "Hey, everybody's dropping off at four seconds." Now, I can think about what's happening at that point in the ad. So, you can start to now deconstruct the actual ad into pieces that allows a creative to actually take it and iterate in ways that are productive. Stephanie: Yeah, I love that. It seems it could get a bit overwhelming if you have tons of ads running, like starting to just try and dissect, what's happening at the four second mark, or what's happening when it should be the D in AIDA? How are you thinking about, if the company has like a large amount of ads that they're testing? Taylor: This is a great question, because this is the number one marketer's dilemma, is that, what do I do next? There's a thousand million gazillion things to do. The answer is you sequence by volume of opportunities. I'm going to just start with the ads that are running in my campaign with the highest spend, and I'm going to iterate on those first because that's my area of highest potential impact. Then I'm going to sequence the rate at which I engage with my ad creative relative to their potential impact. That's a really important thing to think about is that, the sequence by which you decide to do things has opportunity cost to it. So, you have to make sure that you are going after the areas of highest impact relentlessly first. Stephanie: I love that. Yeah, really a good way to think about it. How are you thinking about maybe ... oftentimes, history repeats itself, how are you thinking about looking at historical ad styles or going back to direct mail, which a lot of people are doing right now since everyone's at home? How are you thinking about viewing history to maybe impact present day advertising methods or growth strategies for your brands? Taylor: Yeah. We have this course that we teach to all of our designers called advertising philosophy. The idea is to do that exact thing, which is to understand the fundamentals of advertising that are always true. So, we start with things like behavioral psychology. We read The Choice Factory by Richard Shotton, which talks about different human biases, to help them understand things that are just true of people, period. Then from there, we sort of begin to allocate that against the medium. We read a little bit on advertising and the history of advertising the change, the history of advertising, which are all just chockfull of amazing adding examples that are primarily prints from a legacy of magazine print ads, but they're so much in those print ads. If you think about how hard it was to actually create impact with a print ad, like someone had to open a magazine, they had to see the ad, then they'd to physically go somewhere to take action. It was way harder to be an advertiser there. Taylor: So, the copy had to be so strong and the visuals had to be compelling. There's so much to be learned from a lot of those principles that I think we underestimate the value of the art and history of advertising before we worry about applying it to the modern medium. So, we teach that to all of our people, because one, we want them to fall in love with advertising, because we think it's an incredible art form. A lot of times, for creatives, advertising is sort of seen as the thing that you do when you fail at being a real creative. We just don't believe that. We believe that it is like a true, true art form that reaches millions and millions of people, and if you can learn to really love it and to love the way in which you can impact human behavior with your communication, it can unlock like inspiration for you. That's a long winded way of answering, and it's not just as simple as direct mail, but you've probably realized by now my answers are rarely simple. Stephanie: No, I love them all. Every time I'm Like, ooh, that's a good quote. We should pull that one, because yeah, that's a really good point. Even thinking about when we're generating ads for Mission, it takes so much brain power to think about like, what's good copy, what kind of images should we use? What is someone going to remark about? It's a process. It's harder than even building out a podcast sometimes. So, I can [crosstalk 00:47:18]. Taylor: Yeah, as a simple hack, because I think these things are cyclical. If you are really creatively stalled and you're looking for inspiration, I would really encourage you not to use Facebook ad library as a mechanism for copying. Go look at one of these books, they're full of ads, and literally copy an ad from 1960, and think about the language, the imagery, and literally replicate it in the modern day. It will be more impactful than copying somebody's ad from Facebook ad library. That is a much better source of really potentially impactful ad creative than is the stuff that you're going to see from basically every brand on the internet. Stephanie: Yeah. That's really great. Are there any brands that you're watching that are actually always head of someone, where you're like, these brands all have the same ads, but this particular one is always kind of ahead of the game? Taylor: Yeah. I put out the other day, like one of the things I've gotten shamelessly relentless about is when I see something amazing, I go try and figure out who did it and try and hire them. So, TRUFF, the hot sauce company, their ad creative is as good as anybody's I've seen in the last few months. I put out on Twitter the other day, like I was citing that as an example. I just said, whoever did this, if you reach out to me, I'll double your salary to come work for me right now. Taylor: I think what they've done is really, really fascinating, clever ways of taking a sort of historically boring product in hot sauce and making it super compelling. One of the things, a lot of creatives feel constrained by the product attributes, like our initial entry point in ad creative all the time is like the product features. We just have this phrase that we tell our creatives all the time, which is you live in an infinite creative universe. You can say and do anything and make it relevant to this product. One of my favorite examples of this is there's this legendary ad from Gillette razors. It's a picture of an egg in a frying pan, and the headline is, this is an ad about razorblades. Taylor: The copy just talks about how the nonstick material in the pan is the same thing that they use to build the razors so it doesn't grab your face when it goes by. It's just brilliant. But the idea is like, it's a picture of an egg in a frying pan. It didn't come with the asset library from the client when they sent it over. But if you open yourself up to the possibility of telling stories broader than just the library of photos you receive from the client, and you really embrace this idea of an infinite creative universe, you can do anything. I think that's when you get to the really interesting stuff. Stephanie: Oh, that's great. I love that. Yeah, one of the ads that a friend's company is running, it's for socks, but it's literally a piece of corn growing out of two different. Something like very random, not relevant and it's their best performing ad. Taylor: That is the thing. It's like random. Again, you've got to think about somebody who is scrolling endlessly on their phone, and what is going to stop them Taylor: It's just about understanding, and this is the thing. You've got to be an internet user. In the same way, like everyone thinks about platforms like Reddit is this really specific sub-culture where you'd have this specific language. I saw a hilarious ad for a Reddit out the other day that understood this really well. It was Fresh Box, or one of the meal delivery services. The ad was basically like, "Hey, Reddit, my boss asked me to run an ad on Reddit, so I went ahead and took care of it for you." It's basically this meme app that Reddit users use, which is a robot blowing up the brand. It was basically the satirical way of understanding the medium so clearly, that they mock themselves in a way that made them endeared and loved by the Reddit users. That sort of ability to understand the place and the environment in which people are receiving your content is a real skill. Stephanie: Yeah. No, that's a really good example. I know we only have a couple minutes left, so I did want to ask a higher level Ecommerce question because from the interview, I just know you're so excited about predicting the future and you just feel very confident about it. Taylor: Do it. Stephanie: I wanted to hear, what kind of trends or patterns or disruptions are you most excited about right now in Ecommerce, or do you see coming down the pike? Taylor: Let's see. One of the things that I like, I'm sort of betting on for the future, is the global Ecommerce market. I think about the ... when anytime I see a marketplace where there is this pent up demand, that the infrastructure doesn't yet support, but it's finding a way to happen even before the infrastructure exists, what that means is that, by the time the infrastructure catches up, you're going to have a massive moment of arbitrage. Think of it like a wave that builds up that suddenly then released by some sort of technological innovation, and that's where there's periods of arbitrage before everybody else shows up and the competition's there. I think about a market like India, where you have this massive, massive market that is coming online really, really fast, and you have this problem, which is a payments infrastructure. Taylor: Nobody there has credit cards. Almost everything is cash on delivery, and none of the systems yet support the infrastructure for that delivery and payments processing. But yet, there's massive engagement from the user base. The second that gets solved, it's going to be a huge opportunity. This is true in a ton of other countries, where you have ad inventory costs that are extremely low, you have demand that's really high and you just don't have the systems that need it yet. That's a thing I'm watching and following really closely, as we already have clients that are seeing 30, 40, in some cases, 50% of their spend in international markets, where there's tons of friction in fulfilling the product. The second that, that all goes away, we are on the precipice of a truly global marketplace in a way that we haven't even begun to process. It's going to be really, really cool. Stephanie: Ooh, that is a very good answer. What other parts, or what other places in the globe are you looking at right now? India of course, is a big one next million users, everyone's focused there, but what other smaller markets are you looking at right now that you see a big opportunity, or your brands [crosstalk 00:56:20]? Taylor: Places where like, so the United Arab Emirates is anytime you ... especially, if you have any sort of luxury product, there's massive opportunity there. There's highly efficient opportunity. It's pretty volume constrained. It's a small country. Super interesting. I think Southeast Asia is super, super interesting to me. Nigeria, even from a talent standpoint in the Ecommerce world, that's a giant country. I think sometimes, because we have these geographically warped maps because of our Western centric view, we don't realize how big some of these countries are. Those are a few, Nigeria, Southeast Asia and India from a hiring standpoint, from a potential market opportunity standpoint are places that we're following really closely. Stephanie: And is good spots to watch. All right, so we have a few minutes left. I want to hop into a quick lightning round brought to you by our friends at Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Taylor? Taylor: Ready, fire. Stephanie: All right. What's next on your reading list? Taylor: What is next? I'm going to pull up audible right now. Do I have a countdown on my clock? Shoot. Where's my reading app? Audible. Someone just sent me a book. Oh, I know what it ... Here, let me take it. I'm failing at the time challenge, but [crosstalk 00:57:36]. Stephanie: That's okay. Thankfully, we can edit this podcast and make it [crosstalk 00:57:39]. Taylor: Yeah, a book called Caste: The Origins of Our Discontents, by Isabel Wilkerson. It's all about sort of racial history in the United States and some of the things that have led to our own version of a caste system. This is a big sort of initiative for me personally, in my own learning and development right now, is sort of redesigning my own sense of history, as well as we've got a bunch of big diversity inclusion initiatives inside of CTC right now. So, I'm trying to do the work of my own education, and that's a book that was just recommended to me. Stephanie: That sounds good. I will have to check that out as well. What's up next on your Netflix queue? Taylor: Man, Netflix is so dead right now. It's one of the biggest drawbacks of COVID era. We just finished Money Heist, which is awesome, or Heist, maybe it's just called, which is dub from a Spanish show. So good. But I'm watching a show on Amazon right now called Upload, which is about this idea that like in the future, they've invented a way that when you die, they upload your consciousness into this digital world and you can interact with the present world. It's sort of a comedy, but it's ... I like those sort of futurist dystopian content. Stephanie: That's interesting. If you were to create a podcast, what would it be about? It can't be Ecommerce, and who would your first guest be? Taylor: Right now it'd be about trading cards. I've become obsessed with baseball cards in the last few months. My guest would be God to the name of Evan Vandenberg, who's launching this company that I might potentially be an investor in called [CollectX 00:59:07], which is basically, think of it as Robinhood meets DraftKings, but it's basically the digitization and tokenization of physical cards into a market dynamic that I'm sort of obsessed with. That's a weird nerdy answer. I'm sorry. Stephanie: I know nothing about trading cards, but that sounds very intriguing. All right, and the last one, what favorite piece of tech or an Ecommerce tool are you trying out right now that is either making you more efficient or you're having a lot of success with? Taylor: It's one that we're building, which is our growth data tool, which is just all around cohort specific LTV data. I have this super fun position of being able to hire a rad developer and a rad product manager and just build something that I want.that is just so fun. To have ideas in your head and then for them to be able to manifest themselves into the world, it's magic. That's my real answer, but I'm an obsessive Evernote user. I believe a lot in creating an external hard-drive for your brain as a really, really powerful tool. I think we were already sort of bionic people more than we realize, and expanding your mental capacity by taking great notes, I think is a serious life hack. Stephanie: Yeah. I completely agree there. All right. Well, this has been an awesome interview, so many good insights and tips and things that people can actually implement, which I love interviews like that. Where can people find out more about Common Thread Collective and yourself? Taylor: So, commonthreadco.com is our website. Then, I would say follow me, Taylor Holiday on Twitter. Stephanie: You are a good Twitter follow. Yes. All right, thanks Taylor. Taylor: Awesome.
If you want to keep up with what’s going on in the eCommerce industry, the best thing to do is to go straight to the source and ask. But where can you find a group of eCommerce business owners openly talking about their pain points, sharing tips about how they grow their businesses, and combining their knowledge to solve problems together? Does such a mecca exist? Andrew Youderian is here to tell you that it does. Andrew is the founder of eCommerce Fuel, and on this episode of Up Next in Commerce, he discusses how he built a community of more than 1,000 seven-figure eCommerce business owners, plus he shares all of the insights he’s gathered along the way. From questions about Amazon, to a crash course in community-building, to the single metric he says should guide eCommerce businesses today… Andrew divulges some of the industry’s best-kept secrets and more in today’s interview. Key Takeaways: The Value of Selective Community Building: A community is only as strong as the people in it. Together, a community can deliver ideas, content, and capital to other members who would not be able to find those things on their own. But to ensure that all members are receiving value, it is important to be selective about the acceptance process. Finding Your Way Through The Amazon: “If I'm selling to wholesalers, should I let them sell on Amazon?” “How do I control my brand identity on Amazon?” These questions and more are plaguing the industry and at eCommerce Fuel, the community is gathering to come up with answers, including how to capitalize on the recent delays in shipping Amazon has seen. Meaty Metrics: While most owners will point to revenue as the main metric to judge success, it is widely believed that revenue is one of the least important metrics when judging the health and long-term viability of a business. There are other metrics that are more telling, including repeat purchase rate, and one other that gets very little fanfare but could change the course of your business: price per visitor. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to Up Next in Commerce, this is your host Stephanie Postles and today we're joined by Andrew Youderian, the founder of eCommerceFuel. Andrew, welcome. Andrew: Hey, thanks Stephanie. I appreciate you having me on. Stephanie: So, is a weird feeling a podcaster being interviewed by a podcaster? What are your thoughts right now? Andrew: I think it's great. You have to do all the work and I can just sit back and relax. Well, unless you send some really pointed questions my way, so maybe I shouldn't be relaxed, so we'll see. Stephanie: Oh, yeah. I don't know. Andrew: But, yeah- Stephanie: You might have to sit up straight and get ready, this might be intense. Andrew: This may be, I need to stop slouching here. But no, it's good. Good to be on, it's fun to be on the other side of the mic for a change. Stephanie: So, I want to dive into your company eCommerce Fuel. I looked at it and it seems awesome. It seems like you have gathered so many insights from this company that you've built all around eCommerce, but I want to hear in your words what is eCommerce Fuel? Andrew: At eCommerce Fuel we provide community content and capital to seven figure plus store owners, and so we do that through an online form which is really the heartbeat of our community. We've got over 1,000 vetted store owners, and the idea was really just get a lot of people together that are doing this day in and day out, that we're running seven... our average store owner is probably doing three or four million dollars a year with their business, so that's community aspect. We also do a big event every year for our community through content, like you said I'm a podcaster. I've been doing the eCommerce Fuel podcast for I think it's about seven years now, which is crazy. Stephanie: Wow. Andrew: And then we have a capital arm as well where we invest in promising eCommerce businesses. We have 20 investors that have a lot of similar experience or world class experts, everything from Facebook marketing to email marketing to product design and so we invest in companies that we think are interesting, so that's what we do at eCommerceFuel. Stephanie: That's such a cool model. So, for you podcast I think I saw you had over 300 episodes. Andrew: Yeah. I think, actually I think we're... yes, we do. I've been, like I said, been doing it since July 2013. Yeah, been going at it for awhile. It's been fun. Stephanie: Yeah, that was really cool to look at your backlog and the guests that you've had on. So, your business models' really interesting how you have a capital arm and community, I mean two things that I would say are very hot right now. Everyone is always thinking about of course being investors, I mean at least here in Silicon Valley that's everyone's dream it seems like. And then building up a community is something that we've heard a lot of guests mention on the show, like how to properly build a community. What was your idea behind starting this business and having those different arms of the business? Andrew: They came in stages, so in a nutshell, left the corporate world and got my teeth in eCommerce for starting in 2008 on a couple different eCommerce businesses and built those up. So, I had a sense of this space and nobody was talking about eCommerce unless it was like from a Home Depot or like a Lowe's, like a, you know, Fortune 500 style? Stephanie: Mm-hmm (affirmative). Andrew: And so I started writing about what it's like to grow an eCommerce business for a small team or a single founder and developed a little bit of a following on the blog, started podcasting, and then from there that kind of just naturally led to me meeting all these great people and I thought what if we got a bunch of people in a community together that had some kind of vetting thresholds and just made sure everyone had some level of experience? And that launched the community and built that up over time and then the capital arm is fairly recent, really recent in fact, it's about five or six months old. That just came as a natural extension of seeing all these interesting entrepreneurs that hopefully we'd built some trust and report with, or that people knew about us from the time running the business. And then also just a really great group of investors who also had not just money, but a lot of in the trenches experience and advice to lend, so it kind of came in stages. Stephanie: Yeah, that's really cool. To start with the community aspect, what are the vetting procedures that people have to go through? How do you know who to bring in to keep it a high quality community? Because I think that's biggest problem when you're getting in all these Facebook groups or communities, you're like, "Oh my gosh, just everyone's in here and I'm actually not learning anything." So, what does it look like to get into your community? Andrew: Yeah, you're right. I mean, if I could only do one thing well in a community it would be bring the right people into it. So, our guidelines are a little nuanced but you need to be operating a seven figure business. If you have a very proprietary product that you've made from scratch or that is a little harder to make sometimes we'll take people in kind of the mid to high six figure range. If you're selling just on Amazon usually we require a little bit more than that, so that's on the revenue threshold sides. Andrew: So, we keep it no major SaaS vendors, and then for service providers we're really careful. I'd probably say only 10% of our applicants that we accept are service providers and they need to be recommended by an existing member because you can... An amazing email marketing expert that knows the space, that is respectful of people and isn't going to come in at a hard pitch and is going to build relationships the right way through adding value, is a huge asset. But we want to make sure those are the type of people we have and not people who are just trying to sign somebody up on the first day, so. Stephanie: Yeah, that's really important. How many people are in your community now? Andrew: We have about 1,100 members in the community. Stephanie: Okay. How did you go about building that up? What is your method of bringing new people into the community? How do you get in front of people and even tell them about eCommerceFuel? Andrew: Community building's interesting. You've got this chicken and an egg problem, right? Stephanie: Mm-hmm (affirmative). Andrew: And the way that I did it was when I was blogging and podcasting early on about eCommerce, just over that probably 12 month period really focus on not trying to monetize the business or anything, just trying to build authority, get a little bit of a reputation, and connect with people. Over the course of a year, just naturally, organically, met about 100 to 150 really interesting people. And any time I did, I'd just put a little tag on them in gmail and say, "Community seed member." Stephanie: Oh. Andrew: So, a year in a had this list of 150 people and I reached out to them and said, "Here's what I'm doing. I'm starting a community, are you interested?" And then over the course of about 30 to 45 days I dripped in, I added, about four or five people a day. I'd bring them in, I'd introduce them, I'd introduce them to other people, I'd ask them questions, kickstart discussions, and so it gradually grew. I didn't just drop everyone in at once, and it took about like 45 days but we had a bit of a community at that point. And then from there I had over the last year built up some traffic to the website, was able to put up a page that said, "Hey, here's the community. You can join," and that gave us kind of... because you need both things, right? Stephanie: Mm-hmm (affirmative). Andrew: Like in community you have to have new people come in because you always have a drop off even in the most healthy. So, from it was able to kind of, with a lot of work, get to self sustaining within probably 18 to 24 months, so. Stephanie: Wow. Yeah, that's great. And it is a paid community? Andrew: It is, yes. It's a paid community, so it's... yeah, it is. It's $99 a month. Stephanie: That also helps... Okay, yeah. I'm sure that also helps with quality and bringing in people who are serious and really want to learn and contribute to get their monies worth. Andrew: Oh, it helps so much. I mean, for a couple reasons why. We have, just like you said, on the vetting side, yeah, it shows that people are actually serious about this. The other nice thing is it gives us the resources to do things like hire a real community manager. We have someone full time that their whole job is just to vet people to make sure that if people have questions that don't get answered they can move them to the right people. It let's us invest in technology, we've probably poured six figures plus into the custom tech for the community, so yeah, it makes it a lot easier. Stephanie: Yeah, that's really cool. When it comes to keeping the community engaged, because to me that's one of the biggest things to make sure people keep renewing their membership and they want to check in everyday and see what's new and see who's talking, how do you go about keeping them engaged? And maybe what have you seen works and what didn't work? Like any tests that you've done where you're like, "We've tried this and this failed," or, "We tried this and this really increased engagement a lot and helped keep it going?" Andrew: I think the best thing you can do, two things, the first thing is to actually have discussion and content that are highly relevant to what people are doing day in and day out. So, again, kind of going back, if you get the right people in the same room that's 80-90% of the battle. From that point, setting up custom notifications is really important. So, some of the custom tech that we've talked about, when people sign up we don't just blast them with every single discussion that pops up, that's crazy, right? They'd just drowned in a fire house because we have like 5,000 comments every months in there. But we do try to figure out like, hey, what are you an expert in and what are interested in learning about? And then when they join we tailor their notifications to try to create the highest level of a signal to noise ratio possible, and so that's another thing. The third thing is just maintaining a really respectful environment, like we have a pretty strict no jerks rule. I probably shouldn't say this, but I get a lot of pleasure out of throwing people who are just downright disrespectful and just, you know, kind of just generally unpleasant out of our community because they're horrible. Stephanie: Yeah, good. Boot them. Andrew: And also non-solicitation. We kind of have a one strike, one warning, and then if you do it again you're out. So, we don't put up with pitches, you know, if people are hard pitching stuff they're out. So, I think those are the big things that help with maintaining an active community where people keep coming back to. Stephanie: Yeah, those are such good points and it's not only applicable to your business but even thinking about any eCommerce business of how to build up... I mean, everyone talks about building these communities but how do you actually make it helpful and personalize it to people in a way that people want to engage on your social media post or they want to engage on your blog or tag themselves wherever they're in your clothing or with your mug or whatever. So, I think these lessons actually can apply across industries as well and not just upon building a community like you're doing. Andrew: Yeah. Community building, it's interesting, it's kind of like a brand. It is a brand. It's insanely hard to get up and running, like the amount of time and energy and love and relational just work that you need to put in, I don't say it in a bad way, but just building relationships takes a tremendous amount of work. It takes a ton of time, just like building a brand. But it's insanely defensible, I mean, if you're willing to put in that, you know, if you have a multi year approach. You can't steal people's friends, right? Stephanie: Yeah. Andrew: And that's what happens, whether you're building a community for your brand or kind of a micro niche community like this for eCommerceFuel, is people come in and they stay because they get value and they stick around for a couple months but then they come to an event, they connect with people via PM, and then build genuine friends. I don't know, you'd be hard pressed to tear me away from my good friends and it's really defensible in that department, so. Stephanie: Yeah, I agree. I love that. So, you probably get a lot of really good insights into the world of eCommerce and where things are headed just by some of the questions that some of the members in your community are asking each other, and I wanted to know what kind of top questions do you see occurring right now where it's like quite a few people are asking the same type of question or these same things keep popping up? Andrew: Yeah. Let's start with the 500 pound gorilla in the eCommerce space, and that's Amazon. Some of the questions I think people are asking on there is how do I... I'll just go through a handful of them and then maybe we can talk about ones that are most interesting to you. If I'm selling to wholesalers, should I let them sell on Amazon? How do I control my brand identity on Amazon? There's some interesting popping up right now about how... I don't know if you've noticed this, but Amazon Prime used to be for awhile it was free shipping, then it was two day, and it was one day, and now it's like- Stephanie: Yeah. Andrew: ... three to five days if you're lucky depending on where you live. Stephanie: Yeah, I did notice that and I was like, "What's happening here? Usually I can get my stuff for my son in like a day and now it's taking a week." Andrew: Yeah. It's kind of crazy, and of course because of just with COVID eCommerce is blowing up, the capacity is limited on the delivery networks. But it's interesting because it kind of levels the playing field at this moment in time for independent brands because the shipping factor is not so much of an issue, and in fact a lot of people are probably are almost in... If somebody gives you something and takes it away it's worse than if they just had never given you anything to begin with, right? Stephanie: Yeah. Yeah, yeah I feel way more sad right now than I ever would have before this. Andrew: Exactly, right, because the expectation's there. So, that's creating an interesting opportunity. One of the things that Amazon just recently came out with I think in the last couple days was re-introducing... Way back, I don't know, two, three, four, I don't know how many years ago, multiple years ago, you used to able to ship your products from Amazon's warehouses to customers. You could use them as a 3PL fulfillment center without Amazon branded boxes. They changed that for many years and just this week I think they changed back to saying, "Oh, actually you can use our fulfillment services with your own proprietary boxes," or at least with unbranded boxes. And I think potentially... Who knows why they did it, it was kind of perplexing to a lot of people, but perhaps because they realize that they're losing on the shipping game and other merchants maybe are starting to migrate other places and if independent merchants are able to deliver the same shipping without Amazon maybe more then we'll move off. And one thing that we've done, we've done a State of the Merchant Report for the last three years, and our one for this year should be hopefully coming out fairly soon. But a trend that is really noticeable is the number of people that are going to Amazon is really... it's not reversing but it's plateauing very significantly. Andrew: And even just chatting with merchants and seeing a lot of case studies, people are taking a lot harder look at is it worth going on Amazon for how much channel risk you take on, how much loss of control of the consumer that you give up, you don't have addresses, all these things. They're just taking a lot harder look at is this good for my business long term? Stephanie: Yeah. So, do you think 2020 will show that a lot of people are pulling back from Amazon? Andrew: That is a good question. I think not a lot of people, but I do think when we released the report I made this prediction in the report too, so very likely could just fall on my face in the mud here, but I think the percentage of people who sell on Amazon, it was about 55% of all stores that we surveyed last time, I think that will decrease a small amount. I don't think we're going to see a precipitous drop but I think it goes from 55% to maybe 54 or f... I think we start to see that inflection point. Stephanie: Yeah, that's really interesting. The one thing I also read in your 2019 report was about the different marketing channels that people were using and I saw that Amazon ads had the highest ROI but not many people are using it, so I'm wondering what are your thoughts around that aspect of using it as a marketing tool? Andrew: Yeah. No, it's... Wow, good prep work. If you're on Amazon, Amazon ads you have to have a... people reported them being the most effective sales channel that they use. So, if you're on the platform they work really well, so definitely should be doing that if you're on the platform. I think it's just more of a... it's not a question so much of should we use Amazon ads if you're on the platform, you absolutely should. It's more of a question of do we want to be on Amazon in the first place? But, yeah, for people selling on Amazon they work really well. Stephanie: Yeah, okay. But then the other interesting thing I saw was that the average order value was way lower for... because if it's maybe a direct to consumer site or anywhere else people can maybe stack on additional things from your brand, where I think I saw on Amazon the average order value was much lower which makes me think you're not getting that, hey, you should maybe also try this from my brand and this from my brand as well and kind of increase the cart value. Andrew: I think that could definitely be part of it. I think a big part of it too is that if you have people on Prime there's no free shipping threshold, right? Have you ever ordered a... what's a good example here? Like a $3 koozie and it shows up and you're like, "How did they pay for the shipping for this? They lost money on this." Or even better, you order a $7 paperweight set that weight like 10 pounds and they ship it. There's no threshold so it's easy to impulse buy small stuff on Amazon. Stephanie: Yeah. Good point. Andrew: Whereas if you're buying from an independent merchant not always, but more often than not you're going to have some kind of free shipping threshold. So, either you're intentionally going to seek it out or you're buying multiple things so I think that probably also has a big part in why those order values are different. Stephanie: That's a good point. That's a good reason to look further into data and not just look really quickly like I did through the report. So, what other trends are you thinking are happening either right now, because a lot's been changing because of COVID and things are kind of just all over the place where some people are struggling, some people aren't. It seems like the market is changing quickly. What other trends or things happening do you see that people are surfacing in your community, or are you building into your next report coming out? Andrew: Yeah. So, eCommerce obviously no surprise here is just exploding, and we did a survey, this was in March when the world was falling apart and nobody knew what was happening and it was much more uncertainty than there even was now, and you saw early on in that you kind of saw a very big dip for the first probably week when COVID really started spiking and being taken seriously. And then you saw kind of half and half, half the businesses were doing okay or growing and half were failing, now I'd say you definitely have some businesses that are really struggling. If you're in the event space, if you sell items in the event space, any of the kind of in person things are having a hard time, but by large I'd say most of our stores are doing, you know, most of the industries are doing really well so that's fantastic. One thing that's tough, it's a downside, and anybody who's selling is probably going to be aware of is just the sales tax issue in the Unites States is just an absolute disaster, just on making- Stephanie: Tell me a bit about that because whether- Andrew: It's just a dumpster fire. Stephanie: I don't know if I... well, I actually probably have avoided anytime I see tax I'm like, "Oh, no thank you." So, I would love for you to dive in a bit and tell me why is the sales tax a disaster because [crosstalk 00:18:28]. Andrew: Yeah, so I'll try to be somewhat brief because you could probably talk about this for quite awhile, up until two or three years ago pretty much the case was if you... The only places you had to collect sales tax for was if you had Nexus in a state. So, if you had... I run a business out of Montana and Arizona, so Montana doesn't collect sales tax and so traditionally we've only had to collect sales tax in Arizona. There's a big Supreme Court case that came across in 2017 or 18. It was Wayfair versus South Dakota and pretty much the shakeout from that was that the Supreme Court said that states can require sellers that are outside of their state, they have no physical presence in their state, if they sell to a customer within their state they can collect sales tax on them if they reach a certain threshold. If they sell either a certain dollar volume in that state or if they have a minimum number transactions for that state. And it could be as low as 200 transactions and $50-100,000. So, the problem that causes is that now you have companies who create this economic Nexus and now all of a sudden they have to be responsible for collecting and submitting sales tax not just to 50 states but to potentially sometimes all these different municipalities and cites, and just creates a disaster of a compliance thing. Andrew: So, you've got companies that have sprung up to try to deal with that, and one top of that, if you sell on Amazon, technically if you have inventory... Normally, you send your inventory into Amazon and they a lot of times will split it up in three or four warehouses so it can be delivered quickly. Well, technically now if you have those inventory in those four states you have Nexus in those states and you have to also collect sales tax. So, it's just on the Amazon front, on the independent front, it's just created... We don't have any central governance for this. What I think would be best is if the federal government kind of took it over and said, "Hey, we'll create a national sales and redistribute." But at the moment you either have to deal with an insane amount of complexity, especially as you get larger, or you have to run the risks of being out of compliance and facing huge fines. It's a really rough place to be. Stephanie: Wow. How are you seeing eCommerce companies tackle this? That is not something that I've even thought about honestly, and it kind of scares me to ever start an eCommerce store now. Andrew: Yeah. There's a lot of different ways. Sometimes there's places... I have a company called The Tax Valet that helps out, they do a really good job. Kind of a personal hands on approach to doing this. Some merchants will use SaaS software like Taxify or TaxJar to be able to do that kind of stuff, Avalara as well. And some people just roll the dice and say, "Hey, this is a nightmare I'm not going to try to deal with this," so there's a lot of different... it depends on your risk tolerance, it depends how big you are, but people are taking a lot of different approaches to it. But to do it right it's really unfortunate. Stephanie: You'll have to hire someone. Andrew: Yeah, hire someone or really go deep on the SaaS side of things and dive in. Stephanie: Yeah, that sounds messy. Well, earlier you were talking about the howling out of eCommerce and I wanted you to talk a bit about that because we're talking still about the trends and what it's going to look like in the future, and I thought you had an interesting take on that so I'd love for you to go over that if you could. Andrew: Sure. And again, of course totally could be wrong here, but when I look forward into the future I feel like Amazon's going to be hallowed out in the sense that, or excuse me, eCommerce is going to be hollowed out in the sense that you have... On one side, you have brands on Amazon that sell either one or two things, they're either well known national brands, like the... well, I don't think Nike sells on them anymore so that's a bad example, but the... Why am I blanking on big national brands here? Tide for example could sell on there or Rubbermaid or Adidas, brands people... household names. They sell on there because it's just they know that brand, they go find it, and they want to buy it. You have people who are selling really small things, like we're talking about koozies or you needs stapler, or maybe you need a little backyard pool for the fact that your cousins are coming over and you really don't care if it breaks in three weeks and so you buy that. But then for anything in the middle that's like kind of not a huge national brand but also something that you want to have that's quality, I think a lot of those companies are going to start... people are going to buy much more from the companies themself, direct to consumer. Andrew: Because they can merchandise them better, the shopping and check out experiences are getting easier. I think brands are increasingly not going to sell on Amazon because there's, in addition to all the things we talked about, you also have huge IP issues and people ripping you off. So, I think that's going to be the hallowing out of eCommerce when Amazon's going to be a big donut and in the middle a lot of people are going to be selling directly on their own sites just because it makes more sense for all the reasons I mentioned, so. Stephanie: Yeah, that's interesting. We've also talked a bit about the conscious consumer that's kind of rising out of all this and how people are starting to care about what is the source of this product, is it actually sustainable? Is it a quality product? And less about can I have more and more focused on quality and sustainability. Have you heard that trend as well in your community? Andrew: Yeah, I would say I think that's something that's been kind of gradually increasing over the last five to 10 years. I think more than anything how it ties into our conversation is that Amazon over the last couple of years, and they've been fighting it and they've done some, to their credit, they've done some things to combat it, but they still have a... If you buy something on Amazon most people are not going to think it's... there's a little bit of a thought that it's probably not high quality, a little bit of a stigma for buying stuff on Amazon especially if it's not a name brand. Part of that- Stephanie: Even the name brands people wonder if it's it... is this a legit name brand, I've seen that a lot in comment and reviews. Andrew: Oh, totally. Partially because of review manipulation, partially because of counterfeiting, and partially because there's just a lot of... I mean, there's everything on Amazon so how do you filter through it, right? Stephanie: Yeah. Andrew: So, yeah, I think that's part of going back to that [inaudible] about the hallowing out of eCommerce unless it's a brand you absolutely have faith in or it's something that you don't care about the quality. Would you rather buy one of those borderline things from Amazon and roll the dice with an unproven brand, roll the dice with one of those mid-tier brands being counterfeited? Or, especially if you can get it just as quickly either because Amazon is shipping stuff really slowly or because increasingly independent merchants can deliver it more quickly with some of these other options via straight from the horse or straight from the source rather. So, yeah, I think for me that's how the quality issue ties in I think to the larger discussion. Stephanie: Yeah, that makes sense. Do you think that is why the drop shipping model has kind of decreased? I saw on your report that that is not as big of a thing as it used it, and I just remember... maybe even like last year, over the last couple years that was a huge thing. Everyone just said, "Start a eCommerce company and just drop ship things and let other people take care of it for you." What are you seeing with the drop shipping trend? Andrew: Yeah. So, when we talk about drop shipping I think it's important to differentiate two different things that come into people's minds. One is drop shipping, you can build a great high quality business based around drop shipping. A couple of businesses I started were drop shipping based businesses, one of them's still, under a great new owner, is still doing well. Really at the end of the day it's less about the product quality and more about how it's delivered. So, like Home Depot for example, they drop ship a ton of their stuff, some of their even big name brands because they're can't afford to hold everything in stock and that can potentially work out reasonably well. I think where it got a really bad reputation with all AliExpress side of things and so where- Stephanie: Yes, that's the stuff I read. Andrew: Yeah, right. And that's a whole different ballgame, and for people who, you know, if you're not familiar with that the 30 second version is you go onto AliExpress which lets you pretty much ship pretty much ship products directly from the factory in China to consumers in the US very cheaply through some kind of loopholes in the postal service. You can set up a store really quickly but by and large the products are garbage. They're just crappy, so that I think is where... There was a big rise in that, people ran that for a while, tried to run with that, but the problems were you couldn't build a brand around it because the products were awful, and because it took weeks to get your product to your customer, and probably because most likely if you're launching one of those businesses you know nothing about the product, so. Stephanie: Yeah. Never seen it, you don't even know if it'll make it or not. Andrew: Yeah. But even on the other side I'd say, that all aside, even if you're selling really good quality products, Amazon in the last five years has completely solved distribution. When I started for awhile I sold trolley motors, I sold CB radios, and back in those days you really could get a business up and running purely by sourcing a relationship with a wholesaler, doing a decent amount of marketing, having reasonable customer service and you were in business. But like today if you know what you want to buy, you know the brand, and you want it at a fair price, at a reasonable quickly you're probably going to go to Amazon for something you discreetly know that you want. So, Amazon's solved, at least before COVID and probably still I'd say a large degree, they solved distribution. So, how do you add value? You got to add value through some other way, usually that's through a lot of education or a really curated product line if you're going to sell existing products and those can be harder to get right. So, I don't think drop shipping is completely dead but I think it's gotten significantly harder versus even just two or three years ago. Stephanie: Yeah, that makes sense. So, one question I always try to ask on here is about metrics and data, and with access to your community I want to know what kind of metrics do people talk about as their success metrics or what do you hear people debating about when it comes to metrics behind if a business is doing well or not? Andrew: Yeah, I think the one everyone loves to talk about is revenue, right? But I think that's probably a pretty horrible metric to use. It's easy, and we're totally guilty of it, that's one of our thresholds for even membership. So, guilty as charged, I'm going to slay myself along with everyone that I slay here. We use it because it's easy, we use it because it's socially acceptable. It's way easier to say, "I do three million in revenue versus I made $600,000 last year. It's also way easier to say, "I did three million revenue," than, "Oh, I only made $20,000 last year and that was I didn't pay myself anything," right? Stephanie: Yeah. Andrew: But metrics that I think are most important, one that... To be totally frank, in the community we don't talk a ton about... a lot of our conversations really don't revolve around what metrics should you track. Bottom line is a big one, of course. Conversion rate's a big one, average order size is a big one. Repeat purchase rate is a big one. And I'd say we don't have tons of conversations about them, but I think probably the most important ones to think about today are repeat purchase rates because advertising is doing nothing but getting more expensive. It's getting harder and harder to get in front of people without paying the big tech gatekeepers. So, the more likely a customer is to come back to you and needing that product the more likely you can actually build a viable long term business, that's a big one. I think profitability per visitor is a huge metric. It's harder to calculate but if I was going to run my business on one metric it would be profit per visitor to my website. And the reason I say that is because it encapsulates a lot of things, conversion rate, traffic, all these different things. Andrew: But it really makes you focus on pricing. If I would have to identify the one thing that I have done across multiple businesses in my life that has had the biggest impact and taken the least work, hands down it would be pricing. And so few people play with it. Some people can't, a lot of people can. And it's terrifying to change prices because we all fear that when you change the prices that your business is going to disappear, but that rarely happens especially if you do it in a really smart way. And what you should be maximizing is your profitability per visitor, at least for new customers at a minimum. So, yeah, those are some of my thoughts on metrics, and again we don't... total frank, we don't talk a ton about... those aren't the hot topics but I think those are some of the things to really think about. Stephanie: Yeah. So, now you've opened up, what are some of the hot topics? What are some of the heated debates that are going on behind the wall? Andrew: That's a good question. You know what, let me pull it up. Stephanie: Yeah, open it up. Let's see. Andrew: I'm going to pull it up here. Stephanie: Sounds good. Andrew: So, we have a cool little feature. Let's just surface all the top discussions from the last year. So, I can't... for confidentiality I got to be sensitive, but here's some of our top stories from the last let's say month. The story about how someone sold their brand, their business that they built over the years and just the emotional rollercoaster and what they learned, and how they were looking to hire multiple... How to use influencers on YouTube to build an eight figure business. Stephanie: Oh, that's a good one. Stephanie: Yeah, the influencer one is interesting to me because it kind of brings about the question of the social shopping experience and how the US is so based... right now, I mean, a lot of people are looking towards influencers. Whereas other markets, like China, are not really as much about that. It's more about the social shopping experience. What were your thoughts, or what was the debate when it came to the YouTube influencers and how they utilize that, and do you think that's a longterm trend? Andrew: Yeah. I think one of the big themes I've seen is that the really big influencers a lot of times are spendy and hard to track, but you could potentially get a better ROI if you focus on helping maybe working with smaller influencers either for less money or just for product. Because it's, I don't know, I don't know about you but when I'm on Instagram and I see someone using a product, and especially if they even mention it in any little way I'm immediately a little suspicious. I'm like, "Is this person really like this product or are they just getting it comped and they're having to fulfill their end of the agreement that they signed up for?" Stephanie: Yeah, especially the more popular they are, like as it goes up to the really popular famous people then I'm like, okay, do you actually use that whitening strip? How much are you getting paid for that? Andrew: Yeah, and so I don't think influencer market is going away. I mean, we've had famous people endorsing things for decades, maybe 100+ years, especially in the United States, but I do think, yeah, I just think you can also waste a lot of money on it if you're not doing it carefully. Stephanie: Yeah, I completely agree. So, on your podcast I'm thinking, this is like self serveant, so I'll go with it, but what are some of the best questions that you've asked your guests before where you continued to get the best answers or the best stories? Andrew: Oh, good question. One of my... A couple ones, I would say what's the biggest mistake, or what's... excuse me, what's the last thing you apologized for I think is an interesting one. Stephanie: That's a good one. Andrew: I think another one is what's your number? Like, what's your number to be happy, like if you had X in the bank and what's your number where you'd be happy without having anymore? It's interesting to get a sense. You get numbers from all over the place from a million to 100 million, sometimes bigger, so. Stephanie: Oh, gosh. Andrew: Yeah. A lot of the questions are very specific to the individual person and their story, but for two general ones I'd say I like those ones and get some really interesting ones those times. Stephanie: Yeah, that would be really interesting. A good kind of peak into who that person is or how they think too. I like that. Andrew: Yeah. Stephanie: So, I know we haven't gotten to talk about the capital arm of your business yet and I wanted to kind of go into what that was like starting it up and what kind of issues you were encountering when starting a capital arm? What does that look like and I want a little behind scenes for the new side of your business. Andrew: Sure. Well, thank you. I appreciate it. Yeah, and I'll say in total transparency, like I said, very early into this. We're only about four or five months into this, so still pretty new. But you asked, and specifically were you hoping to know kind of some of the hard parts about starting that? Stephanie: Yeah, like what was the... not the thought process, because that seems pretty obvious like you have this great community and you maybe see some of the challenges that are going on, but what was it like starting a investment arm and what kind of challenges have you run into so far in the first four months? Andrew: Yeah. So, what it was like, it was terrifying. And I think- Stephanie: Sounds like it. Andrew: Yeah, traditionally you kind of have these two approaches where either you go out and raise a bunch of money and then you get all these commitments and you close on it and then you have to go out and put this money to work. It's kind of your life for the next often 10 years, and it's a traditional fund route. The other route is what's called syndicate where you pretty much do deals on a deal by deal basis, which gives you a lot more flexibility but the problem is every time you get a deal you got to go pass the hat and call a million and half the people are out, you know, of those half a quarter of them decide at the last minute that... like the funding process is a nightmare on that side. So, putting it together I kind of did something of a hybrid of those two where we have a group of about 20 investors that are tentatively in. I know them, they trust me, I trust them, and there's kind of a... they signed an informal thing that says, "Hey, I'm in for the next three years for this amount of money." So, hopefully it gives us the flexibility of not have to go out and deploy money just to deploy money, but we can also can be a little flexible, and we can also have the commitment from some people to go forward. Andrew: So, that's totally on the technical fund side, probably super boring to most people. But in terms of some of the challenges, I think that the challenging thing is just the number of deals you have to look at to try to find a good deal. I mean, I looked at over 100 deals so far at some level of depth and it's just finding, A, just good companies, B, where it's a good fit for both parties, and C, where you can see it working out well for everyone. It's really hard to find good deals, especially as a minority partner that comes in to invest, especially on the eCommerce side because our approach and what we're trying to do is buy, invest, in the long run with companies to build profitable businesses, like we're not trying to flip them. And I think in tech investing you can get away with a lot of sloppiness because you're kind of swinging for the fences. So, if you have a bunch that don't work out it's a big deal, most of them don't work out. Stephanie: They don't. Andrew: But with eCommerce, our model... we're looking to do singles and doubles and it's just hard to find really good businesses that you feel are going to be around for three to five years. So, the hardest part for us has just been finding great businesses that we feel check all our boxes, so. Stephanie: Yeah, that makes sense. Is there a common theme behind what these businesses are needing capital for? Andrew: Yeah, I would say... So, financing for eCommerce businesses is tricky. There are some options out there, there's things like Shopify Capital, there's ClearBank, there's PayPal Capital, Amazon Lending, all these things, but they're expensive. They also take a... often times you don't pay them back on a fixed rate, you pay them back on a percentage of revenue which can be good and bad. So, inventory financing is a big one but I'd say the people that we talk to it was probably half and half. Half of them want money for inventory financing to grow the business and half of them just really would love to have someone who has spent $15 million on Facebook ads in their career to be able to help them and give them some high level guidance on what to do and some thoughts there, or someone who's done a lot of importing to be able to tap into that knowledge based in that network, so. Stephanie: Yeah, I agree. When were thinking about fundraising back in the day I was like, "I actually don't really care about people's money as much as are they going to help me?" Like, I really don't want the most famous investor because I highly doubt they will spend any time with me. I want the person who's ready to get their hands dirty and help me with the nitty gritty stuff that I'm looking for help with. Andrew: Oh, totally. Yeah, there has never been... There's so much money sloshing around right now, right? And so there's a lot of places that get money, which is good if you're raising money, but it's greed. I think the real value ad is the experience side and the money is just kind of a nice perk that comes along with it often. Stephanie: Yeah. Yeah, I completely agree. So, you've been looking at a lot of businesses and you have a lot of businesses in your community, what is one thing that you wish online sellers would either start or stop doing? Andrew: Start or stop doing... Stephanie: I like to throw out the hard balls. Andrew: Yeah, no this is good. I would say I wish people would start having more fun with the copy in their business. So, one thing I always... and I didn't, I can't claim- Stephanie: That's a good one. Andrew: I can't claim credit for this one, but I've always liked to try to make the copy and confirmation emails and things like that fun and interesting and a little bit different as opposed to like, "Thank you for your order. Your order is 49732. We appreciate your business." Such a great... Transactional receipts are one of the most opened emails across all emails, shipping ones absolutely, and if you're trying to build a brand there's no better point to be able to, you know, have some fun and be able to be different and differentiate yourself, right? So, I think that's a big one. You can extend that to the product packaging, your website, all that stuff. But I would say take a little more risks and have a little bit more fun. I would check out a site called mancrates.com, have you heard of them? Stephanie: No, tell me a bit about them. Andrew: They're so good. They're so good. They sell fun gifts for men, so for example, instead of ordering your dad a tie you can order him a 16 inch by 16 inch wooden crate of beef jerky and steak rub that he has to open with a crow bar when it shows up to his house, Like stuff like this that's different. Stephanie: Oh my gosh. Andrew: And the copy is freaking just hilarious. So, check them out if- Stephanie: Oh, that's good. I'll have to check that out. Andrew: Yeah, they're really good. It's just you're buying an experience for the recipient and people pay up for it, so. Stephanie: Yeah, now more than ever with people not going out as much, not going in stores and stuff, you do have to figure out how to differentiate yourself. And I think that's a good point that, I mean, right now I'm even thinking I bought something and I'm getting the actual logistics email of DHL or whatever will be shipped at this time, and it's all this other text that I don't care about, so it's like, "Okay, I actually don't care about this email that's coming through." And if they would've made it unique and fun and exciting... like I don't even know what this is that I bought, that's how bad it is. There's no branding or anything, it's just coming apparently. Andrew: Yeah, if they were like, "The DHL guy had a wreck but your package was so important that he grabbed it from the fiery box and he crawled with one arm bleeding out and he handed it to the last person he saw and said, 'Deliver this, please. Deliver it to Stephanie,' and then he died." Stephanie: Oh my gosh. Andrew: That might be intense and maybe it doesn't work for all brands, but it sure as heck gets your attention and you're like, "Whoa, this is interesting." Stephanie: You need to write for our brand. I'm going to bring you on our team, Andrew, just for your copy. I need that. Oh man, that's good. All right. So, I want to do a higher level eCommerce question because I just think you're, one, you're willing to take a risk and you're willing to predict the future which I like. I appreciate that. So, I want to hear either what disruption is coming to eCommerce that's not already here, because a lot of people have said, "Oh, COVID's the biggest disruption." That answer's already been taken, so either the biggest disruption or you can tell me what the future of online commerce looks like in five years. Andrew: Biggest disruption coming, I'll try to tackle both of them. Biggest disruption is I think that... man, it's just coming from the guy. You talk about be willing to predict the future, I made a bet with somebody when Amazon was $200 a share that Alibaba was gonna out pace it. And now that Amazon is $3,000 a share, it was a humbling experience and it cost me a very experience steak dinner. That being said, here's my prediction... Stephanie: That's all right. I want your prediction still. Andrew: I would say the biggest disrupter, oh man... I'm going to throw a couple things out there, I think text is going to be a big one, SMS. But that's not like a big disrupter as much as just a new marketing channel that us marketers can leverage for awhile until we completely destroy texting for everybody which will probably take three or four years. Stephanie: That's a good one though. What are thinking around using that as new marketing channel? Andrew: Oh, I just think, I mean, if you look at the... I think email is just getting harder and harder unless you really want to hear somebody's email. So, I just signed up for the service HEY, are you familiar with that from Basecamp? Stephanie: I've heard about it and I seen a bunch of drama on Twitter about it, so. Andrew: Yeah. There has been... probably between them and the App store and all that kind of stuff? Stephanie: Yes, yes. Andrew: Yeah. So, one of the reasons I signed up for them is because they have this thing where you can screen your emails now, and the first time you get an email from a new sender you can say, "Hey, I want this person to pop in my inbox, or no, Johnny, from Michigan I don't care about your boat covers. Don't ever talk to me again. It's unsolicited." So, that kind of thing, I think email is going to be... there's going to be more and more tools and services that let you curate your email and really slice down who gets to hear from you and so email is going to get harder and harder. But if you look a just text message delivery versus email it's an order of magnitude higher engagement, readability, click through, et cetera, and I think that marketers are already, I mean, they're already starting to do that. People that I know that are on the leading edge have five, I haven't six figures, but definitely seen some good mid tier five figure SMS lists and they just do really well. So, the problem is you got to be really careful because when people text me about things that I'm not interested in... like texting for me is very personal. I text my wife, my family, my good friends. Andrew: I don't text with Bobby's Boat Shop in Michigan, and if he sends me a promotion via text I'm going to be pissed off. So, you got to be really careful about how you use that but I think that will be a big marketing channel going for, so. Not really sure if that's really a disrupter and it's already kind of here in some regards but I'll throw that one out there. Stephanie: Yeah, I like that. I think that's a good one though to think about how to be careful when you start using these new channels, because completely agree. I've had I think someone just texted me this morning who's like, "I'm the education blah, blah, blah person of your district." I'm like, "What are you texting me right now? Don't." Andrew: Oh, totally. You can really... and I think there's some pretty stiff penalties for not being careful about that in terms of if you just spam people via text, which is good. But yeah, nothing's worse than getting a text from someone you really don't want to hear about, so. Stephanie: Yeah, I agree. All right. So, next we have a lightning round, if you're ready, Andrew. It's where I'm going to ask you a question and you have a minute or less to answer. Andrew: Perfect. For each question? Stephanie: Yeah. Andrew: Awesome. Is there like a booing sound if I go over so I stop talking? Stephanie: No, it'll just be me, "Boo! Boo!" in the background. Andrew: Do it, do it. Stephanie: All right. What's up next on your Netflix queue? Andrew: I don't really... Oh, actually I do have... what is it? They're in Arizona, there's a place called Biosphere 2 where they locked all these people into this kind of self contained environment as a training mission to go to Mars, and they isolated them from earth atmospherically for two years, and surprise surprise it was a huge trauma fest. Can't remember the name of the movie but that's what I'm watching next on Netflix. Stephanie: Oh my gosh, that sounds insane. Andrew: Spaceship Earth is the name of the documentary. Stephanie: Spaceship Earth, okay. I will have to check that out. Very interested in that, and I also pontificate about Mars sometimes on our other show Mission Daily, so it's perfect for me. Andrew: Oh, perfect. Watch it tonight. Stephanie: All right. Where are you going next for your travel destination when you can travel? Andrew: Probably down Tucson, Arizona where... I'm up in Montana right now, but probably Tucson, Arizona which is where we live, so. Stephanie: Cool. Andrew: That's kind of a cop out. I need a better one. Stephanie: Wait, you live in Montana and you live in Tucson? Andrew: We're up here, we spend some time in the summertime up in Montana just to see family, friends, like that. Stephanie: Oh, cool. Andrew: Yeah, so we're heading back there soon. Don't have any plans at the moment but the next big trip I would like to take would be to Mongolia. Stephanie: Oh, that would be very interesting. Do you have an Instagram? I'll have to follow along when you go there. Andrew: @capalisthippie, so. Stephanie: Okay, I'll follow you. If you were to create a Netflix original, what would it be about? Andrew: Oh, this is easy. It would be... I'm fascinated with the question of where is the balance between running a business and being ambitious and chasing entrepreneurial success and having a great life and traveling and seeing your family and nurturing other side of yourself, and I feel like so few people get that right. So, my documentary would be pick 12 entrepreneurs from varying levels of that spectrum, live with them and follow them for two months each and try to come to some conclusions about if you were going to try to design your life to be able to maximize both of those, where's the line? Stephanie: Yeah. That's a really good one. I need help with that right now. Andrew: I think a lot of us do. Stephanie: Yeah. What podcast guest are you trying to get on that you just can't get, like they're just not responding and you really want them? Andrew: Oh, that's a good one. I think awhile we were trying to get Tim Ferriss on the show, which is super cliché. It didn't work out. Stephanie: Ouch. Andrew: Yeah, I know. I'm still upset about that, Tim. What is the favorite piece of tech that makes you more efficient? Andrew: Good question. I would say text expander is a big one so you can do saved replies and bump those out. Yeah, I'd say that's probably one of my favorite. Asana is another great one. I love Asana for we manage all our SOP's and long term projects there, so I'd say those two. Stephanie: Yeah, completely agree. I like them. All right, the last one, what new eCommerce tool are you hearing about that a lot of people in your community or outside of it are having success with right now? Andrew: I would say there's a tool called Bonjoro, and it's not necessarily just for eCommerce, but it allows you to send custom welcome videos to people really easily. If you think about sending a video to a customer it's probably not the filming that's the hard part, it's probably like the okay, I have to film it and then I have to send it, and then I have to edit and export, and it just lets you cue up these emails, send videos to people for kind of nicer customer service touch. So, yeah we use that for onboarding for a lot of our members and I've heard people have good luck with that, so. Stephanie: That's cool. Well, Andrew, this has been such a fun interview. Where can people learn more about you and eCommerceFuel? Andrew: Yeah, if you like podcasts, which at the end of listening to me talk for 45 minutes you prob are- Stephanie: Do you want more? Andrew: ... a glutton for punishment, yeah. I would love to have you as a podcast listener on the eCommerceFuel podcast, so you can get that anywhere you get podcasts, iTunes or elsewhere. But yeah the big home is just eCommerceFuel.com, so you can learn about the community there if you're a store owner and want to get plugged in or if you have an interesting business that are looking for either money or probably more importantly some expertise from a group of really experienced eCommerce investors. Yeah, I would love to have a discussion with you. So, eCommerceFuel.com is the best place for all that stuff. Stephanie: Well, it's been a blast, Andrew. Thanks so much and we will see you next time. Andrew: Yeah, this has been fun. Thanks for having me on.
Not many people trade in both a successful finance career and the chance to get a Harvard diploma for the opportunity to launch a business. But that’s what Sarah Paiji Yoo did. And when she found success and sold her first company, she knew that she could never satisfy that entrepreneurial itch by doing anything but building another company. Sarah went on to co-found a start-up studio and helped launch a number of other companies, including M.Gemi and Rockets of Awesome, but she craved more. Ultimately, she wanted to dig into something that served a deeper purpose. Today, Sarah is a co-founder of Blueland, a consumer products company on a mission to eliminate single-use plastic packaging. The way Sarah and her team are accomplishing that mission has started with creating a new way to develop and use cleaning products and has included a stop along the way in the Shark Tank, where Mr. Wonderful himself, Kevin O’Leary, bought into the company. On this episode of Up Next in Commerce, Sarah sheds light on common mistakes that young entrepreneurs make when they are starting out, as well as shares the secrets for avoiding those mistakes. Plus, she explains what the holy grail metric is for judging the health of your company. 3 Takeaways: In the early days when you only have one or two products that consumers buy, it’s easy to keep track of how people get funneled through. As you begin to expand your product offerings, measuring acquisition behavior and retention becomes more important in being able to judge the health of the company and the new products brought to market. The importance of focusing on product-market fit can’t be overstated. Often, young companies and their founders get caught in the trap of trying to please investors or race to profitability through clever marketing or other shortcuts. The only way to achieve meaningful, sustained success is to know you have product-market fit from the get-go, and then optimizing your strategy from there. You can still do something even if you don’t have all the pieces to the puzzle. Even though an idea seems simple, there are always going to be complications to work through. Being tenacious and having grit are the keys to being able to see you vision through to completion. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey, everyone. This is Stephanie Postles, your host of Up Next in Commerce. Today we have Sarah Paiji Yoo on the show, the co-founder and CEO at Blueland. Sarah, how are you? Sarah: I'm great, how are you, Stephanie? Stephanie: Doing well. And you're calling in from New York, right? Sarah: Yeah. Good, old New York City. Stephanie: Yeah, how's New York life right now? Sarah: New York life, it certainly feels ... It's funny, because I feel like in the beginning, we definitely were the hotspot of coronavirus. But now it feels like one of the safer places to be, given the high immunity. So, it's good. I think it's a little unfortunate that summer now, it's my favorite season in New York, so, it's unfortunate that we're still, for the most part, having to stay at home. But I think we got in our groove and it has definitely given at least my family the opportunity to force ourselves to find other ways to explore nature right outside New York City. Stephanie: So, I'd love to dive a bit into your background before we get into Blueland. Because I read some interesting things about you about having some Ecommerce companies in the past and dropping out of Harvard MBA program and I'd love to hear a bit about your journey of how you got to where you are today. Sarah: Yeah, absolutely. So, I guess if I were to start way back, I started my career actually pretty traditionally in finance and consulting. Certainly early in my career I actually had no aspirations to be an entrepreneur. I always consider myself relatively risk-averve so it is interesting to see how life unfolds. But yeah, I started my career very traditionally after those stints in consulting and finance, which I actually wouldn't trade for the world. I really appreciate the experiences and the skillsets that I picked up and the frameworks it gave me to really think about the world and business. Sarah: But after those stints I decided to go back to Harvard for business school, to really, most of all to be able to have the time to step back and reflect on what it was that I wanted to do next. Because I think my early experiences, if anything, taught me that I wasn't a lifer in terms of professional services, I really wanted to be more in the driver's seat and wanted to be at a company versus advising the company. And so, yeah, I made the decision to go to business school. And when I got to business school it was a really interesting time because there had been, right before I came, a series of female founders that had started very impressive companies, GuildCrew, Birchbox, Rent the Runway, LearnVest, Katrina who started Stitch Fix with just one year ahead of me in business school. Sarah: And that was extremely inspiring for me just to see a set of women who were young and had a very similar background or set of experience as myself and see them so quote, unquote, early in their career, setting out to build their own business. And I decided that given business school ... You can make what you want of business school but it doesn't have to be particularly rigorous. And so, I had more time on my hands than I did previously what I was working in, so I decided to really use that time and try to start a business while I was in business school. And a few months in I ended up starting work on my first startup, which was Snapette, which was a mobile shopping app that helps consumers find products and stores around them. Sarah: I was really excited about everything that I was seeing around smartphones and the mobile space. And this was still pretty early on. So, this was almost 10 years ago, pre Instagram days, if you can imagine a world before Instagram. Stephanie: Tough world to start in. Sarah: Yeah. Yeah, exactly. But yeah, that's the first business I decided to start while in school. I ended up raising a round of venture capital that summer between my first and what was supposed to be my second year of business school. And so made ... it was actually a very easy decision, to drop out of Harvard and continue to just work on Snapette. And I ended up scaling that business for the next about three and a half years to a small team, about 20 people. And then we ended up selling that business to one of the world's largest stock search engines at the time, called PriceGrabber. Again, almost four years in. And- Stephanie: That's amazing. What was the process like, selling the company? Did you actively go about selling your company or were you approached? Or how did that look? I heard a good quote the other day that companies don't just get acquired, you actually need to actively go and sell your company if you want it to be sold sometimes. Sarah: It's interesting because I've also heard the opposite. Stephanie: Oh, interesting. Sarah: Which I can related to both [inaudible 00:05:48]. I was actually worried with the phrase, but we were lucky in terms of we received an inbound. Stephanie: Oh, nice. Sarah: That tipped us off to, "Oh, this might actually be a good time to sell. And the context of that period was, I started Snapette at a time when Mary Meeker and a lot of these industry experts were saying, "Oh, mobile's going to be the future. People are going to spend more time on their phones than on their desktop," and that seemed inconceivable, the early days as she was saying that. And when we sold, that's when we were seeing about 30% of site traffic, to many of the major sites coming from mobile instead of desktop. So, it still hadn't flipped yet. Sarah: But it definitely felt like it was coming. And so, yeah, we had an inbound from a traditional, online, non-mobile player. And that kick started me to reach out to a few more folks in the space that had a similar profile, because if we were going to engage in these conversations I thought, "Let's run a robust process," because obviously competition can always help drive a better outcome. And so that's what I did. And ended up not really engaging a bank or anything. That's where my former finance experience definitely did come in handy because I did have experience buying and selling companies and so I understood ad a high level what that process looked like. And so, yeah, we were able to quarter back that process in-house and get a few offers and ultimately find an acquirer for our business. Stephanie: That's amazing. So, at that point you got the itch to start another company? You're like, "This is great. I'm going for round two." Sarah: Yeah. Yeah, yeah. Exactly, exactly. So, initially we had ... Not initially. We had a one year lockup with the parent company. And so our whole team moved over. And it was interesting, I think initially I was extremely excited about the prospect of being part of a much larger organization, that had much higher revenues and much larger budget. And I didn't expect how quickly ... I feel like day one, post-acquisition all of a sudden, the speed at which we were running, everything came to a halt. And all of a sudden my calendar was full of just meetings with lots of people back to back. Sarah: And I think it was hard. I think it was hard going from also this small, mobile startup where Apple would make an announcement about the newest feature and then I would get together with my team and our engineers and really think about like, "Oh, how can we integrate this? How can really use this to push our product forward?" And in a larger organization, completely understandably you have much longer product roadmaps, you need to justify why a change that you want to make is going to add more value to the company than some much larger initiatives that maybe underway. Sarah: And we were dealing with 18 month, plus product roadmaps, which to me at the time felt like, "Oh my god, if I have to wait 18 months to start working on some of these things, I'm going to be dead." So, it was an interesting contrast for me. And so, I certainly, definitely developed that itch to go back out and start something again. And I think also as a first time founder with Snapette, I had made so many mistakes along the way. And I was just dying to do it again but be better the next time around. Stephanie: So, then where did you go after that [crosstalk 00:09:35]? Sarah: Yeah, so after that, it's interesting, because I think ... my career, my life had been so linear til pre Snapette. But I think that startup journey really showed me both the joys and the benefits of just being being open to what life may bring and that really just reaffirming the Steve Jobs quote, "If you can't connect the dots forward, only looking back." And so, at that point I knew I wanted to get back into early stage company building. I wasn't proactively looking for my next business or the next idea, but I ended up reconnecting with a former acquaintance in the Ecomm space, Ben Fischman, who had also sold his startup, Rue La La, which was one of the first flash sale sites here in the U.S. Sarah: And he had sold his company right around the same time I sold Snapette. And he was exploring the idea of raising a fund and to start a series of new businesses. So, it wouldn't be a venture capital fund, but it would be more like a startup studio. And the thesis that we both share was that, at this point it was 2013, we believed that it was still very early innings in terms of direct-to-consumer. So, at that point Warby Parker was our, in way, that preeminent example of direct-to-consumer. But it was our belief that we would continue to see whole categories move direct-to-consumer, and many of which we've seen now come into fruition. I remember at that point thinking about, "Oh, we're going to see everything from shoes to socks to tampons to vitamins, etc. Everything is going to develop a new brand and find more efficient ways to directly reach and communicate with consumers." Sarah: And so, yeah, he was like, "You should come do this with me." And at that point, again, I didn't have a specific idea in mind. I knew that I wanted to be back in the company building stage. I loved the tech and direct-to-consumer space. And so, yeah, I jumped onboard with him and was a founding member and partner of that team. And so, that startup studio was called LAUNCH, or is called LAUNCH, it's still around today. And the goal was to then launch one new business per year, which is what we ended up doing. So, over the next four years we launched M.Gemi in our first year, Rockets of Awesome. M.Gemi is a direct-to-consumer footwear business. And then we launches Rockets of Awesome the second year, which is a direct-to-consumer subscription kids apparel business. And then we launched Follain, which is a clean beauty retailer. And in the last year that I was with LAUNCH, LAUNCH Trade, which is a direct-to-consumer coffee marketplace. Stephanie: Very cool. How did those individual companies do? Sarah: The individual companies have all been doing great. They're still around today, very proud of how far they've come. But it was definitely a crazy time. Certainly in a period where we've seen over funding and collapses, you know many important DTC businesses I think very proud to say that all those businesses are in great shape and still around today. Stephanie: Yeah, that sounds really fun. Chaotic and crazy but fun. Were there any universal truths that you learned? Even though the companies sound very different that you were launching there, was there anything that you found a best practice and then you could apply it to future businesses? Sarah: Yeah, I think the biggest takeaway, probably from launching multiple businesses is just the importance of focus and the importance especially of focus on product market that in early days I think it's very easy, especially when you are venture backed, either with access to capital or with this immense pressure to grow quickly, to grow into the valuations that you may have raised that it can be easy to fall into the trap to shift a lot of your focus to marketing and growing. But ultimately the best marketing is an amazing product or service that drives strong retention, strong word of mouth. Sarah: And any marketing spend that you deploy is going to be so much more efficient and effective if you don't have a leaky bucket. And I think that's one that is certainly harder, especially in this world where we celebrate large fundings and also companies growing very quickly. And I just think there's so much value, especially early days of almost staying smaller so that especially the founders can really focus entirely on product-market fit and making all the tweaks necessary to really optimize the product, service or offering. Stephanie: Yeah, I completely agree about that. How did you all go about finding or knowing when you had product-market fit? Were you like, "This is the one, let's move forward."? Sarah: Yeah, yeah, yeah. I think it's hard to draw that line in the sand, for sure. I think an important metric or area of metrics to look at certainly are around retention and repeat. Because ultimately there is a lot of focus, especially in D2C, on acquisition. And whether it's customer acquisition cost or cost per acquired customer, ultimately, that doesn't give you the full picture. That just tells you that you were able to have a clever ad and maybe you have attracted someone to make that first purchase. But it's certainly a lot cheaper to have your customer purchase again and repeat with you than having to go out into the market and pay for a brand new customer. And so, we've always been extremely focused on the retention metrics as a leading indicator to help the business. Stephanie: Yeah. yeah, that's great. So, then, at what point were you at LAUNCH where you were, once again, "It's time for me to move on, do my own thing again."? Sarah: Yeah. Yeah. So, I had a crazy journey and it was an amazing ride. I learned a ton about launching new business, having to do that back to back. But I think after my fourth year, after the fourth business, I developed a deep seated desire to do something that was a little more personally meaningful. I think for so many years simply the challenge and excitement of bringing a new brand or product to market that had never existed before was enough for me and it was incredibly energizing. And I still love that aspect of it. But at that point I was looking to build something beyond selling more shoes or beauty products. Sarah: And I think that also was heavily influenced by my becoming a new mom around that time. So, it's not coincidence that the number of years I've been working on Blueland is about the same number of years as my son's age. Stephanie: Yeah, it's funny how all of a sudden, same with me, you get interested in what's organic and what's actually natural and- Sarah: Hard to miss it. Stephanie: Yeah, it's something I never paid attention to that much until having kids. Sarah: Yeah, no, exactly, exactly, exactly. And I think you also start questioning how you're spending your time. You have very limited time, and thinking once you have children and a family it highlights more clearly for you the trade offs between work and rest of life. And I think, I was very open to how I would feel on the other side of motherhood. I was very open to maybe I wasn't going to want to work at all. Maybe I was going to be so obsessed with my child that I was going to want to spend every waking moment with him, which would also have been a fine outcome. But interestingly, after having my son, for me, I realized that I still really did love working. I loved my work a lot but I think I just needed to find more meaning in it if it was going to take up so many hours of my day and taking away from my child. Stephanie: Cool. So, then, what was the first step when it came to ... what really led you to creating Blueland? Was there an aha moment, was there something ... Tell me a little bit about what Blueland is maybe first and then how you came up with the idea. Sarah: Yeah. So, Blueland is a consumer products company, we are on a mission to eliminate single use plastic packaging. And we are starting with cleaning products. And so, the first set of products that we launched, when we launched about a year ago were a set of cleaning sprays and hand soap. And what was really unique about our products was that instead of selling you a bottle of liquid, these products are traditionally about 90% water, we've shrunk these products down to these tablets that are about the size of a quarter so that instead of buying a new plastic bottle every time, instead of paying for all this water which you already have at home, you can use one of our beautiful, reusable bottles and simply fill them up with warm water, drop in one of our tablets and it starts to bubble on its own, there's no shaking or stirring or weird chemistry required. And at the end of a few minutes, you have a full bottle of hand soap or cleaning spray. Stephanie: Yeah, that's cool. Sarah: And our cleaning sprays include a multi-surface cleaner, glass and mirror and a bathroom cleaner. Stephanie: Yeah, it remind me of a Alka-Seltzer, where you drop it in and then all of a sudden you have this big big bottle of cleaning solution. Sarah: Exactly, exactly, exactly. And we stared there because we found that it was very intuitive for people even though it was something that had never been done before, it was brand new to market, it was something that people could see and quickly understand like, "Oh, that makes sense. That water and the tablet can make a bottle cleaner." And so, yeah, those are the products we started with. Happy to say last month we released our newest category which is the dish category. So, we launched a dish soap and dishwasher tablets. And in a similar vein, these products were created as part of a reusable, refillable system. So, upfront we sell you a permanent, forever container that you can refill with our refills that come packaged in paper based compostable packaging instead of plastic. Sarah: And so, our dish soap is actually a powder. But it's used very similarly to liquid, to the extent that you just sprinkle it directly onto your sponge, you add water and then you get a nice, rich foam. And yeah, our dishwasher tablets are naked, to the extent that they don't come individually wrapped in that plastic film that you'll find, with most all dishwasher packs. Stephanie: I've never really thought about, "Where does that film go? Does it just go down the drain? Sarah: Yeah. So, it's unfortunate because it- Stephanie: That's sad. Sarah: Yeah, it is sad. It is sad. Because I think the assumption for a lot of people, understandably, is that because it dissolves, that it just goes away. But unfortunately, because it is a synthetic petroleum based plastic film, the plastic molecules do still remain and enter our water systems and majority of it is then ultimately released into the oceans, rivers and anything else. Stephanie: So, when building this company, I read that you had reached out to over 50 manufacturers who all turned you down. And I wanted to hear- Sarah: Oh my goodness. Stephanie: I wanted to hear that story a bit, because I think most people maybe after 10 woudlve been like, "Well, it's not possible." Or, "We can't find how to contain these tablets." Or, "No one knows how to do it." Tell me a bit about what was that process like when starting to build the products out and trying to find people to partner with to make them? Sarah: Yeah, yeah, yeah. So, I think a big piece of being a entrepreneur, it's not rocket science, it's just being tenacious and having grit and not taking no for an answer and not assuming that because it's never been done, that means that it can't be done. And so, yeah, I think when we initially came up with this idea for Blueland, it was a crazy idea. And we had a lot of questions from people like, "Well, if it's so easy, why hasn't it been done?" And we're like, "Well, somebody has to be the first." Sarah: And so, yeah, initially, the natural place to start was to reach out to manufacturers, because typically, whether it's in the food space or the cleaning space or in the beauty space, a lot of these spaces are fashion. A company usually works with a contract manufacturer to actually make their products. And so, first choice was finding someone with the existing infrastructure that could just make this for us. Not surprising, in retrospect, hindsight's always 20/20, that no one could do this for us. We were reaching out to cleaning products manufacturers who were creating these products as liquids, and they were pretty much telling us how, "We don't know how to deal with solids, like we don't even have tableting machinery. And in fact, many of the ingredients that we buy for our liquid products actually come in liquid form. And so not even sure how we would then transform that into a dry product." Stephanie: But did you have an ingredient list? Were you like, "This is what I want in it?" Because that [crosstalk] seems hard to me of like, how would I make a multi-surface cleaner? Sarah: Exactly, exactly. So, in the beginning it's just this huge chicken or egg problem. So, we reached out to many manufacturers. And at that point it became also just less so in terms of ... we didn't necessarily think we were going to find an end-all, be-all solution with one of these calls but our hope was that we were going to get enough smart people in the space, who had been in the space for decades to talk to us in each of these conversations, we were going to glean a little bit more information. And if they couldn't do it, they would potentially know someone else who could. Whether it was a scientist ... because a lot of these contract manufacturers also work with contractor chemists, et cetera, they might know of an ingredient that they heard of that would be able to help us do this and so it really was just our form of Googling around, when Google could only get us so far on these niche topics that no one had a reason to read up about online. Sarah: But yeah, I think it became apparent through these conversations that someone was going to be able do just do this for us and everyone was recommending that we would need to come to them with a formula. And at that point felt like we hit another wall because my co-founder and I, we didn't have any chemists in our direct network. We had no idea where to even begin. We were both business people. And so, we, after asking our network, not really finding any leads to any reputable chemists, certainly no chemists with a cleaning products background, we just turned to LinkedIn. Stephanie: Ooh. Sarah: That was just a natural place to turn to, to be able to search for experts based on their experiences and at that point ended up going down another, very long rabbit hole of collecting ... We still have that spreadsheet today of hundreds of names of chemists that we found on LinkedIn and wrote up what their background was and ranked them and then just started reaching out to them, just [inaudible] reaching out to them on LinkedIn and just trying to get as many people as we could on the phone with us, like we were doing with the manufacturers. Stephanie: Did you get a good response rate from people or was it slow? Sarah: It was definitely slow. In LinkedIn there's all these limitations of if you're not connected, they may not readily see your message, also turns out a lot of chemists aren't actively checking their LinkedIn or messages. We also were just two random people that were messaging about this crazy idea that most recipients on the other side probably had like, "I don't know how to do what they want to do," or, "This idea seems crazy," or, "Why are they soliciting me for a job? Why would I leave my big company, well paid job to go do this?" Sarah: So yeah, I think suffice to say response rate wasn't great. But to some extent, it also was a numbers game, which is why we did reach out to so many people. And we were able to get a good number of people also just to get on the phone with us. And there definitely were a set of folks that we're so thankful to that were inspired by our mission and the audacity of at least the vision, and were willing to chat to see if they could be helpful. And that is ultimately also how we found our incredible head of R&D, Syed, it was through LinkedIn. Sarah: He was formerly at method, which is one of the world's largest non-toxic cleaning products companies. And prior to that, he had the perfect background because prior to cleaning products he was actually working in nutritional supplements. So, vitamins. So, he also had that hard, tabled-like form factor experience. Stephanie: That's amazing. So, how many tablets are you selling today? And how much plastic is it removing from the environment if someone chooses that versus a normal alternative? Sarah: Yeah, yeah, absolutely. For us today, I forget the latest numbers. But we've sold tablets in the millions- Stephanie: Wow. Sarah: ... at this point, which is exciting because that means that our impact has also certainly been in the millions of plastic bottles eliminated. I think people are always surprised to hear that five billion plastic cleaning bottles are discarded each year, because there is so much focus on the water bottles and the coffee cups and the straws. Rightly so, because those numbers are even larger. But people are always surprised to hear how much of ian impact you can do by also just swapping out your cleaning products to a reusable solution. Stephanie: Yeah, yeah. That's amazing. Nice work. So, I'm guessing there has to be some kind of convincing and education factor that had to go on because a lot of customers at first, they all worry about maybe the anti-microbial factor and everyone's probably ... at least when I think about it I'm like, "Just throw some Lysol on it or bleach or something, that'll clean up anything." How do you go about convincing people that your product has the same benefits and even though it's natural, it'll still work? What does that education piece look like? Sarah: Yeah. So, that education piece is obviously so important and has become even more important during this period of time and COVID where people are very focused at keeping germs, bacterias and viruses at bay. We received, especially in March and April, that was the number one question that we were getting, especially around hand soap, actually. Where people were asking if our hand soap was antibacterial, whether our hand soap would kill COVID. And there we were very direct with the answer that ultimately, no, our hand soap is not antibacterial, it's not disinfecting, we cannot make the claim that it kills COVID. But it was an educational moment for us because at that point we could start the conversation with consumers that also are rooted in many studies that suggest that antibacterial soaps might actually be doing more harm than good, as well as if you look at the FDA, they've made official statements that say, "Regular, non-antibacterial soap is effective for the removal of bacteria and viruses," and that hand washing with plain, non-antibacterial soap is a great way to prevent the contraction and spread of illnesses. Sarah: And so, I think most people that hear that get it, and it will even link them to the FDA site on proper hand washing techniques and just to just reassure people this, "By no means are we looking to mislead or brainwash," but that it's just more the education of, you know, many times I think there's this perception you need a certain set of ingredients to get a certain job done. But- Stephanie: It's part of the marketing behind that too, for people who do have the antimicrobial stuff in it, they're pushing it so hard, "You need this," when I've read the same research about you actually don't really need that and you can still have very clean hands afterwards. Sarah: Yeah, yeah. Exactly, exactly, exactly. And so, it's been nice. It's been a nice period where we can also provide that education, because we are staunch supporters of non-toxic formulations. And so, any opportunity that we have to speak more to the efficacy of non-toxic products as well is always, we think, a good thing, not just for us but for the broader industry and for people on the planet. Stephanie: Yeah. So, how do you get people to find you? I'm thinking, if I'm going to the grocery store, that's maybe where I'll pick up a cleaning product when I run out or something. Are you in retail or were you planning on going into retail before COVID or are you staying strictly B to C? Or how are you thinking about that? Because it seems like it'd be hard to bring people over to buying online when maybe they've never thought to do that unless it's through maybe Amazon Prime or something, I don't know. Sarah: Yeah, yeah. No, it's definitely one of the larger areas of friction that we recognize. To the extent that it's interesting when you think about it from a direct-to-consumer perspective or context because I definitely went into this eyes wide open, as to this is a category that's going to be harder to convince people to go to a separate, online destination to buy the products. Because in my past, I've been in shoes, I've been in apparel, I've been in beauty, and for all of those, especially something like shoes or swimwear, I would argue it's easier to convince someone for a one-off special purchase, like glasses, to go to a separate destination. Sarah: But to your point, with the cleaning products, this is a product that even early surveys have found that over 80% of people would prefer to just purchase these either in brick and mortar stores or just as part of the shopping that they're doing regularly anyways, whether it's weekly or biweekly grocery shopping, whether it's all on Amazon or at their local Target or Walmart. And I think that because of that, retail will definitely have to be an important part of our future. At the moment we are still a most all direct-to-consumer business. We have a handful of retailers that we sell through but still pretty minimal like we're with Goop or with West Elm, we're with Nordstrom. But I think- Stephanie: Those are some pretty good names. Sarah: Yeah. Those are definitely great names, but those are more I think we still view brand enhancing names and not necessarily the place where people are going to every week to traditionally buy these products. But I think it all comes back to focus and we also always knew that direct-to-consumer was going to be an important component of launching the brand. I think there's so many benefits, especially from a brand building and story telling perspective and explaining the mission and as a new brand to market just explaining who we are. And it's certainly an efficient enough channel to be able to get to early adopters and a set of consumers. But we do believe that if we are going to truly maximize our environmental impact and reach as many households as we can, then absolutely, we do need to, at one point, go into retail, physical retail and traditional retail. Stephanie: Cool, so, how do you get in front of the early adopters that you just mentioned? What kind of digital channels are you exploring? How are you doing your marketing? How are you finding customers and bringing them back? Sarah: Yeah, yeah, definitely. Instagram has been an invaluable channel for us, especially on the organic side. I think we've had great success there. So, we've been live for probably just about a year now, we have over 170,000 followers on Instagram, all of it organic. We haven't really done any paid influence or promotion or anything. And I think it's really helped that because our mission is so integrated into our product offering, we are a mission driven company but that could mean different things for different companies. And for some companies that means it's a donation that they're making or a philanthropy in addition to whatever their core product or service is. And for us, our mission is just 100% integrated into the products that we sell. And that's given us the ability to, on social speak across a range of topics and speak more broadly about climate change and plastic pollution and tips on how we can each do our part. Sarah: And it's been so exciting to see how much that's resonated with the community on instagram and how quickly we've grown and it certainly is one of our largest channels. So, it's exciting to see that organic is something that that can work for a direct-to-consumer brand. Stephanie: Yeah, especially if you have that. Sustainability is a hot topic right now and like you said, if you're able to lean into those groups and people and tags and stuff, that opens up a whole new market where maybe other DTC companies who are just trying to sell their product and create brand new content, very different. So, it seems like that'd be a very helpful way to get new customers and access to an audience that maybe you wouldn't get access to otherwise if you weren't building a sustainable product. Sarah: Definitely, definitely, definitely. And it's also been a really great amplifier for word of mouth. I think we're fortunate that we have a product that people feel more inclined to share. So, everyday we get hundreds of people story-ing our products and their unboxings. And I think that's being driven by two things. One is just the mission I think that gives people a real reason or additional reason to want to share our product with their friends, because also saving the planet is something that we have to do together and they understand that the more they can raise awareness for things that help this planet, to their friends and community, the better place we'll all be in. But also, our products are very visual and experiential. The process of making the solutions, dropping the tablet, showing the tablets dissolved. Sarah: I was very worried, before we launched Blueland that that would be one of the largest hurdles to our success because undoubtedly it is more work for a consumer than just going out and picking up a bottle of solution. But I think it's hugely benefited us, especially in a world with video, Instagram stories, et cetera. Stephanie: So, when you're thinking of the health of Blueland, as you're building it, what kind of metrics are you looking at? Specifically maybe around your website and how to know if you're really doing well? Sarah: Yeah, it's definitely starting to get a lot more complicated now that we have so many more products. I think early days it was a lot simpler ... I would say early days it was a lot more straightforward given ... I think over 90% of our new customers were coming in through the same kit. They were all purchasing our four piece kit. And because it that initial basket was pretty uniform, it was much easier to track those cohorts over time and understand both acquisition behavior and success as well as retention behavior and success. I think now, as we look at our business, there's a lot more granularity. We've layered in more fragrances, we have at this point I think six different kit permutations that you could opt into. Sarah: There isn't a clear kit that all new customers opt into. We also have many people that are adding refill packs now to their kits and their first purchase, which changes the way we have to think about repeat curves and retention because a customer, if they're loading up a dozen multi-surface cleaning tablets in their first purchase, that's actually a great thing for business. It drives higher AOP, it's certainly also better for the environment because we're only shipping that package to them once and they may not need another package from us for a year, at least on the multi-surface cleaner side. But as you can imagine, we then need to look at our data in a much more nuanced way and cut in so many more different ways to really understand what is happening. But yeah, largely we are very focused on customer acquisition cost, the conversion on our site at every part of the funnel and then repeat basket size based on original basket size and channel. Stephanie: Yeah, that makes sense. So, is there any best practices when all of a sudden you have a lot more data to work with and you're trying to actually see trends and parse out the noise. Is there anything that ... I'm assuming with your finance background, you're probably already very good at data. I also have a finance background and how long I had to be in sheets and looking at numbers all day was crazy. But, you do learn how to actually parse through large data sets. Like, what are some best practices that you say worked when it came to expanding your product catalog and actually trying to find trends and things to pay attention to? Sarah: Yeah, absolutely. I think the main thing is making sure that you're being thoughtful about the tests that you set up and setting them up in a way where the data will be valuable and also just taking into account what you're in or how much volume you're getting and so not trying to test too much all at one time. Because I think, and I bring up testing because sometimes it's hard to look at just the organic data that you're getting and make a determination as to what the value drivers are. So, for example, a question that we're trying to solve at the moment is that, are there better kits for people to start on? Do we have a preference as to, is the customer going to be more likely to stay with this? Is the customer more valuable if they buy into kit one very kit four? Sarah: And it's hard to look at the data that you have without setting up a clean test because there maybe other factors that have driven certain consumers to a kit one versus a kit four, that would then make their retention characteristics different. So, to do a very clean test, you would want ideally place randomize and drop off a set of consumers to either kit one or kit four and then see if those two cohorts perform differently over time. Sarah: But it's just making sure that we're being really thoughtful with the test, making sure that there's not other confounding variables that we're introducing, like for example making sure we're using the same ad creative to drop people off on kit one versus kit four, taking into account, again, how much traffic we expect to drive, how quickly that test will wrap up. Because certainly you could think, "Well, we're going to do this test for kit one through seven and do seven kits that we're landing on." But it may also just take forever to get any type of answer of statistical significance if we're dividing up our volume in that way. Sarah: Yeah, so things like that. But certainly something that we're thinking a lot about and is certainly far from straightforward. Stephanie: Yeah, tough problems to solve but I'm sure very informative and helpful for the future. So, I know we don't have too much longer but I did want to ask, we've been on a Shark Tank kick lately, we've been a couple of companies who've been on Shark Tank before you as well, and I wanted to hear- Sarah: Awesome. Stephanie: ... very high level, doesn't have to be a really long story, but how the experience was for you and how you dealt with the increase demand and your inventory and everything that came after being on the show? Sarah: Yeah, yeah, yeah. What a wild experience. It's always actually been facetious, half serious dream of mine to go on shark tank. So, it was really exciting. I think we over prepared every step of the way, which was right in terms of I don't say that negatively. But everything from leading up into the pitch, to making sure that we were ready from a site perspective. Our team still says today that we've never been so prepared for anything outside of Shark Tank. Stephanie: That's amazing. Sarah: So, it's something that we always point to, even with our new product launches or other things that we're trying to do. Because especially in startup world, you're rushing, it's never ... And we always point to, "Look how well Shark Tank went, because we spent the time, we were organized, we put the time in and it definitely pays off." Stephanie: What kind of things did you prepare? If you were to look back and say, "These two things were the best things that we did to prepare? Or what were some of the levers there that you were working on? Sarah: Yeah, yeah, definitely. So, I think before filming on that side, it really was all hands on deck, full team for that week leading up to our Shark Tank filming we pretty much focused on Shark Tank. Especially Syed, our head of R&D and myself were going to go into the tank. But even the rest of the team, we were required probably at least twice a day, for about an hour and a half each, so about three hours a day, whole team would be on just grilling us every which way, with the hardest questions they could throw, with the most inappropriate questions they could throw at us. Stephanie: That's fun. Sarah: It's fun. And it was, in the beginning it definitely was incredibly embarrassing because it was so hard. You're just like ... But after that, it really did prepare us for anything that could come our way in the tank. So, that was great. Including lots of, they just threw lots of mental math at us, which if anything, I don't know if they got us better at mental math that it got me better controlling my facial expression when I didn't know something. Stephanie: Yeah, or just delaying the response so long they forget what they asked, maybe? Sarah: Exactly, exactly, exactly. So, that was very valuable. And then from a site perspective, we really did everything we could possibly do to make sure that the site didn't come down. We spoke with a lot of other companies who had aired on Shark Tank to get their tips for what to do, and that was really helpful. Like the guys at Plated had a landing page ready. Because their site did go down. And so, they were very thankful that they did have a landing page ready to capture email addresses. And they were able to capture a ton of email addresses that way and then email the people when they were back up and running. So, we did that. Someone, another company had a really great idea to swap out all the videos or gifs we had running through the site. So, anything that was heavy that takes up a lot of speed or memory and just pairing back to replace all the videos on our site with images. Again, just to lighten up the site as much as we can. Stephanie: Cool. Yeah, that definitely seems like some good due diligence. And you guys ended up getting a deal, right? Sarah: Yeah. We ended up getting a deal with Kevin O'Leary, who has been fantastic and really supportive and shockingly accessible. Stephanie: I was going to ask that, do you actually get time with him and is he actually helpful? Sarah: Yeah, yeah. We get a lot of- Stephanie: Give me all the gossip. Sarah: Yeah. We get a lot. Early days, I was like, "Is this too much time? I have other things to do." But we probably speak by phone or text once every two weeks or so. And definitely- Stephanie: Wow. Sarah: Yeah, yeah, and [crosstalk 00:52:50]- Stephanie: That's way more than I actually thought. Sarah: Yeah. Yeah, in early stage I feel like I was talking to him multiple times a week, especially right coming off of Shark Tank when we had a lot of opportunities and he brought us onto QVC the week after Shark Tank aired. Stephanie: Oh, nice. Sarah: We've done multiple press interviews on TV together. It's been great. It's been really great. Stephanie: That's really cool. Yeah, thanks for sharing that story. So, now we're running out of time. Is there anything you wanted to cover before we jump into a quick lightning round? Sarah: No. I think we covered a lot of ground. Stephanie: All right. Cool, well, let's jump into the lightning round brought to you by Salesforce Commerce Cloud, this is where I will ask you a question and you have a minute or less to answer with whatever comes to mind. Sarah: Okay, great. Stephanie: Are you ready, Sarah? Sarah: Yes, let's do it. Stephanie: All right. I'm going to start with the hardest question first because you've been in the industry for a while and I feel like you'll have a good answer to this, what one thing will the ... Oh, let me rephrase that. What one thing will have the biggest impact on Ecommerce in the next year? Sarah: Ooh, in the next year. Oh, that one's harder. In the next year ... I would say packaging. It's a non-traditional answer. But I do feel like we're seeing the tides are shifting. I've just started to receive my first set of Amazon packages that for once are coming in paper based envelopes instead of plastic based envelopes. And I think that's going to send a great signal to the industry of, "We need to be a lot more thoughtful about with all this Ecommerce comes an incredible amount of packaging waste and consumers are becoming so much more knowledgeable and mindful about the waste that they're creating." And I think we'll start demanding this stuff of companies. Stephanie: Love that answer. What's up next on your reading list? Sarah: What's up next on my reading list? So, I've been incredibly inspired by the Black Lives movement, Black Lives Matter movement. And so, I have picked up a ton of books in that process. And my next one actually, by my bed right now is White Rage. Stephanie: Nice. And have you started it yet? Sarah: I have not started it yet. Stephanie: Cool, we'll have to circle back and let me know what you think of it. Sarah: Yes. Stephanie: If you were to build another company, which I feel like you will probably be doing in your lifetime, what would that next company be? Sarah: Oh, geez. That's so hard, that's so hard. that's so hard because I love the company I'm building at the moment. I always tell my co-founder that I don't think I'd want to sell this business because I don't know what I would work on next. It's just an incredible mix of product development, science and really doing things that I believe will make a huge difference in the world, as well as just educating people in areas outside of our products, which has been incredibly gratifying, just being able to talk about ... Email's probably a couple times a month and certainly social posts multiple times a week where we're just talking about things that have nothing to do with our products but just ways that you could cut out single use plastic from your day to day life. I do think that if I do move on past Blueland, it certainly is going to be something around the space as well in terms of where- Stephanie: Sustainability. Sarah: Sustainability, exactly, sustainability and climate change. Stephanie: Cool. It would seem sad to throw away all the knowledge. I've heard that quite often where a lot of times founders will just get eager to move onto the next thing and they don't always properly value all the knowledge they built up either from their current company they're at or what industry they're in. And so, yeah, that seems great. Sarah: Totally. Stephanie: What's up next on your Netflix queue? Sarah: So, next up on our Netflix queue is season two of The Politician. I know I'm a few weeks late, but I've actually heard that ... my husband and I loved season one and we heard season two there's actually a lot of focus on plastic pollution and there's actually a character who's really leading the charge on eliminating plastic from her and other day to day lifestyles, so, it'll be interesting to see their spin on that. Stephanie: Yeah. No, that sounds cool. Yeah, there's also a series, I don't know if you've heard of it, it's with Zac Efron, which at first I was like, "No, how is he going to do a series on big problems and sustainability and things like that?" It's actually quite interesting. They ... Sarah: Oh. Stephanie: I'm trying to think what it's called. Maybe producer, Hilary can look that up for me and put it in our notes here. But yeah, he went through, first he visited Iceland and was showing there all of the renewable energy that they generate for Iceland. And then episode two was talking about water and it went into France's water system and how they purify it in a much better way than a lot of places in the U.S. do it, so, another one to just put on your radar. But I don't know the name of it, I just know Zac Efron's hosting it. Sarah: No, that's great. I haven't seen him in anything since High School Musical so I'm actually- Stephanie: I know. Sarah: ... excited to see him all grown up. Stephanie: I know, when I saw him on there I was a little bit confused. I was like, "Wait, what?" And then I was like, "Okay, yeah. You're doing a good job. This is cool." Oh, let's see, Hillary put it in there. Down to Earth with Zac Efron. Pretty good one, very interesting. Sarah: Great. Great, great, great. I'm going to add that to my queue. Stephanie: All right. And then the last one that I've recently started asking, what is the number one tool or app or technology that you use day to day that's most helpful to you or that you either learn the most from or that you loved the most? Sarah: Yeah. It's got to be Instagram. I wish I had a more creative answer but ... Stephanie: No, I love Instagram. Sarah: ... I learn so much from others and from incredible resources and I think most recently I think the Black Lives Matter movement has been an eyeopening one for me in so many ways and I think in so many ways that we're trying to even as a company make sure that we are sustaining that moment, but really have been grateful for that platform as a source of education. Stephanie: Yeah, yeah, completely agree. All right, Sarah, well, it's been so much fun talking to you about this. Where can people find out more about you and Blueland? Sarah: Yeah, so, people can check out our products and learn more about our products at blueland.com. You can also follow us along @blueland. And I also post lifestyle tips frequently to my personal account, @spaiji. That's S-P-A-I-J-I. Stephanie: Awesome. Well, thanks so much for coming on the show and we will definitely be following along in your journey. Sarah: Amazing. Thank you so much for having me.
What is the right percent profit margin you should target for your products? How do you get the most out of your Facebook ad buys? How much should you really pay attention to conversion rate? These are just a few of the questions that every small business and Ecommerce shop wants the answers to. On this episode of Up Next in Commerce, we picked the brain of Andrew Faris, the CEO of 4x400, a company that has helped grow numerous Ecommerce companies from less than 500,000 into the tens of millions. Today, Andrew spills some of his advertising secrets, including how to make Facebook your core driver for customer acquisition. Here’s a mini spoiler: human bias is leading you astray, but there is a simple way to correct course. Find out that, and more, on this episode! Main Takeaways: Conversion rate is so context-specific that it's not that helpful of a metric. Instead, analyze conversion rate relative to average order value and relative to the traffic sources the customer came from. Before you invest in anything else, you need to drive traffic to the top of the funnel. Currently, Facebook ads are the core driver of customer acquisition for online shopping. Andrew suggests that most Ecommerce brands should invest in the platform and then trust the algorithm to put you in front of the right audiences. You have to take big swings with your experiments. Don’t get hung up on micro-details like the color of your buttons or rewriting your copy. Instead, find big ways to make changes and then see how the outcomes stack up. Because we are all riddled with our own biases, we often cannot predict accurate models of the future on our own. Instead, use data as your guide as you peer into the future. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey everyone. This is Stephanie Postles, co-founder of Mission.org and your host of Up Next in Commerce. Today on the show, we have the CEO of 4x400, Andrew Faris. Andrew, thanks for taking the time. Andrew: Stephanie, I am very glad to be able to do this. I have never been accused of not liking to talk about Ecommerce in particular, but just in general. So this is fun. Stephanie: Well, you're my perfect guest then. I was creeping as one does on your LinkedIn. I saw an interesting thing that you have a background in religion and theology. I was wondering how you transitioned into the world of business from that background. Andrew: Yeah. I can always tell when somebody has looked at my LinkedIn or not because that's maybe the only place where that's found anymore. Stephanie: You're welcome. Andrew: Yeah, yeah. No, I went to school for biblical studies, and then got a master's degree in New Testament. So that was my whole pathway, was to go into that and actually was a pastor for a while. Did that, and then about ... gosh, how long ago? Five and a half years ago stepped out of that not because anything in my faith changed per se, but just because I was just rethinking a bunch of stuff in my life and reworking a bunch of stuff in my life. So it's just total life change in all kinds of crazy ways. I didn't have a clue what I was going to do actually. Andrew: That educational pathway doesn't have a direct connection to almost anything that's not work in a church or academic setting or something like that in theology. So, I really loved that education a lot, but I was figuring it out. So I called a friend of mine named Taylor Holiday, who ... and I was talking to him about if there's any available work in his world of work. Just basically as an in between thing while I figured it out. I just thought I'll just go do something for a couple months to figure out what I want to do. He said, sure, and brought me to a company called QALO, Q-A-L-O. If you've seen the silicon wedding rings that are for- Stephanie: Oh, yeah. Andrew: .. on the internet a lot, QALO was the first big company of those. QALO went zero to 20 million in a year and a half and was not funded. So, I was bootstrapped. I went there and it was just growing super, super fast. Also, being not funded and being a bunch of people like that, it just meant that they just were, in those worlds probably some of your listeners probably know this story a little bit, which is like, you just find people who can do stuff in that setting. I literally started in the warehouse. At one point, I sat down with Taylor, who's now one of my partners. Taylor was running marketing for QALO at the time. His brother was one of the founders. Taylor said, "Hey, you've got a mind for numbers," which he knew because we were in a Fantasy Baseball League together and knew that I was a big baseball stat nerd. Andrew: May not be interesting to many of your listeners I'm sure, but I have a lot to say about the interplay of thinking about sports through statistical lens and thinking about Ecommerce. Anyway, so that was the origin. We had been in this fantasy baseball for a while, "I know you have a mind for numbers, why don't you learn Facebook ads and Google ads and learn digital marketing?" I said, sure, but still I was not really sure what I wanted to do in the longer term. But I was like, "All right, that sounds fun." So, did that and loved it. Andrew: I mean, I was so totally unaware of what was happening, but I still remember the first conversation I had with Taylor in a bank where he told me what I'd be doing. He's explaining to me how Facebook ads, Google ads worked and said, "Is it okay? Well, here's the deal. You get customers into the funnel with your ads and then you drive ..." and I stopped him in the middle of that sentence and said, "What's the funnel?" That was where my digital marketing knowledge was at. From there, that ended up being the pathway to the digital marketing and Ecommerce career growth. So I was at QALO for a while, went to CTC, the agency that owns our company, owns the majority of it and became the head of strategy there. And then now I run 4x400. Andrew: Yeah, it was a crazy set of circumstances with Taylor. We actually went to junior high together, but had not reconnected because of that. We reconnected outside of that. So, just weird circumstances. Stephanie: That's interesting. Andrew: This gets into my life philosophy a little bit. I'm a believer in divine providence and think there was some of that happening around. Stephanie: For sure. Yeah, that's awesome. Always good to be in business with someone who's willing to bet on you because you have that beginner's mindset and it's probably why you're doing so well. But I'd love for you to detail a little bit about the structure of CTC and 4x400 in the holding company structure because we haven't had anyone on the show quite like this. So, any details around what 4x400 is and how it's connected to CTC would be great. Andrew: Yeah, sure. Common Thread Collective, it grew out of ... Taylor was building the agency alongside the growth of QALO. Started really focusing on Facebook ads. CTC does a lot more in that now, but CTC is now a full service digital sales agency. We said digital sales sell digital marketing because what we're doing is selling things on the internet, it's consumer goods, really focusing on Ecommerce entrepreneurs. The mission of CTC is to help entrepreneurs achieve their dreams. So that's really what we're about. We're specifically really good taking people in somewhere in the journey from zero to 30 million. Andrew: I was a strategist there and then became the head of strategy there. CTC continues to grow and do well. Taylor Holiday, as I mentioned is the managing partner of CTC. Andrew: In the midst of that, we also were like ... I mean, we came from this background of starting QALO. Taylor also was early on with another one of our partners named Josh Rodarmel who founded Power Balance. If you don't know Power Balance, Power Balance was the really popular silicon bracelets that were worn by athletes for a long time, still are worn by some. Andrew: That company was another super crazy fast growth company. I think they were zero to 50 in a year and a half. Yeah, I think that was the number. But anyway, I did on the brand side selling consumer goods in those worlds. We're like, why don't we launch our own brands as well? So, that's how 4x400 started. Eventually I went over to that side of the business. We started with building our own brand from scratch. It totally saw giant failure called [inaudible] company, just a huge waste of money. It doesn't exist anymore. It was sports themed baby goods and it just ... there are a lot of reasons that didn't work Stephanie: Wait, sports themed baby goods, so- Andrew: Yeah, yeah. Stephanie: ... like onesies. Andrew: Yeah. Like onesies that look like football uniforms. They're adorable. I don't know why nobody bought them. Stephanie: Okay, that's super cute. I'll buy one from you. Andrew: Yeah. I think that you'd have to go find a flea market in Northern California somewhere. I had to go get it every day. Stephanie: I will find one, I actually need to for my twin. So, it'll be a long journey, but I'm going to do it. Andrew: Okay. You're in Northern California, right? Stephanie: Yeah. Andrew: Yeah, I think that's who we sold to, so [inaudible] don't worry. We did that, and then realized actually most of our skill at this point ... most last couple years that we have really been spent after we'd gotten out of the brand side so much growing brands, not so much building brands. So we thought, why don't we just do that? Now our model is, at 4x400, we work with entrepreneurs who are in early stages and feel a little stalled out. We provide them with a team around them that can help them grow it. 4x400 mission is also to help entrepreneurs achieve their dreams. We just do it in a different way than CTC. Andrew: CTC does that the traditional client relationship 4x400, takes the majority share of the brand. And then our goal is to make it so that by bringing us on as a partner and all of the expertise and resources we have around finance operations, marketing, growth customer service, even just really thinking through the whole system of what it means to be a great Ecommerce brand, we can help brands grow. We just closed actually our fifth brand that is currently in our portfolio. We're hoping to close another one soon. Who knows by the time it comes out, if that will happen? We're trying to work with brands who are doing less than half a million in revenue and saying like "We can try to grow you from there." CTC is the majority owner 4x400. 4x400 is the majority owner of these brands. So there's this giant web of relationships there. Stephanie: Yeah, okay. That helps me understand the landscape a bit more. How do you think about acquiring brands, how do you find brands that are willing to say, "Okay, we'll give you a majority share and come under your company"? Andrew: Yeah. Well, there's a few ways. CTC is a magnet for some of them. Sometimes brands will come to CTC and CTC will say, we're not the right partner for you. You're not a place where you can afford us. One piece of advice I have for a lot of it was like, if you are paying an agency not very much money you should really think about whether the agency is good because agency economics just require, for you to get great service, they typically require a pretty good investment. Just think about it. Agencies exist by marking up people's time. So, an agency works well if they are able to attract and train great talent by nature of access to large amounts of information. Andrew: The value of an agency is that they are spending millions and millions of dollars of other people's money on stuff. So, it's information arbitrage in that respect. You can come to an agency and get that information applied to your brand in a way that maybe an in house resource can't always do because they just are not going to have the visibility to as much of what's going on. For that to work, then you have to mark up that time of high quality, talented people who are probably not cheap. And then also for something like Facebook ads, Google ads, and then oftentimes there's a creative element of that and a writing element of that, and a strap gentleman have that, so that means you got to pay designers and other people like that too. And then there's web dev parts of it. You start to put that all together and if it's too cheap, then you have to be going like, wait a minute, what am I actually getting here? Andrew: Some brands in the early days, will come to ... they'll be stalled out or come to CTC for resources. CTC will say to them, actually you can't really afford this. What we actually think is a better solution for you is to talk about a deeper investment where we can really surround you with more stuff. What we find is a lot of entrepreneurs love product building and customer communication in certain ways. They love their customer, they love their product idea people, but they don't necessarily have all of the skills around everything else it takes to grow a brand. In fact, they don't want to do those things. Andrew: Most entrepreneurs don't start brands because they love finance, they don't. They don't even necessarily love tactical marketing. A lot of times what we can say to them is, "Let us take all that stuff that you hate doing anyway from you, you feel overwhelmed and stalled all the time anyway. You come with us, we'll pay you a consistent salary," which is also a big help to some people who are going like, I just don't even know if I can perform this anymore. We'll help you grow. Some entrepreneurs want to stay on, some don't, some just wants to take it. So it really depends on each entrepreneur, but that's basically a lot of how we think about it. Andrew: And then for us, we evaluate the brand by saying like, "Does it have basic product market fit and basic fundamentals to where we think as we bring in all of our tactical expertise and all of our specific expertise in various disciplines that we can then apply that to the brand and grow it?" A brand who comes to us who hasn't really invested much in paid media, but has done 100 to $300,000 in revenue, we look at that and say, "That's ..." Actually, we have a really high amount of respect for that. It's really hard to do that, it's hard to do $100,000 without being good at Facebook ads. It's not easy. So we look at that and say like, "Good job. We don't think you're a failure. If you come to us and want our help, we think we get it." We look at that and say, "That's very impressive. Let us surround you now with resources that we can scale this to 10, $20 million in revenue." Stephanie: Very cool. How are your brands performing now? Andrew: Yeah, good. They're doing good. Andrew: I think COVID really helped Ecommerce brands massively. Two things happen at the same time. One of them is that large corporations who have diversity of sales channels, but were spending lots of money on advertising, pulled their advertising budgets the way the heck back. Of course, lots of other companies couldn't produce products. So they couldn't sell products in retail settings, so they pulled a lot of the budget back. They couldn't produce products because of supply chain problems. And then at the same time ... So that meant that in large auction based advertising work universes like Facebook ads and Google ads, ads got suddenly way cheaper really fast. Andrew: The way that works is that because those are built on an auction, if a lot of people leave the auction everybody's prices get cheaper. We've looked at this data across CTC accounts. There was a giant plummeting of advertising CPMs in those worlds. And then at the same time in the last couple months, conversion rate on websites went up because the only place to capture demand was online. You couldn't go buy stuff in the store. So if you're selling things on the internet, that's where people are buying things from. And then of course, the stimulus checks it. As people have noted, that actually ended up being one of the largest increases in revenue to the average American family in history. So, all of a sudden, people have money to spend. Whether or not they should have spent it on consumer goods is a different question, I don't really know. But they had money to spend. Andrew: The less places for that demand to be captured mostly on Ecommerce stores. And then also, it got a lot cheaper to reach those people with ads. You put that all together and Ecommerce did really, really, really well for a couple months. So that really helped us. There's no question about it. We're still feeling some of the positive effects of that. It feels weird to be a winner in COVID, but there's no question that Ecommerce brands were .. To varying degrees depending on the category you're in, for sure. Andrew: We have three brands that are in the established stage and not in the start it up stage. Stephanie: What account is established, is it a revenue metric or- Andrew: Yeah, a good question. I'd say a million dollars during 12 months, or a million dollar run rate. We would look at and say, "Okay, we're growing at the pace that we want." I can just give you some numbers. We're projected this year to go to have one of our brains go to 8 million, that brand did 100,000 in 2017. Last year, we really took it over halfway through the year. I think we ended at 750 for the year. So, that's definitely our fastest growing brand right now. Stephanie: That's [crosstalk 00:16:47]. Andrew: Another one- Stephanie: ... some good growth right there. Andrew: Yeah. We feel good about that. That's profitable too, which is definitely in our model. We took on a little bit of funding early, but not a ton of funding. We function more like a bootstrapped company. And then another one went from ... just a little over two years ago, we acquired it. It was basically doing no revenue, it'll do 3 million this year. Yeah, that's a different story. And then another one went from 250 to a million to just under two, this year, we'll do four to four and a half probably. So those ones are all we feel established growing at the pace we want, we feel really good about. Stephanie: Yeah. That's some impressive number. How do you grow these brands? What are some of your tactics and strategies that you rely on those, what do you see success with? How can someone else learn from what y'all are doing to grow their Ecommerce companies? Andrew: Yeah. Facebook ads is the core driver of customer acquisition for us. I mean, selling consumer goods direct to consumer online, Facebook ads is still the most powerful tool in the world for reaching people. I'm hearing chatter about other things, YouTube, Snap, even Tik Tok, Google ads, product's changing. I just think still at this point, at scale, depending on what you mean by scale, people define that word differently. But for us, that's the core, top of the funnel way that we get traffic to our website. Andrew: I mean, you think about what Facebook ads is, it's not buying ads so much as buying traffic. I guess it's both really. But we look at that and say, "If we can make the traffic worth more than we're paying for it, worth enough more that we're paying for it to cover the cost of goods and things like that," I should say, "Then we can win." That's how we drive top of funnel traffic for us. And then after that, we try to do everything that we think great brands should do, which is like create a beautiful website that treats their customers great, has generous returns and shipping policies as much as we can afford to do it basically, which varies from brand to brand, depending on a number of factors. Do a great job with your retention email and other automated flow stuff. Constantly testing conversion rate optimization on our site in various ways. There's just a whole bunch of that kind of stuff that we're doing on the backend of that. Andrew: We are also certainly looking to invest in other top of the funnel type metrics, our traffic drivers as well. I would think of Google search as mid funnel and Google shopping as mid funnel. So, we're definitely investing there as well. I think we'll keep doing other stuff. That won't work forever. There's going to be a cap to how much Facebook ads does the driver work and we fully intend to add to our customer acquisition approach when we can. But our goal has been to grow profitably and we think that's one of the best ways to do it right now. Andrew: The other thing is it's not just one of the best ways to do it, it's just that we also have deep expertise in it. So, I'm just a believer that do the thing you do well as much as you can. I think it works for leadership and working with teams. Just as much as we can set up our team members to be doing the things that they love doing and they're good at. As long as the things that people love doing and are good at create value for the company, then you should pay them to do it. So that's the way we look at it too. Andrew: Just coming from the agency side, I personally have managed, I don't know, 25 ad accounts, that's probably more than that. Seen a lot more of that when I was the head of strategy and working with other strategists. I don't mean that to brag. It means that now I have some intellectual capital built up on what works. So, that's what we use from there. Stephanie: Cool. To drill in a little bit deeper then for the Facebook ads because I think a lot of companies probably have looked at Facebook ads, maybe they're using it. I haven't heard of anyone growing liked you guys are growing your brands consistently. So what tactics are you using specifically, or what do you see works well? Andrew: Yeah, there's a lot I can say about that. I think this is going to sound so fishy, but if you're getting serious about that, there's a couple of things ... The thing I would actually tell you to do, if you don't know where to start and you're getting serious about it, is to go visit your admission.co. I don't know, maybe I can give you a link to this, Stephanie, at some- Stephanie: Yeah, we can link it up. Andrew: Cool, yeah. So that is CTC's education program. It's not a course, it's different than every other education thing I know of in this world. It's actually a moderated community with access to ... Taylor, the CEO of CTC is in there doing webinars like our team members, our brand managers and people like that. Also, might jump in there and do webinars exclusively for that community. What we're doing is teaching all of the things that are ... what we believe are really the best practices for Facebook ads from the perspective of creative, from the perspective of targeting, bidding, all that kind of stuff. Bringing people through all of those things and then giving them continued support with access to the actual CTC teams who are doing that same thing that I was describing, which is spending millions of dollars of other people's money, so you can have access to that knowledge set. I think it's 500 bucks a month right now. Andrew: I even say sometimes there's even executive level people who will take their whole team through it. It's not like you're going to be in it for forever. The point is that you can do that and get access to what we believe works best. We're always evaluating that. There are certainly other things to do there, but that'll give you what we ... We try to be really honest and transparent where we can about what we're seeing. So that will give you mental ways to think about that problem. Andrew: I think one of the things that can go wrong is you could listen to me talk about this, and maybe you're an entrepreneur and you hear my numbers and you go like, I'm going to go do that. You just blow money because you make simple mistakes that somebody could help you not make, if you've just got some support. There is no way to learn besides doing it really. You're going to make mistakes, it's okay. In my view, creative needs to be really product focused in the sense that it's on Facebook ads and Instagram ads. You are driving high quality traffic by giving people a clear sense of what your product is right away. Clear wins over everything else first as a baseline. Andrew: Clear doesn't make you give you the best out in the world. They're clear plus some other things do that, but clear establishes a baseline of what you can expect and at least drives what I consider high quality traffic to your side. People who are interested in you because of your product. So that's probably the first basic principle I would say is focus on being clear in your creative before you focus on being clever or funny, or any of those kinds of things. You can drive a lot of very cheap traffic to your website with Clickbait tactics, but they won't buy anything. Ultimately, it won't matter how cheap the traffic is if they don't buy anything. So that's the kind of thing I would say. Andrew: And then the other big thing I'm a huge believer in is trust the algorithm. There was a world where people talk about Facebook ads as the value of micro-targeting that was one of the phrases people would talk about. This idea that you'd go find exactly your customer really specifically target them without everybody else. I think there was a time when that was part of how you did it. Those times are gone. What I would say is what you want to do is give Facebook as much information as possible and let Facebook's algorithm predict the future for you because humans are terrible at predicting the future. Algorithms are pretty good at it. So, algorithms do a really good job of looking at the data set of who's responding to your advertising. And then going and saying, here's some more people like that to put you out in front of. So, we believe in really broad targeting. Andrew: Let Facebook have as much freedom as you can to go and find the next person to put you out in front of. Over time, not even over that much time, Facebook's amazing in this regard much quicker than Google is at this. Facebook will find who those people are. So that's the broad principles I would say is trust the algorithm, be clear with your creative. There you go. There's just so much more I could say about the Stephanie, but I'm going to stop there. So I don't take up the entire rest of the podcast. Stephanie: Okay, cool. Yeah, we will definitely link that up. I think it's a really important point too to segment a piece of your ad budget for testing. I know we do that internally as I'll tell. Our team members are like, "Hey, you have this much money. If you spend it and you just learn from it, that's okay. Versus this amount let's actually protected and make sure we drive results with it." So I think it's good to go into a mindset being okay with using a portion of ads for an R&D type testing project. So, you feel like you can learn from it, but not blow your entire budget on it. Andrew: Okay, no question. Constantly testing is super crucial. What I'd say about that is, when I want to test on Facebook ads, the place I want to test most is take big swings with your tests. The common thing you hear people say with testing, you'll hear people like, I've seen so many articles trumpeting like, oh, we changed our CTC button color or we changed it from [inaudible] now and it was a 15% lift. Andrew: First of all, I just don't believe those studies anymore. Secondly, the reason you're writing about it is because it's exceptional. It doesn't happen all the time. I just think that's a waste of people's time. But most people need to do, if they're looking to go from not successful to successful, the larger the difference in outcome you want, the bigger the change you need to make. You can't just change the background color of your ad and expect that it give you wildly different results. That's once you have results you like and now you're just dialing in and trying to grab an extra 2% of value here and there. I just rarely see that thing work. Andrew: What I would say is much better to think to test is something like, what's the offer that you're giving people? What's the product you're starting with and leading with? That can create wildly different results. We just ran something for our jewelry company that we ... 31 Bits, which is our other most recent acquisition, our fourth brand. We started with a batch of ads focusing on one set of products were necklaces and bracelets and things like that. We were getting a dollar of 50 clicks, low click through rates, et cetera, and very poor conversion rate. Andrew: We changed the product set, same exact brand, similar styles of photography, but just different products to a whole different category of product and saw triple or more the performance suddenly CTC went way down. Click through rate, went way up, conversion went way up. The reason why is really obvious, it's jewelry, some people like some bracelets better than others. If you just use the same stuff all the time, people are going to respond to it the same way over time. There's no magic to that. That's how people shop for something that you wear. It's about what it looks like. So, by changing the products that we led with that made a huge difference. So that's what I'd say is for Ecommerce consumer good people, that's the kind of test you want to be running. Andrew: Give it a whole different products out, a whole different offer, a whole different way of framing the offer, don't just change little bits of the creative and copy if you want to change your outcome in a big way. Stephanie: Yeah. I love that. People I talk to sometimes are focused on those micro adjustments that you're talking about or just the minimal incremental pieces that they could change, whether it's button colors or all that. That's a good point too. Yeah. Focus on the higher level things. But how did you decide on what new products to show? Andrew: In that case, part of it was what new products ... there's a change in our product development, that's going to make it so, or in our manufacturing that was going to make it to that, we're phasing out some products anyway. We always start by looking at most products over various periods of time. This is a simple way to start. I mean, there's not a lot of science to it in that respect. I think we're just looking around- Stephanie: Just seeing what it's doing well in the market. Andrew: Yeah. And what's done well on our side. Honestly, part of it is for a place to start your testing just like make a hypothesis and test it. I mean, it's not- Stephanie: Yeah. What timeframe are you looking at? When you do the test, are you looking at 30 days? Let's see how it does and try something new, or is it like after a couple of days you'll know and try something different? Andrew: Yeah. I'd say budget is probably a bigger factor than time. So if you're spending thousands of dollars a day, it doesn't take very long good answers. If you're spending a couple $100 a day, it takes a little longer. It also changes relative to your average order value. What you need is a statistically significant number of responses and really a statistically significant number of conversions. You can think of conversions as micro conversions as well. For example, a click on an ad is a conversion in a sense. Clicks as a percentage of impressions is a conversion. Because it's pretty cheap to run Facebook ads, you can actually figure out a reliable statistically significant performance in a click through rate pretty fast without having to see how those clicks convert. Andrew: In that case, it took us, I mean, I think we're got 100 bucks, when we knew that this new round of ads was way, way better performing because the gap and click through rate was so significant between the two. That's another core principle here. The larger the gap and the outcome, or the larger the disparity in the outcome, the more likely it is that it's a reliable result, if that makes sense. In that case, I think we spent between the two products, that's a total of 1,500 bucks. The whole goal of that was to test those while we went and ordered new products to try and start scaling a little bit for a larger test in the future. I didn't really care what the actual result was. The goal is a bigger goal to win bigger over time. Stephanie: Yeah, that makes sense. When talking about growing, I saw that you guys live by a central Ecommerce growth formula. I was hoping you could go into that a bit. Andrew: Yeah. This is changing a little bit in some ways. I'll give you the baseline version of it, which is visitors tasks conversion rate times average order value. This is actually really simple. Every business in the world only actually has three factors that make up the value that you get from a purchase, or that make up your revenue actually. The first factor is how many people come to your business. This could be people walk into your store, it doesn't have to be a website. But just never people who show up. And then you multiply that by the conversion rate. So, what percentage of those people buy something from you? And then you multiply that by how much they spend. Andrew: When you look at that, that will equal your revenue. If you just say, how many people get there, how many of those people buy and how much they spend when they do? That's the entirety that makes up the revenue. That's incredibly simple and intuitive in a lot of ways. But what I find is that in the fog of war, people lose sight of that very simple concept. So, they start making tests and changes without a really clear idea of which one or multiple of those variables they're actually trying to affect. Of course, those all relate to each other. For example, your average order value goes up, your conversion rate goes down, that's a general rule of thumb, it's true across everything. It's intuitive when you think about it. Andrew: A smaller percentage of people are going to buy a $1,000 item than a $10 item. As you drive more traffic, it's highly likely that you're driving lower and lower quality traffic. Everybody exists along in the world, exists along a continuum of people likely to buy your product and unlikely to buy your product from your mother, who's the most likely person in the world to buy your product to- Stephanie: That is number one. Andrew: Yes. To a subsistence farmer who doesn't have the internet is the least likely person. The farther you go from your mom to the subsistence farmer, the more expensive it is to acquire that customer. So as traffic grows, then your conversion rate is likely to go down. That's just another helpful concept, I think. These are rules of thumb to heuristics they're not always true, but that's a basic way of thinking about it. We think about those three levers in what we do and really try to understand when we test something at any point in our funnel, whether it's on the website or ad level or whatever, which one of those am I actually trying to affect? Where's the problem in my business? Andrew: I've talked with friends of mine who own CrossFit gyms, and I've said to them like ... I'm thinking of a friend in particular whose gym was struggling. I was trying to help him think this way, which of these is the problem for you? Are not enough people showing up to your gym? Or when they show up, do they not buy a membership? Or do they buy a cheap membership or you give them a month free and then they don't spend any money after that? Which one of these is the problem? That probably gets towards LTV as well, or CLV, Customer lifetime Value as something to think about in the midst of all this as well. This is where you can make it a little more complicated, but that basic principle is true. Across the gym, just like on my consumer goods websites, it's the same problem. You just have to figure out which one of those things has the highest upside at the lowest cost to fix next. That's where you should put your energy. Stephanie: Yeah, I love that. Have you ever pitched a brand to be taken over by a 4x400 that you believed in where everyone else on your team didn't believe in it? Andrew: Oh yeah. This is where it helps to be coldly rational. Gosh, I don't mean rational like smart, I'm always right. I just mean my approach is unemotional to a lot of this stuff. To the probably emotional dysfunction in other ways in my life or something like that, I'm not saying you should emulate this necessarily. But that's why there's therap, so it's fine. So, sorry? I know there's some noise there. A lot of times, if we're tweeting about a new brand acquisition. People will say privately like, "I do believe in this," or "I don't believe in this." I just started think that's like ... I think without having the view that I have in the acquisition process, I just don't even know what somebody is judging that on. People just go by their general sense of what they believe about if it's a good brand or not. Andrew: First of all, other people are not like you. Your subjective sense of that may not reflect at all what I brought population to potential customers is. Secondly, to me, you can validate this pretty clearly by looking at simple product market fit, things like margin is a huge question, which makes businesses work and it makes other businesses fail, is one of the problems of opening day. We made a huge mistake by just giving ourselves away too little margin on the products. Stephanie: What's the little margin, what do you consider small? Andrew: Yeah. Well, I think if you're going to try and grow a brand with ... I'll just tell you, we target 70 points plus of margin for brands that we are trying to grow with our method of growth. And then that's really important. If you have other growth mechanisms that might not matter as much. But for us, we want 70 points plus landed margin. We can deal with a little less than that, but if you're going to try and grow a brand with Facebook ads, you're going to need to be able to exist at a two to one return on your money on ads probably. It's hard to really beat that number, if not withstanding something like coronavirus throwing those small. So we target that. That becomes a big question for us, if we think we can do that. Andrew: Sometimes actually it's part of the first thing we have to fix for a brand is, we see supply chain processes that are in our view broken and we would say like, "We love everything about this brand. It's convergent on site, is great relative to its average order value, relative to its traffic sources." We dig into all that stuff, and say, "But your margin is not good enough, but we think we can solve that. W can help with getting your shipping cost down by repackaging it differently, or thinking about what products to focus on or not, or changing your manufacturer or something like that." We don't want to ever do that at the expense of giving people a good product. We haven't compromised on that at this point, which I'm happy about. But yeah, those are all the things that we can look at as potentially something to fix. But in our view, 70 points plus, makes the game a lot easier for sure. Stephanie: Got it. I like that point too about, what would someone know when they're doubting a brand? Because that is definitely a human flaw thinking about ... even when I'm thinking about those rubber bracelets from a while back, for me to say, "Oh, that's dumb," I don't need to be balanced or anything, or I need help with that. It's funny because it's like, well, apparently a lot of other people did because look how many people bought it. Yeah, I think that's also a good lesson for anyone starting something up. If they hear someone say like, "Oh, that's dumb, you shouldn't do that." Probably good to take a step back and be like, well, that's just one person's opinion and not let it deter you from trying at least. Andrew: Yes, especially relative to the set of metrics I have in front of me, which are going to tell me something a little bit different. This is one of the things that's so great about data is that I'm just wrong, Stephanie, about so many things in life, I just know I am. So having some source outside of my own brain that I can look at. When my own eyes are lying to me, humans are just biased machines. We're just machines of bad thinking about stuff. So, finding ways to be aware of my priors going into something and my bias going into something, check those against some sorts of truths that exist outside myself. Of course, people can lie with data and data can be poorly collected. There's all kinds of ways that can go wrong too. But in light of all those things, I just think that it becomes really helpful to do that, to go and have a source like that to go check in. So that's what we do in our process. Andrew: There's various levels of excitement about brands even internally. But there's no question that ... We sincerely believe it can work based on the data set in front of us and a few other old principals. So that's what we do. Stephanie: That's cool. We're mentioning data, stick with the data when it comes to it and don't just listen to unfounded opinions. What kind of metrics do you look at that you think a lot of other brands aren't utilizing enough? There's obvious ones like conversions and click-through rates and all that kind of stuff and revenue obviously, but is there anything that you look at that you think enough people aren't paying attention to? Andrew: There's no magic here. After we acquired 31 Bits, this jewelry company ... really super cool brand. This brand was started by women who were anthropology majors in college and wanted to provide good quality jobs to people who could not access them by nature of where they lived in the world. So they started in Uganda after a trip there and had these women making these really cool beads. This started in 2009. These women were out to change the world with this brand. It's just totally authentic, beautiful brand story around all of this stuff. When we acquired that, I on my podcast, it's called- Stephanie: What is your podcast? Andrew: Yeah, yeah. I feel so lame doing this right now, but- Stephanie: Oh, sorry, Andrew. Andrew: I know. There's a tangent there. But anyway, if somebody really wants to hear how I think about this question, I spent about 45 minutes with Taylor, the head of our agency, talking about exactly why we acquired 31 Bits. We did an episode about that. I'll find it and send it to you for the show notes as well. And then we interviewed the ladies from the brand for the next episode after that, so people could kinda hear why they chose us as well. We tried to be really honest about why we think it'll work and why we think it could fail. I would say the metrics related to that, that I care about, it's not just conversion rate it's conversion rate relative to average order value and relative to traffic sources. That's a huge one for us. Andrew: Conversion rate itself is actually so context specific that it's not that helpful of a metric. I mean, think about the conversion rate of a direct click. Somebody comes to the website, types in 31bits.com, presses enter. Let's take a 45 year old female on a desktop computer direct versus a 25 year old male on their cellphone through a display ad on the internet, saying conversion rates to describe what both of those people are doing and getting a baseline is not going to be helpful at all because the baseline for those two different customers of what you'd expect, they're so different. I mean, just the device issue you're twice as likely to convert on desktop than you are as mobile before you talk about any of the rest of the demographic's software or anything like that. Andrew: We try to really give some specificity of the context of something like conversion rate. Even one thing you'll see there is like, sometimes the brand's conversion rate will look low, but it's actually not low. The reason it looks low is because they're getting a ton of blog traffic via organic search SEO essentially. That blog traffic is technically on their URL, but it's not at all related to their product and it's not people looking for their product. Therefore, that blog traffic will have an incredibly low conversion rate and will therefore negatively influenced the total conversion rate. If you bucket that blog traffic out, it turns out the conversion and the brand is fine and their website works great and you just didn't realize that. I don't know if that example made sense. But there's- Stephanie: It does make sense. Andrew: ... there's just all of these kinds of contexts, things like that, that I think are really crucial to look at all the way around. We look at some other stuff like we've looked at entire funnel on our site, so we'll look at not just the conversion rate thing. If somebody doesn't buy something on your website, there's a question of why did they not buy? Because they made it to your website, so what happened next? Did they never add anything to cart or did they add to cart and then drop off once they got to checkout or did they never even make it to checkout or what? We look at each of those things and try to understand what's going on. Andrew: If somebody adds to cart and makes them check out and then drops off, why? The answer to that question is probably because you're shipping cost is too much a lot of times, or it's going to get shipped slowly, or they're not confident in return policy or whatever. So we'll look at some of that stuff too. We have a value of 4x400, which is understanding before you act and paired with that is hard problems require deep focus, or require deep work. The basic concept is like, before I go and throw out a million solutions, I want to really understand as clear of terms as possible exactly what's wrong. Andrew: When I hear somebody say my Facebook ads are broken, the thing I want to say is, "What do you mean? What's happening? What broken- Stephanie: What are you doing? Andrew: Right, yeah. "Is the conversion rate broken? Are the clicks too expensive? Where is the problem? Are you not getting a high enough AOV? When you say it's broken, what do you mean?" To try to help people answer that question because then it can guide where to think about the next problem. Stephanie: Cool. I love that. Yeah, that was a really good example. Stephanie: Are there any things, technology or otherwise tools that you're using right now that are maybe new that you're excited about? Andrew: Well, I'll tell you what I think that is, it's not the answer you're looking for, but I think it's the answer that I get. Stephanie: Go for it. Andrew: My answer is no I don't. We will get there to where we'll need to do that, but I just think this is a massive distraction for a lot of people. I think people love to go chase the next new thing. They'll even say things like, "well, my customer is on Tik Tok." I don't really know what that means. Yes- Stephanie: I don't really know who's on Tik Tok right now. Andrew: I'm 36. First all, I'm 36, I'm too old and I don't get Tik Tok. I've never had Facebook on my phone, so I'm just the worst social media marketer ever in that respect. I do not understand what's happening in the world. I just don't always know what that kind of thing means. I think your customers probably also want Instagram because there's a lot of people on Instagram. So I could be wrong about that, I guess. I'd be so happy for somebody to correct me if that's the case and reach out and tell me, "You're not looking at this right." Anyway, I just think it becomes a huge distraction for people to go and try and find another new thing to go do instead of to get really good in one or two areas. Andrew: We will expand channels over time. I think we're really trying to build out more search and shopping as a next step for us, that is not a new channel at all. It's actually the oldest digital marketing channel, search in particular,. I'm playing around with some ideas from SEO, but really I'm just trying to make my customer more valuable at this point. So, just trying to really get better via email, post-purchase, via my unboxing experience, trying to think about how unboxing and product experience creates retention in word of mouth. I'm trying to dig deeper and get better at the things I'm already doing rather than adding a whole lot, I think. Stephanie: With everything happening in the world right now, it does seem like there, like you mentioned early on the show, there're a lot of changes happening, especially around Ecommerce. I know you're talking about focusing on what's working and all that, but is there anything you're preparing for over the next three to five years that you're anticipating around Ecommerce trends? Andrew: Yeah, all right. This is my coronavirus beat right non. This is a really fun question and is a great podcast fodder. I do not fault you for asking it and I don't want you to hear my answer to this as condescending. But there's no possible way in the world that I could predict the future that far out. Here's what I believe about predicting the future. The more complex the system you're project predicting with the more inputs that there are there, over the longer the timeline, the harder it is to project. So, I might be able to give you some sense of what's happening next week, but then also last week, all these companies started saying they're going to pull their Facebook ad spend. Stephanie: Yeah. I didn't why I mention that, but I'm like well, that seems like it's a good opportunity then, like you're mentioning to get on Facebook. Andrew: Yeah, yeah. Stephanie: I think Zuckerberg even said they'll be back or something like that, which is just funny. Andrew: First of all, who could have predicted over that timeline, that kind of thing would happen? Before you even talk about Zuckerberg, who ... There's just so many elements. The system of macroeconomics in the U.S., before you even talk to the world, is so big with so many inputs and so complex that I just don't believe in anybody's ability to really predict that. So what I think is that it's not helpful generally to do that. I'll say three to five years, the one thing I feel broadly, fairly comfortable with though, I think even this has, there's some basic questions is that Ecommerce, as an industry, Ecommerce is a share of U.S. retail spending, will continue to grow. Andrew: I mean, I just have no possible way of predicting that. So I feel like it's a good place to be if you're in Ecom, I think you should be investing in Ecom broadly. I just don't think otherwise it's very possible to do that. I mean, just look at what we were all saying about coronavirus two months ago and the models that we were all looking at about what this thing could be. It's been devastating. I don't want to underplay that, but it has not been in the U.S. the millions of deaths at this point, at least. Who knows that people were predicting? I just look at that and go like, that's because predicting that many things for something with that much unknown is really, really hard. Andrew: My take on this is to go read Nate Silver's book, The Signal and the Noise and to hone your skills thinking about what kinds of things you can and can't project, and even how to think about projecting things. And then to go from there, which means the way you win is not by predicting the future, but by honing your fundamentals and carving really good thought processes. This is what I really believe in the most. To think about this all like poker, which is that good poker players don't win by winning a hand, they win by playing lots of hands really well and by making the right move over and over. Understanding the game that there are going to be times when they're going to be in a big spot with a lot of money in the pot and the card will come up and go the wrong way. But if they play enough big pots and enough money in it, the law of large numbers says that they'll win over time. I think that's the way to think about it. Andrew: Get really good at understanding something like visitors and conversion rate times average order value and asking the right questions about that. Get really good at following your profit margins everywhere you can . Get as much clarity about them as you possibly can that way you know where your money is going and where you're making money and where you're not. If you can do those things over a long period of time and just get good at finding good people to work with and get good at those sorts of things, you will win. So ultimately, I bought into the partnership at CTC with my own money, I'm not rich. Andrew: The reason I put my money into that is because I believe in the humans that are the partner group there, and I believe that those people overall given enough chances will win. That's the way I think you should think about your brand and your business is find partners and find brands and businesses that you believe will play the right hand the most times and are people of high character. That is part of the right hand of what you're play, you're going to have a relationship with these people. Every part of your business, if you can do those things, then I think over the aggregate, you're going to win. Stephanie: That's great. That actually took a very nice spin because at first I'm like, okay, no one's going to disagree with you that Ecommerce is going to grow. But I like the spin that you just took on it about what you should focus on instead. So, good answer. Andrew: Thanks. Yeah, I know. It's a compound answer in some ways, but it's really what I believe is true about the world. It's so sexy to say, okay, over the next month, this is going to happen and this is going to happen. Next time somebody on the show gives you that answer, bring them back on in six months and ask them what happened and- Stephanie: I was just going to say that. I think the world is still missing a little bit of the accountability piece because I see people still on Twitter, even the people who are talking about the end of the world, no one's following up with these people, how come this guy has had a billboard out around California for a long time saying the end of the world was going to happen, I guess, a few weeks ago, and it didn't? What now, are we going to follow up with him and be like, "Hey, what happened?" Andrew: Yeah, that's a very California story. I like that. Stephanie: All right. We're going to shift now into something called the lightning round brought to you by our friends at Salesforce Commerce Cloud. This is where I'm going to ask you a quick question and you have a minute or less to answer. Are you ready, Andrew? Andrew: I am. But this is the ultimate challenge for me. Stephanie: This will be the hardest part of the interview. Andrew: Yeah, it probably are. All right, I'll do my best. Stephanie: I actually feel like you're going to have some great answers, that's why I've been excited to get to this. All right. If you were to have a podcast, who would your first guest be and what would the show be about? Other than the podcast that you're running now, you can't say that one. Andrew: Okay. I think it would be about exploring. Does it my guess have to be a live or can I pick anybody? Stephanie: No. Andrew: Okay. I think it would be about exploring big ideas about the world like theology, philosophy kind of stuff, but for the every man or woman. So, it would try not to be too much in the clouds, my guess would be C. S. Lewis, not because he's the most interesting thinker in the history of the world, although he's a really interesting thinker, but because he says things in really interesting ways. So, I think he would be a fascinating guy to just sit and talk with. When I think of a historical person I'd want to talk with most, would be that. Either that or a baseball ball guest. Stephanie: All right. Well, that's cool. That's a good answer. What's up next on your reading list? Andrew: Books I'm in the middle of or after? Stephanie: I'd say, you can do both, middle of and ones that you're looking back on like, that was a good book. Andrew: Okay. The Color of Law is the book I'm in the middle of right now. Richard Rothstein going through the history of government and forced racism in the U.S. incredibly helpful book for me so far. I'm three quarters away through. Highly recommended to try and get your head on straight about what's going on with race in the U.S. just pure history. It's really good. And then I am reading a Christian book called Money, Possessions and Eternity about how to use your money for compassion and care for people instead of for yourself. So, that's what I'm in the middle of right now. And a baseball book called Ball Four, which is a famous book. Stephanie: That's cool. If you were to pick a country to focus on to maybe buy a new brand from, what country would you look into? Andrew: A country? Stephanie: Yeah. If you were to bet big, I'm going to go for something in India, that's top of mind right now because I just read the whole thing between India and China and turning off Tik Tok in India. So, it's very interesting to me thinking about, if you were to bet on brands from a certain country or are you looking to go international, where would you go? Andrew: I think the answer is India. I think that's probably the right answer. The cost of reaching people in India is very cheap and India's economy seems to be growing very fast. But I'm just bullish on global economy in general. So, I think you could probably broadly pick out. In the last 50 years, massive amounts of extreme poverty have been alleviated in the world thanks to globalization and technology and all kinds of things like that. The world is a much better place than people make it sound. That's another book record recommendation, Factfulness by Hans Rosling. Go read that book- Stephanie: Factfulness. Andrew: ... it will help you look at the world totally different. Factfulness. Forget my other book my other book and finish reading that one. Stephanie: I'll link of that one. Yeah, no, I think that's where I would bet too because I think I just read that, it's a billion and a half people there only a third of them, I think have cell phones right now. They're coming online at a very quick rate. So, I think- Andrew: Yeah. I mean, it's incredible how much better life has gotten in the world for so many people. There's very hard life in the world for a lot of people, so to not to underplay that. But it's just crazy and it's going to keep happening. Stephanie: Yeah, I agree. What's up next in your travel destinations? Andrew: Anywhere- Stephanie: When you can travel. I think, just outside my neighborhood. Andrew: Yeah. I like Austin, Minnesota where my family is, hopefully in a couple of weeks, but we'll see. As far as other places, I love Boston. Would like to go with my wife there. I have a seven month old though, so the actual answer to this question is probably nowhere for a while. Stephanie: Yeah. That's my life too. I have four month old twin boys and a two year old. Someone asked me like, "Oh, where are you going to go on vacation?" I'm like, "Nowhere outside of 10 miles away." It's a mess to get into the car that would be- Andrew: Four-year-old twin boys? Stephanie: Yeah, yeah. Andrew: I think it's awesome. Congratulations. That's beautiful. Stephanie: Thanks. Yeah, it's a wild ride. All right, the last one ... Yeah, you know. What's up next on your Netflix queue? Andrew: I just watch the same shows over and over again with my wife. Stephanie: Does she get to choose? Andrew: She does most times, yeah. Stephanie: So you guys are watching Selling Sunset and things like that? Andrew: No. We watched Parks and Rec, 30 Rock and The Good Place- Stephanie: Okay, those are very ones. Andrew: ... over and over and over again. That's probably all we watch. I don't know. The decision fatigue I have on this particular issues, we just created a Slack channel that worked for media recommendations because I just don't know even what to do anymore about where to look next. So, I wish I had a better answer than that. It would- Stephanie: Let us know if you find something from your Slack channel. Andrew: Yeah. It's probably another episode of The Good place. My team is really hot on Yellowstone right now, so there you go. Stephanie: Okay. I don't know what that is, that just shows I am not with it either. So I'll have to check that out. Andrew: Kevin Costner intense ranching family season three. Stephanie: Okay. I'll have to dive into that one. All right, that was a good lightning round. Is there anything that you were hoping to cover, are there any last words of advice before we hop off? Andrew: I think just that in situations like this, I always just want to say that when somebody asks you for answers on a podcast, it's super easy to make it sound easy in some ways. But it's really hard actually to do these things and to grow business and to work in a team and all these things. So, I think the parting word for me is always just to say, it's not actually as easy as it maybe. I hope I didn't make it sound like that. It's just challenging at times. So, keep at it and surround herself with good people. Yeah, I think that's it. I think I just properly took all the wind out of the point that I was making by monitoring it at the end there. Maybe out of [inaudible 01:02:52]. That's the big piece for me, is just you can do it, it is harder than it sounds a lot of times. Stephanie: Yeah, I like it. Well, Andrew, thanks so much for coming on the show. It was a lot of fun and ... Yeah, thanks for taking the time. Andrew: Thanks, Stephanie, for having me. It's super fun.
Auctions are dead. At least, that’s what the press seems to think about auction platforms. But Tophatter is experiencing something different. The platform that started as an auction platform for homemade goods is now expanding to include a variety of products and is looking more like a third-party marketplace. Sree Menon is the COO of Tophatter, a discovery and auction platform that is gamifying the Ecommerce experience. On this episode of Up Next in Commerce, Sree explains the way Tophatter has differentiated itself through gamification, fast, real-time auctions, and a customer engagement experience that users have embraced. She also provides insight any founder or CEO would need to know about the fundamentals of setting up an online marketplace — or any start-up for that matter — and she discusses the importance of unit economics and A/B testing. 3 Takeaways: The gamification of the buying process and the gamification of internal innovation are proven ways to create more engagement with your customers and your employees. Both will keep coming back if they are enjoying their experience, and creating a game-like environment helps build fun into everything It is impossible to build a marketplace or create a successful business without first understanding unit economics. It is good to have a story behind your business and a plan for where you want to go, but you need to have data points that prove that your story is true and that your plan will work out Retail consolidation is going to be a major factor in the coming years. There will be much more emphasis on creating omnichannel experiences that will completely change how we shop For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey everyone, and welcome back to Up Next in Commerce. This is your host, Stephanie Postles from mission.org. Today we're joined by the COO at Tophatter, Sree Menon. Sree, welcome to the show. Sree: Oh hi, Stephanie. Thank you so much for having me. I'm excited to be on the show. Stephanie: We are very excited to have you here. So I was looking at your background a bit, and it's very interesting. I would love it if we could start there, maybe telling us how you got into your role you are in now, and yeah, how you got there. Sree: Yeah. It's a very long, long career. I started in the online world, which I think is more relevant in this podcast at Dell. I used to lead the commercial online sales for Americas, Latin America, and North America. I was there for several years, perhaps nine years overall at Dell, six years in online, and then I moved to eBay, was the general manager for the motors group. It was an amazing journey. But I did know that I wanted to go and work at a smaller startup using the skills that I have, and that's what brought me to Tophatter. We are a discovery based shopping marketplace, and it's been an amazing journey, and I'm happy to talk more about that in this podcast. Stephanie: Cool. Yeah. I'm sure the shift from Dell and eBay was pretty immense from going to a smaller company. What was that like, and what kind of learnings did you take with you from Dell and eBay? Sree: So it's a great question. So the things that you take for granted at a big company are generally that, look, you're not worried about the fact that the startup may fail. There isn't that. There's a tremendous sense of security because you're working in a big company. There's of course a lot more pressure in terms of being able to communicate a lot about what you're doing, working with many, many different teams cross-functionally, and also, the time to market or the time to execute an idea is very long. It takes a lot of cycles. So when you go to a startup, it's absolutely the other way around. I hardly have any scheduled meetings every week kind of thing. It's mostly just, you need to solve a problem, and so you're meaning to kind of solve it or brainstorming on something. Sree: So the pace of innovation, the pace of executing is so much faster when you're in a small company. But of course, that kind of freedom also comes with a lot of responsibility, with a lot of pressure to meet numbers, to be able to understand the intricacies of the entire business and not just to function, and it's thrilling and exciting. Stephanie: Yep. Yeah. That's awesome. So for Tophatter, it kind of reminds me a little of eBay. But I would like to know, how is it different? Because eBay's auction business seems like it's kind of declining, but Tophatter seems like it's thriving. So how would someone think about what Tophatter is and how is it different? Sree: That's right. So eBay's auction, the way I think about it is, yes, as compared to the overall business, in terms of just eBay or how e-commerce has evolved as an industry, auction is probably a smaller portion. The way eBay was designed originally, let's go back to the historical context, it was largely a C2C business, right? Auctions work well in a C2C background or in any background or in any context where there isn't a fixed price or value of an item. It is what the buyer is willing to give you. So for instance, I have a Louis Vuitton which is five years old. I price it a lot in my mind. I think it's very precious to me. But that value may not be the same. It may not be perceived the same by a buyer. That's where an auction really fits in really well. Sree: Now, that's one use case. So from that perspective, I think eBay's still doing well in terms of that format when it comes to C2C, when it comes to very high word items, high value items like cars and stuff like that, used cars, again, things that don't have an MSRP. Now, in our context, the auction model helps because it's more of a gamification element versus here's the value of that item in terms of the emotion that I have of it. Because we largely know we're not a C2C platform at all. We are a B2C platform. But they are discovery shopping items. So it would be for instance, if you're working on Embarcadero road, which is here in San Francisco, and you had a nice lunch, and now you're just kind of browsing on the streets, looking at the vendors, and you see a bracelet which is made of shells, and you want to pay the pricing at $20. Sree: Maybe it's a little too expensive which you're already feeling happy, and you're ready to pay for that. Or you find something for $5. It's basically some just overall discovery and emotional connection with that item. Those kinds of products, and that kind of platform works very well with an auction format. Stephanie: Very cool. So give me a little more details on how you gamified the process. I saw it's a 92nd auction, which I had never heard of, and I thought it was very fun and definitely would convince buyers to buy quickly. But in what ways did you gamify the platform, and has it been successful with short auctions? Sree: No. I do believe so. I think even the auction, we call that as a gamification technique per se. So think about what a game does for us. It makes us competitive. We compete. So just competing on an item is gamification in itself. Because you shorten it, it's basically shorten the timeframe, the adrenal that you boost to get of competing is much more extreme. So I think the core of that platform uses that gamification technology, and then now we've added on things like badges. We've added on things like, you can collect if you shopped in certain categories, you collect a badge. You could collect it and then cash it in as chips to get some credits. So there's a bunch of other techniques we've added on, and we're continuing to do that, right? I think that's what makes our platform unique and different. We're literally trying to take an offline shopping, browsing, hunting experience and putting it online and having fun in it. So whether you call it games or just an absolute fun experience, that's what we do. Stephanie: Yeah. I could definitely see that being a big team because there are many 90-second auctions. That sounds fun. I'm going to have to try that out. Is there certain incentives that you've seen be more successful, whether, like you said, it's badges or certain things showing up on the user's profiles? What things have you seen work well, and which ones were kind of duds? Sree: No. This is the badges have been really useful for us last year that we launched it. We also launched a few other things. We tried to kind of add a community angle to it. But those experiments didn't do very well. You could poke, or you could give some... Even the gamification element, having a name there, that was very helpful to us. So I think what has been working well is having pictures. At one point, we even had pictures of individuals that they will upload, adding profiles of themselves. These are all things that were very successful, apart from the badges that I said. We continue to iterate. We experiment a bunch every quarter, every month, every week, and we try to see what works. Sree: But the big wins for us last year was badges, the names, and the profiles per se. We didn't think that people would want to add profiles and talk about themselves, but you'd be surprised they do. This is where I think the convergence of a little bit of the community and gamification and shopping is all occurring, and everyone's discovering their own comfort level in terms of that convergence. Stephanie: Yeah. Very cool. Is there any metrics that you look at when it comes to adding these different features, or you said you're running tons of experiments all the time. What are your go-to metrics to be able to tell you if something is successful or not? Sree: That's right. So if we look at the typical funnel metrics, we try to look at the engagement metrics, which are, are people bidding. More bids that we have, then obviously, it means that people are engaged, and it also drives up the ASP of the item, which is very helpful from the sell site. So that's definitely what we look at and eventually conversion. So if you're bidding, that is conversion. Stephanie: So I could also see it being interesting with... You're essentially getting, like you said, multiple conversions just by someone bidding on it to where I'm guessing you could retarget those people, and you have consumers earlier than a lot of other brands might experience. Is that what you've seen, and how do you go about reengaging those people? Sree: It's a great question. So I mean, what you're seeing is basically, even people are engaging on an item. Only one person is winning it. Let's say there were 10 bidders. There's nine of them who were interested in that item. Maybe they were not interested in that item beyond a certain price point, but they were. So what we do is if you bid on an item, we do consider that as a saved or aligned item. So we save it as an aligned item in the backend. Sree: So we use various notification methodologies for when that item comes back. So let's say I bid on the... I'm looking at the platform right now, on a CBD cream, pain relief item. Stephanie: Very popular these days. Sree: Very popular. No. I didn't mean it because it's gone up, like somebody is out to get me, and I don't want to pay $15 for this. So I kind of stop at 14. So now, the system will automatically capture that. If you look at the platform, there's a little heart-shaped on lot, which basically is our version of we like it. So the next time the CBD cream is coming up for auction, I will receive a notification that says it's coming up for auction. Come back to the platform. So we drive up a bunch of engagement with those kind of notifications. Stephanie: Yeah. That's very cool. What kind of investments have you done into personalization? Sree: Right. That's a very interesting question, actually. Stephanie, for us, the traditional definition of personalization is to be able to give you that item at the price that you want. That doesn't really work well in our auction platform. So for us, there's a broader meaning of personalization. For us, it's about personalizing to a group of people with similar tastes and similar needs and shopping behaviors versus tailoring it to an individual. So I would suggest that we use terms like targeting. So there are males if there are electronic items, shaving items. We know they generally appeal to men. So our feed optimizes knowing that this is a male. Their feed will optimize depending on the fact that are they male or female. Stephanie: Very cool. So the other thing that I was thinking about is it seems like it could be a little bit difficult to bring a seller to a platform and say, "Hey, you have there's 90 seconds for your product to get sold. I was curious how you convince sellers to come to the platform. One interesting thing I saw was your guys' blog, which seems to focus a lot on education that isn't really about Tophatter per se, but it's things like how to optimize your e-commerce warehouse strategy or how to sell more products. It seems like it's just an educational tool that could be possibly convert sellers to come on the platform. What does that process look like to get them to list their first product? Sree: That's great. You have multiple questions, and they're all very interesting. So [crosstalk 00:15:02]- Stephanie: I seem to be that. Sree: They are interesting. Your brain works very fast. I can tell. So I think the first question is, how can they? What happens in 90 seconds? I think you're trying to say, can they realize the price in 90 seconds? Well, that is the interesting part is you would find that there are certain items on our platform that can go up $100 in 19 seconds or a little bit more than 90 seconds. I'll talk about that in a little bit. But some popular items, we keep them on block longer because we know that there's a lot of excitement. So if I'm listing, for example, an iPhone, which is a refurb iPhone, but still not very old, you will see that will generate a ton of interest. Sree: What does that mean? So what does that show to the seller is that if you have an item that a lot of people will like and converge, you will be able to realize the price and probably more than what you wanted in a short period of time. So to sellers who understand the audience and understand what would appeal to the audience do really well on the platform. So that's the number one question on price realization. The second point I think you're making about educating and teaching them a lot on what can sell and how to optimize the platform, what your warehousing strategy should be. Well, because we are a discovery based platform, it's like people get bored quickly, right? Because suddenly, everybody likes this CBD cream. We've got a ton of inventory there on. We've got a ton of buyers. Sree: But after that point, it's like that song that has been at the top of your charts, and you've heard it so much. You're bored of it now. So then that very quickly goes out of fashion, and that makes it harder for a traditional seller to do warehousing strategies and what have you. Then they're like, "I had a great product, was selling really well. I was making a lot of money, and now I'm not. Now, what do we do?" So sellers have to be really smart about how they test. So they kind of have a marquee product that they know that they make most money in velocity. It keeps selling that, knowing that this is going to not be the case in a few weeks or a few months, but then continue to test on the others in parallel in anticipation of creating leads and nurturing more products that can fill in the gap when this one runs its time. Stephanie: Got it. Yeah. That seems like it's a lot of moving pieces to make sure that you're putting the right product out with their right amount of inventory level. Are these sellers also selling on their own websites traditionally? Or are they pretty focused on you guys and maybe Amazon? Sree: Yeah. So are we the primary platform, or do they sell on other platforms and their own- Stephanie: Yeah, or their own. Yeah. Sree: Or their own. Yeah. So some of them, we do find a mix of all of that. So if you think about the pyramid structure almost as the very top of the big players who sell on every platform, did themselves have their own big e-commerce companies, sorry, websites, and they're selling on those platforms themselves. They don't do a lot of GTV. Those are the ones that have found a marquee product and probably have a ton of inventory on the platform, and they kind of probably also want to do testing and channel optimization in their own companies. So we probably are one of them. So they don't do a lot of GTV. But they are good players. They provide great experience, and they're also happy to use our platform also probably because it gives them a ton of velocity as compared to the other platforms. So those are the very top. Sree: Then you have the ones in the center who are actually small, medium businesses. They are mostly for whom Tophatter is the primary channel. So what they do is they will do a ton of testing on the platform, figure out what's working, like I said, find successes. They'll build their entire business around it. Then if it doesn't sell after a point in time and they're stuck with inventory, then they liquidate it on other platforms. So the other way around. So different use case in this case. Sree: Then the bottom of the ones are just people who come in and go. It could be even a buyer like you and me who think, "Oh yeah, I have a purse in my closet. Let me try and sell it." So you'll have a bunch of people who come in and go. Stephanie: Gotcha. So as a COO, you probably have a very good bird's eye view, like you said, into the entire company. What advice would you give to someone if they were talking about starting a marketplace, which is probably one of the hardest, I would think, e-commerce businesses to start. What kind of things would you advise them to do or not do? Sree: Oh, that's a great, great question. So hard, so hard. You're exactly right. It's very hard. I think the first thing is you have to kind of figure out is your customer acquisition and your unit economics. You have to get a sense of, am I able to bring in the customer with the certain level of advertising costs? Again, do I have a platform that they are engaged enough that the unit economics will work out. I think that's the primary question. Sometimes the indications are that they will, and over time, they don't. Right? And that's where it all changes. Sree: So after having built the initial base for that, then the idea is to be able to understand the startup or whoever's starting the company has to constantly look at, how do I drive that engagement? How do I drive with LTV? What are the changes they could make? And really experiment a lot. Experiment a lot. Be open to walking away from... Be open to learning from the results of those experiments and being brave enough to not feeling so personal about those experiments and the business model that you have to hold onto it. Right? So you should know when a particular thing is not going to work or has hit a ceiling, and then you continue to innovate and continue to iterate and experiment. Stephanie: Yep. That makes sense. Are there any metrics, maybe financial ones or not financial that you look at to understand if you guys are growing the way that you want? How do you think about success when it comes to the growth of the business and the platform? Sree: Oh, absolutely. So those are the three big metrics for any company, no matter what, is always the three, right? The big ones. GTV in our case, right? Are you growing your top line. Then you want to look at, what's your margin or revenue in other cases? What's your margin? Is it healthy enough? How much liquidity do you have? Basically, that's the healthy part. How much of operating income do you have? You may have negative operating income because you're a startup. But the idea is you want to know whether your unit economics are going to be scalable. Sree: There has to be a story. So let's say your unit economics are not working on right now. That is because of X, Y, Z reasons. You are investing in logistics or investing in international growth. You're investing in something. But there has to be an IP that you'll build up that will allow you to be able to monetize this in the long term where unit economics will work out. There has to be that formula, and there has to be that clarity. There has to be proof points when you're building the business that that story or that narrative that you build is going to come true. Stephanie: Yup. Is that something that you all have been able to keep track of from the start? Because I could see a lot of startups maybe getting pretty far in and being like, "Oh, oh, I probably should've started measuring this." But you don't really think about that when you're starting a company. You're just trying to be scrappy and get it out. Is that something that you've paid attention to since the beginning or at least since you've been at the company? Sree: Well, actually, a lot of it right from the beginning. So even I've been here only for three years, but the founding team, they were very, very diligent about unit economics. So I think the fact that we have been staying standing for eight years now and as big as we are is a Testament to the fact that the founding team was so focused on unit economics. So we know our formula. We know really well what for our formula, how sensitive that is, and what are the factors that causes it to be sensitive. So we've got guard rails around that. We might make investments in my opinion, bold moves. But we also know based on the guard rail that we have established is when that is shaky and when we need to pull back. Stephanie: Are you A/B testing or running multiple tests on kind of what user interface works best or what users enjoy the most? I'm guessing you could have a bunch of different interfaces and see how they more eagerly interact with the platform. Sree: Well, totally. So A/B testing is just what we do, right? That's all we do. Even in operations, we kind of try to do A/B testing. But even retail sellers, why do you do A/B testing? Have a listing with these words? Have a picture with these words? Stephanie: Oh, that's great. Sree: Right? So that is such a core part of our DNA is A/B testing, being able to have population groups, hold out groups. Actually, that is so much in our DNA that even in terms of our OKRs, we actually call it games. Our OKRs are called games now. We want to know whether what we're doing even in an operational sense makes a difference to the company. So we have a holdout group that does not receive any of the things that the operational team is doing, and then we try to compare the effectiveness of the population, the holdout. So we've really taken this whole A/B testing to a whole new level. Stephanie: How do you get your employees to engage in that way and thinking that way of like, everything's going to be tested and measured? How did you get them to put that hat on? Sree: No, it's very interesting. It is a little bit of a struggle initially for us because in a marketplace environment, it's like an economy, right? There's so many things that are happening is really hard to measure the impact of one activity. So you bring in a big seller and you say, "Wow, this seller's GTV has grown by X%." Well, that's probably because he has replaced the GTV off another person. Right? So how do we know that this is incremental to the platform? Sree: Right. It's a very hard question to ask, and even at eBay, we used to struggle with it. But of course, eBay was at scale. So there are established ways of measuring things. So in our context, to answer your question more specifically in terms of employee engagement, what we showed was we actually did want to experiment with the marketing team, where it was about giving credits to our buyers and seeing how they engage, so lifecycle marketing activity. That was very easy to do. You just have a group that you don't send credits and see how they perform and give another group credits. It was very clear the impact of the team and how they were managing the spends in driving engagement very clear. Sree: So we use that as an example of how we could leverage that. But the key is how you set up the measurements, what kind of tactics you're measuring. You can't measure every single thing. You also want to measure things that are important. Also, you want to make sure that you have a business strategy and the measurement follows that versus the other way around that you define a measurement system and then say, "Okay. Now, let's only do things that we can measure." Sree: So there is a fine balance there. So just to kind of summarize then how we did this was we said, "Okay, what's the business strategy? What are the things we should do? Now, having said that, which activities are most amenable to A/B testing into measurements? Let's go ahead and play games around that." So on a daily basis, you will have SQL reports that are set up that speaks out based on those games how you've done. That actually really helped the teams understand and refine the tactics and levers. Once you found a tactic that worked or a lever that worked, then the teams could go and scale it into a big process, which is the dashboard and what have you. But if you didn't know what those tactics say, you're not sure, and you want to test it, this was a very good way for even the teams to understand and measure and refine. Stephanie: Yeah. That seems like a really fun way to engage employees and get them excited about data. Because I could see a lot of people being like, "Ah, I don't feel like looking at these metrics. I don't really know what they mean, and I don't know how to take an action from it." But putting it into a game format just your platform seems like the perfect culture fit as well. Sree: That's right. That's right. You have to understand also that as an organization, who's comfortable with data, and who's not, and find ways to support it. So all of these games are set up by our team in growth, the analytics team who basically worked very closely with all of the other teams, whether they are product and engineers or operations. They understand what the teams are trying to do, and then they suggest the measurement system. So it's a collaborative effort. So that gives the people who are not very comfortable with data to know that they are supported, and it's simple interpretation of the data. They don't have to define a whole lot of other things which could be perceived as pressure driving. Stephanie: Yeah. That's so important, having that team mentality, because I think in the past, engineers were kind of left out of coming up with the metrics or KPIs or helping influence product decisions, and I'm seeing this movement now where everyone's starting to work together and develop those KPIs and metrics to think about, and they're not kind of leaving the engineers out and just saying, "Hey, we'll come up with everything, and we'll let you know how to make it for us, or we'll give you all the specs." It seems like there's a unifying process happening right now when it comes to the different teams. Sree: Absolutely. I'm a big believer that we should have the collective intelligence of everybody. Just because you're writing code or you're making a sales call doesn't mean that you may not be able to contribute to the bigger picture. In fact, because you're in the trenches, you probably have a different perspective on that problem, and it's important to be able to harness all of that energy and all of that input to then step back and see what it's offering us. Stephanie: Yeah. Completely agree. Are there any marketing channels that you all are experimenting with? Because the world's moving so quick, and there's all these new platforms popping up. Is there anything that you're trying out right now or somewhere that you're finding success that maybe others aren't looking? Sree: I think it's just the usual TikTok and Instagram and Snapchat, what do you call, other channels besides the big two Facebook and Google. What has been interesting for us, we are largely a site for older people and women, majority. But TikTok is for young people. They're literally Gen Z or so. We're seeing some success there. I don't know how much that can scale to see it. But that's why it's so important to continue to experiment. You'd have some surprises. So TikTok is definitely a surprise for us. Stephanie: Yeah. We've actually had quite a few guests on the show mention TikTok. So what kind of ads are you putting on there? If a brand right now is thinking about utilizing TikTok, what are some ways that you're utilizing that platform right now? How are you engaging the younger generation on there, which I heard is actually aging a bit. So how are you using it? Sree: It's a short video format with the product and just making... I think we all know that video is very engaging and lot more content on video. It's just our ability to scale, I think, is the key here. We have so many products. We have so many items to be able to continuously find the right level of engagement in terms of... If it's a video, it has to have a product. It has to be able to do all of that messaging because we are not leaving it to the consumer to be able to browse and find that information on their own. So that's the only challenge in terms of the scaling, but yeah, generally, it's just very short. We work with partners who create all those creators for us. Stephanie: Got it. I'm wondering if you have to definitely probably have different messaging on that platform, where I wonder if it can't be... You can't have the brand up in front maybe. It has to be more like, "Here's the fun behind it and go find out what's behind this," I'm thinking, to market to that. There's different users maybe on an Instagram or Facebook where it can be more obvious. Is that how you guys have kind of approached that? Sree: That's right. That's right. Also, what is it that people are engaging with? So for example, on Facebook, it's value. Those are the things we use a lot because we feel like those are the campaigns that do well for us, right? Where we see deals and fun and value. Whereas I think more from a TikTok kind of a customer, it's more the experience, the gamification element and probably a lot more products that are skewing different to that audience. So that's the kind of experimentation we can doing and testing and coming up with the best optimization for that channel. Stephanie: Yeah. That's very cool. We'll definitely have to check that out. I was reading a very pretty funny article about how some of the younger generation is using TikTok, and they're... I don't know if you've heard about this. They're putting faces on different storefronts. So whether it's Nordstrom or Target, they're putting eyeballs and a mouth on it, and then they're creating personas for these brands. So then you're dating each other and having drama. They're like, Target and Home Depot are having a tiff today or whatever. They're breaking up. I was reading this whole article about how TikTok is being used for that, and I'm like, "Oh my gosh, is this really a platform?" Everyone on the show keeps talking about like, "TikTok's the way to go." And I read this silly article about the drama between brands that these kids are making up. I mean, it was pretty funny. I wanted to go check it out, but it made me question it a little bit. Sree: It is definitely engaging. Oh my, I have a 12, 13-year-old son. That's all he does all day long. It's so hard. We have to literally snatch his phone and hide it. TikTok is very addictive. Stephanie: Oh, man. Yeah, I believe it. But I'm sure there's a lot you could learn from him too of, "Hey, what do you think would be a fun ad? What would you like to see on here?" Sree: You're right. I do film them sometimes when he and his friends are bidding on Tophatter. It's interesting to see how they engage, what they do. It's fascinating, kids these days. Stephanie: Yeah. Hey, that seems like a good way to kind of learn and test product and test marketing if you have a 12-year-old. Now you know, everyone. That's what you can use for your product testing. So you've been in the e-commerce industry for a while. What's one thing that you wish online sellers would start or stop doing? Sree: Would start or stop doing. It's fairly mature now. So let me think about that. Stephanie: It could be D2C sellers, who they're all starting up on their own, where you're like, "You probably should do this, or shouldn't do that. Or I've seen success around this, or this is really annoying when people do this." Sree: No. I mean, as a consumer, I think the more connection that I have to the seller and being able to... So I'll give you my first experience to explain. When I was a consumer at eBay long before I joined eBay, I had a situation where I hadn't got the item that I wanted. So the seller simply just shipped me another item as a replacement, asked me to refund, send everything back and just kind of begged that I don't give him a bad review. So I mean, keeping that aside, but the whole idea of the way that seller actually engaged with me and took care of me made me feel very trusted as a consumer. So I think that is the big challenge for e-commerce, as all players, whether they are a retailer e-commerce arm of a retailer or you are a pure marketplace like us. Sree: I think the challenge is the element of trust. Because the end of it, I can't touch the item. I don't know who you are. I haven't seen you. I haven't gone in your store. That's I think the critical aspect. I don't know, Stephanie, if you realize this, that even though we think e-commerce is a very mature market from an online perspective, the penetration rate for certain categories is still fairly small. Books and CDs are probably 55% of online sales, penetration. But apparel and beauty, for instance, apparel is less than 30%. I don't know what happens after COVID-19. So I don't know the numbers, but the expectation for 2020 or apparel was 29% and beauty 11. Sree: So I mean, this is another angle to what I said. But it's also the emotional element of when I'm wearing this outfit, how do I look? Does it fit me? Am I getting the community feedback off? Yeah. It's great if I go shopping with my friends. They'll be, "Yeah. That looks very cute." How do they replicate that part? Or if it's beauty, how does it look it with my skin color. Those are some challenges that I think we still need to address. Stephanie: Yeah. I completely agree, especially the trust piece. I mean, on Instagram, every single day, there's probably five new apparel companies advertising to me. You go to their website, and you're like, "Did you just start yesterday?" It seems like there needs to be some kind of mechanism to show. Sree: That's right. Stephanie: I know there are people that are trying to show this is a trustworthy website, and they've been around for five years. But it definitely seems hard from a consumer perspective if things are moving more online and people do start getting more comfortable shopping online, if you get burned once, it's going to be pretty hard to want to try out a new company. I think that'd be something that'd be difficult but necessary to figure out. Sree: Yeah. To add to that, Stephanie, is also like... I don't know. What is the agency? If you're buying something, like you said, I click a lot of the ads on Facebook, and I have a similar reaction, and being also on the other side of a partner of Facebook, it's very interesting to me to see both sides of the aisle is, how does Facebook become an arbitrator here, right? How do they make sure that the buyer is taken care of and folks like us, Tophatter as a company who are sellers or advertising in the platform how to hold us accountable and managing our internal metrics of how we considered customer satisfaction and marrying that with Facebook's definition? Sree: So it's a very interesting challenge because you're talking about distribution across so many... There was a time when you knew eBay, right? It's organic search. So you didn't have to go through an intermediary like Facebook. Now we've added that on. Facebook has become one of the biggest ad pair. So when you add that on, what is their responsibility in all of this? Stephanie: Have you seen these platforms- Sree: I don't have the answers. Stephanie: ... shifting? Have you see these platforms since you've been on them kind of shifting their viewpoint on responsibility and of upping their standards when it comes to new brands joining? It seems like it's starting to get better when it comes to that. Sree: No. It's a very good question. Actually, they have. But I don't think that they are very mature in terms of how to think about it. So let me explain this a little bit. So let me use eBay as examples. So when eBay went through that question of how responsible are we, how can we make sure that the seller's performance matched that customer's expectation? I think if you had like 25 years of experience building that out, seller performance management system. Facebook is fairly immature there, right? I think they're still very early in the process. They've just figured that out. People are asking them questions, not only on the news content. They're being held accountable, but they're also being held accountable for the advertisers on the platform from a commerce perspective. Sree: So they're not mature. They're figuring it out. They have some rudimentary measures. But I think the gap for me as a consumer of Facebook's advertising... not consumer, sorry, as somebody who advertises on Facebook, for me, the biggest challenge is that I cannot connect the dots as to what I think my customers need and how Facebook thinks my customers need. I may have great customer satisfaction on my platform, but Facebook may not think that I do and vice versa. So I think they have some maturity maturing to do. Stephanie: Yeah. It definitely seems like it's a tough pole between these platforms. Do you want more revenue, or do you want to cut down on your revenue to also have better brands come on and not let just anyone come on the platform and potentially hurt the end user? Sree: Exactly. That's the kind of challenge we have at eBay too, right, and we have [inaudible] right? All marketplaces have the exact same thing. Because anybody who has, generally speaking, sensationalism, whether it is news content or products, also, the bad sellers do things in such a way that they might get more volume, and they may be even willing to pay for it because they don't have the overhead costs. So that is the same challenge that we have as marketplaces. But then what you do is you create a performance management system where you reward good behaviors, and you improve the baseline for the entire platform. You move the goalpost for the entire platform consistently, continuously. That of course took 25 years for eBay to get there, and still, I think you need to continue to refine it. So I think it's a question of time before Facebook figures it out. Stephanie: Yeah. Well, hopefully, with everything going on with COVID, it's been speeding everything else up. So hopefully it'll kind encourage speed around that area and it doesn't take 25 years to develop, hopefully. Sree: I agree. Stephanie: So we mentioned COVID. That brings me to the question of, what do you think the future of online commerce looks like, especially after the pandemic's over? Sree: Great, great question. I think that the last I saw, there was like 120% increase in online shopping in Q1, I think. You're in the US, something crazy like that. That of course won't be as crazy. The growth rate will probably come down. But then some of the shift is significant, and they'll stay there. So we all know that grocery shopping penetration went up. It's probably going to not be as high. But people who have never done grocery shopping online will be like, "This is kind of cool. I need to stick with it." So there will be some shift that stays permanent. Sree: I think the more interesting thing for me is what I'm seeing with retailers. The retailers who do not have an online presence at all are kind of coming to terms with the fact that they can't ignore it. All of the industry is designed around physical location. The processes are designed around physical location. Their marketing is designed around that. Pricing strategy, procurement strategy, returns, everything. So that's why they have been very resistant in terms of... Generally speaking, there are some who do better than the others. Generally speaking, they're a little more old school when it comes to e-commerce. Can you believe that Ross does not have an online- Stephanie: Oh, yeah. I know. [crosstalk 00:45:37]- Sree: Or Marshalls. I love Marshalls. I'm like, it's too hard. I want to shop, and I can't shop because they don't have a website. Stephanie: I actually just brought this up in another interview about TJ Maxx. There was a whole article that they will not be going online. I mean, they have a very minimal e-commerce experience right now. But I think they put their foot in the sand, and they were like, "No. We're not doing it." Right. Sree: We won't do. That's fascinating. That's fascinating. So maybe they can get away with it because they are only a discount retailer, right? They have major investments, and maybe they've realized that this is the niche, and they don't want to divert the resources somewhere else. That's okay. But now, the other retailers that were on the brink of bankruptcy have been kind of pushed to facing it at the moment. I think, what, 25 retailers probably have already filed for bankruptcy thus far. I hear that in the next five years, there'd be a hundred thousand stores that may be closing now. Well, what that means is there will be a tremendous amount of retail consolidation, and we'll have to take it seriously. People will have to redo the processes. Sree: Some good example I think I've heard is Zara. Zara is very serious about this, and they're like, "We will close art stores, and we will have a few channel strategy. We are going to use COVID-19 as a way to accelerate that, that we were going there anyway. Let's do that." I think that's the right way to go. Stephanie: Yeah, that's great. I wonder what will happen with all the stores. It seems like there could also be an opportunity for different retail models to pop up, like pop-up stores and [crosstalk] shops. Sree: [crosstalk 00:47:13]. Sree: It seems like that- Stephanie: Absolutely. I think that stores will never go out of fashion. But how you use stores, initially it was stores as a central point of a strategy. Instead, it will be a strategic lever. I mean, there's a reason why Amazon bought Whole Foods. The fact that there are retail locations is a strategic lever for Amazon. Best Buy turned around. They used the stores as a very strategic lever, same thing with Walmart. So people will always want to socialize. People will want to hang out. So the stores could be an experience. It could be a place where you pick up things quickly. It could be a place where actually, there are things that you don't want to try on. You can't figure it out. You go there. Maybe it's a place where you drink wine and hang out and- Sree: Cool. Stephanie: ... do other things. Sree: That kind of store. Stephanie: That kind of [inaudible 00:48:11]. Stores could be an experience. It doesn't have to be a transactional place where you just buy and sell things. Sree: Yeah. I completely agree. Or even the stores are known for having the newest items, where some people who care about that, they can go into the store then- Stephanie: To the store. Sree: ... for the people like me who maybe are like, "Yeah. It's been out a few months, I don't mind. I can just shop online." So yeah. I completely agree about the experiential aspect of it. So before we move into the lightning round, is there anything around the e-commerce industry that you wanted to highlight or talk about that I just missed? Stephanie: No. I think I didn't want to talk about the retail, which we covered. So thank you for asking me that question. Sree: Oh, yeah. Yeah, that was great. All right. Cool. We can move on to the lightning round, brought to you by our friends at Salesforce Commerce Cloud. This is where I'm going to ask you a question tree, and in a minute or less, you can give me a wonderful answer. Are you ready? Stephanie: No pressure. No, I'm not ready. Let's go for it. Sree: No pressure. Just take a deep breath. It'll be fun. All right. So what app are you enjoying most on your phone? Stephanie: Should I admit it is TikTok. Sree: Yes, you can admit that. I actually have just started getting into TikTok. So there's no judgment coming from my end. Are you doing dancing videos or what are you doing? Stephanie: No. I don't know. I just watch. It's hilarious. Sree: You're slashing from the sidelines. Yeah, that's me too. I'm like, "I'm not creative enough to make something per se, but I'll watch everyone else." What is the newest e-commerce tool that you're trying out right now? Stephanie: Newest e-commerce tool. [inaudible 00:49:45]. Sree: So any kind of tool that you're working on for the platform right now at Tophatter? Stephanie: Yeah. So Got it. So React Native. I'll pick that. Sree: Okay. If you were to have a podcast, what would it be about, and who would your first guest be? Stephanie: I think it would be about managing stress and how to live a balanced life, a happy life. I would love to get Dalai Lama. Sree: Ooh, that's a good one. We'll have to email him. I'm sure he'll say yes. Stephanie: All right. What's up next on your reading list. Sree: On my reading list. I have a history book that I just ordered, and I have Ben Franklin's biography that somebody had written that is on my reading list now. I've done a lot of business readings, so I need a break now. Stephanie: Yeah. Cool. Yeah, it's always good to get a break and read something fun. All right. The last one, what one thing will have the biggest impact on e-commerce in the next year? Sree: I think the retail consolidation to me is the most interesting phenomenon that I'm seeing. So that forces a lot more innovation in the industry. I really think that the omnichannel strategies are going to be the new thing, taken at a different level. It already is a thing. But then taking it to a different level, that's what I foresee, and I'm very excited to see in the next few years. Stephanie: Yeah. Completely agree. Well, Sree, it's been such a blast having you on the show. Where can people find out more about Tophatter and yourself? Sree: Well, you can find out about me going to LinkedIn. Go ahead and download Tophatter on your app. Or if you are more comfortable in desktop, go to tophatter.com. You'll find us all there. Stephanie: Awesome. Well, thanks so much for coming on Up Next in Commerce. We'll have to have you back. This was a blast. Sree: Awesome. Thank you, Stephanie. Had a great time myself. Have a great day. Stay safe out there.
Everyone is excited about A.I. and the idea of using technology to improve business. But that excitement has also led to confusion. There are many definitions and applications of A.I., and few have been able to truly optimize their A.I. strategy. That’s where Ashwin Mittal comes in. Ashwin is the CEO of Course5, a transformative intelligence company helping companies improve their businesses using technology like A.I. and machine learning. On this episode of Up Next in Commerce, Ashwin explains where and how people have gone wrong with A.I. in the past, and the steps an Ecommerce company needs to take in order to be able to get the most out of A.I. It all starts with understanding and controlling your data, and includes retraining your employees to rely less on their guts, and more on the analysis A.I. provides. He reveals how to do exactly that on this podcast. 3 Takeaways: It’s important to build a structured data foundation from the start so you can move to a place of making decisions with data You must teach your employees how to interpret and analyze data and make sure they are comfortable using the data to make decisions. Individuals must be taught to lead with data and then let their gut take them the final 20% of the way toward a business decision Understanding the entire customer journey and where there are points of failure will help you create a strategy on optimizing your data and building an Ecommerce experience that is successful from start to finish For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey everyone, and welcome back to Up Next in Commerce. This is your host Stephanie Postles, and today we're joined by Ashwin Mittal, the CEO of Course5 Intelligence. Ashwin, thanks for coming on the show. Ashwin: Thanks for having me, Stephanie. It's a pleasure to be here. Stephanie: Yeah, I'm really excited to have you on today because throughout a lot of our previous interviews that we've had so far, everyone has mentioned AI in some form or fashion, and when I saw that you were coming on the show and we were going to have a deep dive conversation into AI, I was very excited. Ashwin: It's a deep subject to talk about, so yeah, it should be fun, hopefully. Stephanie: It will be. So, what brought you into the world of AI? What got you excited about that and building a company around AI and analytics and all that? Ashwin: So, we've always been in the business of delivering insights for sales and marketing to customers from data and information. But about five or six years back, I realized that we're in this perhaps future technology wave of transformation because of the onset of artificial intelligence technology, and from a big picture perspective, if you look back the last 30 years, 40 years, we've perhaps seen two or three waves of substantial change value creation through technology. We've seen the PC wave, and we've seen the internet wave. You can say, okay, maybe there's a separate mobile internet and social media wave, but it's part of that. Both of these have completely changed our personal and professional lives, and one was built on the other. Because we had PCs, so the internet was [inaudible 00:02:03]. Ashwin: So, my belief is that with AI it's going to be pretty much the same. It will take 15-20 years to play out, but its impact is going to be as deep and profound as the internet. And it's going to be built on top of the fact that we all have computers, that we're all connected, all devices are connected, and for us being in the data business of driving insights from data, we're really in the eye of the storm. Because the root of AI comes from data science. So, on the one hand while this presents a challenge to our business, and possibilities of us getting disrupted, but at the same time, it presents even larger opportunities. Ashwin: So, at that time, I decided that we needed to really double down on the AI wave, and started to completely reorient the business and the company towards riding this wave. So, that's really how [inaudible 00:03:12]. Stephanie: That's great. So, how would you explain Course5 Intelligence? What do you all do? What kind of clients do you help? What problems do they come to you with? Ashwin: So, we help our clients make the best decisions from data and information for sales marketing customer-related problems. And within that, one of our largest focus areas is digital and Ecommerce. We typically work with large corporates, Fortune 500, Fortune 1,000 companies, and in some cases, we might be working with the Ecommerce group, their digital group, with the CMO's office, sometimes with IT or some combination of all of these. Stephanie: Very cool, and you guys have over 1,000 people that you employ, right? Ashwin: Yes, we have 1,200 people. Stephanie: Wow, that's crazy. When did you all start, and how long did it take to get to that 1,000-person mark, and what was the change like within your company? That's a lot of people to manage. Ashwin: Sure, sure. Yes. So, we've been in business for, what? 16, 17 years, and we've also changed and evolved along the way. The way you run a company that is 50 people doesn't really work when you're running a company that's 200 people, and you need to run a company differently when it's 500 people, and certainly when it's 1,000. So, we've also had to learn, change, evolve along the way. How we run the company, what kind of talent we bring in. How we set the organization structure, and today we're pretty much a global business. We're present in seven, eight different countries, have customers all over the world, so we're sort of a micro multinational on our own. Stephanie: That's great. Is there any struggles that you face when it comes to working with your teams around the world that you had to learn along the way? Ashwin: Sure. Yes, yes. No, absolutely. Absolutely. So, there's one challenge, which is a more difficult challenge, which is culture. There's a second challenge, which is also important, but perhaps not that difficult, which is regulation. Culture is a really tough one. It's not as tough today as it used to be maybe seven, eight years back. Today because of just the globalization and easy access to information everywhere, people are a lot more aware of different cultures, different people, and a lot more sensitive and things like that. Ashwin: But in our early years when we were globalizing ourselves, we had to learn about different approaches, different cultures. We had to be very open minded, and I think we managed okay. We're still learning, it's important to be sensitive. Culture is an important issue. In terms of regulation, that's somewhat easier. You just have to follow certain processes, protocols and make sure that they're completely compliant in every job that you're offering. And especially in a business like ours where you're dealing with data and information, and there's a lot of regulation around that, around data privacy and sensitivity around that and things like that. So, we need to just ensure that we are compliant in every geography that we operate. Stephanie: That makes sense. So, everyone talks about AI. Like I mentioned, a lot of people mentioned in our previous interviews, and oftentimes I think people if they're using AI or they're referring to something like it's AI and it's actually not. So, how would you describe AI? And specifically, how does AI help Ecommerce, or could it help Ecommerce if people aren't already looking into it? Ashwin: So, first point you made is spot on, right? What is AI? Stephanie: Yeah. Ashwin: So, this really means different things to different people, and honestly, there is no one perfect watertight definition. So, AI is essentially an umbrella term that covers a bunch of different technologies, which are all meant to convey computers getting intelligence, which is not typically expected from computers, and which is more human-like. Which is the common sense definition, which we would all accept. But then what falls in that bucket, and what doesn't fall in that bucket is different for different people, and I'll give you a simple example. Take a very old technology, something like OCR, optical character recognition. Nobody would call that AI today, but when it first came out, maybe some people thought it was actually computers becoming intelligent, and it was kind of AI. Ashwin: So, the definition is also keeping on evolving as our expectations from technology keep changing. But I would say that amongst the different technologies that encompass AI, the core one, the most important one, at least to me, is what you call learning or machine learning. And machine learning is essentially the ability of computers to learn, and that is really a game-changing technology. And then that supports all the other technologies that are typically and the umbrella term of AI. Where a computer can run a certain process or program and get better at it every time it runs, which is what humans are good at doing. Ashwin: So, that for me is one of the most important technologies. And sorry, you had a second question you asked about AI and Ecommerce? Stephanie: Yes. Yeah, how it impacts Ecommerce right now. Do you think people are using AI efficiently or what do you think the future could look like if they do start implementing this in a better way? Ashwin: So, it's already here. It is being used extensively, more by some companies, less so by some. Companies like Amazon are, of course, using it in a very, very mature and sophisticated manner. But various types of companies are using it, many of our clients are using it, and its footprint is increasing. It's used in automating various tasks, in virtualization, in campaigns, even at the back end in supply chain, inventory management. We all know that chat bots are used for customer support in A.I. In Ecommerce. Physical robots are used in warehouses, which also could have AI technology. If it helps, I can give you a couple of examples- Stephanie: Yeah, I think exactly. That'd be great. Ashwin: ... of a couple of our platforms- Stephanie: Yes, please. Ashwin: ... which truly you would consider as AI. So, we have this one platform called Compete. Now what Compete does is it enables our customers, our clients to gather competitive intelligence in the market, and respond in quick time. So, it has technologies and a bunch of bots that go out and search all competitive websites of a brand to collect and synthesize all the information on what the competitors are doing in terms of the five Ps. So, you traditionally have four Ps, product, placement, promotion and price, and we have a fifth, people reviews. Ashwin: And so, this keeps collecting this information in rapid time, and on different product SKUs and different combinations, how competitors are doing, what they're placing, how they're pricing. And then this is updated in a dashboard along with analytics to help the Ecommerce players monitor competitive moves and respond quickly so they can optimize their revenue, their profits. This platform's also used extensively during these major selling seasons, like Black Friday, Cyber Monday, and brands expect to make substantial sales in a very short period of time. Ashwin: So, they have to be very responsive to what the competitors are doing and what's happening in the market. So, this is one example, one platform that we have. Another one, which we call Adomate, this is really taking it to the next level where we're using AI to optimize creativity? Stephanie: What? Ashwin: Creativity, exactly. So, AI is not getting creative, just to be clear, and I'll explain to you how it works. Stephanie: It's not going to take over the world, do all the artwork in the future, write all the books. Ashwin: No, no, no. Well, there's some of that talk going on, but I think that you'll always want to read the book written by the author, you'll always want to know about the author. You'll want to see the artwork, which you want to know the painter's story. While those things might happen, but I don't think that's going to... Robots can play sports, right? But you want to watch humans play a football match. You don't want to watch robots play, they might play better than the humans. So, it's the same thing with art. Ashwin: But in terms of this platform called Adomate, so what we're doing is we're actually optimizing the process of content creation for either campaigns or advertising. So, when companies typically do campaigns online for Ecommerce, they will create, let's say, 100 different creatives, 100 different images, and put them into a system. And then the system will do live optimization depending on who's responding to what. Change which creative is being shown to whom. But you might have missed something fundamental, right? You don't know why something is working, why something is not working. Maybe you missed something in those creatives. Maybe there's some combination of both that you didn't know about. Ashwin: So, what our AI system does is using computer vision it actually reads every creative. So, it actually looks at the creative and then distills it into structured data. Who are the protagonists in the creative or what's their ethnicity? What's their emotion? What the background colors? Is the brand shown? Is the logo shown? Where is it shown? If it's a video, then it will break it into frames and read each frame. And so, you've got now structured data against each creative, and then you have the data of how people responded to that. Who clicked, who bought which segment, and you can combine all of that and actually then get prescriptive. Ashwin: So, depending on what kind of campaign you want to run, what segment you want to target, you can actually advise, "Okay, use a dog in this or use a Latino woman or bring the brand in or use red color instead of purple or whatever." Stephanie: Wow, that's interesting. Are a lot of companies using that today where they're actually personalizing the image for the product based on who comes in using AI behind the scenes to come up with that in real time? Ashwin: So, this is an early stage platform. It doesn't change the image in real time, though that's also possible. And my AI head tells me that we should be doing that next. But it doesn't change the image right now, what it does is it prescribes. So, for the next campaign, when you want to create something, then you would enter into the system what you're trying to achieve and the system might advise you what to do. Or if you have a creative you can submit it to the system and it will give you a score of how successful it's likely to be. Ashwin: But even that is an early stage platform. This is one of our exciting newer products, and we have maybe three or four customers using it right now, but it's certainly something that we're betting on. Stephanie: Got it. So, when these customers come to you, one thing I think about is when you have a problem. Back in my old days at prior companies, the teams I worked with who were focused on machine learning always told you like, "Well, you can apply machine learning to a lot of things, you just have to know the problem and if it's worth solving with AI and machine learning." How would a company know if the problem that they're maybe encountering is something that could be tackled with AI? Or how do they start thinking about that, especially if they're a smaller company, maybe a B2C company right now, and they are feeling certain pinches in areas, but they're not really sure how to handle that? How do you tell someone to start thinking about this or how do you have a conversation with someone so they can get this on their radar? Ashwin: Sure, sure. No, great question. So, it has to go step by step. That's what we always tell them, and first, honestly, a data foundation needs to be in place before you should even be thinking and talking AI. In terms of technology, what data you're collecting, how your metadata is defined, what data sources you're using, what are the connections between all of those, and are you able to establish a single source of truth. You can't put the cart before the horse. You need to make sure you're collecting the right data and it's reliable data. Ashwin: Then the other, I would say, even more important piece than that is organization culture. So, technology is all available, and getting your people aligned to data and technology to drive their actions and decisions is very good. If you're not able to achieve that, then all else will fail. So, we tell people that even before you think about advanced analytics or you think about AI, first get your teams into the culture of making decisions through data. We've all made decisions through gut, and gut is nothing but some kind of big data swirling in our heads. How do we move from there to letting data take us 80% of the way, and then still the top 20% can come through our gut? Because there are things we know that we may not have put that data into that system. We may not have been able to capture everything which is in our heads. Ashwin: So, we need to first get that culture in place, otherwise the entire analytics and the agenda won't [inaudible 00:18:12]. Once we have that in place then we can start driving different types of analytics programs and business outcome led programs for higher sales, higher profits for customer. Getting better customer experience, and it's not necessary that every problem, as you said, needs AI. Depending on the size of the company, the complexity of the problem, sometimes you might just be able to use a prepackaged solution. And there are prepackaged solutions out there, which maybe can solve your problem instead of developing something custom. Ashwin: But yes, if your problem is complex, your data size is large, then yes, you can have substantial rewards by deploying an AI solution, which we've seen with many of our [inaudible] customers. Stephanie: Cool. Yeah, great answer. So, when it comes to the companies that are coming to you, there has to be a core theme that many companies are struggling with, where you keep hearing the same recurring problems or the same thing that they want help with. What is that theme or problem if you could kind of group it together, and what did it look like after they implemented some of your analytics and AI got assistance from you guys? Kind of like a case study if you have one. Ashwin: Sure, sure. So, yeah, it depends on the company and what stage of the data and analytics maturity they're at, and what their business objectives are. So, sometimes we're asked to help with foundational data issues of assessing data quality of living data infrastructure. We sometimes work with our customers to create access to data and to create across sources, and just provide them with reports they can consume to run their business. Ashwin: So, in these cases we might start with a discussion of their business, and what data and metrics they need to make decisions and on what frequency. Sometimes we might get asked to choose or implement a specific data technology. And then for customers who achieve data maturity around data and metrics, then we get asked to drive business outcomes, which in the Ecommerce world it could be conversion rate optimization, it could be upsell, cross-sell, customer churn reduction, personalization. Ashwin: Essentially for many clients, we work with them through this life cycle, and this typically takes years. We first build their data foundation, we provide them with key metrics and intelligence to run the business, and then start driving sophisticated analytics programs, and then start leveraging AI in a more sophisticated way. So, it's really a journey, and it keeps evolving. So, it's not something that you come in, you do and you finish. Stephanie: Mm-hmm (affirmative), makes sense. So, what are some of the metrics that you provide them. You said you provide metrics around the business. Is there a core set of metrics that you think are really important for every company to look at or how do you think about that? Ashwin: Sure. So, again, it depends on the way they view the business and their needs, and typically, this will start with a conversation between us and them of how they run their business, what are key metrics they want to look at? Maybe we might have a point of view what metrics they should look at. But on the tactical side, we might help people optimize metrics or measure metrics like basic things like nuclear revenue, margin, campaign incrementality, lift. So, lift is the extent to which a campaign drove sales over and above the regular run rate of the business. Ashwin: These high-level metrics could be broken down to... Within these metrics you might have some metrics like average order value, units per transaction and others like that. Conversion rate typically tends to be a metric of focus, and then these could be compared to past periods, could be segmented by channel, by device, by geo, by transaction Stephanie: When it comes to the metrics, have they ever led a company the wrong way where you saw someone look at a certain metric or data point and they were making decisions off that where it was actually giving them bad information? Or you had to advise them like, "You guys shouldn't be looking at this because this isn't helpful. Maybe you should be looking at this instead." Ashwin: No, absolutely. So, that happens all the time, and honestly, data if it's garbage in, it's garbage out. It's actually a great question because so often we've seen companies and very large sophisticated companies where different business units, geographies and departments have built their own data systems and their own infrastructure. And then in that process they've gone about defining their own data and their own way. They define a certain metric. Every metric needs to be defined what that metric essentially means, how it's calculated. Ashwin: And then if you have different geos, different views defining metrics in different ways and then when you put it all together and you're trying to look at it, it makes no sense. So, we've often seen that happen. It's very important for companies to really have a very clear data foundation and a data strategy, and to have a metadata layer, right? Define the data beforehand. And often sometimes we have to come in and just do that. Sometimes we'll end up just doing their house cleaning with our customers. Stephanie: So, if you were to start an Ecommerce company today, would you tell them getting the data aspect right from the start is a priority? Should they make sure they have their data dictionary, and they're talking about how they're actually putting their metrics and collecting the right data? How should someone think about this if they're brand new, and set themselves up for success? Ashwin: Absolutely. Absolutely spot on. So, what we call it is a data strategy. So, they need to have a clear data strategy in place as in what data they need to collect, how they're going to define that data, what technology they'll use to collect that data, and what business outcomes they'll drive from that data. How they'll use that data to drive certain business outcomes. And of course, that will evolve because business is dynamic, the business changes, the market changes, and what you track, how you think about things, it has already changed a lot in last few, and it will continue to change further. Ashwin: But it's very important to have a data strategy, and it's important to keep reviewing it and enhancing it as you go. Stephanie: Are there any data points that you recommend people to collect that maybe they're not already, because I'm sure a lot of platforms that especially newer brands are on probably collect some level of data, but I don't know if it's the right kind of data or what they really need to help them with that longer term data strategy. Are there any key data points where you're like, "Make sure you get this, this and this from the start to really be able to help build towards the future"? Ashwin: I mean, it's all these ones that I've mentioned like conversion rate. Obviously, traffic and obviously conversion rate. Different points of failure where drop-off has taken place. Campaign effectiveness, campaign effectiveness by segment. All of these definitely would recommend that people collect. One thing we've discovered is even in today's day and age, one of the biggest failure points which we've talked about for a long time in Ecommerce, but it still holds true even today, is just the checkout process. So, just the customer is willing to give the brand his or her money, but somewhere something doesn't work, something doesn't render, some option doesn't come up and there's drop-off. Ashwin: So, definitely collect data around the entire journey and where the drop-off and all of that happens if it does. We found that it's remarkable that even today that seems to be an area of [inaudible 00:27:17]. Stephanie: Gotcha. So, with all this data that you get access to when you're helping them build their data strategies and all that kind of stuff, is there any surprises that you've seen when going through some of the customers data and helping them organize it and build systems around it. Anything that you saw that you weren't expecting? Ashwin: Yeah, so actually we covered a couple of those challenges that we've seen, but the two main sort of surprises that we've seen are the two that we just covered. One is, just like we said, the checkout process. The page takes too long to load or it doesn't render on a particular device or particular browser. And then just the entire confusion around the data asset that the company has and how it's being measured, the metadata, and also there are opportunities for data sharing with partners and with vendors. These are really under leveraged, and if it's done in a thoughtful way it can yield real dividends. Ashwin: So, to give you an example, we have this major CPG customer, and we were helping them with their Ecommerce business and with their Ecommerce analytics. And then they said, "For our Ecommerce business we actually have a different supply chain because we have to compete with the needs of Ecommerce customers, which is very different. We need to have quicker deliver times and whatnot." So, they asked us to help them with their supply chain analytics. So, we started doing that, and then we realized these guys were buying their raw material product from farms, from various farms. And the farms actually have a wealth of data that can be combined by our customer across various farms to give them back valuable inputs to improve their efficiency, and also to improve product quality. Ashwin: Perhaps there wasn't enough advantage being taken of this opportunity, so I think there are opportunities that businesses just don't realize that they're sitting on, which they're able to leverage. Stephanie: Yeah, that's a really good example. We had a similar example when talking to Grubhub where they would share their data back with the restaurants to help them improve. Like hey, this person.... You'd get maybe a bad review whenever someone orders the nachos versus... Or they order at 5:00 PM, like what kind of chef do you have at 5:00 PM versus 9:00 PM when you get better reviews. Again, it's a really interesting point about how companies can partner with each other to share data to help each other. Stephanie: Do you think there's any hesitancy around that, because I could also see companies viewing even the farmer as maybe a potential competitor? If they were, I guess, worried about that, or worried about sharing data that could somehow come back and bite them later. Have you seen that hesitancy because I do see this as the way of the future, but I just don't know if I've seen enough people doing it yet? Ashwin: Sure. No, you're right. You're absolutely right, and that hesitancy is there, and it's fair concern that there could be competitive issues. So, for example, so many brands sell direct and sell to marketplaces. What information does the marketplace share with the brand, and what information does the brand share with the marketplace? There is a symbiotic benefit because when the brand has its own property that provides a certain richness of information about the product. And while they may still be doing a larger share of their revenue in the marketplace. But these kinds of concerns are there, competitive concerns are there. Ashwin: Then there are also concerns about data privacy because data privacy is a big issue and it can be done ensuring compliance, but one has to be careful of how one shares the data. What data is shared? Is it masked? Is it personally identifiable or not? And then the other issue is what we spoke about earlier is that they may be defining data in different ways. So, different entities that are defining their data in different ways, again, if it's shared, it may not lead to the right analysis because it may actually provide different perspective than what it's meant to provide if it's defined in different ways with [inaudible 00:34:10]. Stephanie: That makes sense. Is there any way that you think it would be best to set up a data sharing program that would also make sure that the company doesn't lose focus? Because like you said, it could be a pretty big process to make sure that you're putting the right data points in there, masking it, actually giving your supplier or whoever it might be insights. Then I could also see that turning into 50% of your day job. So, how do you advise a company to think about that if they are thinking about sharing data with a partner so that they also don't lose focus on their own product? Ashwin: Sure, sure. So, and some retailers are doing it today already. Amazon does it, Amazon has Amazon Marketing Services where it shares a fair amount of data with its brand partners. It has certain definitions and certain ways in which it makes it available, which is pretty standard. So, then it's up to the branch to take advantage of it and use it in the way that it makes sense for them. And then they might have the other marketplaces that may be sharing this data in a different way. Ashwin: So, that's where we really come in is that we know how the different formats work and the different definitions work, and we bring it together in, let's say a dashboard that makes sense for a brand to consume and process different sources. Stephanie: Yeah, that makes sense. So, we keep talking about data definitions and how companies, oftentimes different teams will have different definitions for the data. I have personally experienced this in some of my old roles. And oftentimes, it's because maybe a team is very entrepreneurial where they're trying to start their own project and they're trying to create their own dashboards, and you just all of a sudden have funny different organizations using a different metric for, like you said, the conversions. Have you seen any best practices for large companies to be able to create a global spot for people to go and look into that dictionary to find what this data metric, if it already exists, what it means? Have you ever seen anything like that, that actually works well? Ashwin: Yeah, I think it's great question, and honestly there's no real silver bullet. Different companies are using different approaches and strategies, and the entire data and analytics journey is really evolving across companies. Different companies have different organization structures to [inaudible 00:36:45]. One thing that works, which has worked for some companies is having a chief data officer. Somebody who's really part of the CEO's office and who's empowered to drive that agenda throughout the entire business. Ashwin: But for certain other types of companies it doesn't work because they're so fairly diversified, they have different business units that have different needs, and they want that dynamism. So, in those cases there is a compromise where every business then goes ahead and sets up its own system and approach and uses that. So, then you typically have, on the one hand you have, let's say the core operation systems like your accounting and things, which work as a single source of truth. And then every business uses what we would call then multiple versions of the truth, which sit on top of a single source of truth and then they create their own logic and versions on top. Ashwin: So, we've seen both approaches, and both have their pros and cons. I don't think there's a definite answer. Stephanie: So, when it comes to having some versions of the truth in dashboards, I always get hesitant about dashboards because people can interpret them however they want. One person might be like, "Things look great." And the other one might be like... They might expand the time horizon and be like, "Things look horrible." It just depends on who's looking at it and what they want to see or what they think they see. So, how do you... You said that you are providing data a lot of times for these brands to make decisions, business decisions off of the data. How do you, or if you do this at all, guide them on maybe like, "Here's how you should think about this decision"? Or how do you make sure that dashboards are being read correctly? Stephanie: And this is not just for your company, but I'm thinking a lot of companies have dashboards that could potentially be advising people the wrong way. Well, not even advising. Providing data and people are reading it the wrong way. Ashwin: Sure, sure. No, absolutely. So, there, again, there's one very important is the people aspect and training aspect is very important. How to use that information, what it means, what it doesn't mean. As you said, you can look at something and interpret it in five different ways, and one person can say it's great and one person can say it's terrible. So, that training is very important, and along with that what we do is that we will set a baseline for expected performance for most key metrics. And then we have certain tools where we can actually append insights into those dashboards. Ashwin: So, we have this platform called Discovery, where along with dashboards, the system actually generates contextual insights. So, along with a number, it will explain what that number means, and why that number has moved from one point in time to another. So, then that helps people contextualize that information, and as they see that... And they can actually double click on that, so this allows people to interact with that information as well in a natural way. You can actually chat and receive information back on chat, or you can ask a question and the system will... A basic question, it doesn't do very, very deep questions, but basic or an analytical question and the system will understand your question and the calculation can come back and answer. So, things like this- Stephanie: That sounds helpful. Ashwin: Exactly, and then just on a very basic level, as we work with the business and we understand what they consider as good, not good, average, certain metrics, we can do things like color coding, highlighting into dashboards. Basic things like that can also help to just contextualize. Stephanie: Very cool. So, a couple times we've mentioned needing to train employees to have that data mindset and to actually know how to think about data and organize it. Is there any training tools that you recommend or courses or things that you've seen companies have success with by having employees go through them? Ashwin: Yeah, courses there are lots, and there are enough courses and there are lots of great trainers out there. But what is very important is you need to have a couple of internal evangelists within the company. There's this new term actually in the industry actually, which has become very popular, citizen data scientists. You have data scientists, which is like the kind of people they have. Technically people who can go deep in the data and who can drive the statistics modeling and all that. But citizen data scientists are essentially the translators. They're the guys who sit in between the executives who are making the decisions and the data scientists at our end. Ashwin: In some cases, the citizen data scientist may even sit in our organization, but mostly they sit in the client's organization. These people play a very important role of driving that awareness and culture within the company. It's highly recommended that every company either converts some of their existing resources into that or otherwise they hire some people [inaudible 00:42:20]. Stephanie: I like that chief data scientists, and I have heard that quite a bit. I think it'd be interesting to have a course depending on if you're in Ecommerce, it'd be nice if there was a certain path that employees could go down to then be well versed and know how to operate within their industry. Because it does seem like there's just so many courses, I don't even know where to begin sometimes with them. And oftentimes you don't know what you need to learn either. Seems like there needs to start being some tracks that you can go down. Ashwin: That's true. That's true, and because of AI technology and because of all this transformation, there are lots of new opportunities also, new roles that people can take up. And I do believe that going forward we should all plan to spend some percent of our time learning. Stephanie: Yeah, so when it comes to skills, do you see people headed in a direction where everyone's becoming a polymath where they're a jack of all trades with many things, or do you see people really focusing in on a specific skill like, "I am an expert in AI for retail, that's my lane that I swim in"? How do you see the future shaping up for skills? Ashwin: Sure. So, I think that there is always an increasing need of course right now for specialists. But there will also always be a need for good generalists because you need specialists who can be deep in a certain function or technology, especially disciplines like AI, but at the same time we need generalists who can make sense of all these different pieces and put them together. So, I think that both career tracks... Therefore, you should just be clear which one of the two you want to be. Trying to be both then you're setting yourself up for failure. Stephanie: So, for everyone listening you're good either way. Whatever one you are, you just have to choose. So, to zoom out a little bit into the general Ecommerce industry, what trends or patterns are you most excited about for digital commerce? Ashwin: So, well, now we are in the midst of a human crisis, right? So, a humanitarian crisis with the COVID pandemic, and of course, we are all very mindful of the human tragedy, the hardship, the economic hardship it's put on people all over the world. It is exciting that this crisis has presented to really accelerate digital transformation and the use of digital channels. So, we have seen companies that have had digital transformation plans that have been one year, two years, three years long. And then, now they're talking, "Okay, we're going to accelerate and do this in two weeks, in three weeks." And it's actually becoming possible. Ashwin: So, what was thought to be impossible is actually becoming possible. We're seeing that if people really want to get these things done, they can. So, that adoption is exciting. It has potential to be... Digital has a potential to be much more personalized, more predictive than brick and mortar commerce. So, it offers a better experience for the customer, and it is good in other ways. It is good for social good as well because you can argue that it will reduce to some extent the impact of climate change. Less traffic, less congestion, less travel. And people get more family time for exercise or hobbies or what have you. So, digital commerce brings with it a lot of benefits as well, which I'm quite excited about. Stephanie: Yeah. Yeah, completely agree. It definitely seems like a lot of things have set up very quickly, and it's interesting watching the companies, there's a couple that I've been following, who just aren't moving to Ecommerce. How do you view companies like that who are taking a strong stance not to go online? Ashwin: It's interesting. While I do think that the industry at large is moving towards Ecommerce, and not just digital commerce, but digital everything, right? Digital entertainment, digital customer experience or digital communication. Most brands will need to do that to be successful. But sometimes there is always a market for those few contra players, right? Because there may be some consumers who may just want... Not want that new approach and new technology and who make the stand. They might have a spice boutique customer base who works with them. It won't last forever, but maybe it might help them for maybe the next seven, eight years, I don't know. Stephanie: Okay, so when it comes to everything that's been happening with the pandemic, how do you lead in times of change at your company or personally? Ashwin: So, a leader that has inspired me from his book was Satya Nadella at Microsoft. In his book, one quote that really stood out for me was he wrote that the C in CEO stands for culture. And he also talked about the importance of empathy in leadership. And so, I have taken it upon myself to foster the organization culture that we want to have. The culture that ties us together, and that is really helping us in these times. That culture that we fostered, which is bringing us all together. Ashwin: Along with that empathy, understanding of the challenges people are going through. It's not just being work from home, but anxiety about the disease, anxiety about the economic future, and along with that regular communication, transparency in communications. These are some of my key priorities, which are driving some of my actions in this crisis. Stephanie: That's great. Are there any challenges that you face when it comes to working remotely? Ashwin: So, it's actually been quite a surprise that when the pandemic hit and when we have to transition to work from home across all our different geographies, and 1,200 people moving to work from home, and I'm really surprised at how effective it's been. The work that we do is iterative, it requires collaboration and things like that, and it's working fine. And it seems like thankfully this happened at a time where all these technologies had evolved like Microsoft Teams and Zoom and others where it's still become very much possible. So, now I wonder why we used to be in offices all the time- Stephanie: Mm-hmm (affirmative Ashwin: Exactly. And so, it's not just us. It's the whole industry just thinking these things. We still need offices for bonding for having certain hard conversations, for inducting new employees, for fostering our organization culture, but we don't need them all the time. We can have 60, 70, 80% work from home. I don't know what the right balance is, we'll discover. But more than- Stephanie: Are you changing that at your company? When you can go back, are you only having a certain portion of your employees go back? Or how are you thinking about that? Ashwin: So, we've not taken a clear decision yet, but it will be definitely at least 50% work from home, maybe more. Could be 60, 70%. And we'll just have to experiment and find the right answer. We also want to see how things change when the pandemic isn't there and then how that changes people's orientation. But at least 50% work from home, and maybe much more is very much doable. And it will give hopefully people a good balance of engagement in office, and at the same time better quality of life because of [inaudible] and things like that. Stephanie: Yeah. Yeah, completely agree. Ashwin: But in terms of the pandemic, while work is not suffering, but the bigger issue is the emotional challenge. As I said earlier, people are not meeting their colleagues, not meeting their friends, so they have anxiety. Here we've tried to do a lot of things. We've tried to engage people through various activities like talent [inaudible] or talent contests and things like that. Yeah, so I'm amazed at the kind of talent we have in the company. People are singing and drawing and cooking. Ashwin: We've had different types of training. I rolled out a new skill learning challenge, where I challenged every employee to learn a new skill to enhance their career over the next 60 days. I said that I'll- Stephanie: How are you tracking that? Ashwin: So, it's not mandated. It's just a challenge, which is free for everyone to sign up for or not. But at the end of 60 days, if you have done it, you can report, and there'll be a prize for person or people who have enhanced their career prospects the most, and prizes for leaders who have helped their team members enhance their career prospects. Just to set an example, I said I'll learn how to program and write code in Python. Stephanie: Oh, man. Ashwin: It's been fun. I'm doing it with my daughter and it's been fun. And we also are providing some resources for things like mental health counseling and things like that if people are feeling anxiety and depression. Stephanie: That's great. Really good examples of things that other companies could take and implement on their own too. Especially the talent thing, that's really fun. Ashwin: Yeah. Stephanie: All right, you probably get this question a lot, but I have to end the interview. So, I'm sure a lot of people have asked you this or want to know this. Do you think that AI will replace jobs or will it just augment jobs and maybe some will not be around anymore, but it will also create new opportunities? What's your take on that? Ashwin: Sure, that's a great question, and that's a question that so many books have been written on it, and there's so much discussion in the industry. I'll just give you my point of view, and there are some people who think quite differently as well. But AI, what AI does is AI doesn't really automate jobs, it automates tasks. When you think of a job, any person's job is made up of a bunch of different tasks. Typically, what we've seen is the AI systems will automate some of those tasks, so that person is not becoming redundant, but some of their tasks are freed up. Ashwin: And so, then that gives the opportunity to use that individual to then do other things. To drive more personalized experiences, to take the businesses to the next level and things like that. But then that requires that right orientation in that individual, and then requires training. The company to provide that training to those people, or for the people to also take interest and train themselves through resources available. So, like I said, I think that now everybody in this new environment will have to consistently be training and upgrading their skills. Ashwin: But do I think that AI is going to come and replace other jobs? No, I don't think so. I think it will free us up from certain tasks and will enable us to widen the scope of [inaudible 00:57:19]. Stephanie: Well, that is a good positive way to end the interview. Before we move into the lightning round, are you ready Ashwin? Stephanie: So, the lightning round is where I ask a question, and you have one minute or less to answer. And we will start with some easier ones. Once you can travel again, what's up next in your travel destinations? Ashwin: Oh, wow. Okay, well, I'd love to go to the Maldives. Stephanie: Great. Ashwin: Yeah, I'd like to go and do some scuba diving. Stephanie: Sounds amazing. What's up next on your Netflix or Hulu or wherever you watch TV shows? What are you watching? Ashwin: So, I'm currently watching Money Heist on Netflix. I don't know if you've watched Money Heist- Stephanie: I haven't. Ashwin: ... know Money Heist on Netflix. Stephanie: No. Ashwin: That Spanish adapted English show, pretty cool. And I also like the historical genre, so I'm watching some shows like Last Kingdom and Vikings. Stephanie: Mm-hmm (affirmative), sounds good. I'll have to check those out. What's up next on your reading list, other than Python 101 manuals? Ashwin: So, that is taking up some of my reading time right now, and I'm trying to be disciplined about not wasting time consuming just unlimited amounts of coronavirus news and doing more productive things. So, right now I'm reading The Alliance by Reid Hoffman, and I'm also reading Why Should Anyone Be Led by You? Robert Goffee. Stephanie: Oh, I will have to check out that second one, I've heard of the first one. All right, the last harder question, what one thing will have the biggest impact on Ecommerce in the next year? Ashwin: Well, what's already had the biggest impact is the COVID crisis, but in the next one to two to three years, I think it's going to be AI. Stephanie: Well, that's a perfect way to sum up the interview. Ashwin, thank you so much for coming on the show. It's been a blast, and we'd love to talk again soon. Ashwin: Thank you so much Stephanie, it's been a pleasure. I look forward to talk to you soon.
You may only know Kellogg’s as the company that makes your favorite cereal. But there is so much more to the company than just delicious treats. Robert Birse is the Head of Global B2B Ecommerce at Kellogg’s, and he has been leading the charge to position Kellogg’s as one of the leaders in creating scalable B2B Ecommerce strategies. On this episode of Up Next in Commerce, Robert explains all the ways that Kellogg’s is upending traditional Ecommerce strategies in order to help customers find greater success. Using technology like A.I. and machine learning, and by developing a platform that all of their customers and partners can use, Kellogg’s has been pushing the ball forward on bringing small and large businesses into the world of Ecommerce and helping them get the most out of their Ecommerce strategies. 3 Takeaways: A brand like Kellogg’s has the power to up-end the typical Ecommerce strategy. Instead of asking how to get customers to buy more, they ask how they can help their customers sell more. In doing so, their customers and partners become more successful, and it’s a win-win for all parties Change management is important because many of the small businesses Kellogg’s works with have to fundamentally change the way they think about doing business.hey have to rely much more on technology than ever before. But the appetite is there because A.I. and predictive analytics are proving to be critical tools in helping businesses determine what to stock and how to look at consumer behavior B2B Ecommerce is still in its infancy, but there is an appetite for innovation across the board from brands to retailers to distributors. They’re eager to test, iterate and experiment with new technologies in order to create better one-to-one engagement at scale For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Stephanie: Welcome to Up Next in Commerce. This is Stephanie Postles, your host from Mission.org. Today I'm very excited, we have Robert Birse on the show, the head of Global B2B & B2B2C E-commerce at Kellogg. Rob, how's it going? Robert: It's going great. Thank you very much, from captivity. Stephanie: Yes, yes. How is life in captivity? Robert: Well, I'm thinking about calling Amnesty International, see if they can get me out of here. Stephanie: Well, we were just talking about what life looks like right now, just us eating lots of Cheese-Its on our bed at home, calling into Zoom calls, or maybe that's just me. Maybe that's not you. Robert: No, I think that's a typical picture across the world right now. Stephanie: Yeah, which is okay. Temporarily, it's okay. So, I saw you have a very long history in E-commerce. I think I saw dating back to even early 2000s, right? Robert: I'm afraid it was in the '90s. Stephanie: Oh nice, okay perfect. Well, I would love to hear a bit about your background and what led you into E-commerce. Robert: Sure. Well, I was working for a catalog distributor, so not a distributor of catalog. We use the catalog as our medium to communicate with our customers who were predominantly engineers in factories across Europe. The business that I was responsible for at the time was a small specialist distributor, and we were struggling a little bit to find our position as E-commerce was starting to take more of a role in the consumer engagement or the customer engagement in our case. So we were on the tube and this was the late '90s, and we took a digital transformation, even though digital still wasn't really a bonafide strategy because it was only emerging. The first task we undertook was to create a digital asset library from all the bromides and things that we'd cumulated to support the catalog production. Robert: So we partnered with a startup in London, a bunch of basically college graduates who were trying to create the first digital content management system. And that was more than 20 years ago. So we did that and we started to work to create a digital presence online, starting with static content and then moving into transactional capabilities. It helped transform that little business into something that had a much greater future. So that was my first introduction to digital and then never looked back since to be honest. Stephanie: Oh, that's great. What kind of transformations has your career seen since the starting point in the '90s to now? And what does your role look like now at Kellogg? Robert: Yeah, I mean, I've used digital disruption and innovation in all the roles I've had since that position in the UK to varying degrees of impact. When I joined Allied, and I moved to Texas, we transformed that business collectively from a couple of hundred million to 600 million in a very short period of time. Just really ensuring that we unified the sales channels with the digital channel. In the early '90s, or early 2000s was very popular to Ring-fence E-com as a separate channel, and I felt that was wrong. So when we moved to the US I tried to ensure that the unification happens, so it was the best one to punch we could possibly give our customers, we're always on capability with the human interaction. I have used that principle throughout my career to build success. Robert: Ultimately all the way to Kelloggs where now, I'm using technology to create value for our customers, changing the paradigm that was always traditional in sales engagement of how do I get my customers to buy more? Now the principle behind our E-commerce strategy from a B2B perspective, is how do we enable our customers to sell more? And then we will be the recipients of the downstream benefit in due course, and that's a big change in the approach. Stephanie: So what did your first, maybe like 90 days look like? When you came to Kellogg's and you saw the lay of the land, what were some of the initial things that you were like, we have to do this, or have to shift this? What did you do? Robert: Well, the train was leaving the station when I joined Kellogg and I decided to embark on a pilot, a B2B pilot, in Brazil of all markets, one of the hardest B2B markets in the world. So it was an interesting challenge to ramp up very quickly. Now, thankfully that we're using Salesforce Commerce Cloud as the technology platform, which I was very familiar with. So that was okay, but getting familiar with our business model in Brazil, which was a direct store delivery model was a different beast for me. And then obviously with Portuguese language challenges, it was an interesting 90 days, but it was certainly a massive. You know the saying, jump in the deep end and [inaudible] and that's where I found myself. Stephanie: Thankfully you're still swimming today, which we all are glad about. So what does your day to day look like now? And how would I think about B2B when it comes to Kellogg's? Because from a consumer perspective, I don't really think about what goes on behind the scenes. I just go to my local whole foods. I find my cereals and my RXbars, and I don't think about how it gets there or how maybe it gets to a smaller Mom-and-pop stops. So how do I think about Kellogg's B2B experience and B2B2C experience? Robert: Well, I hope the consumer will start to see how B2B is impacting the shopper experience, not directly but indirectly. So as part of our mission, we're trying to use technology B2B platforms to create a conduit where we can influence, educate, and inform and enable our retail, especially our independent small retailers. Not a frequency store or space in particular, to be better store owners and to create a better in store experience. As well as use some of the modern engagement tactics, such as social media engagement to bring more food traffic to their store from within their community. Therefore, strengthen their business and providing a jumping off point for them to become more successful in the future. Robert: So the consumer should recognize that when they go to the store, the store has always got the product they're expecting to find in the store, and if that product is displayed in a fashion that's compelling and it's positioned next to other products, they well, that would be the perfect combination. Then B2B commerce, modern B2B commerce is starting to have an impact on the buying experience. So that's what goes on behind the scenes, and that's what our vision is built around. Stephanie: Yeah. That is something I never think about, is this product positioned next to another one to make a better, maybe make me buy more. How do you figure out what products should be next to each other? And how do you work with the store owners to ensure that they abide by those rules? To make sure that, maybe not rules, but it'll also help them sell more as well. So how do you work with the store owners to creating a partnership? Robert: Well, in the past, it was always through traditional sales engagement. The Lucas success has always been a principle behind how we've engaged our retailers in using planograms and driving compliance around these planograms and the science behind them has been well understood, and the discipline has been in place for a long time. However, the cost of serving and maintain that relationship at a cadence that we need to continue has become ever more challenging. So digital is helping to change that paradigm and allowing us to go back to the long tail and really start to help our smaller retailers to really become stronger and more effective in their day to day life. So we see things like AI driving the intelligence around product recommendations for a store type, for instance. Robert: So if you are an independent store owner and you are in a rural environment where you are a 1,000 square feet and two the cash registers, that we would like to be able to cluster you with other retailers just like you, do the analysis and determine what you must stock, what you could stock and what you shouldn't stock. And then ensure that we're talking to the owner operator on a cadence that would allow us to then do more of that and offer and recommend as consumers trends change. So we're always ahead of demand, not buying demand in the long tail. Stephanie: How do you stay ahead of demand? What kind of tools and technologies are you using to ensure that you're able to quickly react to consumer buying behaviors or inventory levels for the store owner? How do you stay ahead of those things? Robert: Well, you're giving me way too much credit to say that we're actually ahead of those things, we're aiming to be ahead of these things. So let's make sure that's completely clear and we're being transparent, there's a lot of work to do here. So what we see is the ability to take all that historic purchasing information, and then combine it with social listening to see what consumers are talking about, then plugging in triggers like weather and other influences on buying patterns and then continue to feed machine learning and AI logic to build a picture that is constantly dynamic and changing so that we can then say to the customer, the retailer, "Hey, this product is starting to decline its popularity so we're recommending you start to reduce the inventory you carry. And by the way, this product is gaining popularity and we're going to drive a marketing campaign in your market to promote it. So now it'll become a hot commodity, please accept this recommendation and capitalize on that demand and it will happen in the coming weeks." That's what we're aiming for. Stephanie: Do you see the partners being ready to accept that and wanting to stock the products that you're recommending? Are they trusting your guidance or has it been an uphill battle when it comes to those recommendations? Robert: Well, first of all, the primary segment we're focused on is that high frequency store, independent retailer, a C-store, a convenience store that kind of customer segment, and they've been incredibly underserved for many years now. So any insight that we've given them so far, and the questions we've asked them about would it just be of interest, they've all unanimously said, this is what we've been asking for years, please help me grow my business. So I think the appetite is definitely there. Stephanie: Yeah, that's amazing. How do you set up platforms and systems for these different businesses? Because I could see each one needing something a little bit different. So how do you scale that model to provide the data to each company in a different way, or each, like you said, store in a different way? Robert: Right. It has to be done without human intervention to start with, we cannot be responsible for building an army to support such endeavor. So at Kellogg we're really focused on a single global platform, one ecosystem of applications that will scale globally across markets and channels and the customer segments within these channels, with a lower cost of ownership as we scale it out. So that's the first guiding principle. The second end is, if a machine can do it, we probably shouldn't do it. So everything is going to be machine driven. And then by rewarding the owner operators to complete their profiles, that allows us to capture information like, is your store rural, suburban, or urban, gives us another great data point to then create more effective costuming. Robert: And then in these clusters, the analytics can be very powerful and the machine can then start to communicate through marketing automation on a cadence that we could never possibly imagine before, and then touch them with relevant content that is absolutely pertinent to their business. So I would make a recommendation to you and your store that you're missing these two products, you should this and if you do stock these, we predict that you will make X number of dollars incrementally every year thereafter. And that's very powerful for comparison. Stephanie: Yeah, no, that's great. Are there any pitfalls or learnings when going about this partnership model and helping the retail stores that you saw along the way that you would find maybe other companies or brands will need to do this, where you're like, "Hey, we ran into this problem along the way, or this was a big hiccup that other people could probably avoid if you listen to this podcast." Any advice around that? Robert: Well, I think it's going to be the same answer that everybody gives, and that's really focused on education, change management. You're asking people to change their habits. So in emerging markets like Brazil, for us high growth markets, there's a full service that the reps provide to date. And so the store owners are accustomed to doing a particular style of business with us, we're asking them to change that and be more responsive from a digital perspective. Now corporate, for all the bad and sadness that's come with corporate, it has been the catalyst for changing the perspective of many retailers to how they should interact with their brands. So that's been that the silver lining of corporate is it's elevated the position of why B2B could be a very important tool in their growth strategy going forward. And that's changed the perspective of consumers considerably. Stephanie: Yeah, that's a good silver lining. So I saw that you also created a mobile app to reach some of the smaller retail clients. Can you tell me a bit about what problem you were facing and why you thought mobile was the best way to solve that problem? Robert: Well, that's a really easy one is the business tool of choice for small business owners. The internet and the mobile device and companies like Kellogg's are now developing solutions, online solutions that years ago would have been financially out of reach. Now they have all these tools that they can run their business, and that's why mobile is so important to us. Stephanie: Got it. Do you ever feel like you're encumbered by trying to meet your partner obligations or that the experiences maybe can't be what you want them to be because of certain obligations you have with partners? Robert: No, I feel more enabled to be honest, because it's a difficult market. The times are always challenging. So anything that might add value to a relationship, I think it goes a long way to creating a winning business scenario. So don't feel there's any barriers, maybe some adoption challenges that those would have been there regardless. So I feel that there's such a large opportunity to use Ecommerce to change our engagement model, that there're enough partners that have put their hand up and will put their hand up to say, "Yeah, I would love to be part of that because I can see that could create competitive advantage for me and alone I can't do it but in partnership with you, I feel that you could guide us and help us aspire to our own digital endeavors going forward." Stephanie: Yeah, completely agree. How do these retail partners keep track of all their other brands? So I'm thinking, if Kellogg's has their website that you would log into and you would look at the recommendations and get your orders and your inventory and all that kind of stuff. How would a retailer keep track of everything else they have in their store too? Is there like a single source that they can rely on or how do they think about that? Robert: So that's a great question, and it's greatly misunderstood. There is no real lifespan for a single application to serve a single brand in a retail environment. Who in their right mind would manage 50 different applications from different brands? So for two different models, I foresee. So in a mature, disciplined distribution based market, such as North America where most of our distribution wholesale partners have a web presence to date with E-commerce capabilities, we will be looking to integrate into that, to improve the experience in that environment. So think about a store within a store concept, and that would be where I would see brands like Kellogg's and others prospering and allowing the retailer to buy across a broad selection of products available from the distributor, but also to technically punch out to reach my Kellogg experience, where they can see their performance plus with their peer group to get the recommendations that we're offering, being informed about trends and product demand and so forth. Robert: And then if they're inclined to confer upon a recommendation we've given them that product order will go back into the distributor environment to be processed in a normal fashion, thereby allowing them to continue to go about buying other products for the store. Now in markets where distribution isn't as well evolved from a digital perspective, then marketplaces become the answer to ensuring that a retailer can go to a marketplace designed for their customer segment, with brands that represent at least 40% of their shelf. So that there's enough for them to do in one execution to not create administration, but to reduce administration in the procurement of product. Stephanie: I got it, that makes sense. How do you think about working with different platforms? You just mentioned marketplaces and I saw when you go on Kellogg's website, you direct people to go on platforms like Amazon and then also CVS and Target. How do you balance working with bigger stores and retail partners, and then also platforms like Amazon within your Kellogg strategy for E-commerce? Robert: Well, there's a lot of room for improvement on both ends, so in the end you're referring to where the large platforms are in play, there's a ton of up side to improve content, to improved recommendations, to really get deeper integration, that we can take all that learning and insight and present it as a more refined offer list dynamic. Obviously the price part architecture element of ensuring that what we're presenting is something that's scalable and profitable for us, as well is a key factor in these relationships at both ends, of course. I would say that they're not mutually exclusive in the sense that, we can operate in two spectrums here. So in the large platform, but also taking that technology and applying it to enable the long tail to prosper. Robert: Monetizing the long tail is actually, a very worthy prize worth unlocking for every CPG company in the world. And I think that's where the glue on your food is to be honest, we do a great job in most cases with our Walmart's, and our Target's and our Amazon's. We don't do a tremendous job today with a smaller, high-frequency stores as an example. Stephanie: Yeah. That long tail does seem really important. How would you advise other CPG brands to engage with those? Like you said, the long tail? Robert: Do you know, I think partnerships are key. The synergistic product from more than one brand that you could curate into a collective offer, there is a lot of power in that. So strengthen in numbers has always been the case. So I think we could really team up better in the industry to make a more powerful proposition to our retailers, that creates greater value, greater economies of scale, and it's easier to adopt. And I think that's what's missing today because everybody is a little nervous about working together, trade secrets and what if the competition find out. But honestly in my entire career, I've always had a hard time just getting our innovation execution done, nevermind, stealing somebody else's in time. So in reality, it will never happen, but there's an insecurity, that's common to human nature, I guess. Stephanie: Yeah, I see the same thing in startup world where people don't want to share their ideas and you're like, "Trust me, I've got my own stuff to work on, I'm not trying to steal your idea and build a whole nother startup on top of the stuff that I'm working on. Don't worry." Robert: So true. Stephanie: Have you seen any successes when it comes to those partnerships that you would advise others to think about it this way, when it comes to letting people lower down their guards and allowing them to see this could have benefit for everyone, any successful case studies there? Robert: No, nothing is mature as a case study yet. We're still very much in the embryonic stage of developing this strategy. You can see it though in play from time to time when we do joint ventures with other brands targeting the consumer, to be honest. We did last year, we did a very exciting campaign with cheeses and house wine, that was the box wine company. Stephanie: Oh, tell me more about that? Robert: Well, this one is very interesting and very simple, it was a box wine. The box had to be extended to contain cheeses. Cheese and wine, as you know, is a perfect combination. I personally was just eager to get my hands on a box and, yeah, that morning it went live at nine o'clock and we sold everything in about 40 seconds, I believe. So none of us got any, so the power- Stephanie: You're still on the wait list. Robert: It's never coming back, I don't think. Stephanie: Oh, no. Robert: We have to recover from the demand. Yeah, cheeses doesn't need much help [inaudible] as I said, we can't make enough to meet consumer demand. That's a great example of when you can join forces and just make the proposition more compelling. So I see that playing out in the B2B space as well, as I said before, together we're stronger. Stephanie: Yeah. How do you think about what partnerships are advantageous to have? It seems like it'd be hard, and I could see a lot of brands maybe partnering randomly, and you're like, "Ah, that's not really even helpful to the consumer." So how would you think about striking up new partnerships in a way that's mutually beneficial to both brands and is good for a longer term strategy? Robert: Well, it depends what your ambition is, of course. So there'll be different solutions for different approaches. I mean, obviously, we wouldn't partner with a Benjamin Moore Paint brand, there's no correlation. So within the food industry taking snacks as an example, the beverage industry is the perfect partner, beer, wine, alcohol, Cheez-It and Pringles, it's a perfect combination. So the same as for cereal, milk and yogurt, it's a perfect combination. So there's definitely groupings of product where you can see which brands aspire to the same vision, it would be critically important as well. So just because the product has synergy doesn't mean that the strategy is there, you can't force a round peg into a square hole. Robert: So my first checkbox criteria would be, is the digital ambition the same? Do both companies, or do three or four companies aspire to own breakfast across all hospitality in the world? Well, if we do, then we've got a common objective. Now, how do we go about it together is the next step. Stephanie: That's great. It seems like the larger brands too, might have to give a little bit more, or provide a little bit more help to the smaller brands, if they're picking someone like ... If you were partnering with a smaller wine company or something, it seems like you might have to be ready to do maybe the 80% of the heavy lifting, because maybe they don't have the resources or the budget. Is that kind of how you're seeing things play out when you pick partners, that sometimes Kellogg's has to do the heavier lifting to create a partnership? Robert: Yeah. Even with partners with some of the bigger brands we're actually willing to do the heavy lifting. We made a decision with our leadership to own our destiny in this space. So it's from top to bottom, and I do see that small startups in an incubator fashion, we would be a great big brother to get products launched. And we have our own startup business within Kellogg's where we're giving grants to products like Leaf Jerky and so forth, which is a different plant-based product that challenges the status quo of what we felt like Jerky was in the past. So yeah, I could see that there could be a market verticals that we would go after, there might be health club awaited before we joined the Kohler, we were talking about RXbars and examples. Robert: So predominantly through health clubs and so forth, why not probiotic yogurts? Why not non-alcohol based beer? So why not the combination? All plays well to the health industry, so there might be some small companies in there that are pioneering excellent alternatives that we would be, I think, more than delighted to partner with them. Stephanie: Yeah. No, that's great. So Kellogg's is over, they've been around for over a 100 years, right? Since 1906, is that correct? Robert: Yeah, it's correct. Stephanie: Okay. Oh, good memory, Stephanie. So with a company that's been around for that long, how do you think about making sure that the company continues to innovate? Like you said, you have a startup within Kellogg's, what do you see within that startup? What kind of products do you see coming out of that? And would you advise a lot of other large companies to also put on their startup hat to compete with these B2C companies that are all popping up everywhere? Robert: Well, change has become the new norm. I mean, taking COVID aside, people want to taste new things, that is my impression, anyway. I think, there's an appetite for new and more challenging flavors and so forth. So in the food industry, I can see that the innovation around our product offers is actually critical for success. But the innovation doesn't stop there though, we have to be more innovative in how we present these products, how we ensure these products create value other than just in flavor, but in health and wellbeing as well. So Kellogg has always been a very health driven business right from its inception, that continues to be an underpinning philosophy of our company. I see a great deal of passion in our business and investment for innovation. It's not just digital, it's all down to food, not innovation kitchens and the chefs we have, they're inspired to really go find new products. Robert: We do a great job of creating an incubator within our business by constantly searching for ideas within our employee base around what we could do with Kellogg products. So I think you look inwards and outwards there's no stone not worth turning over to find out an idea about a new product. Stephanie: Yeah, that makes sense. When you mentioned marketing earlier, it seems like you would have to market to two different audiences. You have to market to your retail partners and then also to the consumers, how do you go about, maybe within your platform where you're selling to retailers, do you market differently than how you do to consumers? Or how do you think about that? Robert: Well, so now you bring up an interesting subject in the sense that direct to consumer, which could in sense be side by side be B2B, does provide you with an awesome channel to test the appeal of new product, and affordable cost if you engineered it appropriately so that you've got something you can stand up and tear it down quite quickly without major investment. So I don't know if you would really want to continually be knocking on the door of your retailers with new products without having some good market data behind it, to say that this will sell. And so testing that product in market that becomes a critical part of the evolution of the go to market strategy. So I see traffic consumer testing being interesting proposition for companies like Kellogg's going forward. Stephanie: Got it. So you test the product with a market first, and then you go to your partners and say, "Hey, a lot of people like this, you should also put this in your store?" Robert: Absolutely, because that's where we get the scale, and then we can then turn on all of our abilities to cross sale and use some of the capabilities we talked to earlier about in the B2B platform, ensuring that our retailers know how to create success with new product. There's another interesting aspect of that too, so if you'd go back to the conversation around the long tail of retail, these companies, these business owners don't have sophisticated inventory management tool. So one of the biggest challenges we're solving for is ensuring that new products, our products we've recommended for that retail when they're placed that they stay. Because we see a lot of occasions where a new product is being placed or our product from the portfolio that they should be adopting, has been taken. Robert: And then a week later has been sold and never replaced because somebody in the evening has just redistributed product on the shelf to complete the look and that position be lost. And so making sure that these products are reordered and reordered again, until they become habitual, their presence is habitual on the shelf is a massive opportunity so it's not about just new product and innovation, it's also about ensuring the stickiness of product they are placing on a shelf. Stephanie: What ways do you engage with your partners to make sure that they, like you say, keep reordering, have you seen any best practices to stay top of mind with these people even if they do excellent and lose a spot in the shelf. They're like, "Oh, hey, this product actually belongs there." How do you go about building those patterns? Robert: Well, there's also technology becoming available from scanning to just constant recognition. So there are solutions coming, they're not particularly affordable today for the segment we've been addressing, which is the high frequency stores segment. So the challenge has been resolved by manpower up until now, and of course, that's not very affordable. It's interesting when you go to markets like India, if you don't show up something else will steal your space. Stephanie: [inaudible 00:32:09]. Robert: I know, so there's a whole bunch of, I must run ... Making sure that you hold onto the shelf space that you've worked so hard to attain. So we're looking at tools like, asking our retailers to take shelfies using the robot cameras and uploading- Stephanie: Shelfie? Tell me more about a shelfie. Robert: So a shelfie is just, the shelf equivalent of your selfie, in the sense that, we're to set challenges for our retailers and say, "Listen, take a shelf of your cereal display." And then we'll match that image to the planet ground that the AI has in its memory, and then give them a score, and that score will then be translated into points, Kellogg points that they can use for purchasing everything from a discount to cleaning services, say for instance, in the future. So one thing happens in this process, is we ask them to do a challenge, before the actually did their pictures there is a pretty good chance they're going to address any gaps on their shelf. So we see it being a little self serving and helping us get a better position in the store, but also then just educating the retail around best practice and reinforcing that practice. So the look of success is getting closer and closer in the package stores within their reach. So that's just one example, I guess. Stephanie: Yeah, no, that's awesome. That's a really fun example. Have you seen the rewards program that you have actually really incentivize these retailers to, like you said, take these shelfies and engage with your brand more? Robert: No, again, you gave far too much justice. I talk with authority, but we're still very much in the theory and the testing, the technology is still catching up, but we see rewards and we have a rewards engine built into our platform to date. We haven't really turned it on to its full force yet, but it will be a cornerstone of our strategy. We're looking at gamification rewards and recognition as being a key driver of behavior going forward, and creating the path to best practice. So it will be a constant in our engagement strategy, so at eight o'clock, nine o'clock at night, we'll be connecting with an owner operator of a store through WhatsApp or email or text to say, listen, we have a challenge for you, and this challenge is worth a 1,000 Kellogg points. If you go and take that shelfie or if you can tell us, answer this question about the new product you recently stocked, did it sell out, did customers come back and repurchase? Did you get any feedback in any shape or fashion about the flavor? What did they think, and reward them for that first party data insight. Robert: Now, all of a sudden you've got this incredible ability to harvest information that could be invaluable to your R and D teams. At the same time, you've got the opportunity to influence best practice and take the customer on a journey, the customer being the retail owner operator on a journey to become better at their craft, which is super exciting to us. Stephanie: No, that's really awesome. It seems like there'd be room to build a community among these store owners, to all do the challenges together and to talk about best practices. Have you all explored that? Robert: We're exploring it. We're definitely exploring it. So it came from, when we looked at one of our customer's segments being a K through 12 schools starting here in North America, there's a lot of schools that are rural. They're isolated, they don't have large school communities to support them, and there's so many challenges that they face from allergies and health and nutrition, taking food and making education subject matter. All of these things we're looking into to say, okay, so our community together would be again stronger. So connect schools that are similar together and then connect schools that are not similar and let them use our product as a teaching aid. So we aspire, this is long away from happening. Robert: So please don't take this as something that's been executed today, but we can see that sometime in the future, we'll create a syllabus around corn and our cornflakes and how it changes the flavor of patterns in Japan compared to Idaho, and then to schools when their kids are having their breakfast, they can share the differences in the sweetness and so forth because the [inaudible 00:36:46], the climate is different so that the plant takes on a different flavor. So that's a subject that you could turn into a syllabus and education and bring kids together. Yeah, it is a very exciting proposition for us and different from anything we've ever done before. Stephanie: Yeah, that's awesome. And I did not know that flavors around the world would be different. So you definitely taught me something brand new here. Robert: Yeah. We've done a few things at Kellogg's in the office in Chicago where they've taken five or six or seven different sources of cornflakes and put them all in independent bowls unmarked, and then tasted them and people were convinced that sugar had been applied and so forth. And it actually hadn't, it was just that the different produce, produce different flavors and it was quite an epiphany for many of the folks tasting them. Stephanie: Yeah, no, that's really interesting. So when it comes to your B2B platform, what are some of the best capabilities that you're using today that maybe you weren't using a year or two ago? Robert: Again, cornerstone of what I'm trying to do with the B2B platform is create efficiency, and so to create efficiency, the first thing I'm trying to tackle is preventing any waste of time as it pertains to identifying a product. So we are integrating scan into the mobile device, using the mobile device camera, quickly scan that barcode it will take you straight to the product in our platform. So no need to key in, no need to type in the barcode or any keywords that are associated, just quick scan within less than a second you're on the product detail page, and you got a path to purchase with one click. You've got a path to understand your performance versus your peer group with one click. And you've got a path to understand how to sell more by accessing the tools that give you the toolkits that will help you do that. So that's, that's one aspect. Robert: The second aspect is to create value around ensuring that big data is conferred into some form of exportable logic that says that, hey, you are not creating the optimal product assortment. Companies, businesses, stores, like you sell these products successfully, and you're missing revenue as a result of not taking them. So here's a recommendation for these products. Here's the stocking quantity that we believe you should take. And here's a revenue projection based on MSRP from the class that you belong to that. That to me is transformational in so many ways. Stephanie: So are you using AI behind the scenes to create a lot of these recommendations? And do you think a lot of brands are also doing this or is there a lot of room for them to adopt to this technology? Robert: Yeah. AI is the key to success. So we've talked about AI for several years now, and it has really not delivered what it says in the box as of yet, but I am a 100% confident we're getting closer and closer all the time. Anybody that's been getting with AI knows that a lot of teaching into the logic that supports the output, but we're definitely getting closer to being able to use it at scale. What I see in the next year to 24 months will be the ability to then turn on that dynamic, self-sustaining logic that continues to morph as it reads more data and continue to present very tailored recommendations to all of our retailers worldwide, simultaneously because the computing power, obviously, continues to scale at an exponential rate. So it doesn't do necessarily what it needs to do today, but the path is now clear, and I think it's just around the corner, to be honest. Stephanie: Yeah, no, I completely agree. Are you all training your own models for AI? Are you relying on a platform to help you with that? How would you recommend another brand or a larger or smaller brands to start adopting this technology or start experimenting with it? Robert: Well, there's a lot of data scientists that they're all better actor than I am for sure. Stephanie: Sure? Robert: Yeah, I'm absolutely positive. So we've been looking outward to smaller businesses, as well as some of our larger partners to use their experience. Because clearly they see the opportunity too, so I would continue to just make sure that you're using a blend of traditional partnerships and innovative new businesses that come up with some left-field idea about how to resolve one of the challenges. Constantly looking for new ideas from the marketplace, from the periphery where there's new startups starting and looking for an agent, they might have a great concept that we can use. I often equate it to something you might see in a Paris fashion show where coming in the the runway is a presentation that could be quite outrageous, but some form of it we'll get to the high street that will be very popular with the consumer. So a really wild idea can really translate and be boiled down to something that can be a game changer in reality. So never assume that it has to be something that's already in place, but to be open to suggestion and I try and work on a daily basis to be that way. Stephanie: Yeah. I think that's a really good lesson too, to look at tangental markets and industries that could also help influence not only new products, but also E-commerce strategies and just like keeping tabs on what other people are doing, especially startups who are moving quickly and experimenting quickly. How do you keep tabs on companies like that stay up to date with what other people are trying? Robert: Well in prior lives, working for brands that were less recognized, it was on me to continue to search and find, and encourage my team to continue to look for these innovations. Working for a brand like Kellogg's, there's a lot of people come calling. So I'm obviously in a fortunate position to be exposed to a lot of these ideas on a day by day basis from various entrepreneurs. I feel that Kellogg's could prosper from taking on the idea so that role has changed. So I'm very fortunate in that regard to be exposed to great ideas across the industry and not just from within the food and beverage industry as an example but from sending an upturn to, you name it aerospace, there's a lot of innovation going on. Stephanie: What is definition of success for E-commerce? What kind of metrics do you look at? What do you think is successful? Robert: Yes. Okay, so none of the traditional metrics are really going to be of any interest. So for me, the success has moved upstream. So when I think about what does success look like from a digital perspective in B2B, it's very much around ensuring that the retailer is selling more products more effectively and more efficiently, and putting more money in their pocket. So if I can look back and say that all the retailers that we supply our products are prospering as a result of our E-commerce engagement, because we're delivering not just the fundamentals of E-commerce, which is about auto management and everything else that comes with it. That's just table stakes, whatever else comes with it, where we create the value through AI recommendations, access to toolkits, marketing campaigns, guidance on how to create the perfect store. If that's translating into more dollars at the point of sale, then that's what success looks like to B2B commerce going forward, in my opinion. Stephanie: Yeah. It seems like that partnership and education is really important in B2B, have you guys seen success with doing that? Robert: Well, again, I wish I had something much more tangible to give you in terms of the successful metrics. This is still ground zero, we're still very much in day one of our B2B engagement. I think you will find that modern B2B is still in day one globally across both industries. So there's still a lot of learning, a lot of testing, a lot of refinement to do, but the appetite is there. When I talk to other brands, they feel the same way about how we can harness technology to create value. The retailers I've talked to they are hungry, and so is our distributor and wholesaler partners too, to participate in this new era of one-on-one engagement at a scale that's affordable and on a cadence that has never been achievable before. Just that combination of menu items is really driving the hunger to get to that point quicker. Robert: I wish I had to go quicker, we're definitely trying to get there quicker, but it just takes time to build. And so ask me again in six or 12 months, and I'll be in a far stronger position to give you a better answer. Stephanie: Oh, you've just invited yourself around two. So with things changing so quickly, are there any new or emerging digital channels that you all are focused on or trying out? Robert: Again, comes back to just watching and keeping an eye on how things are changing, an example would be, for instance, say WhatsApp for instance. So WhatsApp starts life as a messaging tool, becomes incredibly popular worldwide, supplanting email, phone, texting everything. Now WhatsApp is developing your online ordering capability that will potentially change the trajectory of B2B commerce. So we're watching it very, very carefully, but there's a caveat, there's so much low hanging fruit in just doing what we already know, we can do better in B2B commerce. The WhatsApp example would be a very shiny object while we still need to continue to look to shop opportunities, we need to temper our enthusiasm to be distracted, it can be a distraction. We know that there's enough revenue potential just executing our primary mission without chasing rabbits down holes. Robert: I don't want to be the anti-innovator, but there's got to be a balance. So I use three words to caution myself, stop, better and clever. Stop doing things that create no value. Identify what you do well, but do it better. And say Friday afternoon is for the clever things. So Friday afternoons are dedicated to it, but don't let it become all consuming and that's how I approach this. Stephanie: That's great. That's a really good lesson, Friday afternoons with a beer maybe then you're even more creative, right? Robert: Why not? Yeah, certainly, my wine consumption during COVID is gone up tremendously. Stephanie: I think everyone else. So are there any B2B commerce trends that you're excited about that are coming down over the next couple, well, maybe even in the next year? Robert: Well, I just think the fact that the chatter around B2B has climbed exponentially in the last three or four months, is exciting. I'm super excited about what machine learning can do for scale in just enabling us to do the value added services that we've aspire to do, but couldn't execute because of the cost. So these two elements that B2B is becoming a cornerstone of business strategy, and it's not seeming to be as a poor cousin of B2C, B2B can be sexy. We're taking all of the goodness from the user experience and applying it, but then with this logic, that's data driven it's hard to turn down when we recommend products to a particular owner operator that I've got a revenue projection associated with them, that's a hard proposition. Plus we're giving them an award for accepting the recommendation. If that recommendation comes and was close to our prediction, then I think conversion could be a 100% going forward. Robert: Now in digital, we usually have 2% conversion and an action was great, a 100% conversion, wow, that's perfect execution. What does that do to the industry? Truly transformational. Stephanie: Yeah, I completely agree. So when it comes to implementing technology and stuff, because I think, like you said, a lot of people and a lot of platforms are focusing on B2B now, it is a new player to look at where B2C was maybe the sexier area before. How would you advise other companies to think about onboarding new tech technologies and tools in a way that sets them up for longterm success? Robert: Well, first of all, think scrappy. You can't innovate with the mindset of perfection. Large companies, I think suffer more than small companies, of course, there's a procedure and there's an ROI calculation, and there's a certain set of expectations. Especially when you're dealing with technology that can't quite deliver on the initial promise, but you have a fairly competent perspective on it, we'll get there. So you have to be a little ashamed of what you take into market, because quite frankly, in my experience, you see the flaws, whereas the target audience does not. They see something different, something value added, they know it's a work in progress, and they can see it resolves a pain point. It removes all of the inadequacies of what you didn't do as a result of getting to market quicker and testing a reaction. So that would be my recommendation. Feel a little ashamed, to be a little ashamed about what you go to market with initially. Stephanie: So is there anything that we didn't cover that you want to cover before we move on to the lightning round? Robert: Oh, no, I didn't know there was going to be a lightning round. Stephanie: Yes. There's a lightening round. Robert: That's a little scary. Stephanie: Yeah, anything high level, E-commerce trends, the industry that you're like, "Man, I really wish Stephanie asked this question and she just didn't." Robert: No, I don't think so. I think we've covered off the fact that, I think the biggest thing that's missing in the industry is that more collaboration. I think collaboration is going to be a game changer in terms of driving success. So that's what I'm seeking to build through networking and working with other brands to try and find some common ground we can explore in. So if anybody is interested, please reach out to me and I'll be happy to partner. Stephanie: Yeah. I completely agree. That's great. All right. So the lightning round brought to you by Salesforce Commerce Cloud is where I ask a question and you have one minute or less to answer. Are you ready, Rob? Robert: No. Okay, I am. Stephanie: All right. You're ready. What's up next in your cereal bowl? Robert: Oh my God. No, Scott's, it should be porridge, but it isn't. I like porridge, I'm a diehard Frosties guy. I don't know, there's not a bad time in a day to consume Frosties, so that's what's always in my cereal bowl. Stephanie: I agree. It's a delicious choice. What's up next on your Netflix queue? Robert: Netflix, I just finished watching Altered Carbon and it was a book that I'd read, three books I'd read many, many years ago. And it was actually a really good rendition of the novel. So I thought it's Sci-fi is very forward looking, it's probably what you'd expect me to watch, but I thought I enjoyed that series. Stephanie: Yeah, that sounds great. What's up next on your podcast list or audible? Robert: Yeah, so podcast, during COVID, I mean, I listen to a lot of podcasts, especially at nighttime and I've started to rediscover Vinyl. So I've become a bit of a pseudo audio file or want to be, at least I fought the big stuff, but I'm working my way into. So I started to listen to Vinyl's audio file podcasts, which have been fantastically interesting, but suddenly they're talking about technology I can't afford or justify. My wife keeps a very close eye on me, so sorry- Stephanie: Oh, man, so rude of her. Robert: I know terrible, isn't? But logical, she saves me from myself. Stephanie: That's good. Yeah, that's really fun. Well, if you were to have a guest on a podcast of your own, so if you were to have The Robert's podcast and you want to bring on your first guest, who would you bring and why? Robert: Oh, that's easy. That's easy. I am a big soccer fan from the UK. And one of my idols is Alex Ferguson. I would love him to be my first case on a podcast. He has such great insight into leadership, management, the stories he has. He would be, there's an entire encyclopedia of subjects we could discuss, and he's an idol of mine. Stephanie: That'd be a fun one. I would listen to your podcast. All right. The last hard question. What one thing will have the biggest impact on E-commerce in the next year? Robert: One thing, I think, changing the culture within companies to really embrace innovation, not to necessarily wipe the investment and make a net positive operating gain in the short term but to be more risk orientated. I see a lot of challenges around investment strategies and payback periods and so forth, and it really does slow down our ability to go to market. So if we can get to a point where there's an acceptable investment tolerance, and that will obviously vary by company size and profitability, then I'd like to see more about an entrepreneurial approach to taking that startup fund internally, and going to market with it, improving success or a failure. In Kellogg's we've done a tremendous job recently of celebrating failures. Robert: We've even have an award, for the peace of the award for failure. So it's a transformation that's underway, but we still have to get more comfortable with capital investment that can be used to experiment rather than the business case that supports it longterm, which will come, that will come when we determine what the metrics are or what the levers that work that can be expanded upon and so forth. So that's what I'm looking for. Stephanie: I love it. You are a lightning round expert, so nice job. Well, it's been a blast having you on the show, where can people learn more about you and Kellogg's? Robert: Well, they can see my profile on LinkedIn, obviously, I'm not a big social media user today. So reach out to me through LinkedIn and I'll be happy to engage. Stephanie: Awesome. Thanks for coming on the show, Rob, it's been a blast and we will have to bring you back since we have an invitation now for round two, we'll have to bring you back in the future. Robert: That was a mistake, wasn't it? Stephanie: No mistake, we'll have even more fun then. Robert: I look forward to it. Thank you very much for having me on. It's a great pleasure. Stephanie: Thanks.
Chad Ledford likes to say that his Ecommerce journey started with a van and a fax machine. And it’s true. Chad has gone from selling socks out of a van to building one of the first and only online sock-sellers in the early 2000s, to his gig now, as the co-founder of AddShoppers, a company that was named one of the fastest-growing startups in Charlotte for two consecutive years, and an application installed on thousands of eCommerce websites There were obviously many twists and turns on his journey, and he explains them all on this episode of Up Next in Commerce. But the main idea that drove Chad throughout his winding road was the idea of diversification. Long-lasting success only comes through diversifying marketing platforms, acquisition tactics, and communication channels where you can build those coveted one-to-one relationships with customers. He explains it all here. 3 Takeaways: Anything that allows you to build a one-to-one relationship should be valued above others. Be willing to experiment here to maintain customer relationships Be open to new and emerging channels and be ready to quickly experiment with those platforms so that you can be a first-mover and gain market share More and more publishers will soon invest in creating their own platforms, thus lessening the reliance of major consumer channels like Facebook and Google For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey, everyone, welcome back to Up Next in Commerce. This is Stephanie Postles, your host, and today we have Chad Ledford, co-founder of AddShoppers. Chad, welcome to the show. Chad: Thanks for having me. Stephanie: I would love to dive into your background a bit, because it seems like you've had a really interesting background, and getting into ecommerce, I want to hear all the stories around that, and how you got to where you are today, if possible? Chad: Yeah, you got it. I like to say that it started with a van and a fax machine. So, to give you a little background, my grandfather who raised me has been in the hosiery industry for the past 25 years, so he kind of introduced me to just entrepreneurship in general, but whenever I turned 16 I took one of his vans and loaded it up with socks and went door-to-door to small businesses to sell the socks. So, I did that pretty much throughout high school, saved up enough for college, and then whenever I went to college, my freshman year I didn't do a whole lot, played probably too many video games, but it really introduced me to the internet. Chad: So, my sophomore year I started to get the itch around trying to make money again, and that's when I basically took the socks that my grandfather had, and then put up my first ecommerce store. It was built on Microsoft's ecommerce platform, I don't even remember what it's called today, but it was back in the early 2000s. We just put up a couple SKU's, I gave my grandfather a fax machine, put a fax machine in my dorm room, and then as I would get orders I would fax it over to him, and it would print the labels off for it. Stephanie: Oh, my gosh, that's amazing. So, what kind of socks were they to be selling like hotcakes like that? Chad: Yeah, it was pretty much every type of sock. So, I think Bombas has probably made it cool, but at the time we didn't really have a brand, it was just socks. It was like ankle socks, or crew socks, but nobody else was selling them online at the time, so we got really good at the search marketing side of it. If you bought socks in the early 2000s, you probably bought them from us, because we were number one on Google for the keyword socks, and- Stephanie: Wow. Chad: Yeah, it was kind of a fun adventure at the time. Stephanie: So, was your grandfather any bit hesitant to go online, or work with his grandson? What was that like working together? That sounds, yeah, just really fun. Chad: Yeah, he was really supportive early on until it got to be too many orders that he didn't want to do it anymore. So, he basically said, "We have to find someone else.", and then that's when we got introduced to the idea of dropshipping. We basically just needed to find somebody that wanted to handle the capacity, and then that's when we learned about dropshipping, and how that fits in ecommerce. Stephanie: Wow, so you've definitely seen it all from the very start. What are some of the biggest shifts that you remember where you're like, "Man, dropshipping used to be like this.", or building up a website I remember silly things that would be super hard. What were some of the things that you remember from back in the day that just kind of look silly now looking back on the processes that you were doing, or the things that you were undertaking? Chad: Yeah, I think whenever we started doing it we were just thinking about it more from like a tactical execution standpoint. But what I mean by that is we could basically put up a site, put some products on it, and then we could rank for it pretty quickly. We weren't really focused on creating a brand, we weren't really focused on lifetime value, or how do we kind of cross-pollinate between multiple brands and things like that, it was really just how do we rank number one for this thing, and then push as many orders through it as we can? So, I think part of that is just being young and figuring out what business actually means, and how to maximize lifetime value. Chad: But at the same time, just the shifts that we saw, search was starting to gain more momentum, and more people were going online to start to look for things, and that's when we started to see the shift from retail dollars going a little bit more online, obviously that's accelerated a lot recently. But yeah, it's just kind of interesting, at the time we just saw it as a way to make money, but now kind of in hindsight it was a bigger shift that was happening with people, and people wanting to get more convenience, and better deals, and things like that. Stephanie: So then what brought you to co-founding AddShoppers? At what point were you like, "This is something I want to do."? And could you give us a little background on what AddShoppers is? Chad: Yeah so, that first business, 3tailer, was really built around Facebook. Whenever Facebook made a change to their algorithm we had to react as fast as we could to try to keep up. So, whenever we started AddShoppers ... we tried to be a little bit ahead of the market when it came to social media. Again, this was before everybody had a Facebook profile, and Pinterest was just sort of coming online, but we saw that a lot of people were spending time there, and a lot of people were engaging there. Chad: So, the first version of AddShoppers was to try to figure out what was happening inside of social, and is it driving sales for people? So, it was mostly an analytics product that a brand could plug in and it would tell them if a social channel was driving sales, and if so kind of break that down and tell you how and why that was happening. But the thing that we were trying to solve is diversification of revenue. We had the 3tailer business, which was really built on SEO, but we saw social kind of up and coming, so we wanted to figure out how to monetize that and drive sales for our own business. Stephanie: Wow, that's great. It seems like you guys were definitely very ahead when it came to spotting these trends, and seeing something that could get big, and starting to offer solutions around it to give deeper data insights for that. How did you realize that was a problem for companies back then, when I doubt a lot of companies were like, "We need access to the data, we need to do more with it."? I mean, now it seems obvious, but back then were you getting customers who were looking for help around that? Chad: Not really, it's just what we felt through our business, we had felt the revenue impact. We didn't have a wholesale channel set up or a physical in-store, so whenever something changed online we had to be on top of it to figure out what was going to happen next, and as social was kind of coming online we saw it as an opportunity. So, it wasn't a stroke of genius, it was we had to to survive, and that was the main reason that we focused so intently on it. Stephanie: Very cool. So, what does AddShoppers look like today? How has it evolved? Chad: Yeah so, similar to the early days of search marketing, Google kind of won the market, and then same thing happened with Facebook, Facebook won the market. At the time when we started it there were probably about 20 different social networks that we were kind of tracking, and figuring out how to drive influence on, but once Facebook became the clear winner it was obvious that the same things were going to start happening, Facebook was going to make changes, that was going to impact people the same way that search did for our business. So, we decided to look into other channels, and more specifically we wanted to looking into channels that don't change often. Chad: The ones that don't change often are usually kind of the baseline architecture of the internet, it's the open protocols, basically email, or SNTP, being able to send a message to someone has been around since the internet started, and as much as people have tried to kill it, it's still one of the top channels, and it's one of the few things that a brand can really own and be able to have that direct communication with a client without having to ... or with a customer without having to pay some sort of an ad tax, or CPM to really get in front of those people. So, today our solutions are really focused on creating ways for brands to tap into those open protocols a little more of like email, and being able to message a customer directly without having to go through the big guys. Stephanie: Got it. So, how do you get those emails? Is it something that a brand could already access, or what does that look like? What problems or pain points do the brands have when they come to you? Chad: Yeah so, most digital commerce brands realize the value of email today, especially whenever it comes to retention and lifetime value. So, the conversations are a little bit easier now because they understand that it is a really strong channel, and it's one that they have to defend, but most brands can only tap into what's considered first party data. So, first party data is data that the brand captured themselves. So, a lot of people build up emails from popups, or they capture it during the checkout process or things like that, but that usually ends up being anywhere from like three to 5% of their traffic that they've spent a lot of money to get to their site that they're actually able to capture, and be able to continue creating that relationship with them. So, the problem that we help solve today is tapping into that other 95% of people that are on the website, people that haven't given them their email address yet, but they're still showing a lot of engagement, and they probably still want to try to get those people to be their customers. Stephanie: Got it, so the people who are just casually browsing, or maybe added something to the cart and then left, the people like that who didn't directly give the brand their email, but maybe seemed kind of interested. Chad: Yep, exactly. Stephanie: Very cool. So, one thing I've read a bit about is that you said brands have been over-reliant on Facebook and Google when it comes to customer acquisition. How do you envision sellers getting around those two giants? If that's a main channel like you mentioned, like they're dominating the market, how should a brand find customers if they're not going to rely on those two areas? Chad: Yeah, I don't think they should neglect those. I think they need to figure out how they can push as much volume on those as possible profitably, but as a lot of D-to-C companies have seen more recently, as everyone starts to do that, it gets more expensive for everyone, because it's an option. So, it's more about creating diversity in the revenue streams, and it's more about just creating a closer relationship to the customer, and the ways to do that is through one-to-one channels, or really any kind of open protocol. So, if email is an example, another example is SMS, push notifications, direct mail, really anything that can kind of get you one-to-one with that customer and really build the relationship. Those are the things that should be valued a little bit more. There's ways to do it where it's not scary, and you can track the revenue quite easily. So yeah, I would say that diversification of the revenue is really the big thing, it's not just about avoiding working with the big guys, but only using them as much as you need to. Stephanie: Got it, that makes sense. So, what are some maybe, not a case study, but an example of a brand who came to you and diversified their channels to start maybe using ... texting is one thing that a lot of people have come on here saying they're thinking about or they are experimenting with sending texts to customers or potential customers, but they're not always really sure how to check that or how to measure the results. What are some maybe examples where you've seen that work well, or other channels that have worked well that maybe a brand normally wouldn't have explored? Chad: Yeah, I think the one that comes to mind it's a pretty big omnichannel retailer, they have about 50 locations and they sell sporting goods. I don't know if I can share the name, but basically- Stephanie: That's all right. Chad: ... they did a lot with the traditional advertising, so they ran local TV commercials, they ran local radio ads, and then they did a bit on Facebook and Google mostly around retargeting. They didn't really see those things as kind of top of the funnel activities, and because of that they basically relied on it for retargeting for the most part. So, they were basically spending on these offline channels, and then they were using digital as a way to retarget and try to convert those people, because it was the only way they could tie together the conversion of, "Hey, this person is on the website, and they just bought something.", and they could pretty much always get like a 10 to one return on ad spend. Chad: So, for them, they were kind of stuck in this omnichannel box where they couldn't do additional things for branding or impressions, because they didn't have a great way to track it, so whenever they started working with us, we helped them expand out into these other channels where they were still able to get a guaranteed 10 to one return on ad spend, because we were using things where we didn't have to buy media, like email and some onsite personalization things that we did for them. Today we don't have an SMS product, it is on the roadmap, along with push and a few other products, but really the email is still one of the biggest revenue drivers that we found for clients. Stephanie: Very cool, and do you help with looking into the data after you start these campaigns for the different brands and whatnot, because I know before we were recording you mentioned that you're really big into data and you love diving into that, so how do you incorporate that into the product, and with your clients? Chad: Yeah so, for us, there's two kind of chunks of data. There's the first party data, which you'll see in like Google Analytics, or if they have a CDP they can kind of analyze what their specific customer base is doing. The data that gets us really excited is network data, what's happening across a huge chunk of people. Our network sees about 200 million people each month, and kind of what they do throughout that purchase cycle, and then what they're actually responding to. So, whenever we think about data it's more about the overall trends and how you can change a visitor's behavior by creating a nudge, or creating some sort of incentive or offer to actually get the person to come back and convert. Stephanie: Got it, how do you have that big of a network, and how are you able to kind of see what people are doing? Chad: Yeah, so there's kind of two data sources that we have. One is a blind co-op, which I would say half of our clients are participating in that, and the blind co-op is the brands submitting data into it in exchange for being able to use the data that comes out of it to activate the campaigns. We don't sync data, we don't actually put data into another system, it's all self-contained within our system, but about half of the volume that we see comes from that co-op of data. And then the other half comes from publisher relationships that we have where we license the data, and again, we don't sell data, or we don't push data out of it so that users can still control all their data, but it gives us additional scale so that we can start to match who these people are. Stephanie: That's awesome. Was there any hesitancy with the brands sharing their data initially, or is it a little bit easier once they heard that other brands you were working with were already doing that? Chad: Yeah, we offer both. If they want access to the co-op data, they have to be part of it, so they have to submit to get access to it, that's basically what makes it the co-op. So, they can still work with us, and they can still tap into that publisher data, and a lot of the enterprise brands that we work with will never submit any data to any other system including us, and it's just off the table, it's not going to get through legal. We can still work with those brands, we just do it through our licensed publisher data. But the thing that gets us really excited is that idea of the co-op, and the brands being able to work together to do more together. Stephanie: Yeah, that's really cool. What's some of the most interesting things that brands have seen when they utilize the co-op data where they're like, "Oh, I never realized this or that."? Have you heard any underlying themes from these brands where they're getting access to something that maybe they never even knew to look into before, or had enough data to see that trend? Chad: Yeah so, we're still pretty early on the insight side of this and being able to open up things that they haven't been able to learn on their own. I would say we're a lot further along on the activation side of the data, so being able to actually perform a campaign that drives incremental results. So, just as an example, whenever we send out browse abandon or cart abandon emails, we end up sending about five to 10 times more emails than they're able to send internally. So, if a brand is sending out like 10 cart abandon emails a day right now, we'll probably send 50 to 100 of those by leveraging the data that we're tapped into, and then the benefit of that is revenue and less cart abandonment. Stephanie: Yeah, that's really cool. How do you guys identify shoppers that maybe were unknown before? Like if a brand couldn't identify them before, how are you all able to identify that shopper more easily? Chad: Yeah, so the core technology that this is built on is called deterministic identity resolution. It's a little bit of a mouthful, but Facebook has the biggest identity graph which uses deterministic identity resolution, and the way that it works is pretty simple. You, as a user, you've signed into Facebook on your phone, tablet, laptop, all of these various sources, and as you've done that, Facebook has given you an identifier, your Facebook ID, and then it's linked that to the different devices that you've done it on. So, our system works the same way, if you go to a publishers site, and you use an email address, our system encrypts the email and hashes it, and then we link that to the device that you do it on. Chad: As you do that across a network of devices and different publishers, that's how we're able to link an individual, or a hashed email, back to the actual devices that belong to that person. Once you have that link, then you're able to perform different types of marketing campaigns. So, what we're doing is actually no different than what Facebook and Google are already doing, except we activate the campaigns differently. Those guys, you can only get access to that identifier if you buy media through them and if you show an ad on Facebook, or across Google's display network. Ours lets you do the same thing, but we're doing it across open protocols like email, and SMS, and other channels. Stephanie: Ah, got it, and are you able to create like a shopper profile once you have all that data to then know how to maybe personalize your messaging to them, or really cater to that buyer who left? Chad: Yeah so, we don't append a lot of data to the actual identifier currently, mostly it's just the actual product that someone looked at, just so that we can dynamically include that product inside of the email, or anywhere else that we want to kind of push that product data to. So, we don't include anything like gender data, or demographic data, anything like that, right now it's just the email to the identifier. But as we continue to grow the dataset then that starts to get more interesting, and that's what's going to enable opening up insights and things like that. But today, we're really just heavily focused on the use case of kind of winning back those lost people using this unique dataset, and then from there we can start to append additional data to it as we go. Stephanie: Got it. It seems like there'd be a lot of new customers coming to you with this new D-to-C movement and a lot of people getting online really quickly now, especially with everything with the pandemic going on, have you seen a surge of customers coming to you and saying like, "Chad, help me. We have a bunch of people now visiting our site, and we actually don't know where they're coming from, and how to bring them back."? Chad: Yeah, most of our business is still driven through word of mouth, or through our agency partnerships. So, it's definitely been an influx this year, we're growing probably 20 to 30% month over month right now, just given- Stephanie: Wow, nice. Chad: ... everything that's been going on. So, it's a pretty exciting time, and it's awesome to see people looking outside of just Facebook and Google to figure out other ways to monetize. Stephanie: Yeah, that's awesome, congrats, that's great numbers, of course. When these brands are coming to you, are there any blind spots that you're like, "You obviously are missing this.", that a lot of larger brands just haven't looked into before? Chad: So, larger brands have a harder time kind of doing the up and coming things. Obviously they have a lot more things like infosec and legal that they have to go through. So, my only criticism of big brands is just that they don't test enough or fast enough, it's more about just speed of iteration. The space that we're in, digital commerce, it changes so fast, and by the time you're doing something that everyone else is doing you have to pay a premium for it. If the bigger brands could just get a little bit earlier in the adoption cycles of things, then they would be able to capture more market share and more of a customer base, and not have to worry so much about the D-to-C guys. Chad: But that's really the biggest difference between the big brands and why D-to-C's continue to capture more market shares, because they iterate so much faster and they test so much faster. So, my only feedback to big brands would be to figure out how to do it faster given all the internal constraints, and if you can figure that out it's not about finding one silver bullet, it's just getting through those iterations a lot faster. Stephanie: Yep, yeah, I definitely have seen that in practice before with having to go through a million approvals just to get one website, or one bug fix, or whatever the case may be. I'm thinking though right now might be a great time where brands have kind of broken down some of those barriers, because they had to move fast because of everything with the pandemic going on, they had to quickly stop campaigns, start different ones. I mean, so much has gone on over the past couple months, have you seen that on your end where it's shifting needs, and shifting a pace that maybe they weren't ever acting at before? Chad: Yeah, there's really kind of three camps that we're seeing play out. One is sort of the travel camp, which is at a halt, nothing's going on, and then at the other end of that is food delivery services, or really any kind of online education, which is just exploding, 400 to 600% over what they were before, and they're just getting hit so hard that they can't take on any additional projects for lack of resources, they're just trying to keep up with what they have. But then there's kind of this sweet spot in the middle of brands that are growing, maybe they're growing like 20 to 100% over where they were last year, and they're starting to hit kind of those Black Friday levels that they were at in Q4. They weren't really ready for it, but after the first couple months of this, I think people have started to realize this is probably going to maintain, and those are the brands that are really kind of what I see is capturing a bulk of the D-to-C movement right now. Chad: The guys at the other end of the spectrum where they're just getting hit so hard, yeah, they're winners but all the other competitors are also winners. So, we don't really know who the winner is out of all the winners yet, but in kind of that middle range, those guys that are competing in the middle, and still getting pretty reasonable growth rates, the ones that are getting another 10 or another 50% growth because they are able to iterate a little faster, those are the ones that are going to come out the big winners in their categories. Stephanie: Yep, yeah, completely agree. It'll definitely be very interesting to see who sticks around, because it seems like a lot of these trends, and I know it's been debated for the past maybe month of like what's going to stick, what's not going to, I think the data's coming in now that quite a bit of it seems like it's going to be here for the longterm. Do you have any thoughts on what's going to last trends wise, and what's going to maybe revert back to how it was a few months ago? Chad: Yeah, I think the ... we've just been kind of playing it out month to month. I think we're assuming that half of all the growth is probably going to stick. So, if you were doing $100 last month, and you're at $200 this month, then your new normal's probably 150. Maybe that's conservative or completely wrong, but I don't know how else you'd model out in this world. I think it's definitely inflated right now, but I don't think it's going to go back to where it was, so we just kind of picked the middle of the road there, and assume that half of it's probably going to stick. Stephanie: Yeah, no, that's probably a good initial methodology to use. I think one thing that's always interesting is looking at what's happening in China. I think I was reading about the Starbucks app how maybe it went to 85% usage from maybe 10% or something like that, and then it dropped back to, I think, like 33%. So, it showed that, like you said, it was inflated at a certain point, but now it was a huge channel shift to more people never probably going back to waiting in line, and ordering at the kiosk, or whatever it may be. Same with Philz here, I ordered online, or through the app a few times, and I'm like, "Why have I never done this before? Why do I walk up and stand in line?" It feels silly now. So yeah, I agree, that's probably still a bit inflated, but there would be quite a bit of a large shift that maybe not everyone's anticipating. Chad: Yeah, and the lifetime value approach to this, or figuring out how to get retention right is really going to determine the winners out of it. I think a lot of people are doing it now because they have to, so they're getting exposed to different things like an app, or they're buying something online for the first time, but if the experience is better than what they did before, they're going to keep doing it and then you can create the new behavior. But if the experience is worse, then they're going to sour on it, and then if it's not any better than what they were doing, they're going to go back to it. Chad: So, part of the onus is on the brand to really own that, and this is definitely a window of opportunity for every brand to get in front of more customers, and to acquire a customer for a little bit less, but the more that they can just focus on creating that great experience the easier it's going to be. A perfect example, we ordered a couch from Costco, like some outdoor furniture, and they shipped the complete wrong set to us, and it's still in our driveway after three weeks, and they haven't replied yet- Stephanie: Oh, my gosh. Chad: ... so it doesn't make me want to buy from Costco online- Stephanie: Oh, no. Chad: ... instead of just going to Costco. But yeah, any time that those kind of scenarios play out to the customer, they sour to that experience from that brand. Stephanie: Yeah, I'm trying to think of ways of how brands can rise above the noise, because I think through all the push notifications I'm getting right now, and some of them are helpful to keep them top of mind, I think it's like Uber Eats, and DoorDash, they're sending me coupons, and I'm always seeing notifications pop up that kind of remind me like, "Hey, you did this once, don't forget about us." But then a few other brands it seems like they're silent, and they haven't thought about maybe how to actually keep me engaged and retain me after all this dies down. How do you think about keeping a customer who maybe wasn't on that channel before retained to come back for the long haul? Chad: Yeah, I think it comes down to trying to create that personal experience and letting them know that you're always going to have their best interest at heart. I think that's probably where most people are under-investing right now, they're over-investing in supply chain or logistics because they have to have those things, but if they really go above and beyond on the customer support side and try to find those ways to have a conversation, it doesn't always have to be phone, it can be chat, it can just be a really responsive email team, but that's really where you can separate is ... most people kind of understand right now that things are going to be a little bit delayed, and shipments might take a little bit longer, but if you can't get back to a person in time, and if you're not letting them know that you're going to bust down walls to do what's best for them, then you're risking losing that person. And I think that's been proven with Zappos, Amazon, pretty much any one-to-one ecommerce, Chewy, it's all about the customer experience, and customer support is really what drives lifetime value. Stephanie: Yeah, completely agree. It seems like right now is a really good time too where you have the customer is a little empathetic to, like you said, things being delayed. I know I ordered something off Etsy, and it's like three weeks delayed. However, the person who is selling it has been constantly keeping me updated of like, "Here it's in San Francisco, here it's ... I see it on the map, I'm so sorry it's delayed." But I feel actually okay with it being delayed because she's been so open about where it is and why it's delayed and all of that. I think that's a good point of if a brand gives a good customer experience, even if something's not going well, that customer could still walk away with feeling good about it and having a good relationship with the brand just because they knew what was happening throughout the whole process. Stephanie: So, you've been in the world of ecommerce for a really long time, so I feel like it's good to kind of make sure you answer some high level ecommerce questions since you seem to be a good expert to ask. What's one thing that you wish online sellers would either start or stop doing? Chad: Yeah, I think starting's probably going go back to just iterations and testing faster. I think it's ... Most ecommerce teams, and the VP of ecommerce and CMOs, they'll usually set a KPI of like, "Let's hit 200,000 next month in sales.", or whatever it is. What they don't really set is tests, how many tests are we going to run next month, and whether those tests are successful or unsuccessful, being able to really emphasize that, and get through those cycles faster, that's the fastest way to really kind of have a process that lasts a long time in this space, because everything else is going to change. The channels are going to change, the way we market is going to change. Chad: So, the thing I would say do less of is kind of trying to squeeze a little more out of the lemons that you've already squeezed. So, if you've already done a lot through Google shopping, and you kind of optimized AdWords, then yes, there's always room for improvement, but if you try to get in front of that next thing that happens, it's going to pay dividends down the road. So, I would say do more testing and more iterations, and a little bit less optimization on all the things that have already worked once you're comfortable with those. Stephanie: Ooh, I like that, that's a good answer. It seems like brands right now are pretty hesitant to either do a lot of iterations just because of everything going on, or market in general. Have you also noticed that trend? Chad: Yeah, I think that's starting to loosen up a little bit now. I think a lot of brands just didn't know what to think early on, and for better or worse it was a great reason for them to go back and renegotiate a lot of things with a lot of people. So, I think they've kind of gone through that, probably cut some costs, and now they're realizing, "Oh, we might not have had to do that, but that was good to do. So now what are we going to do with all this extra stuff that we have?" So, I think people are starting to be a little more open to it now. Marketing budgets, any time there's a downturn, is always a thing that gets hit pretty hard. But ecommerce is definitely kind of in its own bubble, in its own world right now, so I think it's going to get a lot more attention that it didn't get before, and I think it's going to get a lot more emphasis on growth than it did before. Stephanie: Yeah, yeah, I completely agree. Is there anyone that you watch in the field ... not in the field, but I guess in the industry that you're like, "This is a good brand to watch.", where they stay ahead of trends, they're always kind of one step ahead of everyone else? Chad: I think wish.com is one that probably doesn't get talked about a whole lot- Stephanie: No. Chad: ... but they do a lot of really interesting things. I think when people think about D-to-C they end up leaning more towards the actual brands like Allbirds and those guys, which do a great job, but I think it's really interesting to watch the guys like wish.com, and even some of the stuff that Pinterest is doing right now is starting to get pretty interesting, more of kind of the marketplace approach. So, if I'm a D-to-C brand and I'm selling shirts, those are the guys that I'm trying to work with a little bit more. Stephanie: Got it. So, what is Wish doing, because I haven't kept up with them. I downloaded the app back in the day, and it wasn't the type of things that I would want to maybe buy quality wise, but I heard it has gotten better, so what kind of things are they doing, or Pinterest, that you got your eye on? Chad: think they're realizing that discovery is becoming more of a thing, especially on mobile devices and mobile apps. So, Wish does a lot with kind of endgame ads, and driving media buys directly from publishers. They don't do a whole lot on Facebook and Google, because it just gets too expensive, but they've gotten really good at running kind of the remnant ads, and driving downloads, which they can kind of funnel all the way through to a conversion. Chad: So, their conversion path is a little more complicated than just like, "Here's a Facebook ad, and did they buy a shirt?" But the way that they're able to monetize that is because they're focused on a little bit higher funnel conversions like an app download, and they know if they can get the app download, let's just say half the people are going to end up buying something for $1, because most of the stuff on Wish is $1, and then after that maybe they'll start to buy more expensive things on there. Chad: It kind of goes back to the ... there's a psychology study about a guy that was running as a candidate, and he wanted to get people to put these big signs in front of their yards. So, he went to half the houses and gave them a huge sign and said, "Will you put this in your yard?", and then he went to the other half of houses and asked them if they would put a small sign, but then he went back a week later and said, "Can I replace that small sign with a big sign?" Stephanie: That's good. Chad: Half the people would let him upgrade to the big sign after they got the small sign in place instead of asking for the big thing upfront. So, I think the brands that are really doing a good job right now are focusing more on those type of tactics where you have a small ask for the consumer, and then you sort of build on that over time instead of just asking them to buy a $1,000 mattress. Stephanie: Yeah, I like that story about the signs, I'm going to have to use that one in future episodes. Do you think it's ... Is there any reason to be nervous around relying on marketplaces like Wish, or Pinterest, or even Amazon? Chad: When they get too much market share that's when it becomes a problem, because then they can kind of control the ocean. It's best if there's a lot of players, usually five plus players, because then you've got options and you, as a brand, have a little more negotiating ability, and you've got some more leverage. So, this is what happens in the world, everything kind of gets consolidated, and then it starts to break apart again, or it gets unbundled. So, I think we just kind of keep going through those cycles, and then as you can, as a brand, capitalize on those cycles and try to do enough testing where you can figure out what that next shift is going to be, that's when you really start to hit your strides. Chad: A lot of the D-to-C brands that we look at today, and we're like, "Hey, these guys are awesome.", it was because they were early on Facebook Ads, and then they diversified outside of that. So, they really got their momentum by finding that market opportunity where there wasn't a lot of competition, and then capitalizing on it as fast and as hard as they could until it became too competitive, and then they expended it out, now they run TV, and they're basically a traditional brand like everyone else. So, if you want to be a successful D-to-C brand you have to find one of those market opportunities where you think that a wave is going to happen, and then you just ride the wave as long as you can. Stephanie: I like it. So, are there any platforms that you're paying attention to right now, or that you've heard some of your brands are looking into that are maybe more early? Chad: TikTok's probably the biggest one [crosstalk 00:38:46]- Stephanie: Yep. A lot of people have brought that up. Chad: Yeah. Stephanie: But tell me your thoughts on TikTok. Chad: So, they still have a lot to figure out with TikTok's ad platform, but this is always how it happens, they have a huge group of customers, and they're getting a ton of impressions, but they don't necessarily have all the data that they need to be able to get the highest CPMs for those impressions. So, right now it's sort of a ... they're just kind of running brands one-off, and you can get CPMs for pennies and just hope that it does something. TikTok doesn't have a very robust attribution system as far as like, "When they saw this did they actually convert?" Chad: But that's always how it works. If you can find something that really resonates then it's going to ... you can just maximize it, you can just push it as far as it'll go, and as far as your supply chain can handle it. So, there's no clear, "Do this on TikTok and you get this.", and that's what makes it appealing. If you can get into a platform like that, run a ton of experiments, and figure it out before the next guy figures it out, then you get the cheapest CPMs, and you get a huge growth rate from it. Stephanie: Got it, yeah, that's really interesting. It's funny how many people are starting to look into that, but no one's fully explained it how you did about why you want to find a platform, like you said, that it's not a, "Do this, and then you will get this result.", because if it's like that it's probably everyone already knows how to do it, and there's a lot of competition, and it's expensive. Chad: Yeah, I think Gary Vee probably said it best, but marketers kill everything. Once you figure out something works, then every other marketer's going to do it, and then it's going to stop working. Stephanie: Oh, he is heavy on TikTok, so he's- Chad: Yep. Stephanie: Yeah, I've gone on there a couple times and seen him all over the place on there. Are there any other platforms like that that you're looking into? Chad: I've heard retargeting on Snapchat's pretty good depending on the audience that you have, if they're under about age 40 then you can usually get pretty good results on there, who knows what that's going to keep growing into. There are some D-to-C companies that get pretty good traction on Twitter. I don't know if either one of those are really kind of growth channels anymore, they're more like optimization channels either for retargeting, or just figuring out how to get a little bit lower CPM, maybe it's half the rate of Facebook, but it could still work pretty well. Chad: I think what's going to happen next is that a lot of the publishers are going to start creating their own ad systems for this stuff. I think a lot of the publishers are sitting on a lot of data, and being able to target that data with them directly is going to be enabled by CDPs, or customer data platforms. So, a lot of these guys are starting to build those out now so that they're less reliant on Facebook and Google's ad systems for all the ad buys. So, I think that's where the unbundling is probably going to happen, it's probably going to happen with the publishers as they start to pull inventory from those guys, and start to figure out their own ad system. And if they can start to figure out lookalike models that work on the publishers sites, then you can cut out some of the middle guys, and then drive down the rates, which makes it more appealing to the D-to-C guys. Stephanie: Yeah, ooh, that's interesting. That'll definitely be fun to watch, because yeah, I've seen a lot of posts right now around people going to the more expensive platforms, maybe like LinkedIn where everyone's like, "It is not efficient budget wise to try and run ads on maybe LinkedIn.", but if you run a small subset on there, and then you retarget on Snapchat, that is way cheaper. That's how a lot of companies seem to be trying to get around the more expensive platforms right now. So, it'll be fun if more open up that aren't like that, or you don't have to go through that many steps to actually find your audience. Chad: Yeah, definitely, and I think another one is Tabula, if you haven't tried Tabula, you probably should, they've got lookalike models now and some retargeting, and the CPMs are still pretty low, so they're definitely one to keep an eye on. Stephanie: Oh, I haven't heard over time that, I'll have to check that out. So, is there anything that you want to share before I move into the lightning round where I ask a couple questions, and you have to have a quick question answer? Anything around ecommerce, or AddShoppers that's top of mind that we missed? Chad: So, we deal a lot in customer data, so sort of the elephant in the room with us is always upcoming regulations, and how do customers actually want to use their data, or how do we create an environment where we can have trust in the marketing world without violating someone's personal data. So, we as a company, we launched a brand called SafeOpt, it's S-A-F-E-O-P-T.com, and SafeOpt is basically the endpoint for shoppers so that they can tap into our data. A lot of companies have created things for CCPA, and GDPR that are limited to just California or just Europe, but we've created the SafeOpt brand to be exposed worldwide to anybody that ever wants to get access to their data, and I think that's how we, as marketers, build trust with consumers is by making everything transparent. Chad: I know like my grandparents and in-laws and things like that, they sometimes think if they're near an Alexa and they say something, Alexa's picking up on it, and all of a sudden they're going to start to see ads for those things. As a marketing technologist I know that the amount of data they would have to ingest to do that is pretty much near impossible, and that they're probably not going to do that. But it's little things like that, that create this perception of marketing being a bad thing, or marketing being a thing that is like this black box of it knows everything about me. So, I think that we, as marketers, have to continue to push towards versions that create transparency, and versions that give control to people that want control. Stephanie: Yeah, that's great. So, for the brands that are just optimizing for the California or European rules, what could you see happening for people who aren't thinking more holistically? Could they lose access to ... maybe if they had a whole customer subset dataset where maybe if they didn't do things correctly from like a privacy protection area, would they lose that whole entire dataset and couldn't use it in the future, or what do you see happening if they don't get ahead of this? Chad: I think a lot of it's more hyped up than what customers actually want to do. We get very few CCPA requests, or GDPR requests. Most people are just curious, they want to know what's in there. They don't necessarily want it to go away as long as there's some sort of benefit for them. Some people do, and you want to purge those people as easily as you can, because you don't want to violate their trust either. If they want to be completely anonymous that's up to them, but I would say that's probably less than one to 5% of all people, and it's probably the group of people that isn't the highest lifetime value. But yeah, I would say just focus on creating a ... It's one thing to just do what the regulation requires you to do, and it's a completely nother thing to do something that creates a good customer experience while accommodating the regulation. Stephanie: Yep, yeah, I love that. Cool, all right. Well, with the last couple minutes I was going to move into the lightening round, brought to you by Salesforce Commerce Cloud, are you ready, Chad? Chad: Let's do it. Stephanie: All right. What's up next on your podcast list? Chad: Ooh, I like Joe Rogan. Stephanie: Yep. Chad: I think he's pretty much just constant. Stephanie: But now you got to go to Spotify for him, right? Chad: Yeah, pretty much. Stephanie: Yeah, I like him, too. What's up next on your reading list? Chad: I'm reading Great by Choice from Jim Collins right now. Stephanie: Mm-hmm (affirmative), awesome. You'll have to go to our Mission Daily podcast, we are having Jim Collins ... we had him on the show, but we haven't published his episode yet, so I think it's coming out in a couple weeks. Chad: That's awesome. Stephanie: So, you'll have to go over there afterwards. What's up next on your Netflix queue? Chad: I've got a eight-year-old and a four-year-old, so I don't really get a Netflix queue right now. By the time nighttime comes around I'm ready to go to sleep, so I've got nothing. Stephanie: All right, I like it. What's up next on your travel destinations when you can travel again? Chad: Yeah, we go to Maine every year, this is going to be the first year we missed it in probably like 14 years- Stephanie: Oh, no. Chad: ... so we want to get back to the Maine beach as fast as we can. Stephanie: Oh, that sounds fun. Yeah, Maine seems really pretty, I need to check that out. All right, and the last, slightly harder question, what's one thing that will have the biggest impact on ecommerce in the next year? Chad: All right, that's a trick question. One thing with the biggest impact ... I think it's probably going to be the unbundling of Facebook. Stephanie: Tell me more. Chad: I think that ... So, Facebook is ... I would guess that they've hit their prime, and that micro-networks are going to start to grab users away from Facebook and push them over to their platforms, and all the various iterations that that's going to happen in. Mark's done a great job of kind of buying all the scale and everything that Facebook has now, but I think that without them continuing to innovate there, and with all the things that are happening inside of Facebook right now, I think they kind of hit their peak. I could be totally wrong, people said the same thing about Microsoft and a lot of other brands, but I think that's probably what's going to happen next. And then that's going to drive, for ecommerce, new opportunities like we were just talking about where if you're early enough on those you're going to be able to drive huge brand awareness and a lot of sales. Stephanie: Cool. Yeah, that's a great answer. All right, Chad, well this has been a blast, where can people find out more about you and AddShoppers? Chad: Yeah, so AddShoppers is A-D-D Shoppers.com, and I'm on Twitter @ChadLedford. Stephanie: Awesome. Well, thanks for coming on the show, and we'll see you next time. Chad: All right, thanks, Stephanie.
Sometimes an opportunity comes along that’s too good to pass up. For Matt Hulett, that happened when a friend approached him about a job at Rosetta Stone. The famous language-learning company was stuck in the analog world and they wanted Matt to be the guy to bring them into the digital future. It was no small feat, but Rosetta Stone has made progress on the digital transformation and Ecommerce journey, including introducing a subscription model and overhauling its tech stack and app. On this episode of Up Next in Commerce, Matt discusses the challenges of transforming a world-famous brand, including how he chose a free-trial subscription model over going freemium, what it was like to achieve buy-in from investors, and the future of Ecommerce and why he thinks social selling still hasn’t reached its full potential. 3 Takeaways: Even the most well-known brands need to earn their stripes when entering a new space. When a previously offline product starts playing in the digital world, it has to prove to customers that their investment in this new space is worth it AR and VR are tools that Ecommerce platforms will be exploring more in the coming years. If you can provide a more immersive experience, you differentiate yourself from the competition and create more value to your customers Stay true to the brand and don’t try to compete on business models that don’t fit For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to Up Next In Commerce, this is Stephanie Postles, co-founder of Mission.org and your host. Today, we're going on a digital transformation journey. Matt, how's it going? Matt: Oh, really good. A little cooped up here like we all are, but I'm hanging in there. How are you doing? Stephanie: I'm doing well. Yeah, same hot, very hot. It's 92 here and the places in Silicon Valley usually don't have air conditioning so just a little sweaty in the studio. Stephanie: So I must admit, I have not checked in on Rosetta Stone in a while and when I started browsing through you guys' website, I was like, "Whoa, you all have come a long way from CD-ROMs and everything that I was used to when I was growing up and thought of Rosetta Stone." So I'd love to hear a little bit about what brought you to Rosetta Stone and your background before you joined. Matt: Yeah. It's interesting, just before I dive in, it's rare to join a company where everyone knows your brand and your product like just about everyone in the United States does Rosetta Stone. Matt: And so actually, it's an interesting story because there's not many ed tech companies that are a public companies, you could count them on your hand and the company has been a public company for over 10 years. Matt: It's been around for 27 years and it's a really interesting backstory on how the company was founded and so some of that came into play with what got me attracted to the business. Matt: So a friend of mine who's a recruiter talked to me about this opportunity and I typically do restarts, pivots as they are [crosstalk] for startups. Matt: And even the startups that I join are typically pivots. So there's kind of this pivot transformation story that typically is a draw for me for whatever weird reason why I attracted to these things and when he said, "Oh, it's Rosetta Stone." Matt: I was like, "Oh, the CD-ROM company, the yellow box." I was like, "Yeah, but they're trying to be digital." I'm like, "They're not digital yet?" Matt: And so the draw for me was typically, I take on jobs and assignments that are very difficult where I have to either completely change the strategy or get new financing on a new idea. Matt: There's generally something really, really wrong and Rosetta Stone was so intriguing to me on the surface for the intellectual reasons why they brand the product, people love it. Matt: It's not one of those iconic brands that people are afraid of. It's not like saying, "Matt, do you want to restart Myspace? I was like, "Oh my God, it's Rosetta Stone, of course." Stephanie: That's your next project. Myspace. Matt: Yeah. Stephanie: Just bring it back. Matt: Making it great again. Too soon. But what personally drew me, that's kind of the intellectual business level, what personally drew me into the company was and is the fact that I'm dyslexic, and a third of the revenue for Rosetta Stone is actually one of the fastest growing. Matt: We sell software into K-12 schools primarily in United States that help kids learn how to read, better learn how to read which is a problem. I've seen my own youngest son struggle with his dyslexia as well. Matt: And so on a personal level, it's very emotional when you can kind of tie that emotional tie to a company to its mission and vision. It's really intriguing. So it's been one of the best career decisions I've ever made. Stephanie: Yeah, that's great. Were there any universal truth that you discovered as you are kind of pivoting from different companies and trying out different roles and turning them around? Was there anything like yeah, universal truths that you saw while doing that? Matt: Well, that's a great question. Yeah, a couple things. One is it's so crazy to me, when I step into a company how basically from week one, maybe day one, no one really understands how the business works, like truly understands it. Matt: The key insight, what makes the business special, what can you do to apply capital or a time or attention to improve your strategy or your outcomes? It's just so, it's so weird when you go to a business that's operating, and maybe these are the only businesses I look at where it's not quite tight inside around the strategy and what makes the kind of the economic engine run. I think that's the biggest one that I see off the top of my head. Stephanie: Yeah, that's interesting. I can definitely see a lot of companies struggling there especially as they grow bigger and they have many business units and everyone's kind of chasing a different path, I can see people losing sight of what's important and what's actually driving this business like you're talking about and making it profitable or maybe it's not, but it's the lost leader, something that we still need. So yeah, that's really interesting. Stephanie: So when you joined Rosetta Stone, it hadn't been digital. I mean, only a few years, right? I think it stopped, maybe it didn't stop doing CDs, but it went online. Wasn't it in 2013? Matt: Yeah, I would say it was like half digital. What that means is we were selling one of the most expensive products in the App Store at the time and we didn't really have the concept of really effective sales funnels, a well thought out pricing and packaging strategy based on the type of customers that we're going after. Matt: We didn't have a lot of mobile native features and capability. So I would say it was kind of a port of the CD product in the mobile environment and that was kind of the approach. Matt: And also the approach was really not to focus on the consumer business. So not only did we make this kind of business model and digital transformation move, but also when I came into the business, the big focus was for the language side of the business was to focus on enterprise customers. Stephanie: Mm-hmm (affirmative). Matt: I thought that was actually the wrong move because enterprise is difficult, it's a smaller market, yet consumers where everyone knows Rosetta Stone, everyone likes the product. They actually remember the CD products in many cases and want to use them again, but they want to use them on your phone. Matt: So I thought, "Well heck, everyone knows who I am from a brand awareness perspective, I'll have an easier time deploying less capital against the consumer space and enterprise space." So there was not only just a business model shift, but also a strategy shift. Stephanie: Did you end up sticking with that business model shift to focus on enterprises or did you kind of make it a mix of 50/50? Matt: Oh, good question. So it is about 50/50 today, although consumers now are growing fast. I mean, we're a public company so I can only speak to our public company numbers, but in Q4 of last year, we grew the consumer business about 20% year over year and this is from a business step was growing at single digit. Matt: And then our last reporting earnings quarter, we grew the consumer business around 40% year to year and the enterprise business has struggled more primarily because of the C-19 impacts this year because obviously, we're in a never before seen macro economic headwind, but generally, it's the right decision to make and I view the enterprise business as more of an extension of what we want to do for all adult learners versus creating as a separate entity. Matt: That's a long answer to say consumer turned out to be the right move. It was not clear when I joined the company that even joining Rosetta Stone was a smart move. Matt: I had a lot of folks that I know, acquaintances more so than friends say, "Good luck. There's a lot of error in this company." And I just think it's just a really exciting problem and it's a ... Sorry to keep going because I've had maybe 80 cups of coffee today and just, I don't know. Stephanie: No, keep it up. Matt: It's like the two big verticals that are the most expensive that increased their prices to consumers over the last 50 years are healthcare and education and they have the lowest penetration of digital, and like, "Well, those are hard problems to solve. Why wouldn't you want to be involved?" So anyways, I think it's really fun. Stephanie: Yeah, that's fascinating. So when you came in, what were expectations for your role? What did people want you to do? Did you have a 90-day plan? How did that look? Matt: Oh yeah, if anyone thinks these are scripted questions, these are not scripted questions. These are very good questions. So during the interview process and I'm sure you've had this experience before, when you meet with somebody in a company, you're like, "I'm going to do whatever it takes to get this job." Stephanie: Yup. Matt: And I had one of those experiences with Rosetta Stone. I knew I wanted this job and so I came into maybe the first or second interview with a 90-day plan before I even started, this is the first or second interview. Matt: And the 90-day plan did change slightly because then I knew a little something, but I've done enough of these transformation projects, these pivots where I knew there's these basic building blocks in a format, I have a toolbox of things that I do that really didn't change. Matt: The inevitable strategy didn't know before I started, I didn't know the team members, were they the right fit or not, I didn't know any of that, but the basic building blocks I definitely put together. Stephanie: Got it. So what was on your roadmap, did you have to think about how to re-platform to support your commerce journey and shifting into enterprise and then consumer? What was on that plan that you laid out? Matt: Yeah, and I kind of learned some of this years ago when I was ... Sometimes I think my best work, I can't speak for you or anybody else, but my best work is when I'm completely ignorant of the challenges in front of me and so when I was younger, I worked for ... Well, actually, we sold our company to Macromedia and they had a division called Shockwave. Matt: And Macromedia at that point was not bought by Adobe, and this is Web 1.0 bubble, so I'm dating myself which is not legal in Washington State and these jokes have all jail time. Stephanie: [crosstalk] get us in trouble. Matt: I know. And so we step back through that experience and I learned a lot from the Macromedia Adobe kind of M&A folks about how to approach a problem. And that plus some other work experience over time really got me to the point of thinking through things from I call it the insight, the math in the heart. Matt: And no one framed it that way to me, but that's kind of how I framed it and so when I think about the insight, I think about the addressable market, the position that we are in the marketplace, so supplier's demand competitors. Matt: Then I think about what value we're driving to consumers, what value are you driving to your suppliers if you have them. And then what are the decisions you're going to make based on the strategy that you're laying out for the best outcome? Matt: So you want to grow market share, you want to grow revenue share. Do you not have enough capital? Do you actually need to raise capital and buy companies in order to get size and scale that's the outcome? Matt: So it's kind of a process that I've done over time and I want you to figure all that out, and it takes a while, maybe 90 days, maybe a little bit more, then it's really like how do you put a process together and dashboard is a little trite, but how do you actually run the business so you understand what things are working, the unit economics, what key layers of the business are you looking at, and then figure out an organization to support that and then you find the right team. Matt: And it sounds kind of exhaustive in terms of an answer, but I think too many people come in situations and they say, "Okay, I started this job, I got to restart it. What's my team look like?" Matt: And it's always I think the tail wagging the proverbial pivot dog and I typically, you can find startup people that are good at startups and sometimes, you find startup people that are good at later stage. Matt: You can find every dynamic possible, but until you do the work on, "I need this type of person for this type of growth stage, it's the right person the right time." Matt: If you don't do the work upfront, then you end up having a team that isn't the right team for the outcome that you want. Stephanie: Yup. Yeah, I've heard ... I forgot who said that startup advice where a lot of startups especially around here, are looking to hire that VIP level person, you have to pay a bunch of money to and someone was making the point of like, "Well, will they help you right now where you're at?" Stephanie: And it's okay to kind of grow out of people, but it's not okay to hire someone who's way above that actually can't get their hands dirty and do the work of what needs to be done right now. Matt: That's right. There's lots of people that have different approaches. I actually like to be pretty data driven in terms of how I think about people so I use like employee satisfaction studies and I use different personality profile tests. Matt: Obviously, you're not trying to like ... Hopefully, no one is like applying an AI filter looking at my reactions on this live video, but you can go overboard with data, but I do feel like you need to get the right alchemy talent for your team. Matt: And I've made mistakes where you have that senior person that doesn't want to get their hands dirty when you're like, "Look, I'm in build mode, I'm painting the fence, and I'm the CEO and I'm painting the fence and then I'm talking to the neighbors and driving Uber ..." Matt: The alchemy of that is hard to do, but that's a long winded answer to say there's there's a process and I think it's figuring out what's special about your company, how do you improve it, how do you run it? How did the inputs become the outputs and then what team is required for that? Stephanie: Yeah, very cool. So with the company having to shift as they did to go online and create mobile experiences, what kind of challenges did you see come up when you guys were going through that shift? Matt: Yeah, so there's multiple. So I always think about kind of the four constituents in most businesses, its investors, its customers, it's your internal employees and society. Matt: Not in that order. The order depends on lots of different things and so when I kind of checked down all those boxes, I think the big one, the first one I pick is investors because you're having to explain a model where the CD is purchased up front, it's very expensive versus you don't get all the revenue upfront, you amateurize that revenue and recognize it over 12, 24 whatever terms of the span of the subscription. Matt: So it's a change in terms of how you're reporting revenue, explain it in a consistent way, explaining the new metrics of subscription is challenged one I think from an investor perspective explaining why we have a language business, the Lexia business that I mentioned that focused on literacy is a 20 to 25% growth business, it's growing pretty nicely and language was declining. Matt: So then explaining to investors why do you still have this business and why are you changing the direction from enterprise to consumer, I think for employees. Matt: I always like to think through the employee piece, get the employee piece right, you can do anything and so getting the employees reason to believe, I was the first president to actually run the language business. Matt: It had multiple owners of the P&L and I was the first person probably since the CEO, we had one CEO that that started Rosetta Stone and took it public 20 plus years ago. Matt: I was the first single leader to ... I also tried creating a reason to believe a compelling vision, mission and culture and then when I think through kind of the customer piece, it wasn't as hard to be honest because there was so much brand equity that was good brand equity that doing little bit of things in a way that was kind of planful and data driven actually generated a lot of great outpouring of support. Matt: So the customer side of what we were doing wasn't as difficult as I would have thought and we also had an enterprise business that had already integrated things like digital tutoring with the software and demanding Fortune 500 companies. Matt: So there was some DNA in the company where we knew, "Boy, you can earn every interaction with every interaction." So that was that piece and then later, I started building more hooks into society as part of that and so I kind of view it as a self-fulfilling positive effect of you take care of your employees, they take care of your customers, the investors get great outcomes, and society benefits and you keep kind of turning this crank and you start getting much more reflective about it. Matt: And it does have, it does pay off. It takes I think, in general, I think people brag about how fast they can turn around companies. I don't know why people brag about that. Matt: I don't know, my experience is two years and taking a business from bad to like growing, at least, believing in itself is very hard and so I look at those four factors and I think the society piece is one that's super important that a lot of companies pay lip service to and there's a lot of discussion especially in Silicon Valley about some large companies that are controversial there. Matt: But I'll give you a for instance why if you can tie together the vision, mission, culture values to society, how that's self-reinforcing, we had a obviously horrible global pandemic that we're still pulling ourselves out of and everyone's kind of living through this experience at the same time. Matt: And we basically took just two days to decide that we're going to give away our software for free for three months for students. And we run a current business and selling software to enterprises and adults and we said, "You know what? We know that parents are actually going through hell because there's kind of a make your own adventure right now and schooling." Matt: [crosstalk] and I can feel it myself and we are like, "Oh my God, this is so stressful and the anxiety I heard from our own employees about it was overwhelming and I'm asking them to work harder." Matt: And so we said, "You know what? We're going to give away three months subscription and we're going to just do it and you just have to ... The parents have to put their email address in the school and that's it." Stephanie: Mm-hmm (affirmative). That's awesome. Matt: And we're not a free ... We're a paid subscription product. We're not, there are other competitors that have a freemium model and as you know, changing models or mixed models generally don't have a long history of working and we said, "You know what? We're just going to do it." Matt: And so the team decided to do it, I just said, "Yeah, let's do something." They said, "Here's exactly what we're going to do." And it was live, and then the amount of positive benefits, we got that from pure impressions. Matt: It actually helped our adult business to ... Adult language learning business. That's just one quick example of when those things all start working together. Matt: It's transparent, it's engaged and it's consistent. It becomes kind of operating leverage as well. So it's fun. It's fun to see how that work. Stephanie: Yeah, that's great. It's definitely a good reminder of do good things and good things will come back to you. Did you have any struggles with maybe like surges and people logging in and trying to get on the platform that maybe you hadn't experienced in the past? Because it was maybe a bit more predictable since it wasn't free? Matt: That's a really good question. Not on the system, the system's basis, but certainly from a support basis because we had a lot of, we outsource most of our customer support, and we debated for a while whether we we're going to continue phone support, we still do and I still debate that one, but a lot of our service providers were in outside United States and they all of a sudden had to work from home and then some facilities shut down and so we are just constantly playing whack-a-mole with our support organizations. Matt: And then also, I would say to our frontline heroes were our tutors and we employ a lot of highly educated tutors that have degrees in language learning and they all work from home primarily, they're part-time employees. Matt: And they turn out to be like our heroes because they took some support calls in addition to one-on-one digital tutoring. And so there was unique ways in which we had to adapt with the demand, but I would say more on the demand side regarding the support elements and we definitely saw a surge do the work from home trend as well, but that didn't impact kind of service levels and general software. Stephanie: Okay, cool. And I could see it being a bit tricky to develop and maintain a platform that has so many different layers to the business. I'm thinking about the enterprises who are going on there and buying seats for employees, and I'm thinking about the school is going on there for students, and then the individual consumer like me who's maybe like, "Hey, I'm going to Italy and I want to learn Italian." Stephanie: I don't know, but like it seems like it would be pretty tricky creating a platform that does all of that. How do you think about creating that so everyone gets a good experience and also being able to monitor and measure it in a successful way? Matt: Yeah, I've never seen the complexity Rosetta Stone before at the smallest scale, but what I mean by that is we have three businesses and we're a small cap public company. So that's unusual and the business was run on the language side ... Well, let me step back. Matt: So the literacy business is a business that was acquired seven, eight years ago and that's a 30-year-old company that was acquired, it's called Lexia and it works as a distinct operating unit from my business and is run by an awesome gentleman. Matt: And I use that word loosely and if he's listening, sorry Nick, he's a great guy and so passionate and his team is so good and it's ... I've never seen before a product that's built with like academic research combined with awesome data product engineering that gets results. Matt: It's just, I've never seen anything like it and they had the time to build this product over these many years, it was always digital first and so they're run separately. Matt: My language business was run on two different tech stacks. Actually, it was like five and when I started, I was like, "Well, wait a minute, why is this product that looks the same running off this underlying architecture? Why don't we move everything to react?" Matt: As I kind of went through this morass of tech stacks, it was a lot of M&A that generate a lot of complexity and a lot of tech debt. And so I would say majority of our innovation was not innovation, it was just keeping these old tech stacks up. Matt: So from an R&D perspective, in addition to all the other complexities we just talked about in this interview, I was trying to grow the consumer business, trying to change the business model, swapping out new team members for more growth orientation and doing a huge tech migration. Matt: And the complexity around that is mind boggling. We finished that late last year like de-flashing like old weird services, moving to a services architecture. All that stuff we end up doing and inevitably, the goal is to have one learner experience, just like you use Google, Google Mail for your enterprise, or personal. Matt: There were some admin privileges and other things that are associated in the back end, but in general, the product kind of looks and feels the same and that's, the inevitable goal which we're very close to execute on. Stephanie: Got it. Were there any pitfalls that you experienced when going through all those different pieces to the business or anything where you're like, "When we implemented this, or we move to this type of tech stack, this is when we saw a lot of improvements with conversions or anything around the consumer or enterprise business." Matt: Yeah, just on conversions, yeah, one thing on that is interesting is the amount of improvement we saw just with like putting different team members with specific goals and this is going to sound kind of crazy because everyone is going to like, "Yeah, he's talking about agile." Matt: Just getting very specific about areas in the funnel to improve and how to adjust the trial experience at certain times, and experiencing and showing customers different things at different times. Matt: That had like a crazy amount of upside for us. And I would say less architecturally that we see an improvement other than we had just less stuff that wasn't moving the innovation forward, but just these small things have big impacts and get and I must say like if any one of my team members is listening to this and say, "You haven't solved all that yet is." Matt: It's very difficult to take a business that is so complex, and then all sudden kind of say, "Look, we're going to reduce all the complexity, networks are innovating again." I think there's still a challenge of like, faster, smaller teams, we use a safe framework which is kind of scrum like. Matt: I don't think we figured all that out yet, but it's way different than when I came in and felt very waterfally to me. We're going to issue a press release, what this release is going to look like in one year and we're going to work back from that, I'm like, "Yeah, that's very Amazon." Stephanie: Yeah, yup. Matt: I'm like, "Well, how do you even know this is the right thing if you don't have any customer?" So there was there's a whole evolution of trying things, validating them, making sure that you're deploying enough capital against that makes sure it gets a fair shake, but not too much where you're, you're in over your head and we've had some public black eyes on some of our tests, and I don't care. Matt: We were trying some things internationally with tutoring, it didn't work out, it didn't have the capital honestly to support some of it and I kind of feel like those are good experiences to understand whether you're going to invest more in something or not. Matt: And so I think the fact that we can start doing those things now because we simplified the platform or if possible. Yeah, I think it's hard to say no to things and yes to things. And some of that discipline is easier when you're a startup because you just don't have people to outsource to. Stephanie: Yup. There's always an excuse. Nope, no one else can help us with that. Can't do it. Matt: Yeah. There's never like I'm a product manager by training and I've used every product manager tool under the sun and now I've kind of just resulted in my using Google Sheets again and what I'm trying to triage like epics and themes and stories, and I still like to play around with those types of planning elements, I just always look at all these people in these points available. I'm like, "You guys have no idea the luxury we have." Stephanie: I'm sure they like hearing that. Matt: Yeah, there's nothing more pure than a startup and it's like five people, five engineers and like a product manager that codes and the seat goes, doing UI, UX and it's ... Stephanie: Yeah, that's really fun. So you mentioned earlier a free trial which I actually went on Rosetta's website and I ended up going through the entire trial of learning Spanish. How did you all think about creating that free trial and actually convincing people to do it? Stephanie: Because a lot of times, I think I would see something like that and I'd be like, "Oh, that's too much time and I don't want to start that process right now." Stephanie: And I eagerly jumped in and started doing the lesson plan because it was engaging and fun, and it kind of felt like the real world with the person walking around and you're stopping and talking to them. How did you think about creating that? So it actually converted users into paying customers? Matt: Oh, thanks for saying that. Yeah, I think we have a long ways to go. I think in terms of what we could be doing is we're just, I just feel like we're sprinting to the start line because of the late start, but I think the core piece is for most companies and they think about like what business do you want to be in a lot of people will default to like whatever their venture capitalists said they should do from their other companies they manage or whether they read on TechCrunch or whatever, or listen to on this program is I think you have to be very specific once you figure it out the approach to the product that you're going after. Matt: Are you going to be freemium? Are you going to be paid trial? Or are you going to be for lack of a better term I call it force-trial or upfront trial and there's elements of this that change, there's kind of nuances. Because that's more of a nuanced discussion is the freemium players in the language space for instance would be Duolingo. Matt: How do you get the most amount of MAUs, Monthly Active Users and get enough of them to convert? Or the Spotify example, and you're using basically cap ex as cap, you're using your R&D to drive user and usage and that's kind of Slack-like. Matt: Slack is slightly different obviously. Then the paid trial is, "Well, I have enough of something that's good that I want a lot of people to use it, but I want the conversion to be pretty good." Matt: And so for the first one with freemium, you have to say, "Okay, it's going to be so fun and compelling and I'm going to actually invest in growth that isn't there yet because I think I have scale effects —I can crowd out everyone else." Matt: The second one is I actually have a pretty good product, I need enough people to use it and then feel like I use it enough to want to use more of it. And that's what I decided to do and I'll explain why. Matt: And then on the upfront paid thing is typical like for low ACV, Annual Contract Value SaaS companies you'd see, please just call my ... Just call us and we'll walk you through it with one of my sales reps. Matt: And we'll do a guided tour through the demo or whatever and the decision why we did the second one was it was a good decision and is people knew enough about what the Rosetta Stone brand was like that we knew people would want to try it and that for people that remember what it was like, they definitely would want to use it again and we felt like the pinch was more compelling if we gave everyone a little taste of that. Stephanie: Mm-hmm (affirmative). Matt: We could have said, "Please pay up front." And we're the gold standard and giddy up, but we felt like we needed to earn our stripes a little bit into proving to people that we weren't just like a port of a CD product. Matt: And so that's why we decided to do that and we've played along different roads before. We've never done full freemium and I would argue at this point in the market, we would not be better served to do that because Duolingo has done a really good job of growing their monthly active users and have built some advantages there and we're not trying to play that game. Matt: I'm trying to play the game of being a really good, effective language learning product and I'm trying to set the tone in the trial experience that when you're using the product, it's not going to be like a game. Matt: It's not going to be like Clash of Clans. I guess Clash of Clans is a bad example, or the jewel or like Candy Crush I guess is what I was thinking of. Matt: Every day, I collect coins and I'm collecting coins to benefit my gameplay. It's kind of how I think about Duolingo a little bit and it's ... I think they're masterful of what they do, but I think they're designed to do something different than what I'm trying to do. Matt: And if you're serious about learning a language, and you stick to what I'm doing and you do a couple tutor sessions that we offer, you're going to get there. Matt: And so the business model and what we're trying to do in terms of posture, not market share, but revenue share really drove kind of the philosophy on the trial experience. Stephanie: Yeah, it definitely, it felt more serious especially where you could speak in the language and it would tell you I guess if the tonality was right, and if you were saying it correctly, and it would keep kind of advising you on it, once I saw it had that feature, that to me was when I was like, "Whoa, this is really serious, and I better be ready to learn this language because it's not like a game, it's not just saying random words." Stephanie: You're actually kind of conversating and having to hear yourself which I think is really important. That seems like a big first step to getting people to try it. Matt: It's an interesting observation because we are very oral first in our pedagogy. We want people to engage with the product and speaking is actually just in general a really good way to learn and then the key outcome of speaking well is not sounding stupid. Matt: And so if you're trying to learn a language, you want to sound somewhat authentic. So for Rosetta Stone, I would say, for anyone that really wants to learn a language, we'll get you there, but if you're just kind of trying to build like, it's like counting your calories kind of. Matt: If you wanted to do something like that, then I would say, pick a freemium product over ours and yeah, it's not like super intense scary, but it's like, "Yeah, you better do your lessons before you do your group tutoring session." Stephanie: Yeah. No, that's, I mean, that's great to incentivize people like you're paying for this, you might as well get the best out of it. Is there, so one thing I was thinking when I was interacting with the free trial was, "Wow, this would be really cool if there was like a virtual world where you could be walking around and talking to other students who are learning." Stephanie: Are you all thinking about any technologies like that to implement or is there anything on your radar where you're like, "We're moving in this direction or planning on trying this tech out or this digital platform out?" Matt: Yeah, we've played with VR in the past. I've been kind of like bearish every time someone says, "Let's go into VR." I'm like, "This is [crosstalk 00:39:27]." Stephanie: It's a hot word for a while. VR everything, it doesn't matter to the problem. Matt: Yeah, I know and I have a lot of friends. One really good friend of ours, she has a pretty successful, his definition of success and I think it is honestly successful VR games company, but like I have a lot of other friends that went into VR that gaming or especially verticals that just had a hell of a time just because there's not enough handsets that are available. Matt: Well, we have dabbled in in terms of immersive experience. I think what you're saying is is there a way to since we're immersive, use technology to make it even more immersive and what I really want to do is enable more AR in our experience. Matt: And we have like a little feature called seek and speak where you can ... It's like an almost a sample app where you can use your phone, we use ARKit to do a treasure hunt for things around your house like fruits, objects around your house and incorporate that in your speech practice. Matt: And I always thought that was like a really cool thing for us to expand into and if we ever get the Apple visor, some AR HoloLens or whatever, it'd be cool to start interacting with your world around you, not just with translation, but also to see if you can actually interact with folks that are kind of ambient around that experience. Matt: I personally and maybe this we're going too deep here, but I always thought it'd be cool if like I can visit another country and just decide how much of the spoken language am I going to generate myself, how much am I going to have my device do it because I'm not going to spend the time. Matt: And then how can I phone a friend? How could I have my tutor or my guide integrated experience where I'm going to sound really authentic if I do this or here's an experience that I could do here. Matt: I think the goal for language learning inevitably is different based on where you are in the world, but if you're from the United States or one of ... Maybe some European countries like the UK, it's kind of like this is a cool way to get engaged with a culture. Matt: If you're not in those countries, learning English primarily is a necessity and so I think some of these AR ideas that you just mentioned would be really good and speaking more frequently to other folks that are even not native speakers, but just trying to generate language is a very good way to teach. Matt: We have a product coming out called Rosetta Stone English this summer, literally like a couple months and it is a version of Rosetta Stone for EL kids or English Learners K through six. Matt: And this product is an oral first product and this blew me away. The stat if you're trying to teach a kid English primarily from lots of different countries is written communication. Matt: It's like 20% spoken and so our product is like 70, 80% spoken because this ... And so it's just really interesting. What could you do that's more immersive using AR or VR? Matt: I think there's, I'm with you. I think there's a lot of cool things you could do and I think you could enhance the travel experience quite a bit. I think you could enhance the young learner experience quite a bit. I think there's so many cool things you could do. Stephanie: Yeah, I completely agree and there seems like a lot of opportunities there. So what kind of disruptions do you see coming to the world of ecommerce and online learning? Matt: Yeah, it's a weird market and it's weird because like depending on what we're talking about in terms of overall commerce, it's like a $6 trillion education market, 6 trillion. Matt: Consumer is probably the largest out of that and then obviously, there's higher ed, there's middle school, high school, there's elementary, and then there's adult education and then where it's coming from, is the consumer paying, is the government paying. Matt: And so take all this aside, less than 10% is digital right now and I think there's going to be this massive realization and awakening because of the C-19 pandemic of everything that I do has to be digital. Matt: And it's not that we're replacing teachers, it's how do we integrate digital curriculum and conductivity between the teacher and the student, how do I build a data layer that personalized that experience. Matt: I think that can happen between, language learning, it can happen in lots of different curriculum like reading and writing. And not having a digital enabled kind of curriculum I think is going to be like if you don't have a solution for that, if you're an education system, if you're a college, if you're whatever, and if you don't offer these types of products in the future, you're going to go the way the dodo bird. Matt: I think higher education has a wake up call. J.Crew, I like J.Crew, they're in bankruptcy now. Hertz, I used Hertz. They're in bankruptcy now and I think there's this massive pull forward right now that's happening because the product that we've been using in education hasn't changed in like 40, 50 years. Stephanie: Yup. Matt: It's the same problem. If I time warp myself from 50 years ago into most classrooms, it would look the same. Stephanie: Yup. Yeah, I've always kind of thought that a disruption was definitely coming around higher education, but this seems to have moved everything forward by many years and especially around K through 12 where that felt like it would be much harder to change. Stephanie: For colleges, it's like, "Okay, now it's changing pretty quickly with all the boot camps coming out and company's not really always requiring degrees, at least in this area." Stephanie: But K through 12 felt hard to change and it feels like this is going to be an interesting forcing function now that like you said, a lot of kids are home and parents are figuring out how to be a part of their education more in the online learning process. Stephanie: It just seems like there's going to be a lot of opportunities that come up because of this. Matt: Yeah, I agree. And I also think that now I'm sounding like the tech utilitarian, but I would say that ed tech and I'm not from the ed tech space, but I am in it now. Matt: I would say that the ed tech providers that ... We're now entering the third wave I guess is how I think about it. The second wave which is typical of most other businesses that you and I have seen before, like ecommerce or sales ops tools, now you can talk about those and go, "Remember Omniture and it was badass?" Matt: Yes, it's now part of Adobe Cloud Matt is when you talk about these generational shifts in how we think about things, I think a lot of the ed tech players, people who are selling software to schools or directly to the parents or kids or whomever, they've definitely oversold or oversold the efficacy of some of those products. Matt: And when I talk about digital transformation, I'm not talking about the ability to do things self serve, and have the teacher look at some flat experience. Matt: Right now and this is not against teachers. Teachers, they're like little mini MacGyvers to me. I mean, they're like doing amazing things streaming together curriculum on the fly. Stephanie: Yeah, both my sister and my mom are teachers and I do not know how they're doing it and how they had to pivot so quickly to being in the classroom and my sister is actually a ESL, English as a Second Language teacher. Yeah. Matt: Oh my gosh, okay. Stephanie: Yup, because I have a twin sister and she always tells me about the difficulties that she's experiencing right now trying to bring her students online and develop curriculums online and a lot of them don't have internet access and it's just very interesting seeing how they kind of develop workarounds to make it work for their students. Matt: Yeah, my criticism of education isn't the teacher clearly, a lot of it is kind of the cost basis in the bureaucracy and when I talk about ed tech, it's like I think it comes down to and this is not a Matt Hulett Rosetta Stone specific thing is educating a group of young individuals or even old individuals, it doesn't matter the same way at the same time makes zero sense. Matt: And so building in the ability for the student to do some things themselves, having a data layer so that a teacher understands the areas in which that student is struggling, and so that the instruction becomes very personalized. Matt: It is generally what I'm talking about and it's right now, I think we have a billion and a half young kids around the world that don't have access to computers. Matt: And if they do have access to computers, they're scanning in their Math homework and sending it to a teacher. Well, who knows if I struggle for five minutes on this problem versus long division versus multiplication? The teacher doesn't know. Matt: And so I think the ed tech software that I'm more in favor of what I'm speaking about is how do you build curriculum-based, efficacy-based software, not unlike what your mom and your sister think about because they have degrees and know how to actually educate someone, they're not software [inaudible 00:49:10]. Matt: And if they're wanting to provide very explicit instruction, my guess is they're really swamped. They've got other things they need to do, they're probably paying for materials that are [crosstalk 00:49:22]. Stephanie: Yup. Matt: And so I think about all these stresses and we're asking them to provide excellent education, it's just, it's too much. And so I really feel like this third wave of technology, and I think it's going to happen is it's going to integrate this we call AI and HI, how do you integrate the best of what software can do and integrate that into the lesson planning of the teacher versus let's try to create AI for the sake of AI and disintermediate teachers which I think is ridiculous is and that's what I'm talking about. Matt: Because I see a lot of tech companies playing the game of ed tech versus education companies that are actually trying to be technology companies. Matt: I think the latter will be the software and the providers that will end up actually being the most successful and the most adopted, but obviously, I'm passionate about this because I've seen this with our Lexia software. Matt: And we have like 16 plus academic studies that show that the software works and I'm like, "How is this possible that two-thirds of kids still today by the time they're a third grade or reading below their grade level that continues through eighth grade?" Matt: Two-thirds are reading below level. How is this possible? And I'm not here to tell my own software. I'm just like, "Why is this possible?" Well, it turns out we don't train teachers to teach kids how to read. Matt: There's an approach to it, and we don't do real time assessments of kids struggling, the teachers swamped, they don't know what's going on. Matt: Anyways, I could talk about this for hours, but I do think there's this world where at some point, the $6 trillion business of educating all these kids and adults and young adults will be digitized. Matt: And I think that will be an interesting space. Ed tech is that one space where most VCs wouldn't want to touch. Stephanie: Yup. Yeah, I know. It's a hard ... I mean, health care and education. It's a hard space. So yeah, I completely agree. I know we're running into time and I want to make sure we can jump into the lightning round. Matt: Okay. Stephanie: Is there any other high level thoughts that you want to share before we jump into that? Matt: Nope. I think I hit the verbose button when I answered that question, but I didn't realize you have some familiar background on education which got me going so I [crosstalk] Stephanie: Yeah, no, yeah. Matt: I will be [crosstalk] lightning round. Stephanie: Yeah, we need a whole other podcasts where we can just talk education stuff and I can have my family be the call-ins and they can give us a little advice and ideas. Stephanie: All right, so the lightning round brought to you by our friends at Salesforce Commerce Cloud is where I ask a few questions and you have one minute or less Matt to answer. Are you ready? Matt: I'm ready. Stephanie: All right. What's up next on your reading list? Matt: Words that matter. I don't know the author. Stephanie: Cool. What's up next on your podcast list? Matt: This podcast of course. Stephanie: Hey, good. That's the right answer. Matt: And then Masters of Scale. There's a new podcast actually with one of my competitors from Duolingo. Stephanie: Oh-oh. Very cool. Yeah, that's a good one. What's up next on your Netflix queue? Matt: God, it is embarrassing. Do I have to say it? Stephanie: Yes you do. Matt: Too Hot to Handle. Stephanie: Oh my gosh. I can't believe you're watching that. I'm judging a little bit, but I've also seen a few episodes. So if you were to choose a company right now to turn around, not Rosetta Stone, some brand new company, not a brand new one, but maybe one that's in the industry right now where you're like, "I could jump in and help." What company would you choose? Matt: That's a great question. WeWork. Stephanie: Woo, that would be an interesting one to try and turn around. Matt: Yeah. Stephanie: All right, next one. What app are you using on your phone right now that's most helpful? Matt: I listen to a lot of podcast, I love Overcast. I don't know if anyone ever mentions that. I just love it because I listen to things 2x. Stephanie: Yup, yeah, I know. I agree. I like that app as well. What language are you or your family working on right now to learn? Matt: Well, it's funny. I'm kind of barely competent in Spanish. My 16-year-old is actually I would say pretty intermediate level Spanish and my 10-year-old is oddly learning Japanese. Stephanie: Oh, go. Go him. A boy, right? Yeah, that's great. All right and our last, a little bit more difficult question. What's up next for ecommerce professionals? Matt: Oh boy, ecommerce professionals. I think to me it's a lot of the same topics in ecommerce have been discussed for so many years and I think that the interesting one is how do we actually make social commerce really good. Matt: And I think I spend a lot of time just, I'm not serious with it, but playing with like, TikTok and Twitch, and I think there's some elements to the social selling piece that I think are super interesting that no one's really figured out and I buy actually a lot of products off Instagram, and it's still too much friction and it's not quite working right for me. Matt: So I think there's some ... How do you integrate ecomm and then TikTok in a way that's native to that audience? I think there's some things there. Stephanie: Oh, that's a good answer. Well, Matt, this has been yeah, such a fun interview. Where can people find out more about you and Rosetta Stone? Matt: Rosettastone.com for the company and I'm matt_hulett on Twitter and it was a pleasure to talk to you today. Stephanie: All right, thanks so much. Matt: Thank you.
When Christiane Lemieux was looking to sell her first company, she knew she wanted to find a buyer that understood that the future revolved around Ecommerce. She found that buyer in Wayfair and for the next few years, she worked with the company to cultivate as much knowledge about the eComm space as possible before venturing out on her own once more. Today. Christiane is the founder of The Inside and the author of numerous books, including her newest called Frictionless. The idea of her new company and the book revolves around the concept that in order to have success in the world of Ecommerce, you need to give your customers an experience that is so easy and efficient, that they never have a reason not to buy. On this episode of Up Next in Commerce, Christiane explains why that frictionless experience is so important, and how to make it a reality. Key Takeaways: Thanks to innovators like Bezos and Jobs, the world shops in a different need-it-now way. As a result, the biggest challenge Ecommerce platforms face is creating a frictionless experience By leveraging the design community to be consultants, The Inside is targeting customers who can buy with more frequency and create predictable, repeatable conversions Getting online quickly and the businesses who have a digital-first strategy are successful For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Christiane, welcome to the show. How's it going? Christiane: Hey. It's going really well, Stephanie. How are you doing? Stephanie: Doing great. So, for all of our listeners, I want you to pronounce your own name since I did not do it this time. Christiane: My name is Christiane Lemieux. It's very French and a huge mouthful, so I completely give you a pass on that. Stephanie: Thank you for doing that, so I did not have to. So, you are the founder and CEO of The Inside, a direct-to-consumer home furnishing brand. I love to hear a little bit about that and how you started it? Christiane: Well, this is my second foray into the world of home furnishings. I started my first company, it was called DwellStudio, out of college. I went to university at Parsons School of Design here in New York. And I started a home furnishings brand from my New York apartment. 13 years later, I sold it to Wayfair. And speaking of what's up next in commerce and the digital landscape, part of the reason that I did that was that... Oh, you know what, I should cut my nail Hold on. Sorry. Let me just cut this so it doesn't ding on you. Stephanie: Okay. Christiane: Sorry, I'll go back to Wayfair. So, I sold my first company to Wayfair, and part of the reason that I did that was that I got to be entrepreneurial fork in the road where I had never really raised money before. And I realized that if I was going to continue down, the growth trajectory that I was on, it would involve me opening more than the one store I had in New York. It would involve me raising money for the first time, substantial amounts of money for the first time, to roll out stores. Christiane: And at the end of the day, I sat and thought for a very long time about the business model that I was on, that was growing, that I had started, and I realized that it didn't feel right to me. I really believed that all businesses were going to, at some point, in the near term or distant future, transition to eCommerce. And what I wanted to figure out was, who could I either partner with or sell to that would understand that idea and philosophy? Christiane: And so, I hired an investment bank in New York and they actually had me meet with a whole bunch of home furnishings companies, most of them, you would probably know. But when I walked into Wayfair's office in Boston with 1,800 people and 800 engineers, I realized that we were really aligned from a conceptual point of view in terms of what the future of DTC look like, direct-to-consumer look like. And so, it wasn't the best offer financially but, to me, it was the best offer intellectually and philosophically. So, I sold my business to Wayfair in 2013. Christiane: And then, I went on their executive committee. I mean to say that it was a learning would be doing a disservice. It was like a full immersion into eCommerce with one of the best teams in the country, and by far, the best team in my particular category. And so, I learned so much from them. Christiane: And as I was sitting there, I was like, "What would make me start another business? What in the world after building one from the ground up and selling it, what would I do?" And so, I realized that if I could take my first business, which is really design-first and brand-first, and then merge that into what I had learned at Wayfair from a digital commerce-first perspective, that I might be crazy enough to do it again. And that's what I did. Stephanie: Yeah, that's amazing. So, what were the key learnings that you took away from Wayfair, and maybe the pitfalls that you saw where you're like, "Oh, I should avoid that."? Because when I was looking into Wayfair, I think they're still very unprofitable. And so, did you see things like that and you're like, "Oh, if you just adjusted this part of the model or this part of logistics, I wouldn't have to worry about that."? Or what kind of things do you take away from that experience? Christiane: So, I would say there's almost nothing wrong with Wayfair. And I'm saying that, I mean that honestly. First of all, Niraj, their CEO is one of the smartest digital executives in the country, if not the world. I think that he's very much following the taking market share approach pioneered by Bezos, of course. And so, I think we're just very much on the same path. He will own the furniture category online and he will very quickly, if not even now. I mean, the last quarter was insane for them because now we're all sheltering at home and [inaudible] in a very different way than we did maybe nine weeks ago. But he'll take market share and he will be very profitable, and he'll own furnishings online. Christiane: There are other companies that have pursued that line of growth that weren't necessarily as equipped as he is. And he's equipped to do that. So, as relevant as that is in the post-WeWork discussion, I think in his particular case, he's already got the groundwork done to be able to do that and do it fairly flawlessly. I think for me- Stephanie: I mean, definitely still... The first company that comes to mind when I do think about buying furniture or looking for anything, even above Amazon and Walmart... I mean, they're the first ones I would go to so I agree. Christiane: Also, because they've got the best selection and they've also got the back-end figured out. And so, they taught me things like overpack centers. I was like, "What is an overpack center?" And so, they take- Christiane: They have overpack centers where they take in the goods from the manufacturers and they overpack them, so they don't break. And by diminishing the chance of something being damaged, not only do they make the customer experience better, which is really necessary in this day and age, but they also ensure that their margins don't get completely depleted by goods that arrive damaged. And so, it's not a crazy thing to do, but at the end of the day, it's totally crucial. Christiane: So, I mean, they taught me so much about, first of all, UX, customer experience, and then the logistics and the profound necessity to really think about delivery in a way that is beyond just parcel delivery or white glove delivery. They really think about it from a 360 perspective all the way from margin protection to a really flawless customer experience. Some of the things that you don't necessarily learn when you're building a design brand, I learned at Wayfair, so I'm forever thankful. Christiane: The difference is that they're like Amazon, they're a marketplace. And so largely, they don't design and produce their own SKUs or their own products. And they don't need to because their value prop is that in COVID-19 when every single person in the country, all of a sudden, needed some kind of a home office and/or home school. I mean, you went right to Wayfair and you ordered a desk and they came to you perfectly, right? Christiane: I wanted to take the ideas of brand and design but apply the Wayfair rigor of digital thought around how I executed this next brand, some of the things like having no inventory, having exclusive product, having a 3D studio to do the photography, dropship, largely dropship the product. So, instead of sending it through a more expensive white glove delivery, have it lightly assembled so that UPS or FedEx could do the delivery. And so, all of these things add up to really beautiful customer service, exclusive custom product to the customer, and then margin improvements around delivery, around no inventory, around a decreased cost in photo assets. Christiane: So, what I wanted to do is I challenged myself to think of all of the substantial problems with a home furnishings business, solve them first, and then start the business. And so, that's how I did it this time. Stephanie: That's super smart. So, how long has The Inside been operating and how's it doing today with everything going on? Christiane: So, I left Wayfair in 2016 and I called up my favorite supplier. She went into business with me on a B2B beta way. And so, we did that for close to two years. And then, I met the extraordinary, Kirsten Green of Forerunner, and she said to me, "This is really interesting, Christiane. Why don't I write you a pre-seat check and you go figure it out." Christiane: And so, we came out of beta in July of 18th. We're a year and a half in, and it's going very well. It's going very well. In this pandemic, I did not have the category breath that Wayfair has which made this a very interesting business time for them, but enough of a product breath that I think that we're helping people improve their homes on a daily basis right now, which is what we set out to do. Christiane: And listen, I feel extraordinarily lucky that it's a digital-first company. I don't have stores, I have a very lean staff. We were working from a work kosher, which we closed down at the end of April. So, we are going to be dispersed until, at least, the beginning of 2021, so we won't have an office. We can do all of this virtually. We hold no inventory, so we have no warehouses. Essentially, we had to let go two people just to preserve the business. But we've come through this, I think, as well as you can. My whole MO right now is making sure that nobody loses a job, really, because that's the scariest part of all of this is the unemployment numbers. I mean, that just keeps me up at night. Stephanie: I know. Yeah, seeing how high they're trending is definitely that's scary. Was there any big digital pivots you had to make or that you made quickly when COVID-19 started, or right now? Christiane: Well, I think that what we did... Apparently, from my digital marketing, either cohort or people that we work with, there are three DTC areas that have done very well in this particular pandemic, I mean, the Starling pandemic, so this pandemic, but it's athleisure, home, and alcohol. So, those three things had extraordinary growth. We happen to be in one of those categories. Christiane: I think one of the things that we did, which I think, anybody in a growth category in this particular time, we stayed the course with marketing. So, a lot of people caught their marketing. And what we're seeing is customer acquisition costs have come down, the cost for all of these paid marketing initiatives across all the platforms have come down. And so, we really leaned into that. Christiane: The other interesting thing that's sort of trend that's come out of this is not the digital marketing, I don't know if you've noticed this, but a lot of people are doing direct mail. Direct mail a huge resurgence obviously, depending on the category you're in, but people are home, and they're reading their direct mail. Stephanie: You shifted into that space of it? Christiane: We're looking into it now. Stephanie: Cool. Yeah, that's great. When you were first building The Inside, were there certain key technologies that you leaned on to build up the website, or are there any favorites that you utilize? I mean, I saw you have quizzes on the website, which seemed amazing. Is there anything specific where you're like, "This is my favorite piece of tech we use or a plug-in how we build our website." Any details around that? Christiane: Well, it's funny, this is our third iteration of our website. Christiane: So, we actually had to build our site from the ground up, which has its challenges. Christiane: One of the things that happened to us is we were on a really new version of Java, and Google couldn't index our site in the beginning so we had to do all kinds of back-end hacks to fix that. But for like three weeks, we're like, "Why is our traffic so bad?" And then, we realized that we weren't showing up at all. Stephanie: That's not great. Christiane: No, it's so horrible. So, just all these learnings along the way have been really interesting. So, because of the customizable aspect of our business, we had to build our own site from the bottom up, and that's given us the ability to keep growing our SKU count and keep allowing people to customize each and every one of the pieces. Christiane: I think that there's plug-ins. Everybody loves the Affirm or any kind of extended payment plan. There are things that are so unbelievable like Apple Pay and Amazon Wallet and all these things. If you don't have them, I mean, you're putting yourself at a huge disadvantage. I mean, they're not necessarily plug-ins, they're more payment tools. Christiane: I think the name of the game now is, it goes right to the core of my book, is making the experience frictionless. I mean, this is philosophical, but I think if frictionless extends even beyond that digital aspect of our lives, people are used to getting what they want, when they want, at the price they want, with the look they want, because of... Christiane: And I would say that Bezos might be the grandfather or the father of the frictionless experience. I mean, he changed the way we consume, and buying, shopping, whatever, fundamentally, in the same way that Steve Jobs changed the way we think about media. I mean, Bezos changed the way we shop, and he made it frictionless for us, and he keeps going beyond. Because if you think about Amazon Prime, he made everything accessible to us in two days. I mean, not necessarily right now, but generally speaking, and that just removes the friction from everything. Christiane: And philosophically, it's given us time back in our lives, right? Especially, let's think about others, me as a mom, I never have to take two hours of my day to go to the toy store to get the Lego for my son, William's friend, Gray's birthday party ever. It gets delivered to my house and it takes me no time. And that time that I get back, I mean, pre-COVID, I think the digital generation looks at time in a completely different way and the generation that preceded that, right? Stephanie: I absolutely agree. Christiane: Yeah, because there is all of this found time, and I think the digital generation also understands that it is the only non-renewable resource, right? If you have money, you can throw it on almost anything, right? I mean, you can have a jab for a trainer or whatever, or if you're clever and you have to be resourceful like me, you can find, I don't know, a meal delivery service or the stretch class on Mindbody, or whatever it is you're looking for. There's ways to hack almost anything. The only thing we can't hack is time. Christiane: And so, the more frictionless your experiences are across every single thing you need to do every day from like your healthcare all the way down to your grocery shopping, the more of this found time essentially you get back or digital time. Christiane: Pre-COVID, the people were applying that to travel, experience, I don't know, wellness, self-care, working out, all these things. Because it's the first generation that doesn't have to wait in line to get their license renewed at the DMV. Stephanie: Yeah. I mean, that's definitely a very different generation now who knows nonsense and they're not going to put up with the old way of doing things. How did you think about designing your website and your customer journey to create that frictionless experience? I mean, like I said earlier, I love seeing the quiz. I actually took it to see what kind of bedframe I should buy. How did you think about designing things to make it easy for people to buy? Especially furniture, that's kind of tricky. People are usually used to testing it out. Christiane: They're used to testing it out. So, my caveat is the following, that is definitely a work in progress. We look at this every day in every way, I don't think we've made it frictionless yet but we're trying to. And I think that for home furnishings, in some ways, we have to act as your decorating friend, as well as your place to buy the product. And so, to the extent, we can make your choices easier, so the quiz or you can text us or email us or set up an appointment for a design consultation with us. If we can help you be your trusted friend and design advisor, that I think is one of the tools to a frictionless experience. Christiane: Like every other eCommerce site, there's table stakes things like, "If you don't like it, you can return it," and you have 30 days to return it. Because you know what, that's just the name of the game today. And also, we have to ship it to you for free because that's also the name of the game today. Christiane: So, there are things that have been institutionalized, I'd say, by Amazon first and then adopted by everybody else that are just table stakes. And so, we started out with those and that was, I think, like 1.0 of frictionlessness online. And then the companies that are really forward thinking are the ones that could build on that on a near constant basis. So, yeah, that's very much where we are philosophically and trying to make the UX better every day. Stephanie: Got it. What kind of metrics are you focusing on when you're making all these iterations and trying to make the experience even better? Are there certain things you pay attention to or that you sync up with your team every week and go over? Christiane: A lot of it is Google Analytics and then we look at the Facebook metrics for the paid marketing, all of these things. But some of the things we look at are, obviously, like the really basic ones like bounce rate. One of the things that people are looking at now is, they call it dwell time, how long people spend on each page and how in-depth they go. So, we look at that. Christiane: We look at who designs a piece of furniture, and then transacts, and then who abandons the cart and why. And so, we're trying to finesse the experience all the time so that people feel they're not stuck with paralysis of choice. Because I think the thing about customizing is that, especially if there's 16,000 different iterations you can possibly make, you might get paralyzed by choice. Christiane: So, the quiz is very helpful there because you may have learned that you like coastal mid-century, your favorite color is blue, here are three patterns that you like that are foolproof for you. And then, you can go from there. You can iterate from there. So, you can choose a brass leg or wood leg or whatever that works for the rest of your interior. But at least you've narrowed down to the extent you can, algorithmically what you like. And so I think that, I mean, all of those things are super important. Stephanie: And I think less choices is definitely key. Especially I've seen a model where they're populating an entire room for you of like, "Here's the whole entire bundle, so you don't even have to think about it. You can swap things in." And like you said, having someone that you can text is so super important, where you feel like you have a friend where you're like, "How would this look? What do you think about this? Show me something that's similar." I think all of those are really strategic. Stephanie: But when it comes to some of those metrics, how do you... For dwell time, for instance, I think any of these might lead you down the wrong path based on what's happening right now with the current environment where I heard that, well, times are up, but then conversions aren't maybe up at the same rate. Is there any metrics where you're like, "Oh, they might be reading into that the wrong way, and we shouldn't maybe take a quick action based on that right now." Christiane: I think that's right. I think people are... Because we have so much time, and content looks different from one person to the other, the content they like. So, if you're in the middle of decorating your house, you might be on all these sites, and because you have, all of a sudden, more disposable time at your fingertips than you have in the past. So, I think dwell time is important, but add-to-cart is really the thing you want to see, and then the final conversion. Christiane: So, we look at where people are hanging out from a GA perspective and then look at the add-to-cart and then look at the conversion on that add-to-cart. Of course, for us, the metrics that we want to focus on are getting from add-to-carts to conversion to the extent we can, and so trying to make the PDP and the the checkout page as flawless as and as inviting as possible to really get people to transact. Christiane: I mean, in front of that is as much inspiration as we can possibly allow people to consume, whether it's through Instagram or through Facebook Ads or through whatever means to get them inspired. But really, our job, especially on a site level, is to make it so easy that why wouldn't you buy it? And to the extent we can quell your paralysis of choice. That's really where we're focused right now, is really helping you design the space of your dreams digitally. Stephanie: Very cool. So, you just mentioned Instagram. I saw that you launched an Instagram Live series called Go Inside. Can you speak a bit about how you're utilizing that to potentially drive sales and the strategy behind that, and ROI that you've seen on that content or how you measure that? Christiane: Well, I think, for us, part of this... The interesting thing about the home furnishings business is that there are two distinct consumers, there is the DTCs, so the consumer you think about who wants to buy an upholstered headboard and goes on and chooses their fabric, and executes on that, but there's also the trade. Christiane: And so, our particular category has interior designers, and many of them who, at the end of the day, are a very big part of this business, and a very, very important customer to anybody in the home furnishings business because they are buying on behalf of multiple people. And if you make the whole experience frictionless for them, it's not just one bed every five years, it could be five beds every month. Christiane: And so, I think part of our Instagram strategy is really letting the rest of our community meet the interior designers that really work with our product, not only so that they can see what this community does, but also, at the end of the day, we would love our interior designers to get business and to really think about this, not only as a home furnishing company, but as a community that we're growing for people who love design and who want to, as we call it, live beyond the beige. And for us, that's really people who want to personalize their spaces, and think about their spaces as something that is theirs and that is customizable, in a way that's frictionless. And so, by going live with our interior designers, we're introducing the world to this great community of people who can service that. Christiane: A little early for ROI right now, but if we circle back in a little bit of time, I can let you know, because data has to have like a decent subset, right? So, we just launched a home design 30-minute consultation, and that's really helpful in terms of conversion. Because if people get you on the on the line and walking through their spaces and really helping them, chances are it's the kind of help that they're looking for. So, we find that useful. Stephanie: Well, how do you think about scalability when it comes to having those one-on-one interactions with the customer and consulting them on the products and whatnot? Christiane: Well, that's where these two things dovetail together, right? And so, if we build a really beautiful, robust design community that is local... Because every different area has a different design philosophy. In California, you can live indoor or outdoor, in New York, a lot less. And so, if I can introduce you to a design in your area via Instagram Live, and he or she is showing off some of the projects they've done, there's a good chance that you will then reach out to them and let them know that you were introduced to their work on The Inside. Christiane: And the rest, I think, is just great for everybody involved. I mean, that's my business philosophy. I love a win-win-win, so the customer wins there, the designer wins there, and we win there not just because of a sale, but because we've made somebody's home and life better. Stephanie: Yeah, that's a really good strategy. And this thought that you are partnering with the designers and having them do the consultation, that's super smart, where you don't really have to worry too much about hiring a bunch of people and customer support to do it who don't really have good design principles probably. Christiane: Yup. That's how we'll scale. So, we're just at the inception of this, but you get it, right? So, they can meet Maureen Stevens on Thursday night or tomorrow night, and if she's in New Orleans and if they love her design, they can call her up. And when she finds out that they were sent to her via The Inside, then she'll most likely, I mean, hopefully, use one of our upholstered beds in her next project. But even if she doesn't, if somebody gets a better interior because of something we did along the way, then I feel pretty good about that. Stephanie: These micro-influencers and designers who are helping with these consultations, are they starting to request metrics and wanting to see data and things that your team will have to start supporting eventually? Christiane: I hope so, but not yet. I hope that... Listen, that's part of that frictionless post-COVID change. I think everybody is going to need data, digitally-driven data, so that they understand exactly what the reach is beyond this traditional business models that they've had prior to all this. Stephanie: Yup. I think that because of COVID, a lot of people are definitely putting on their entrepreneurial hats and they're going to want to see those metrics. And I think it'd be really interesting to have some type of leaderboard that would show which designer is doing the best and who's helping customers, and just gamify it a bit. Christiane: That'd be so much fun. It's almost like you're at, whatever it is, flywheel and who's biking the fastest. Stephanie: Yeah, I know. Just implement that tomorrow. Easy. So, are you- Christiane: Stephanie, I'm going to take a note right here and actually do that. That's pretty interesting. Stephanie: Yeah. I think that's where a lot of the world is going when it comes to gamifying certain purchases and making it more fun. Well, when it comes to gamifying, are there any pieces of tech that you're thinking about? I was just playing around with IKEA's app where they have AR that you can put the product in your room, which was really fun to play with. I was just putting full-on dressers on top of the bed and just being silly with it. But have you thought about doing that since your products are so unique, it seems like it would be really good to get them in the room where people are trying to design it? Christiane: Absolutely, yes. And in fact, we were talking to a company in Palo Alto, who was on the forefront of this, probably right around the corner from you. Stephanie: Oh, we're neighbors. Christiane: Yeah. And they are pioneering this incredible drag and drop. So essentially, you can take a picture of your room, and then you can drag and drop furniture into it. It's so well done. It's so well done that they can tell where your window is and they can have a shadow underneath the furniture so that it looks perfectly real. Interestingly, a lot of the technology that people use for gaming is really applicable here. So, it can create a really unique and kind of true-to-life experience. Christiane: So, yes, we're looking to this all the time. I think that as a brand spanking new startup, we're trying to make sure the fundamentals are frictionless before we add all kinds of layers of complexity to the customer experience. So, we want to make sure that it's really easy for you right now to go in and say like, "I love the modern platform bed and I like it in polka dot. I'm going to transact," versus... Because I think that we got to make sure the customers where we are in terms of technology, too. So, I think we're taking baby steps there, but the answer is absolutely yes. And all of that technology is fascinating to me. Stephanie: Yeah, completely agree. I'm definitely watching that market closely and it seems like people are leaning heavily in, but agree that until you understand how you want the customer journey to work and the product to work and everything, I think... Stephanie: We were just talking with someone from Lenovo who's saying that after years of being in business, you have to just start killing a bunch of things because too many things build up and it starts worsening the customer experience. So, it's probably good to figure everything out first before pulling in a bunch of new trendy tools. Christiane: Yeah. We need to have a really beautiful conversion rate indicating to us that the customer journey is frictionless before we can start throwing pretty complex essentially gaming ideas at them. Stephanie: Yup. And it would seem like you would need a pretty large catalog as well if you're going to develop an entire AR app for your company. I mean, people probably slip through placing furniture. I mean, at least that's what I was doing. I was like, bang, bang, bang, bang. I was putting in front of everywhere. It seems like I would need a pretty large catalog for that, too. Christiane: I think that's right. I think that's absolutely right. And so, somebody like IKEA touches every part of your house. I mean, we're too young to have that kind of SKU count. It has to be in every single category, right? You can't just have the dining room chairs, you have to have the dining room table too. So, we'll get there. We're not there today. And so, I think that you're right. That's a very good point. And so, IKEA is a layup for them. It's a layup for Wayfair as well. Stephanie: Yeah. Are there any specific follow ups you do with your customers to keep them coming back, or ways that you're acquiring new customers that is maybe unique? Christiane: What's great about our category is that design is a process, right? I mean, even if you hire an interior designer, it usually takes quite a while. And also, people are thinking about their homes in a different way than they used to. It's all these things where it's done, you live in it, and that's it. I think people are constantly upgrading or adding in seasonal elements. And so, once we know you, Stephanie, are coastal mid-century from your quiz, we can keep sending you design ideas that- Stephanie: Did you just see my quiz? Christiane: No. Is that- Stephanie: That's what I was. I'm like, "Did you see me?" Christiane: But I have a feeling. Well, first of all, I can see your personal file from our Zoom earlier today, so I- Stephanie: You mean, hoodie and sweatshirt? Just kidding. Christiane: I also know where you are. I know how old you are. I know where you went to school. But this is all I do all day long, so I can pretty much- Stephanie: You're good. Christiane: ... figure it out. So, since you are coastal mid-century, I would know what to send you as a follow-up. I don't know if you have outdoor space or not, but I might send you some really cool outdoor furniture that would work with the bed you had. I will try and assist you in decorating your space, getting the home of your dreams pretty subtly until one day, you pick up the phone and say, "Hey, Christiane, will you just call me back because I want to do my entire living room?" And I will say, "Of course," and I will call you back and you'll FaceTime me through your living room and we'll decorate it. Christiane: But until then, I'm going to show you all the beautiful things you can have at very reasonable prices to make your space exactly the mid-century coastal dream you want it to be. Stephanie: That's great. It's a good process. So, to pivot a little bit, you've written a couple books and I'd love to dive into them because they're all around everything eCommerce, it seems. And so, if you want to maybe start with your most recent one or your first one, whatever one you want, I would love to hear about them. Christiane: Well, so I've written three books and I'm working on two other ones right now. But the first book I wrote was called Undecorate and it was really, for me, that watershed moment in design when I realized that the way people approach their interiors was no longer going to be like, "I design it. I live in it for 25 years. My kids take a few things when I die and that's the end of it." I realized that people were approaching their interiors the way they were approaching fashion. And that was largely because for the first time ever, things like Pinterest, that was right after Instagram launched... But all these things, all of a sudden, we were surrounded by content and media in a completely different way. So, you didn't have to buy a magazine to look at a beautiful interior, you got to see it all day long on your phone. Christiane: And so, what that did was, I believe, it raised the design IQ, not only of our audience in the United States, but globally. And so, all of a sudden, people are interested in interiors, they're interested in design history. They're interested in all these things that they weren't before and they think about their spaces in a less static way. So, I wrote that book. Christiane: And then, I followed it up with a book called The Finer Things, which was my first Instagram-generation encyclopedia of the decorative arts on the same day, and I'm writing right now the Instagram-generation encyclopedia of important furniture. This one's take me a long time, I think, four years to write. It's a big project. [inaudible] is the one I'm writing about furniture right now. Will probably take me between two and a half and three. Christiane: And then, I wrote Frictionless, which is really my first business book. Because I realized that I had started a business out of college in 2000. I grew it organically for 13 years. And if I hadn't written a book at the end of that journey, it would have been useless. It would have been fire-starting kindling at this point, because everything had changed, every single thing. Stephanie: It makes you wonder if you can rely on books these days anymore because, I mean, especially around eCommerce, everything's new and so quick. It's like what sources should I even look at to stay up to date with things? It's definitely probably not a book. Christiane: Yeah. I mean, I sat and thought what is the underlying differentiator? What makes something win or something lose here, right, if I look at all the incumbents in my industry. But just generally, what is it? What's the winner or loser? And what I realized was that it was the frictionless experience that allowed somebody to get into a, it could be a crowded category. Christiane: But if you can do in the least invasive way, you will win because all people want is as few clicks as possible to get exactly what they want with the commerce table stakes and have it delivered to their home and they don't want somebody calling them up with a delivery time. They don't want 37 phone calls. They don't want a helpline where nobody helps them. When you get into those scenarios, you're like, "I'm not doing this. I'm never coming back." Stephanie: Whenever someone wants to call me, I'm like, "Oh, can we not? And don't leave me a voicemail. Can you just text me, please?" Christiane: Yeah, just text me. Or my favorite thing is Slack. Just Slack me. Christiane: Slack is frictionless. I mean, it's beautiful. Christiane: And so, experiences like that, I don't know, equal parts art and science, I think is the big differentiator. We, as human people, now that we've experienced it, that's what we want. We want the Slack experience in every single facet of our life. And if it's not- Stephanie: No one's going back after that. Christiane: No, no. And if it's not that, then you're like, "Why does this suck so badly?" And then, you find the experience in that, I don't know, that milieu that you need, and you can find it. I mean, if you can't find it today, you'll be able to find it soon. And that's what every business should go after. Christiane: Because all the rest of it is table stakes, right, like fast and free delivery, great design. You can do those things, but to do it in a frictionless way is what's going to change your business or give you the competitive advantage you need to take market share. I mean, that's what Wayfair taught me. And when I sold to them and I understood how far ahead of the commerce game they were, it was amazing to me. Stephanie: Yeah, that's such a good experience. When you were doing your research for Frictionless, was there any surprises that you found or companies that you're following that were doing something surprising that you hadn't thought of? Or just a good process that you were like, "Oh, that's really neat. I can see why it works for them."? Christiane: There's so many nuggets in this book. I mean, I find just talking to the founder of Ixcela, she does a gut biome. You send in your... I'm obsessed with that. You send in your blood sample through the mail. I mean, the idea that we can have MIT science level help digitally is amazing to me. I mean, all of these... That is going to be the outcome of this particular pandemic because what we're realizing is that all of the things we thought we needed to do like endless in-person meetings, we just don't need to. I mean, I will never take 60 subways in a day in New York again to go to in-person meetings unless they're absolutely necessary. Christiane: So, I'm thinking about my life through the lens of frictionless experience. Those things, that's a lot of friction, like running around, being late, being stressed, when we don't need to do it. I mean, Zoom has also changed our lives, all of these platforms. Christiane: And the interesting thing is that I believe the entire world, regardless of what generation you are, just got schooled in technology, right? We all just got fully immersed in what it means to be a digital citizen. Christiane: Even my 75-year-old mom in Ottawa, Canada knows how to use Zoom now and thinks it's the greatest thing ever, and I'm like, "Mom, I told you so." But sometimes it takes being forced into something to realize how extraordinary it is. And now she realizes she can have all of her grandkids all over the world on one Zoom call and everybody can talk to each other. How amazing is that? Stephanie: That sounds very similar to my parents as well. They were teaching me how to put backgrounds on Zoom. I'm like, "Mom, I got it. But thank you." Actually, she did send me a pretty funny article that showed how to loop a video on Zoom so it looked like you were moving around and paying attention in a meeting, which I guess her... She's a teacher, so I think some of her students were doing that. They were looping themselves just moving around a few times, and it looked like they were really on board with the whole lesson. Christiane: Oh, my God. That is hilarious. Stephanie: I'm like, "That's good. Thank you for sharing that wisdom." Christiane: One of the partners that we're working with at The Inside, it's a very big home furnishings company and they are pretty sophisticated digitally, and all of them have a constant Zoom competition of who has the coolest background. Apparently, somebody had something like a 1980s workout video. That was fantastic last week. These guys are thinking about this on a near constant basis like your Zoom background now is a reflection of who you are and how creative you are, how digitally savvy you are. I think it's hilarious. Stephanie: So to zoom out a little bit, what do you think the future of online commerce looks like after the pandemic's over? Do you think things are going to shift back a bit to how they were? What kind of disruptions do you see coming down the pipe? Christiane: People would think "we're going back to normal," I think normal has changed. And I firmly believe that the companies that weren't thinking digitally are thinking digitally very seriously now. Christiane: Because as I told you, here I am in SoHo, New York and it turns out when there's a pandemic, nobody lives here. At 7:00 at night is when we all cheer. I mean, there's now six of us on my block who I see every night, and everyone else is gone. And there is one coffee shop that's open, and that coffee shop very early on had a contactless app. So, you could order your coffee in advance and then go and pick it up. Nobody touched anybody with gloves and a face mask on. I've gone there every single morning for the last nine weeks because I want to get out of my apartment and I want to see some of the world, and they have really good coffee. Christiane: And across the street from them is the fanciest coffee place in New York that people are die hard lovers of, and you know what, the doors are closed and they never came up with a contactless app and they never figured out how to digitally bring themselves into this particular pandemic and keep their business going. And I think that that's only like a neighborhood version of what the rest of commerce is going to look like, and not only commerce, just like service as well. I think that people are going to have to think about how to pivot their particular businesses digitally as quickly as possible. Stephanie: I don't think this will be the first event where businesses have to come online quickly and figure it out. And we'll definitely see the people who did do that this time and the ones who didn't. Christiane: Yeah, especially some of the ones that didn't and who are waiting for things to go back to normal might not make it through this. And that breaks my heart because there are fairly... You could probably scrappily do something fairly quickly, but you have to want to. And I think that people that didn't have their head in the sand... Is that what the ostrich does? Stick their head in the ground? Stephanie: I think so. Christiane: If your head wasn't in the sand, and you were iterating, or at least pivoting during this, it's going to serve you really well on the other side. Stephanie: Mm-hmm (affirmative). Yeah, it seems like it'll be, well, it is an environment right now where people have to learn quickly, but they'll probably look back and be like, "Glad I did that." We learned and we moved at the pace that normally would have taken us maybe on a five-year roadmap, we were able to get it done in a week or two weeks. We got pushed into that, but I'm sure they'll look back and be happy they did. Christiane: But also, look at the very fast category options. I look at the home furnishings category where, I don't know, it'd be those between 20% and 25% of consumers were willing to buy the category online. I think, in the last ten weeks, it went up to 60% or 70%. I mean, that is massive, world class adoption in a very short period of time. And I would imagine that that is universal across some of these categories. So, it'll be really interesting to see what happens post the pandemic. Christiane: But the people that are listening to the CDC won't be rushing out and shopping and going to the beach as quickly as... Some people will and some people want. So, I think that digital adoption is going to be extended, at least for 18 to 24 months, if not, forever. Stephanie: Yeah, I completely agree. So, before we move into the lightning round, which I'll explain, is there any other thoughts or ideas you have that you want to share? Christiane: No, I think we've covered up everything. I mean, I could go off... You and I are philosophically aligned that this is the way of the future. I mean, I could talk about this for days, but we need a whole Round 2. Stephanie: Yeah. It'll be really interesting to see what the landscape looks like in 8 to 10 months, if not, and then again in 24. Because I think you're right, I think that the people that are thinking on their feet and iterating constantly and really pivoting their businesses to be digital-first in whatever, incumbent-second are the people that are going to win here. It'll be a really fun way to look back. Stephanie: All right, then the lightning round, which is brought to you by our friends at Salesforce Commerce Cloud, who sponsored this podcast, of course. Christiane: Excellent. Stephanie: This is where I... Yes, they are great. They're amazing. Christiane: They are. Stephanie: This is where I ask you a question and you have a minute or less to answer. Does that sound good? Christiane: Sure. Stephanie: All right, what's up next on your reading list? Christiane: What's up next on my reading list? Oh, I have a really good friend in New York City who just wrote a book, Lauren Sandler, and I'm going to read her book next and it is called Christiane: Her new book is called This Is All I Got, and it's A New Mother's Search for Home. She is an investigative journalist. She writes for The New Yorker and New York Times. And she actually followed a single mother through the shelter system in New York. But I've just started it, it's pretty amazing. Stephanie: I'm going to check that out. Christiane: Yeah, it's pretty amazing. I'm trying to think what else? What am I reading that's like business-related? What is it? Harder Things? I just started it. Stephanie: The Hard Thing About Hard Things? Christiane: The Hard Thing About Hard Things is the business book that I'm reading right now. My editor at Harper who did Frictionless, also was the editor on Ben Horowitz' book. Stephanie: Oh, cool. I got to read that. Christiane: Yeah. I highly recommend that one. Stephanie: Highly recommend? Christiane: Yeah. I think that there are probably universal truths. And also, we're going through hard things right now. And I think it's people that are accepting and fluid in the hard things that end up being okay. Stephanie: Yeah, I completely agree. What's up next on your podcast list? Christiane: On my podcast list? Oh, my God, there's so many on my podcast list, but I'm stuck on the daily right now, if I'm honest, because, first of all, the news is so completely crazy and riveting. And also, I'm obsessed with all the COVID data. You know, I just had the test because my son was exhibiting some symptoms, and all three of us are negative. Stephanie: That's good. Christiane: Yeah, it's really good. But as a parent, the whole Kawasaki manifestation of this is very scary. Because the first bill of goods we got sold was that, "Oh, if your kids are under 20, you're fine." I was like, "Great." I don't care if I get it, I'll figure it out. But if my kids get it, I don't know what I'm going to do. And now, that's not the truth at all. So, that's generally where you'll find me. It's hard to take your ears away from the news right now. Stephanie: I know. Yeah. I have to, every once in a while, take a break because I have three kids under two and a half. Christiane: Wow. You're like me. My kids are 21 months apart. Stephanie: So, who do you follow in the industry or any newsletters or sources that you go to to stay up-to-date on all things eCommerce? Christiane: Wow. I mean, everything, like Crunchbase and TechCrunch. Oh, and I've been watching some of the podcasts, some of the live stuff on Extra Crunch. I'm trying to think eCommerce. I mean, there's just so much of it. I don't know, where else do I follow? Stephanie: Or if nothing comes to mind, we can also skip this one. Christiane: Okay. I mean, all of the above. And also, all the inbound newsletters and things like that. But just generally, the newspaper. Stephanie: Oh, newspaper. Okay. The last harder question is what's up next for eCommerce professionals? Christiane: What's up next for eCommerce professionals? Wow. Stephanie: Big shift. Christiane: Well, I think that everyone is going to have to become somewhat of an eCommerce professional first of all. I don't think digital and analog are going to be two separate things anymore after this particular pandemic, and I think that everybody out there is understanding that in a pretty profound way. I think that digital immersion is not only necessary, I mean, I think it's the only way to actually stay relevant and push your career forward. Christiane: Part of the reason that I wrote the book was also to try and understand being the parent of two children, what the future would look like for my kids and what does that mean for college and all these things? Because I wanted to understand 72% of people want to be entrepreneurs, and what does that mean? And so, I think that if they think about that from a digital perspective, it's actually a pretty great place to be, right? It means you're immersing yourself in the digital aspect of things. I think that it's not just eCommerce professionals, it's going to be every single professional. Christiane: I do think when I look at the landscape, that the content part of this is really important, right? Because even when I was at Wayfair, I mean, we did content but it wasn't merged the same way. So, your AR question I think is really important. I think that we're going to shift online for a lot of the things that we did in analog ways before this. Christiane: So, if I'm an interior designer, I'm not thinking about what my career looks like when I come into your house, I'm thinking about what can I learn online so that I can do it for you from a distance, right? And I would apply that to every single aspect of every single job out there. If I have an analog job, how can I digitize that? And I think everybody's going to have to think about that. Christiane: I mean, look at doctors are doing it through telemedicine and designers are doing it through FaceTime. You can go down every single career. I mean, pharmacists are doing it through telemedicine as well. One of the people that I profiled in the book is Eric Kinariwala from Capsule in New York. And I mean, that's a genius business because he's delivering everything from the drugstore, all of your pharmaceutical needs, anything that your doctor has prescribed, you can get delivered to your home. I'm talking to him next week, but I think he probably crushed it in this particular scenario. Christiane: So, I think there's no... You're not on one side of the fence or the other, like this silo in the company does eCommerce and this one does regular commerce. I mean, I think that the two now are going to be forever conjoined. Stephanie: Yeah, that's such a good point. Completely agree. Well, this has been such a fun interview. We definitely need to be back for Round 2. Where can people find out more about you and The Inside and your upcoming book? Christiane: Well, my upcoming book is at frictionless.pub, and you can get a copy of it there. It links to Amazon and Barnes and Noble and every other great book place to buy books. The Inside is theinside.com. And the rest, there's an endless breadth of information on Google. Stephanie: Yup. Awesome. Yeah. Thanks so much for coming on the show. It's been such a blast. Christiane: Thank you. Thanks, Stephanie.
After working for some of the biggest tech companies in the world, Nate Bucholz was ready to leave his Google and Facebook roots behind for something smaller and an opportunity to experiment and move fast. He found that opportunity at Cardlytics, where he serves as the Vice President, eCommerce Partnerships. In this role, Nate and his team are working in new and exciting ways on a platform for an industry that isn’t typically considered new or exciting. Cardlytics works exclusively with banks to build their digital and eCommerce platforms, connect with customers and create rewards programs that lead to mutually beneficial relationships between customer and company. And to do all this, Nate and his team are analyzing troves of data and using technology in unique ways to truly perfect the digital experience for all involved. On this episode of Up Next in Commerce, Nate explains it all, including what data is the most telling and how to utilize said data in the best ways possible while also building and maintaining trust among all parties involved. Key Takeaways: Forget metrics about who and how many people are on your platform and really hone in on where they are laying out their money. Then use that data to decide where your marketing dollars should be spent Using anonymized data, you should isolate data sets and analyze specific behaviors to predict who might leave your platform or service, then create an action that will make them stick around The ROI from purchase behavior insights comes when you change your targeting practices based on the data you collect For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible eCommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to another episode of Up Next In Commerce. This is your host Stephanie Postles, and today I'm joined by Nate Bucholz. Nate, thanks for coming on the show. Nate: I'm happy to be here. Thanks for having me. Stephanie: Yeah, and where are you in the world today? Nate: I am sitting in my office/guest bedroom in Alameda, California. Stephanie: Yeah, keeping all the kids out as best you can. Right? Nate: The door knob rattles, but it is locked so we should be safe, I hope. Stephanie: We'll see. Yeah, once all this is over, it'll be nice to be able to bring people back to our studio and not have to do bedroom meetings anymore, but for now we'll make it work. Nate: Sounds very scandalous, but yes. Stephanie: It is a little scandalous. So I'd love to hear a little bit about, actually, I want to go back, back background on you. I want to start in the early days because I saw where it led up to, of working at Google, and Facebook, and where you're at now at Cardlytics, and I actually was wondering, I'm like, what is Nate's first job he had because everything else looks amazing. Was he working out on a firm when he was little? What was your first job? Nate: I was a dishwasher at a local restaurant in Lake Oswego, Oregon where I grew up. Stephanie: Oh, that's awesome. Nate: Worked my way up to busboy and waiter at some point. Stephanie: Very cool. Yeah, I think a lot of us started out in those kind of, I was a silverware roller, and so I would just roll silverware for eight hours a day. And I asked to be a hostess and they were like, "No, you can't be a hostess yet. I mean, you're not that senior." Nate: You've got to earn that. Stephanie: Yeah. It was good times. So you went to University of Oregon, right? Nate: I did, yeah. I did my undergrad there and then went on to work in public relations for a little bit. I had the, not so enviable job of getting good press coverage about Windows in Millennium Edition which is quite old now, but it was pretty the bad operating system and that was my first time- Stephanie: Oh, man. Nate: ... post college job. Stephanie: I'm sure you learned how to be pretty scrappy in that job though, don't you think? Nate: Yeah. I mean, there's always something good I think that you can find or an audience for a product if you can find the right one. After that I was in the Peace Corps for a couple of years in Ukraine doing business development and volunteer work. And then I came back for graduate school here in the Bay Area at the hospice and school at UC Berkeley. Stephanie: That's Cool. And then did you head right to Google after that or was there something between? Nate: I did, yeah, there was a brief internship, but after getting my MBA I went on to Google, in a travel vertical, or their travel vertical, I should say, up in the Seattle office. Nate: I was going to say that I was with Google for quite a long time, almost 11 years, and got to move around in a good way quite a bit. So I started out in Seattle and travel, then moved over to our London office for four years where I led a sales team there and so I oversaw the advertising sales for airlines and car rental. And then my wife and I had a son while we were in London and it kind of changed the lifestyle a little bit. We decided to get back to the US, moved back to the Bay Area, in retail-focused industry, mostly e-commerce, for about a year and a half, and then, actually, the last intake Google was in Malaysia where I was in the office in Kuala Lumpur looking after the branding and YouTube partnerships. Stephanie: Oh, wow. Very cool. What was that experience like? Nate: It was great overall, personally, it was amazing. We had this amazing expat lifestyle where our son was in this wonderful private school, we had lots of travel and so forth. Professionally, it was a real challenge, there were some of my, I'd say professional strengths that kind of turned into weaknesses in a different environment. Being quite loud and outspoken, and non deferential, didn't apply necessarily so well in some of the situations over there. But I mean, it was great. It was a good learning. Nate: At the same time my whole career had been and is now, once again, focused on more direct response marketing. And I had jumped not only into a new geography but also into the more brand forward environment working with Johnson & Johnson and Procter & Gamble and kind of the sort of traditional marketing that would have been on TV before, and online now is more about reach and frequency rather than getting people to buy things immediately. So that was also a new world. Stephanie: Got it. So then you quickly decided to head back to your e-commerce marketing type roots and go to Facebook afterwards? Nate: I did. So it was a finite assignment over in Malaysia and when I came back with Google I kind of felt like I was coming back to the same thing that I had left and I wanted to do something different. Facebook offered me a role, very similar but leading the team that that worked with one of their very largest advertisers. And that was more of a product heavy role in terms of working with the product teams to build things that would allow the largest, most sophisticated advertisers to grow their spend more. Nate: It was interesting, there were a couple of things that prompted me to leave. Which one was, it was very similar to Google, which is a wonderful thing, but you're part of a giant machine and it's hard to feel like you have a real big impact. And at the time, though they've changed this and allowed people to work from their San Francisco offices as well. I was commuting down to Silicon Valley from Alameda, which is about an hour and a half each way. So- Stephanie: Yeah. No, thank you. Nate: ... it's kind of brutal. And actually a colleague at Facebook connected me to someone they knew at this company I had never heard of, Cardlytics. It's a ad platform, much like Google and Facebook, except it operates entirely on banking channels. So if you log into Bank of America or Chase, Wells Fargo, one of many, many banks, you'll see offers from different companies for some sort of incentive to purchase like a cashback rewards or something like this. And that's where we operate. Nate: And it's a much smaller company for one so I enjoy feeling like I have a bigger impact, but the common thread through these three companies that they all sit on an amazing trove of data. So Cardlytics can analyze the purchase behavior of about half of the credit and debit card swipes in the US and we're in the UK as well. Stephanie: Wow. That's a lot. Nate: It is. It's amazing. And so I've learned from Facebook and Google that when you've got an amazing first-party data set, then you can kind of get a seat at the big kind of table and so it's a lot of fun to analyze that and see how it can apply to marketing. Stephanie: That's cool. Were there any learnings that you had from Google and Facebook that you kind of brought with you or best practices when working with large brands or a large e-commerce like store owners that you saw where you're like, Oh, a lot of people were doing this and we noticed that was actually the wrong move, or here's some best practices we learned from the top brands that smaller brands could apply, that you maybe brought with you to Cardlytics? Nate: Yeah, I mean, the first thing that I tried to do with my team when I came into Cardlytics was change the mindset about what is big and the impact that we could have. So we'd gone from this really small company to now, there's about 400 employees, and we've been public for about a year and a half, but it's still pretty early, pretty young. And I think a lot of the Cardlytics employees had viewed the going public as, Hey, we've reached the big time and we've made it. And I kind of tried to share this viewpoint of the ad budgets, the marketing budgets that are out there, the potential for growth that I saw at Facebook and Google to really kind of pay them big I would say. Nate: And I also saw that because Cardlytics is a different sort of advertising platform, but a lot of the language was language that we spoke internally and we have kind of impressed that upon the marketing teams and so there was a lot lost in translation. So I think one thing, Facebook and Google have almost been able to use their own language because they're so large, but it's become industry standard and we need to conform to that to make it easy for marketers to make apples to apples comparisons when they're thinking about their budgets and how they spend it. But there's been an evolution. So I started Google in 2007 and at that time it was all about search and it was all about clicks and- Stephanie: And still is. Nate: Well, it is, it got more sophisticated though, you know what I mean? Stephanie: No, no. I mean, I just left, let's see, two years ago from Google and I still feel like they're so heavy on search. Nate: This is true but it was the greatest sales job in the world. I'd go in, I'd say, well, you got a hundred clicks, but your competitive group got 200 clicks so let's go ahead and double your clicks. Here's the budget that'll do that for you. But it evolved, it went to measuring the money that was spent off of each click for example, looking at your conversion rates and getting into the mobile experience, trying to get marketers to catch up to consumers in terms of the fact that everybody was shopping on their phones or a good enough amount of people to warrant some serious attention. Nate: And then moving on over to Facebook, because Google had that first mover advantage of everything being based off of what you see from the click, it was trying to open up people's eyes that there's more than just last click when you look at an attribution model, that there's a lot of influence that happens prior to that. And Facebook always, we always said internally they figured they were undervalued by like 30% because of all this view through attribution that they're losing. Nate: And then ironically getting people to stop targeting so granularly, even though it's possible to let the machine do its work and start doing machine learning, based targeting so that Facebook could open up its inventory more. And I think that the evolution, and I'm definitely biased obviously, these are the moves that I've made in my career, but part of the reason I've made these moves is I see the next stage of marketing getting more and more rigorous about what is actually bringing an impact. This is why it was so hard when I was doing branding work in Malaysia. It was not so much a return that was required, but a reach and frequency, and it didn't really matter how that was gained. Nate: It was just, let's hit a lot of eyeballs a lot of times, and Cardlytics is on a totally other end of the spectrum where it's not even about your interests online. It's just, where do you lay down the money, on what sort of categories, what have you done in the past, what's the basket size and the frequency, and these sorts of things. I think that's a natural evolution of marketing as you get better data, you're able to cut out the waste more and more and get more efficient. At least that's the idea. Stephanie: Yeah. How do you see marketing spend evolving over the next couple of years when it comes to measurement and ROI? Do you think it'll change how people think about things? Like you said, they used to just think about clicks and maybe impressions and then they started niching down a bit and wanting to actually target maybe who their customer is, and where do you see that heading over the next five years? Nate: Five years is a long time to make- Stephanie: I was going to say 10. Nate: Oh, my gosh but yeah. It'll be implanted in my retina somehow in my screen. I think, obviously I'm talking to you now from my guest bedroom and there's this whole pandemic going on. These kinds of catalyst events are what I think make large vector changes in things that would happen slowly over time anyway, right? There's a shift to digital over time. If all of a sudden everyone's TVs had exploded, there would have been a faster shift. And I think that the fact that a lot of marketers have either pulled back their spend or just paused all spend entirely, means that there's going to be a whole new shift when they go back to whatever the new normal is because you're going to look at every channel from a totally fresh perspective. Nate: And obviously things have shifted online more and I have some interesting stats that I can share about that as well. There's been this online shift of people who maybe had never purchased groceries online or maybe they were happy just with their broadband cable and now they're doing all sorts of streaming services, whatever it may be. So I think online is going to benefit a lot as people see that they didn't have such a huge downswing or maybe they didn't notice a big change when they canceled some channels and not others. Nate: But I also think over time, and we were really good selling with data at Facebook and Google to explain why more and more money should be shifted through those channels. And they weren't bad decisions but there are a lot of other marketing channels out there. Obviously, Cardlytics is one on my mind but there are several that have the scale and have the data to challenge some parts of the marketing budgets that have just almost, not mindlessly, but I don't know if they've followed the trends to shift to Facebook and Google. Nate: And so both of those channels have diminishing returns. Like your first audience that you target on Facebook will have amazing ROI and pretty soon you're going to get a look alike audience and pretty soon you're going to just kind of expand it out and the ROI falls as you do that because it's a less rich pool of potential consumers. And it's the same thing with Google, if you think about the keywords and for some reason I use running shoes as an analogy a lot, but that first keyword that says, I want to purchase running shoes today, will have an amazing return if you bid on that. Nate: But there's only so many and if you want to grow, pretty soon you're bidding on tips for healthy lifestyle or something like that. You're still trying to sell some shoes, but it takes a lot more clicks to get those shoes sold. And so one of two main points that we try to make when we speak to marketers is, Hey, listen, you'll be fired if you don't advertise this on Facebook and Google because they're amazing channels and you should use them. But there's a point where just because it's easy doesn't mean you pump more money into those. You need to take the lowest performing set of your marketing spend and see where else you can put it. So that's a lot of the conversations that I'm having these days. Stephanie: So you said you have access or, Cardlytics has access to lots of data and I think right now is a perfect time to wonder what kind of spending habits are happening in this COVID environment? What are the changes occurring? What are people spending on? What kind of info do you have to share around that if any? Nate: I have some interesting info. So we have a great marketing team but what I meant to say was, also we have a great analytics team and no more than a week into this stay at home lock down that most of us are experiencing, they built this dashboard where we're looking at quite granular categories and how the spend is changing year on year, updating every week, looking at all the different DMAs in the United States, and so we can see what happened. And right around the beginning of March, all spend everywhere just plummeted, as you'd expect, online as well. And if you look it's quite a depressing heat map. It's just a red United States with various shades of red. Stephanie: Yeah. As expected I guess, but still sad. Nate: It was sad, it was sad. However, we've seen some interesting shifts and there's some that are pretty obvious, like people shifted to online grocery for example. There are others that are coming in that I think are kind of interesting and you saw where it was quite depressed in the home improvement category for example. And now online for home improvement has gone up like 64% last I saw, and you'd see where there's this trough of people not doing anything and hunkering down and then all of a sudden they start spending on their homes. What happened- Stephanie: Oh yeah. Getting all handy at home. I can- Nate: Exactly. Stephanie: I started looking at things being like, could I fix that? No. But it's a good idea. Nate: Following home improvement was when parents I think started to lose it a little bit and so the online toy purchases and kids' products have gone up significantly. We just bought a small kitty pool to put in the backyard as we realized we can't go anywhere else. Stephanie: Yeah, I bought into that as well. I bought a, let's see, a scooter for my two year old, a lawn mower bubble machine. I'm like, anything that helps, here just take it. Nate: Absolutely. Exactly. So health and beauty has gone up a lot and pet goods up a hundred percent. A lot of that is shifting from offline to online, but that's one that happened almost right away. And so you see, and I guess these aren't surprising, it's following what you'd think of in human behavior, but make sure the kids are occupied and, Oh my God, what if we run out of pet food? And so that's gone up quite a lot. Nate: But I think the bit about online versus offline was a little bit surprising to me, but I suppose makes sense. And lends itself to how I think marketing is going to change, is how it's changed geographically over the United States. So if you look at online spend year on year, it's gone up across the United States, but on the coasts, especially if you think of DMAs like San Francisco and New York, it hasn't gone up as much because I would hypothesize there's not as much change in behavior that's really needed. People are already buying largely online. Nate: If you look at the smaller DMAs, especially the more in the middle of the United States and just smaller city areas, they've spiked a lot more. And so their year on year changes are more toward the high, not high, but mid double digits increases in online spend. So that's one of those catalysts like I mentioned where maybe people were just fine doing their brick and mortar shopping because that's what they were used to and their peers and people around them in their communities were kind of doing the same thing. This has really changed the behavior specifically in these smaller DMAs. And that's where I think after this whole thing is over, you'll see a level rise in e-commerce. Some people will go back to their old behaviors, but I think a lot of them will stick. Nate: And I was reading an article of some, there was a financial article and this guy was, I think he managed a hedge fund or something like this, and he was writing about how shocked he was at how easy online banking was, which is like, well, I've been doing that for a long time, but there's some people that were just stuck in their old ways. And once people realized that it's quite easy to get your groceries delivered online or to do whatever shopping it is online, online banking, we've seen an increase, which has obviously helped Cardlytics since that's our whole platform, is online banking. Nate: But I think those customers, some of them will stick around and the challenge for marketers that we're starting to talk about now is, Hey, if you are lucky enough to see an increase in your category, as soon as things start going back to normal and businesses start opening up in reality, like brick and mortar, how do you retain those customers? And I think that'll be a big challenge for marketers just to hold onto as much as they can of whatever they've gotten from this if they're online already. Stephanie: Is there any advice during that transition of like, here's some ideas of what you could do to kind of keep that clientele? Because I could see you're saying the more urban areas who maybe were not online before, having to use different messaging for them to convince them, this is still the way, which it probably is. Like online banking, whenever my parents were like, I'm headed to the bank to cash a check, I'm like, Duh, why? And they're like, I'm not doing that on the phone they might take my data. And I'm like, okay, go ahead. You drive 15 minutes to go cash your check mom. But is there any different advice that you would give for those kinds of communities who maybe weren't online for certain things before versus other ones that didn't really change as much? Nate: Yeah. I mean, it's going to be, a loyalty marketers are going to be in their sweet spot where that'd assist building that, but there's a lot of companies that we work with that are all focused on customer acquisition, and they're loath I think to spend advertising dollars on existing customers because they already have their access to these customers, whether it's a mailing list or whatever it might be. But the reality is a lot of those emails aren't opened or bounce or for whatever reason. I mean, even Amazon advertises quite a bit with us and just because you have people shopping in one business area doesn't mean that it's easy to get them to shift to another business area. Right? Nate: So what we've been saying is, before these people leave let's anticipate who's likely to leave and we're looking into models for propensity to churn, for example. So we can look at who stops using a certain service or stop subscribing, and then look back at six months and when I say who, this is all anonymized data. By no means do I know you and your bank account. I would know bank account, 5632 or whatever it might be and a whole group of them, but what is the change in purchase behavior that happens leading up to this and then who can we identify that hasn't yet churned but is starting to exemplify that sort of behavior. And so you can start isolating groups that maybe haven't reached this type of loyalty that means they're going to stick around. Nate: And it could be as simple as just analyzing your own data as a marketer and seeing what's the average frequency of purchasing or the spend amount of those who have stuck around for a long time. And then those who are, we call them one and done, right? They try the service because they have some offer and then they're gone. And the people that are still beneath that threshold, whatever it is that you designate, are the ones that you need to invest in and hit up with a message before they go away. Stephanie: Got it. What are your views on how e-commerce is going to change after all this is done? I know that certain people will be doing more things online, some of them might drift back to their old methods. Is there any other things that you see happening or changing for good or are new things coming about over the next year or two after this kind of calms down? Nate: Speaking as just a consumer one thing that's been convenient I would say is, I'd like the ability to go into a store of course, but those that are open, that do curbside pickup and things like this, they all want payment beforehand online, right? So there's no contact between two people. I think I could see a mesh of online and offline happening a lot more frequently where you've already selected whatever it is that you want, maybe you've already made your payments, whatever it is. So that when you go into the store, it's more like an Amazon store almost where you go in and you get your goods and you just leave. Right? Nate: So using technology even in the brick and mortar environment to make a more seamless process and it can allow for maybe fewer lines, better customer service, that sort of thing. I think on the marketing side, e-commerce is nothing new, but I think this shift is going to mean even those that had topical knowledge of things like measuring incrementality or looking at the analytics of their marketing programs, they're going to be forced to dig in even more because it's just going to have a shift in importance and you can no longer be on the surface and do your marketing. I think there's going to be a requirement to dig in a little bit deeper on the numbers and know the impact of your marketing. Which I guess is a natural trend anyway, but as I said I think this will accelerate that. Stephanie: Yeah, completely agree. So you said you have 50% of insight into the spend in the US with people moving to more banking online. Where do you guys project yourselves to be within a couple of months? Do you think you'll have 60%, 70%? What are you thinking? Nate: Well, the percentages is derived from the banks that we have partnerships with. I'd love to say they're nimble and quick to form these agreements, but it takes a long time. But Cardlytics, when I joined, or I guess for most of its history it was this long tail of credit unions, there is something around 2000 financial institutions in our network, but it's a really, really, really long tail. The anchor partnership that we had was Bank of America, and then early last year we brought Chase on as a partner, and then Wells Fargo and later this year will be US Bank. So it will grow but it happens slowly over time. The shift online just means that there's going to be more people who are, hopefully, interacting with these offers and looking a little more closely at their finances and hopefully, using our ad network kind of more regularly I suppose. Stephanie: Got it. How does that partnership work? Because I was reading through that you guys partner with the banks and you run their rewards programs, right? And in turn you have access to the data and all that. Can you explain that a little bit more because it's a super intriguing model, but it also sounds very complicated where I'm like, wait, who's doing what? And so you guys are running rewards programs, and you're doing marketing stuff. How well does all that work? Nate: Yes. So we kind of think of it as three groups that that can benefit. So you've got Cardlytics and we take in advertising revenue, which is wonderful and we like that. You've got the bank and the reason the banks are motivated to do this with us is because they get to offer something to their customers that's a value add. So we call them offers rather than ads, which they are. And so a logo that'll allow you to have say, 10% back if you go and purchase with a certain company. Nate: And from the bank's perspective, they're differentiating themselves from some of their peers who might not offer this. And a customer comes on and says, Oh, well, because I'm a customer of Chase, look what they're offering me, this 10% back or $5 back or whatever it may be. And in fact, when you do get your money placed back into your account, the money comes from the bank. So this is why the average consumer hasn't heard of Cardlytics, because Cardlytics is simply the, I guess the technology behind the platform and the Salesforce to bring on these brands. Nate: And so we will share some of the revenue that we bring in with the banks, but a large portion of what we share goes to the customers. So I think we've rewarded something more than $500 million in these rewards over the course of when the company's been doing this, which is great. And then we retain a portion as well. Stephanie: Okay. Got it. And then how do you take that data that you have access to? What do you do with that afterwards? Nate: Right, so the data, it all remains behind the bank firewall and when we analyze it at all, as I said, is anonymous as far as who it is. But we can look down to spend at a zip code level and we look at category spend and all this. The way we do it is in a couple of ways, primarily it's to target. So we might say, Hey, we know people that like to buy pet food but they've never bought pet food with your company, and we'll show an ad. We can get quite granular with that. We might say someone who did buy from your company six months ago but then hasn't bought since is a lapsed customer so let's target them. Nate: At the end of the campaign a big differentiator is that we'll actually look at the incremental impact of the ad.So we'll do a holdout group, and it's just a test versus control, which is not totally uncommon in marketing, but the difference is we know who's spending the money and who's not spending the money. And so we'll take this holdout group, we'll make sure that the way that they spend is the same as the test group by and large over the past year or so. And then we'll just look at the lift in spend between those who saw the ad and those who didn't, and the idea is that it would take into account anything you're doing on TV, on Facebook, on Google. So at the end of it you can actually say, well, what was the incremental gain that I got for the money that I spent? Nate: And incrementality is tossed around a little bit, but at an analytical level, at a 95% statistical confidence, you can actually see what the impact is of the ad spend, which is kind of the- Stephanie: The goal? Nate: The end goal. Right. And so that's quite interesting, and then I would say the targeting and the measurement are the primary ways that we use the data but we'll also work with some of our advertising partners to show a different business insights. And we can look at where the, if you shifted spend to you, where did it come from and how did that change over time or we can look even at, for brick and mortar companies, we've helped them decide where to open businesses based on where they have low market share and where there's increases in demand and things like that. Nate: I mean, it's almost endless, the possibilities, as long as we are careful about observing our, we don't want to give too much data that anyone would be able to make market decisions or certainly not reveal anything personal about a customer, which we don't have access to any way, the banks scrubbed that before we get that information. Stephanie: Yeah. They know better. So is there any themes that your partners come and ask you guys for help with, like you said some of them asking for where to open a brick and mortar location. Is there a couple of questions where you're like, Damn, we get this a lot, them coming and asking us for help around this or that? Nate: I think a lot of them are curious if their perceptions of market share are real and whether they really are strong or weak in certain areas and we can confirm that for them and help sustain it or change it depending on the situation. I think that's kind of the most common but I'd say also, as far as spend categories, people are curious about who their competition is. And by that I mean it might not be the same type of service. Nate: So if you think about audio streaming, is that a competition for book purchases or is it competition for music streaming? Is it books on audio or is it podcasts or is it music or is it something entirely different? Is it, I don't know, travel or sporting goods or something like that, and so we can actually look at, in a campaign, if you bring over customers, where does their spend decline in other areas? Nate: So for example, on podcasts and books, the competition is share of ear, if you will. So they might decline in how many books that they're purchasing, but actually they'll be more correlated to maybe fewer premium subscriptions for music, as an example. Which makes sense I guess, like there's only so much time you can put something in your ear and go about your business and listen to it whether it's a spoken word or it's music, really makes no difference to the customer. Stephanie: That's great. And how do you guys, you were talking about there's a lot of privacy efforts that you guys make sure when it comes to the bank data or your data, what are some big things you're doing to make sure that data is protected and similar there'll be one question everyone's like, Oh my gosh, Cardlytics has all this data. What are you guys doing to make sure it's protected and used and not abused? Nate: Sure. We take it very seriously obviously, it's something, I remember a same question would come up to me at Facebook and Google. It might be about the customer or it might even be, Hey, you're also working with my competitor. Right? And the first thing I would say then, and I'd say now as well is, look, if we messed up here and did anything wrong, the whole model comes falling down, nobody would trust you, nobody who does business with you. The bank certainly wouldn't partner with us if we weren't responsible. Right? And the banking industry is one of the most regulated that we have in the US, and so there are a lot of safeguards, for one, before we see any data from the banks, the banks are stripping out anything that we could see that would actually tie to us that person. Right? So we don't even get that. Nate: Second, we have to operate behind the firewall so any data that we see about market spend and so forth at a raw level doesn't leave our servers. So we don't actually give that to the marketers. So by the time it gets to the marketer we'll definitely share specific insights, but it'll be trends that are grouped together in terms of people or companies. And so we've got quite explicit guidelines on our data practices that we follow. There's a few different checks and balances I suppose. Stephanie: Got it. That makes everyone feel better I'm sure. But yeah, like you said, Google and the Facebook Store, when you see how much data they have, any other company's no match to that. How do you think about, when it comes to acquiring new customers in your, like to me all the customers you're working with sound much harder than some of the other guests we've had on the show. You know, acquiring normal consumers, you're having to acquire banks and big brands. How do you all go about creating those partnerships and keeping them and keeping those clients happy because I could see banks being hard to keep happy because they're just kind of, some of them anyways are in a different era it feels like, at least some of the banks I work with. Nate: There is a spectrum of the banks that are more or less progressive or more or less digitally savvy. I work on the advertiser side, but we have a great bank team which partners with these guys, our founders, our CEO, they came from the banking environment as well so we kind of speak that language. And I think what we offer is one, there's this reassurance that on the, for example, the privacy side and the data protection that we do well with it. We take it seriously and we haven't breached that trust with any partner before. And then every bank wants to please their customers and retain their customers and you might not always see that in practice, but that's what they want and they're all competing with each other. Nate: So if we can offer a great customer experience where the customer can get some cash back from some different brands and make some money from it. Some banks are more concerned with the revenue share and some would rather plow that revenue share back into the customer rewards, just kind of depends on their approach, but it's a way to help their customers and retain their customers. But it takes a long time to form those partnerships and it's a lot of technical integration as you can imagine. And so once they're formed they tend to stick with it for a while because there's a lot of investing on both sides. Nate: On the advertiser side, I mean, once we get to the point where we've really explained everything, typically they want to advertise with us, but the challenge is one, they've maybe never heard of us so we have to start from zero. Two, we have to explain how we're different than something else, like an affiliate marketing channel or something like that. And then to really figure out if we're worthwhile, you have to dig into the incremental return, which is why I touched on that because we are behind the bank firewall, we're not going to share all the impression data and who your campaign reached exactly on a one to one basis. And so if we don't plug nicely into whatever you formed when you're marketing with Facebook and Google, it's a bit of extra effort and there's a lot of work getting our data scientists together to kind of verify, what we say we do is what we actually do and so there's this rigor that's needed. Nate: Which is why, going back to what I said about the shift that e-commerce and marketing experts having to get more under the hood with what they're doing will benefit us because if you're willing to spend the time on looking at the numbers, we usually benefit. But people are busy and they don't always have the time to do that. Stephanie: Yeah. Do you spend a lot of time training them on, here's some metrics you maybe should look at or here's things that are important that you never considered before, and if so, what kind of things should they be looking at that maybe a lot of them aren't right now? Nate: Sure. Stephanie: Or what data do you give them where they're like, "Ooh, that's good I've never seen that." And you're like, "You should have seen this before." Nate: Yeah, we've kind of got two sets of advertising partners. There's those who don't really want to be bothered with those details, and it's a little frustrating because I feel like there's this wealth of data that they could analyze. They just want to know that they're getting a customer for 20 bucks a pop or whatever it is and they're good. And then there's others who dig in more and tend to eventually become our larger partners and they really want as much data as we'll give them. Nate: And the things that we educate them on, it might be like what their expectations should be on marketing incrementality, like how much bang do you really get for your buck? And when you do bring a customer on, like I said, where is that share coming from? Where are they declining in spend? Because it's rare that somebody just spends more money. Sometimes they do, but not on a frequent ongoing basis, and so where's the money coming from and is your competitive set what you actually thought it was or is it something a little bit different? Nate: And then looking at why people stopped using a product so I mentioned this propensity to churn, which is kind of predicting the future of what somebody is going to do, but you can statistically do this in a lot of cases by analyzing large groups of people who have had this behavioral change in the past and then seeing who else fits that model, has it quite reached the point of stopping their spend. That's something that I think is kind of surprising to some as well. Nate: And we've got a kind of an intro slide that we use where we say, you see these three data points from your customers, once they're on your platform you know what they're doing, but we know everywhere that they're spending their money. And that sheds a lot of light on to the type of person that they are. And the analogy I use in, University of Oregon wouldn't really like this, but I love Oregon Sports and Facebook would look at me and say that I'm a huge sporting fan, specifically Oregon Sports, but I almost never spend any money on it. Right? I do a lot- Stephanie: You're the worst kind of customer. Nate: I'm the worst kind of customer and so there's this discrepancy between kind of your behavior and so a marketer would say, Ooh, let's target him for a lot of jerseys or whatever. Cardlytics would say, no, this guy, he's a cheapskate. He's not going to go and buy- Stephanie: Stay away. Nate: ... anything. Let's get the person who, whatever they do online, they're plunking down their credit card for certain products and so I think that's kind of a different mindset as well. Looking a little differently about how you form your ideal audiences for targeting. Stephanie: Yeah, that makes sense. Do you give them dashboards that they can actually play with or do you kind of give them customer reports based on what they want, and if so, how do you manage those different types of clients. It sounds like a lot of different clients to manage how do you keep track of it all? Nate: Yeah, so it kind of depends on how big the partnership is with us. Right? We haven't really built out our long tail so most of it is pretty white glove service, but by and large, a smaller advertiser will get certainly access to their ad spend, how many clicks, impressions, conversions and all that. And then we'll make agreements as part of a partnership. Certainly if someone makes a commitment to be with us for a year and to be advertising over time, we'll agree to it. Certain analytical, custom analytics is what we call them, and that's jointly determined by our, was really designated by the client themselves, but our analyst team will come in and talk about what we can do and we'll figure out what the problem statement is and what they want to figure out and we'll deliver a customer report. Nate: And then we're starting to develop a dashboard as well which some advertisers have access to. And there you can look at the competitors and the competitor category that you'd like your information on, geographic areas. And then that data is updated periodically and it's limited set of data but it kind of answers on an ongoing basis what the customer analytics might do on a one off basis. So we're moving in that direction, providing more and more insights into the business or we're trying to. There's always a challenge of you've got a lot of data, but making sense of that is another matter altogether so we really try to figure out what the business problem is rather than, it would be interesting to see, and then throwing out a lot of requests. Stephanie: Yeah. Got it. But therefore the other- Nate: But it is pretty interesting. Stephanie: That sounds really insightful to be able to provide that information to them and see how they actually utilize it to change their marketing strategies or product strategy or any of that so yeah, that sounds really cool. All right, so we only have a couple minutes left. At the end of each interview we do something called the Lightning Round, brought to you by Salesforce Commerce Cloud. It's where you quickly answer a question, whatever answer comes top of mind, and you have one minute to provide an answer. Nate: Okay. Stephanie: Let me know if you're ready, and I'll start with the easy ones first. Nate: I'm worried but ready. Stephanie: All right. What's up next on your reading list or audible or podcast? Nate: Yeah. I want to sound a lot more intellectual here, but I've been into C.J. Box as an author and it's like this super fictional reading about this game warden in Wyoming and it's kind of an escapist. Stephanie: Hey, I like those kind of books I feel like I have to read it right now. All right, what's up next on Netflix or Hulu queue? Nate: Netflix. I would like to watch Extraction. Stephanie: Okay. Nate: Yeah. But typically we're watching a lot of cooking shows, we've gotten into that a lot. Stephanie: Any good recipes recommended, [inaudible 00:45:02]? Nate: Mostly they've been focused on restaurants that I can't go to, which is really frustrating. Stephanie: Oh man. Yeah, that's sad. All right, what's up next on your shopping list? Doesn't have to be groceries, it can be anything that you want to buy next. Nate: I've heard about the therapeutic values of pressure washing. I want a pressure washer. We'd go out there and just clean the house. It's part of that home improvement upswing. Stephanie: Yeah. You're that person. We're going to walk by and be like, Nate, take it away from him. He's been doing it for eight hours. All right. The next hard question. So your job is to stay ahead of expectations and your competition. What do you think is up next for e-commerce pros? Nate: I think within the marketing budgets that you're spending, up next is slicing those more and more granularly, and by slicing, I mean looking at the impact of each portion of your marketing, even within the same channel, and figuring out if that can be better employed elsewhere. Stephanie: Great answer. All right, well, this has been a really fun interview. Thanks for coming on the show and see you next time. Nate: It was a pleasure. Thank you very much.
For those not in the know, The Mars Agency is an independent agency that combines the best of technology with the best human intelligence to provide solutions to businesses throughout the world of retail and eCommerce. And one of the Martians who leads the charge at Mars is Amy Andrews, the SVP Business Development & eCommerce. On this episode of Up Next in Commerce, Amy walked us through all the trends she’s been seeing in the eCommerce industry, including the changing consumer behavior, the rise of omnichannel experiences, and why companies that can crack the code of using voice plus video technology could see a huge payoff. Key Takeaways: There is an opportunity to merge eCommerce and influencer content in order to make a more relevant and personalized shopping experience The amount of data in the eCommerce world is overwhelming and can lead to losing the humanity of the work, which Mars tries to avoid by having a blend of the best technology and the smartest humanity Voice shopping still hasn’t reached its tipping point, but there is data that shows that voice technology is growing in the world of eCommerce For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible eCommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to Up Next in Commerce, this is Stephanie Postles, co-founder of Mission.org and your host of this lovely podcast. Today we're joined by Amy Andrews, SEP of business development and eCommerce at the Mars Agency. Amy, how are you? Amy: I'm doing well Stephanie, how are you doing? Stephanie: Doing great, yeah as great as can be. So, when I heard of the Mars Agency, I saw that you called your, was it your customers or your employees Martians? Amy: We call our employees Martians, very lovingly. Stephanie: Oh man, I love that. I was trying to think of a name I wanted to give our employees, but nothing comes close to that. Tell me a little bit about the Mars Agency and how all that came about. Amy: Sure. So the Mars Agency has been around for over 45 years, started by an amazing woman, Marilyn Barnett, and really our focus has been on marketing to shoppers over that last, almost half a century. And Marilyn was really a pioneer in this space, she used to be when she started kind of the grocery model who would hold the box of laundry detergent as people walked by. And really just, yeah, and talk about women in business. She was just such an interesting leader and saw that as a marketing opportunity for brands at retail, and started the Mars Agency. And we have a long history in shopper marketing, and shopper marketing is really just marketing to shoppers so, as that has evolved and how people shop has evolved, we followed them and led them to all those different places. Stephanie: Got it. So are you working with large brands to kind of teach them the trends in the industry and how to market to, like you said, the shoppers, is that how to think about the Mars Agency? Amy: Yep. We work with a lot of large consumer package good clients so, like Campbell Soup, Nestle Waters, several others across top retailers. So Walmart, Target, and for me in the eCommerce space, Amazon is definitely a huge player. Stephanie: Okay, cool. And what is your day to day look like there, what is your role look like? Amy: So I lead our eCommerce team, which I mentioned some of the retailers but we really work across all eCommerce retailers and digital platforms. If you think about things that some of you probably use more recently than others like Instacart and other delivery services. We help brands market to their shoppers in those spaces, and really anywhere that you can buy a product online. Which used to be physical stores would convert it online, or your kind of Amazon, Pure Play retailers, and now as I'm sure you've experienced definitely, there's a lot of different options to buy online as you're scrolling through. Instagram you can shop now and kind of always be almost we're moving towards one click away from a purchase in any environment so, that's really what my team focuses on, for our clients, how do we help them market and ultimately sell more online? Stephanie: Got it. Has everything with COVID-19 kind of adjusted your strategy of what you're advising your clients to do? Or what kind of shifts have you made when it comes to that advisory role? Amy: Yeah that's a great question. I think we have seen a lot of data as this, sadly continues for us. But it has definitely had a huge impact on the eCommerce space, particularly for grocery, since a lot of our clients are the CPG packaged clients. We've seen online grocery projections in the last couple of weeks reach what we thought they would be in 2025. So there's been, yeah huge growth in this space, and a lot of new users to this space so, we know that's out of necessity, but again as this kind of continues, we think that a lot of these people, like 60% of people tried a delivery service for the first time in the last six weeks. That's a ton of new people who are buying new groceries online and, yeah there's been a lot of experience as I'm sure you've heard with, not being able to find what you want, or having slow delivery time- Stephanie: Yeah. Being out of stock of my favorite matcha tea, very disappointing. Amy: Out of stock, yes. Which is a little bit easier to deal with than toilet paper but- Stephanie: Yeah, I guess. Amy: I guess it depends on where you are on both with your supply but, no we've had ... Yeah, a lot of people are having to make different choices and having to try things but as this continues, I think people are forming new habits, and even new preferences, so it's definitely influencing how we're advising our clients and where they should invest. I think what's also interesting is because of a lot of those issues, a lot of our clients and a lot of retailers have just put their marketing on pause, to make sure that they can get things in stock, and for retailers to make sure that they're not price scourging or kind of promoting things in the wrong way that would send the wrong message. Amy: So I think what will be interesting long term is, some retailers and brands kind of catch that, and once they have products in stock, once, even Amazon this week has fixed some of their Amazon Fresh delivery issues. As those things start getting worked out, I think they'll be a lot more interesting marketing opportunities, especially as you think about all those new users, either to a retailer or to a brand. I don't know if you bought a different tea brand when you couldn't find yours. Stephanie: I did, I did. Amy: Yeah, a lot of people are having that experience right, so then it's like how does that new brand try and keep you and then how does your old brand try and get you back? So we're definitely working with our clients on all those types of questions. Stephanie: Got it. Do you think clients should be turning off their marketing budgets? As you mentioned, a lot of them are doing that right now, do you think that's a good strategy, or should they till be maybe thinking of ways to experiment because this is a whole new world, it might be actually a good opportunity to kind of experiment a bit without offending people if possible? Amy: Yeah, no, I think ... Yeah, I think it is a bit of both. I think initially, not just marketing but a lot of businesses and industries, just kind of paused to figure out and make sense of what was going on and determine what they should do next. And I think that was, probably a smart move at the time, just to not make any rash decisions. But we're definitely partnering with our clients now on, what is the right way to market. I think one of the trends that we'll see is probably a lot more regional and geographic differences. Like we in the Bay Area are still sheltering in place for another month. So, online shopping here will be very different than other states that are opening up. Amy: And, marketing to those people might be very appropriate now, and I would definitely recommend testing and trying things in that space. Stephanie: Got it. Amy: So I think it's going to have to be a combination. Stephanie: Yeah, completely agree. Do you see the companies you work with coming to you with similar struggles? Like other themes that you're hearing and any advice around some of those struggles that they're experiencing? Amy: Yeah. I think a lot of the marketing struggles, or just some of the struggles on a more macro level of just the unknown, especially in terms of timing and how long it will continue. And then we kind of have some of the same issues in terms of data, you know there's so much out there, like when you turn on the news, you see so many different stories and different points, sometimes it's kind of hard to determine what are the right guidelines, or what's the right data that you should follow. So, we're really treating this as an ongoing conversation with our clients. And it does differ by geography, it does differ by category or industry. So, I think taking a really custom approach and being able to adapt now, and have a strategy where you're also able to easily adapt moving forward, is going to be really important. Amy: We typically do annual planning with our brands, and we've already been talking, you know we're already in the stages of re-planning but, I think re-planning will be something we do all year now, I don't think it's kind of the pre COVID plan and the post COVID plan, I think it's going to be continuing to adapt. And the brands and retailers that are able to evolve in that way are probably going to be the most successful. Stephanie: Yeah, completely agree. It seems like a good time to kind of pivot in certain areas, cut projects that aren't, maybe as necessary, and thinking in a completely new light based on everything that's happening. What kind of things do you see being cut or changes be made in these re-planning sessions at these companies? Amy: I mean, the big question now, which the Mars Agency is tackling with our clients is, what might come back in-store and what might not, in terms of marketing and planning around that? There's the kind of legal or even not legal, but kind of the official guidelines or restrictions side of things, in terms of how people shop and how many people can enter the store at what time. But then I think there's also a very real consumer behavior piece of it. So, one thing that has happened in stores and that a lot of our brands being food brands, we've done is, things around sampling and trying new products. And whether that's a cooked piece of food outside of a wrapper, or a sealed up new product, I think in both of those cases, I don't know if for myself, and if I think about other shoppers, I don't know how eager we're going to be to take either one of those samples now. Amy: So, we're trying to rethink things like that that have been really traditional vehicles to encourage trial, how do we think about that in a new way? Either if that's a re-plan in terms of, what do we do with those dollars and invest them in something else? Or what I think is maybe more creative and exciting is, how do we think about sampling in a new way? Or how do we think about demos in a new way? And that's where we really see the in-store and the eComm world kind of colliding, and really creating some of these omnichannel is the word that we use a lot. Stephanie: Yeah. Amy: Omnichannel experiences, so that we're moving towards that anyway, and I think COVID has been an interesting tipping point to, as you said, kind of pivot and think about these things, and push ourselves to think about them even more differently now, to deliver the best shopper experience. Stephanie: Yeah, it seems like it could be with everything bad that happened, maybe a good forcing function to kind of push some brands into the eCommerce world who maybe weren't fully utilizing it before, or not at all. Do you see them being able to adapt to some of these changes that you're recommending them or being able to shift something that they've always been focused on selling in-store, always focused on someone having that in-person experience, like you said, whether it's a sample, a demo, have you seen them be able to pivot on to eCommerce, or being open to that, or even having the technology to do it? Amy: Yeah. I mean I'm pretty optimistic, so I think yes, I think all brands can do this and adapt and pivot and do so relatively easily. I think that was a big question before all of this, and the crisis was just how quickly should each, brand based on their category, be moving into this space? And a lot of brands were over-invested in eCommerce because they felt that that was going to be the future so they're a bit of a step ahead. And that doesn't mean that other brands can't catch up but, I think COVID has just been a kind of internal tipping point for a lot of organizations to think about how they're treating eCommerce and maybe prioritizing it a little bit differently. Amy: So, yeah for brands or companies who weren't thinking about it before, I would definitely say, now's the time. And, because the whole industry and the whole world is really shaken up, it's a great time to think about how you're treating eCommerce differently, and then within the eCommerce space, what we can be doing differently there as well. Stephanie: Got it. Is there anyone that you ever looked to in the industry, where you maybe point your clients in that direction of being like, hey, here's an industry leader when it comes to the checkout experience, or the shopping experience, or the unboxing, or anything like that? Anyone that you guys kind of look to as like a leader in the space? Amy: Yeah, that's a great question. I think there are a lot of examples of brands or retailers doing, I would say pieces of the puzzle really well. The one that comes to mind for me as someone who is creating a really holistic, best in class experience, is actually a retailer. I think IKEA does a phenomenal job in this space, in terms of just digital experiences. They have different digital technologies, and apps and platforms, and AI, and all of that, that is really just helping recreate the experience of going to an enormous, huge physical retail destination, I mean, I can't think of a more traditional shopping experience than kind of browsing through those huge displays in IKEA. Stephanie: So many levels, at least here in Palo Alto. Amy: Yes, definitely. I think of like a huge retail footprint that they've had to translate into a digital experience. There's one now where instead of IKEA saying, what's the best .com site or digital catalog? They are thinking what's the best shopping experience? And now you can as a shopper, walk through an IKEA store, through virtual reality, and pick different products, and then also using AI to see them in your own bedroom. So I think they've just done a great- Stephanie: Oh wow, that's awesome. Amy: ... Job. Yeah, I think I've just done a great job of thinking about it a little bit differently, and kind of doing it in a fun way that that's the biggest piece for myself as a shopper as well, that's sometimes missing from the online shopping experience. It's so convenient, and there are so many wonderful, wonderful benefits that come along with that. But you do lose kind of the fun of shopping, and browsing around, and I think IKEA has done a nice job of bringing some of that physical experience in a fun, very branded IKEA way, to their shoppers digitally. Stephanie: Yeah, completely agree. I think sometimes people forget that it's not just shopping and trying to buy the thing, but really, like when I go to IKEA, it's my day. It's a whole experience, I'm ready, I'm prepared, I've had my snack, and I'm ready to go through every single setup area to like look at their bedroom, and see how they set it up, and look at this living room setup and incorporating VR into that shows that they know exactly why their customers, at least customers like me come there, is to be able to experience it like I'm actually there. So yeah, that's great. Are you advising other companies to kind of, not only think that way but maybe moving into technologies like that, that they weren't utilizing before? Whether it's VR, or AR, or any of that kind of stuff? Amy: Yes. And I would say just even more broadly, we're advising our clients, and working with a lot of our clients right now on, how do we create the best digital content that's going to be relevant for an eCommerce shopping experience? So, yes that could be an amazing VR IKEA type experience, or that could be a six-second video on a product page, that tells you exactly what you need to know about the benefits of this new water that you're drinking. So I think it's about, what's right for those different brands and, then having that content strategy that then dictates what technology you might need to use to deliver it. Stephanie: Got it. Yeah, I definitely see that shift of a lot of companies, brands, turning into kind of their own media companies when it comes to producing their content, and focusing heavier on that, and not just on a paid strategy where maybe that's been, how it's been for a couple of years. Amy: Yeah, I think I've also seen brands, hopefully, using technology to deliver experience instead of just kind of using or testing, technology for technology's sake, or to have something new. So, it used to be QR codes, and then maybe some AR that just, is just kind of there for the fun, cool factor, that's interesting. In some cases, it's kind of fun, but I think if you're just doing it for the tech's sake, and it doesn't deliver a consumer, or a shopper benefit, it's really a fad and kind of dies quickly. So, we're always trying to think about, what's the need first, and then what can we use to deliver against that? Stephanie: Yeah, it's good to flip that mindset when it comes to that, because yeah I can think of, especially QR code, that's a good example. I've seen random places it's on there, like a cereal box or something that delivers no value, and I don't actually want to even see what's behind that QR code, it seems like it was just placed there because everyone was doing it. So- Amy: Right someone told that- Stephanie: ... You definitely- Amy: ... Told that marketer, "You need a QR code." And they checked that box. Stephanie: They did it. Amy: Yeah. Stephanie: Have you, when it comes to content, I know a lot of brands right now like you said, are focused on that and trying to make sure they get, of course, new customers in that vertical, and also make sure they put out great content. Have you seen any best practices with their clients around like you said, short product videos seem to really increase conversions where you know, like something on YouTube, if you've never been on YouTube maybe isn't the best way to go? Is there any themes around that? Amy: Yeah. I would say generally we always start with what's going to be the right message for the type of media, or for the type of tactics. So, you mentioned YouTube, that's obviously a very different format than say Pinterest, who's also having quite a moment with everyone at home looking for inspiration and recipes, and all of that. Obviously, that type of content you would develop for that would be very relevant to our brands, but also relevant to that platform and what we know people are looking for there. Yeah, I think we're definitely moving towards kind of more bite-size, or smaller content formats, in general. So definitely short format, we always give the example of, you don't want to have your 30 second or 67, 60 second, excuse me, TV spot and just use that everywhere, on your eCommerce sites or on your digital media more broadly, we want to be tailoring it for the environment. Amy: I think another thing that we're trying to do a lot more of now, in terms of a trend, is how are we leveraging influencer and user-generated content in a new way? So, if we talk about relevancy, especially in the eComm world where reviews are so important, and the new mom, you might go on and you're testing the reviews of a stroller, or a really important product for your baby more than you trust advice from your own parent, or from your mom peer group even right? So, people play a ton of influence on that, especially in the eComm space. So, thinking about how we merge eCommerce and influencers, has been really interesting and we've been working with our clients on taking influencer content from a particular shopper since we're in that space. Amy: So, how do you leverage Walmart influencer content on walmart.com, and Amazon influencer content on their site? And in doing so, you create an even more relevant experience for the shopper, because not only do they have those product details and reviews, but you've kind of put all that influencer content in one place, so they can have more ideas on how to use your products, or just more relevant images and messages based on people like them. Stephanie: Yeah, that completely makes sense. I wonder if right now, with how the market is, if it'll kind of give the wrong signals to companies. Like maybe, you have all these people at home so, if you see content is very easy to get right now, you have people maybe at home who actually want the longer podcast and the longer clips. Whereas after all this starts to calm down, I wonder if it'll be hard for brands to kind of pivot again, if all that reverses. And, all of a sudden there's not many consumers who want to create content for free anymore, and long reviews and, people want those shorter clips, like you talked about. Do you see any problems coming up by brands acting too quickly right now, to kind of pivot to what the environment is now? To then it reversing maybe again in a month or six months. Amy: Yeah, I think that's a good question, and that's why I think, as I kind of mentioned earlier, we're taking a proactive but kind of cautious approach. So, one thing we did for one of our brands was, we just went out immediately and pulled out content that, I don't want to say offensive, because that's almost too strong of a word, but pulled out content that wasn't culturally sensitive. For example, a group of people in a home that was more than 10 people. Stephanie: Got it. Amy: We went in and took all of that content down, you know, just to make sure we were being sensitive, and we were also being relevant. Even if someone wasn't particularly upset about it, and maybe they had no thought on it, but we want to make sure we're giving them the most relevant message of how our brand can be used in their lives. So I think that it is going to be an evolution, it's going to be really interesting to see kind of what behaviors stick. I think bread makers was one of the top terms searched on Amazon, the last several weeks. So, I wonder if we're going to get burnt out on making bread anytime soon. Stephanie: That does sound delightful but I'm like, yeah, I don't know how long that trend will last because, my mother-in-law makes bread, and man is it a process. Amy: Well, maybe she needs a bread maker. Stephanie: I know, she does. Amy: But yeah, I think it'll be interesting to see how much of those are kind of the COVID trends that then people get sick of it, or people want to, I'm not sure, maybe people will want to race back to the stores like you said, it'll be maybe really exciting when an IKEA opens, and you can go back in, and browse around and get your meatballs and all that. And I'm thinking people are going to do that in a different way. And I think that we're going to have to continue to evolve. So, that's what I mentioned about the kind of planning, I think annual planning is dead. I think we're going to be planning over and over again, if that's monthly if we can get kind of more on a routine, or maybe that's just continuous as things change, and as the news changes. Stephanie: Yep, completely agree. So, the Mars Agency has been around for almost 50 years I think, how does the company and the Martians of the company, recognize trends and then act on it quick enough to help your clients? Amy: Yeah, I think, I honestly think that's why we have been able to be around so long. In the marketing and advertising world, we're one of the few independents who's left, we're still family-run, the company is now run by Marilyn's son and Ken Barnett. And I think that having that independence, and having really just a lot of still that entrepreneurial spirit, has allowed us to really adapt as the industry has adapted and, in most cases kind of stay one step ahead. We talk a lot about our Martians, as you said, and really think that there's a balance between, our people and our technology. So, over the years we've, of course, as most industries have invested more in technology and data, and all of that, we've also really balanced that with our Martians and having, what we say is the latest technology and the smartest humanity. Amy: I think some companies, especially in the eCommerce space, because there's so much data there, and so many different tech platforms, I think if you go too far in that direction, well one, there can just be kind of data overload, and you're not able to find the insights and all the data. But two, I think you just lose a lot of that humanity, and kind of that person who we like to be who's saying, "Well, why is that the case? And, what does that data point mean?" And kind of taking it that step deeper, so that we can really understand what the human behavior is because I think that's where you have the best marketing ideas that really resonate with people, instead of just kind of trying to attack a data point. Stephanie: Yeah, completely agree. Are there certain metrics or data points that you've seen many brands use that you're like, you guys are all using this, but it actually doesn't really tell you much. Instead, maybe you should look at this instead. Amy: Well, because we're focused on shopper marketing and conversion, I mean, our ultimate data point is always sales. So we're always looking at, how many products were we able to sell as a result. Along with that though, you obviously want to understand what other impact you might have had on engagement. Or, in some cases, there are other circumstances that are affecting sales that are out of our control. We, of course, want to measure all the other media metrics as well. I think to answer your question on, are there certain metrics that brands are looking at that they shouldn't? I don't know if I would say you shouldn't look at this, but I think a lot of brands are placing a disproportionate kind of weight in the eCommerce based on their ROAS or their return on ad spend. Amy: And there's just some interesting ... There are some ways that you can get a very high ROAS, and that a lot of media companies or retailers will say, you had a very high ROAS and it's typically because you are reaching people who would have purchased anyway. So I think that's one where, it does beg the question of sometimes having a person or maybe a smarter data set that's kind of suggesting, why is that the case? And digging a little bit deeper to understand the why behind that metric. Stephanie: Yeah, that seems like an easy way for someone to be like, hey, look how great those ads doing when you're like, all those people were already previous customers so. Amy: Right if you're ... Yes, if you're targeting past purchasers, you can typically get a pretty high ROAS so. Stephanie: Yeah, that's pretty funny. Are there any new emerging technologies that you're advising marketers to look at or other like eCommerce platforms that you're telling people to check out? Amy: I don't know if I would say this is an emerging technology, but just in light of all of the changes around COVID, I would say looking more at new delivery platforms or channels. And this is something that, we're just having early conversations with our clients on now. But, there are a lot of what used to be in the world of retail, relatively niche players You see a lot of those platforms having really explosive growth now, kind of during this COVID period. So it'll be interesting to see how that behavior might change over time. Amy: I think we're also seeing some really interesting partnerships, so you can have your 7-Eleven order delivered by DoorDash. Or you can make a reservation to shop at a local store on OpenTable. Again, those aren't new technologies, but I think it's kind of new platforms and new channels that will be really interesting to test and learn as we go, as you're suggesting, and then also as things, hopefully at some point, kind of start to normalize. Stephanie: Yeah, cool. And then how do you think about, I saw on your website that you were talking about getting the most out of voice technology and how to conquer Amazon? Do you think, I know voice technology, it feels like it's been trying to ... It's been like that up and up for a while and no one's really cracked it. Even when I was at Google, it still felt like they couldn't crack it. How do you think about incorporating that into what your clients are doing? And same with Amazon as well? Amy: Yeah, that's a great question and you nailed it. I think it has been growing, we have on my eCommerce team, a dedicated voice specialist has a background in user experience. And, similarly, I think we've had tons of great conversations around voice, we've seen tons of great data in terms of how it's growing, but I don't think we've reached the tipping point yet of voice shopping. I think it's still, some of the data and it'll be interesting again, to see kind of how this being at home more might change that. But, there are definitely different behaviors that have grown with voice more than shopping has. We're still actively pursuing and exploring that with our clients. Mars is the preferred Alexa developer, we also work with Google Voice as you mentioned. Amy: But I think it just comes back to, really the foundation of what we do which is, how can we create better shopper experiences, and voice definitely has the technology to do that. I think it's just about the adoption, especially in the shopping space. So to date, we've worked with our clients on, creating skills that can be useful to shoppers based on their different categories. But I think it'll be interesting to maybe see how COVID changes the voice space as well. Stephanie: Yeah, I could see that becoming useful, especially as the catalogs get bigger of what the brands are putting on their eCommerce sites. It'll be easier if you're able just to tell the website like, I want to find this, instead of having to go through the whole catalog and try and find exactly what you want, and it probably growing by 50% from the time you were there maybe two months ago if they can crack, getting the voice technology to actually work and be seamless, and not an extra step. Amy: Yeah. And then I think another thing that'll be interesting now is just, I even have to remind myself as we're talking because typically we think voice and we think, speaking into the speaker, but with the combination of voice and video. Plus people being at home and maybe wanting more, we know there's been a huge surge in recipe searches for example. I think having the voice plus visual is a different way that brands should be thinking about voice now, and something that we're working with some of our clients on. Stephanie: Yeah, completely agree. And what about the conquering Amazon piece? I'm only thinking about how that maybe has shifted a lot, especially lately because of everything Amazon is doing of like, only surfacing maybe essential things, and changing shipping times, and maybe kind of burying certain retailers if they didn't view them as essential. I could see a lot of people kind of getting scared about relying on Amazon as their platform to sell from, and maybe moving away from that and trying to build their own eCommerce store on their own, and just do their own thing. Do you see that kind of happening? Or what are your thoughts around Amazon? Amy: Yeah I mean, Amazon could probably be a whole nother topic or hour. Stephanie: A whole podcast one. Amy: Exactly, I'm sure there are millions. But, I think in terms of, we've been really digging into what has this last six or so weeks meant? And where have we seen new growth? Walmart.com in March was the number one downloaded app in the grocery space and surpassed Amazon for the first time. So, it's interesting to kind of see all these stats and you think, oh, maybe Amazon isn't as important. Amazon just still dominates the eCommerce space. Which is why you mentioned, we have it on our website. I would say even as of two months ago, people were using Amazon and eComm interchangeably, almost. Amy: So, it's great and it's exciting to see that, and as we have always advised our clients, we should think about this holistically across this space and across all different retailer dot-coms and delivery platforms like your eCommerce strategy should be comprehensive. But I don't see Amazon ever not being a component of that, at least not in the near future. There are a lot of issues now from a user experience, from a shopping experience, also as you mentioned with brands and maybe being deprioritized for essentials or not being able to market in the way that they have been able to before. But it still really is the lion's share, it's still seeing the most growth during this time period. Amy: So it's not, I don't think it's a place that brands can afford not to be, with the exception of maybe a couple of the really big ones. But I think the idea of trying to tackle eCommerce without Amazon, or without having a strategy around Amazon, and there's by the way, a bunch of different ways that you can do that, it definitely doesn't have to be every brand's number one eCommerce retailer. But I think it probably has to be part of the strategy, just because of the number of shoppers that are using that as their primary eCommerce destination. Stephanie: Yeah, agree. So earlier we were talking about brands creating content, how do you think about the intersection, or what do you advise your clients when it comes to the intersection of content management system, their commerce platform, and their CRM? How do you see that working in their space are any best practices around that or advice? Amy: Yeah, I think, I mean one is to be thinking about the total experiences we've been talking about, and making sure that, no matter what agencies or, in our case, we're oftentimes working with a lot of other agencies either at different parts of the funnel or that the brand is working with for different pieces of their advertising. A lot of our clients are large enough that they're hiring multiple agencies. So I think it's, having IT as planning processes that are very integrated, and making sure you're connecting all the different partners so that you can leverage all of the different content and all of the different wonderful assets. Amy: In terms of, what should the content strategy be, I think it comes back to, what's going to be best and what's going to be needed and relevant for the shopper in that environment. So, we're really working with our brands in the eCommerce space on, how are you creating eComm content that typically doesn't always exist in other brand channels? So, how are you creating content for your product pages with information that people need to know when they're at that point of buying you versus buying a competitor. If you don't have that right content, let's create it, we help our clients map that out on what's needed in terms of assets, and videos, and enhanced content, and all of that. Amy: And then really track that over time to make sure that we're constantly optimizing it. We have a new technology, an eShelf maximizer tool that uses data to look across different websites, and identify across thousands of skews for a lot of our brands, what product pages might have some issues or some areas of opportunity, and then we can fix those right away. And with the retailer's constantly changing their algorithms and limitations, and all of that. This is kind of a huge pain point for our brands so, even though we'll optimize content as brands change their packaging, or new products launch, there's kind of continual issues and continued opportunities to optimize. So we're using technology to make sure that we can stay ahead of that and be really proactive for our brands. Stephanie: Got it. Do you see them being able to kind of manage that in a way that stays organized? Because, I kind of view a lot of brands having their content management as one silo, and their CRMs another one, and their commerce platforms another one, it doesn't seem like they've been able to integrate like, well, here's how our content is affecting our customers and actual conversions. Do you see that kind of shifting now? Or are a lot of your brands already ahead and they're already kind of all intertwined, and they got it? Amy: Oh, I wish that was the case. No, I think, I mean, I think we have silos within the Mars Agency, I think most companies have silos, I think most of our clients would say that they have silos within their companies as well. Unfortunately, I think that is a reality so I don't want to gloss over that picture too much. I think it's about, how do you look for ways to work and collaborate across those silos, for more of a common goal? So, I think eComm has been a silo for a lot of brands today. We've kind of siloed it off and said, let's deal with that separately because we don't quite know what to do with it, or maybe it's still a little bit too new for our brand or company. Amy: And this is really a moment when I think we can be integrating it in, we certainly have done that at Mars. Our team is now integrated with our customer development team. So when we're working on a Walmart plan, it's not the Walmart in-store plan and the walmart.com plan, we're all one team. So I think hopefully, that would be an outcome of this time period is kind of breaking down some of the eCommerce silos. But I think as you pointed out, there's definitely still an opportunity for, I would say most brands, to kind of better connect. I think content and eComm are coming together much more naturally. I think CRM is still a piece that we could, as an industry, probably better connect to some of the other pieces. Stephanie: Yep, completely agree. Have you seen, like what do you think the first step is to that digital transformation? Or have you seen a company really do it well? Is it like start from scratch, throw everything away and start over? Or, how have you seen that work? Amy: I think that actually, most companies have kind of, that we've worked with, have kind of taken eComm out and brought it back in, or taking the digital team out and brought it back in. And I think that's actually an okay approach in terms of, especially where you are with your company's growth in this space, some kind of half joking that eComm has been a silo. But, in a way that's been necessary for some companies because, as eCommerce has grown, it typically starts off as an add on within a current team, and then as it grows, it kind of gets its own silo, or its own little team on the side, and then as they get big enough, they come back into the integrated team, typically the marketing team, or in some cases, the sales team. Amy: And I think that that makes sense because, as the space grows for different clients, it needs different resources. I think a lot of companies are going to be fast tracking that now, so they might skip that step of having the separate eCommerce team and just automatically integrate it. I don't think that's a bad thing, I think that could be beneficial to, instead of kind of separating it or starting from scratch, just integrating in from the team from the beginning. Stephanie: Yeah, that makes sense. That sounds like good advice. So, do you see any disruptions coming to eCommerce? Like one thing I've been paying close attention to, or reading up a bit is about these pop up retail stores. And I think maybe that could be a trend that a lot of retail stores are closing down right now, and people might be scared to actually set up locations for 10 year leases, after all this dies down. So I'm wondering how maybe that could influence the future of retail and eCommerce. Do you see any disruptions like that that is on the horizon that you guys are looking into when it comes to eCommerce? Amy: Yeah. I mean I think there's going to continue to be a lot of disruptions, and probably a fast tracking of what would have happened anyway. So, some, as we've seen in the last several years, some really established big box retailers have closed down, or shut several of their locations, because that huge size of space didn't make sense anymore, and to your point that frees up space for other types of retailer formats. I think coming out of this that, one of the disruptions will be, what we go to a physical store for, versus what we continue to buy online. So I think there's going to be a lot of differences in those categories, and even in in subcategories within that. I think what's going to be interesting about the physical stores is just, how do we deliver an experience in those stores that is worth kind of leaving your house for? Amy: And I think some of the best retailers, and some of the best brands have been talking about that for years, right? How do we create a physical experience of our brand? If you think of like the flagship stores, that's meant to be bringing the brand to life and delivering on that experience, and then you think of retailers who have been improving their in store experience, to get people to browse other categories, or browse other sections. I think a lot of that was a trend that will now really be pushed and challenged, and fast tracked as we rethink about what that physical space means to a shopper. So, pop ups, as you mentioned, were great because they were delivering a different experience and that was a reason to go, see something new, or maybe see something that you could only buy there. Amy: I think exclusives will probably continue and be played around with in a new way in terms of what's exclusive online versus in store. But I think it's a little early to tell what disruptions are going to continue, and how people are going to use those physical spaces. I mentioned it earlier, but I could also see there being a big difference in geographies. The coasts have always been a little different anyway, but I could see the the retail experience on the coasts being a little bit slower to change at first, and then probably having more disruptions in the end. Stephanie: Yeah, completely agree. I can see also when they start streamlining the return process, I've already started see that at least with Amazon, where it's like, you don't even have to bring a box now or anything, just bring the good back there. Once that starts feeling easier, it seems like a lot of things could shift because, to me that's been the biggest hang up of ordering things online and, not knowing how to really return it, and not knowing if I'm going to feel like doing it, and keeping the box, and printing out the label and all that stuff. It seems like that could be a big shift too, and it's kind of already been forced that way over the past couple months. Amy: Yeah, no, that's a great example of now people are having to get creative in how they do things, both retailers and shoppers. And also, just as you try things and get used to it, you might realize that the return process wasn't as bad as you thought. Or the delivery window that your groceries came was actually more convenient than what you'd wanted before. So, I think some of those habits are going to change, which is always interesting to see, because now we're still in kind of the survey phase of, what do you predict that you're going to do? Or will you use this service again? And it's always interesting of course, to see what people say versus what they actually do. Stephanie: Yeah. Amy: And I think just over time as we all keep doing this, we could say, we hate it and it's a pain. But some of that we're going to be adopting those new habits that will stick with us in the longer term. Stephanie: Yeah that'll be really interesting to see what actually comes from that. So before we move into our lightning round, is there any other thoughts you have for eCommerce leaders or trends or anything else you want to highlight? Amy: No, I think you've covered it. I mean, I think this is just such an interesting time for the eCommerce space that, if you talk to someone else next week, they might say something different, and that's what's kind of exciting about it is watching how quickly it's changing, and just really being able to adapt quickly to stay relevant. Stephanie: Yeah, that's why this podcast is so fun. All right. So the lightning round brought to you by Salesforce Commerce Cloud. This is where you answer each question in a minute or less. So you have a minute, you don't have to rush too much, but it's kind of whatever comes top of mind. Sound good? Amy: Great. Stephanie: All right, I'll start with the easier ones first, and then move to the harder one towards the end. What's Up next on your Netflix queue? Amy: Oh, this is the lightning round. Let's see. Stephanie: When your eight month old and three year old aren't hanging on you. Amy: Exactly. I have to move into my adult entertainment mode which also doesn't sound like the right phrase to use, so that shows that I've been watching a lot of cartoons lately. Stephanie: No more Daniel Tiger for you. Amy: I know I'm just glad that I can get off Disney Plus and over to Netflix. We are big fans of Nailed It, and with the at home baking, I know I'm a season behind on nailed it, so I need to get caught up on that. Stephanie: Cool. What's up next in your travel destinations after the pandemic is over? Amy: Oh, we were supposed to go to Vienna for my husband's 40th, so hopefully we can get that back on the agenda. But, next week I'm going to be driving from the Bay Area to Aspen to see my new niece so- Stephanie: Oh fun. Amy: It will be a road trip. Stephanie: Sounds awesome. What is the best shopping experience that comes to mind that you've had lately? Other than being in a store? Amy: Yes, I have not been in a store lately, nor had a good experience in a store lately. Well, just this week was the first time that I could get an Amazon Fresh order, and I am a pretty heavy user. So they had a lot of issues, so I was really excited this morning at 7:00 AM when my Amazon Fresh order arrived. Stephanie: Yeah, that's game changing. I love seeing them come up and deliver it. I'm like, this is nice. Not having to do it. Amy: Yes. Stephanie: What was the last thing you bought from an ad? If you remember? Amy: The last thing I bought from an ad. That wasn't one of my clients products? Stephanie: Yes, yep, that wasn't one of your clients [inaudible 00:51:31]. Amy: Yes, that I was actually buying as a consumer, let's see. I bought some Hannah Andersen Star Wars pajamas recently for my three year old. They're very cute and available now and actually they did arrive quite quickly so. Stephanie: Awesome- Amy: I'd recommend that for the- Stephanie: ... For PJ's. Amy: Yes for the toddler PJ's, they are great. Stephanie: Yep, I know all about that. All right, and the hard one, what's up next for eCommerce pros? Amy: Oh, that's a big switch from PJ. Stephanie: I know, that's why I saved it for last. Amy: Yeah, I think eCommerce pros are going to be ... Have much higher regard in their own industries, and have a lot more influence. So, hopefully what's next for them is being able to kind of take a greater role in that brand and marketing experience across retailers. I know we've talked a lot about Amazon, but I think it's, how do we integrate eCommerce and into everything that we're doing, and that should be really exciting for the eComm pros. Stephanie: Cool. Love it. All right thanks so much for coming on the show Amy, this has been fun. Amy: Thank you so much. Appreciate you having me.
How do you build a successful eCommerce business that has attracted nearly 5 million visitors in a month? For Jerry Hum, it took a few failures and a couple of stumbles out of the gate with his cofounders before finding the winning combination of users, demand, and products all in one. Jerry is a co-founder and the Executive Chairman of Touch of Modern, a members-only e-commerce website and app focused on selling lifestyle products, fashion, and accessories to men. On this episode of Up Next in Commerce, Jerry takes us through his early struggles and how he found the secret sauce to making his eCommerce platform one of the most popular among male shoppers. Plus he explains what metrics other eCommerce pros should be looking at, and gives some advice to other entrepreneurs. Key Takeaways: For a multi-brand company, customer retention and lifetime value is the critical metric to look at Build the primary platform where your primary customer prefers to buy Combine marketing engagement and transactional data to prevent high engagement high cost marketing yielding low sales volume --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible eCommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey everyone. This is Stephanie, your host of Up Next In Commerce. Today we have Jerry Hum. The co-founder and executive chairman of Touch Of Modern. Jerry, how's it going? Jerry: Pretty good. How are you? Thanks for- Stephanie: [crosstalk] good. Yeah, how's it going? So you're in a loft right now, right? In SF, living the quarantine life. Jerry: Yeah, in San Francisco. Stephanie: Yeah. Jerry: Yep. Stephanie: How- Jerry: [crosstalk] for a little longer than most other folks. Stephanie: Yeah. So what's your day look like with being sheltered in place and... I think San Francisco is even stricter than Palo Alto where you guys [inaudible] allowed to do even more than we are. Jerry: Yeah. Well, we actually started preparing for it a little bit earlier actually, just as it was making news headlines and most companies were still up and running. We were planning kind of contingencies and all that planning and seeing how work from home would be like if we had to do it. Luckily we came up with a plan just in time. We actually went into it before even California started making statements about it. So I think we are kind of in a pretty decent groove in terms of keeping the business running smoothly and all that. In terms of a day to day, I'm actually surprised as to maybe how engaged people have remained. Stephanie: Mm-hmm (affirmative). Jerry: Being that we have to do it all through technology. I actually started thinking about it, why is it that work from home is almost a little bit easier now than it was in the past. And I think it's because when it's the only option then you just do it. Right? Stephanie: You have to make it work. Jerry: Yeah. It's not like if half the office is doing one thing and then... Or not like half the office. If most of the office is at work and a few people are work from home then it's actually more difficult because the people in the office are like, "Oh, I'll just wait for that person to get in or something." But if this is the only way that every one is communicating then it's actually fairly smooth. Obviously everything takes a little bit more time and all that. Stephanie: Yeah. Jerry: [inaudible] day is actually longer than usual. Stephanie: Yeah. Jerry: All things considered, I think it's working pretty well. Stephanie: Good. Yeah. Hopefully it will all come to a close soon. How have you all handled... I mean has there been any struggles, I'm imagining taking photos of your products and things like that? That's probably a very in-person type of thing that [inaudible] people have perspectives on and all want to help. How are you handling things like that with your business that seem pretty hard to do virtually? Jerry: Yeah. So luckily, some of our folks have set-ups at home. Stephanie: Good. Jerry: Yeah. Because usually, photographers, this is not just a job. It's also a passion and a hobby. Right. Stephanie: Yeah. Jerry: So we've been able to make due... Obviously at a reduced capacity. Yeah. Stephanie: Yeah. Well, good. So maybe that's a good point to dive into what is Touch of Modern. If you were to explain it to the listeners and give us some background. Jerry: Touch of Modern is the only shopping destination that men visit daily. And we offer a [inaudible] mix of remarkable products across all categories and that you can use everyday.This could be anything from a flame thrower you can strap to your wrist, or the newest exercise gadget, or anything in between. Stephanie: Are women allowed? Because I was on there and I was like, "I want to buy some of this stuff." I would buy... Maybe not a flame thrower but there was some good stuff on there that I'm like, "I want this." Jerry: Of course, women are allowed. It's just kind of more... A little bit more of our differentiator. Because most E-commerce sights out there are catered toward women. Stephanie: Yeah. Jerry: [inaudible] we're not the only one but one of a few that really cater to men. Stephanie: Got it. Yeah. It looks awesome. A lot of the products. I was afraid to hit buys right away. How did you come to create the idea of Touch of Modern? And I think I read it was the third... The third times a charm. That you had done three other things, or two other things before that until you got to Touch of Modern. What was that like? What was that journey like? Jerry: Yeah. I'll give you the long story here, maybe. Stephanie: Good. Jerry: [Four] founders, guys from New York. The business actually was a peer-to-peer experienced market place. And this is kind of similar to what Airbnb has now. Obviously they built that on top of their existing business but we were trying to start from scratch at the time. That was extremely difficult because you're telling folks to change their lifestyle. Right? If you need to suddenly offer a cooking class, that's not a easy thing to do if you don't have the customers for it. Right? Stephanie: Mm-hmm (affirmative). Jerry: Or the time for it. And then we're telling customers to come on this platform and book stuff. But if you don't have the activities, what is there to book? Stephanie: Yeah. Jerry: So it becomes this chicken and egg problem. Stephanie: Yeah. Jerry: It came out of our own need because we were guys from New York, you're kind of looking for interesting things to do all the time, just in the city. Right? The second business was called Raven. Well, the first one was called [Scarra 00:05:24]. I don't know if I mentioned that. Second one was called Raven. That was a slight variation on the first. And that was we took out half of the equation because we realized, double sided marketplace, super hard. Right? Stephanie: Yep. Jerry: We started offering activities that already existed. This could be like hang gliding. This could be sky diving. This could also be day at the spa. Right. Stephanie: Mm-hmm (affirmative). Jerry: We also layered on a recommendation algorithm where you could like stuff. And based on your activity, we would offer you a daily feed of different activities and things that were new to discover in your area. We got a lot of engagement out of that. People found really cool things. If you look at my feed versus somebody else's, it would be really different based on what we like. When we looked at it, it was like, oh this is a pretty accurate description of things I'm interested in and my hobbies and such. Right? Jerry: And that was difficult because people would then discover stuff but they wouldn't actually book it with us. They would just call directly [crosstalk 00:06:29]. Stephanie: Wow. Jerry: What we learned from that was, well, we need reason for people to transact. Right? And we need maybe something to make us relevant for right now. So the second generation of that business was actually arranging events where we built a mobile app as the early days of... Not the iPhone but when apps started getting the more complicated... Better than just the kind of beer pouring app. Stephanie: Yep. Jerry: Those simple things. Right? So we used Geofencing to create this thing where if you went within a certain perimeter of something going on, we would tell you about it. We'll alert you and be like, "Hey, like... Street fair over here or something over there." And that was really cool because there wasn't another app like that. At least that we know of... That we knew of at the time that was doing that. Also at the time, a lot of folks were moving to San Francisco. Stephanie: Yep. Jerry: Probably even more so than they are today. A ton of messages from people saying, "Wow, you're really helping me discover the city. Every weekend we pull this out and, you know, see what's going on." Especially because San Francisco is the type of city that always has something going on. Stephanie: Yeah. Like on the side streets, you're like, "There's a whole festival going on right now." Jerry: Yeah. So that was really cool but again, a lot of these things were free. So it wasn't there wasn't a real business model there. There's just a ton of engagement. Stephanie: Mm-hmm (affirmative). It seems like you guys are kind of ahead of your time with that. Because even when I'm hearing about that now, I'm like, oh, if you would have kept going with that one, Airbnb probably would have acquired you. Jerry: Yeah. Right. Stephanie: Oh, if you kept going with the Geofencing thing, Google would acquired you because I worked for Google Maps before this. Jerry: Oh, yeah. Stephanie: They're still trying to figure out how to show you where the festivals are, where the farmers markets are based on your location. So maybe you guys are just ahead of your time with everything. Jerry: Maybe. That would be the positive view of it. So I think the lesson we learned from that was... Incredibly hard to scale location based things. because you could sell out all the tickets to this one show or a certain percentage of it but there's unlimited margin and you're constricted by the location and therefore we couldn't justify the kind of business mechanics that were necessary to actually make that sustainable. I mean, it raised a ton of money. Right? And so this isn't going to get like... Where it wasn't like, hey, we're going to get to a billion people and then it's going to work. It's not like that. Stephanie: Yeah. Jerry: So we were like, what were we good at and what were we not good at? We were really good at getting people engaged. Really good at discovery aspect of things. We just needed something more scalable to be the thing that we featured. And realized that, hey, products... You get scale with products. Right? Mass distribution and all that. There's real margin there because that's kind of built into the modal that [inaudible] already exists. Jerry: We had always kind of liked products, just as the people that we were. But we didn't want to touch it because we didn't want to deal with real world problems of moving things around, shipping, [crosstalk 00:09:46]- Stephanie: Yeah. Logistics. Jerry: Yeah. Logistics. Right? After going through the struggles of the first two business, we realized that things are not really... It's not rocket science. Right? This has been done. We started thinking about what kind of unique angle we could take at it. I remember we were in the living room and we're talking about speakers for some reason and who made the best speakers. Dennis had his idea. Jon had his idea. And then Steven, who's real audio files, was like, no, these are the best speakers. He knew all these brands that we didn't even know about. We knew the mass market brands but not the kind of stuff that he was into. Stephanie: Mm-hmm (affirmative). Jerry: He had all this knowledge. Okay, you win that debate. Right? And we realized that we have this thing that we geek out on. Right? Jon was really into cooking and he had these really expensive knives that he would keep in this [inaudible] that he would have to take out and show us. Dennis was really into outdoor activities and all the gear that's associated with that. I use to be an architect when I was in New York so I spent way too much money on furniture. So that was my thing. Right? And so everyone had our own thing. No one out there was catering to this desire or whatever it was that ties all these things together. Right? Jerry: So we just started sourcing things that we thought were cool. Hey, if we think it's cool, other people are going to think it's cool too. Right? It wasn't like a men thing. It wasn't even necessarily a discovery thing. It was just these were the things that we thought were cool. Stephanie: Mm-hmm (affirmative). Jerry: Through that process, right away it kind of hit in a way that the other two businesses did not hit at all in two years. Right? Where day one we started getting real transactions and kind of buying activity. Right? Stephanie: How? How did you get buying on day one? How did people even find your website or know where to go? Jerry: We did not even have a website on the very first day. We actually... What happened was Dennis, who ran marketing, would just start running ads and would go to a landing- Stephanie: Okay. Facebook? Jerry: Yeah. Stephanie: Or what kind of ads? Okay. Jerry: Facebook. Earlier in the days of Facebook too. I think a lot of what we did, now, can't be exactly replicated but there's probably some learnings to take from it. Stephanie: Mm-hmm (affirmative). Jerry: So we basically just collected emails and say, "Hey, there's this thing that's coming soon." Right? I think [inaudible] probably remember years ago there was tons of these types of things that are just coming soon and you're like wow [crosstalk 00:12:39]. Stephanie: Yeah. That was the strategy back then of just like just put up a landing page and see if people want that fake product that you could create. I remember books where they would suggest that and I'm like, that's a good idea. Jerry: [crosstalk] that is more less of a pit. I mean, we were creating it. Stephanie: Yeah. Jerry: I'm not talking about like, let's just run ads and see if people like it. We were just building it at the time, that same time we were running ads against it. And basically we had an idea of what that metrics needed to look like in order for a business to work. Right? We just made assumptions down the whole funnel. Right? If we acquire an email for this much, and if this percent of folks convert, and assume a certain order value, and certain repeat rate then this is what our business would look like. Right? Stephanie: Mm-hmm (affirmative). Jerry: And no data for anything outside of what it would cost to acquire an email. Basically, we knew the cost of that. Then we started sourcing products and building the website behind it. Then we just went down the funnel and firmed our assumptions. Sometimes they were better and sometimes they were just different. We kind of just proved it out from the top down. Stephanie: Got it. That's really cool. Has it always been a member's only platform? Has there ever been a time where people could just go to the website, the app, and just see the products without inputting their email? Jerry: Yeah. So, we require folks to input the email for the upfront reason that we are talking to... And this is also maybe one of our differentiators, is that we are not a clearance channel per se. We talk to vendors who have products that are new to market. Right? So they may have endeavors to go to traditional retail or something else, and they may not want their prices shown necessarily to everybody. Stephanie: Mm-hmm (affirmative). Jerry: So that's one [inaudible] been the case. Stephanie: Got it. Okay. Cool. So when I was looking at your catalog and just seeing everything that you have, how do you go about curating something like that? I mean, it sounds easy in the early days of, oh, so and so likes knives so he pulled in his favorite knives. But I saw how many products you have on that page. Maybe it's like... How many a day do you release? Jerry: It's about 300 a day. It's quite a bit. Stephanie: How do you find 300, even a month, cool products that are so unique like that and keep up the level of quality that's on there? Jerry: We have a team of about 30 or so folks on the sources and buying team and they're out just looking for what's cool and unique. And obviously we have our standards and things that we look for and they just go out and try to find things that meet those standards. And they also try to find things that are... that we've just never seen or heard of before. Right? Then we bring it back, it goes through an approval process, and then we put it up and run it. It's fairly simple. Stephanie: Does it still go through you to approve of every single product? Jerry: Not every single product. Stephanie: No. Jerry: In the early days it was and now we have a team of folks that can do it. Stephanie: Got it. And you also have an app that people can buy from. Is it the same functionality? Does the website mimic the app or how did you think about expanding to mobile? Jerry: It's mostly the same functionality. We expanded to mobile fairly early on. Like I said, our previous companies were... We were already experimenting with mobile back then. I don't think we had one on Scarra but Raven, we definitely did. Stephanie: Mm-hmm (affirmative). Jerry: That was a core part of it. So we went to mobile pretty early on and I don't think we knew this per se, but it was interesting because men tend to be more comfortable buying on mobile too. Stephanie: Mm-hmm (affirmative). Jerry: And maybe that influenced part of our strategy or vice versa. It seems to actually be the more popular platform for us. Both in terms of actual use engagement and revenue as well. Stephanie: Okay. And do you see different customer profiles when it comes to the mobile user versus the website users? And do you cater to them differently based on that? Or personalize things different? Jerry: No. The experiences are pretty congruent on both sides. The mobile users tend to have a little bit of a higher value. But that could also be because you kind of have to self select into mobile. Stephanie: Mm-hmm (affirmative). Jerry: You go on to the website and then you're all, hey, we're really into it. And then you go on the app. Right? Stephanie: Yep. Jerry: It's kind of hard to say what's [inaudible 00:17:21]. Stephanie: Go it. Very cool. So in the early days you were doing Facebook ads. And I think I read that you were doing TV ads as well at a certain point. How has your marketing strategy evolved over... since you started? Jerry: Yeah. So in the early days of Facebook it was like a wild, wild west. Right. Big brands weren't really on it. So it was a great time for companies like us. And this is why I say a lot of it can't really be replicated today exactly the same way we did it back then. So when a lot of competition started moving in, in order to compete, we kept broadening our category just... I mean, just becoming a stronger business. Right? Stephanie: Mm-hmm (affirmative). Jerry: So it would be a lot harder to start with just a handful of products the same way we did. When we started, I think we launched with 12 products and that was it. It was like 12 individual products, not twelve vendors, just 12 [inaudible] things you could buy. Right? Stephanie: Yep. Jerry: That was enough to make it work. Probably impossible now to do that. As the business grew we could support more channels. We went into Google and then eventually got to the size where we can actually start experimenting with TV. I think also, TV has evolved over time as well because of visual advertising. Because so many brands see the benefits of digital advertising. You can track things and kind of go after a more specific audiences. That TV now kind of has changed to have some of those properties as well. So we use them both kind of together and they enhance each other. You can tell when, if you're spending too much on TV and not enough on digital, then TV starts to suffer. If you spend too much on digital and not enough on TV then the opposite happens. Stephanie: Got it. How do you find that ROI of the campaigns? Then decide, okay let's scale back on TV and increase mobile ads or something. What metrics are you looking for? Jerry: We actually have the exact same metrics on TV as we do on digital. Right? And this is just... cost acquired customer and lifetime value and all that. The way we track it is now you can know exactly when your spot airs and basically we have a baseline of traffic that we know that, hey, if nothing is airing, this is what are organic traffic looks like. Right. So when we air a spot, we can see that spike. We do a [inaudible] analysis to say this much of the traffic following that airing is probably through the TV. Stephanie: Got it. Okay. Very cool. So when it comes to metrics, when you think about E-commerce, what metrics do you think are most important to keep track of? Or how do you define success when it comes to E-commerce? Jerry: Yeah. There's a ton of stuff. I mean, it really depends... It depends a lot on what kind of product you're selling. Right? I'll give you two extremes. One extreme is like us, and for us we are a multi-brand retailer. Right? You can buy a number of things and also we change our selection everyday. So you can keep coming back to keep buying different things. Right? Jerry: So what's important to us is lifetime value and retention. Right? How fast do you break even on the cost to acquire a customer? At the end of the day, that's kind of like the most basic thing for any kind of company in our space. But the products that you're selling may influence how you look at it. Right? If you're selling cars or mattresses or something that you just don't buy very often, then you may think about it very differently because it's just not feasible to thing that the retention rate is going to be nearly what ours is. Right. Or at least not be frequent enough for you to be able to plan your marketing spin around. Stephanie: Mm-hmm (affirmative). Go it. How do you keep your customers... How do you retain them and keep them coming back? Versus acquiring new customers. How do you think about that mix? Jerry: I mean, you always have to acquire new customers. Stephanie: Yeah. Jerry: I think [inaudible] is just like a natural part of business. You can't deny that it's there. Stephanie: Yep. Jerry: [inaudible] you can be great but there's going to be some folks that it's not for. Right? It's not like 100 percent of your folks are going to stay with you forever. Even the folks that do eventually they may change taste or things like that may happen. So in terms of splits, I think that also varies on performance for us. For us we care about kind of a payback on the spend that we're doing and pending on where we see better performances kind of where we'll weight it. And also kind of seasonally because I would say for retail there's holiday season and all that, you may want to do one thing versus another. But that's going to be really specific to the kind of company that you're running. Stephanie: Yeah. So when it comes to changes in spending pattern, what have you seen with everything from COVID-19 going on? Like what kind of differences? I saw you have a... I think a stay-at-home section or something similar like that. Shelter in place, on your website. How have you seen things change since that started? Jerry: People's priorities definitely change very quickly. Luckily for us because we can change our assortment everyday, we were actually able to adapt really quickly. We got that store up from... From when we said we were going to do it to when it was up was a matter of... Like the morning to that afternoon. Stephanie: That's impressive. How did you line up all the vendors? I mean, to me that's like a long process of picking the vendors and picking out the product and making sure they can ship enough, depending on demand. How did you get all that lined up so quickly? Jerry: The thing is... I mean, when this first started happening especially. And we need to agree now still, it seemed as if time had just sped up suddenly. Stephanie: Yeah. Jerry: Things that would take an entire quarter could happen now in like a day. Right? Stephanie: Yeah. It has to. Jerry: Everyone was wondering what would be different? All of our vendors, suddenly their retail channels dried up. Right? And they had to move things around. So we just called them up and said, "Hey, this is what we're doing." Obviously most of the folks that were on there, day one, were folks we've worked with already in the past. Stephanie: Mm-hmm (affirmative). Jerry: Or coincidentally we were talking to and hey, this fits, kind of thing. Right? It was tapping existing relationships. And parallel, the design and engineering teams were building up the store. We were using some existing infrastructure that we could repurpose and re-skin for the store. It was an amazing feeling. I didn't think we were going to do it in a day but it happened. Stephanie: Yeah. And are you changing that catalog? Like each day or week or... Jerry: [crosstalk] as well. Mm-hmm (affirmative). Stephanie: Got it. Does it... How do you think now your company is going to change based on now you know how quick things can move if it has to? Jerry: Yeah. Stephanie: Do you think that your internal policies and all that stuff could change going forward based on how quickly you can see thing go through? And maybe seeing things aren't a priority or approval for certain things might not be as high priority as you thought they were or... What's your view on that? Jerry: Yeah. I mean, in terms of policies first... I think in more so than anything it was like validation of a lot of policies that we had in place. Stephanie: Mm-hmm (affirmative). Jerry: It was confirmation that we could move quickly. Because we always thought we could. I think that's always been our thing. One of the questions people always ask is how does a company that sells premium products, how does that respond in a recession? Right? This isn't a recession but it's a time when people's priorities are going to shift maybe away from things that were... seems more frivolous to things that are now more essential. Right? For us, we always said, well you know, we can respond quickly but it's never been proven. And now it's been proven to an extent that we can respond quickly. And we can move to things that are more essential. It's still essential with a twist. Right? Stephanie: Yeah. Jerry: It's still within our brand. And it's going to bring a bit of uniqueness and delight into people's lives that are staying at home. Stephanie: Mm-hmm (affirmative). Jerry: I think it's validation that the modal can move quickly. The way we thought. And that our brand can extend to the different categories. And address people's needs as they change. Stephanie: Mm-hmm (affirmative). Do you think these buying behaviors are going to last for a while? And if so, are you shifting maybe your thoughts on what Touch of Modern looks like in 2025, 2030? Is it kind of having you re-think things a bit? Jerry: I think that people's buying behaviors will change because I don't think it's going to go back to exactly the way it was. You know. Stephanie: Mm-hmm (affirmative). I agree. Jerry: Yeah. People are going to be much more... And I hope they're going to be much more health conscience. I hope that this introduces some good habits. Right? I think people take a bit of time to reflect and think about things like self improvement. Maybe they didn't have the time to do before because I think some people staying home are going to realize like, "Hey, there's this new hobby that I've always been wanting to do that I can do now." Or, "Maybe I should drink less." Whatever it is that they discover when they change their lifestyle, that there's actually parts of this that are good, that they can take away and keep with them. Stephanie: Mm-hmm (affirmative). Except for the drinking lessening. I think that one's going the wrong way. Jerry: Wait. I don't know. I don't know how some people are- Stephanie: Happy hour time keeps getting earlier and earlier. I'm like, I need to set up rules around this house. Oh my gosh. It's only like two o'clock, what am I doing? Jerry: Well, I mean, another silver lining here is that I think people now have actually seen how quickly the environment can actually improve just with... And in a short period of time. Right? Because in the past I think it always seemed like this insurmountable thing to certain folks where it's like, "Yeah, you know, we can recycle and do this, but we've been doing that for a long time and nothing has really changed. It's actually been getting worse." Right? Jerry: And then suddenly you take a step back and it's like, hey, things change quickly. Right? Stephanie: Yeah. Jerry: So maybe it's not as impossible as we thought. We just have to be deliberate about habits that we have and maybe where we spend our energy. Stephanie: Yeah. Yeah, I think sometimes a little shake up like that can be good for people and the economy. And good things could come from it. Even though there's a lot of bad going on as well. I think, yeah, it depends where you're looking, I guess. So when... Oh, go ahead. Jerry: Yeah, I mean, [inaudible] other wise it's just all bad. Right? Stephanie: Yeah. No, everything can't be all bad. There has to be something good out there. That's what I'm hoping for anyways. So when it comes to outside of Touch of Modern, and more of the E-commerce industry as a whole, what destructions do you see are coming? Especially with COVID-19 now. We're seeing some of that already happening. But what are you betting on in the future... Yeah, coming? Jerry: Well, I'm going to bet probably more on E-commerce. Right? I think people are going to build habits from shopping at home that are not going to go away. Right? I think certain things that maybe people use to only buy in person are like, hey, I can buy this at home. It's actually a pretty decent experience, probably going to keep that habit even after this. And I think people are going to maybe focus a little more on preparedness for things than they have in the past. I think human nature is that you never think that these kind of outlier type of situations can happen, but they do. Be that once... Once in a century, I'd never think about it. But a person lives a long time. Right? Jerry: You may see a once in a century thing in your life. That's probably going to happen for a lot of people. Right? And this is that thing for us. Stephanie: Yeah. Agree. It seems like there's going to be a lot of new people coming online who never were online before. And it brings me to a point I saw on your website that I liked a lot is kind of meeting a consumer where they're at. There's two things I saw on your website that I thought would be perfect for a new consumer who doesn't normally buy online. The first one was you have a toggle button on your homepage that says, "View as." And you're about to actually change how you view products on the page, depending on what you prefer. Stephanie: So I thought that was genius. Any insight behind that? Or any thoughts when you were creating that? Because I haven't seen many websites allow you to toggle that view to what you prefer. Jerry: Yeah. It's just like a preference thing. Right? Our experience on the landing page is we just drop you right into our offering. Right? It's not like a landing page where you then click in and search and do all this other stuff. Mostly E-commerce is catered to search. Right? You just go on the page and automatically thing is you type in what you're looking for. Right? That's not really our experience. It's there but it's kind of secondary. It's mostly a browse and kind of meander your way through our offering. Stephanie: Mm-hmm (affirmative). Jerry: We let people maybe pick the way they want to meander. Right? Stephanie: Mm-hmm (affirmative). How do people meander through 300 hundred things? Because I was going through and I wanted to look at all of them but after a little I'm like, oh, this is too many. And I kind of wished maybe like... What did I see? There was this screen that extended your screen. So you have your MacBook or something and you plug in a little cord and you have an extension of your screen, which is awesome. Jerry: Yeah. Stephanie: I'm like, that should have been shown to me first because I want to buy that right now. Whereas, what was the second thing? It was showing maybe like an expensive bottle of wine, which I'm like, oh, push that down some because I'm not fancy like that. How do you think about helping people get through these products each day? Jerry: Well, I think your first time experience is going to ne a little bit different than your second and your third time. About almost half of our users, and I'm not talking about customers but just people that visit, will actually come back at least once a week. And so- Stephanie: Wow. Jerry: Yeah. And so if you're doing that and then our most frequent visitors are coming back every single day, then it's not as hard to browse through everything. Because then you can browse through it and then you'll hit a point where, okay, now I'm looking at yesterday's stuff. Right? And so, if you keep up with it everyday then it's not actually a ton of stuff. Stephanie: Mm-hmm (affirmative). Jerry: But for your first time, you're looking at all the days that have accumulated in the past five days. And certain events will also extend beyond that. I think the first time experience is like, wow, this is a ton of stuff. And also because you probably want to click through every single thing. Right? Stephanie: Yep. Jerry: But after awhile you're probably just looking for the things that catch your eyes. Or you're just going to scan and be like, okay, that's really cool. That's really cool. But you're not necessarily going to check out every single thing. Right? Stephanie: Yeah. [inaudible] Jerry: Also, on the mobile app, the scrolling screen is just much slicker and smoother too. Stephanie: Mm-hmm (affirmative). Jerry: I think you might just browse there. A lot of folks also will tell us that it's just something that they peruse through when they're waiting for something or commercial break or something like that. Stephanie: Mm-hmm (affirmative). The second thing I saw that I really liked, which I also haven't seen... Maybe I'm just not on enough websites. I don't know. But I was looking through... It was an about shipping section. And it showed a visual of what does your shipping status mean. Jerry: Yeah. Yeah. Stephanie: And it just... It showed everything from like, we place our PO, and than it goes to the supplier, and here's what it means if you see... I don't know the whole... I can't remember the whole layout. But I thought that was genius showing it in a visual format. And I'm sure that probably brings down a lot of customer support emails. But tell me how you all are thinking about giving that transparency to the customer. Jerry: Yeah. Stephanie: And hopefully prevent a million a emails of, hey, where's my product. Jerry: This is another product of our business modal. Or kind of what differentiates us a bit. We sell across all categories. Right? Meaning that we have to be able to accommodate all the categories. So it's not like, a company that just sells furniture ships one way. A company that just sells clothing ships another way. Right? And so their customers go there expecting a certain experience. A company that sells everything needs to ship all the different ways. Right? So a customer might not know exactly what this shipping process is going to look like when you buy something because they may not realize... I mean it's obvious now when I talk about it but if your company goes on a site, you're going to expect shipping experience to be generally consistent. But for us it's like, we're going to ship furniture differently, then we're going to ship clothing differently, and then we're going to ship, you know, this cup, right? Stephanie: Yep. Jerry: And so for us it's just more like informing the customer, this is what's going to happen. This is what it's going to look like. And this is what the different steps mean. For us, we found that more so than anything, they just want to know what's going on. That it's moving and... like internal. Yeah. Stephanie: How about when it comes to relaying the value of the product? How do you convince someone that something is really good? Because I don't think I saw reviews on the website. Unless I missed them. How do you... That's usually the first thing I look for. Is it five stars? You know, I want to see if someone has the same kind of experience that I'm looking for. How do you tell someone something's valuable without that? Jerry: Yeah. I mean, a lot of what we do is educating the customer. Right? Because a lot of these things they never heard of, they didn't know it exist. I wish we could say we do an awesome job at it and we provide all these reviewed stuff but... And we vet the product. We'll go and look at the reviews and we'll test the product and all that. But it does take a leap of faith in the first purchase and maybe you get a learned trust after some time, that like we've done the research. Jerry: Because if you go and research these products you're going to find that they're pretty highly regarded. Stephanie: Yep. Which I think actually might be the modal that it's headed is just show me one or two people at your company that I trust to review product, and I trust them. Because a lot of reviews, I mean, at least on other places... Marketplaces and things like that. They're paid reviews. And so you go through and you're like, well, I can't trust 90 percent of these anyways. So I think it is kind of shifting towards just give me the one person that I can trust. Or the one company that I can trust to curate something for me. And I know if it's coming from them, it's going to be quality and good. Stephanie: Are there any big transformations that are going to be on your plate after the environment kind calms down? Or any big projects that you plan on starting or changing within your strategy? Jerry: Yeah. We're working on shipping things a lot quicker. The reason being that a lot of our products do take a little bit longer because we have these various modals that we work with. And we found that when we can ship things more quickly people are generally way more happy and more likely to come back and purchase. Stephanie: Got it. How can you speed up the shipping for... when it's a bunch of different, I'm guessing, retailers who all their own different practices? How can you kind of know that you can speed that up and make it all pretty uniform? Jerry: Consign the product. Right? So they will house it in our warehouse and we essentially act as their distribution center. Stephanie: Oh. Okay, cool. Tell me a little bit about that. Do you have to buy warehouses in different parts of California? Or how is that modal set up? Jerry: Right now our warehouse actually has a good amount of space. And we've actually developed our distribution system to fit with our model, right, which is that we run things in these short spurts. Right? And what's cool about that is that things come in and they go out really quickly so we're not sitting on mountains of inventory. I mean, we're nearly inventory-less. We're very inventory light. We don't actually require that much space to run a lot of products. Stephanie: Mm-hmm (affirmative). Jerry: So right now, for the foreseeable future, it's to keep it within our distribution center. It's a long winded way of saying... Stephanie: Okay. Got it. How did you learn to do that? When I even think about shipping products to a warehouse and making sure everything goes well, how did you learn best practices around... Yeah, around all that? Jerry: Yeah. This is interesting because when we first started we were shipping our own products from day one. And so- Stephanie: From your house? Or from where? Jerry: From the house. [inaudible 00:41:45]. Stephanie: That's awesome. Jerry: ... of just tons of boxes in the living room. And then when the FedEx guy came we would... The first day we just piled it in the lobby and our neighbors got really pissed at us for doing that. Stephanie: I can imagine. Jerry: So the second day, we knew when the person was coming and we just did like bucket brigade style where we just passed packages from our living room down to the... Basically we had our four founders there. And we would just pass it down, bucket brigade style, down the stairs as quickly as the guy could load it into the truck. Stephanie: Oh my gosh. Jerry: And then the first day we finally opened the office, we set aside half of it for fulfillment. And the reason why we did that was because we realized our model is just very different than a traditional pick and pack modal, which is what most 3PLs... What's called a third party logistics provider. At least back then, they were mostly doing pick and pack type operations. And it didn't really fit our modal and we realized that at a certain scale we'd have to bring it in house. It's better to learn it now than to try to take it in when it's already at scale and have huge disruptions in customer experience. So basically, we just started doing it at a really small scale and built our operations all custom to that. So our, kind of, back office technology is all custom. Right? So everything ties together and it suits us in a way that... If you went with a just a third party provider, it probably wouldn't work as well. Stephanie: Very cool. Well, definitely have to get that picture from you so you can post it somewhere to show people because that's... Yeah, a really fun story of starting out. Jerry: Yeah. Stephanie: What do you see for new people starting out, building their stores and all that? What is some advise that you give them? Or best practices or things that you did that you're like, don't do that, that actually worked out really bad. Jerry: So this probably goes back to your first question about the two businesses that we had before. We made some classic mistakes. Right? Which is, I think the big one is you build the whole thing and you spend like a year building it and then you think that one day you're going to open and people are just going to come in. Right? Stephanie: Yep. Jerry: Then you start thinking, hey, maybe we just keep tweaking the product and eventually people will come. Right? Really all you're doing is staying busy. Stephanie: Mm-hmm (affirmative). Jerry: Because if the demand is not there, it's not going to suddenly show up, almost like the world changes, right? And you would be at the right place at the right time. So it's prove out the demand first. And then when the demand is there, you can take your time with the product. Right? It's like, you don't want to be in a place where you're convincing yourself that the reason you're not succeeding is because the product is not quite right. Stephanie: Mm-hmm (affirmative). Jerry: If there's a real need for it you can come out with something that's pretty minimal and just addresses the core need. And it doesn't even have to run perfectly and be totally ironed out. And that will give you enough signal that there's something there that people want. And then you can find it down the road and keep expanding your market to... [inaudible] but this is now more mass market. And so on and so forth. Right? Because the early folks, they want your service, whatever it is, so much that they're going to put up a little bit with you in the early days of like not having it all totally together. Stephanie: Mm-hmm (affirmative). [crosstalk] Jerry: And so... Yeah. Yeah. You got to prove out the demand first before you totally refine the product. Stephanie: Cool. And what about when it comes to technology? How do you think about... It sounds like you guys did a lot of just in-house... everything. In-house logistics. In-house website stuff. What would you tell someone right now? Should they try and build things in-house? Or... Yeah, what are your thoughts on that? Jerry: It's easier now to build anything in-house than it use to be. Right? Back then it was actually a little more difficult because a lot of the frameworks that are being used today were really fresh back then. Right? So people weren't learning it in school. They had to teach themselves. There weren't the coding bootcamps back then either. So engineers were still a little bit hard to come by. Now, resources are there and everything. Jerry: We were lucky because we did our own coding in the first versions of the site. It was me and Steven, our CTO. More him than me but we built the early versions of that and didn't hire engineers for a long time. Maybe longer than... we probably should have hired engineers a little bit earlier than we did. But we got by with just two folks building stuff. Right? But you also learn a lot. You are kind of like more intimate with the product, even today, just because we have that history with it. Stephanie: Yep. Jerry: And I think one of the things that's really important to us early on was the data ownership. Right? We don't want to have all these different things talking to each other and not have a clear picture of what's going on. Right? Stephanie: Mm-hmm (affirmative). Jerry: We don't want any black boxes. There's things that if we don't have access to all the data then we're just going to cut that service and we're going to build it ourselves. Stephanie: Got it. Very cool. Yeah. Great advice. So with a couple minutes left, we're going to move on to... it's called the lightning round. Brought to you by [Sales Force Commerce Cloud 00:47:37]. Sales Force Commerce Cloud. This is when I shoot a question over your way and you have a minute or less to say the first answer that comes to mind. Jerry: Mm-hmm (affirmative). Stephanie: Are you ready? Jerry: Okay. Stephanie: Dun, dun, dun, dun. We'll start with the easy ones first and then we'll end with the harder one. Sound good? Jerry: Yeah. Stephanie: All right. What's up next for dinner? Jerry: Left-over Chinese food. Some more. Stephanie: Yep. What's up next that you're buying from Touch of Modern? Jerry: What am I buying next? Well, I'll have to see what comes up next. It changes everyday so I don't know yet. Stephanie: All right. Well, what did you just buy recently? Or what's your most recent purchase? Jerry: My most recent purchase was, funny enough, it is a cast-iron rice pot from [Le Creuset 00:48:22]. Stephanie: Okay. Have you tried it out yet? Jerry: No, it hasn't gotten here yet. It was very recent. This was probably... couple days ago. Stephanie: Cool. What's up next on Netflix or Hulu queue? Jerry: I actually don't have either. I don't even own [inaudible] TV. I don't watch a whole lot of stuff, actually. Stephanie: Okay. Hey, that's an answer. What's up next in your travel destinations after the environment calms down a bit? Jerry: I think an easy one from California would be Hawaii. I like to go there to relax and it's a relatively short trip. So I like to go there [inaudible 00:49:05]. Yeah. Stephanie: What's your favorite island there? Have you been? Jerry: Yeah. I go to Oahu fairly frequently. I really like Kauai, I've been there once to do a hike. Stephanie: Yeah. That's my favorite island with all the waterfalls there and the crazy hikes that- Jerry: [crosstalk] been to the weeping walls? Stephanie: Yeah. Yeah. Jerry: Yeah. Stephanie: Yep. Oh, yeah. I want to go back though. We were only there for a couple days and I feel like there's so many different hikes and waterfalls and just things to see there. I mean, it's... Yeah, like a jungle. It's awesome. On to the hard question. What's up next for E-commerce pros? Jerry: E-commerce pros. Hmm. Man. What's next for the pros? I think, I mean, it's going to be adapting to the changes in customer behavior that are coming out of this. Whatever that is. I don't have a crystal ball for that one. Stephanie: Got it. Hey, that's an answer. All right, Jerry. Well, this has been a fun interview. For everyone who hasn't gone and checked out Touch of Modern, you should. It has really fun products on there. And yeah, thanks for coming on the show. Jerry: Thanks for having me.
In the world of eCommerce, one of the biggest challenges the pros come across is selling something to a customer who physically cannot experience the product at the time of purchase. For Dmitri Siegel, that was one of the hurdles he has had to overcome as the Vice President of Global Brand at Sonos. Dmitri cut his teeth in the world of eCommerce at Urban Outfitters and then moved on to work for Patagonia. And while the number of products he was selling was reduced with each move, the challenge of building a platform that could connect with target buyers remained. On this episode of Up Next in Commerce, Dmitri explains all of the lessons he’s learned in facing those challenges, including the importance of culture, what a successful brand and website redesign looks like, and what some of the most important metrics are when you’re judging the success of your eCommerce platforms. 3 Takeaways: On any project, culture and collaboration is important — you have to be able to personalize and succinctly summarize your goal on paper so everyone knows what they are working toward Optimizing for margins per session can guide you on what to focus on when adding to your site In times of crisis, brands are given a clean slate to reinvent themselves, accelerate projects, and scrap things that haven’t been working For a more in-depth look at this episode, check out the full transcript below. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible eCommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Dmitri, how's it going? Dmitri: It's going as well as it can. I'm enduring. How about yourself? Stephanie: It's going well. It's bright and sunny, and even though we can't go anywhere, at least we get to hang out here, right? Dmitri: Yeah. Stephanie: So I'd love to hear a little bit, Dmitri, about your role at Sonos. What is your title, and if you can give me a little bit of background on what you do at Sonos. Dmitri: Sure. I'm the vice president of global brand for Sonos. It means I oversee all of our brand creative and marketing, product marketing. I oversee all of our digital experience and physical retail experience, so our web site and our physical store displays as well, and marketing operations. So kind of all the touch points that you have with our brand except for the product itself. Stephanie: Got it. And how did you get into that role, because it seems very wide ranging whereas a lot of people are like, I only control the web site or I just have this one vertical. It seems like you have a lot under your purview. How did you move into that role? Dmitri: I had kind of a crazy pivot in my career early on. I was at Urban Outfitters and I was the digital creative director, and this was about 15 years ago. It was very early days for e-commerce. And my boss left, and we were interviewing people to run DTC, and there just was nobody really that had much more experience than I did. And so I kind of made the dumb youthful move of being like, hey, I think I could do this job. And my boss at the time, Ted Marlow, was like, all right, well, we'll give it a shot. And so I went from really running creative and the web site product to running the whole business, and they were so good at operations and merchandising and finance and all these things that they felt like they could teach that to me. And so I just had this opportunity to run a P&L and run operations, and that gave me the sort of balanced background between those two things. Dmitri: And everywhere I've been, I've sort of since then, I've just sort of had that balance of the e-commerce business and creative side, and it just came out of basically someone taking a risk on me early on in my career. So yeah, it's been an interesting, interesting journey. Stephanie: That's awesome, really fun to hear about someone betting big on you like that. Was there anything where when you jumped into that role, you're like, I actually don't know anything about this- Dmitri: Oh yeah, so much. Stephanie: And what did you do in those moments if so? Dmitri: So much. Stephanie: And what are some examples of that? Dmitri: I mean, at that time, merchandising, I looked at everything as what would be beautiful, and so understanding this one might be beautiful, but it's low margin and nobody's buying it. That was an important thing to learn. And I also, I remember really early on in sight merchandising saying, oh look, we should put this in the upper left hand corner because it will sell more, or I think we should put this in the upper left hand corner, it's my favorite product or whatever. And I remember the merchandiser at the time going, you know what? I could sell a lot of old flip flops if we put them in the upper left hand corner too. You're not some merchandising genius. So understanding that, just learning the way that shopping actually happens in that medium and the mechanics of it, very humbling from that point of view. Dmitri: But I think having a learner's mentality is important at any stage in your career, I still have that feeling. There's so much that I don't understand, there's so much to learn, and most often honestly from the people who report to you or who are in your own organization. I think being promoted young into that role, I had to very quickly get comfortable with the fact that people who worked in my team knew more than I did and just being humble about that and learning from them, so that's part of what makes it fun to go to work, so. Stephanie: That's great. Have you seen your role at Sonos change since when you started because of the environment or consumer buying behaviors to where it is now? And if so, what are the biggest changes that you've seen? Dmitri: I think that I came in early on to really get the digital side of the business going faster, and we did a lot of the sort of fundamental blocking and tackling of re-platforming, redesigning the web site, but I think quickly realized that this is really a holistic business and a multi-channel business, and what's happening in the product marketing, for example, has just a huge impact on all the channels, including e-commerce. And I think some of the stuff in this field is very optimization oriented, and it's actually not as impactful sometimes as what your naming a product or defining the core benefits of that product that would actually help it in every channel. So my role has definitely gravitated more to the general brand and product messaging overall, and how that comes to life in e-comm is the harshest test of it, the best place to test that. But it's not the sole focus any more. Stephanie: Got it. Yeah, how do you think about bringing a product that's ... You really need experience. Nice speakers or great food or something like that, how do you bring that experience to life on a web site? Dmitri: It is challenging. I mean, the core benefit of Sonos, sound, is invisible, so you can't see it. And if you're listening on a laptop or on a phone, you're not going to experience the quality of sound that we go for and that we create. But really, I think every product has that challenge. I mean, I like to think that Sonos is more complicated and more difficult, but I think you always have to just be really, really rigorous and relentless about what the value is for the customer and then illustrate that in words and pictures in a very slavish way. And I think it has to be like a pop song. There's no guitar solo, there's no 15 part middle part. It's got to be really to the point and verse chorus, verse chorus. And I think that rigor is really, it's true for us probably more so because it is an invisible, ethereal, emotional kind of thing. But I think it applies to just about any product. Stephanie: Yep. Yeah, I agree. One thing I saw on your web site that, I don't know if it just hit home with me, but I thought it really made me think about the experience was when I was scrolling, I saw the speaker on the page and it had little sound bars bounce off the speaker, and it made me be like, oh, cool. And it gets you kind of in that music mode and just thinking about, I wonder how that sounds now. I'm assuming that was intentional, and if so, was that your project? Dmitri: Yeah, so we actually have an entire style guide of how to show sound and how to talk about sound. What are the words that you use? What are the circles that emanate from the speaker, and is this stereo sound or are we showing the tuning of the speaker? And our brand design team, I think in some of the ways that ... Oh, God, this is a random story, but I remember going to a creative summit for McDonald's, and they had an entire session on the Coke and how to make the Coke look delicious and thirst-quenching. And then there was the burger session, and that sound is that for us. We have to be really consistent and relentless again about how do you make this thing look like it sounds great? Dmitri: And there's actually different ways we do that. So in above the line media, for example, we use this very bold waves of sound coming out of the speaker that really grab your attention. When we're doing an education piece like what you saw on the web site, we want to me more articulated about what the sound's actually doing in that moment, so ... And then we have to package that up as a tool kit so that marketers all over the world and partners can show it in the same consistent way. And it's true that repetition and that consistency that I think you actually build a sound brand. Stephanie: Yeah, very cool. And how did you come up with that style guide? Was it a huge project that took a lot of buy-in and everyone had a different idea, and then did you have to train your retail partners or other people of how to interpret it? Dmitri: I think everything always starts with listening and listening to your partners and understanding what they're actually going to use basically and what they really need. And so the style guide was sort of a culmination of a lot of projects where we would have conversations about, God, I can't see the speaker in this shot. I wish there was some way to call attention to it, or the sound of the speaker is so ... You have five speakers in the sound bar, but I can't really tell that from what you're showing me. So hearing a lot of that, and then trying different things and saying, well, this really worked, or this didn't work, and then compiling it ultimately into a style guide. But we didn't set out with a white sheet of paper. It's more listening to the needs and solving the problems of the marketing organization and the go to market organization overall. Stephanie: Got it. Very cool. And I think I saw y'all just did a whole brand redesign with the colors and all that. Do you want to talk a little bit about that, because I don't see many brands doing that. It's usually like, I pick my corporate palette, and it's blue, and it has to be blue for the next 100 years. How did you think about changing that? Dmitri: Yeah, this redesign, it was the coolest one I've ever been a part of because we were able to do the site and the brand redesign at the same time. So often those are two separate projects and maybe even two separate teams where you have the brand design team that goes and comes up with this really cool, hip, exciting brand identity, and then you have this web design team that's like, I can't use any of that. I don't know how I'm supposed to get that to work on the web site. Because we're all one team, we were able to really work on it simultaneously. So we would do some brand exploration, and then we'd be like, okay, maybe the product detail page with that, okay, settle on some core messaging, does that work on the home page, and go back and forth between web design and brand design simultaneously. Dmitri: And we just have a really good team that is really collaborative, and we all had that mission in the end, we want you to see an advertisement, go to the web site, and have it be totally consistent. We don't want these disconnects where the ad sells you something and then you get to the web site and you're like, what kind of ... I thought this was that kind of company, but it's this kind of company. And so that process was really digitally driven. But a lot of times, if you just approach a ... Like we just redesigned the web site, you don't get that sort of high-level brand thinking and strategy to it and communication hierarchy and stuff. And also, you just don't get the sizzle of brand to it. You sort of can get a very functional thing, and we're a premium brand and we command a premium price point. Dmitri: And I think if people show up at your site and it looks like an out of the box thing, then they're like, I don't know if they're really going to deliver on the experience side, so ... It was really cool to balance all of those. And then as far as the question related to color and our brand identity, our product is really black and white. That's the design philosophy of the product itself is that it's really bold, high contrast black and white. And our brand identity was the same way. It was very bold black and white. And what ended up happening with that is you couldn't really see the product because everything was black and white. Dmitri: And then also our category, all of a sudden everybody was just really severe black and white. And so we just, we didn't have a great context to show the product. We weren't standing out in the market. And so our brand is more about the lifestyle of the experience of your home, having high-quality experiences with music and content. And so once we started bring the color in, it just, the product could really pop out, and also just our brand looked really different in the category, so ... We didn't choose a brand color. These colors will keep changing over time, and they're more in a digital, kind of almost a seasonal fashion kind of usage. But this definitely feels right for our company and our product. Stephanie: Yeah, no, that's a great way of thinking. Are there any best practices you learned when trying to work with multiple teams to update the brand and update the web site? Any dos and do nots or places where you're like, oh, this went wrong, but this went really well, and ... Yeah, any guidance for other companies who are listening right now, like maybe that's a good idea to do both? Dmitri: I mean, you really have to build trust in your team, and it's about culture I think first. We couldn't have done that kind of project four years ago. I think our culture is at a place where we trust each other, we're collaborative, we have a shared goal in mind. We're willing to be honest with each other about what's working and what's not working. So I think you have to have the right culture to do that. I think also, when I very first got out of college, I taught school, public school. I was- Stephanie: How cool. Dmitri: An art teacher for a couple of years, and- Stephanie: What grade? Dmitri: It was junior high and high school, so- Stephanie: Okay, that's kind of a hard age to teach. Dmitri: It's very- Stephanie: They can little meanies. I was, anyways. I was a meanie. Dmitri: I mean, when you have 30 kids in a New York City public school, and you have no carrots and no sticks, I think what I learned from that experience is just like, you have to externalize the goal. It can't be personal, and it has to actually be written down and be agreed to as, this is what we're going to do, what's on this piece of paper. It's not about me and it's not about you. It's about what's on this piece of paper. And I think that was helpful with this redesign. We just had a really shared sense of purpose that wasn't the brand team's agenda or the product marketing team's agenda. It was like an external third thing that everybody was working towards- Stephanie: I like that. Dmitri: And I think that's really important. Stephanie: Yeah, no, that's great, because then if not, you've definitely got teams kind of battling it out and competing and trying to push agendas, and it's nice to ... It's kind of like putting it on a higher authority of, well, this is what we all agreed to, and this is where we're headed, not towards either one way. That's great. Dmitri: Yeah. Stephanie: Were there any tools or technologies that you utilized or implemented that really helped with updating the web site and updating the brand? Dmitri: I don't think that technology played a huge role in it. I mean, Google Slides. We use Google Slides a lot. Stephanie: Tried and true, yep. Dmitri: But I think that the tools of the trade are pretty consistent. I think that the ... I mean, when you ask it that way broadly speaking, Zoom, Google Slides, and Slack have really enabled us to collaborate with different agencies and with different teams, often in different locations. And because we were already working that way, this current disruption is pretty seamless for us in terms of how we work. It definitely posed a challenge in terms of our typography. That's a huge thing obviously that drives design and it drives my point of view on design, and when you're working in a digital medium, it's just, it's really different. That's actually one of the places that I think brand design and digital design kind of get crisscrossed is brand design is generally this print-driven medium where you can be pixel perfect on every single bit of typography, and digital is just, it's just much more dynamic and you have less control over every application. So I think that's one where we had to carve out enough time for the digital team to solve those problems. Dmitri: Often you throw over this PDF and you're like, this is how I want it to look. I want it to look exactly like this. And they're like, well, that's going to take some custom work, because type doesn't really set up like that in a browser. So we were I think good about leaving enough time to actually do that work. Stephanie: Very cool. Yeah, that's great, and how did you think about measuring success of the redesign, or what's the impact been since you launched it? Dmitri: Our business is doing great. I think in my experience with redesigns or re-platforms, there's usually a dip when you first launch, and then it normalizes. I actually see that a lot in product reviews and app updates, and it's something I wish someone had told me when I was younger, because I used to freak out in the first couple weeks when you launch something new. But what we've seen is a lot of people understand the product better. That was our big goal is, people still were saying they didn't understand how the system worked or how the products worked. And so the customer understanding was a big goal of ours. And there were things where design choices really helped that, and then there were things where design choices didn't help that. So for example, one of the ways we did image galleries when we first launched didn't make it really super-duper clear how to click to the next image. And so we found that ... We did user testing all through before launch and after launch, and that single change, for example, had a huge impact on customers' understanding- Dmitri: The product, clicking through the whole gallery of images or finding the support link on the site for example. We kind of buried that in the original design and then found, no, that's really important, because if someone needs support, they really want to find it and they don't want to have a hard time finding it. It's been a while obviously since we launched it, but all the product launches have gone really well. The cognition and understanding of how the products work together is way up, so it's going well. Stephanie: That's cool. How do you find out what the customers are struggling with? When you're saying the support link was too low, how did you know that was a problem? Dmitri: I mean, it's a mix of quantitative and qualitative. So you're looking at behaviors, and wow, people are stuck on this page or they're clicking on this part of the page more. And then qualitative of just asking them what their experience is as they go through. So saying all right, we want you to go to the site and buy Sonos One, and then kind of narrate your experience as you're going through it. And that's where you kind of get some of the specific things that you wouldn't see in behavioral, which is why someone is doing what they're doing. It's just as important as what's happening. Stephanie: Got it. Very cool. And have you updated the technology behind your web site in the past couple years, or have you stuck with one thing? If someone was coming in and building a big e-commerce store now, is there anything you would recommend to keep up with customer demand and inventory and, yeah, everything that it takes to run an e-commerce store? Dmitri: I mean, I think that is one of the things that's changed so much in my time in e-commerce. I think 15 years ago, 12 years ago, it was really a life or death decision about what's your e-comm platform? You're going to be stuck with this. It's going to take millions of dollars and years to implement, so a lot of your success or failure was based on decisions about technology. I think that the tech has gotten a lot better. It's gotten a lot more accessible from a price point perspective. Implementation's gone a ton easier. It's still painful to switch, so switching costs are real. Dmitri: But I would say you're so much better off starting today than even two years ago. The platforms are super accessible, and in a way, I mean, I think a lot of the skillset has actually become automated and commoditized too. Search optimization or even a lot of the sort of marketing tactics that drive e-commerce, that used to be a real differentiator. If you were an analytically driven marketer, you could get an edge. But a lot of times now, you're better off just going with the platform automation on these things. So I think my advice would be, the thing that always you forget is the content management piece. You can launch with a great web site, but every day, you're going to want to update it and launch new products and launch new features, so really understanding how you're going to make new templates and how you're going to add new content is the thing that generally people overlook. Stephanie: Got it. Yeah, how do you think about that intersection of your content management system, your CRM, your underlying commerce platform? How do you think about those three together? Do they work together in sync, or are they kind of separate entities? Dmitri: I'm going to be very unpopular probably for this opinion, but I mean- Stephanie: Good. Dmitri: I think you can spend so much time and money trying to create this temple to technology, everything seamlessly integrated on the platform side. But what I've learned is that, or I feel like this has changed since I got into this business, but is that if your message is consistent, then you can actually let the tools do what they do, and your customer journey will be consistent. And the more that you focus on consistency of your message and your customer journey basically, your customer communications, you can allow the different technologies to do what they do best and be less obsessive about connecting every single point of customer data. Now I mean, that's also relevant to our business. We have 10 products. If you're Amazon or Wayfair and you have just infinite complexity in your assortment ... That was more the Urban Outfitters experience. We had 20,000 styles and we launched 7,000 styles a week, and so there was this huge how do I connect the right product to the right person challenge. Dmitri: But for a lot of businesses, you're dealing with a finite product set, and as long as you're consistent in how you're showing those products and what you're saying about them, you can let your re-targeting vendor go crazy. You can let your CRM program go crazy, because it's all going to add up to the same story in the end. So I think that I often feel like people spend more money trying to back of house stuff than they do on the customer, and I always try to look at that split of, are we spending money on the things that the customer can see, or are we spending money on ourselves to make ourselves feel cool about the systems that we have, and just balancing those things. Stephanie: Got it. Is it very different with a platform that has, like you said, a huge catalog versus only 10 products, and is there a different way you would handle an Urban Outfitters model when you were there versus at Sonos? Dmitri: Yeah, I mean, it is really different. The three big brands I worked with are Urban Outfitters, Patagonia, and Sonos, and each time I've gone to a smaller and smaller assortment because it's such a pain in the ass to have a big assortment that I was like, I just want to get to a smaller assortment. But- Stephanie: You're going to be down to just one product soon, just that's all Dmitri sells- Dmitri: That's my dream. Stephanie: Just one thing. Dmitri: Live the dream. No, it's really different because all the tricks of merchandising ... I think of like, people have been shopping since the Roman forum, right? It's a very human experience to wander around and find the thing that reflects your sense of self and choose it over the other thing and buy the middle price point because it's not too expensive. All that stuff is super innate to people. And so I think when you have a big assortment, you have a lot of products to play those games with, like this is something new, so you should look over here because it's new, or this is going fast, so you should look over here. With Sonos, it's very much about getting people to understand the experience, and get it that it's like, you can mix and match all these speakers. You can buy one or you can buy three, and you can move them around the house. And they need to understand that gestalt much more than ... That's more important than them picking one speaker and having a box shipped to their house. Do you know what I mean? Stephanie: Yeah. Dmitri: They might get that idea, and they might buy something at Amazon or at Best Buy, but if they get that concept, they're a super high-value customer, for us that's more margin to better business for us to be in. So a lot of what high product count sites are about getting you to a decision and to put something in your basket and check out, and for us I think, and for a lot of businesses and a lot of DTC businesses that have these narrow assortments, it's much more about communicating the gestalt and the value of the product. Stephanie: Mm-hmm (affirmative), yeah, because I'm sure once someone buys one, two, three, then it's like you've got ... That lifetime value of that customer is bigger because they're going to come back. And now I'm looking right now, we have our Sonos speaker, hey, right next- Dmitri: All right. Stephanie: To me, but I don't know ... I mean, we have a couple in our house and all around the studio, but I don't know if I'm getting the full value of it because the only songs that seem to play on our speaker are Old MacDonald and Happy and You Know It, for my two-year-old, all day long. So I think there's a bug. I need to send it back and get that updated hopefully soon. I'm sure you have the same problem. Dmitri: It is fun, though, singing to your kids though isn't it? Stephanie: Yeah. Dmitri: I love that aspect of it, just sharing music with them and dance parties and ... We're so often with our headphones on in our little phone world, but having it be something that you can share with the kids is really fun. Stephanie: Yeah, but I also enjoy that you can ... I'll turn off the kitchen, just leave the living room running and be like, you go have your dance party out there. I can't listen to that song another time. Dmitri: Totally. Stephanie: So if you're thinking about defining success for an e-commerce platform, what do you consider successful? What metrics do you look at? Yeah, how do you think about that? Dmitri: Well, if I have to pick one- Stephanie: Yep, only one. Or you can pick two, but stack rank them. Dmitri: Oh man. I mean, the ultimate one to me is margin per session. Stephanie: Okay. Dmitri: It's not the easiest one to get at, but I think traffic is really a tough one because it's driven often by an e-mail or it can be driven by bad things or you can have a bunch of crappy traffic that's unqualified. So like, great, you've done this marketing campaign that's not converting. I think conversion, you can have people again, like you could be converting on a sale product that doesn't generate a lot of revenue profit for the company. And so I like per session because it just, it corrects for traffic basically. And then I like margin because it's like, it motivates you to sell the high margin stuff and sell the high-quality stuff, and those are generally your best products and the things that bring people back and make them more high-value customers, so that one's really, when you're really in the weeds of it, that's something that I look at. Dmitri: And then usually, you're designing a specific part of the site and so step conversion is really helpful to look at, did I get them to go from here to here? Because if I didn't, then I know they're not going to get to the final steps of the process, but ... I think that, in my role, one of the things that's important is just a very high-level business understanding of margins are basically what you can charge for the product. It's based on people's perceptions and perceptions of your brand, and you have to dedicate a certain amount of time to just faith in that. And that's a pretty high-level thing. I don't expect someone at a junior level or somebody who's responsible for the day-to-day revenue of a particular category to get, but if you don't invest some of your development time and reinforcing premium, then you just, you're not going to be able to charge the margins. And so that's one that's a little more high level, but ... I think of the brand comes through in the margin. Stephanie: Got it. I think I just heard that Amazon's switching their algorithm to showcase higher-margin items, where before it was always based off of what they thought the customer would want to see first. How do you strike that balance between maybe showcasing higher-margin products higher up ... I mean, I know there's not many, but how do you think about that versus making sure the customer experience is what they want? Dmitri: Yeah, so it is less of a challenge with Sonos because our product philosophy is to make the fewest number of products possible for the most number of applications. So we only have a couple home theater products. We only have a couple of music products. And it's really about the size of the room, but I think it's like, that's all merchandising stuff. We sell 80% black, but you always show the color because it's going to excite someone and make them feel like the experience of wearing a great new jacket. And I think with sound, it's the same thing. I kind of want to get people emotionally invested in the experience of music, which is awesome, and just remind them, listening to music is great. Dmitri: And so that's kind of the first thing that we try to lead with is just what a great experience this is and reminding people that they have ears and it's one of the only five senses they have and it can be really transporting. And so that generally is going to be more of our premium products that do that, but then they're going to ... Most people will buy the middle price point. That's just the rules. Stephanie: Yeah, got it. Very cool. So to shift a little bit to the present day, the current environment, everything with COVID-19. Do you guys see a lot of changes in your business right now with what's happening? Dmitri: Our business obviously is ... We do a lot of business in physical retail, and physical retail is closed. And so that has really been disruptive to a lot of our partners and the people that we work with. And so on a personal level, it's just, it's hugely impactful. And obviously, we are really invested in our partners and the people that we work with. And so we're doing everything we can to work with them. A lot of that volume has shifted to online channels, so most of our partners have a web site and they're seeing that too, so their business is shifting online. Our direct to consumer business is way up. Dmitri: And so I mean, I think that is a circumstantial behavior. People can't go to the stores. Stores are closed. That's a behavior, and I think what people expect ... I feel like everybody is re-evaluating everything 100%, and you have a complete clean slate as a brand, which kind of sucks if you have a great brand like ours. You're like, wait, remember yesterday you thought we were awesome. I think every brand has to kind of start over, and every action you take as a brand is going to be evaluated in this new reality, like do I need Sonos now? Do I need to travel now? What do I actually care about now? And I think that's an incredible, almost once-in-a-lifetime experience. Dmitri: And anybody who's, especially young marketers and brand people going through this right now, this is going to be the proving ground for the future. The greatest brands of the last century were defined in the world wars, and the brands that figured out how to endure the Great Depression and those disruptions, and they didn't do it by disappearing. They weren't created by going off radar. They figured out how to stay in the public consciousness and to be relevant, even when people felt so horrible. So that's what I'm thinking about a lot right now and observing in the marketplace. Stephanie: Yeah, no, I agree, definitely the clean slate idea of everything can change from this point forward is, yeah, good to remember. Is there anything that you're, like any big strategic projects or things that you're shifting either off your plate or a new thing that you're starting to work towards based off of consumer buying behavior over the past couple months? Dmitri: Yeah, we really had to take a look at how our brand shows up, as all companies and brands do. And we really, we tend to be a very aspirational brand, and I think in this moment, it's really important to be personal and to be helpful and to just kind of tone it down a little bit and be real with people. And that's a big effort when you have a global marketing offense that spans channels and geographies, and the team just did an incredible job of realizing, accepting, and taking action and is continuing to learn and adjust as we go through it. But I think we couldn't just show up the way we did two months ago. Everything you do has to in some way be relevant to what's happening right now. And so it's touching everything. Dmitri: We're fortunate in that our product roadmap hasn't changed. We haven't had to take major programs off the board in terms of not being able to fund them or whatever. And we're at an incredible busy time right now. We have these two major launches coming up. So we were in the final mile of that work, and so we've just been proceeding, but then also, yeah, got to look at it through the lens of what's happening today. Is this going to seem off, or is this going to seem weird to be doing this right now? And you have to pull the plug on it if it's going to not look good for the brand. Stephanie: Yep, yeah, completely agree. It seems like it's also a good forcing function to make larger brands be more agile and make decisions quicker and be able to adjust to the market, whereas before this, I don't think there was that forcing function. Dmitri: It's true, and I think it accelerates changes that were already happening. So I think that's a situation like this, anything you were thinking of doing, you're going to probably, you're going to have the opportunity to do. It's also just a giant dumpster fire that you can throw almost anything on. If you want to get rid of something, some old behavior or if you wanted to ... I mean, I see brands that were really struggling with their perceptions, again, they have this fresh moment. They can throw their old identity on the fire and re-introduce themselves, and it's almost like a once-in-a-lifetime opportunity to do that. So definitely looking to take advantage of that as well, like what do we want to shed? What do we want to get rid of? Because that's also part of the opportunity right now. Stephanie: Yep, yeah, I think the brands that'll experiment a bit with that as well and try something new like you said are going to be the ones that come out on top, because I've seen quite a few come through my inbox that just have the same messaging. And I'm like, did you all just hire the same PR company to just be like, title, addressing COVID-19 challenges. It's like, here's what we're doing, and it's so cookie-cutter. I'm like, I don't connect with that. But the brands who send unique messaging and you can tell they care, like you're talking about Sonos really showing that you want to be there for them and the retail partners and the customers, that's very different. And yeah, you can start from scratch and have a whole different journey from here on out depending on how you choose to handle it right now. Dmitri: Yeah, and I mean, some of that is luck of the draw. When we went into that process of self-examination, we're like, okay, our mission is to give people a really deep, immersive experience of music and content in their home. It's like, that's still pretty relevant. Our goal is to connect people to music and as a way of making their lives richer and escape. That's still pretty relevant. I mean, it's not luck, but we're very lucky that that's what our product and what we stand for as a brand is still really relevant, and then it's more about like, okay, how do we talk about this in a way that's relevant? But I mean, look at Zoom, look at Portal, products that you were sort of vaguely maybe aware of all of a sudden are completely relevant and useful in your day-to-day life. So you've got to kind of be grateful if you happen to fall into one of those categories. Stephanie: Yeah, and the fact that there's so many new customers who are sitting on the sideline that are now coming on board. I mean, I'm thinking about for Zoom, it's my grandmother sent a link and was like, family Zoom call? I'm like, Grandma, how did you know about Zoom? And then my mom's like, oh yeah, I've been using that for teaching. I'm like, you guys ... I mean, we just got on Zoom not too long ago. But it seems like a very good time to be able to bring people into your product that you never had access to before and you might never have had access to them, unless something like this happened maybe. Dmitri: I know, and I do think this is one of the things that you won't go back from. I think it'll go back to some extent, like you won't have every school in the world doing school through Zoom, but it works really well, and you can be more remote. I think about the follow-up doctor's appointment. You go to a doctor and then you're supposed to come back a month later for a check-up, and you drive an hour and you sit in the waiting room, and then you go in for five minutes for them to be like, yeah, you're fine. It's like, you're not going to do that any more. You're just going to get on Zoom and be like, I'm fine, and they'll be like, cool, you're fine. Everybody's going to save a couple hours. And so I think there will be lasting effects on our behaviors and we're not going to want to go back in every way to the way things were. Stephanie: Yeah, no, that's actually a good point about doctor's office visits. I have two twins, they're seven weeks old now. And we went to their doctor's appointment, and one of them had a little baby acne or something. And they're like, well, don't come back for a follow-up. Just snap a picture of it and upload it into a Google Doc, because we can't access pictures but we can upload Google Docs and just do that. And I'm like, oh, from now on, then I'd rather just always do that. I don't want to come in here and expose my kids to maybe get sick from coming here. I'll just send you pictures and let me know. Dmitri: Yeah. Stephanie: So, yeah. Dmitri: But I mean, we're in the orbit of Los Angeles, and we have our own traffic situations, and there's so many trips that are just a total waste. Stephanie: Yep. Dmitri: My wife's a therapist, and you couldn't really do psychotherapy or therapy via Zoom. It's not secure, but there's so much innovation happening in that space right now with HIPAA compliance. And so yeah, I think less time in transit isn't a bad thing. More time at home listening to Sonos. Sounds good. Stephanie: I know. Hey, I'm all about that. I'm definitely all about that. So when it comes to leadership, whether it's in times of change or just in general e-commerce leaders, who do you brands do you look for, what brands do you look to or people in the field that you kind of keep tabs on what they're doing? Dmitri: In terms of leadership, I mean, I think we have an amazing CEO. My boss is amazing, so I feel really fortunate that I don't have to look too far for leadership inspiration. Stephanie: Yeah, that's good. Dmitri: That would suck if you were like, I don't know, I can't find it in my company so I have to go read a book- Stephanie: No one here. Yep. Dmitri: But man, leadership is one of those topics that the longer I work, the less I really feel like I understand it, or ... It's such a human one-to-one thing, and I think that what I like about our company and our CEO's approach is that you really focus on the culture overall and not this meeting practice or this latest book or whatever. It's just this consistency of how we treat each other is really the focus. And every time you go back to that, it actually helps you through a management challenge. And I think right now, the thing is just to be really, really patient with people and really understand how hard it is to do this. You've got kids crying in the next room, you've got elderly parents that you can't go be with. It's emotionally really stressful and really hard, and the best thing you can do as a co-worker, forget being a leader but just as a co-worker and a human, is to just be patient with people and to understand that it's going to ... Their first reaction, they might be coming in hot to a meeting because of something else entirely. So I think that's really important, and then ... Yeah, I think as far as brands and companies that I look to, there isn't a single company. It's interesting, we have these sort of index fund companies, like Apple, Amazon, Google. They do everything. They do every single kind of marketing, they do every single kind of branding. Dmitri: So you can always find an example there of, well, if you had unlimited money, this is what you would do. So I feel like that's kind of an interesting resource that you can always ... Or if you have contacts there or whatever, asking them questions, and we do a lot of partnerships with them. So that's always a good test I think of whatever you're thinking about. I do tend to look at smaller brands as far as just what's happening and how you want to look as a brand. It's been really interesting, again, to see how fast everybody's adapted from a branding perspective. Every single ad right now is people on Zoom or healthcare workers. I think a month ago, I was like, I don't think people are going to be able to advertise. What will be in the ad? And then it's just so fast. Everything's moving so fast. You just have to- Stephanie: Oh yeah. Every ad's that's catered to me right now is sweatpants and work from home outfits, which are basically sweatpants that look like jeans. And I'm like, man, I mean, that's what I want to buy right now. This is great. Dmitri: This is one of the challenges I think for consumers and for brands is that because everything is so automated, algorithm-driven, you kind of get into these wormholes, and you get into this, I call it a coffin of your own preferences. You can't see a way out of sweatpants, like, how am I going to get these sweatpants off my Instagram feed? And brands, that's a challenge for us too, like how do we break through that just self-reinforcing? Yeah, you probably are interested in sweatpants right now, but getting you to see something else is challenging I think, so- Stephanie: Yeah, I agree. Dmitri: Have you pulled the trigger on sweatpants at all? Stephanie: Well, before ... I mean, I own many sweatpants. Thankfully, our company is work from here a lot, so I don't have to always wear nice jeans. But I did pull the trigger on one pair of jegging pants- Dmitri: Nice. Stephanie: That look like jeans, so at least when I go on a walk, people think I'm fancy. So, I did. Dmitri: I am in the sweatshirt business right now. I get in these shopping sort of really focused trapping things, but it's almost more as a way to work through some of what's happening in the market? What's the customer's mindset? But I do it through my own experimenting on myself kind of thing. Yeah, and it's pretty extreme what's happening, whole businesses that are 70% off. And at the same time, the options are totally unlimited and it's a really, it's a time when I think you have to stay incredibly alert in the moment, because it is moving so fast. You can't sort of ... People want there to be a new normal, like, oh, we did it, the new normal of marketing and e-commerce is this. But I don't think we're going to get there for a while. Dmitri: I think people, we're going to have to be on our toes adapting for months. And that's going to be a challenge for the teams, because the teams are like, we just did all this work and now we have to change it, or what do you mean we don't want to show Zoom in any of our coms any more or something. But I think the fall into the Great Depression took four years. This took like four weeks. This is just a hyper-accelerated world we're living in, and you've got to stay alert. Stephanie: Mm-hmm (affirmative), yeah, completely agree. So if we zoom out a little bit and have a conversation on higher level e-commerce trends, are there any e-commerce trends coming that you're most excited about or that you're looking forward to? Dmitri: I think the trends that I've noticed recently is really the commodification of digital marketing and that, again, there used to be able to be a differentiator. You could pretty much get a business going by raising some money and then using these platforms to grow, and the platforms were willing to kind of subsidize your growth because it was their own growth of market share. And then about a year or so ago, that really flipped, and the platforms are like, no, we're going to take the profits now. We're going to be profitable. And so you saw these DTC brands I think really struggling that their customer acquisition engine wasn't as profitable as it used to be. So I think what I'm really excited about is I do think that there's a rejuvenation of the social channels. I think the sort of toxicness of them, at least my experience over the last month, is that they've gotten way less toxic. Even Walt Mossberg is back on Facebook. Stephanie: All right. Dmitri: That's a big deal. Stephanie: Yep, that's a good sign. Dmitri: So I think that the potential of those channels never got fully realized of as far as really being able to connect with people and brands in an authentic way and have that follow through to your business, and I kind of feel like that might be what we're going to actually experience now, where the targeting is so good, the relevancy is so high, and the community aspect is getting less toxic because of just, people are not wanting to be assholes right now I think- Stephanie: Yeah, which is a plus- Dmitri: As much, yeah, as much, and I think the platforms, I hope they'll take a little more responsibility too in this moment and go, okay, this isn't just about an election. This is life or death now. We can't allow such misinformation and just toxic behavior, because it's costing lives. So anyway, I see this sort of perfect storm there of social actually becoming the commercial channel that it never really realized in the past. And so that's one that I'm pretty excited about. It's obviously the only way we can reach people right now. And the ability to pull it through to your actual business is getting really, really good. So that's probably one that I'm excited about. Dmitri: And then I think also for us, the integration with our app and just that part of the digital experience and connecting the online to the in-app. I just had a great experience buying a printer and using the app to set the printer up and having- Stephanie: Really? Which printer? Dmitri: Yeah. I mean, I don't want to shill for another company, but I bought an HP printer, and they forced me to set it up with the app, which I was super annoyed by at first. But then I was like, wait, this is actually really cool. It's just going to measure the ink and send me the new ink when I want it? Yes, please do that. I hate- Stephanie: Oh, that's great. Dmitri: Finding out that I need to order ink. So I think this integration of IOT devices and the app component with the commerce component, I'm super excited about that for us. I think we've taken a lot of steps in that direction, but I think people are going to get more and more comfortable with it because it's actually going to be a good experience. So those are two that I see. Stephanie: Completely agree. Yeah, and especially the first one. I've seen a slow shift to brands kind of turning into media companies and not relying as heavily on certain platforms, because yeah, I know a lot of brands that had been relying on Amazon so heavily. Well, now that Amazon's shifting to, okay, well, here's what we view as essential and here's what's going to get shipped out, and I think a lot of brands are going to rethink relying on those platforms and instead maybe think about how they can rely on themselves more and promote their content on their own a little bit more. So yeah, two really good points. All right, so let's ... I think we only have a couple minutes, so I don't want to ask you too many things. Let's see. And actually, maybe we should just shift right over to the lightning round, just to respect your time. So the lightning round is when I ask quick questions, and you have to just say whatever's top of mind, and you only get one minute or less to answer the question. Dmitri: Oh my God, I was not aware of the lightning round. Okay. Stephanie: Dun dun dun. Dmitri: I want to do a couple push ups. All right, I'm ready. Stephanie: Yeah, do some push ups, do some deep breaths, just shake it out a bit. It's just for fun. But yeah, whatever just first comes top of mind. Dmitri: Okay. Stephanie: So we'll do some easy ones first, and then we'll do a hard one last. All right, so, what's up next on your reading list? Dmitri: The Last Kid Left by Rosecrans Baldwin. Stephanie: Okay. What's up next on your podcast or Audible queue? Dmitri: Stay Free: The Story of the Clash and Music Exists. That's a podcast I'm listening to that's really, it's just ... It's Chuck Klosterman and one of the guys from The Ringer, and they don't talk about specific music. It's like music concepts in general. I like it. Stephanie: Oh, cool. And you have a art background, so does that ... Do you think everyone would like that podcast, or is that more Dmitri specific? Dmitri: If you like music, I think you'll like it, yeah. I mean, they talk about like why do bands change? Why do bands change their style? Stephanie: Got it. Dmitri: That will be a topic they'll talk about, and they'll be like, okay, ACDC never changes, but this band did ... So it's that kind of thing. It's just like hanging out with your friends talking about music, but your friends are really smart. Stephanie: That sounds cool. I like that. All right, what's up next on your Netflix or Hulu queue? Dmitri: Oh man. I started watching Black AF, which is the new show from the guy who created Black-ish, and it is- Stephanie: Me too, yeah. Dmitri: It is so funny, oh my God. Stephanie: Yep. Dmitri: I basically can't wait- Stephanie: I just saw it last night. Dmitri: To ... Yeah, I can't wait to just go binge that thing. Insecure just started again, which I love that show, and My Brilliant Friend, which is on HBO, which is the Elena Ferrante books. I just, every episode I'm dying when that comes out. So those are my picks. Stephanie: Cool, I'll have to check out that last one. I haven't heard of it. What's up next on your travel destinations after we're allowed to go out into the world again? Dmitri: I want to see my parents. That's definitely- Stephanie: Where are they? Dmitri: They're in D.C. Stephanie: Okay. Dmitri: That's mostly my friends. It's like it's less destinational for me, but ... I lived in New York for a long time. I want to go back to New York. I love that city, I love so many people there. It's been through such a hard time. I want to go there. We had dreamed of going to Japan before this, so that's definitely going to happen at some point. I love going there. Stephanie: Awesome. Dmitri: My kids have never been there, so those are a couple spots. Stephanie: Yeah, Japan's great. That's definitely one of my favorite places I've been. It's so fun. The people are so nice there. Yeah, just a good, very different environment. Did you do the hot spring baths? What are they called again? Dmitri: Onsen? Stephanie: Yeah- Dmitri: Yeah. Stephanie: Did you do those? Dmitri: Yeah, I would go. When I worked at Patagonia, I would go a bunch, and it was a cool way to go there because we actually didn't spend any time in Tokyo. We would go up to Hokkaido and go skiing and go down [inaudible] and go surfing. And so yeah, it was ... The culture, even outside of Tokyo, is just so cool. Just everything is so considered, and every experience is thought through, and yeah. Stephanie: And everything's so clean, and it just feels so safe. We were in I think Hakone area, and there's a bus system that goes around, and there was kids, and I swear they were only like five or four, getting on the bus by themselves, going to school. And I'm like, oh my gosh, in America, no parent would ever let you just walk all the way down the street, get on the bus by yourself. I mean, these kids are small. But then, there, it actually did feel right for some reason. Dmitri: Yeah. So I hope you get back there. Stephanie: Yeah, very cool. All right, the last one. So it's your job to stay ahead of expectations, your competition, all that. In your opinion, what's up next for e-commerce pros? Dmitri: I think that you can't just be shipping boxes to people. I think that your site experience and your commercial experience, you've got to break the mold of, pick a box on our web site and this box will show up at your doorstep. I just think that's not a competitive advantage, and it's just not a customer advantage. And you've got to figure out some other way of engaging your customers that isn't about shipping and getting a box delivered to their doorstep. So it'll be different for every business, but I mean, I think obviously subscriptions are interesting, but also just the way that you decide what you want, it's not navigating a bunch of little squares on a page, but really learning about me and understanding and what I need and offering me a solution versus a box that's going to get shipped to my house. Dmitri: So I think the site experience and how that connects to either if you have an app or your CRM programs, all that stuff, it's ... The paradigm is just dead right now, and I think if you're not disrupting that, then you're going to just be perceived as, why am I bothered? Why would I bother shopping here? I can get a box shipped to my house by a lot of other companies. Stephanie: Yeah, completely agree. Wow, you were very good at the lightning round. You really had answers right away, so yeah, nice job there. But yeah, it's been a blast, Dmitri. Thanks so much for coming on the show. I know after this, I'm going to go and play all my Sonos speakers and put on a little surround sound techno music going on to pump me up a bit for the rest of the day. So yeah, thanks for- Dmitri: Oh, that sounds good. Stephanie: Hopping on. Yeah, it'll be a good rest of the day. So thanks so much. Dmitri: All right, bye bye.
Ready to Positioning Your Business to Profit? Go to-->>> http://positioningtoprofit.com/Patty: Hey there Patty Dominguez, thank you so much for joining me on this episode of Her Legacy Podcast. We are in episode 15 with Susan Borison and Stephanie Silverman. Two women that are moms at the time there were moms of teens and they were looking at sharing what was happening. Challenges of parenting teens and this passion project turned into something that has continued with yourteenmag.com. And I find them absolutely fascinating because of their insane amount of perseverance the way that they collaborate and they make it fun. Along the way. So these are two women that took the concept of a challenge and they turned it into a passion project. And it is truly an honor to collaborate with them as well. And so it is my great pleasure to introduce you today to Susan Borison and Stephanie Silverman from yourteenmag.com.Patty: All right well thank you so much Susan and Stephanie for being on our show. You are the founders of your teenmag.com and it is a pleasure to have you on. So this is a three people podcast and Susan at the beginning was saying wait wait. Who's going to say what? And so we're just going to riff on this. People were just going to go with the flow and talk about how do you know when it's time to quit. And you're going to hear from two women who have been in business with yourteenmag.com for the past 12 years. How's that for tenacity. So thank you both for joining me today on Her Legacy Podcast.Susan: Thanks for having us.Patty: So I want to ask first and foremost typically I say hey let's get braggy. What's your superpower? But I'm speaking to an individual. But when you look at your Teen Mag what is your Teen Mag super power in your opinion?Susan: I would say it's just creating great content for Parents Day in and day out.Patty: Right. And you've been around for 12 years. What's been the feedback around. I mean certainly the longevity that you have to create something so sustainable. How do you know that what you have to offer is great and I'm being completely honest here how do you know that. Do you get a lot of rave reviews?Susan: Yeah we just actually got something today. And it was from a reader who said. Hi there. I don't think I've ever told you just how much enjoyed your teens through the years have made times that exhale.Because I found out I wasn't alone in this situation or simply got great advice. It's a wonderful publication. So we hear that all the time. And you know the best part about hearing it is that's what we set out to do.Patty: Yeah that's brilliant. And the fact is you provide community and support. And we know that when a business comes at it from a servant leadership part it just takes on a different position in people's mind. When you think about mindshare I always think about when somebody is building a brand like what's the mindshare that you capture.And I really see that with your teen mag. Just because I'm working on your project I see that there is just this level of comfort security for parents to feel that they're not alone. I think that's deeply deeply meaningful. Aside from of course that stellar content that you have so I really commend you for that because not a whole lot of people would have that level of attention to detail and care. So.Susan: Thank you. I think one of the things that we've tried to create is like a grownup playgroup for people and in our case it would be a virtual playgroup. But for many moms that was such a place to get information and to figure out. What was normal and what wasn't normal and you don't really have that anymore as your kids get older.So our goal was to create a space where you could come and you could say I have this problem and people could bolster you with their solutions or just compassion or just say me too. And. Then we have a number of spaces where that's really happening like our Facebook groups are great for that. Really supportive it's the village that we all look for.Patty: Exactly exactly that level of support. All right so take me back. Take us back all the way to the beginning. How did this start. How did yourteenmag.com start?Susan: Well since I was there first I'll start with that and then Steph can jump in. I have five kids. I went to law school. I stopped working after my third was born and I was fortunate enough to be able to make that decision and stay home with my kids. And when my kids when my oldest ones were getting near high school I really felt like I had to get out of their way. I had a lot of time on my hands but they did need. And I didn't want to go back to law.And so for years I had been saying to my husband. Why is there no parent's magazine for us as our kids get older? It's not a cumulative skill set. And I lost. And I just don't know if this behavior is normal or if I should be calling like an emergency room hospital to bring them all in. You know like you just don't know. And how do you find out. OK I don't know. But I also don't know where to go to find out without making turning everything into something extreme.And most of the things that we confront in adolescence fortunately aren't that extreme but we don't know it. So I just set out to feel the need of something I wanted and when I went and spoke to friends they wanted it to. I mean you know I had a gut that it was universal but you don't know you could be an opinion of one. And it wasn't the case every time I spoke to somebody they too were feeling alone and were looking for ways to kind of get validated or.You know as much as we don't want to hear that there's a crisis going on we'd rather know it than ignore it. So then from there we really just got a group of women Stephanie was one of them and then Stephanie and I soon after became partners. And that was the beginning of a love project really like a passion project.Patty: I think that's so brilliant. And the first part of that. Spoken like a true entrepreneur is that we really look for solutions to problems instead of just saying oh yeah that's a problem there. And so I'm assuming to sort of right around where 2006 or 2007.Susan: 2007 I think.Patty: Well the conversation started in 2007 and then the magazine was launched in 2007. OK. And then the other side of it is not only the fact that you identified that there was a need in the marketplace but you also validated it by checking in with other mothers checking in with your target audience if you will as you were developing the idea you were assessing. Yeah there is a need in the marketplace so you've looked at for the validation to say wow. Nobody's filling these needs. So now it's up to me to put something together and you rally.So I just want to give context to that because I think it's so important. I mean ideas are plentiful. People have ideas but it's the execution where most people fall short and they don't really understand how to take it through to break. And so for that reason I mean that was really great that you were able to assess not only there's an opportunity but here's what I to do about it am. So to that point. Talk to me about the beginning of me. Did you have experience with creating an online publication?Stephanie: We had no experience as you said she was a lawyer. I was a banker. We didn't know anything about publishing. Sue had this great idea we had met through a leadership course. I would say like every great relationship we were friends first before our work marriage and it was to this day we will say it with her credit that we really didn't understand the media business. We didn't even know it was called the media business to be honest. I think what we understood was that parents seemed desperate for the same information that we were desperate for. And. I guess we just kept going. Right.So we were getting some certainly some good feedback but also I think we were undeterred by this idea that OK we're you know we're helping people. It seems to resonate. Like let's just keep going. And so this idea of yeah having the skill set first and then then building the business. That's not how it happens. You know there's a saying in this leadership course you're on about building a bridge while you're walking on. Yeah that's pretty much our story. And I think. I was making notes as we're sitting here and I was just thinking about the even just the value of our partnership and being able to. Throw things back and forth at each other right and say likeOkay well when what about this or what about that or. OK well let's try this and I don't think we've ever been accused of. Waiting two longer. We're both. We will take action and we just continue to plow ahead and just watch media and while we do have the business the media experience were both smart women and I think we both have that. Mindset that we'll figure it out. We're both puzzlers. We love to win. We really love to win. And so that just propelled us forward was just you know just keep going. Keep going and keep solving keep going and keep solving.Patty: I love that. I love that. They know right before we got a call. I was like wait. Like let's go live. Because Susan said we're a 12 year start up and capturing that right. That yourteenmag.com is a 12 your start up. Tell me what that means. Tell us what that means to you.Susan: I want to say that just to respond to something Stephanie said we not only did Stephanie and I not know the industry but there wasn't one woman around the table. We were a group of women who did not know each other but someone knew someone who knew someone. And we sat around the table really working hard to get to the point of publishing our first print magazine. And no one around the table had any background so we were literally just passion.That's all we had passion and grit. But as it turned out that was a real advantage in an industry that was changing so rapidly which is why many people told us not to do it because why would you get into media when media is you know falling apart. But we had this distinct advantage of not knowing anything so the world was our oyster like when no one ever could say we've always done it this way because we didn't know we were doing so we know there was one issue.When we do this to this day but we get cover sponsor and someone who was also in the media industry said to us like where did you get that idea from. And we were like I don't know. We just you know we had some more real estate. And so we said well would you want to be on the cover. But that was hard for people who were born in the worlds of media because nobody did that for us. We didn't care we didn't know it was just a joke.Patty: I love that. I love it as an example. You made your own rules along the way and really not sticking to conventional wisdom of what. People think it should look like. And because of that there was an opportunity right there. So I think the curious action taking is something to be commended because. Most people would say well who can I model or.And it's OK to model. But I think just like you said the ambiguity and you being very comfortable in it really helped you all along the entire process. So that's pretty cool. That's a great idea. That was I'm sure completely out of left field for somebody to say well that's not how we do it.Susan: Right.Patty: And then you're probably like Oh really. And then by that time it was a really approving concept I'm assuming right.Susan: I mean it's worked great for us.Patty: That's awesome. I love that but not a great story like not following conventional wisdom So, Oh my god that's awesome. OK. So tell me now at the beginning like what were some of the myths as you put so many people are in a situation where they have a great idea with a very passionate which is what you're saying or they have like-minded friends colleagues that turn into partners and they were allowed into this journey of saying OK we got to make this happen.It takes tenacity and we take action. And so it's like I always say there's just peaks and valleys through this whole journey. What were some of the like kind of crash and burn moments where you questions. Should we continue? And how did you get out of it.Susan: I'll let Stephanie answer that but I'm just going to say that this shorter story is how many peaks were there not how many valleys.Patty: That's so sad I might need a tissue.Stephanie: Oh yeah.No no I'll give you the home where I really thought we were closing up shop like this. Sue knows the story I'm going to stop. So it just launched a new product. And we were things were going well with a distribution model we had partnered with an organization that was going to execute on this distribution model. Was going to be all over the country at different events. And so because the first event was close to where we are based in Cleveland Ohio is the you know let's go to the first one let's watch how it rolls out. You know we can always learn the server I guess or go to. So we went there and discovered that what we had agreed to with this company was not how it was taking place. So we watched you know this event unfold realized that they were not upholding their end of the bargain. And. We seize the day it's so us.I'm looking at Sue and I can see each other while were sitting there having this conversation though your listeners can't and I'm laughing because it was so us. I'm realizing maybe the theme of your team is rule breaking. So Sue and I we're taking this new publication we have and we kept like breaking all the rules.You know they were told you know we could do this but we did it. They said don't do that. Well we did it anyway because they were not upholding our ends of the bargain. We sold advertising sponsorship that this would be distributed in a certain way. So yeah it was more like a cartoon where like you know they close one door and then the little people running around on the train coming the other door and they try, were trying everything.So we get back to our hotel room that night and we realize we get a real problem here. We think rollout to you knows another 30 cities and this distribution is not working. So we're sharing a hotel room. And we're talking go to bed and wake up at about 5:00 in the morning I think we may see like a light. Sue was on her computer and her computer is on her lap. And we're trying to figure out like OK what else can we do and create our own distribution method. And I thought yeah this is the day. And meanwhile I'm appearing Sue I don't know if you remember this part. I'm appearing on a panel maybe 48 hours later all of entrepreneurs and you know these are like oh like why it's so great to be entrepreneur.And success and all these great things. Anyway we end up figuring out a new distribution within Sue, 24 hours not even. I mean we already had a new plan and we felt good about it. We felt like well we're so glad this happened. Now we own this distribution of this whole thing and yet we thought you know in those 12 hours or whatever it was it felt like a thousand and 12 hours that this was going to be how we went out of business like this was it It was going to be our biggest accomplishment was really looking like our biggest failure and failure is just. That is not in our playbook.Susan: I love it. I mean one of the things about a partnership that is a marriage and works there I mean we have a wonderful partnership is that there's this. I would say that it's you know we kind of think well neither one of us hits that point of like we should get out of this at the same time. But I don't actually think that's what happens. I think what happens is when one of us articulates starts to tiptoe into that space of panic the other one is the spouse who stands up and says everything's going to be fine.Like there's not going to be two of us panicking right now. So it's not just me and it's not just Stephanie but we each play that role to each other when one of us is feeling like I just don't think we're going to be able to pull this off.And then the other ones like oh no I had a fabulous day. And even if it's not true even if a week later we both admit that like we were just being good to each other and bolstering each other but it really really does work.Patty:] That's amazing. And what do you think is the reason for that is that personality types like ying and yang. Did you guys have core values discussion or. I mean you've been together for so long you just kind of find your ebb and flow but what initially was a reason that you were able to create something really like where you're symbiotic. It sounds like.Susan: They were just too committed to succeeding at this. I mean I often look at my own marriage and I remember someone asked Pink the singer why she's still married and she said we just don't leave. And I thought you know in my own personal marriage I often feel like it's a commitment to the marriage even more than a commitment to the person.And I think Stephanie and I are so competitive and so damn committed to making this. You know what it could be that you know we're in it we're just both in it.Patty: That's cheating. All right so I'm going to flip the script a little bit .Susan, how would you describe Stephanie as an entrepreneur. Like what are her strengths that she brings to the table that are such a key component to your Teen Mag.Susan: I think the most amazing thing is to have divided the company in a way that we didn't even know was the right way. It was kind of like well I'll do this and I'll do this. And all of a sudden like Stephanie turned into I mean I guess the word is a sales person but it's not that it's so much more. It's an ability to really understand how you partner with other people to make those relationships grow.And. You know 11 years ago ten years ago whenever it clicked in it was like astonishing to watch and I was just telling Stephanie about the first time we sat with somebody and she threw out a number that was bigger than any we'd ever thrown out. And I was like I'm not so comfortable with silence. But she had already gone into the meeting deciding that silence was the important tool like she throws it out and sit quietlyYep. And I was like praying that I do not violate her rule. Because I could have come out there and completely. Like beat against ourselves you know. And we got the contract and it was insane. And that was just the beginning of this journey of like really learning a place that, I mean I think in very ironic ways where each doing what we should be doing. But we didn't know it.Patty: And how about you. How about you Stephanie if you were to describe what Susan brings to the table those personality attributes.Stephanie: Two things come to mind. The first would be. She is a great problem solver. She can solve anything. So like there is no wall that is too tall. So like you know. She'll get to something and. somebody quit. Somebody says we can't do that.Somebody said it doesn't matter what it is she'll say OK and she'll have it solved within like. A minute literally like it's crazy. It's crazy how quickly she can go from like standing at that wall. To jumping over it around it through. Doesn't matter does not matter.Patty: That's tenacity.Stephanie: That you were saying get out. What is her? Yeah her super power. She can mount large walls and circumvent them. That's one of them. And then the other one and I already lost her. Oh she has a great ability. I mean it's really so problems solver right to come at it from another angle that I thought. Would say well wait a minute so? If we're trying to get. X. Maybe we should be asking this question. Oh. I don't even think of that and it's so funny.And this is not what you asked. It relates to maybe just how we relate to each other. Is there are so many times I just telling the story yesterday to somebody or so many times where you know I mean meeting when we talking about something and somebody I don't I will refer to. Something and I'll say yes Sue had this awesome idea and she'll start language like you knew that was your idea. It was so not my idea we were talking then and then we honestly cannot remember. He wasn't. Maybe it was yours.What were very good and I always say this like. Often people call me Sue call her Steph and we make jokes with the same person and that am what you ask. Our values are very much the same. We have good marriages right. We have good relationships and we bring it into this business too But, We are very good. I would say at if we don't agree on something. And this gets back to nothing the same person we are very good at talking it through. And one of us eventually. It's never the same one will say you know what ,you got this.You got this like this is your you know like you were excellent at like throwing something back and forth. Well I don't see it like that. You know what. You take it. You're right or I don't even know I don't even care. You know you handle.Patty: And so here is what I'm seeing and I think is really important is that in the partnership you complement each other really well. You can recognize each other's strengths and then at the same time it sounds to me like there's little to no ego whatsoever. About who had the idea or who gets this or who gets to that because you know that it's all for making your teenmag.com get better at putting out a different product. That's very rare. Very rare.Susan: I want to say that we learned early on from somebody who turned out to be a wonderful mentor to us. That collaboration was a really it was the most valuable thing we could do in our business. And it came at a time that was so important for me personally because I was seeing everybody else in the space that we were in as a threat. And her response was at one time said look at this like to show her the competition and she said oh my god that's so exciting.Give them a call. And I was like. What? She's like yes maybe you can work together. So that really changed. I think for both Stephanie and I how we run the business and so when we can't figure out whose idea was that is the consummate compliment about collaboration that we've had people work for us and it didn't work out for them well at all because. That was a process that they couldn't wrap your head around that at the end we weren't going to know who got credit.That it was going to be like this brainstorming every second of every meeting where something bubbled to the top but it was a word from every single person. And at the end it was just the right thing. I love that there are people who can't just. I mean it's not better or worse it's just not the environment they work well in.Stephanie: Sue do you remember whose idea the cover sponsor was.Susan: No clue.Stephanie: Exactly.Susan: Do you?Stephanie: No I have no idea. That's my point. No idea, it could have been your idea Patty. I have no idea.Patty: Well I was going to say this I remember one of the best bosses I ever worked with corporate was so great because he was all about collaboration. And I remember we had a presentation in front of our biggest client at the time is when I was in management consulting and that something had happened at home my son had to be hospitalize he was like 3 years old. And I called them up and I was Paul, I can't make it. Like literally I have to be here.It's you know my son is in the hospital like anybody else would be like well what are we going to do in this and that. And then it was like without hesitation he's like, No problem. So and so we'll pick up the ball and one of the things that I so appreciate it at the beginning of why I got that job was because we've worked together, we play together we win together. And if you don't understand that I will cut you off like cancer.Like he was so militant about that one whirl. And because of that we operated like a well-oiled machine it was probably the best situation I've ever been in in the tenure that I had in corporate life you know 18 years because the majority of people are all about well who gets the credit. I want to look good. It's very self-serving. Whereas he was like he understood.Those by all of us contributing were so much stronger. Right. And we're all going to get the accolades that we want by collaborating in that way. And that's such a distinct Sense of leadership and emotional intelligence that literally 99 percent of people just don't have. So that is a huge competitive advantage to you guys that I could see just from the outside looking at. So I think that's phenomenal.Susan: OK I want another chance to give Stephanie superpowers.Patty: Yeah go ahead.Susan: So the two that make. Life fun. Is that Stephanie laughs like a lot? She laughs. I mean I wish I could see what my sister in law gave my husband. But it was something about how no one thinks I'm funnier than me. So my husband in my work status.Believe that, like they both they like look at her. I mean you can see her but her whole body is involved in a lot of right thing.Susan: Right. So they both find themselves very funny which of course actually does create just an atmosphere of Laughter. It does.Patty: Yeah.Susan: And so that's so much fun and cuts through any problem you ever had and then the other thing that I marvel at because I think I'm 8 years older than you right?Stephanie: I know I'm going to be 50 in March.Susan: I'm going to be 58 in April so that's a good idea.Stephanie: There you go. Were also good at math.Susan: Yes you're very good at that. The thing is I cannot remember anybody's name anymore at all. And Stephanie knows if your daughter was dating. Am and who the person was and where they went to college and they were thinking about transferring so she made a connection and she checks up on that. So if you're going to be in sales you want to. STEPHANIE.Stephanie: Yeah I was at one. No you don't. Because she belongs to you. So but yeah that is a phenomenal spokes at. For a 50 sample yesterday morning Sue and I are sitting in a coffee shop already at 2 waiting for a meeting I look over the coffee shop and I think I'd recognize someone that we met with one time it's been awhile it been a year So I'm out mother just see her, Sue look across over there. I think that's the person and I start You know, and Sue put her glasses on and she's looking in out first no one can see my face but she's got this look like I've never seen that person before in my life right.That look and I go Oh see you' recognize her huh. And we started. I'm like crying. Like everything is fair game. I agree with Sue says I'm going to be. If you can find any shred of something to laugh at. Count me in.Patty: That's awesome. That's awesome. All right so we're turning the corner. What do you each individually excited about. Of where yourteenmag.com is going.Susan: All right. Well last I think two weeks ago, Stephanie hadn't been out of town I would have called her and said we need to meet and talk about whether there's any way to pull this off. And two weeks later I think we are going to kill it in the biggest way.And I can't even believe. How things have come together. Working with you. This is extraordinary. Working with the people you're giving us which is extraordinary having. Like a man who has no reason to want to love us say he will work for us for pennies because he wants to see us succeed. I mean it's all. There's just all these things happening right now and they're working they're working. I think. You know it's like the sky's the limit right now. It's really exciting and we're never going to say it was an overnight success.Stephanie: I know.Susan: It is. Hard hard work more sleepless nights than nights with sleep. And we could never pull ourselves away from this because it's been a passion project.Patty: Well I love it.Stephanie: And the one thing I'll add to that is and they just said this to someone the other day. That I look around the table and look around like if the players can have their hands in Your Teen right now. And it's the right team. You know I look at every piece and my husband has a saying that when you see someone who's.Doing the job they were meant to do it. And he always says they're sitting in the right seat. I look around our table and I say Oh my God we've got every. It's all the right seeds. And like I've never felt like that in the business as much as I get. Excited is I feel different times whenever I can honestly look around now and say wow like how do we get so lucky.Patty: That's awesome. That is great. And it just shows because you were committed. You're committed until it wasn't until it's convenient or until you're tired or any of that it's like until ,until it gets to the levels of success that you that you deserve and you're looking for so I love it.I mean it's such an honor to be a part of you guys his journey on your teen and where you want to take it because there is so much more coming you're going to see the incredible feedback and how you can serve your customers or clients at such a different level in 2019. So for the people listening for more information check out your teenmag.comPatty: And you're on Facebook on Instagram or you on Pinterest as well.Susan: Twitter. Interest.Patty: Am I missing anything.Susan: [00:31:10] Twitter.Patty: Twitter. I always forget Twitter Twitter and now that again yourteenmag.com I so appreciate your heart because both of you have such tenacity and you guys in my book are bad asses so just so you know. It's official. You are bad asses.Susan: That's a compliment.Patty: A deep compliment because most people it just won't do what it takes to keep going so. So this was all about how do you know when it's time to quit. Well the answer is you don't. You don't when it's a passion project and you have the right team and the synergy is there and the collaboration is there and there's no ego in the whole thing.And I also really commend you for having a beautiful partnership that you've able to curates develops into something meaningful and it almost kind of crosses over doesn't it. Between the professional and personal like were you deeply are like gosh you guys are like family right. Like that level where you look at your team and say you all are like family. We deeply care about each other. That's when you know you hit the mark in terms of the lines are blurred in such a good way. That there's no difference between working or b right.It's a love that dynamic team is just jelling and it takes on a life of its own. So I see it very clearly with that you guys are developing. So thank you so much. Oh one last question I can't believe my famous question. The question is that each of you answers please. When all was said and done what do you want your legacy to be?Susan: Well I mean I love your teen. It's been a journey and a gift. And some of the things about your teen I love but my family I mean I already feel like you know there are moments in life I remember right after I got married being on a plane with a tremendous amount of turbulence and I thought well if I die right nowI have this great love affair like you know that I got to experience that. So I feel that way in my own life like to have this husband and these kids and these friendships and the partnership with Stephanie and all of these other people we've gotten to meet along the journey. It's hard to think of something better.Patty: Wow I love that How about for you Stephanie?Stephanie: No you can't take the words out of my mouth but I will add to that. It's funny you are saying about being a bad ass. The one thing I always say is I want to be known as a kind bad ass.Patty: Okay. Yeah definitely. There's a difference right about. The fact that you are a success but how you got to be a success. Right. If you like burn bridges in the process that was the big bad ass.Stephanie: Yeah yeah. Now that kindness goes a long way. I hope people think about me I was about that with my kids too that they were kind. Come to teach you Steph.Patty: Gracias she's throwing up the P sign. All right. All right ladies thank you so much for being on her legacy. Get yourteenmag.com and I so appreciate you and I think it be a good idea to come back on the podcast.Right because we're so many good things are happening for you all and see what happened right. The 12 year starts of what's the story of glory. We could talk about that about would be really cool. Sounds good.Susan: I think you got in steady.Patty: You so much for joining us on this episode of Her Legacy Podcast...Links mention in this episode:Website: yourteenmag.com,Media Handles: https://www.facebook.com/YourTeenhttps://www.instagram.com/yourteenmag/https://www.pinterest.com/yourteenmag
Sin un plan previo, nos juntamos con 3 títulos de temáticas incómodas, de ésas que no sirven simplemente para pasar un rato… Nos ocupamos de un secuestro aéreo, un cambio violento de gobierno y una historia enormemente desconcertante con protagonista infantil: “7 days in Entebbe” aka “7 días en Entebbe”, de Jose Padilha; “No escape” […]
Dr. Martin Lee. Photo courtesy of Prolacta Bioscience. Episode 4 features Dr. Martin Lee, Vice President of Clinical Research and Development at Prolacta Bioscience. During this episode, Dr. Lee provides a comprehensive overview of a 100% or exclusive human milk diet in the prevention of NEC in extremely premature babies, those weighing less than 1250 grams (2 pounds 12 ounces) and who have the greatest risk for developing the disease. He discusses: * His transition from the blood industry to Prolacta, which developed of the world’s first human milk-based human milk fortifier * What constitutes a 100% or exclusive human milk diet * The clinical evidence showing a 70% reduction in NEC, an 8-fold reduction in surgical NEC, and a 4-fold reduction in mortality through the use of exclusive human milk diet * The importance of safety in the breast milk industry, including Prolacta’s rigorous product testing and donor safety profiles which parallel blood industry standards. Copyright © 2015 The Morgan Leary Vaughan Fund, Inc. This episode was produced in part by the TeacherCast Educational Broadcasting Network. [powerpress] STEPHANIE VAUGHAN, HOST: Welcome to Episode 4 of Speaking of NEC—a free, audio podcast series about Necrotizing Enterocolitis. Produced by The Morgan Leary Vaughan Fund, and funded by The Petit Family Foundation, Speaking of NEC is a series of one-on-one conversations with relevant NEC experts—neonatologists, clinicians and researchers—that highlights current prevention, diagnosis, and treatment strategies for NEC, and the search for a cure. For more information about this podcast series or The Morgan Leary Vaughan Fund, visit our website at morgansfund.org. Hello, my name is Stephanie Vaughan. Welcome to the show. I’m the Co-founder and President of The Morgan Leary Vaughan Fund. Today, my guest will be Dr. Martin Lee, Vice President of Clinical Research and Development at Prolacta Bioscience, which “creates specialty formulations made from human milk for the nutritional needs of premature infants in neonatal intensive care units.” Last October (2014), while attending the annual Preemie Parent Summit in Phoenix, Arizona, I had the pleasure of meeting Prolacta’s Chief Executive Officer Scott Elster. During our conversation, I was invited on a tour of the company. A few weeks later, along with a group of representatives from various preemie organizations throughout the country, I flew out California to tour Prolacta’s human milk processing facility, and to learn more about the people and research behind the company. I was highly impressed by all aspects of Prolacta from the manufacturing plant itself to the rigorous testing their products undergo throughout their processing. Even more impressive to me is the fact that everyone that we met at Prolacta has a personal connection to prematurity. The CEO himself is the parent of twins born prematurely. And, I was shocked to learn that one of the key reasons the company was formed, and their products developed, was to reduce the incidence Necrotizing Enterocolitis. The company’s reason for existing is the prevention of NEC. And the research presented to us by Dr. Lee was stunning. So when we began producing this series, it was only fitting to invite Dr. Lee to share the benefits of an exclusive human milk diet to premature infants and the clinical research supporting its use. With that in mind, let me introduce my guest today. This is Dr. Martin Lee from Prolacta Bioscience. And I’m so glad you could be with me here today. How are you? MARTIN LEE, GUEST: Good. How are you doing Stephanie? STEPHANIE: Good, good. So in previous podcasts, we’ve talked to doctors that are attending neonatologists and researchers. So I would like to give you the opportunity to give a little bit of your background and how you got involved with research in NEC. DR. LEE: OK. Absolutely. Well, I spent probably most of my career doing clinical research with various types of pharmaceutical and biotech products. I started with a company you’ve probably heard of called Baxter approximately 35 years ago, and I spent a good number of years working with them. And how that’s relevant to our discussion today is I was working with their group that manufactures blood products, and obviously blood is a significant human fluid, has many of the same issues with regards to safety that we have with breast milk. And so I learned a lot about some of the testing that needs to be done, some of the safety factors that we need to consider. And then I would say about 15 years ago, I met someone who was talking about forming a company who basically wanted to bring breast milk and breast milk products to premature infants so that they would have the benefit of receiving 100% human milk diet, particularly the smallest of the small premature infants. So together we started the company Prolacta. And the whole idea of course in starting the company was to put it‚…I think the most important thing was to put it on a firm clinical scientific basis. And that meant doing really important well-designed clinical trials to evaluate the most important morbidities like NEC, in particular, and even mortality in premature infants, infants certainly that had a high risk of both of those consequences of prematurity. STEPHANIE: OK. Maybe not all of the people that will be listening fully understand…what is an exclusively human milk-based diet? Can you get into that a little bit? DR. LEE: Absolutely. So obviously we know‚…we meaning pretty much the world understands that the best thing a newborn baby can be fed is mother’s milk. And for term babies, that is obviously going to be sufficient. They’re born at the right time and usually at a sufficient weight and mother’s milk has all the good things in it that help the baby to grow, help their immune system to develop, help their organs to develop, importantly it helps their brain to grow at the right rate. But a premature baby by definition is born too soon. And we specialize‚…the work that we’ve done at Prolacta,…specializes in the infants that are born as much as 27 weeks or 12 weeks premature so 27 weeks since the time of gestation. When those babies are born, they have a lot of problems obviously because they’ve come out of the womb way too early. And one of the things that of course they are is way too small. The average baby that we’ve studied in our research trials is less than a thousand grams. That’s around two pounds. Now most people know that the average baby is 6-7-8 pounds. And so they’re born so small that what happens is that mother’s milk which of course comes in when the baby’s born‚…nature didn’t intend mother’s milk to be able to feed these type of babies. This is an unfortunate consequence of something that happened with the mother, something that‚…injury, genetics, whatever it is that would cause a baby to be born premature, the milk comes in, but it cannot feed that baby well enough. And what I mean by that is the baby needs to grow. He needs to grow a lot. The baby needs to have their immune system protected by the mom’s milk, and so on and so forth. So obviously we always talk about mother’s milk being the thing for a newborn baby. It’s not enough for these premature infants. So what they need is what we call a fortifier, something with a little extra kick to the baby. And there are fortifiers that have been on the market for a long time. They’re made by the formula companies. And naturally these fortifiers are made from cow’s milk. And cow’s milk is not the best thing for a premature infant. It may not be the best thing for babies in general, but besides the point, it’s certainly not the best thing for a premature infant. So when we’re talking about 100% or exclusive human milk diet, we’re talking about mom’s milk; we’re talking about a fortifier which is necessary for the baby to grow and to be protected from infection and so on and so forth. That comes from human milk. And what Prolacta did was develop the world’s first human-milk human milk fortifier. And in fact, it sounds like a mouthful because when we talk about human milk fortifier, general people realize or may not realize that that’s a cow’s milk-based fortifier. We make the one from human milk. So that’s what we mean by 100% diet. And then one other thing just to add to that, Stephanie, is sometimes mom’s milk doesn’t come in enough or the baby wants it or needs to eat more, get more milk, so then there’s donor milk involved too. And that’s another aspect of the 100% diet. And of course donor milk is coming from other moms, which again provides the additional nutrition that the baby needs. And there you have the entire spectrum of what we mean by 100% human milk diet. STEPHANIE: OK. Thank you. Yeah, I know that there’s probably a bit of confusion amongst parents new to the NICU that human milk fortifier is a fortifier put into human milk, and not necessarily made with human milk. So I know that that does tend to cause a little confusion. DR. LEE: Right. STEPHANIE: So thank you for clarifying that. DR. LEE: Sure. STEPHANIE: So I guess I’ll ask you to go into a little bit of the research because I find it fascinating. As you know, we were out to your facility in November and I thought that this is a fabulous company. I was not aware of it when our babies were in the NICU and I will just make a tiny note that I know you’ve got significant statistics showing the benefit of human milk and exclusive human milk. Unfortunately for Morgan, he fell in to that other small percentage that I did pump. But he developed NEC so rapidly at four days old being born at 28 weeks. At four days old he developed NEC and I don’t think he had two feedings. So there are babies that get it even when all attempts are made to have an exclusive human milk diet. DR. LEE: Sure. STEPHANIE: And I also know that my other son, Shaymus, his milk was fortified, and to be honest, I’m sure it probably wasn’t with an exclusive human milk fortifier. So just some things to sort of give everyone background. And again, that was, you know, four years ago, 2010-2011. DR. LEE: Sure. I hope…I assume they’re doing OK today, right? STEPHANIE: Yes, yes. Everybody’s doing very well today… DR. LEE: Excellent. Excellent. STEPHANIE: which I think is why I’m so personally‚…my personal opinion is that your products are wonderful and, you know, things being what they were then versus now, I would definitely advocate for 100% human milk diet and advocate for this if I was a parent in the NICU now. So I think it’s great to get this information out to people. DR. LEE: Sure. Absolutely. So your question concerned the type of studies we did. Well, as I said to begin our conversation, we recognized that the only way that people‚…the medical community, both neonatologists, nurses, lactation people‚…would appreciate and realize the importance of what 100% human milk diet does and helps as far as the baby is concerned is to do proper research. As I said earlier, my experience is in the pharmaceutical and biotech industries where doing formal randomized controlled all the kinds of bells and whistles that need to be done when you need to license a drug or a biologic for marketing in this country and other places in the world as well. That’s standard stuff. So when we set out to do these studies, we said what we’re doing here is just as important, just as the need for rigor has to be here as it would be in any other kind of situation where you’re testing a new medical intervention. And that’s what this is. So we decided right off the bat we would get together the best of the best as far as the neonatologists in this country are concerned, and we brought them together and we set up a protocol. And basically the protocol was based on a very simple premise. It is 100% human milk diet better than feeding a baby mom’s milk fortifying then with standard human milk fortifier and then if all else fails or at least maybe not be sufficient than using formula. That’s standard practice for premature infants in this country. It was in 2007 when we started this trial and to a large extent it still is today. So it’s 100% human milk diet standard of care which includes cow’s milk based fortifier and formula. Babies in this study were randomized which is‚…you know, it’s a fairly simple term, but just to make sure everybody understands what I mean by that, the decision when a parent agreed to have their baby be participating in the study which group they get into, the Prolacta or the 100% diet versus standard of care was essentially a coin flip, not literally of course, but that’s the basis. Now why do you do that? Because that’s the best way to design studies. It provides an unbiased approach to making the decision of treatment of nutritional treatment, taking it out of the hands of anybody and putting it in the hands of strictly chance. So you randomize babies. There was a sufficient number of babies in the first study we did. There was over 200 babies that were randomized and I think it was 12 centers around the country. And what we were looking for in this study was whether or not they develop NEC and that was the most significant endpoint of the study. There were other things that we looked at. We looked at how much parenteral nutrition they received. We looked at other things. We looked at sepsis. We looked at‚…which is essentially bacterial infection that circulates in the bloodstream. We looked at hospital days. We looked at days on a respirator/ventilator and so on and so forth. But the main endpoint in this study was Necrotizing Enterocolitis. Now, the babies, by the way, that we used in this study or the babies that constituted the population of the study were babies under 1250 grams (2 pounds 12 ounces) down to 500 grams (1 pound 1 ounce). Very simple reason for that. I think many of the people listening will know that there’s a classification of premature infancy called very low birth weight. And that’s babies under 1500 grams (3 pounds 4.91 ounces). But we said, you know, we want to get the babies that have the highest risk of NEC. So we didn’t use, if you will, the heaviest babies in that weight category because they have, it turns out, the lowest risk of NEC out of all very low birth weight babies. So we took away that 1250-gram group. We also didn’t go below 500 grams because unfortunately, babies born less than 500 grams which is really about a pound or less have unfortunately not a high chance of either succeeding in life really and survival or they have a lot of other problems that make it very difficult to evaluate then. So it was 500 to 1250. That’s basically, I think, the most important aspect. And like I said, they were randomized. We followed them for a period of 90 days, maximum 90 days. Babies could have gotten off the study earlier if they got on to mostly oral nutrition which of course hopefully babies all do because they start off with what’s called parenteral nutrition which means they get their feed essentially through intravenous feeding. They then transition off of that onto enteral feeding which is typically a tube that goes either through their nose or directly through their mouth into their stomach. And that’s called enteral feeding. And then they go to oral feeding. So babies who are on for 90 days or if they got to oral feeding sooner, then they were off the study. Very simply, just to summarize what constitutes a fairly complex study to manage, we found a magnificent reduction in Necrotizing Enterocolitis. The babies in the standard of care group had a NEC rate of about 16%. Or put simply, that one in every six babies develop NEC that got some sort of cow’s milk protein or cow’s milk diet. The babies who got 100% diet was less than 6%. That 16 to 6 is about 70% reduction, and that is phenomenal. We’ve had some of the really very famous neonatologists told us that they don’t see‚…you don’t see that kind of reduction with really any intervention that they’re used to seeing. You just don’t see that. You see incremental things. But now all of a sudden we cut NEC by 70% by doing this. And it even gets more impressive when you consider that the majority of babies or at least half the babies who develop NEC have to go on to have surgery. STEPHANIE: Right. DR. LEE: And that is a really serious consequence not only just from the fact that a premature infant has to go on to major surgery and they take out part of their digestive tract. But even worse, they have a reasonably high mortality rate. So in this study, the rate of NEC surgery of all those babies that were in the two groups, it was at 11% in the standard of care arm and only just over 1% in the Prolacta arm. We reduced the rate of NEC surgery by eight fold, I mean just an incredible difference. Virtually wiped out NEC surgery in this study. STEPHANIE: That’s amazing. DR. LEE: Yeah. I mean, we expected to see something really good. We didn’t expect‚…I guess you could say well we should have expected‚…but it was beyond our expectations, wildest dreams to show this kind of effect. Now a lot of people have looked at this data and said well that’s interesting, and maybe that’s real. But can you‚…you know, can you do it again? And the answer is yeah. We did it again because that first study that I just described, these were only babies who were getting‚… which are most babies‚… who were getting some breast milk from their mom. But there are a small cohort of‚… I don’t know quite what the percentage is in this country, but there’s a percentage of babies who don’t get any breast milk. There’s various reasons. Mom is sick. Mom’s not available. So on and so forth. So we also did a second study in which we only treated babies or fed babies who had to get their nutrition either one of two ways. Since breast milk wasn’t available, they got formula. Soon as they were able to get enteral feeding, in other words the tube feeding, they got formula. That’s one group. The 100% arm, same thing, except here, instead of getting mom’s milk, they got donor milk, and then they got the fortified. So it was a real stark comparison. Only human milk, only formula. And it was a very small study. It was only‚…that first study, I don’t know if I mentioned or made clear, that was a 200-baby study. Pretty big study. STEPHANIE: Yes. Um-hmm. DR LEE: This study was only 53 babies partly because it was very, very hard to find these babies. I mean, we would sign up a mom, they would agree to put their baby on, and then they realized gee, I really want to feed my baby. I really want to give them breast milk. And of course, that’s fine. That’s great. STEPHANIE: Right, right. DR LEE: But they can’t participate in the study. STEPHANIE: Right. DR LEE: So we had a hard time finding. But we eventually did it. Took us three years to find 53 babies, but we did, and you know what? We found the same significant difference, particularly in the surgical NEC. There were‚…in the control arm, there were 24 babies, and four of them had to go on to surgery for NEC. That’s one in six. So about 16%. In the Prolacta arm, in the 100% milk arm, nothing, no surgeries, nothing. One case in NEC overall, but no surgery. So that turned out to be wow. That’s the kicker. Two separate studies, two different classes of babies, breast milk, no breast milk, doesn’t matter. When you give a baby that’s born premature like this, this weight category, less than 1250 grams, and you feed them with only human milk, they’re going to do better. And it even turns out when you start putting all the data together an extra‚…I hate to call it a bonus‚…but an extra important key outcome was that mortality was reduced. Mortality fortunately in this baby population is pretty low. It’s about 8% overall because of the prematurity, of course. We reduced that to 2%. So a four-fold reduction in mortality. So now when you put it all together, what do you have? You have prevention of the major morbidity‚…that is NEC‚…of prematurity, and you prevent mortality. And how can you really ask for anything more from a nutritional approach to these really fragile infants. STEPHANIE: Right. Right. No, I totally agree. And as I said before, my personal opinion, you know, as the mother of a surgical NEC survivor, I would advocate for this if we had to do it again. It’s definitely phenomenal. DR. LEE: Yeah, it’s almost this kind of effect you would expect to see if this was a pharmaceutical breakthrough or some new wonder drug or some sort of biotechnologically-produced intervention. But all it is is feeding the babies properly. I mean it’s such a fundamentally sound, logical‚…this is what nature wanted these babies to get. STEPHANIE: Right, right. DR. LEE: Babies should get human milk, nothing else. STEPHANIE: Now you had mentioned previously the difference between donor milk and then your human milk nutritional products. Can you‚…when I hear conversations, I sort of always think it’s like comparing apples and oranges. You know, it’s almost two different things. So can you clarify what the difference is with donor milk and your products? DR. LEE: Well, again, I’m sorry to be maybe not entirely clear. We make a donor milk product. Essentially, all our products are made from donor milk, both the fortifier, of course, and we make a simple donor milk product that is formulated to have 20 calories per ounce which is what doctors and nurses and dieticians believe they’re giving the baby when they feed the baby either mom’s milk or milk from another person. So donor milk is essentially the equivalent of mom’s milk other than the fact, of course, it comes from another mom. But however‚…and in fact, the American Academy of Pediatrics has said the best thing for a baby is mom’s milk. But if mom’s milk is not available, then donor milk is good. STEPHANIE: Right. DR. LEE: But the problem, of course, and one of the I guess you could say‚…I’m trying to think of the right word. Bad things that people associate with donor milk is well it comes from somebody else, and how do I know that person is the right person to provide milk for my baby? And that’s one of the key things that we had at the center of what we did at Prolacta from the beginning, which was to have a safety profile that was beyond reproach. I mean, we do things as far as testing the moms, testing the milk, that nobody else who ever handles breast milk does pure and simple. I’ll give you some examples. One of the things that I thought of very early on is because, again, remember I told you I came from the blood industry and they test blood and they test donors obviously every which way you can think of. But there’s one additional problem that donors who provide milk have in a sense that blood donors don’t. When you take blood from a donor, you’re seeing the person and it’s blood coming out of their vein and it’s coming right into a bag and you know whose it is. But a milk donor, she donates at home, pumps at home, puts it into containers, and then sends it wherever the donor, the milk bank, might be. In our case, it’s here at Prolacta. They’ll send it to us, and here’s the problem. How do we know it’s that person’s milk? STEPHANIE: Right. DR. LEE: How do we know it’s the person who we screened and did all the blood testing on to start with, that it’s her milk. So we do something very, very unique. We actually have the mom provide a DNA sample, they do a little cheek swab, they put a little stick essentially in there, and scrape off a little tissue from inside their cheek, send it to us so we have a profile. Now she sends us her milk, and when she sends us her milk, we can actually match it up. And now we know it’s that safe mom’s milk, all right? Now you might ask what’s the point? I mean what self-respecting individual is going to send somebody else’s milk to you? And the answer is nobody, for the most part I can say almost universally, will do that intentionally. But there are mistakes. I mean one of the things we’ve seen is moms that are lactating, sometimes there’s a couple of women in a neighborhood, and they’re all doing the same thing. And somebody’s freezer will become full with milk, and they’ll say to their neighbor, “Can I put my milk in your freezer?” And they said, “Sure, no problem.” And she’s got her own milk in there. And then they go to ship milk and lo and behold, there’s somebody else’s in there. We love that‚…we love the moms, but we have to be sure that every mom that donates is a mom that’s free of all of the nasty things that could be in blood because those things could be in milk as well like AIDS and hepatitis and syphilis and all those kinds of things that we should be concerned about. Even as an adult you certainly want to get blood from someone like that. You certainly don’t want to give that to this fragile premature infant. STEPHANIE: Right, right. DR. LEE: So going back to your original question about what we do versus donor milk, that’s all one in the same, I think you could safely say. Everything is based on the concept of donors and the milk that they provide and the safety of that milk supply being tested from any way you can think of so that every product that’s made from human milk is as safe as possible based on all of the different protocols that are used. And that includes other things besides DNA testing. It includes drug testing; it includes testing for whether the mom smokes because they may tell you they don’t smoke, but we’ve seen that instance where there’s byproducts of nicotine in the milk, and that’s not good for a baby. So we do that kind of testing. It’s just a laundry list of things to make that as safe as possible. STEPHANIE: Right. And I guess‚…I’m sorry‚…I guess to clarify my original question, I was speaking specifically about your fortifiers versus human milk. If you could explain a little bit the difference of that‚…I mean this was a very good‚…I can’t think of the word‚…a very good deviation, but yeah. When I was saying apples and oranges, I meant donor milk versus fortifier. DR. LEE: OK. I’m sorry. STEPHANIE: No, that’s OK. DR. LEE: The fortifier essentially‚…if you want to keep it very simple, the fortifier is just very concentrated milk. STEPHANIE: OK. DR. LEE: So essentially, what you do to make the fortifier is you take milk, you filter it to get rid of a lot of the fluid so that you concentrate the protein, you concentrate some of the other important nutrients in there. And that way the baby can get extra, like we say, protein, extra other nutrients in a very, very small volume. So for example, in our typical fortifier which we call Prolact +4, if you add that to mother’s milk in a ratio 80% mother’s milk to 20% fortifier, assuming mother’s milk is about 20 calories per ounce, you’re going to add 4 additional calories for that baby in that small volume which is a lot. So then we can actually do even more than that. We can do a +6, six calories, we can do +8 and even +10. That kind of product is for the babies that are the most fluid restricted. They can get 30 calories per ounce in the same volume that milk that originally was 20 calories per ounce was. So that’s really important for those babies, for example, that have heart defects who can’t take in a lot of fluid or babies for whatever reason are fluid restricted. STEPHANIE: OK. Thank you. DR. LEE: Sure. STEPHANIE: Yeah, that was‚… I think it’s important for parents and family members that might be in the NICU to be able to have a conversation with their doctor and fully understand what’s being given to their baby and be able to ask the right questions. So would there be anything else that you would want to add if you were talking to a parent who’s got a baby in the NICU right now for them to be able to advocate best practices for their baby? DR. LEE: I think that the simple issue for a parent under these circumstances is to ask the doctor based on all of the evidence that’s out there, clinical evidence,…and that’s how doctors make decisions. We talk about evidence-based medicine. This is based on the best evidence that the doctor is aware of, what’s the best way to feed my baby? And having said that, you know, the evidence that we’ve discussed here today is for those smallest of the small. For a larger baby, this is not necessarily‚…it’s not that it’s wrong. It may not be necessary, but when you’re dealing with the smallest babies and the ones that are struggling to survive and grow and thrive and get to where you want all babies to get to, to childhood and so on, then you have to ask the doctor the question what is the best way that our baby can get out of that NICU, that Neonatal Intensive Care Unit, and get home and be with his or her parents. That’s really, I think, the fundamental question. And the doctors should be able to answer that question based on the evidence that exists for the diet that the baby should be fed. STEPHANIE: Right. Thank you. Yeah, I think this is a really great conversation for any parent in the NICU, especially those, like you said, the smallest that are at the highest risk for developing NEC and as you said, other issues as well. And it’s‚…it can only be a benefit in my opinion. DR. LEE: Absolutely. And just to add to that, they should also ask the question‚…because there are other sources of nutrition, and there are other places from which milk can be attained we know about, for instance, women sharing milk on the Internet, milk sharing sites. You’ve got to be extremely careful. You’ve got to ask the question not only what’s best for my baby from the point of view of effectiveness, but also what’s the safest for my baby. And you want to be sure that the source, where that milk is coming from, where those products are coming from, comes from a place where you can say everything possible based on modern technology has been done to protect that milk, protect the safety of that milk. And I think that’s really critical. I think there was a story the other day‚…I forget which show, where it came up in one newspaper or another‚…about‚…oh, I know what it was. It was an article that was published that basically looked at milk samples. They actually collected milk on one of these sharing sites, and they found a large percentage of them had nicotine in the milk, had other things, other bad things that you don’t want a baby to have in that milk. So you’ve really got to ask that question what’s the best? What’s the safest for my baby as well? STEPHANIE: Right. Right. And Prolacta has provided us some material, some reference materials for sharing. So I will say that we’re going to be posting those on our website and will have them in the show notes as well. And I really appreciate you taking the time to talk to me today. If there’s anything else at all that you would like to add, please feel free. DR. LEE: Well, I just want to thank you for the opportunity to let obviously the parents out there know that we’re here for one very, very simple reason. I mean I know it may sound kind of corny, but we said from the day we opened the doors at Prolacta that we’re here to save babies, and I think we’ve done our job in that regard. And we’ve proven that that’s the case. So I’m really‚…I’ve worked, as you heard me say, for 35 years doing clinical and medical research, and I’m very, very proud to say that this is, I think, my best story to tell out of all that long career. STEPHANIE: Right. And as I said, I was out in the facility, took the tour in November, and we were very impressed with your company. And like I said, if I had to do it all over again, I would certainly be asking these questions and in my opinion, I think this is a phenomenal company. And your rigor in testing and your facility are top notch. So thank you. LEE: Well, thank you. Thank you. I really appreciate that, and it means an awful lot to me and to obviously everybody that works at Prolacta. STEPHANIE: Right. So thank you for joining us. And hopefully we’ll talk again soon. LEE: Alright. Thanks so much, Steph. STEPHANIE: In closing, I’d like to share a few thoughts about today’s conversation with Dr. Lee. Recently, I’ve seen a lot written about the use of donor milk, human milk products, and the emerging breast milk industry. Often times, the opinions expressed about Prolacta are solely related to cost: the expensive of Prolacta’s products versus those coming from nonprofit donor milk banks. In my opinion, the cost of using Prolacta’s human milk-based human milk fortifier far outweighs the potential risks of not using it, and any discussion about cost needs to be framed within the context of total cost of care. As Dr. Lee mentioned, Prolacta’s human milk-based nutritional products are intended for extremely premature infants who weigh less than 1250 grams (2 pounds 12 ounces) at birth. My son Morgan weighed 2 pounds 5.5 ounces at birth; my son Shaymus weighed 2 pounds 7 ounces. Prolacta openly shares that the typical cost of using their human milk-based human milk fortifier for these babies is $10,000. That, however, is only a fraction of Morgan’s and Shaymus’ total cost of care. Each of whose exceeded $1 million. In actual numbers, the cost of an exclusive human milk diet using Prolacta’s human milk-based human milk fortifier would have been less than one percent of Morgan’s total cost of care, and less than one percent of Shaymus’ total cost of care. And while Morgan’s case shows that no current preventative strategy for NEC is 100% effective, research shows that access to, and the use of, an exclusive human milk diet significantly reduces the risk of NEC in the majority of extremely premature infants. Show your support for our smallest and most fragile babies, those who have the greatest risk for developing NEC. Show your support for continued research in NEC. And join our effort to raise awareness about, and funds for research in NEC by making a donation to Morgan’s Fund at morgansfund.org. If you’ve had a personal experience with NEC and would like to share your story, or have a question or topic that you’d like to hear addressed on our show, e-mail us at feedback@morgansfund.org. We’d love to hear from you! Additional resources: Prolacta Bioscience, Inc. What Is Necrotizing Enterocolitis? N.p.: Prolacta Bioscience, 2015. Print. Prolacta Bioscience, Inc. 100% Human Milk: The Best Nutrition. N.p.: Prolacta Bioscience, 2014. Print. Prolacta Bioscience, Inc. Nutrition for Premature Babies. N.p.: Prolacta Bioscience, 2014. Print. Prolacta Bioscience. Premature Babies: What to Expect. N.p.: Prolacta Bioscience, 2014. Print. Copyright © 2015 The Morgan Leary Vaughan Fund, Inc. The opinions expressed in Speaking of NEC: Necrotizing Enterocolitis (the Podcast series) and by The Morgan Leary Vaughan Fund are published for educational and informational purposes only, and are not intended as a diagnosis, treatment or as a substitute for professional medical advice, diagnosis and treatment. Please consult a local physician or other health care professional for your specific health care and/or medical needs or concerns. The Podcast series does not endorse or recommend any commercial products, medical treatments, pharmaceuticals, brand names, processes, or services, or the use of any trade, firm, or corporation name is for the information and education of the viewing public, and the mention of any of the above on the Site does not constitute an endorsement, recommendation, or favoring by The Morgan Leary Vaughan Fund.