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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.
Stephanie shares an intriguing discovery about the origins of design patterns in software, tracing them back to architect Christopher Alexander's ideas in architecture. Joël is an official member of the Boston bike share system, and he loves it. He even got a notification on the app this week: "Congratulations. You have now visited 10% of all docking stations in the Boston metro area." #AchievementUnlocked, Joël! Joël and Stephanie transition into a broader discussion on data modeling within software systems, particularly how entities like companies, employees, and devices interconnect within a database. They debate the semantics of database relationships and the practical implications of various database design decisions, providing insights into the complexities of backend development. Christopher Alexander and Design Patterns (https://www.designsystems.com/christopher-alexander-the-father-of-pattern-language/) Rails guide to choosing between belongsto and hasone (https://edgeguides.rubyonrails.org/association_basics.html#choosing-between-belongs-to-and-has-one) Making impossible states impossible (https://www.youtube.com/watch?v=IcgmSRJHu_8) 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 learned a very interesting tidbit. I don't know if it's historical; I don't know if I would label it that. But, I recently learned about where the idea of design patterns in software came from. Are you familiar with that at all? JOËL: I read an article about that a while back, and I forget exactly, but there is, like, a design patterns movement, I think, that predates the software world. STEPHANIE: Yeah, exactly. So, as far as I understand it, there is an architect named Christopher Alexander, and he's kind of the one who proposed this idea of a pattern language. And he developed these ideas from the lens of architecture and building spaces. And he wrote a book called A Pattern Language that compiles, like, all these time-tested solutions to how to create spaces that meet people's needs, essentially. And I just thought that was really neat that software design adopted that philosophy, kind of taking a lot of these interdisciplinary ideas and bringing them into something technical. But also, what I was really compelled by was that the point of these patterns is to make these spaces comfortable and enjoyable for humans. And I have that same feeling evoked when I'm in a codebase that's really well designed, and I am just, like, totally comfortable in it, and I can kind of understand what's going on and know how to navigate it. That's a very visceral feeling, I think. JOËL: I love the kind of human-centric approach that you're using and the language that you're using, right? A place that is comfortable for humans. We want that for our homes. It's kind of nice in our codebases, too. STEPHANIE: Yeah. I have really enjoyed this framing because instead of just saying like, "Oh, it's quote, unquote, "best practice" to follow these design patterns," it kind of gives me more of a reason. It's more of a compelling reason to me to say like, "Following these design patterns makes the codebase, like, easier to navigate, or easier to change, or easier to work with." And that I can get kind of on board with rather than just saying, "This way is, like, the better way, or the superior way, or the way to do things." JOËL: At the end of the day, design patterns are a means to an end. They're not an end in of itself. And I think that's where it's very easy to get into trouble is where you're just sort of, I don't know, trying to rack up engineering points, I guess, for using a lot of design patterns, and they're not necessarily in service to some broader goal. STEPHANIE: Yeah, yeah, exactly. I like the way you put that. When you said that, for some reason, I was thinking about catching Pokémon or something like filling your Pokédex [laughs] with all the different design patterns. And it's not just, you know, like you said, to check off those boxes, but for something that is maybe a little more meaningful than that. JOËL: You're just trying to, like, hit the completionist achievement on the design patterns. STEPHANIE: Yeah, if someone ever reaches that, you know, gets that achievement trophy, let me know [laughs]. JOËL: Can I get a badge on GitHub for having PRs that use every single Gang of Four pattern? STEPHANIE: Anyway, Joël, what's new in your world? JOËL: So, on the topic of completing things and getting badges for them, I am a part of the Boston bike share...project makes it sound like it's a, I don't know, an exclusive club. It's Boston's bike share system. I have a subscription with them, and I love it. It's so practical. You can go everywhere. You don't have to worry about, like, a bike getting stolen or something because, like, you drop it off at a docking station, and then it's not your responsibility anymore. Yeah, it's very convenient. I love it. I got a notification on the app this week that said, "Congratulations. You have now visited 10% of all docking stations in the Boston metro area." STEPHANIE: Whoa, that's actually a pretty cool accomplishment. JOËL: I didn't even know they tracked that, and it's kind of cool. And the achievement shows me, like, here are all the different stations you've visited. STEPHANIE: You know what I think would be really fun? Is kind of the equivalent of a Spotify Wrapped, but for your biking in a year kind of around the city. JOËL: [laughs] STEPHANIE: That would be really neat, I think, just to be like, oh yeah, like, I took this bike trip here. Like, I docked at this station to go meet up with a friend in this neighborhood. Yeah, I think that would be really fun [laughs]. JOËL: You definitely see some patterns come up, right? You're like, oh yeah, well, you know, this is my commute into work every day. Or this is that one friend where, you know, every Tuesday night, we go and do this thing. STEPHANIE: Yeah, it's almost like a travelogue by bike. JOËL: Yeah. I'll bet there's a lot of really interesting information that could surface from that. It might be a little bit disturbing to find out that a company has that data on you because you can, like, pick up so much. STEPHANIE: That's -- JOËL: But it's also kind of fun to look at it. And you mentioned Spotify Wrapped, right? STEPHANIE: Right. JOËL: I love Spotify Wrapped. I have so much fun looking at it every year. STEPHANIE: Yeah. It's always kind of funny, you know, when products kind of track that kind of stuff because it's like, oh, like, it feels like you're really seen [laughs] in terms of what insights it's able to come up with. But yeah, I do think it's cool that you have this little badge. I would be curious to know if there's anyone who's, you know, managed to hit a hundred percent of all the docking stations. They must be a Boston bike messenger or something [laughs]. JOËL: Now that I know that they track it, maybe I should go for completion. STEPHANIE: That would be a very cool flex, in my opinion. JOËL: [laughs] And, you know, of course, they're always expanding the network, which is a good thing. I'll bet it's the kind of thing where you get, like, 99%, and then it's just really hard to, like, keep up. STEPHANIE: Yeah, nice. JOËL: But I guess it's very appropriate, right? For a podcast titled The Bike Shed to be enthusiastic about a bike share program. STEPHANIE: That's true. So, for today's topic, I wanted to pick your brain a little bit on a data modeling question that I posed to some other developers at thoughtbot, specifically when it comes to associations and associations through other associations [laughs]. So, I'm just going to kind of try to share in words what this data model looks like and kind of see what you think about it. So, if you had a company that has many employees and then the employee can also have many devices and you wanted to be able to associate that device with the company, so some kind of method like device dot company, how do you think you would go about making that association happen so that convenience method is available to you in the code? JOËL: As a convenience for not doing device dot employee dot company. STEPHANIE: Yeah, exactly. JOËL: I think a classic is, at least the other way, is that it has many through. I forget if you can do a belongs to through or not. You could also write, effectively, a delegation method on the device to effectively do dot employee dot company. STEPHANIE: Yeah. So, I had that same inkling as you as well, where at first I tried to do a belongs to through, but it turns out that belongs to does not support the through option. And then, I kind of went down the next path of thinking about if I could do a has one, a device has one company through employee, right? But the more I thought about it, the kind of stranger it felt to me in terms of the semantics of saying that a device has a company as opposed to a company having a device. It made more sense in plain English to think about it in terms of a device belonging to a company. JOËL: That's interesting, right? Because those are ways of describing relationships in sort of ActiveRecord's language. And in sort of a richer situation, you might have all sorts of different adjectives to describe relationships. Instead of just belongs to has many, you have things like an employee owns a device, an employee works for a company, you know because an employee doesn't literally belong to a company in the literal sense. That's kind of messed up. So, I think what ActiveRecord's language is trying to use is less trying to, like, hit maybe, like, the English domain language of how these things relate to, and it's more about where the foreign keys are in the database. STEPHANIE: Yeah. I like that point where even though, you know, these are the things that are available to us, that doesn't actually necessarily, you know, capture what we want it to mean. And I had gone to see what Rails' recommendation was, not necessarily for the situation I shared. But they have a section for choosing between which model should have the belongs to, as opposed to, like, it has one association on it. And it says, like you mentioned, you know, the distinction is where you place the foreign key, but you should kind of think about the actual meaning of the data. And, you know, we've talked a lot about, I think, domain modeling [chuckles] on the show. But their kind of documentation says that...the has something relationship says that one of something is yours, that it can, like, point back to you. And in the example I shared, it still felt to me like, you know, really, the device wanted to point to the company that it is owned by. And if we think about it in real-world terms, too, if that device, like, is company property, for example, then that's a way that that does make sense. But the couple of paths forward that I saw in front of me were to rework that association, maybe add a new column onto the device, and go down that path of codifying it at the database level. Or kind of maybe something as, like, an in-between step is delegating the method to the employee. And that's what I ended up doing because I wasn't quite ready to do that data migration. JOËL: Adding more columns is interesting because then you can run into sort of data consistency issues. Let's say on the device you have a company ID to see who the device belongs to. Now, there are sort of two different independent paths. You can ask, "Which company does this device belong to?" You can either check the company ID and then look it up in the company table. Or you can join on the employee and join the employee back under company. And those might give you different answers and that can be a problem with data consistency if those two need to stay in sync. STEPHANIE: Yeah, that is a good point. JOËL: There could be scenarios where those two are allowed to diverge, right? You can imagine a scenario where maybe a company owns the device, but an employee of a potentially different company is using the device. And so, now it's okay to have sort of two different chains because the path through the employee is about what company is using our devices versus which company actually owns them. And those are, like, two different kinds of relationships. But if you're trying to get the same thing through two different paths of joining, then that can set you up for some data inconsistency issues. STEPHANIE: Wow. I really liked what you said there because I don't think enough thought goes into the emergent relationships between models after they've been introduced to a codebase. At least in my experience, I've seen a lot of thought go up front into how we might want to model an ActiveRecord, but then less thought into seeing what patterns kind of show up over time as we introduce more functionality to these models, and kind of understand how they should exist in our codebase. Is that something that you find yourself kind of noticing? Like, how do you kind of pick up on the cue that maybe there's some more thought that needs to happen when it comes to existing database tables? JOËL: I think it's something that definitely is a bit of a red flag, for me, is when there are multiple paths to connect to sort of establish a relationship. So, if I were to draw out some sort of, like, diagram of the models, boxes, and arrows or something like that, and then I could sort of overlay different paths through that diagram to connect two models and realize that those things need to be in sync, I think that's when I started thinking, ooh, that's a potential danger. STEPHANIE: Yeah, that's a really great point because, you know, the example I shared was actually a kind of contrived one based on what I was seeing in a client codebase, not, you know, I'm not actually working with devices, companies, and employees [laughs]. But it was encoded as, essentially, a device having one company. And I ended up drawing it out because I just couldn't wrap my head around that idea. And I had, essentially, an arrow from device pointing to company when I could also see that you could go take the path of going through employee [laughs]. And I was just curious if that was intentional or was it just kind of a convenient way to have that direct method available? I don't currently have enough context to determine but would be something I want to pay attention to. Like you said, it does feel like, if not a red flag, at least an orange one. JOËL: And there's a whole kind of science to some of this called database normalization, where they're sort of, like, they all have rather arcane names. They're the first normal form, the second normal form, the third normal form, you know, it goes on. If you look at the definition, they're all also a little bit arcane, like every element in a relation must depend solely upon the primary key. And you're just like, well, what does that mean? And how do I know if my table is compliant with that? So, I think it's worth, if you're Googling for some of these, find an article that sort of explains these a little bit more in layman's terms, if you will. But the general idea is that there are sort of stricter and stricter levels of the amount of sort of duplicate sources of truth you can have. In a sense, it's almost like DRY but for databases, and for your database schema in particular. Because when you have multiple sources of truth, like who does this device belong to, and now you get two different answers, or three different answers, now you've got a data corruption issue. Unlike bugs in code where it's, you know, it can be a problem because the site is down, or users have incorrect behavior, but then you can fix it later, and then go to production, and disruption to your clients is the worst that happened, this sort of problem in data is sometimes unrecoverable. Like, it's just, hey, -- STEPHANIE: Whoa, that sounds scary. JOËL: Yeah, no, data problems scare me in a way that code problems don't. STEPHANIE: Whoa. Could you...I think I interrupted you. But where were you going to go about once you have corrupted data? Like, it's unrecoverable. What happens then? JOËL: Because, like, if I look at the database, do I know who the real owner of this...if I want to fix it, let's say I fix my schema, but now I've got all this data where I've got devices that have two different owners, and I don't know which one is the real one. And maybe the answer is, I just sort of pick one and say, "Oh, the one that was through this association is sort of the canonical one, and we can just sort of ignore the other one." Do I have confidence in that decision? Well, maybe depending on some of the other context maybe, I'm lucky that I can have that. The doomsday scenario is that it's a little bit of one, a little bit of the other because there were different code paths that would write to one way or another. And there's no real way of knowing. If there's not too many devices, maybe I do an audit. Maybe I have to, like, follow up with all of my customers and say, "Hey, can you tell me which ones are really your devices?" That's not going to scale. Like, real worst case scenario, you almost have to do, like, a bit of a bankruptcy, where you say, "Hey, all the data prior to this date there's a bit of a question mark on it. We're not a hundred percent sure about it." And that does not feel great. So, now you're talking about mitigation strategies. STEPHANIE: Oof. Wow. Yeah, you did make it sound [laughs] very scary. I think I've kind of been on the periphery of a situation like this before, where it's not just that we couldn't trust the code. It's that we couldn't trust the data in the database either to tell us how things work, you know, for our users and should work from a product perspective. And I was on a previous client project where they had to, yeah, like, hire a bunch of people to go through that data and kind of make those determinations, like you said, to kind of figure out it out for, you know, all of these customers to determine the source of truth there. And it did not sound like an easy feat at all, right? That's so much time and investment that you have to put into that once you get to that point. JOËL: And there's a little bit of, like, different problems at different layers. You know, at the database layer, generally, you want all of that data to be really in a sort of single source of truth. Sometimes that makes it annoying to query because you've got to do all these joins. And so, there are various denormalization strategies that you can use to make that. Or sometimes it's a risk you're going to take. You're going to say, "Look, this table is not going to be totally normalized. There's going to be some amount of duplication, and we're comfortable with the risk if that comes up." Sometimes you also build layers of abstractions on top, so you might have your data sort of at rest in database tables fully normalized and separated out, but it's really clunky to query. So, you build out a database view on top of that that returns data in sort of denormalized fashion. But that's okay because you can always get your correct answer by querying the underlying tables. STEPHANIE: Wow. Okay. I have a lot of thoughts about this because I feel like database normalization, and I guess denormalization now, are skills that I am certainly not an expert at. And so, when it comes to, like, your average developer, how much do you think that people need to be thinking about this? Or what strategies do you have for, you know, a typical Rails dev in terms of how deep they should go [laughs]? JOËL: So, the classic advice is you probably want to go to, like, third to fourth normal form, usually three. There's also like 3.5 for some reason. That's also, I think, sometimes called BNF. Anyway, sort of levels of how much you normalize. Some of these things are, like, really, really basic things that Rails just builds into its defaults with that convention over configuration, so things like every table should have a primary key. And that primary key should be something that's fixed and unique. So, don't use something like combination of first name, last name as your primary key because there could be multiple people with the same name. Also, people change their names, and that's not great. But it's great that people can change their names. It's not great to rely on that as a primary key. There are things like look for repeating columns. If you've got columns in your schema with a number prefix at the end, that's probably a sign that you want to extract a table. So, I don't know, you have a movie, and you want to list the actors for a movie. If your movie table has actor 1, actor 2, actor 3, actor 4, actor 5, you know, like, all the way up to actor 20, and you're just like, "Yeah, no, we fill, like, actor 1 through N, and if there's any space left over, we just put nulls in those columns," that's a pretty big sign that, hey, why don't you instead have a, like, actor's table, and then make a, like, has many association? So, a lot of the, like, really basic normalization things, I think, are either built into Rails or built into sort of best practices around Rails. I think something that's really useful for developers to get as a sense beyond learning the actual different normal forms is think about it like DRY for your schema. Be wary of sort of multiple sources of truth for your data, and that will get you most of the way there. When you're designing sort of models and tables, oftentimes, we think of DRY more in terms of code. Do you ever think about that a little bit in terms of your tables as well? STEPHANIE: Yeah, I would say so. I think a lot of the time rather than references to another table just starting to grow on a certain model, I would usually lean towards introducing a join table there, both because it kind of encapsulates this idea that there is a connection, and it makes the space for that idea to grow if it needs to in the future. I don't know if I have really been disciplined in thinking about like, oh, you know, there should really...every time I kind of am designing my database tables, thinking about, like, there should only be one source of truth. But I think that's a really good rule of thumb to follow. And in fact, I can actually think of an example right now where we are a little bit tempted to break that rule. And you're making me reconsider [laughter] if there's another way of doing so. One thing that I have been kind of appreciative of lately is on my current client project; there's just, like, a lot of data. It's a very data-intensive and sensitive application. And so, when we introduce migrations, those PRs get tagged for review by someone over from the DevOps side, just to kind of provide some guidance around, you know, making sure that we're setting up our models to scale well. One of the things that he's been asking me on my couple of code changes I introduced was, like, when I introduced an index, like, it happened to be, like, a composite index with a couple of different columns, and the particular order of those columns mattered. And he kind of prompted me to, like, share what my use cases for this index were, just to make sure that, like, some thought went into it, right? Like, it's not so much that the way that I had done it was wrong, but just that I had, like, thought about it. And I like that as a way of kind of thinking about things at the abstraction that I need to to do my dev work day to day and then kind of mapping that to, like you were saying, those best practices around keeping things kind of performant at the database level. JOËL: I think there's a bit of a parallel world that people could really benefit from dipping a toe in, and that's sort of the typed programming world, this idea of making impossible states impossible or making illegal states unrepresentable. That in the sort of now it's not schemas of database tables or schemas of types that you're creating but trying to prevent data coming into a state where someone could plausibly construct an instance of your object or your type that would be nonsensical in the context of your app, kind of trying to lock that down. And I think a lot of the ways that people in those communities think about...in a sense, it's kind of like database normalization for developers. So, if you're not wanting to, like, dip your toe in more of the sort of database-centric world and, like, read an article from a DBA, it might be worthwhile to look at some of those worlds as well. And I think a great starting point for that is a talk by Richard Feldman called Making Impossible States Impossible. It's for the Elm language. And there are equivalents, I think, in many others as well. STEPHANIE: That's really cool that you are making that connection. I know we've kind of briefly talked about workshops in the past on the show. But if there were a workshop for, you know, that kind of database normalization for developers, I would be the first to sign up [laughs]. JOËL: Hint, hint, RailsConf idea. There's something from your original question that I think is interesting to circle back to, and that's the fact that it was awkward to work through in Ruby to do the work that you wanted to do because the tables were laid out in a certain way. And sometimes, there's certain ways that you need the tables to be in order to be sort of safe to represent data, but they're not the optimal way that we would like to interact with them at the Ruby level. And I think it's okay for not everything in Ruby to be 100% reflective of the structure of the tables underneath. ActiveRecord gives us a great pattern, but everything is kind of one-to-one. And it's okay to layer on some things on top, add some extra methods to build some, like, connections in Ruby that rely on this normalized data underneath but that make life easier for you, or they better just represent or describe the relationships that you have. STEPHANIE: 100%. I was really compelled by your idea of introducing helpers that use more descriptive adjectives for what that relationship is like. We've talked about how Rails abstracted things from the database level, you know, for our convenience, but that should not stop us from, like, leaning on that further, right? And kind of introducing our own abstractions for those connections that we see in our domain. So, I feel really inspired. I might even kind of reconsider the way I handled the original example and see what I can make of it. JOËL: And I think your original solution of doing the delegation is a great example of this as well. You want the idea that a device belongs to a company or has an association called company, and you just don't want to go through that long chain, or at least you don't want that to be visible as an implementation detail. So, in this case, you delegate it through a chain of methods in Ruby. It could also be that you have a much longer chain of tables, and maybe they don't all have associations in Rails and all that. And I think it would be totally fine as well to define a method on an object where, I don't know, a device, I don't know, has many...let's call it technicians, which is everybody who's ever touched this device or, you know, is on a log somewhere for having done maintenance. And maybe that list of technicians is not a thing you can just get through regular Rails associations. Maybe there's a whole, like, custom query underlying that, and that's okay. STEPHANIE: Yeah, as you were saying that, I was thinking about that's actually kind of, like, active models are the great spot to put those methods and that logic. And I think you've made a really good case for that. JOËL: On that note, 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.
Joël shares his experience with the dry-rb suite of gems, focusing on how he's been using contracts to validate input data. Stephanie relates to Joël's insights with her preparation for RailsConf, discussing her methods for presenting code in slides and weighing the aesthetics and functionality of different tools like VS Code and Carbon.sh. She also encounters a CI test failure that prompts her to consider the implications of enforcing specific coding standards through CI processes. The conversation turns into a discussion on managing coding standards and tools effectively, ensuring that automated systems help rather than hinder development. Joël and Stephanie ponder the balance between enforcing strict coding standards through CI and allowing developers the flexibility to bypass specific rules when necessary, ensuring tools provide valuable feedback without becoming obstructions. Transcript: AD: 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. 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: I've been working on a project that uses the dry-rb suite of gems. And one of the things we're doing there is we're validating inputs using this concept of a contract. So, you sort of describe the shape and requirements of this, like hash of attributes that you get, and it will then tell you whether it's valid or not, along with error messages. We then want to use those to eventually build some other sort of value object type things that we use in the app. And because there's, like, failure points at multiple places that you have to track, it gets a little bit clunky. And I got to thinking a little bit about, like, forget about the internal machinery. What is it that I would actually like to happen here? And really, what I want is to say, I've got this, like, bunch of attributes, which may or may not be correct. I want to pass them into a method, and then either get back a value object that I was hoping to construct or some kind of error. STEPHANIE: That sounds reasonable to me. JOËL: And then, thinking about it just a little bit longer, I was like, wait a minute, this idea of, like, unstructured input goes into a method, you get back something more structured or an error, that's kind of the broad definition of parsing. I think what I'm looking for is a parser object. And this really fits well with a style of processing popularized in the functional programming community called parse, don't validate the idea that you use a parser like this to sort of transform data from more loose to more strict values, values where you can have more assumptions. And so, I create an object, and I can take a contract. I can take a class and say, "Attempt to take the following attributes. If they're valid according to the construct, create this classroom." And it, you know, does a bunch of error handling and some...under the hood, dry-rb does all this monad stuff. So, I handled that all inside of the object, but it's actually really nice. STEPHANIE: Cool. Yeah, I had a feeling that was where you were going to go. A while back, we had talked about really impactful articles that we had read over the course of the year, and you had shared one called Parse, Don't Validate. And that heuristic has actually been stuck in my head a little bit. And that was really cool that you found an opportunity to use it in, you know, previously trying to make something work that, like, you weren't really sure kind of how you wanted to implement that. JOËL: I think I had a bit of a light bulb moment as I was trying to figure this out because, in my mind, there are sort of two broad approaches. There's the parse, don't validate where you have some inputs, and then you transform them into something stricter. Or there's more of that validation approach where you have inputs, you verify that they're correct, and then you pass them on to someone else. And you just say, "Trust me, I verified they're in the right shape." Dry-rb sort of contracts feel like they fit more under that validation approach rather than the parse, don't validate. Where I think the kind of the light bulb turned on for me is the idea that if you pair a validation step and an object construction step, you've effectively approximated the idea of parse, don't validate. So, if I create a parser object that says, in sort of one step, I'm going to validate some inputs and then immediately use them if they're valid to construct an object, then I've kind of done a parse don't validate, even though the individual building blocks don't follow that pattern. STEPHANIE: More like a parse and validate, if you will [laughs]. I have a question for you. Like, do you own those inputs kind of in your domain? JOËL: In this particular case, sort of. They're coming from a form, so yes. But it's user input, so never trust that. STEPHANIE: Gotcha. JOËL: I think you can take this idea and go a little bit broader as well. It doesn't have to be, like, the dry-rb-related stuff. You could do, for example, a JSON schema, right? You're dealing with the input from a third-party API, and you say, "Okay, well, I'm going to have a sort of validation JSON schema." It will just tell you, "Is this data valid or not?" and give you some errors. But what if you paired that with construction and you could create a little parser object, if you wanted to, that says, "Hey, I've got a payload coming in from a third-party API, validate it against this JSON schema, and attempt to construct this shopping cart object, and give me an error otherwise." And now you've sort of created a nice, little parse, don't validate pipeline which I find a really nice way to deal with data like that. STEPHANIE: From a user perspective, I'm curious: Does this also improve the user experience? I'm kind of wondering about that. It seems like it could. But have you explored that? JOËL: This is more about the developer experience. STEPHANIE: Got it. JOËL: The user experience, I think, would be either identical or, you know, you can play around with things to display better errors. But this is more about the ergonomics on the development side of things. It was a little bit clunky to sort of assemble all the parts together. And sometimes we didn't immediately do both steps together at the same time. So, you might sort of have parameters that we're like, oh, these are totally good, we promise. And we pass them on to someone else, who passes them on to someone else. And then, they might try to do something with them and hope that they've got the data in the right shape. And so, saying, let's co-locate these two things. Let's say the validation of the inputs and then the creation of some richer object happen immediately one after another. We're always going to bundle them together. And then, in this particular case, because we're using dry-rb, there's all this monad stuff that has to happen. That was a little bit clunky. We've sort of hidden that in one object, and then nobody else ever has to deal with that. So, it's easier for developers in terms of just, if you want to turn inputs into objects, now you're just passing them into one object, into one, like, parser, and it works. But it's a nicer developer experience, but also there's a little bit more safety in that because now you're sort of always working with these richer objects that have been validated. STEPHANIE: Yeah, that makes sense. It sounds very cohesive because you've determined that these are two things that should always happen together. The problems arise when they start to actually get separated, and you don't have what you need in terms of using your interfaces. And that's very nice that you were able to bundle that in an abstraction that makes sense. JOËL: A really interesting thing I think about abstractions is sometimes thinking of them as the combination of multiple other things. So, you could say that the combination of one thing and another thing, and all of a sudden, you have a new sort of combo thing that you have created. And, in this case, I think the combination of input validation and construction, and, you know, to a certain extent, error handling, so maybe it's a combination of three things gives you a thing you can call a parser. And knowing that that combination is a thing you can put a name on, I think, is really powerful, or at least it felt really powerful to me when that light bulb turned on. STEPHANIE: Yeah, it's kind of like the whole is greater than the sum of its parts. JOËL: Yeah. STEPHANIE: Cool. JOËL: And you and I did an episode on Specialized Vocabulary a while back. And that power of naming, saying that, oh, I don't just have a bunch of little atomic steps that do things. But the fact that the combination of three or four of them is a thing in and of itself that has a name that we can talk about has properties that we're familiar with, all of a sudden, that is a really powerful way to think about a system. STEPHANIE: Absolutely. That's very exciting. JOËL: So, Stephanie, what's new in your world? STEPHANIE: So, I am plugging away at my RailsConf talk, and I reached the point where I'm starting to work on slides. And this talk will be the first one where I have a lot of code that I want to present on my slides. And so, I've been playing around with a couple of different tools to present code on slides or, I guess, you know, just being able to share code outside of an editor. And the two tools I'm trying are...VS Code actually has a copy with syntax functionality in its command palette. And so, that's cool because it basically, you know, just takes your editor styling and applies it wherever you paste that code snippet. JOËL: Is that a screenshot or that's, like, formatted text that you can paste in, like, a rich text editor? STEPHANIE: Yeah, it's the latter. JOËL: Okay. STEPHANIE: That was nice because if I needed to make changes in my slides once I had already put them there, I could do that. But then the other tool that I was giving a whirl is Carbon.sh. And that one, I think, is pretty popular because it looks very slick. It kind of looks like a little Mac window and is very minimal. But you can paste your code into their text editor, and then you can export PNGs of the code. So, those are just screenshots rather than editable text. And I [chuckles] was using that, exported a bunch of screenshots of all of my code in various stages, and then realized I had a typo [laughs]. JOËL: Oh no! STEPHANIE: Yeah, so I have not got around to fixing that yet. That was pretty frustrating because now I would have to go back and regenerate all of those exports. So, that's kind of where I'm at in terms of exploring sharing code. So, if anyone has any other tools that they would use and recommend, I am all ears. JOËL: How do you feel about balancing sort of the quantity of code that you put on a slide? Do you tend to go with, like, a larger code slide and then maybe, like, highlight certain sections? Do you try to explain ideas in general and then only show, like, a couple of lines? Do you show, like, maybe a class that's got ten lines, and that's fine? Where do you find that balance in terms of how much code to put on a slide? Because I feel like that's always the big dilemma for me. STEPHANIE: Yeah. Since this is my first time doing it, like, I really have no idea how it's going to turn out. But what I've been trying is focusing more on changes between each slide, so the progression of the code. And then, I can, hopefully, focus more on what has changed since the last snippet of code we were looking at. That has also required me to be more fiddly with the formatting because I don't want essentially, like, the window that's containing the code to be changing sizes [laughs] in between slide transitions. So, that was a little bit finicky. And then, there's also a few other parts where I am highlighting with, like, a border or something around certain texts that I will probably pause and talk about, but yeah, it's tough. I feel like I've seen it done well, but it's a lot harder to and a lot more effort to [laughs] do in practice, I'm finding. JOËL: When someone does it well, it looks effortless. And then, when somebody does it poorly, you're like, okay, I'm struggling to connect with this talk. STEPHANIE: Yep. Yep. I hear that. I don't know if you would agree with this, but I get the sense that people who are able to make that look effortless have, like, a really deep and thorough understanding of the code they're showing and what exactly they think is important for the audience to pay attention to and understand in that given moment in their talk. That's the part that I'm finding a lot more work [laughs] because just thinking about, you know, the code I'm showing from a different lens or perspective. JOËL: How do you sort of shrink it down to only what's essential for the point that you're trying to make? And then, more broadly, not just the point you're trying to make on this one slide, but how does this one slide fit into the broader narrative of the story you're trying to tell? STEPHANIE: Right. So, we'll see how it goes for me. I'm sure it's one of those things that takes practice and experience, and this will be my first time, and we'll learn something from it. JOËL: That's exciting. So, this is RailsConf in Detroit this year, I believe, May 7th through 9th. STEPHANIE: Yep. That's right. So, recently on my client work, I encountered a CI failure on a PR of mine that I was surprised by. And basically, I had introduced a new association on a model, and this CI failure was saying like, "Hey, like, we see that you introduced this association. You should consider adding this to the presenter for this model." And I hadn't even known that that presenter existed [laughs]. So, it was kind of interesting to get a CI failure nudging me to consider if I need to be, like, making a different, you know, this other change somewhere else. JOËL: That's a really fun use of CI. Do you think that was sort of helpful for you as a newer person on that codebase? Or was it more kind of annoying and, like, okay, this CI is over the top? STEPHANIE: You know, I'm not sure [laughs]. For what it's worth, this presenter was actually for their admin dashboard, essentially. And so, the goal of what this workflow was trying to do was help folks who are using the admin dashboard have, like, all of the capabilities they need to do that job. And it makes sense that as you add behavior to your app, sometimes those things could get missed in terms of supporting, you know, not just your customers but developers, support product, you know, the other users of your app. So, it was cool. And that was, you know, something that they cared enough to enforce. But yeah, I think there maybe is a bit of a slippery slope or at least some kind of line, or it might even be pretty blurry around what should our test failures really be doing. JOËL: And CI is interesting because it can be a lot more than just tests. You can run all sorts of things. You can run a linter that fails. You could run various code quality tools that are not things like unit tests. And I think those are all valid uses of the CI process. What's interesting here is that it sounds like there were two systems that needed to stay in sync. And this particular CI check was about making sure that we didn't accidentally introduce code that would sort of drift apart in those two places. Does that sound about right? STEPHANIE: Yeah, that does sound right. I think where it gets a little fuzzy, for me, is whether that kind of check was for code quality, was for a standard, or for a policy, right? It was kind of saying like, hey, like, this is the way that we've enforced developers to keep those two things from drifting. Whereas I think that could be also handled in different ways, right? JOËL: Yeah. I guess in terms of, like, keeping two things in sync, I like to do that at almost, like, a code level, if possible. I mean, maybe you need a single source of truth, and then it just sort of happens automatically. Otherwise, maybe doing it in a way that will yell at you. So, you know, maybe there's a base class somewhere that will raise an error, and that will get caught by CI, or, you know, when you're manually testing and like, oh yeah, I need to keep this thing in sync. Maybe you can derive some things or get fancy with metaprogramming. And the goal here is you don't have a situation where someone adds a new file in one place and then they accidentally break an admin dashboard because they weren't aware that you needed these two files to be one-to-one. If I can't do it just at a code level, I have done that before at, like, a unit test level, where maybe there's, like, a constant somewhere, and I just want to assert that every item in this constant array has a matching entry somewhere else or something like that, so that you don't end up effectively crashing the site for someone else because that is broken behavior. STEPHANIE: Yeah, in this particular case, it wasn't necessarily broken. It was asking you "Hey, should this be added to the admin presenter?" which I thought was interesting. But I also hear what you're saying. It actually does remind me of what we were talking about earlier when you've identified two things that should happen, like mostly together and whether the code gives you affordances to do that. JOËL: So, one of the things you said is really interesting, the idea that adding to the presenter might have been optional. Does that mean that CI failed for you but that you could merge anyway, or how does that work? STEPHANIE: Right. I should have been more clear. This was actually a test failure, you know, that happened to be caught by CI because I don't run [laughs] the whole test suite locally. JOËL: But it's an optional test failure, so you're allowed to let that test fail. STEPHANIE: Basically, it told me, like, if I want this to be shown in the presenter, add it to this method, or if not, add it to...it was kind of like an allow list basically. JOËL: I see. STEPHANIE: Or an ignore list, yeah. JOËL: I think that kind of makes sense because now you have sort of, like, a required consistency thing. So, you say, "Our system requires you...whenever you add a file in this directory, you must add it to either an allow list or an ignore list, which we have set up in this other file." And, you know, sometimes you might forget, or sometimes you're new, and it's your first time adding a file in this directory, and you didn't remember there's a different place where you have to effectively register it. That seems like a reasonable check to have in place if you're relying on these sort of allow lists for other parts of the system, and you need to keep them in sync. STEPHANIE: So, I think this is one of the few instances where I might disagree with you, Joël. What I'm thinking is that it feels a bit weird to me to enforce a decision that was so far away from the code change that I made. You know, you're right. On one hand, I am newer to this codebase, maybe have less of that context of different features, things that need to happen. It's a big app. But I almost think this test reinforces this weird coupling of things that are very far away from each other [laughs]. JOËL: So, it's maybe not the test itself you object to rather than the general architecture where these admin presenters are relying on these other objects. And by you introducing a file in a totally different part of the app, there's a chance that you might break the admin, and that feels weird to you. STEPHANIE: Yeah, that does feel weird to me. And then, also that this implementation is, like, codified in this test, I guess, as opposed to a different kind of, like, acceptance test, rather than specifying specifically like, oh, I noticed, you know, you didn't add this new association or attribute to either the allow list or the ignore list. Maybe there is a more, like, higher level test that could steer us in keeping the features consistent without necessarily dictating, like, that it needs to happen in these particular methods. JOËL: So, you're talking something like doing an integration test rather than a unit test? Or are you talking about something entirely different? STEPHANIE: I think it could be an integration test or a system test. I'm not sure exactly. But I am wondering what options, you know, are out there for helping keeping standards in place without necessarily, like, prescribing too much about, like, how it needs to be done. JOËL: So, you used the word standard here, which I tend to think about more in terms of, like, code style, things like that. What you're describing here feels a little bit less like a standard and more of what I would call a code invariant. STEPHANIE: Ooh. JOËL: It's sort of like in this architecture the way we've set up, there must always be sort of one-to-one matching between files in this directory and entries in this array. Now, that's annoying because they're sort of, like, two different places, and they can vary independently. So, locking those two in sync requires you to do some clunky things, but that's sort of the way the architecture has been designed. These two things must remain one-to-one. This is an invariant we want in the app. STEPHANIE: Can you define invariant for me [laughs], the way that you're using it here? JOËL: Yeah, so something that is required to be true of all elements in this class of things, sort of a rule or a law that you're applying to the way that these particular bits of code need to behave. So, in this case, the invariant is every file in this directory must have a matching entry in this array. There's a lot of ways to enforce that. The sort of traditional idea is sort of pushing a lot of that checking...they'll sometimes talk about pushing errors to the left. So, if you can handle this earlier in the sort of code execution pipeline, can you do it maybe with a type system if you're in a type language? Can you do it with some sort of input validation at runtime? Some languages have the concept of contracts, so maybe you enforce invariants using that. You could even do something really ad hoc in Ruby, where you might say, "Hey, at boot time, when we load this particular array for the admin, just load this directory. Make sure that the entries in the array match the entries in the directory, and if they don't, raise an error." And I guess you would catch that probably in CI just because you tried to run your test suite, and you'd immediately get this boot error because the entries don't match. So, I guess it kind of gets [inaudible 22:36] CI, but now it's not really a dedicated test anymore. It's more of, like, a property of the system. And so, in this case, I've sort of shifted the error checking or the checking of this invariant more into the architecture itself rather than in, like, things that exercise the architecture. But you can go the other way and say, "Well, let's shift it out of the architecture into tests," or maybe even beyond that, into, like, manual QA or, you know, other things that you can do to verify it. STEPHANIE: Hmm. That is very compelling to me. JOËL: So, we've been talking so far about the idea of invariants, but the thing about invariants is that they don't vary. They're always true. This is a sort of fundamental rule of how this system works. The class of problems that I often struggle with how to deal with in these sorts of situations are rules that you only sometimes want to apply. They're not consistent. Have you ever run into things like that? STEPHANIE: Yeah, I have. And I think that's what was compelling to me about what you were sharing about code invariance because I wasn't totally convinced this particular situation was a very clear and absolute rule that had been decided, you know, it seemed a little bit more ambiguous. When you're talking about, like, applying rules that sometimes you actually don't want to apply, I think of things like linters, where we want to disable, you know, certain rules because we just can't get around implementing the way we want to while following those standards. Or maybe, you know, sometimes you just have to do something that is not accessible [laughs], not that that's what I would recommend, but in the case where there aren't other levers to change, you maybe want to disable some kind of accessibility check. JOËL: That's always interesting, right? Because sometimes, you might want, like, the idea of something that has an escape hatch in it, but that immediately adds a lot of complexity to things as well. This is getting into more controversial territory. But I read a really compelling article by Jeroen Engels about how being able to, like, locally disable your linter for particular methods actually makes your code, but also the linter itself, a worse tool. And it really kind of made me rethink a little bit of how I approach linters as a tool. STEPHANIE: Ooh. JOËL: And what makes sense in a linter. STEPHANIE: What was the argument for the linter being a worse tool by doing that? JOËL: You know, it's funny that you ask because now I can't remember, and it's been a little while since I've read the article. STEPHANIE: I'll have to revisit it after the show [laughs]. JOËL: Apparently, I didn't do the homework for this episode, but we'll definitely link to that article in the show notes. STEPHANIE: So, how do you approach either introducing a new rule to something like a linter or maybe reconsidering an existing rule? Like, how would you go about finding, like, consensus on that from your team? JOËL: That varies a lot by organizational culture, right? Some places will do it top-down, some of them will have a broader conversation and come to a consensus. And sometimes you just straight up don't get a choice. You're pulling in a tool like standard rb, and you're saying, "Look, we don't want to have a discussion about every little style thing, so whatever, you know, the community has agreed on for the standard rb linter is the style we're using. There are no discussions. Do what the linter tells you." STEPHANIE: Yeah, that's true. I think I have to adapt to whatever, you know, client culture is like when I join new projects. You know, sometimes I do see people being like, "Hey, I think it's kind of weird that we have this," or, "Hey, I've noticed, for example, oh, we're merging focused RSpec tests. Like, let's introduce a rule to make sure that that doesn't happen." I also think that a different approach is for those things not to be enforced at all by automation, but we, you know, there are still guidelines. I think the thoughtbot guides are an example of pretty opinionated guidelines around style and syntax. But I don't think that those kinds of things would, you know, ever be, like, enforced in a way that would be blocking. JOËL: Those are kind of hard because they're not as consistent as you would think, so it's not a rule you can apply every time. It's more of a, here's some things to maybe keep in mind. Or if you're writing code in this way, think about some of the edge cases that might happen, or don't default to writing it in this way because things might go wrong. Make sure you know what you're doing. I love the phrase, "Must be able to justify this," or sometimes, "Must convince your pair that this is okay." So, default to writing in style A, avoid style B unless you can have a compelling reason to do so and can articulate that on your PR or, you know, convince your pair that that's the right way to go. STEPHANIE: Interesting. It's kind of like the honor system, then [laughs]. JOËL: And I think that's sort of the general way when you're working with developers, right? There's a lot of areas where there is ambiguity. There is no single best way to do it. And so, you rely on people's expertise to build systems that work well. There are some things where you say, look, having conversations about these things is not useful. We want to have some amount of standardization or uniformity about certain things. Maybe there's invariance you want to hold. Maybe there's certain things we're, like, this should never get to production. Whenever you've got these, like, broad sweeping statements about things should be always true or never true, that's a great time to introduce something like a linting rule. When it's more up to personal judgment, and you just want to nudge that judgment one way or another, then maybe it's better to have something like a guide. STEPHANIE: Yeah, what I'm hearing is there is a bit of a spectrum. JOËL: For sure. From things that are always true to things that are, like, sometimes true. I think I'm sort of curious about the idea of going a level beyond that, though, beyond things like just code style or maybe even, like, invariance you want to hold or something, being able to make suggestions to developers based off the code that is written. So, now you're applying more like heuristics, but instead of asking a human to apply those heuristics at code review time and leave some comments, maybe there's a way to get automated feedback from a tool. STEPHANIE: Yeah, I think we had mentioned code analysis tools earlier because some teams and organizations include those as part of their CI builds, right? And, you know, even Brakeman, right? Like, that's an analysis tool for security. But I can't recall if I've seen an organization use things like Flog metrics which measure code complexity in things like that. How would you feel if that were a check that was blocking your work? JOËL: So, I've seen things like that be used if you're using, like, the Code Climate plugin for GitHub. And Code Climate internally does effectively flog and other things that are fancier on your code quality. And so, you can set a threshold to say, hey, if complexity gets higher than a certain amount, fail the build. You can also...if you're doing things via GitHub, what's nice is that you can do effectively non-blocking comments. So, instead of failing CI to say, "Hey, this method looks really complex. You cannot merge until you have made this method less complex," maybe the sort of, like, next step up in ambiguity is to just leave a comment on a PR from a tool and say, "Hey, this method here is looking really complex. Consider breaking it up." STEPHANIE: Yeah, there is a tool that I've seen but not used called Danger, and its tagline is, Stop saying, "You forgot to..." in code review [laughs]. And it basically does that, what you were saying, of, like, leaving probably a suggestion. I can imagine it's blocking, but a suggestive comment that just automates that rather than it being a manual process that humans have to remember or notice. JOËL: And there's a lot of things that could be specific to your organization or your architecture. So, you say, "Hey, you introduced a file here. Would you consider also making an entry to this presenter file so that it's editable on the admin?" And maybe that's a better place to handle that. Just a comment. But you wouldn't necessarily want every code reviewer to have to think about that. STEPHANIE: So, I do think that I am sometimes not necessarily suspicious, but I have also seen tools like that end up just getting in the way, and it just becomes something you ignore. It's something you end up always using the escape hatch for, or people just find ways around it because they're harming more than they're helping. Do you have any thoughts about how to kind of keep those things in check and make sure that the tools we introduce genuinely are kind of helping the organization do the right thing rather than kind of being these perhaps arbitrary blockers? JOËL: I'm going to throw a fancy phrase at you. STEPHANIE: Ooh, I'm ready. JOËL: Signal-to-noise ratio. STEPHANIE: Whoa, uh-huh. JOËL: So, how often is the feedback from your tool actually helpful, and how often is it just noise that you have to dismiss, or manually override, or things like that? At some point, the ratio becomes so much that you lose the signal in all the noise. And so, maybe you even, like, because you're always just ignoring the feedback from this tool, you accidentally start overriding things that would be genuinely helpful. And, at that point, you've got the worst of both worlds. So, sort of keeping track on what that ratio is, and there's not, like, a magic number. I'm not going to tell you, "Oh, this is an 80/20 principle. You need to have, you know, 80% of the time it's useful and only 20% of the time it's not useful." I don't have a number to give you, but keeping track on maybe, you know, is it more often than not useful? Is your team getting to the point where they're just ignoring feedback from this tool? And thinking in terms of that signal versus that noise, I think is useful—to go back to that word again, heuristic for managing whether a tool is still helpful. STEPHANIE: Yeah. And I would even go on to say that, you know, I always appreciate when people in leadership roles keep an eye on these things. And they're like, "Oh, I've been hearing that people are just totally numb to this tool [laughs]" or, you know, "There's no engagement on this. People are just ignoring those signals." Any developer impacted by this, it is valid to bring it up if you're getting frustrated by it or just finding yourself, you know, having all of these obstacles getting in the way of your development process. JOËL: Sometimes, this can be a symptom that you're mixing too many classes of problems together in one tool. So, maybe there are things that are, like, really dangerous to your product to go live with them. Maybe it's, you know, something like Brakeman where you're doing security checks, and you really, ideally, would not go to production with a failing security check. And then, you've got some random other style things in there, and you're just like, oh yeah, whatever, it's this tool because it's mostly style things but occasionally gives you a security problem. And because you ignore it all the time, now you accidentally go to production with a security problem. So, splitting that out and say, "Look, we've got blocking and unblocking because we recognize these two classes of problems can be a helpful solution to this problem." STEPHANIE: Joël, did you just apply an object-oriented design principle to an organizational system? [laughter] JOËL: I may be too much of a developer. STEPHANIE: Cool. Well, I really appreciate your input on this because, you know, I was just kind of mulling over, like, how I felt about these kinds of things that I encounter as a developer. And I am glad that we got to kind of talk about it. And I think it gives me a more expanded vocabulary to, you know, analyze or reflect when I encounter these things on different client organizations. JOËL: And every organization is different, right? Like, you've got to learn the culture, learn the different elements of that software. What are the things that are invariant? What are the things that are dangerous that we don't want to ship without? What are the things that we're doing just for consistency? What are things which are, like, these are culturally things that we'd like to do? There's all these levels, and it's a lot to pick up. STEPHANIE: Yeah. At the end of the day, I think what I really liked about the last thing you said was being able to identify the problem, like the class of problem, and applying the right tool for the right job. It helps me take a step back and perhaps even think of different solutions that we might not have thought about earlier because we had just gotten so used to the one way of enforcing or checking things like that. JOËL: On that note, 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: Byeeeeeee!!!!!! 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.
Joël discusses the challenges he encountered while optimizing slow SQL queries in a non-Rails application. Stephanie shares her experience with canary deploys in a Rails upgrade. Together, Stephanie and Joël address a listener's question about replacing the wkhtml2pdf tool, which is no longer maintained. The episode's main topic revolves around the concept of multidimensional numbers and their applications in software development. Joël introduces the idea of treating objects containing multiple numbers as single entities, using the example of 2D points in space to illustrate how custom classes can define mathematical operations like addition and subtraction for complex data types. They explore how this approach can simplify operations on data structures, such as inventories of T-shirt sizes, by treating them as mathematical objects. EXPLAIN ANALYZE visualizer (https://explain.dalibo.com/) Canary in a coal mine (https://en.wikipedia.org/wiki/Sentinel_species#Canaries) Episode 413: Developer Tales of Package Management (https://bikeshed.thoughtbot.com/413) Docs for media-specific CSS (https://developer.mozilla.org/en-US/docs/Web/CSS/@media) Episode 386: Value Objects Revisited: The Tally Edition (https://bikeshed.thoughtbot.com/386) Money gem (https://github.com/RubyMoney/money) 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: I've recently been trying to do some performance enhancements to some very slow queries. This isn't a Rails app, so we're sort of combining together a bunch of different scopes. And the way they're composing together is turning out to be really slow. And I've reached for a tool that is just really fun. It's a visualizer for SQL query plans. You can put the SQL keywords in front of a query: 'EXPLAIN ANALYZE,' and it will then output a query plan, sort of how it's going to attempt to do the work. And that might be like, oh, we're going to use this index on this table to join on this other thing, and then we're going to...maybe this is a table that we think we're going to do a sequential scan through and, you know, it builds out a whole thing. It's a big block of text, and it's kind of intimidating to look at. So, there are a few websites out there that will do this. You just paste a query plan in, and they will build you a nice, little visualization, almost like a tree of, like, tasks to be done. Oftentimes, they'll also annotate it with metadata that they pulled from the query plan. So, oh, this particular node is the really expensive one because we're doing a sequential scan of this table that has 15 million rows in it. And so, it's really useful to then sort of pinpoint what are the areas that you could optimize. STEPHANIE: Nice. I have known that you could do that EXPLAIN ANALYZE on a SQL query, but I've never had to do it before. Is this your first time, or is it just your first time using the visualizer? JOËL: I've played around with EXPLAIN ANALYZE a little bit before. Pro tip: In Rails, if you've got a scope, you can just chain dot explain on the end, and instead of running the query, it will run the EXPLAIN version of it and return the query plan. So, you don't need to, like, turn into SQL then manually run it in your database system to get the EXPLAIN. You can just tack a dot explain on there to get the query plan. It's still kind of intimidating, especially if you've got a really complex query that's...this thing might be 50 lines long of EXPLAIN with all this indentation and other stuff. So, putting it into a sort of online visualizer was really helpful for the work that I was doing. So, it was my first time using an online visualizer. There are a few out there. I'll link to the one that I used in the show notes. But I would do that again, would recommend. STEPHANIE: Nice. JOËL: So, Stephanie, what's new in your world? STEPHANIE: So, I actually just stepped away from being in the middle of doing a Rails upgrade [chuckles] and releasing it to production just a few minutes before getting on to record with you on this podcast. And the reason I was able to do that, you know, without feeling like I had to just monitor to see how it was going is because I'm on a project where the client is using canary deploys. And I was so pleasantly surprised by how easy it made this experience where we had decided to send the canary release earlier this morning. And the way that they have it set up is that the canary goes to 10% of traffic. 10% of the users were on Rails 7 for their sessions. And we saw a couple of errors in our error monitoring service. And we are like, "Okay, like, let's take a look at this, see what's going on." And it turns out it was not too big of a deal because it had to do with, like, a specific page. And, for the most part, if a user did encounter this error, they probably wouldn't again after refreshing because they had, like, a 90% chance [chuckles] of being directed to the previous version where everything is working. And we were kind of making that trade-off of like, oh, we could hotfix this right now on the canary release. But then, as we were starting to debug a little bit, it was a bit hairier than we expected originally. And so, you know, I said, "I have to hop on to go record The Bike Shed. So, why don't we just take this canary down just for the time being to take that time pressure off? And it's Friday, so we're heading into the weekend. And maybe we can revisit the issue with some fresh eyes." So, I'm feeling really good, actually. And I'm glad that we were able to do something that seems scary, but there were guardrails in place to make it a lot more chill. JOËL: Yay for the ability to roll back. You used the term canary release. That's not one that I'm familiar with. Can you explain what a canary release is? STEPHANIE: Oh yeah. Have you heard of the phrase 'Canary in the coal mine'? JOËL: I have. STEPHANIE: Okay. So, I believe it's the same idea where you are, in this case, releasing a potentially risky change, but you don't want to immediately make it available to, like, all of your users. And so, you send this change to, like, a small reach, I suppose, and give it a little bit of a test and see [chuckles] what comes back. And that can help inform you of any issues or risks that might happen before kind of committing to deploying a potentially risky change with a bigger impact. JOËL: Is this handled with something like a feature flag framework? Or is this, like, at an infrastructure level where you're just like, "Hey, we've got the canary image in, like, one container on one server, and then we'll redirect 10% of traffic to that to be served by that one and the other 90% to be served by the old container or something like that"? STEPHANIE: Yeah, in this case, it was at the infrastructure level. And I have also seen something similar at a feature flag level, too, where you're able to have some more granularity around what percent of users are seeing a feature. But I think with something like a Rails upgrade, it was nice to be able to have that at that infrastructure level. It's not necessarily, like, a particular page or feature to show or not show. JOËL: Yeah, I think you would probably want that at a higher level when you're changing over the entire app. Is this something that you had to custom-build yourself or something that just sort of came out of the box with some of the infrastructure tools you're using? STEPHANIE: It came out of the box, actually. I just joined this client project this week and was very delighted to see just some really great deployment infrastructure and getting to meet the DevOps engineers, too, who built it. And they're really proud of it. They kind of walked us through our first release earlier this week. And he was telling me, the DevOps engineer, that this was actually his favorite part of the job, is walking people through their first release and being their buddy while they do it. Because I think he gets to also see users interact with the tool that he built, and he had a lot of pride in that, so it was a very delightful experience. JOËL: That's so wonderful. I've been on so many projects where the sort of infrastructure side of things is not the team's strong point, and releasing can be really scary. And it's great to hear the opposite of that. We recently received a question for Stephanie based on an earlier episode. So, the question asks, "In episode 413, Stephanie discussed a recent issue she encountered with wkhtml2pdf. The episode turned into a deeper discussion about package management, but I don't think it ever cycled back to the conclusion. I'm curious: how did Stephanie solve this dilemma? We're facing the same issue on a project that my team maintains. It's an old codebase, and there are bits of old code that use wkhtml2pdf to generate print views of our data in our application. The situation is fairly dire. wkhtml2pdf is no longer maintained. In fact, it won't even be available to install from our operating system's package repositories in June. We're on FreeBSD, but I assume the same will be eventually true for other operating systems. And so, unless you want to maintain some build step to check out and compile the source code for an application that will no longer receive security updates, just living with it isn't really an option. There are three options we're considering. One, eliminate the dependency entirely. Based on user feedback, it sounds like our old developers were using this library to generate PDFs when what users really wanted was an easy way to print. So, instead of downloading a PDF, just ensure the screen has a good print style sheet and register an onload handler to call window dot print. We're thinking we could implement this as an A/B test to the feature to test this theory. Or two, replace wkhtml2pdf with a call to Headless Chrome and use that to generate the PDF. Or, three, replace wkhtml2pdf with a language-level package. For us, that might be the dompdf library available via Composer because we're a PHP shop." Yeah, a lot to unpack here. Any high-level thoughts, Stephanie? STEPHANIE: My first thought while I was listening to you read that question is that wkhtml2pdf is such a mouthful [laughs]. And I was impressed how you managed to say it at least, like, five times. JOËL: So, I try to say that five times fast. STEPHANIE: And then, my second high-level thought was, I'm so sorry to Brian, our listener who wrote in, because I did not really solve this dilemma [chuckles] for my project and team. I kind of kicked the can down the road, and that's because this was during a support and maintenance rotation that I've talked a little bit about before on the show. I was only working on this project for about a week. And what we thought was a small bug to figure out why PDFs were a little bit broken turned out, as you mentioned, to be this kind of big, dire dilemma where I did not feel like I had enough information to make a good call about what to do. So, I kind of just shared my findings that, like, hey, there is kind of a risk and hoping that someone else [laughs] would be able to make a better determination. But I really was struck by the options that you were considering because it was actually a bit of a similar situation to the bug I was sharing where the PDF that was being generated that was slightly broken. I don't think it was, like, super valuable to our users that it be in the form of a PDF. It really was just a way for them to print something to have on handy as a reference from, you know, some data that was generated from the app. So, yeah, based on what you're sharing, I feel really excited about the first one. Joël, I'm sure you have some opinions about this as well. JOËL: I love sort of the bigger picture thinking that Brian is doing here, sort of stepping back and being like, wait, why do we even need PDF here, and how are our customers using it? I think those are the really good questions to ask before sinking a ton of time into coming up with something that might be, like, a bit of a technical wonder. Like, hey, we managed to, like, do this PDF generation thing that we had to, like, cobble together so many other things. And it's so cool technically, but does it actually solve the underlying problem? So, shout out to Brian for thinking about it in those terms. I love that. Second cool thing that I wanted to shout out, because I think this is a feature of browsers that not many people are aware of; you can have multiple style sheets for your page, and you can tag them to be for different media. So, you can have a style sheet that only gets applied when you print versus when you display on screen. And there are a couple of others. I don't remember exactly what they are. I'll link to the docs in the show notes. But taking advantage of this, like, this is old technology but making that available and saying, "Yeah, we'll make it so that it's nice when you print, and we'll maybe even, you know, a link or a button with JavaScript so that you could just Command-P or Control-P to print. But we'll have a button in there as well that will allow you to print to PDF," and that solves your problem right there. STEPHANIE: Yeah, that's really cool. I didn't know that about being able to tag style sheets for different media types. That's really fascinating. And I like that, yeah, we're just eliminating this dependency on something, like, potentially really complex with a, hopefully, kind of elegant and modern solution, maybe. JOËL: And your browser is already able to do so many of these things. Why do we sort of try to recreate it? Printing is a thing browsers have been able to do for a long time. Printing to PDF is a thing that you can do for a long time. I will sometimes use that on sites where I need to, let's say I'm purchasing something, and I need some sort of receipt to expense, but they won't give me a download, a PDF download that I can send to the accounting team, so I will print to PDF the, like, HTML view. And that works just fine. It's kind of a workaround hack. Sometimes, it doesn't work well because the HTML page is just not well set up to, like, show up on a PDF page. You get some, like, weird, like, pagination issues or things like that. But, you know, just a little bit of thought for a print style sheet, especially for something you know that people are likely going to want to print or to save to PDF, that's a nice touch. STEPHANIE: Yeah. So, good luck, Brian, and let us know how this goes and any outcomes you find successful. So, for today's longer topic, I was excited because I saw, Joël, you dropped something in our topic backlog: Multidimensional Numbers. I'm curious what prompted this idea and what you wanted to say about it. JOËL: We did an episode a while back where we talked about value objects, wrapping numbers, wrapping collections. This is Episode 386, and we were talking about tallying, specifically working with collections of T-shirt sizes and doing math on these sort of objects that might contain multiple numbers. And a sort of sidebar from that that we didn't really get into is the idea that objects that contain sort of multiple numbers can be treated as a number themselves. And I think a great example of this is something like a point in two-dimensional space. It's got an x coordinate, a y coordinate. It's two numbers, but you can treat sort of the combination of the two of them together as a single number. There's a whole set of coordinate math that you can do to do things like add coordinates together, subtract them, find the distance between them. There's a whole field of vector math that we can do on those. And I think learning to recognize that numbers are not just instances of the integer or the float class but that there could be these more complex things that are also numbers is maybe an important realization and something that, as developers, if we think of these sort of more complex values as numbers, or at least mathematical objects, then that will help us write better code. STEPHANIE: Cool. Yeah. When you were first talking about 2D points, I was thinking about if I have experience working with that before or, like, having to build something really heavily based off of, like, a canvas or, you know, a coordinate system. And I couldn't think of any really good examples until I thought about, like, geographic locations. JOËL: Oh yeah, like a latitude, longitude. STEPHANIE: Yeah, exactly. Like, that is a lot more common, I think, for various types of just, like, production applications than 2D points if you're not working on, like, a video game or something like that, I think. JOËL: Right, right. I think you're much more likely to be working with 2D points on some more sort of front-end-heavy application. I was talking with someone this week about managing a seat map for concerts and events like that and sort of creating a seat map and have it be really interactive, and you can, like, click on seats and things like that. And depending on the level of libraries you're using to build that, you may have to do a lot of 2D math to make it all come together. STEPHANIE: Yeah. So, I would love to get into, you know, maybe we've realized, okay, we have some kind of compound number. What are some good reasons for using them differently than you would a primitive? JOËL: So, you mentioned primitives, and I think this is where maybe I'm developing a reputation about, like, always wanting value objects for everything. But it would be really easy, let's say, for an xy point to be just an array of two numbers or maybe even a hash with an x key and a y key. What's tricky about that is that then you don't have the ability to do math on them. Arrays do define the plus operator, but they don't do what you want them to do with points. It's the set union. So, adding two points would not at all do what you want, or subtracting two points. So, instead, if you have a custom 2D point class and you can define plus and minus on there to do the right thing, now they're not pairs of numbers, two values; they're a single value, and you can treat them as if they are just a single number. STEPHANIE: You mentioned that arrays don't do the right thing when you try to add them up. What is the right thing that you're thinking of then? JOËL: It probably depends a little bit on the type of object you're working with. So, with 2D points, you're probably trying to do vector addition where you're effectively saying almost, like, "Shift this point in 2D space by the amount of this other point." Or if you're doing a subtraction, you might even be asking, like, "What is the distance between these two points?" Euclidean distance, I think, is the technical term for this. There's also a couple of different ways you can multiply values. You can multiply a 2D point by just a sort of, not by another point, but by just an integer. That's called scaling. So, you're just like, oh, take this point in 2D space, but make it bigger, make it five times bigger or five times further from the origin. Or you can do some stuff with other points. But what you don't want to do is turn this into, if you're starting with arrays, you don't want to turn this into an array of four points. When you add two points in 2D space, you're not trying to create a point in 4D space. STEPHANIE: Whoa, I mean [laughs], maybe you're not. JOËL: You could but -- [laughter] STEPHANIE: Yeah. While you were saying that, I guess that is what is really cool about wrapping, encapsulating them in objects is that you get to decide what that means for you and your application, and -- JOËL: Yeah. Well, plus can mean different things, right? STEPHANIE: Yeah. JOËL: On arrays, plus means combining two arrays together. On integers, it means you do integer math. And on points, it might be vector addition. STEPHANIE: Are there any other arithmetic operators you can think of that would be useful to implement if you were trying to create some functionality on a point? JOËL: That's a good question because I think realizing the inverse of that is also a really powerful thing. Just because you create a sort of new mathematical object, a point in 2D space, doesn't mean that necessarily every arithmetic operator makes sense on it. Does it make sense to divide a point by another point? Maybe not. And so, instead of going with the mindset of, oh, a point is a mathematical object, I now need to implement all of arithmetic on this, instead, think in terms of your domain. What are the operations that make sense? What are the operations you need for this point? And, you know, maybe the answer is look up what are the common sort of vector math operations and implement those on your 2D point. Some of them will map to arithmetic operators like plus and minus, and then some of them might just be some sort of custom method where maybe you say, "Oh, I want the Euclidean distance between these two points." That's just a thing. Maybe it's just a named instance method on there. But yeah, don't feel like you need to implement all of the math operators because that's a mistake that I have made and then have ended up, like, implementing nonsensical things. STEPHANIE: [laughs] Creating your own math. JOËL: Yes, creating my own math. I've done this even on where I've done value objects to wrap single values. I was doing a class to represent currency, and I was like, well, clearly, you need, like, methods to, like, add or subtract your currency, and that's another thing. If you have, let's say, a plus method, now you can plug it into, let's say, reduce plus. And you can just sum a list of these currency objects and get back a new currency. It's not even going to give you back an integer. You just get a sort of new currency object that is the sum of all the other ones, and that's really nice. STEPHANIE: Yeah, that's really cool. It reminds me of all the magic of enumerable that you had talked about in a previous conference talk, where, you know, you just get so much out of implementing those basic operators that, like, kind of scales in handiness. JOËL: Yes. Turns out Ruby is actually a pretty nice system. If you have objects that respond to some common methods and you plug them into enumerable, and it just all kind of works. STEPHANIE: So, one thing you had said earlier that I've felt kind of excited about and wanted to highlight was you mentioned all the different ways that you could represent a 2D point with more primitive data stores, so, you know, an array of two integers, a hash with xy keys. It got me thinking about how, yeah, like, maybe if your system has to talk to another system and you're importing data or exporting data, it might eventually need to take those forms. But what is cool about having an encapsulated object in your application is you can kind of control those boundaries a little bit and have more confidence in terms of the data types that you're using within your system by having various ways to construct that, like, domain object, even if the data coming in is in a different shape. JOËL: And I think that you're hitting on one of the real beauties of object-oriented programming, where the sort of users of your object don't need to know about the internal representation. Maybe you store an array internally. Maybe it's two separate instance variables. Maybe it's something else entirely. But all that the users of your, let's say, 2D point object really need to care about is, hey, the constructor wants values in this shape, and then I can call these domain methods on it, and then the rest just sort of happens. It's an implementation detail. It doesn't matter. And you alluded, I think, to the idea that you can sort of create multiple constructors. You called them constructors. I tend to call them that as well. But they're really just class methods that will kind of, like, add some sugar on top of the constructor. So, you might have, like, a from array pair or from hash or something like that that allows you to maybe do a little bit of massaging of the data before you pass it into your constructor that might want some underlying form. And I think that's a pattern that's really nice. STEPHANIE: Yeah, I agree. JOËL: Something that can be interesting there, too, is that mathematically, there are multiple ways you can think of a 2D point. An xy coordinate pair is a common one, but another sort of system for representing a point in 2D space is called the polar coordinate system. So, you have some sort of, like, origin point. You're 0,0. And then, instead of saying so many to the left and so many up from that origin point, you give an angle and a distance, and that's where your point is. So, an angle and distance point, I think, you know, theta and magnitude are the fancy terms for this. You could, instead of creating a separate, like, oh, I have a polar coordinate point and a Cartesian coordinate point, and those are separate things, you can say, no, I just have a point in 2D space. They can be constructed from either an xy coordinate pair or a magnitude angle pair. Internally, maybe you convert one to the other for internal representation because it makes the math easier or whatever. Your users never need to know that. They just pass in the values that they want, use the constructor that is most convenient for them, and it might be both. Maybe some parts of the app require polar coordinates; some require Cartesian coordinates. You could even construct one of each, and now you can do math with each other because they're just instances of the same class. STEPHANIE: Whoa. Yeah, I was trying to think about transforming between the two types as well. It's all possible [laughs]. JOËL: Yes. Because you could have reader-type methods on your object that say, oh, for this point, give me its x coordinate; give me its y coordinate. Give me its distance from the origin. Give me its angle from the origin. And those are all questions you can ask that object, and it can calculate them. And you don't need to care what its internal representation is to be able to get all four of those. So, we've been talking about a lot of these sort of composite numbers, not composite numbers, that's a separate mathematical thing, but numbers that are composed of sort of multiple sub-numbers. And what about situations where you have two things, and one of them is not a number? I'm thinking of all sorts of units of measure. So, I don't just have three. I have three, maybe...and we were talking about currency earlier, so maybe three U.S. dollars. Or I don't just have five; I have five, you know, let's say, meters of distance. Would you consider something like that to be one of these compound number things? STEPHANIE: Right. I think I was–when we were originally talking about this, conflating the two. But I realized that, you know, just because we're adding context to a number and potentially packaging it as a value object, it's still different from what we're talking about today where, you know, there's multiple components to the number that are integral or required for it to mean what we intended to mean, if that makes sense. JOËL: Yeah. STEPHANIE: So yeah, I guess we did want to kind of make a distinction between value objects that while the additional context is important and you can implement a lot of different functionality based on what it represents, at the end of the day, it only kind of has one magnitude or, like, one integer to kind of encapsulate it represented as a number. Does that sound right? JOËL: Yeah. You did throw out the words encapsulation and value object. So, in a situation maybe where I have three US dollars, would you create some kind of custom object to wrap that? Or is that a situation where you'd be more comfortable using some kind of primitive? Like, I don't know, maybe an array pair of three and the symbol USD or something like that. STEPHANIE: Oh, I would definitely not do that [laughter]. Yeah. Like I, you know, for the most part, I think I've seen that as a currency object, and that expands the world of what we can do with it, converting into a lot of different other currencies. And yeah, just making sure those things don't get divorced from each other because that context is what gives it meaning. But when it comes to our compound numbers, it's like, without all of the components, it doesn't make sense, or it doesn't even represent the same, like, numerical value that we were trying to convey. JOËL: Right. You need both, or, you know, it could be more than two. It could be three, four, or five numbers together to mean something. You mentioned conversions, which I think is something that's also interesting because a lot of units of measure have sort of multiple ways of measuring, and you often want to convert between them. And maybe that's another case where encapsulation is really nice where, you know, maybe you have a distance object. And you have five meters, and you put that into your distance object, but then somebody wants it in feet somewhere else or in centimeters, or something like that. And it can just do all the conversion math safely inside that object, and the user doesn't have to worry about it. STEPHANIE: Right. This is maybe a bit of a tangent, but as a Canadian living in the U.S., I don't know [laughs] if you have any opinions about converting meters and feet. JOËL: The one I actually do the most often is converting Celsius to Fahrenheit and vice versa. You know, I've been here, what, 11 years now? I don't have a great intuition for Fahrenheit temperatures. So, I'm converting in my head just [laughs] on a daily basis. STEPHANIE: Yeah, that makes sense. Conversions: they're important. They help out our friends who [laughs] are on different systems of measurement. JOËL: There's a classic story that I love about unit conversions. I think it's one of the NASA Mars missions. STEPHANIE: Oh yeah. JOËL: You've heard of this one. It was trying to land on Mars, and it burned up in the atmosphere because two different teams had been building different components and used different unit systems, both according to spec for their own module. But then, when the modules try to talk to each other, they're sending over numbers in meters instead of feet or something like that. And it just caused [laughs] this, like, multi-year, multi-billion dollar project to just burn up. STEPHANIE: That's right. So, lesson of the day is don't do that. I can think of another example where there might be a little bit of misconceptions in terms of how to represent it. And I'm thinking about time and when that has been represented in multiple parts, such as in hours and, minutes and seconds. Do you have any initial impressions about a piece of data like that? JOËL: So, that's really interesting, right? Because, at first glance, it looks like, oh, it's, like, a triplet of hour, minute, seconds. It's sort of another one of these sort of compound numbers, and I guess you could implement it that way. But in reality, you're tracking a single quantity, the amount of time elapsed, and that can be represented with a single number. So, if you're representing, let's say, time of day, what would show up on your clock? That could be, depending on the resolution, number of, let's say, seconds since midnight, and that's a single counter. And then, you can do some math on it to get hours, minutes, seconds for a particular moment. But really, it's a single quantity, and we can do that with time. We can't do that with a 2D point. Like, it has to have two components. STEPHANIE: So, do you have a recommendation for what unit of time time would best be stored? I'm just thinking of all the times that I've had to do that millisecond, you know, that conversion of, you know, however many thousands of milliseconds in my head into something that actually means [laughs] something to me as a human being who measures time in hours and minutes. JOËL: My recommendation is absolutely go for a single number that you store in your, let's say, time of day object. It makes the math so much easier. You don't have to worry about, like, overflowing from one number into another when you're doing math or anything like that. And then the number that you count should be at the whatever the smallest resolution you care at. So, is there ever any time where you want to distinguish between two different milliseconds in time? Or maybe you're like, you know what? These are, like, we're tracking time of day for appointments. We don't care about the difference between two milliseconds. We don't need to track them independently. We don't even care about seconds. The most granular we ever care about things is by the minute. And so, maybe then your internal number that you track is a counter of minutes since midnight. But if you need more precision, you can go down to seconds or milliseconds or nanoseconds. But yeah, find what is the sort of the least resolution you want to get away with and then make that the unit of measure for a single counter in your object. And then encapsulate that so that nobody else needs to care that, internally, your time of day object is doing milliseconds because nobody wants to do that math. Just give me a nice, like, hours and minutes method on your object, and I will use that. I don't need to know internally what it's using. Please don't just pass around integers; wrap it in an object, especially because integers, there's enough times where you're doing seconds versus milliseconds. And when I just have an integer, I never know if the person storing this integer means seconds or milliseconds. So, I'm just like, oh, I'm going to pass to this, like, user object, a, like, time integer. And unless there's a comment or a constant, you know, that's named something duration in milliseconds or something like that, you know, or sometimes even, like, one year in milliseconds, or there's no way of knowing. STEPHANIE: Yeah. That makes a lot of sense. When you kind of choose a standard of a standard unit, it's, like, possible to make it easier [laughs]. JOËL: So, circling back to sort of the initial thing that sparked this conversation, the previous episode about T-shirt inventories, there we were dealing with what started off as, like, a hash of different T-shirt sizes and quantities of T-shirts that we had in that size, so small (five), medium (three), large (four). And then, we eventually turned that into a value object that represented...I think we called it a tally, but maybe we called it inventory. And this may be wrong, so tell me if I'm wrong here, I think we can kind of treat that as a number, as, like, one of these compound numbers. It's a sort of multidimensional number where you say, well, we have sort of three dimensions where we can have numbers that sort of increase and decrease independently. We can do math on these because we can take inventories or tallies and add and subtract them. And that's what we ended up having to do. We created a value object. We implemented plus and minus on it. There are rules for how the math works. I think this is a multidimensional number with the definition we're working on this show. Am I wrong here? STEPHANIE: I wouldn't say that you're wrong. I think I would have to think a little [laughs] more to say definitively that you're right. But I know that this example came from, you know, an application I was actually working on. And one of the main things that we had to do with these representations [laughs], I'm hesitant to call them a number, especially, but we had to compare these representations frequently because an inventory, for example, in a warehouse, wanting to make sure that it is equal to or there's enough of the inventory if someone was placing an order, which would also contain, like, a representation of T-shirt size inventory. And that was kind of where some of that math happened because, you know, maybe we don't want to let someone place an order if the inventory at the warehouse is smaller than their order, right? So, there is something really compelling about the comparison operations that we were doing that kind of is leaning me in the direction of, like, yeah, like, it makes sense to me to use this in a way that I would compare, like, quantities or numbers of something. JOËL: I think one thing that was really compelling to me, and that kind of blew my mind, was that we were trying to, like, figure out some things like, oh, we've got so many people with these size preferences, and we've got so many T-shirts across different warehouses. And we're summing them up and we're trying to say like, "How many do we need to purchase if there is a deficit?" And we can come up with effectively a formula for this. We're like, sum these numbers, when we're talking about just before we introduce sizes when it's just like, oh, people have T-shirts. They all get the count of people and a count of T-shirts in our warehouse, and we find, you know, the difference between that. And there's a few extra math operations we do. Then you introduce size, and you break it down by, oh, we've got so many of each. And now the whole thing gets really kind of messy and complicated. And you're doing these reduces and everything. When we start treating the tally of T-shirts as an object, and now it's a number that responds to plus and minus, all of a sudden, you can just plug those back into the original formula, and it all just works. The original formula doesn't care whether the numbers you're doing this formula on are simple integers or these sort of multidimensional numbers. And that blew my mind, and it was so cool. STEPHANIE: Yeah, that is really neat. And you get a lot of added benefits, too. I think the other important piece in the T-shirt size example was kind of tracking the state change, and that's so much easier when you have an object. There's just a lot more you can do with it. And even if, you know, you're not persisting every single version of the representation, you know, because sometimes you don't want to, sometimes you're really just kind of only holding it in memory to figure out if you need to, you know, do something else. But other times, you do want to persist it. And it just plugs in really well with, like, the rest of object-oriented programming [laughs] in terms of interacting with the rest of your business needs, I think, in your app. JOËL: Yeah, turns out objects, they're kind of nice. And you can do math with them. Who knew? Math is not just about integers. STEPHANIE: And 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!!!!!! 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.
Enjoy this interview with Logan Crumrine, a Crohn's disease warrior of more than 30 years, advocate, and writer. Logan was first diagnosed in 1990. For years he fluctuated between states of flares, semi-remission, clinical trials and surgeries, and then went into complete remission for over 15 years! But remission came to an end in 2012 and he spent the next few years fighting for his life and eventually filed for disability. Today, he's now in his second year of remission and living life to the fullest. Some of you will remember Logan as one of my repeat guests. He shared the first part of his story in episode 29 of this podcast in July 2019, and came back a year later in 2020 to talk about his experience and knowledge about going through the process of filing for disability. Today, he's back to update us on his journey and share what it's like to now live in remission. From the show: Stephanie: What kind of tips do you have for other people who are finding themselves newly in remission and still afraid to let go of the habits that they've held onto for so many years as their safety net? Logan: I think the best advice would be that you've kind of got to do your own walk in that. You've got to kind of let go of those things as you feel comfortable. I still carry supplies in my backpack, but I don't carry as many. I don't carry an extra change of clothes, so my backpack has gotten down to just some undergarments in there and some stuff to clean up if I need to. It's a much smaller kit, but again, I'm still learning. It's still automatic for me to put all that stuff on when I'm going out. And I think it's just, you just kind of have to challenge yourself and push yourself. It helps too that I have Leah with me, who's an incredible partner who reminds me, ‘hey, you know, you made this trip a couple of times without anything. Why don't you try it again?' Or I'll be able to share with her that I didn't even get ready like I normally do for a trip. And then it's kind of an epiphany almost to say, ‘oh wow, we don't need that stuff all the time anymore.' Stephanie: You've shared on social media a few times about struggling with Crohn's and depression. Can you talk about how you've coped through some of the hardest times and how has remission affected your overall mental health? Logan: I think remission has helped my mental health and has benefited it. I still struggle with depression and sometimes, some days, it's absolutely debilitating. Right now, my depression seems to be presenting itself with insomnia. So I can be tired at seven o'clock and think, okay, I'm going to head to bed around nine and then I'm up till two. So it seems to be presenting that way. I think being in a place with more sunlight has helped. Seasonal depression affected me really bad in Washington because where I lived in Washington, from about October to March, it's very dark and very gray. It's nice to be able to look out the window and see blue skies and sun, I'm trying to get back to exercising because that's so vital to mental health. Stephanie: You have shared on social media about your fitness journey and just getting to a place of better overall health, what were some of the baby steps or the ways that you started to get back into that as you were feeling better? Logan: I think that, and for the record, my hiking and walking come and go, like any kind of fitness thing, I do really good for a while and kind of back off for a little while. I think that one thing that I had to do is realize that I have to start with what I can do, even if it's five minutes of getting outside and taking a walk. I started when I was starting to get my health back. I was just literally doing laps around the cul-de-sac. And that's all I could do, just walk around the cul-de-sac very slow with a cane. It was very difficult for me to even get out and do anything. And now, I mean, where I was at the height that's kind of dropped off since we moved, but I'm trying to get back into it. I think I was doing three or four miles a day walking. I was lifting regularly because again, medications that you get on Crohn's and colitis, steroids, sometimes those things play havoc on your bones. Links from the show: Social Media www.instagram.com/logancrumrine Studies on steroids and blood sugar: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4515447/pdf/WJD-6-1073.pdf https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8394226/ What if the Monsters are Afraid of Me (Book) https://a.co/d/elzLPAW Previous episodes with Logan: https://www.podbean.com/ * * * * * Support the podcast ❤️ at https://www.crohnsfitnessfood.com Get your copy of Crohn's Fitness Food and My Rocky Road to Health, Shop my favorite products, Read my favorite books, Subscribe to the podcast, Send a little love/coffee
Engineering manager at Vox Media and author Nicole Zhu joins Stephanie on today's episode to discuss her writing practice. nicoledonut is a biweekly newsletter about the writing process and sustaining a creative life that features creative resources, occasional interviews with creative folks, short essays on writing and creativity, farm-to-table memes and TikToks, and features on what Nicole is currently writing, reading, and watching. 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. Kieran Culkin on learning about billionaires filming Succession (https://www.tiktok.com/@esquire/video/7215641441597410603?_r=1&_t=8bPK4Ingkf5) The Home Depot skeleton (https://twitter.com/jenni_tabler/status/1566266554240888832) Nicole Zhu's newsletter (https://nicoledonut.com/) The Making of a Manager by Julie Zhuo (https://www.juliezhuo.com/book/manager.html) Saving Time by Jenny Odell (https://www.penguinrandomhouse.com/books/672377/saving-time-by-jenny-odell/) 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. And today, I'm joined by my friend and special guest, Nicole Zhu. NICOLE: Hi, I'm so excited to be here. My name is Nicole, and I am an Engineering manager at Vox Media and a writer. STEPHANIE: Amazing, I'm so thrilled to have you here. So, Nicole, we usually kick off the show by sharing a little bit about what's new in our world. And I can take us away and let you know about my very exciting weekend activities of taking down our Halloween skeleton. And yes, I know that it's April, but I feel like I've been seeing the 12-foot Home Depot skeletons everywhere. And it's becoming a thing for people to leave up just their Halloween decorations and, just as the other holidays keep rolling on, changing it up so that their skeleton is wearing like bunny ears for Easter or a leprechaun hat for St. Patrick's Day. And we've been definitely on the weird skeleton in front of the house long past the Halloween train for a few years now. Our skeleton's name is Gary. And it's funny because he's like a science classroom skeleton, so not just plastic. He's actually quite heavy. NICOLE: He's got some meat to the bones. [laughs] STEPHANIE: Yeah, yeah, and physiologically correct. But we like to keep him out till spring because we got to put him away at some point so that people are excited again when he comes back out in October. And the kids on our block really love him. And yeah, that's what I did this weekend. [laughs] NICOLE: I love it. I would love to meet Gary one day. Sounds very exciting. [laughs] I do get why you'd want to dress up the skeleton, especially if it's 12 feet tall because it's a lot of work to put up and take down for just one month, but that's fascinating. For me, something new in my world is the return of "Succession," the TV show. STEPHANIE: Oh yes. NICOLE: I did not watch yesterday's episode, so I'm already spoiled, but that's okay. But I've been getting a lot of Succession TikToks, and I've been learning a lot about the making of the show and the lives of the uber-rich. And in this one interview with Kieran Culkin, the interviewer asked him, "What's something that you learned in shooting the show about the uber-rich about billionaires that's maybe weird or unexpected?" And Kieran Culkin says that the uber-rich don't have coats because they're just shuttled everywhere in private jets and cars. They're not running to the grocery store, taking the subway, so they don't really wear coats, which I thought was fascinating. It makes a lot of sense. And then there was this really interesting clip too that was talking about the cinematography of the show. And what is really interesting about it is that it resists the wealth porn kind of lens because it's filmed in this mockumentary style that doesn't linger or have sweeping gestures of how majestic these beautiful cities and buildings and apartments they're in. Everything just seems very matter of fact because that is just the backdrop to their lives, which I think is so interesting how, yeah, I don't know, where I was like, I didn't ever really notice it. And now I can't stop seeing it when I watch the show where it's about miserable, rich people. And so I like that the visual language of the show reflects it too. STEPHANIE: Wow, yeah, that makes a lot of sense. The coat thing really gets me because I'm just imagining if I could be perfectly climate controlled all the time. [laughs] NICOLE: Right? Oh my gosh, especially you're based in Chicago [laughs], that is when you can retire the winter coat. That is always an important phase. STEPHANIE: Yeah, seriously. I also am thinking now about just like the montages of showing a place, just movies or shows filmed in New York City or whatever, and it's such...so you know it's like the big city, right? NICOLE: Mmm-hmm, mm-hmm. STEPHANIE: And all of that setup. And it's really interesting to hear that stylistically, that is also different for a show like this where they're trying to convey a certain message. NICOLE: Yeah, yeah, definitely. STEPHANIE: So I'm really excited to have you on The Bike Shed because I have known you for a few years. And you write this really amazing newsletter called "nicoledonut" about your writing practice. And it's a newsletter that I open every other week when you send out a dispatch. And last year at RubyConf, they had a conference track called Bringing Your Backgrounds With You. And there were talks that people gave about how the hobbies that they did outside of work or an identity that they held made them a better developer, like, affected how they showed up at work in a positive way. And as someone who has always been really impressed by the thoughtfulness that you apply to your writing practice, I was really curious about how that shows up for you as an engineering manager. NICOLE: Definitely a great question. And to provide a bit of context for listeners, I feel like I have to explain the newsletter title because it's odd. But there's a writer who I really love named Jenny Zhang, and her handle across the Internet is jennybagel. And so I was like, oh, that would be so funny. I should be nicoledonut. I do love donuts. My Neopets username was donutfiend, so it was -- STEPHANIE: Hell yeah. NICOLE: But anyway, so that was kind of...I was like, I need to come up with some fun title for this newsletter, and that is what I settled on. But yes, I've written personal essays and creative nonfiction. And my primary focus more recently these past few years has been fiction. And this newsletter was really kind of born out of a desire to learn in the open, provide resources, act as kind of a journal, and just process ideas about writing and what it means to kind of sustain a creative life. So it has definitely made me more reflective and proactively, like you said, kind of think about what that means in terms of how that transfers into my day job in engineering. I recently moved into management a little over a year ago, and before that, I was a senior full-stack engineer working on a lot of our audience experiences and websites and, previously, more of our editorial tools. So I think when it comes to obviously writing code and being more of an individual contributor, I think you had previously kind of touched on what does it mean to treat code as a craft? And I do think that there are a lot of similarities between those two things because I think there's creativity in engineering, of course. You have to think about going from something abstract to something concrete. In engineering, you're given generally, or you're defining kind of requirements and features and functionality. You may be make an engineering plan or something like that, an EDD, given those constraints. And then I think writing is very similar. You outline, and then you have to actually write the thing and then revise. I do think writing is not necessarily as collaborative as coding is, perhaps, but still similar overall in terms of an author having a vision, dealing with different constraints, if that's word count, if it's form or structure, if it's point of view, things like that. And that all determines what the outcome will be. You always learn something in the execution, the idea that planning can only take you so far. And at a certain point, you gather as much background knowledge and information and talk to as many people. Depending on the kinds of writing I do, I have or haven't done as much research. But at a certain point, the research becomes procrastination, and I know I need to actually just start writing. And similarly, with engineering, I think that's the piece is that once you actually start implementation, you start to uncover roadblocks. You uncover questions or complications or things like that. And so I think that's always the exciting part is you can't really always know the road ahead of you until you start the journey. And I also think that in order to benefit from mentorship and feedback...we can talk more about this. I know that that's something that is kind of a larger topic. And then another thing I think where the two are really similar is there's this endless learning that goes with each of them. I guess that's true of, I think, most crafts. Good practitioners of the craft, I think, take on that mindset. But I do think that obviously, in engineering, you have industry changes, new technologies emerging really frequently. But I do think that good writers think about that, too, in terms of what new novels are coming out. But also, how do you build a solid foundation? And I do think it's that contrast that applies in any craft is, you know, you want to have a good solid foundation and learn the basics but then keep up to date with new things as well. So I think there was this...there's this meme I actually did include in the newsletter that was...it's the meme of these two guys looking at different windows of a bus, and one looks really sad, and one looks really happy. But the two of them have the same caption, which is there's always more to learn. And so I think that is the two sides of the coin [laughs]. I think that is relevant in engineering and writing that I've kind of brought to both of those practices is trying to be optimistic [laughs] about the idea that there's always more to learn that that's kind of the thought of it. And then certainly, when it comes to management, I do think that writing has proven really valuable in that very obvious sense of kind of practical communication where I just write a lot more. I write a lot more things that are not code, I should say, as a manager. And communication is really at the forefront of my job, and so is demonstrating curiosity and building empathy, fostering relationships with people. And I do think that particularly writing fiction you have to be curious about people I think to be a writer. And I think that is true of managers as well. So I do think that has been a really interesting way that I didn't anticipate writing showing up in my day job but has been a really helpful thing and has made my work stronger and think about the people, the process, and kind of what we do and why a little differently. STEPHANIE: Yeah, absolutely. Wow, you got into a lot of different things I'm excited to keep discussing further. But one thing that I was thinking about as you were talking was, have you heard of the adage, I guess, that code is read many more times than it's written? NICOLE: Hmm, I think I have, yeah. STEPHANIE: I was thinking about that as you were talking because, in some ways, in most ways, actually, if you ascribe to that adage, I suppose, we write code for others to read. And I think there's an aspect of code telling a story that is really interesting. I've heard a lot of people advocate for writing, thoughtbot included, writing your tests like they're telling a story. And so when a future developer is trying to understand what's going on, they can read the tests, understand the setup, read what is being tested, and then read what the expected outcome is and have a complete picture of what's going on. The same goes for commit messages. You are writing little bits of documentation for people in the future. And I've also been thinking about how legacy code is just this artifact as well of all of the changes that an organization might have gone through. And so when you see something that you see a bit of code that is really weird or gets your spidey senses tingling, it's almost like, oh, I wonder what happened here that led to this piece left behind? NICOLE: Yeah, definitely. Now that you're talking about it, I also think of pull requests as a great way to employ storytelling. I remember there definitely have been times where myself or other engineers are working on a really thorny problem, and we always joke that the PR description is longer than the change. And it's like, but you got to read the PR description in order to understand what change you're making and why. And here's the backstory, the context to kind of center people in that. As a manager, I think about storytelling a lot in terms of defining purpose and providing clarity for teams. I was reading Julie Zhuo's "The Making of a Manager," and it was a really kind of foundational text for me when I first was exploring management. And she kind of boils it down to people, purpose, and process. And so I do think the purpose part of that is really tied to clear communication. And can you tell a story of what we're doing from really high-level vision and then more tactically strategy? And then making sure that people have bought into that, they understand, can kind of repeat that without you being there to remind them necessarily. Because you really want that message to carry through in the work and that they have that understanding. Vision is something I only recently have really started to realize how difficult it is to articulate. It's like you don't really understand the purpose of vision until you maybe don't have one, or you've been kind of just trying to keep your head afloat, and you don't have a Northstar to work towards. But I do think that is what plays into motivation, and team health, and, obviously, quality of the product. So yeah, that's kind of another dimension I've been thinking of. And also our foes actually. Sorry, another one. Our foes, I think, like outages and incidents. I think that's always a fun opportunity to talk about stories. There was a period of time where every time we had an incident, you had to present that incident and a recap of it in an engineering all-hands every month. And they ended up being really fun. We turned something that is ostensibly very stressful into something that was very entertaining that people could really get on board with and would learn something from. And we had the funniest one; I think was...we called it the Thanks Obama Outage because there was an outage that was caused by a photo of Barack Obama that had been uploaded in our content management system, as required no less, that had some malformed metadata or something that just broke everything. And so, again, it was a really difficult issue [laughs] and a long outage. And that was the result that I remember that presentation being really fun. And again, kind of like mythmaking in a way where that is something that we remember. We pay attention to that part of the codebase a lot now. It's taught us a lot. So yeah, I do think storytelling isn't always necessarily the super serious thing, but it can also just be team building, and morale, and culture as well. STEPHANIE: Yeah, absolutely. I think what you said about vision really resonates with me because if you don't have the vision, then you're also not making the best decisions you can be making even something as low-level as how you write the code. Because if you don't know are we going to be changing this feature a month from now, that might dictate how you go forth with implementation as opposed to if you know that it's not in the company's vision to really be doing anything else with this particular feature. And you then might feel a little more comfortable with a more rudimentary approach, right? NICOLE: Yeah, totally. Whether or not it's, we've over-optimized or not or kind of optimized for speed. Like, it's all about trade-offs. And I do think, again, like you said, having a vision that always you can check your decision-making against and inform the path ahead I think is very, very helpful. STEPHANIE: When you write, do you also keep that in mind? Like, do you write with that North Star? And is that really important to your process? NICOLE: I think it depends. I think that writing can be a little more at a slant, I suppose, is how I think of it because I don't always...just similar to work, I don't always come in with a fully-fledged fleshed-out vision of what I want a piece to be. The most recent piece I've been working on actually I did have kind of a pretty, I think, solid foundation. I've been working on this story about loneliness. And I knew that I wanted to base the structure on the UCLA...a UCLA clinic has this questionnaire that's 20 items long that is about measuring loneliness on a scale. And so I was like, okay, I knew that I wanted to examine dimensions of loneliness, and that would be the structure. It would be 20 questions, and it would be in that format. So that gave me a lot more to start with of, you know, here's where I want the piece to go. Here's what I want it to do. And then there have definitely been other cases where it's more that the conceit seems interesting; a character comes to mind. I overhear a conversation on the subway, and I think it's funny, and that becomes the first thing that is put on the page. So I definitely have different entry points, I think, into a draft. But I will definitely say that revision is the phase where that always gets clarified. And it has to, I think, because as much as I'm sometimes just writing for vibes, it's not always like that. And I do think that the purpose of revision is to clarify your goals so you can then really look at the piece and be like, is it doing what I want it to? Where is it lacking? Where's it really strong? Where's the pacing falling flat? And things like that. So I do think that sooner or later, that clarity comes, and that vision comes into focus. But it isn't always the first thing that happens, I think, because I do think the creative process is a little bit more mysterious, shall we say, than working on an engineering team. [laughs] STEPHANIE: Yeah. Well, you started off responding to my question with it depends, which is a very engineering answer, but I suppose -- NICOLE: That is true. That is true. You got me. [laughs] STEPHANIE: It applies to both. MID-ROLL AD: Debugging errors can be a developer's worst nightmare...but it doesn't have to be. 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NICOLE: When it comes to receiving feedback, I think I wrote a two-part series of my newsletter, one that was about providing feedback, one that was about receiving it. I think on the side of receiving feedback, first and foremost, I think it's important to know when you're ready to share your work and know that you can share multiple times. In writing, that can be I show a very early draft to my partner who is the person who kind of reads everything and anything at any stage. It's something less polished, and I'm really just testing ideas. But then obviously, if there's something that is more polished, that is something I would want to bring to a writing group, bring into a workshop, things like that. Similarly, as engineers, I think...thank God for GitHub drafts actually adopting literally the way in which I think of that, right? STEPHANIE: Yeah. NICOLE: You can share a branch or a GitHub PR in progress and just check the approach. I've done that so many times, and really that helped so much with my own learning and learning from mentors in my own organization was checking in early and trying to gut-check my work earlier as opposed to later. Because then you feel, I think, again, a bit more naturally receptive because you're already in that questioning phase. You're not like, oh, this is polished, and I've written all the tests, and the PR description is done. And now you want me to go back and change the whole approach from the ground up. That can feel tough. I get that. And so I think, hand in hand, what goes with that is whose feedback are you interested in? Is that a peer? Is it a mentor? I think obviously leaning on your own team, on senior engineers, I do think that is one of the primary, I think, expectations of a senior engineer is kind of multiplying the effectiveness of their peers and helping them learn and grow. So I do think that that's a really valuable skill to develop on that end, but also, again, just approaching people. And obviously, different teams have different processes for that, if it's daily stand-ups, if it's GitHub reminders, automated messages that get pulled up in your channel, things like that. But there are ways to build that into your day-to-day, which I think is really beneficial too. And then there's also the phase of priming yourself to receive the feedback. And I think there's actually a lot of emotional work that I don't think we talk about when it comes to that. Because receiving feedback can always be vulnerable, and it can bring up unexpected emotions. And I think learning how to regulate the emotional response to that is really valuable for us as people but obviously within the workplace too. So I've found it really helpful to reflect if I'm getting feedback that...well, first of all, it depends on the format. So I think some people prefer verbal feedback, some people will prefer written. I think getting it in the form of written feedback can be helpful because it provides you some distance. You don't have to respond in the moment. And so I've definitely had cases where I then kind of want to reflect on why certain suggestions might elicit certain reactions if I have a fight or flight response, if I'm feeling ashamed or frustrated, or indignant, all the range of emotions. Emotions are, to put the engineering hat on, are information. And so I think listening to that, not letting it rule you per se but letting it inform and help you figure out what is this telling me and how do I then respond, or what should I do next? Is really valuable. Because sometimes it's not, again, actually the feedback; maybe it's more about that, oh, it's a really radical idea. Maybe it's a really...it's an approach I didn't even consider, and it would take a lot of work. But again, maybe if I sit and think about it, it is the scalable approach. It's the cleaner approach, things like that. Or are they just touching on something that I maybe haven't thought as deeply about? And so I think there is that piece too. Is it the delivery? Is it something about your context or history with the person giving the feedback too? I think all of those, the relationship building, the trust on a team, all plays into feedback. And obviously, we can create better conditions for exchanging and receiving feedback. But I do think there's still that companion piece that is also just about, again, fostering team trust and culture overall because that is the thing that makes these conversations all the easier and less, I think, potentially fraught or high pressure. STEPHANIE: 100%. Listeners can't see, but I was nodding very aggressively [laughs] this entire time. NICOLE: Loved it. STEPHANIE: And I love that you bring up interpersonal relationships, team culture, and feelings. Listeners of the show will know that I love talking about feelings. But I wanted to ask you this exact question because I think code review can be so fraught. And I've seen it be a source of conflict and tension. And I personally have always wanted more tools for giving better feedback. Because when I do give feedback, it's for the person to feel supported to help push their work to be better and for us to do good work as a team. And I am really sensitive to the way that I give feedback because I know what it's like to receive feedback that doesn't land well. And when you were talking about investigating what kinds of feelings come up when you do receive a certain kind of comment on a code review or something, that was really interesting to me. Because I definitely know what it's like to have worked really, really hard on a pull request and for it to feel very precious to me and then to receive a lot of change requests or whatever. It can be really disappointing or really frustrating or whatever. And yeah, I wish that we, as an industry, could talk about this stuff more frequently. NICOLE: Yeah, for sure. And I do think that you know, I think the longer you work with someone, ideally, again, the stronger relationship you form. You find your own ways of communicating that work for you. I think actually what I've learned in management is, yes, I have a communication style, but I also am flexible with how I work with each of my reports, who, again, have very different working styles, communication styles, learning styles. I don't believe that the manager sets the standards. I think there is a balance there of meeting people where they are and giving them what they need while obviously maintaining your own values and practices. But yeah, certainly, again, I think that's why for perhaps more junior engineers, they might need more examples. They might not respond well to as terse a comment. But certainly, with engineers, senior engineers that I've worked with, when I was starting out, the more we developed a relationship, they could just get a little bit more terse. For example, they could be like, "Fix this, fix that," and I would not take it personally because we had already gone through the phase where they were providing maybe some more detailed feedback, links to other examples or gists, or things like that, and our communication styles evolved. And so I do think that's another thing to think about as well is that it doesn't have to be static. I think that's the value of a team, and having good team process, too, is ideally having arenas in which you can talk about how these kinds of things are going. Are we happy with the cadence? Are we happy with how people are treating each other and things like that? Are we getting timely feedback and things like that? That's a good opportunity for a retrospective and to talk about that in a kind of blameless context and approach that more holistically. So I do think that, yeah, feedback can be very fraught. And I think what can be difficult in the world of engineering is that it can be very easy to then just be like, well, this is just the best way for the work. And feelings are, like you said, not really kind of considered. And, again, software development and engineering is a team sport. And so I do think fostering the environment in which everyone can be doing great work is really the imperative. STEPHANIE: Yeah, I really like how you talked about the dynamic nature of relationships on a team and that the communication style can change there when you have built that trust and you understand where another person is coming from. I was also thinking about the question of whose feedback are you interested in? And I certainly can remember times where I requested a review from someone in particular because maybe they had more context about this particular thing I was working on, and I wanted to make sure that I didn't miss anything, or someone else who maybe I had something to learn from them. And that is one way of making feedback work for me and being set up to receive it well. Because as much as...like you said, it's really easy to fall back into the argument of like, oh, what's the best way for the work, or what is the cleanest code or whatever? I am still a person who wrote it. I produced a piece of work and have feelings about it. And so I have really enjoyed just learning more about how I react to feedback and trying to mitigate the stress that I feel in what is kind of inherently like a conflict-generating process. NICOLE: Yeah, yeah, definitely. Another thing that kind of popped into my head to one of the earlier questions we were talking about is in terms of similarities between writing and engineering, style and structure are both really, really important. And even though in engineering, like you said, sometimes it can be, I mean, there is a point with engineering where you're like, this line of code works, or it doesn't. There is a degree of correctness [laughs] that you do have to meet, obviously. But again, after that, it can be personal preference. It's why we have linters that have certain styles or things like that to try to eliminate some of these more divisive, shall we say, potentially discussions around, [laughs] God forbid, tabs or spaces, naming conventions, all this stuff. But certainly, yeah, when it comes to structuring code, the style, or whatever else, like you said, there's a human lens to that. And so I think making sure that we are accounting for that in the process is really important, and not just whether or not the work gets done but also how the work gets done is really important. Because it predicts what do future projects...what does future collaboration look like? And again, you're not just ever optimizing for one thing in one point of time. You're always...you're building teams. You're building products. So there's a long kind of lifecycle to think about. STEPHANIE: For sure. So after you get feedback and after you go through the revision process, I'm curious what you think about the idea of what is good enough in the context of your writing. And then also, if that has influenced when you think a feature is done or the code is as good as you want it to be. NICOLE: Yeah, definitely. I think when it comes to my writing, how I think about what is good enough I think there is the kind of sentiment common in the writer community that you can edit yourself to death. You can revise forever if you wanted to. It's also kind of why I don't like to go back and read things I've already published because I'm always going to find something, you know, an errant comma or like, oh, man, I wish I had rephrased this here. But I do think that, for me, I think about a couple of questions that help me get a sense of is this in a good place to, you know, for me generally, it's just to start submitting to places for publication. So one of those is, has someone else read it? That is always a really big question, whether it's a trusted reader, if I brought it to a workshop, or just my writing group, making sure I have a set of outside eyes, fresh eyes on the piece to give their reaction. And again, truly as a reader, sometimes just as a reader, not even as a fellow writer, because I do think different audiences will take different things and provide different types of feedback. Another one is what kinds of changes am I making at this point in time? Am I still making really big structural edits? Or am I just kind of pushing words and commas around, and it feels like rearranging deck chairs on the Titanic? They're not massive changes to the piece. And then the final question is always, if this were published in its current state right now, would I be happy with it? Would I be proud of it? And that's a very gut feeling that I think only an individual can kind of feel for themselves. And sometimes it's like, no, I don't like the way, like, I know it's 95% there, but I don't like the way this ends or something else. Again, those are all useful signals for me about whether a piece is complete or ready for submission or anything like that. I think when it comes to engineering, I think there's a little bit less of the gut feeling, to be honest, because we have standards. We have processes in place generally on teams where it's like, is the feature working? Have you written tests? Have you written a QA plan if it needs one? If it's something that needs more extensive documentation or code comments or something like that, is that something you've done? Has a bit more of a clear runway for me in terms of figuring out when something is ready to be shown to others. But certainly, as a manager, I've written a lot more types of documents I suppose, or types of communication where it's like organizational changes. I've written team announcements. I've written celebration posts. I've had to deliver bad news. Like, those are all things that you don't think about necessarily. But I've definitely had literally, you know, I have Google Docs of drafts of like, I need to draft the Slack message. And even though it's just a Slack message, I will spend time trying to make sure I've credited all the right people, or provided all the context, got all the right answers. I run it by my director, my peers, and things like that if it's relevant. And again, I think there is still that piece that comes in of drafting, getting feedback, revising, and then feeling like, okay, have I done my due diligence here, and is it ready? That cycle is applicable in many, many situations. But yeah, I certainly think for direct IC work, it's probably a little bit more well-defined than some of the other processes. STEPHANIE: Yeah, that makes sense. I really liked what you said about noticing the difference between making big structural changes and little word adjustments. I think you called it pushing commas around or something like that. NICOLE: [laughs] Yeah. STEPHANIE: I love that. Because I do think that with programming, there is definitely a big part of it that's just going on the journey and exploring different avenues. And so if you do suddenly think of, oh, I just thought of a completely different way to write this code, that is worth exploring even if you just end up going back to the original implementation. But at least you saw that thought through, and you're like, okay, this doesn't work because of X, Y, and Z, and I'm choosing to go this other route instead. And I think that, yeah, that is just a good practice to explore. NICOLE: Another example of storytelling, too, where it's like, you can tell the story in the PR description or whatever, in stand-up, to be like, I also did go down this path, XYZ reason. Here's why it didn't work out, and here's what we're optimizing for. And there you go. So I do think we talk...I guess product managers think more about buy-in, but I think that's true of engineers too. It's like, how do you build consensus and provide context? And so yeah, I think what you were saying, too, even if the path is circuitous or you're exploring other avenues, talking to other people, and just exploring what's out there, it all adds up to kind of the final decision and might provide, again, some useful information for other people to understand how you arrived there and get on board with it. STEPHANIE: 100%. I remember when I worked with someone who we were writing a PR description together because we had paired on some code. And we had tried three different things. And he wrote paragraphs for each thing that we tried. And I was like, wow, I don't know if I would have done that on my own. But I just learned the value of doing that to, like you said, prime yourself for feedback as well, being like, I did try this, and this is what I thought. And other people can disagree with you, but then at least they have the information, right? NICOLE: Definitely. STEPHANIE: So before we wrap up, the last thing that I wanted to talk about, because I think it's super cool, is just how you have a totally separate hobby and skill and practice that you invest time and energy into that's not programming. And it's so refreshing for me to see you do that because I think, obviously, there's this false idea that programmers just code all the time in their free time, in their spare time, whatever. And I'm really curious about how writing fits into your life as something separate from your day job. NICOLE: Yes, I've been thinking about this a ton. I think a lot of people, the last couple of years has forced a really big reckoning about work and life and how much we're giving to work, the boundaries that can be blurred, how capitalism butts its head into hobbies, and how we monetize them, or everything is a side hustle. And, oh, you should have a page running...oh, you should charge for a newsletter. And I think there's obviously the side of we should value our labor, but also, I don't want everything in my life to be labor. [laughs] So I do think that is interesting. Writing to me, I actually do not see it as a hobby. I see it as another career of mine. I feel like I have two careers, but I have one job, [laughs] if that makes sense. I certainly have hobbies. But for me, what distinguishes that from my writing is that with hobbies, there's no expectation that you want to get better. You approach it with just...it's just pure enjoyment. And certainly, writing has part of that for me, but I have aspirations to publish. I love it when my work can reach readers and things like that. But I do think that regardless having other interests, like you said, outside engineering, outside technology, it's a great break. And I do think also in technology, in particular, I notice...I think we're getting away from it, but certainly, there's an expectation, like you said, that you will have side projects that you code in your free time, that you're on Hacker News. I think there is a little bit of that vibe in the tech industry that I don't see in other industries. You don't expect a teacher to want to teach in their free time, [laughs] you know what I mean? But we have almost that kind of implicit expectation of engineers to always be staying up to date on those things. I think with writing and engineering; the two complement each other in some interesting ways. And they make me appreciate things about the other craft or practice that I may not previously have. And I think that with engineering, it is a team effort. It's really collaborative, and I really love working in that space. But on the flip side, too, with writing, I do love, you know, there's the ego part of it. You don't have individual authorship over code necessarily unless it's git blame level. But there's a reason why it's called git blame, [laughter] even the word is like git blame. I've literally had cases where I'm like, oh, this thing is broken. Who wrote this? And then I was like, oh, surprise, it was you six years ago. But I do think with writing; it's an opportunity for me to really just explore and ask questions, and things don't have to be solved. It can just be play. And it is a place where I feel like everything that I accomplish is...obviously, I have people in my life who really support me, but it is a much more individual activity. So it is kind of the right-left brain piece. But I've been reading this book called "Saving Time." It is what my microphone is currently propped on. But it's by Jenny Odell, who wrote: "How to Do Nothing." It's breaking my brain in a really, really, really good way. It talks a lot about the origin of productivity, how we think about time, and how it is so tied to colonialism, and racism, and capitalism, and neoliberalism, all these things. I think it has been really interesting. And so thinking about boundaries between work and writing has been really, really helpful because I really love my job; I'm not only my job. And so I think having that clarity and then being like, well, what does that mean in terms of how I divide my time, how I set examples for others at work in terms of taking time off or leaving the office on time? And trying to make sure that I have a good emotional headspace so that I can transition to writing after work; all those things. I think it is really interesting. And that also, ultimately, it's we're not just our productivity either. And I think writing can be very, again, inherently kind of unproductive. People joke that cleaning is writing, doing the dishes is writing, taking a walk is writing, showering is writing, but it is true. I think that the art doesn't talk about efficiency. You can't, I think, make art always more efficient in the same way you can do with engineering. We don't have those same kinds of conversations. And I really like having that kind of distinction. Not that I don't like problem-solving with constraints and trade-offs and things like that, but I also really like that meandering quality of art and writing. So yeah, I've been thinking a lot more about collective time management, I guess, and what that means in terms of work, writing, and then yeah, hobbies and personal life. There are never enough hours in the day. But as this book is teaching me, again, maybe it's more about paradigm shifting and also collective policies we can be putting in place to help make that feeling go away. STEPHANIE: For sure. Thank you for that distinction between hobby and career. I really liked that because it's a very generative mindset. It's like a both...and... rather than an either...or... And yeah, I completely agree with you wanting to make your life expansive, like, have all of the things. I'm also a big fan of Jenny Odell. I plugged "How to Do Nothing" on another episode. I am excited to read her second book as well. NICOLE: I think you'll like it a lot. It's really excellent. She does such interesting things talking about ecology and geology and geographic time skills, which is really interesting that I don't know; it's nice to be reminded that we are small. [laughter] It's a book that kind of reminds you of your mortality in a good way, if that makes sense. But much like Gary on your porch reminds you of mortality too [laughs] and that you have to put Gary away for a little bit so that his time can come in October. [laughs] STEPHANIE: Exactly, exactly. Cool. On that note, let's wrap up. Thank you so much for being on the show, Nicole. NICOLE: Thank you so much for having me. This was a blast. 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.
What you'll learn in this episode: Why Google's search results page is more important than your website homepage Why the most successful law firms are involved in their marketing, even when they hire an outside agency How a firm's intake process can make or break their SEO efforts Why content marketing today is about quality, not quantity Why consistent Google reviews are the key to ranking higher About Stephanie Chew: Stephanie Manor Chew is award-winning law firm analyst andDirector of Sales and Head of the Elite Sales Team at Digital Law Marketing. For the last 16 years, she has been helping clients build credibility and increase their visibility online through the full lifecycle of digital initiatives. From custom search engine marketing and social media positioning, to targeted content and online reputation management, she makes sure that DLM clients get what they need, when they need it. Additional Resources: Digital Law Marketing Website Stephanie's LinkedIn Digital Law Marketing Facebook Transcript: Gone are the days when you could simply outsource everything to an SEO agency and expect results. To rank on Google today, law firms must take an active role in overseeing and executing their marketing plan. Stephanie Chew, Director of Sales at Digital Law Marketing, finds that the company's most successful clients collaborate with them to achieve the best possible outcome. She joined the Law Firm Marketing Catalyst Podcast to talk about why content is no longer king; why a firm's intake process is the most important part of lead generation; and how consistent Google reviews can boost your SEO efforts. Read the episode transcript here. Sharon: Welcome to the Law Firm Marketing Catalyst Podcast. Today, my guest is Stephanie Chew. She is the Director of Sales at Digital Law Marketing, and she's speaking to us from Annapolis, Maryland. The company is headquartered in Nashville but is basically a virtual firm and works all over the country. Digital Law Marketing encompasses a wide range of digital aspects today, and no law firm can live without them. From SEO to PPC to social media, a law firm can make a case for each of them, especially when they work together. Today, Stephanie is going to educate us on what's new in digital law marketing, where we should start and what we can't live without. Stephanie, welcome to the program. Stephanie: Thank you so much for having me. I'm happy to be here. Sharon: Stephanie, tell us your background. How did you end up doing this? You didn't tell your mother this is what you wanted to do where you were little, I don't think. Stephanie: It's funny; I always wanted to be in advertising in some respects. I was just telling my daughter this the other night when we were watching the Super Bowl. Watching the Super Bowl with my father, I was always so fascinated by the ads, and I always knew I wanted to do something around advertising and marketing. After college, I started with Trader Publishing Company, which is now Dominion Enterprises. It has changed hands a couple of times, but it's basically selling advertising space to car dealers. Then it turned into apartment communities, like for-rent magazines, things of that nature, and then that led me over to the SEO world, the website world. Then I started working with law firms in 2009, and I've been here ever since. Sharon: That's a long time with law firms. I can relate. I wonder what would have happened if I had been in advertising when SEO started. I'm involved in SEO, but I thought advertising was my dream job and quickly found it wasn't. What would you say that lawyers have to do differently in digital marketing? Stephanie: They have to be a part of the partnership. In the first part of my career, we would come in and help firms and companies by putting ads in newspapers or books, and the firm or the business really didn't have to do much. Now the most successful firms out there are involved with their marketing, maybe not as much as we are, but they're a pretty big part of it. More than they ever have been. For instance, getting reviews is incredibly important now, so the firm has to work to get reviews. We can make a firm tell Google how amazing the firm is. We can create an amazing website with wonderful content, great SEO strategy, but if the firm isn't getting reviews, they're not going to get business. Now, more so than it's ever been, the firm has to be behind the digital focus and be a part of what their partners are doing to help them become successful online. Sharon: That's interesting, because when I read a review, the first thing I look at is, “Is this a legitimate review or is something the company wrote?” I hadn't thought about how involved lawyers have to be, how involved everybody has to be. It's not just something done in the back room. Stephanie: Right. The firms that are the most successful online, the lawyers are actually asking for those reviews directly themselves. We've seen firms where they've hired people to get reviews for them. They're never as successful as the actual attorney asking for that review themselves. So, asking for those reviews is one thing we always push our firms to do because, like you said, you look at those reviews to see if they're real or not. Most people look first at the newest reviews, the most recent review that was posted, and then they look at the lowest review. Those are the two categories that people care the most about. So, it's important for the firm to be involved just as much as the marketing company to make sure your reputation is good too. Sharon: Do you explain that from the very beginning, that they have to be involved? Stephanie: Yes, and we will only work with firms that will be involved. We're very lucky that we're exclusive, so we only work with one firm per practice area per geographic location. If a firm isn't a partner with us, there's only so much we can do for them. But having that partnership, we are the best in what do. We like working with the best firms. It creates the best partnership for everybody's success. But yes, it's very important that they're also a part of their own success up front. Sharon: When you say success, is that lead generation? Is it just what they're doing? Stephanie: Yes, lead generation. Our goal is to help firms become visible online organically. Our main focus is search engine optimization, which is organic placement on search engines. We do paid ads, and we're very good at doing paid ads as well, but it's that organic placement that you get the most return from. The more rankings these firms have on the search engines, the more phone calls they're going to get and then hopefully the more cases they get. It really does work that way. We can track a ranking on the search engines, and then we track their phone and work with them to hear how many cases they're getting, and it really does work in that direction. Sharon: Social media and the paid stuff aside, do you encourage lawyers to write articles? Does this help? Stephanie: With our clients, we handle all of the writing because there are couple of different ways you have to write. Number one, you have to write to make sure you're the voice of the firm and it makes sense. You're writing about cases you're looking to get, but you also have to make sure you're writing so the search engines can recognize you. For instance, a very popular search phrase right now is “near me,” like “car accident attorney near me,” “car accident lawyer near me,” “dentist near me,” “best optometrist near me.” It's making sure you get those “near me” keywords in your content, making sure your content includes questions and answers, because a lot of people are asking questions of the search engines. We do have firms that like to write themselves. Attorneys are wonderful writers, but if they're not writing so the search engines can recognize what they're saying, it's not going to help them become more visible when it comes to these search phrases. It's a balance. We do all the writing for our clients with their approval, but if somebody does want to write here and there, we encourage that. We would just help with massaging the SEO and the content. Sharon: Would you massage the SEO or the stuff that makes them go higher in the rankings? If they have a website already, would you say, “It's wonderful, but we can go in and do some things”? What do you do? Stephanie: 99% of the time, we rebuild and redesign and develop the website first. The reason we do that is because a lot of how your website is built is how you're going to perform on the search engines. For instance, if you have a very slow website, Google does not like that. Your site speed is a factor if you're going to rank or not. So, we like to go in and clean up the website so we have a good product to work with to then help with SEO. From there, we write content, build out the content, create site maps, really get to know the firm, their voice, and figure out the types of cases they're looking for. Then we write content around that to help them rank on the search engines. Sharon: Are you called in when they say, “We're about to embark on a rebuild of our website”? It seems to me they already have one when they call you in. Stephanie: Sometimes that happens, where we start working with a firm and they just rebuilt their website, and we have to give them the bad news of “I'm really sorry, but this website isn't going to perform.” We wouldn't take on that client because we want to set up the proper expectations of success for our clients. If you have a marketing company tell you, “Oh no, that's O.K. Your website's slow, but we could still work with it,” that would be a red flag because it won't work as well as it could if you redid the site. It happens sometimes. Sharon: Going back to the “near me,” I don't even enter that, but that comes up as a choice to click on. Stephanie: Yeah, that's usually right. Sharon: That's interesting. What do you mean by content writing? Is that what you mean when you're making sure the content— Stephanie: When it comes to content, you have the content pages on the website. Some of the most popular content pages on a law firm's website would be their practice area pages. You might have a page on wrongful death. You might have a page on car accidents. You might have a page on personal injury. Then each one of those pages includes content. The type of content on that page could be question and answer, could be including those words “near me.” Google pulls from that content to determine how you're going to rank based on the way the person is searching. You'll see a lot of times where Google does an instant answer. If they're asking a question, “what is the statute of limitations in the state of California for a wrongful death case,” a law firm's content page could answer that question, so they'll bring it up as the first result. There's also blogging. You want to make sure you're blogging on a regular basis. In the past, it was as much content as you could put on there. The phrase “content is king” is gone. That used to be the way we spoke when you would push content, push content, push content. Now, it's more about the quality of content versus the quantity of content. It's making sure it's good content that's enriched with the types of cases you're looking for, and written well so the search engines recognize you as an expert on that topic with experience and expertise in the discussion. Google will see that and help you rank better based on the content and what you're saying. Sharon: Is that per lawyer? Let's say on the home page of the website you have banners or badges that say, “We're the best.” Or is it in the bio? Stephanie: It would be in a practice area page. When somebody does a search for a car accident lawyer, let's say, Google wants to provide them with the most specific information they're looking for. So, they'll more likely pull up a car accident page from your website and show that over your home page. Your home page should be a summary of everything you do, and then the content pages are more specific on each practice area. When somebody does find you, they're going to find that practice page usually over your home page, but all of your content should include things that are easily identifiable for Google. Sharon: I always laugh when I see a bio that says they specialize in 20 different things, because how many can you specialize in? What would you do? Would you put everything the firm does? What would you do in order to come up? Stephanie: With a bio, you really want to focus on that attorney and what they've done and that's it. When it comes to the actual practice area pages, that's where you would focus on that practice area. Then maybe you could put in a little sentence or two about which attorney does that, if that makes sense. There are ways of doing it. It's not necessarily a right answer or a wrong answer. It depends on the firm, the market, the practice area. But there are ways you can incorporate that being specific to the attorney and what their expertise is versus what the whole firm does on the bio page, if that makes sense. Sharon: It does make sense. Should you put successes like, “We won a case that was really hard to win for $10,000 and John Smith did it”? Stephanie: Oh yeah, verdicts and settlements pages and verdicts and settlements in general are some of the most visited areas on the websites. People want to see numbers. There are some markets where they might not be allowed to put verdict and settlement numbers on their website, or the firm doesn't feel like it's appropriate to do that. But by the way, law firms that put their numbers on their websites get more attraction than the ones that don't. Sharon: The big question is do people choose a personal injury firm because they like the lawyer? It's a nice, touchy-feely firm versus one that's won all of these big numbers but they might not like as much. How do you choose? What's more important? Stephanie: That's a good question. Again, it comes back to the person choosing and what's important to them on why they're choosing, but if you don't have the big numbers, you definitely want to talk about what you've done. A lot of people want to feel that they can relate to that attorney. I always say talk as much as you can about things you've done to help other people. If I had a case that was specific and I read that that attorney has helped other people with the same thing I have, I'm more likely to work with them regardless of what the numbers are because I feel like they could help me. If you don't have those big numbers, you want to discuss what you've done because people will be able to relate to that. We're also big believers in putting personal information into those bios. Talk about your hobbies, talk about your children, because people relate to things. There are so many situations where I've heard that this attorney got a case because somebody saw they had the same hobby, they went rafting or whatever it was, and their son had passed away, or that they were calling him because he had the same alma mater. Obviously that is a big one people gravitate toward. Outside of politics—I would stay away from writing anything related to politics—the more information you can humanize yourself with, it's going to help people connect with you better and they'll end up hiring you. Sharon: That's interesting. I've heard that both ways. I tend to relate to people, so I would like to know more about them. That's interesting that you should put it in your bio. Are you usually called in the beginning or are they already underway? Why are you called in? Tell us about your business. That's several questions, sorry. Stephanie: That's O.K. Usually we're called in when a firm is looking to take their law firm to that next step and they're looking for more cases. They're not showing up online. They're not getting phone calls. They're not getting cases online. A lot of times, we're called in to firms that have worked with referrals for pretty much their whole law career. They're always getting referrals, and they're tired of paying those referral fees to other attorneys. They'd like to generate cases themselves from the internet. Then we would be brought in to help them analyze what's going on in their market and what their current web presence is. Then we can put together a plan to get them to where they need to be to generate more calls that generate the cases they're looking for. It's usually somebody that wants to make more money off the internet in some way, like they're tired of paying referral fees and/or they're looking for more visibility and better-quality cases. We hear that a lot; that we help firms create better-quality cases over anything else. Sharon: Better quality meaning larger cases, bigger numbers? Stephanie: It could be anything. It could be that it's a firm that did a bunch of slip and fall cases and now they're getting bigger and better quality personal injury cases. It's medical malpractice firms that used to get a lot of junk calls and now they're getting quality calls, things like that. We're really good at SEO, and we're really good at creating more rankings for somebody organically. Usually when somebody finds a firm organically, they tend to be better qualified, quality leads. Sharon: Do you keep your eye on the changes in the Google algorithm? Stephanie: Yeah, we have a SEO specialist that works with digital marketing. We're all senior level, too. I always like to mention that because our SEO specialists are also very recognized in their SEO space. We have one Google Product Expert that works for us. She's one of 50 in the world. She's outstanding. We also have a Google Local Search expert who's been nationally recognized. They're the ones that keep up with the trends and how things are changing, and then we push that down to all of our firms. We're constantly moving in different directions with content and with SEO strategies based on the changes in the Google algorithm and changes in how we as human beings search. It is ever-changing. If you looked back 10 years ago from today, it's totally different to what we're doing. Even a year ago, it's a different strategy than what we were doing. Sharon: That sort of leads me to the next question. When I search, you have to skip like 10 sponsored ads. Is it possible to be high organically? Stephanie: Absolutely. It's interesting because Google has put a lot of emphasis on their paid ads. They have a newer ad called the Local Services Ad. It's been around for two years now, but those are the ones where there are pictures at the top of the page. They're considered Google screened, but they're driven by reviews and making sure that somebody answers the phone and other things in your budget. But the biggest driver of those is how frequently you're getting reviews, which is interesting that Google is doing that. So, there are different types of advertising they're doing, and they're pulling in an organic element with those reviews. Below that you have your pay-per-click, which is the paid advertising for Google Ad Words, and then you have your local. But yes, local SEO is still the sweet spot of getting calls. The firms we see, the majority of the calls come in through that local SEO space. Sharon: When you say you only take one practice area and one geographic area, do you have a map divided up? What do you call a geographic area? Stephanie: It depends on the marketplace, but a lot of it has to do with where the office is located. For instance, we have a state where the firm has 10 office locations throughout the state. Well, they're the only personal injury firm in that state because they have so many offices, so we're not going to work with anybody else. It comes down to who their competitors are. Our whole thing is we're not going to work with your competition. If it's too close for comfort, we go to our clients first and have them tell us if it's O.K. if we work with them, yes or no based on the competition, and we will or we won't. We do not cross that line at all. We are 100% exclusive, and that's why. We only have a handful of clients per state because it's all we want. We don't want to be the biggest SEO company out there. We want to be the best, and we feel that we are. Sharon: What do you do if you're in a room of lawyers, whether it's partners or not, and they say, “Reviews aren't a problem. Sally in marketing handles the reviews”? What do you do then? Stephanie: It depends. Maybe Sally in marketing really does do a great job and she is getting multiple reviews a week. That would be awesome. We wouldn't have a problem with that at all. But if Sally in marketing hasn't gotten a review for six months, we can see that. We can say, “Oh, that's great, but the best thing for firms is to get consistent reviews on a regular basis. Two to three reviews a week would be ideal.” We can show that they're responding to them, that they're engaging with that list, and we really push that. We've had situations where we have gotten firms top ranked—I keep trying to say first page, but there are no pages anymore when it comes to Google. It's about rank. You can't even scroll. So, we could get somebody at the top of the rank of the search engine, but if their reviews aren't good, nobody's going to call them. We've done our job, but nobody's going to call you if your reviews aren't good. It's a two-way street. We coach our firms. We encourage them. We do a lot with intake. We can audit phone calls and help them figure out how people are handling their calls. It's a lot of coaching and encouraging and trying to do our best to get them to do their part, too. Sharon: I think you just preempted my next question. You can have wonderful numbers, but if they fill out the intake form and nobody sees it— Stephanie: Yeah, if they're not answering the phone. We see this a lot. We'll do audits with some of the most successful firms in lots of different situations. I'll never forget there was a catastrophic injury/medical malpractice firm, and a lady called very upset saying that her daughter was just diagnosed with cerebral palsy, and the woman's like, “I don't know if we do that. Hold on. Let me check. Yeah, we do that.” Now the confidence is shot. There's no way. These are not the people to hire. Intake is such a big part of these firms. It's probably the most important part that our lawyers aren't paying attention to right now. Not all our firms, but in our industry in general. We're doing a lot with our clients to help them with that, but in our industry as a whole, I feel like intake is probably the area that can be improved the most. Sharon: People don't talk about that enough, I think. They talk about how much money everybody is spending on SEO and organic, but not about when the calls come in, where they were sent or what happens. Stephanie: It's really a salesperson on that line if you think about it. As you said, firms are spending thousands and thousands, tens of thousands of dollars a month in marketing, but who's answering that phone? All your dollars are going out the window when you don't have the right person. They usually want to cut costs on those types of positions, when really it should be handled as a sales organization. Some of the more sophisticated PI firms, those large firms that are coming into different markets, are handling those as sales calls. It's changing. I've seen firms do a great job, but I do think that's one of the first things that is overlooked. Hopefully it's coming to light now. More firms are starting to do better at it, but you've got to take care of all the parts. Sharon: There are a lot of parts. I was laughing when you said content is king because that's what people used to say. There was a time, a long time ago, when you could tell somebody, “Just write a lot about what you do and you'll be O.K.,” but that's long gone. Stephanie: Yeah, it's gone now. Sharon: Would you say that a website is the hub of everything a person is doing when they're doing paid ads and SEO? Stephanie: I probably would have used to say that, but what I would say now is if you do a search for the firm's name on Google, that is the new homepage. Whatever you see that comes up there is what I would be more concerned about than even the homepage of your website. The reason I say that is because if you do a search—let's say you're a car accident lawyer and somebody finds you by doing a search for car accident lawyers. They are going to see your presence on Google pop up first. Sometimes they'll go directly to your website; sometimes they'll look at your reviews before even looking at your website; sometimes they'll look at where you are before doing that. There's a lot of information they can find out before even getting to your website. If somebody does a Google search of your firm name, on the right-hand side of that search is usually where you'll see the Google information and Google reviews, but on the left-hand side is all those other directories out there, which could have bad reviews. That shows up before somebody even gets to your homepage. It used to be that your website is the hub of everything. It's still incredibly important, and maybe it still is the hub, but when it comes to your reputation, you really need to see what Google has on your firm. What is your brand telling people before they even get to your website? What are all these directories saying? What are all these reviews saying about you? Sharon: What are you seeing with all the sponsored ads? I just happened to look at your website, and there are about five sponsored ads before you even get to yours. What do you do? Is that part of it? Stephanie: If you were to google Digital Law Marketing, there are other law marketing companies that will bid on our name to show up ahead of us. That happens. Or somebody could be bidding on digital marketing or terms like that, but people can see that they're sponsored or paid ads. You can see that right there. Most people, if they're looking for the real website, will pass those and go directly to the organic. Now, some people search differently. Some people would click on the first one they see, but users are becoming a lot more sophisticated than they ever have been, so they understand what an ad is. Sometimes ads are the best result. Google has also done a good job with the ad program so that sometimes the best information you're finding is in the ads. It depends, but it's hard to get away from those ads. One thing you could do as a business is bid on your name. For instance, we bid on Digital Law Marketing, so we're one of the first that pops up when somebody does type in our name. But you do want to make sure you're aware of what is on the internet about your brand. Sharon: It seems like the world has changed so much as a marketing person who's interested in everything you're talking about. For the firm to be at the top and on social media and everywhere, you need a bunch of experts. They need their own team. You can't be an expert in everything or just a lawyer who's interested in marketing. Stephanie: You're absolutely right. We touch on social media, but there's so much more you could be doing with social media. There are so many different avenues and elements of everything. You could have, like you said, a whole team. You hire a company like ours to manage the website, the SEO, the paid ads. Then you have somebody that does social media video, optimization and things of that nature. Then you get somebody that just does PR. PR companies and SEO companies work really well together because it creates good results when they do. There are so many different things. It's not just hiring one person and they can do everything. Sharon: But the marketing person or the lawyer who's interested should also be auditing calls or at least know what's happening. Stephanie: Yeah, and there are so many different tools now. We use something called dynamic call tracking where you can record every call. We're constantly spot checking and listening to our clients' calls to make sure the leads are being handled properly once we bring them to the law firm. If they don't, they're not going to see the success of their marketing dollars. Sharon: Have you ever had to make changes because of the dynamic call tracking? Stephanie: Yeah, we've had to. We've actually had to not renew agreements with clients. In almost 10 years with Digital Law Marketing, we've only lost a handful of clients, and two of those we actually let go ourselves. The reason we let them go is because they weren't helping themselves and they weren't helping to be a partner. At the end of the day, nobody would be successful. Lots of times we have these hard conversations with firms and say, “O.K., this what we found out. We did an audit and 40% of the calls aren't being answered.” The firms are very receptive to it, and they make changes quickly. That's why they hire us, because they know we'll help them with making those decisions. We've had lots of hard conversations with firms, but if firms aren't willing to help themselves, it's hard for us to help them. Sharon: I presume you've been in the position where you've come in to replace another SEO firm. Stephanie: Oh, yeah. Sharon: How long should a law firm wait to see results? Stephanie: Good question. We ask all of our clients at Digital Law Marketing to give us one year of SEO. After that, it's month to month. We don't renew clients because if you don't want to be with us after a year, then we're probably not the right fit. But we don't lose clients because we can show you within a year what we've been able to do for you. If it's not us, then try somebody else. I would definitely give it a year. Just yesterday, I had a call from somebody who was frustrated because their marketing company had been working for three months and the results weren't showing up. I'm like, “You really need to give them longer than three months. Give them a good year. I'm not going to say you're going to be at the height of your performance in a year, not at all, but you will see progression.” We tell people all the time, “We'll be able to show you in the first 90 to 120 days how you're ranking better, how you're getting more phone calls.” We continually show that progression because it takes years to get really good visibility on search engines. You're telling Google who you are over a long, consecutive period of time of building your brand, but you will see progression quickly. You're just not going to see ultimate results for some time. Sharon: You must have lot of people say, “A whole year? You want me to wait a whole year before I start to evaluate?” Stephanie: People have figured it out now. It used to be more of a challenge five years ago, but people have figured it out. SEO takes a while. With paid ads you can see a return a little quicker, but it's still not as quick as it used to be. With paid advertising, we tell everybody to give it at least three to four months. There are so many people that are doing paid advertising, so it takes a little longer. It used to be that you were able to see results in a day, but it's different the way things are working now. It just takes time, but if you're consistent and you're doing the right thing over a consistent period of time, you will see the right results with the right company. You have to make sure you trust who you're working with, too. Sharon: That's probably a big factor. One of the last questions, if you can tell us, is about how people find you. Do they only find you because of a web search, or do they find you other ways? How do they find you? Stephanie: The law firm? Sharon: Yeah, how do your clients find you, so they call you versus another company? Stephanie: They could do a web search and find us that way. We are Diamond Sponsors of the American Association for Justice, the AAJ. It's a national organization. We're also sponsors of the National Trial Lawyers. We do travel a couple of times a year to conventions and meet new firms. A lot of our clients come from other clients because our clients tell our story a lot better than anybody else. On our website, we have a bunch of FAQs and testimonials from our clients, but they can look us up on Google, social media and through our website. We have a form on there so we can do free SEO audits for firms. We'd love for them to fill that out and see if it's something we can help firms with. We are working with firms all over the country, but we do have markets available, so we'd love to hear from anybody that's interested in not having to hire a company again. A lot of times, people come to us and say, “I'm tired of switching companies every year or every two years.” Our clients don't have to do that anymore. So, come to us and you don't have to continually look further. Sharon: That's a big point of differentiation. For everybody listening, we'll make sure to have the website link and any other links. Thank you so much. We really appreciate it, Stephanie. Stephanie: Thank you for having me, Sharon. It was fun. Sharon: Thanks. Stephanie: Take care.
“There are so many people that need my help. They just don't know about me yet,” shares Stephanie German, executive strategist and owner of German Business Consulting. In today's episode, Stephanie shares how career networking and implementing organizational processes can take your business from ugly to beautiful. There are community groups for almost everything, you just have to look for them. Find a group where you belong and show up consistently. This will help you to build a referral network within your local community. Then, make sure that you have organizational processes in place to make it possible for you to delegate tasks to employees. Even if you are a solopreneur, you may end up wanting an assistant or social media manager eventually and having your processes written down will help make that transition smoother. Whether you are a solopreneur or have a larger business, you can benefit from having organizational processes in place that capture leads and enable you to follow up more easily. By building a referral network, you will be able to give back to others and receive genuine leads in return. Tune in to learn more about how networking and organizational processes are the key to taking your business from ugly to beautiful. Quotes “If I'm not modeling and doing what I'm telling clients to do, then I have no business telling them to do X, Y, and Z because I'm not doing it.” (14:57-15:08 | Stephanie) “There are so many people that need my help. They just don't know about me yet.” (27:20-27:24 | Stephanie) “You really have to find what works for you. What works for me and my personality and how I function isn't going to be the same for someone else.” (30:11-30:19 | Stephanie) “Create a system that captures leads and allows you to follow up.” (43:50-43:55 | Stephanie) Links: Connect with Stephanie German: So Your Boss Can't Lead: https://www.stephaniegerman.com/so-your-boss-cant-lead/ LinkedIn: https://www.linkedin.com/in/stephaniegerman/ Website: https://www.stephaniegerman.com/ Amy & Denyse LOVE to network. Follow us on Instagram @midlifeatthemailbox and personally @AmyLAlex28 and @DenyseRabbat. Tag yourself listening to our episodes, make us laugh with your midlife moment or share your favorite episode of our show with your friends on Instagram and we will share it back to our community! #midlifemoment Do you enjoy our podcast? We'd love your help in growing our community. Please don't forget to rate, comment, and subscribe to Midlife at the Mailbox on Apple, Spotify, or wherever you listen to your favorite podcasts! One last note, both Amy & Denyse offer coaching services. Are you ready to promote your business or yourself? What about just a heads up that we have dropped a new episode? Sign up to receive emails from Midlife at the Mailbox. https://view.flodesk.com/pages/630a92cd2812b898e99a8f06 Thanks for listening, see you at the Mailbox! Podcast production and show notes provided by HiveCast.fm
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.
Joël has been thinking a lot recently about array indexing. Stephanie started volunteering at the Chicago Tooele Library, a non-profit community lending library for Chicagoans to borrow tools and equipment for DIY home projects! It's the end of the year and often a time of reflection: looking back on the year and thinking about the next. Stephanie and Joël ponder if open source is a critical way to advance careers as software developers. 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. Chicago Tool Library (https://www.chicagotoollibrary.org/our-organization) Circulate and Ruby For Good (https://github.com/rubyforgood/circulate) Glue Work (https://noidea.dog/glue) Being the DRI of your career (https://cate.blog/2021/09/20/being-the-dri-of-your-career/) The Manager's Path (https://www.oreilly.com/library/view/the-managers-path/9781491973882/) Kingship (https://acoup.blog/2022/10/07/collections-teaching-paradox-crusader-kings-iii-part-iii-constructivisting-a-kingdom/) What technologies should I learn? (https://thoughtbot.com/blog/what-technologies-should-i-learn) Learning by Helping (https://thoughtbot.com/blog/learning-by-helping) "Comb-shaped" Careers (https://killalldefects.com/2020/02/22/specializing-vs-generalizing-careers/) 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 are 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 been thinking a lot recently about array indexing. I feel like this is one of the areas where you commonly get confused as a new programmer because most languages start array indexing at zero. And what we really have here are two counting systems, either an offset so how many spaces from the beginning of the array, or a counting system where you count 1,2,3,4. At first, it feels like why would computers ever go with the offset approach? It's so illogical. Counting 1,2,3,4 would feel natural. But then, the more I think about it, the more I've started seeing the zero-based pattern show up in everyday life. One example, because I enjoy reading history, is how we talk about centuries. You might talk about the 19th century is the Victorian age, roughly. But you might also refer to the 19th century as the 1800s. So we've kind of got these two names that are a little bit off by one. And that's because when you're counting the centuries, you count first century, second century, third century, fourth century, and so on. But when we actually go by the first two digits, you start with the zeros, then the 100s, then the 200s, 300s, and so on. And so we have a zero-based counting system and a one-based counting system, and we sort of have learned to navigate both simultaneously. So that was really interesting to me to make a connection between history and programming and the fact that sometimes we count from zero, and sometimes we count from one. STEPHANIE: Yeah, I will have to admit that I always get confused when we're talking about centuries and making the mental connection that 19th century is the 1800s. It always takes me a bit of an extra second to make sure I know what I'm hearing, and I'm attributing it to the right year. I think another example where I get a bit tripped up is the numbering of floors because, in the U.S., we are counting floors using the one-based counting system, whereas I think in Europe and places outside of North America, to my knowledge, the first floor will be considered the ground floor, and then the second floor will be the first floor and onward. So that is a zero-based counting system that I can recall. JOËL: I never noticed there was a pattern. I just thought every building was arbitrary in where it counted from. STEPHANIE: Yeah, I do think it's a cultural thing. I would be really curious to know more about the history of how those counting systems get adopted. JOËL: So that's a fun thing that I've been exploring recently. What's new in your world, Stephanie? STEPHANIE: I am really excited to talk about a new real-life update. I started volunteering at the Chicago Tooele Library, which is a non-profit community lending library in my city for Chicagoans to borrow tools and equipment for DIY home projects. What I really like about it is they use a pay-what-you-can model so everyone can have access to these resources. It reduces the need for people to buy new things all the time, especially for little one-off projects. And they also provide education to empower folks to learn how to do things themselves, which I thought was really cool. And another thing that I think might be a little relevant to this audience is that I actually first encountered the Tooele library through its open-source software, which is a Ruby for Good project called Circulate. So the Tooele Library had previously been using this software that was built by community members to do all of their lending. And I got to see it in action when I saw a librarian use it to rent out tools to community members. And then I also interfaced with it myself as a member of the Tooele Library. I've borrowed things like saws, cooking appliances like air fryers that they also had. And when I was first a guest on this show, I borrowed a microphone from them to do this podcast because I was just a guest at the time and didn't want to commit to buying a whole new microphone, so that was a really awesome way that I got to benefit from it. JOËL: It's a fantastic resource for the community. STEPHANIE: Yeah, I love it so much. If anyone is in Chicago and wants to check it out, I highly recommend it. And even if you're not in Chicago, if the idea of a lending library interests you, you can check out the software on Ruby for Good. And it's no longer being used by the Chicago Tooele Library, but it would be really cool to see it be picked up by other people who might want to start something similar in their own hometowns. JOËL: So you mentioned you're volunteering here. So this means you're going in person and helping people check out items from the library. STEPHANIE: Yeah, I did my first volunteer librarian shift about a month ago, and right now, they're in the middle of moving from one location to another, so they've had a lot of in-person workdays to get some of that done. But even before that, I had contributed a little bit to the open-source repo, which is just a pretty standard Rails project, so I felt super comfortable with getting my feet wet in it. And it was, I think, my first open-source contribution. I find that some of the other open-source software, especially developer tooling, is a little scary to get into. So this was a really accessible way for me to contribute to that community, just leveraging the skills that I have for my day-to-day work. JOËL: Would you recommend this project for our listeners who are looking to maybe get their own first contribution in open source? STEPHANIE: The Circulate project is actually on a bit of a hiatus right now. But I would definitely suggest people fork it and play around with it if they want to. I also know that Ruby for Good has a bunch of other projects that are Rails apps and have real users and are having an impact that way. So if anyone wants to get into open source in a way that feels accessible and they're building a product that people are using, I definitely recommend checking that out. 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, as we're recording this, it's the end of the year. It's often a time of reflection and looking back on the year and maybe even thinking about the next year and progression. I'm curious since you said this was your introduction to the world of open source, do you think that working on open source is a critical way to advance our careers as software developers? STEPHANIE: That's a good question. Honestly, I think my answer would be, no, it's not critical. I think it's one avenue for people to explore and increase their impact on the community and increase their technical knowledge, especially if it's in an area that they are not quite working in in their day-to-day, but they're really interested in diving deeper in. But I do think there's sometimes a lot of pressure to feel like open source is this shining beacon of opportunity for you to dive into and that it'll bring a lot of meaning to the work that you do. And people, obviously, and for a good reason, talk about how special it is that open source is part of the industry that we work in, but I don't necessarily think it's critical. I do certainly feel inspired by people who create open-source tools or contribute to Ruby or Rails. But I don't necessarily think that it's something that should be a rule and that everyone needs to get into it or contribute to it. Because there are many ways that people can have an impact having influence on the community, and that way is one. But there's also a lot of value, even just focusing on the team that you're on and your company internally. JOËL: I appreciate the nuance there because I think like you said, we often view open source as the main thing that everyone should be doing to get ahead. And there are a lot of different ways to improve your skill and then to get ahead in your career, which are not always correlated. One kind of really basic way that I was shocked at how much it helped me was I was learning a new language, Elm. I joined their online Slack community and just hung out in the chat room and answered the most beginner questions because I barely knew the language at the time. And most of these could be found just by looking up the documentation or by opening up a REPL and experimenting with a thing and giving an answer, which are skills that, as a programmer who's got some experience, I take for granted but that not everyone has that as a reflex. Because Googling, searching documentation, crafting experiments in the REPL those are all skills that you have to learn to build over time. But answering those very basic questions over and over over the course of a few months actually taught me so much about the language, and I'm not doing anything fancy. STEPHANIE: That's awesome. I have a friend who, during a time when I think she was struggling with her confidence in her technical skill and was feeling a bit stuck at work, spent an afternoon answering Stack Overflow questions on basic Ruby and Rails, and that gave her a lot of joy. Because she recognized that she was the person Googling those questions and needing to find answers many years ago, and that was one way that she could pay it forward. And I think she had a lot of empathy, like I said, for those people who are needing a little help, and it felt really good for her to be able to provide it. JOËL: It's a way to have an impact on other people while also solidifying your own knowledge. STEPHANIE: Yeah, exactly. JOËL: So we've mentioned a couple of different ways where you can level up your skills, that might be through helping out other people online, that could be through open source. But I'd like to zoom out a little bit and look at not just improving your technical skills but thinking about career in general when you're looking out over the next 10, 20, 30 years. Do you have an approach that you like to take when you're thinking that broadly? STEPHANIE: For me, I have had trouble thinking about a five or 10-year plan because things often don't turn out the way that I envisioned them. And so I think I've come to realize that leaning into how I feel about things in any given moment is more valuable and oftentimes more accurate to what I really want. Because I can have an idea of what I want my career to look like, but the things that ring most true are what I'm feeling in the moment. And so you mentioned we're releasing this episode at the end of the year. I do tend to do a little bit of recap about how my year went if I spent it doing things that fulfilled me and made me feel good, if I grew in the ways that I wanted, even separate from any performance review. I know that this is a time of reflection for a lot of people. And I don't personally ascribe to New Year's resolutions, but I do like to think about themes or intentions. And those are things that ground me rather than setting particular goals that I may or may not achieve; I may realize I want to change. So yeah, I really recommend just sitting with yourself and spending time thinking about what you want, and that could mean a promotion, but that could also mean a more interesting project using new technology. It could mean more responsibility and decision-making power. It could mean a move into management. I think it's different for everyone. And so when people have asked me about advice or what they should do in terms of coming to a crossroads between jobs or between projects, I think that you really can't tell anyone else what is the right move for them; only they can decide. JOËL: And tech, it's such a broad field. There are so many different roles and paths you can take through it. Well, there's junior engineer, engineer one, engineer two, engineer three, that's just the same everywhere. And there's only one way forward; it's up or stagnation, and that's it. Like you really get to choose your own adventure in this industry, and that's exciting and maybe a little bit terrifying. STEPHANIE: Oh yeah, for sure. I like that you brought up the different levels and roles that you could have because I have found companies that provide a career ladder or engineering ladder that has been useful for me in the past in figuring out if the next step at the company that I'm at is what I want. And it's helpful. It's very clear to me, okay, these are the skills that I need to get promoted into this next level. But other times, that description describes something that I'm not interested in, and that is also really helpful information. JOËL: Was there ever a moment in your own career where you had to navigate some of these decisions to decide what path you wanted to take as opposed to just following a ladder up? STEPHANIE: Oh yeah. I was presented opportunities to start getting a feel for management or overseeing a team as a lead. And people had really great feedback for me that that was something that I had shown leadership in, and they thought I would do a great job in that role. But I actually decided to kind of hit the brakes a little bit on that particular route because what I realized I wanted at the time was to focus more on being an IC and deepening my technical knowledge. And that was really tough. I do also think that a lot of women are pushed into management because they end up doing a lot of the glue work that comes with unblocking people, supporting people, and project management and those are all skills that, like, quote, unquote, "lend themselves towards management." But just because we do that work doesn't necessarily mean that that's the direction that we want our careers to go in. And so that was a really tough thing that I had to do was to make it really clear that I wasn't quite ready for that yet. And I might be in the future, but in that moment, just standing my ground and being like, actually, I want to focus elsewhere instead. JOËL: That's really valuable, knowing yourself and knowing where you want to go, what the next step is. Are there any exercises you like to do to try to figure that out for yourself? Because I know something that I've struggled with sometimes is not being quite sure what I want. STEPHANIE: I journal a lot in my personal life and also about work. I think I tend to revisit that in my notes, especially about things I've learned or things that I felt excited about in terms of projects and what I've been unlearning, and just going through all of the things that I've collected over the year and synthesizing that information. I also really like to lean on my friends and peers. So I really enjoy a good one-on-one when we just talk about those types of things, you know, dreams, hopes, goals. I like to lean on my manager a lot, too, because oftentimes, they're able to see things about my work over the past year that maybe I was just too in the weeds to be able to have that higher level perspective about. As a third-party observer, they see a lot of things that you might not be able to, either on your current project or even opportunities for you to step into at a higher level in the company. So yeah, I think that, in some ways, it's a solitary activity, but it doesn't always have to be. JOËL: I remember having a really good conversation with my manager as well, at some point, talking about that decision of am I interested in maybe moving into the management track? Do I want to stay on the IC side of things? And that was a really good conversation to have. STEPHANIE: So after having those conversations and kind of figuring out what direction you wanted to go, were there times when you had to actively make that choice or advocate for yourself? JOËL: Yes. One of the things that I realized that I care about is investing in other people, and sort of the mentoring, supporting side of things which you might think is kind of a management activity. But management is a little bit different than that. I prefer the coaching aspect than the management aspect. And so what I wanted to do at some point once, I realized that that's what I wanted and that a management position would not fulfill that desire, I started looking to see is there a way to craft that role within the company? A common thing that happens, I think, in workplaces is that you are given roles or titles for things that you already do. Clearly, if there's something that I care about, I needed to be doing it already in my day-to-day work, and I needed to be doing it at a fairly high level. And so I focused efforts there, trying to say I want to get better at this. I want to do this in the opportunities that I do have in my current role. And then eventually, I did go to my manager and said, "Look, this is what I am looking for in the next step." Had a discussion about whether or not management could be a fit or if we could customize a management role for this, and eventually decided that an IC role would be a better fit for that. And among other things, we introduce at thoughtbot the role of principal developer, which is kind of the next step on our career ladder. It can be a little bit different emphasis for different people on the team who have that role, but, for me, a big part of that was putting more impact on the broader team as its focus. STEPHANIE: That's really cool. I really appreciate that you were able to come to the table with what you wanted and able to have a discussion about, okay, so management might not be the right fit. But how can we create this new role that not only benefited you but also benefited the rest of the company because that hadn't been an area that they had quite figured out yet. But by doing that, you essentially did exactly the kind of coaching and making an impact [chuckles] that you had also shared you had been wanting because you just opened this new door for others to also eventually work towards. And I think that's really awesome. That reminds me a lot of the idea of being directly responsible for yourself and your career. There's a really good blog post by a woman named Cate, who is an engineering director at DuckDuckGo. I'll link it to the show notes. But she writes a lot about how you have to own your own career and find opportunities to have that agency. And you can always ask. Like, you might not get everything that you want, but by asking and by bringing it up, you at least can start the conversation rather than expecting or just hoping that things will turn out the way that you want without having said anything. A couple of things that she says in the article that I also really like is the idea of expecting less from your job and more from your career. JOËL: Hmmm. STEPHANIE: At any given point, your job might not check all of the boxes, but maybe they check some, and that is worthwhile. And once you get to a point where maybe the job is not really doing anything towards the direction you want your overall career to go, that might be time to reevaluate. And then she also mentions learning from feedback and asking for feedback, and making sure that beyond the things that you're able to identify, learning from others areas that you can work on to have a better impact on your team is also really important in progressing your career quickly. JOËL: So how is this mindset of owning your career path maybe different than the default that a lot of people might assume in our industry? It sounds like it's a much more proactive approach. We talked already about doing the work to figure out what you want out of a career, what you care about, as opposed to just being told what you should care about by others. Are there other aspects that you have to sort of own as part of owning that career? STEPHANIE: I mean, I think it's just vital to having a work experience that is fulfilling and brings you joy and doesn't bog you down. I know we all have to work, but we also all have the capacity to exercise our agency there. I know we did talk a little about management earlier, and I wanted to also plug a book, "The Manager's Path" by Camille Fournier, which is about management. But she has a really excellent first chapter about how to be managed and what you can expect from having to be an employee with a manager but also what power you have in that dynamic. She says that while you can be given opportunities and have areas of growth pointed out to you, your manager can't read your mind, and they can't tell you what will make you happy. And so I have seen a lot of people spend time worrying about if they're doing the right things to get to the next level. But oftentimes, we just haven't really talked enough about how that next level is really totally different. And there are so many routes that that could take, whether that is becoming an open-source maintainer, or producing content like blog posts or podcasts even, or speaking at conferences, or management. Once I realized that there were so many different opportunities available to me, I did feel a bit liberated because it does seem like, oh, you're just supposed to level up your technical skills until you've become this superstar coder. But that's not what everyone wants, and I think that's okay. JOËL: And, like you said, there are so many different areas where you might choose to focus or invest time into, and you don't have to do them all. You don't have to be the super prolific open-source person, and also keynoting at conferences, and also publishing the book, and also, you know, whatever you want to add in there. So once you know your goals, how do you make those goals a reality? We've been talking a lot about know yourself and have some goals. But at some point, you have to translate those goals into actions that will take you one step at a time towards those goals, and sometimes that translation step is hard. STEPHANIE: It is hard. I think this is another place where I would work with my manager on, especially if I'm on a project where I'm not quite seeing those opportunities. Like I said, usually having another perspective or another set of eyes on what you're working on can make it clear, like, specific and concrete aspects that you can spend your energy on. So if it's wanting to get better at testing, it's like, okay, what does the current test suite look like, and what are some opportunities that you can provide new value to the test suite to make an impact on the team? Or what are some refactoring opportunities you can make if you are wanting to have more of that experience outside of the regular ticketed feature work that you have to do? JOËL: I think it's interesting that you mentioned impact on the team because not only do you want to level up some skills, but if nobody knows about it, your odds of getting that promotion or getting recognized for it are very low. So not only do you have to get good at technical systems, you have to get good at social systems as well. I was recently reading an article about the role of kingship in medieval Europe and how it's very much a role that needs to play out in public in order to build legitimacy so that people will do what you say. You need to be seen to do the things that everybody has in their mental kind of checklist are things that a good king does. And some of those are somewhat divorced from the reality of what actually is effective governance. It could be various public rituals that you do that people see and are like, oh yes, you're doing this parade every year. You're looking the part of a good king; therefore, I think of you as a good king. It could be military campaigns because there are a lot of those in the Middle Ages. And there's this interesting cycle where kings that have long and effective reigns then get to influence what the next generation of kings are going to have to do in order to look legitimate because people will point back at you and be like, well, Stephanie was an effective ruler, and she did X,Y,Z. And so, in order to look the part of an effective ruler, you should be doing those same things. STEPHANIE: That's fascinating. In some ways, I struggle with the idea that you have to prove that you're, you know, doing the kingly things and worthy of that title. But I do think that there is some degree of truth to that in your career as well, where you want to make sure that the work you're doing is visible. And you also just, in general, bring up a really good idea about the importance of leadership in career progression. And I think that in my experience, and from what I've observed, that is a vital way to progress your career is to just start demonstrating leadership qualities, and that could look like reaching out to new team members and helping them with onboarding. That could mean updating the documentation, just taking the initiative, and doing that. That could also mean starting to voice more of your opinions about risks or red flags about a certain technical implementation or a project because you have amassed the experience to be able to make those decisions and put in your two cents and then making sure that the choices that are made are the right ones. JOËL: Additionally, I think even when you're doing things that are a little bit more inward-focused, like learning something new, you can generally find some kind of artifact that you can take and share more broadly with a team. So maybe you experimented with something, and you wrote up a small code example to showcase the thing that you're trying out; make a Gist on GitHub and share it with your team. If you learn something new, maybe write a blog post about it. Maybe even just start a thread in Slack and start a conversation on something that you learned recently. These can be really low effort, but I always look for opportunities to take things that I have learned, things where I'm sort of working a little bit more inwardly on myself and see how can I share that with the rest of the team? Both because it benefits the team, they get to benefit from the impact of some of what you've done but also, it helps a little bit with making sure that your work is visible. STEPHANIE: Yeah, absolutely. JOËL: So we've been talking a lot about improving ourselves technically, but there's one question that we've danced around that we haven't actually addressed, and I'm curious about your thoughts here. For someone who's early career, do you think it's more valuable to be a specialist, someone who goes all in deep on one technology and becomes great at it? Or is it better to go more broad, become a generalist, and know a little bit about a lot of things? From the point of view of what will help move my career forward. STEPHANIE: I personally do think there is an aspect of being a generalist for a little while, a few years maybe, to get a taste of what is available to you. I think that is valuable before really committing to decide, okay, like, this is what I want to specialize in. Honestly, as a generalist myself, I still do feel a bit like I don't know what I want to dive deep into and commit myself a little bit to being like, okay, I'm going to have to sacrifice learning all of these other things to really focus on this one aspect. So I have found that being a generalist also kind of gives me the flexibility to work on different projects that might require learning a new language, or at least one that I am less familiar with. And I know that that's a skill in and of itself, being able to move on to different things and gather information and the skills you need to start contributing and working effectively quickly. So, honestly, I think I can really only speak to that experience, but it has served me well and is, for the most part, enjoyable to me at this present moment. What about you? Do you have any thoughts about generalist versus specialist? JOËL: I think, in a certain sense, there's no right answer. Like we said earlier, there are multiple paths to a career in tech, and you can go through both. I think something that I've seen be less effective, especially very early career folks, is trying to go too broad, jumping on every new language or framework every couple of weeks, every month, and just dipping your toe in it and then moving on to something else and never really learning deeply, or synthesizing, or building a mental model of things. And so you're kind of stuck in the shallow end forever, and it's hard to break through into that initial level of expertise. So I think, especially very early career people, I tend to recommend pick one language or technology and focus on getting good at that and then branch out. And, of course, you're never doing everything in a vacuum because there are a bajillion dev skills you need to learn beyond a language or framework. So I often categorize three areas to focus on that I like to recommend for people; one is pick a primary language or framework and get good at it. Two, learn some evergreen skills, these are things like version control, so Git, SQL, using the command line. And these are not things that you need to master on day one because you're going to use these your entire career. So learn a few things, move on, come back to them next month, learn a few more things, and just keep coming back there every now and then over the course of your entire career to deepen those skills, and that will serve you very well. And then, finally, some random thing you're interested in. I find that I learn so much faster and so much more deeply on topics that I'm interested in or passionate about. And that interest can be very random sometimes, and it can also be fleeting. It can be, oh, I was interested in a thing for a little bit, and I dug into it, and then I moved on to something else. If I have a career or learning plan, I like to leave that room for spontaneity to say there will be things that are maybe not strategically important as my next step, but I can learn them because I'm interested in them because they bring me joy. And then later on, maybe that will actually be the foundation of something important two years down the line where I can draw on that knowledge. STEPHANIE: You bring up a really interesting point. I do think my interpretation of generalist did line up more with the idea of those evergreen skills. So I think also about debugging and testing, and those are just part of the things that you're doing every day. And that might look different from project to project depending on what language or framework you're using and what testing philosophy people on your team abide by. But yeah, those are areas that I do think investing in will serve you well across projects and help put you in a position where you can jump into anything and be like, okay, I have these core foundational beliefs and skills about this work and now, okay, let me figure out how to apply them to the task at hand. JOËL: Are you familiar with the metaphor of the T-shaped developer? STEPHANIE: I don't think so. JOËL: So the idea is that you want to balance out a broad set of skills that you're a generalist at, that you know a little bit about them with a few things that you are a deep expert in. So you have that horizontal bar, but you also have a deep area of expertise which creates a kind of a T shape. In a sense, maybe that's just trying to say, like, do both. But I was recently reading an article that was advocating for not only a T-shaped developer as a sort of starting point but then also beyond that, over the course of a long career, you have plenty of opportunities to develop more than one specialization. And so now you start having a very broad base of general knowledge as well as multiple areas that you have spent significant time becoming an expert in. And this article referred to this idea as a comb-shaped developer, and that's something you work up to over the course of years or decades in tech. STEPHANIE: That's very cool. I love the idea that you might start out as a T-shaped but what you're doing is kind of like adding to your harness of skills and it being an additive process. You'd have more teeth in your comb [laughs] rather than it replacing something or a set of skills. On that note, shall we wrap up? JOËL: Let's 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!!!!!!!!! ANNOUNCER: This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success.
"An advanced practice provider's scope of practice can vary drastically depending on where you practice; listen to the ASCO Education's third episode of the advanced practice providers series, and learn more from our co-hosts, Todd Pickard (MD Anderson Cancer Center) and Dr. Stephanie Williams, (Northwestern University Feinberg School of Medicine), along with guest speaker Heather Hylton (K Health) on what scope of practice is, who or what defines it, and why knowing this information is critical to your oncology care team success. If you liked this episode, please subscribe. Learn more at https://education.asco.org, or email us at education@asco.org TRANSCRIPT Todd: Hello everyone, and welcome back to the ASCO Education Podcast, and the third episode of the Advanced Practice Provider series. I'm Todd Pickard, your co-host for this series, along with Dr. Stephanie Williams. We'd also like to introduce you to our guest panelist today, Heather Hylton. Heather, why don't you share a bit about yourself, what you do, and where you're from. Heather: Sure. Well, thank you so much. It's a pleasure to join you in this podcast. My name is Heather Hylton. I'm a physician assistant based in New York. Most of my career has been in oncology, but I've been fortunate to have been able to serve in administrative and clinical roles in organizations in multiple states. So, I'm currently working in the remote care space, and I'm excited to bring this experience to our conversation. Todd:And Stephanie, why don't you remind our listeners today about your background, and why you have so much experience and really just have a really true appreciation for working with advanced practice providers. Stephanie: Thanks, Todd. I've worked in oncology for almost 40 years and I've had the opportunity to work with advanced practice providers, both physician assistants, and nurse practitioners for a couple of decades now. I've been in stem cell transplants and cellular therapy, and they're absolutely integral to our practice, both inpatient and outpatient in that particular field. Todd: Well, in today's episode, we're going to be talking about advanced practice providers' scope of practice; what it is, what it means, who defines it, and why it is important for oncology APPs to know and understand what their scope of practice is. So, why don't we jump right in? So, I think it's important to define scope of practice first. So, I would like to just offer a little bit of a perspective around that language of scope of practice. Generally speaking, it is what is allowed by law at any particular state for an advanced practice provider to perform care on patients; what types of patients they can see, what kind of medications they can prescribe and write, what kind of activities they can be in, what kinds of relationships they have to have with other providers and delegating or collaborating physicians. So, generally speaking, a scope of practice can be very, very broad or it can be very, very narrow. And it really depends on the state and how the state defines it. So, I'm going to ask Heather to jump in here and can you provide an example or a story, or a case that comes to mind that helps illustrate scope of practice for an APP? Heather: Sure, I'd be happy to, you know, in terms of how I think about this, very simply stated is, what it is that I'm permitted to do as an advanced practice provider. And the boundaries, as you said around this, are really determined by a number of factors. So, education, training, experience, my competency, federal law in some cases, state laws, regulations. And this may also include, as you mentioned, specific physician collaboration requirements, facility policy, clinical privileges that are granted by that facility, sometimes payer policy factors in, and then of course, the needs of the patient. So, one very common question that comes up in the oncology space is, can APPs order or prescribe systemic therapy? And the answer of course, is really going to be determined by going through that checklist of the entities that determine if this is something that that APP can actually do. So, one example I have is a facility where the module that they utilized for ordering systemic therapy provided system rates only to physicians. And the facility that had been using that module before APPs were widely integrated. So, there were some innocent assumptions made that the absence of the APPs in the module meant it was “illegal” for APPs to order systemic therapy. So, in working with this group, we were able to go through this checklist. So, there were no federal or state restrictions on this particular clinical activity, but it needed to be written into the facility policy. So, criteria for establishing competency were devised. And then an education training plan was designed, implemented, and driving systemic therapy became part of that privileges requests from the APP, and then the systems' rights issues were also addressed. So, this was truly a success story in being able to safely expand the number of clinicians, who were able to prescribe systemic therapy in a busy and growing facility. Stephanie: Heather, what does it mean to you (this is a term that our administrators throw around a lot and our nurse managers throw around as well) to practice at the top of your license, whether you're a nurse, physician assistant, or an advanced practice nurse; what is the top of your license? Heather: Well, this is a hot topic. And top-of-license practice really comes down to role optimization. It is just good business. It means that the patients and the caregiver's needs are being met by the professional with the appropriate training, experience and competency for each function or task that the professional performs. And from an engagement standpoint (which I know is not the topic of our conversation today, but it is important) we know that people want to engage in work that they find meaningful. While that definition certainly is individualized, a common thread is being able to leverage that education, training and experience you have to help others. And often, the reason why we really pursued our careers. Todd: I think this is such an important topic to talk about, is the top of license practice, because it really impacts all of us, Stephanie. You know, as physicians, you want to do what you've been trained to do, which is to assess a patient, have a differential diagnosis, do a diagnostic workup, arrive at a diagnosis, create a treatment plan, and have that treatment plan implemented so that you can care for the patient. And APPs are the same way. So, when you have folks, whoever they are, whether they are the nurse or the advanced practice provider or the physician or the social worker or the pharmacist, whoever it is; if they are utilized in a way that does not take into account all the skills and competencies that they have to deploy and provide for that patient, they're really working below the top of license. As an example, if you had an APP go from room to room to room with you seeing patients and the only thing that you had the APP doing was scribing, that APP is working well below their licensure. And in fact it's incredibly wasteful with limited resources in healthcare, to have folks who have lots of skills and competencies working at a level where you really should have a different member of the team providing that service. Like if you need a scribe, you should get a scribe. And so, I think that kind of illustration really makes it salient to folks to think about; we should all work to stretch the knowledge and skills and competencies that we spent so much time developing in all of our training and our certification. Because otherwise, it's just wasteful. And as Heather said, it's not very satisfying. Stephanie: Todd, I think that those are excellent points that you bring out and I think that's very important for people to realize that APPs aren't scribes, they aren't there to extend me. They're there to help me as a physician in my practice, to help the patients actually. And then we should work together as a team to give the best patient care that we can. But many times I see my colleagues, just as you said, going from room to room with their APP and expecting the APP, you know, “I'll pontificate and tell you do this, that, that and the other, and then you go out there.” I think also from a career and job satisfaction rating, it's really important to have that team around that can help each other out. And I think that really does help in terms of decreasing burnout and other things like that. Todd: So, Heather, can you give us some idea of how is scope of practice defined at a state or an institutional level? How do people arrive at those kinds of decisions or, you know, how does an institution decide what the scope of practice is? How does it work? Heather: Taking a step back and just, you know, kind of thinking about it through different lenses. So, you know, in contrast to physicians whose scope of practice has minimal variability from state to state, we know that there can be a bit more state to state variability for APPs. And the regulatory bodies or agencies can also be different. And there may be multiple agencies that weigh in on what that APP can do within a particular state. And so, it's certainly important to be familiar with the Practice Act for each state in which you are licensed. And I would also add onto this, in certain geographic areas, this may be particularly relevant to you if you are in a practice that has multiple locations in multiple states, but we'll come back to that a little bit later. But, you know, again, kind of going through your checklist, starting off, looking at what the Practice Act says, and these can all be written up in many different ways. Sometimes it comes across as what I would call like a laundry list, which when you first read it, seems pretty straightforward, but it can also kind of lead you into some issues because if it isn't on there, then what does that mean? Some Practice Acts are written up really more on the basis of what activities are excluded or things that you cannot do as an APP. And then some are just kept very broad, which sometimes makes people uncomfortable, but I would encourage you to not be uncomfortable with that because sometimes, they're written this way in order to give you more flexibility to set that scope of practice at facility level, which is ideally where you really want to be cited. You don't want to create something more limiting or more restrictive than what the state actually allows you to do. Todd: That is a critically important point and one that in my 24 years as an advanced practice provider who happens to be a PA, that has come up often and frequently is, “Well, it doesn't say this” or, “It doesn't specifically exclude that. And so, we're uncomfortable.” And my response is, “Well, that gives us an opportunity to create this space”, because, you know, many times, as you point out, Heather, these kind of ambiguities are written intentionally, so that local practice decisions can be made, so that physicians and advanced practice nurses and PAs can decide as a team, how do we work? You know, in my state, it was very specific that they wanted APPs and physicians to collaborate on ‘what does our practice look like?' And every local level, outside of those very large kind of rules about who can prescribe and who can pronounce a patient dead or write a restraining order — outside of those very large things, they really want us, they want the care team to figure it out and to do it in a way that's best for our patients. I think that is the best approach, is when we get to decide how we work. You know, the places, some of the states that have these laundry lists, you're right, Heather, it seems like, “Oh, that's easy,” but then you're like, “wait a minute, there's only 10 things on this list and we do, you know, 57, what does that mean?” And so, I think it can be very disadvantageous when you have those lists. And I do think it's important to think through these things, work with your legal colleagues to analyze these things, and then take an approach, stake out some territory, you know, once you've gotten informed and say, “This is what our scope looks like, we've all talked about it and this is how we're going to work as a team.” So, that's wonderful when you've got that level of flexibility. I think that's really great. Stephanie: Does insurance reimbursement play any role in terms of scope of practice, either locally or nationally? Heather: It absolutely can. And it's important to know, for example, if you are in a practice, where you're seeing Medicare patients, to understand Medicare conditions of participation. If you are in a practice where you are taking care of patients with Medicaid or certainly private payers as well, like understanding what is actually in those contracts, so that you can make sure that you are either updating them if you need to, or making sure that what you need to be able to bill for is billable within those contracts. Todd: It's really interesting because I always have a sense of feeling like I need to cringe when somebody says we can't do this because of a reimbursement issue, and also, partially laugh. And the reason why I have both of those reactions is it's typically a misunderstanding, because saying that we won't reimburse for oxygen unless a physician's order is present to prescribe the oxygen does not equate to only a physician can do this. And so, you constantly have to kind of explore these issues and say, “Okay, so yes they use the word physician, but as an APP who has a collaborative delegatory relationship with a physician, and according to my state license and scope of practice, I write physician orders.” So, if you connect those dots, if I, as the APP, have written the physician order for the oxygen, it meets your criteria. It doesn't say a person who holds a medical license, it says physician order. And so, I think that's where you have to really constantly be on guard about these misconceptions, misunderstandings, and these ambiguities. And as Heather said, working with APPs, you just have to say, “Look, there's going to be ambiguities, we're going to work it out, we're going to figure it out. And, you know, reimbursement is important.” But you have to remind folks that reimbursement doesn't define practice, it defines how you get paid. Stephanie: Excellent point, Todd. Excellent. Heather: I'll add a story to that as well. When I first came to New York, I became aware of a situation where the narrative at a particular facility was that a major private payer would not reimburse for services provided by PAs. Now, I thought that was a little strange, but, you know, I was a new kid in town, but at that time — there are more now, but at that time there were 10,000 PAs in New York. That's a pretty big number. And so, I thought, you know, I probably would've heard something about this if this major payer would not reimburse for these services. So, to help with the situation, I started doing the research, you know, looking at specific information from the payer, checking with connections at other facilities to learn about any issues that they may have experienced with this payer, checking with our national organization and so forth. And really, nothing was coming up, suggested that the payer would not buy reimbursement for services provided by PAs. And ultimately, it came down to something very simple, which was the facility just didn't have this in their payer contract, they hadn't needed it up to that point. So, it made perfect sense and it was fixed once the issue was identified. So, this goes back to just being very vigilant about the research that you're doing. And sometimes, it takes a little time to get to the solution, but really that perseverance does pay off. Todd: Heather, I'm sitting here, I'm laughing because I just had a recent example of where the right and the left hand within a state had no idea what was happening. So, an employer who does ambulatory outpatient treatments at different retail locations (we'll just leave it at that) there was this concept that PAs as an example, were ineligible because of the state requirements that then were reflected in this company's policy. And what was so interesting is that a PA colleague of mine started investigating and I said, “Well, what does the state law say?” And she went and she looked and she said, “Oh, it was changed last year that this thing that was causing this policy in this employer was changed.” And I said, “Well, does the company know that the law was changed?” So, she reached out to the medical director who was a physician, whose daughter was happening to want to go to PA school. So, she had an in, she had an in right away, which serendipity does play a part here. And she said, “Did you know that the state law changed?” And they said, “No.” And so, she sent them the state law and then within a week, the medical director said, “Oh, just so you know, we're hiring PAs now, we've updated our internal policies to reflect state law.” So, sometimes it's just these small things that people forget the details, that when something changes, you have to reflect that in your policies of companies or institutions or your practice group. And that's the one thing that I think is so different for APPs from physicians. Physicians are kind of just granted this big broad authority and it rarely changes. It's very stoic and it's kind of fixed. But for APPs it is constantly in flux, constantly in flux. And that's just the nature of it. I don't know why it's been that way. We've organically developed this in the United States over the past 50 years, maybe 50 years from now, it'll be different, but right now, it's not. And so, I think that's the important thing is there's more space out there for advanced practice, scope of practice and top of licensure, than you think is possible. It just requires a little work. Heather: I will say that I 100% agree and, you know, when you take a step back from some of these, like these Practice Acts, they tell a story about the climate in the state and the history in the state. And it's quite fascinating if you like that. I'm not the most fun person at a party, but, you know, these things, they tell a story and it gives you a good sense of what's actually going on in the micro environment in that state. In the last year plus, I've spent a lot of time reviewing Practice Acts of most of the states of the union, and so, I have this ability to really compare. And I also know which states I really, really like and which ones are a little bit more challenging. But there are things like even legislation that's left over from the industrial revolution that's actually influenced how a particular pharmacy interprets, you know, whether or not they can accept a prescription without a counter signature from a physician. And so, some of these things, like when you start drawing some of these lines, it becomes very interesting and it definitely comes down to some interpretation as well. So, always being able to work with a good legal team or people who do understand Practice Act information and working with your state resources as well, as well as your national organizations can be very impactful. Todd: I would also say step one is to pull up whatever Practice Act is influencing something and read it. They are in English, they're not in Latin or French, they're in English. And many times, you can find something very plainly said. Other times you do need your legal friends to help you understand, “Okay, now what does this mean? I read the words but it's not clear.” But sometimes it will say, you know, “An APP may prescribe a controlled substance.” Period. So, oh, well, there's an answer right there. Now, there may be a how-to section later, in another part of the regulatory or administrative code within a state, but for the most part is, don't be afraid to look, don't be afraid to phone a friend and explore and ask questions. Stephanie: You're eligible though for controlled substance licenses nationally, right? A DEA number? Todd: That's a hot topic. Stephanie: Is it? Heather: There may be other things that you need to do within a state as well in order to prescribe. So, for example, in Massachusetts, even to prescribe legend drugs, you need a Mass Controlled Substance Registration, because any substance that's not a DEA scheduled substance is considered a category 6 substance in Massachusetts. So, if I'm going to write a prescription for Omeprazole, I need to have a Massachusetts Controlled Substance Registration, as any prescriber would in the state. So, again, some of these little nuances, making sure that you're very familiar with that and doing the research. Stephanie: So Heather, you're in New York, I'm sure you get patients from Massachusetts. So, you have to make certain that you can prescribe both in New York and Massachusetts and probably, Rhode Island and all the states around there? Heather: Well, you bring up a really good point, which is, you know,when you are in a practice that has locations in multiple states, and we can talk about telehealth a little bit later. But if you are in a medical group that has practice sites, say in Connecticut, Massachusetts, and New York, licensed in all three states, and you work at sites in all three states, say you're an APP who likes to float and you make these commutes each day. So, all three states may have significant differences in their Practice Acts or what you need to do in order to optimize your practice in that state. And that includes collaboration requirements. So, some states have the ability for nurse practitioners to have autonomous practice, but there may be other steps where you may need a particular license, in order to be able to do that within that state. So, again, being very aware of those steps that you need to take is really important. Stephanie: So, Heather, you mentioned telehealth, which is a big topic through COVID. I don't really have to tell people how big a topic that is. So, what are the changes or what is going to happen with that now that we're “getting to the other end of COVID”? Heather: That's a big question mark, right? So, certainly, the advancement of telehealth was an important development during the pandemic. And many states have a separate set of laws, regulations that govern delivery of healthcare services through telehealth. So, if your practice is utilizing telehealth to deliver medical services, it's necessary to be fluent in this information. So, this can include important information such as how a patient provider relationship is established. And, you know, it may also include information on prescribing practices, what may or may not be permitted or the conditions under which a prescription can be provided and so forth. And so, some states relaxed telehealth-related rules under state of emergency declarations. And so, making sure that you are up-to-date on this as some of those rules have returned to the pre-pandemic state and some of those relaxations actually became permanent. And of course, if you're billing for these services, knowing the payer requirements and then the policies and procedures you need to follow, in order to bill for those services. And where the patient is physically located at the time that the service is being provided, is the state in which you need to be licensed in order to provide that service. So, if Todd is performing a telehealth service for a patient in Oklahoma and he's not licensed in Oklahoma, he won't be able to see that patient. Todd: It's really strange because telehealth has brought a different layer of perspective around scope of practice and licensure that we hadn't really faced as much before, right? So, for example, I've been a PA for 24 years. I have been able to call across state lines and interact with patients and talk to them on the phone, get updates on their surgery, if they're having, you know, a postoperative infection, get them an antibiotic and do that kind of work forever. But as soon as you add that technology and that billing entity called a telehealth encounter or a virtual encounter, it becomes a different animal all of a sudden. And this really came to light during the pandemic. And we quickly realized all of these things made it impossible. And that's why all the states did all of these emergency declarations saying, “Just forget it, just take care of people.” But now that we're getting past that, we're kind of going backwards, not because anything bad happened, but because folks are saying, “Well, we want to go back to the older ways where, you know, every state could have differences in regulations and make folks pay those professional fees to get licensure.” So, it'll be interesting to see how this space develops, particularly since our patients are becoming more consumers. Really, they want to talk to who they want to talk to, when they want to talk to them, and they want service here and now. And I think we're going to have to continue to respond and adapt to that. And some places will lead and some places will lag. But those lagging places quickly are going to start having conversations within the state and our legislators will respond. I mean, politically, it will change over time. It just, you know, matters how quickly. So, it's really an interesting thing to watch unfold in real time. Stephanie: Heather, any final remarks, concerns, advice to those out there, both physicians and advanced practice providers, about how to handle questions about, my God, what is your scope of practice? Heather: I'm so glad you asked Stephanie because I have a list I might be able to pass them along. So, here we go. Do take the time to review the state Practice Act information and laws and regulations and of course facility policy governing a practice where you are. And as the license holder, you are responsible for knowing what you are permitted to do. Please do not make any assumptions about others' knowledge of this. Unfortunately, I've seen people get caught up in that and always own it, yourself. Generally, recommend facility policy not be more restrictive than what is permitted under the Practice Act of the state. Fact check, challenge your assumptions, and if you haven't had the chance to already do so, do check out the ASCO Advanced Practice Provider Onboarding and Practice Guide for more resources. Stephanie: Well, I'd like to thank Heather for her excellent insight into this very complicated topic. Todd, as always, is always on top of everything. And sharing both your experiences and your ideas with us on APP scope of practice, which can vary quite drastically depending upon the state and also the type of institution you practice in. Stay tuned for our next episode. Until next time, take care. Voiceover: Thank you for listening to the ASCO Education Podcast. To stay up to date with the latest episodes, please click subscribe. Let us know what you think by leaving a review. For more information, visit the Comprehensive Education Center at education.asco.org. Voiceover: The purpose of this podcast is to educate and to inform. This is not a substitute for professional medical care and is not intended for use in the diagnosis or treatment of individual conditions. Guests on this podcast express their own opinions, experience, and conclusions. Guest statements on the podcast do not express the opinions of ASCO. The mention of any product, service, organization, activity, or therapy, should not be construed as an ASCO endorsement.
The Catalyst: Sparking Creative Transformation in Healthcare
“If you can create better boundaries to just slow down a little bit, it is crazy how everything else will feel so much more amazing,” shares Stephanie Fusnik, nutrition coach. Stephanie saw through her medical schooling and career that there were large gaps in the way the healthcare system approaches physical rehabilitation, chronic disease, and weight loss. In particular, her older female clients were struggling to lose weight or improve their health based on their doctor's recommendations that were not taking into consideration the impact of hormones on metabolism. Stephanie soon realized that by teaching perimenopausal and menopausal women about the role of hormones like cortisol in their bodies, her clients finally saw noticeable results not only in weight loss, but also overall quality of life. Once perimenopause and menopause begin, women's bodies no longer can handle stress in the same way that they were able to before. Cortisol levels increase and stay high rather than returning to normal, because there is a lack of hormonal buffers like estrogen and progesterone that would typically help with controlling them. When cortisol levels are high, women experience increased brain fog, weight gain, digestive problems, and trouble sleeping. Learning to implement and uphold boundaries in order to reserve time and energy for yourself to not get overly stressed is pivotal for helping lower cortisol levels. With proper boundaries and an understanding of how hormones impact overall health and metabolism, it is possible to repair your relationship with your newly changed body. Perimenopause and menopause cause large changes in the way women's bodies work. The shifts in hormones cause increased cortisol, slower metabolism, and in turn an increase in a variety of other health issues. Tune into this week's episode of The Catalyst to learn more about the impact of menopause on the body, why boundaries are so important for overall health, and how nutrition plays a role in managing hormones. Quotes • “There's not enough information on this out there because lots of studies are done on men, and the whole fasting thing, and not eating your carbs, and eating low calorie, and those things don't work anymore.” (5:04-5:13 | Stephanie) • “To dismiss someone's health concerns is one of the most disrespectful things you could ever do.” (7:25-7:29 | Stephanie) • “Stress is stress. And you get the same response whether it's good or bad, your body doesn't give a shit. So then we go through these hormonal changes. And typically before, we can handle it okay, because we have hormonal buffers like estrogen, progesterone, they all help us deal with that kind of stuff. As soon as we go through peri-menopause, and menopause, and those things drop, our body cannot handle that stress anymore.” (10:13-10:34 | Stephanie) • “If you can create better boundaries to just slow down a little bit, it is crazy how everything else will feel so much more amazing.” (15:56-16:04 | Stephanie) • “You're supposed to be selfish in certain aspects of your life. If you're not taking care of yourself, or doing things that you love, and you're not happy, that will bleed into all your relationships.” (17:15-17:24 | Stephanie) • “Just because you're not scheduled for something doesn't mean you're available.” (19:53-19:57 | Stephanie) Links Connect with Stephanie Fusnik: Website: www.vitalityosteopathicandexercisetherapy.com Tiktok: vitalityoet.stephanie FB: Stephanie Fusnik FB Group: Metabolism and Menopause by Vitality - Secrets for Fat Loss Instagram: vitalityoet.stephanie Connect with Lara: Website: https://drlarasalyer.com Instagram: @drlarasalyer Facebook: https://www.facebook.com/drlarasalyer Linked-In: https://www.linkedin.com/in/drlarasalyer/ YouTube: https://www.youtube.com/c/DrLaraSalyer TikTok: @Creativity.Doctor Podcast production and show notes provided by HiveCast.fm
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.
What's hot today might be out of the zeitgeist tomorrow. Are people still doing goat yoga? Are skinny jeans really the new mom jeans? There are so many trends to keep track of and so many “next big things,” it's impossible to know what's real and what's just a passing fad. For a business, it's important to understand the distinction, and it's even more important to have products that will thrive regardless of the different cycles your industry will run through. Lopa van der Mersch says she has that kind of product with her company, Rasa, which makes a coffee alternative with adaptogen blends. Lopa has a fascinating story, including inadvertently entering into a cult, navigating tricky co-founder relationships, and building up a business to more than $2M in revenue all from her garage.On this episode of Up Next in Commerce, Lopa explains why she believes that her product will be a game-changer regardless of societal trends, and she breaks down how to spot something phony or bad for you, whether it's in a product or even in a partner or personal relationship. Enjoy this episode! Main Takeaways:Finding the Right Match: When partnering with a co-founder, especially one who is a close friend, some things you should consider are their skills and their ability to resolve conflicts. Ask yourself would you hire this person to do this job if they were not your friend? And think back to how you have handled conflicts with each other in the past. If you are comfortable with the answers to those questions, you can feel more confident in that person as a partner.Culture Shock: Growth in any industry is related to what is happening in common culture. When something is trending, a corresponding industry will rise. Today's society is focused on health and wellness more than in the past, so companies that deal with products in that space are on the rise. But to stay solvent even when the trends change, companies need to ensure that they have products that are worth something and add to a person's life regardless of whether it's trendy or not.Let It Come, But Also Go After It: Striking the right balance between organic growth and focusing energy and money into specific channels is difficult. The key is to make sure that you are diversifying your efforts wherever you choose to try to gain attention. Play with the levers of what's working in one area, but continue to invest elsewhere so that when one thing begins to fail, you have other 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---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 Lopa van der Mersch who currently serves as the founder and CEO of Rasa. Lopa, welcome.Lopa:Hi, great to be here. Thanks for having me.Stephanie:I am very excited to have you on. So your history as we talked about before the show started is very intriguing and I think our guests would love to kind of start there and hear a bit about your background, childhood, all of the things about Lopa.Lopa:All right. Well, let's see how long we have. So it's all a question of where do I start, right? I mean where do we plug in? But I will say I think a good place to plug is around when I was 16, I first heard the word enlightenment, I don't even remember in what context and I was like, that. I want that, whatever that is. And I started reading spiritual books on Taoism and Buddhism and I went from being this incredibly miserable teenager, like the most, like special. I know like everybody's miserable as a teenager, but I was extra. I'm extra about everything. And then I kind of went through this awakening process as I discovered this other dimension to life and I was just hungry and I was positive and I saw beauty everywhere and it was great.Lopa:I started getting into yoga and I kept on finding myself wanting a deeper and deeper relationship with a teacher. And then I did find a guru, like a real guru from a lineage in India and studied with him for a long time and learned a tremendous amount. Spirituality was a huge focus of my life. I've probably done six months of retreats over the years. And for a while three to four hours of meditation practice a day and I was hardcore. And at some point in there, I started to sort of question the navel gazing nature of it all and was like, what else can I give to the world? And what else can I bring to the world? And through serendipity in many ways, I found a job in the bio char industry.Lopa:And for those who aren't familiar, bio char is short for biological charcoal. It's charcoal that you add to soil to both sequester carbon and improve soil quality. And I helped co-found two businesses there. I worked for Richard Branson's Carbon War Room while I was there. I spoke at TEDx. It was like I was in the right place at the right time in an industry that was really growing specifically for its focus on being a potential solution for climate change. And then after, I don't know, five years of eating, breathing, sleeping, sweating bio char, and then practicing and doing retreats when I could and all of that, I left that context and went on and around the world trip with my now husband and just at the very end of that trip, we inadvertently as always happens, got into a cult. And no one knows you're getting into a cult when you're getting into a cult. Nobody's like-Stephanie:Okay, how do I even know if I'm not in one right now then?Lopa:It's a great question. So there's sort of two distinctions of cults. We are all in a certain cult in terms of modern society, in terms of our involvement with media and the way that it shapes the way that we think. All of that could be considered a cult. And depending on how you look or who you talk to, that could be seen as a benign cult or a destructive cult. Many religions are benign cults. But in this context we were in what could be considered a destructive cult or another framing that they use in cult academia is high demand group. And so one of the ways that you can assess if am I in a cult kind of situation, how much demand is there for your time, for your attention, for your devotion, for your money? And in this context, we were pretty much 100% of our time was focused on this cult. My husband was working at the time and found it incredibly hard to maintain his job and all of his duties in the cult context.Stephanie:How did you inadvertently get into it? Did you meet one person and they're like there's this cool thing, it kind of sounds like this, and it's just like a community of just like besties. And then you get in there and it just turns into more and more and more work, or what does that look like?Lopa:Yeah. Yeah, it's always gradations. So we met somebody and she was talking about her experiences with this woman. And often people don't think of women as having that, but it usually there's some kind of narcissistic component to any cult dynamic. Not necessarily though. And I will also say too, just because I think it's important to understand, you can be in a cult of two and another way to look at that is an abusive relationship. So that would be considered like the smallest size of a cult and then bigger ones are what we normally think of when we think of cults. So if you're in a relationship and you're like am I in a cult of two, look at how much demand is on your time and how much are they trying to limit the world around you?Lopa:So yeah, we met this woman, she was telling me about her experiences and they were amazing and mystical and psychedelic in many ways. And I was like, all right, this sounds like what I want. Yeah. I want that magic. I want that other worldliness. And so we went to go see her and she's a very powerful, very charismatic woman and there's real great spiritual teachings in there too. Nobody joins a cult just because they're like, oh, I want to get abused. That sounds great. There's something that draws them in. And usually it's a trauma bond that keeps people in because there's like, oh, today it's a little bit of love and tomorrow I'm going to humiliate you and today, you're the best thing ever. And tomorrow I'm going to question every aspect of your sense of self.Lopa:So it started as this charismatic, interesting, powerful woman who had a lot of energy. I did have psychedelic experiences around her. Cool. That's fun. Without any drugs and it's the context there. And there are some things that I probably should have been like um, she gravels and hisses and speaks in tongues and stuff.Stephanie:A little off putting.Lopa:Yeah, yeah. But I was like, well, everybody around her kind of did it. And so that normalized it and was like, oh, well maybe I just don't get it. And maybe okay, if I start doing that, then I'll be more spiritual too. And all that kind of stuff. And with almost any cult or context, it gets more and more insane literally. It's like an onion. The outer layers and people who just come to a class here and there, they might be like, she's amazing. What are you even talking about? This is not a cult.Lopa:And then as you get deeper and deeper in and closer into that kind of inner circle, that's where things like some of her like... Sorry, I'll go back and say for the first six months or so, it was like bliss. It was amazing. It was just awesome. And I felt so seen and so loved and all of that. And then after some time is when, and in spiritual contexts, you're trying in some way to break your ego down. And so the eco breaking down a scene in this context of like, well, I need this and so I'm being humbled.Stephanie:Yeah, you need that abuse and ripping apart every piece of need because I [inaudible] and I need to be separate from that.Lopa:Exactly. Exactly. So this is part of the growth and I just have to sustain it and all of that, and it can be tricky to assess if that is real, is it really actually good? And you do need to be cut down in some ways or we all have times in our lives where somebody gives us a reflection that we really don't like but we really fricking need. And that can really hurt to let it in. I think a prime present tense example is people beginning to see the embedded racism in their system for white people and I think that's a reflection that none of us really want to hold, but we have to. It's important to hold and that's a big ego, like we have to let the knife go in on that one, for example.Lopa:But then in these more kind of abusive context, it's like you have to look very closely at what is this person's motive? Do they really feel like it's coming from I am actually trying to help you in some way. And she always said that she was and this was all for us and all for love and all of that. And when it came down to it, some of the things that really kind of set us off towards the end was just realizing how incredibly unhumble she was and how unwilling to receive feedback or any kind of bi-directional. She gives a lot of feedback in our direction. And then we're like, are you kind of sitting on a pedestal and then freaks out. And so those were some of our cues. And sometimes it is, you find just this tiny little cue, and then that's the thread that lets it all kind of break down and then you realize, whoa, wait a second, what are we doing? Where are we? Why are we prioritizing every minute of our lives around this person?Stephanie:Wow. Can you get out? Because I always hear when you're in-Lopa:It's hard.Stephanie:It's hard to get out. So what does it look like you trying to get out of that?Lopa:Yeah. I mean, it's different for every person. For us, it was an outside reflection from somebody who was a relative stranger who brought up. He was like, I'm sure she's a really beautiful person, but I see some red flags and I'm just a little bit concerned and then gave some examples of other teachers who were very humble. And I don't know if he specifically chose these teachers because they're very humble or what, but it was a strange experience. My husband and I were both on the phone with him at the time. When we got off the phone, it literally felt like a bubble popped.Stephanie:Wow.Lopa:We were, wow. Okay, something changed. And we felt kind of naked and exposed. And then we were like oh, we just need to give her some feedback. She's kind of lost her humility and she's like, I am that, I am everything. And so we just need to sort of remind her of her humanity a little bit, right, because we're all humans. And there was a process of, we gave that piece of feedback and then over the next three weeks, there were 3000 emails sent between the group. I went back and looked at my gmail and it was like 3006 or something, crazy. 3006 or something absurd. I'm trying to [inaudible] language out of my vocabulary. And my husband really saw it quickly and was out and for me, it took a little bit more time where I was kind of questioning myself, oh, maybe she is the real deal and I just can't take it and all of that.Lopa:And therapy was a really big part of the healing and the reconciliation and finding my core sense of self again, which got adjusted over the course of this whole time. It was like, somebody questions your motive once and you're like, oh no, that's not where I'm coming from. And then they do it again and you're like, what do you mean? And then they keep doing it and keep doing it. And you move a little bit off of your center over and over because you start to question yourself, well, maybe I am this kind of showy person and you start to believe that. And that's gaslighting and that's how that happens. So for me, it was a process of kind of reexamining all of my beliefs and all of the dogmas that I'd picked up in the course of my life and all of these different things to get back to kind of what feels like a core solid sense of self and a lot of therapy.Stephanie:Wow. That's intense. Okay. So you get out of this cult and then what happens after that?Lopa:Yes. Well that year was a doozy. I now call it my own personal 2020. Now that we've had 2020, I'm like, oh, that was my 2015 because yeah, I left the cult, 3000 emails, I had an emergency back surgery while I was pregnant, I moved across the country a week later, lost a family member, had an emergency cesarean birth that was traumatic, I had a huge falling out with my family. I was fried. And so Rasa actually really came out of necessity. Necessity is the mother of invention. I was fried and I was like, I need something to help me keep going because now I had a baby waking me up, really precious little munchkin. And I tried coffee. I've never been a big coffee drinker because it's a little too much for my system. I tried coffee and was like, whoa, okay, irritability, jitters, panic attacks, sleep is even more messed up. No. This is a hard no.Lopa:And so I looked at all the coffee alternatives out there and tried them all. And I was like, really? This is it? Come on, we can do better, right? And I've been a big herb person, just an enthusiast. I love herbs. I've always had lots of jars of herbs in my kitchen and stuff like that. And I was like, can't we just put a bunch of really good herbs in there? And then I started to really think about here, looking at coffee in this coffee cup that people just don't even really question, this ritual of drinking coffee, it's even built into so many aspects of our culture in terms of don't talk to me until I've had my second cup of coffee kind of stuff.Stephanie:Community stuff like let's meet up for coffee.Lopa:Yes, totally, totally. People talking about how coffee is their personality. And I started being like, wow, this is something that people often actually used to override their body signals. So like their body's like, I'm tired. The answer is not rest or downshift a little bit or maybe I need a little time in nature or anything like that. The answer is often coffee.Stephanie:Yeah.Lopa:Coffee is the tool of a society that does not give two shits about anything except for your productivity in a way. And we buy into that and we do that. And I say this also in the context of not saying that I'm sure a lot of people listening, entrepreneurs, people out there in the world are like, no, you do not blah, blah, blah, my cup of coffee. I understand that. I really get it. It's not that coffee is bad or coffee is the devil. It's about how you're relating to it. Just like how you're relating to anything. Like a glass of wine with dinner is not a bad thing. It's a beverage, but if you have a real dependency on that, and that is something that you really need and you have two or three or four, it's all about right relationship fundamentally. So yeah, I started looking at that and I was like, wow, everybody's just drinking coffee, coffee jacks up your central nervous system. It causes a cortisol flood from your adrenals.Lopa:So it's literally triggering a stress response which is part of why you feel so amazing. And because the cortisol is there to help you be able to beat the tiger or run away from the tiger or whatever. And I was like, wow, that doesn't necessarily put us into our best selves. When I am revved up, I'm not necessarily kind of grounded in my best decision-making, my cognitive executive function is not operating from that wide spacious perspective. And so I was like, all right, what if we, and then there was this other kind of aha about coffee is also one of the few accepted bitter tastes in our culture.Lopa:We don't tend to love bitter in our society, but coffee is super bitter. And so as chocolate is the other one. And I was like, so there's a bunch of amazing herbs out there. Some of them taste kind of like crap, but if you stick them into this like rich, robust cup and with other things that are kind of masking the taste, you can actually get people to drink something that's going to be incredibly healthy for them every single day and is actually going to help them regulate their stress response.Lopa:And so that's where at that point, I started working with a herbalist. I love herbs and there's a bit of a trend out there of people just being like, oh, there's all these trendy things out there, let's just go ahead and throw them into a bag and sell them. And herbalism is a very, very long standing tradition. That's the original medicine, the people's medicine and there's a lot of science in there too. And so I think it's really important. It's very different to have a herbalist formulated product versus trendy things in a bag products. And so I worked with a herbalist and they actually did the formula. And so that was five years ago. We were kind of in beta for roughly two years. And then we hard launched in April of 2018 and now I am founder and CEO of a 20-person business and things are going great.Stephanie:Wow. That's amazing. So when thinking about formulating the product, did you go into it already knowing I want to have for sure these things in it, or did you really just relinquish control and just say, you tell me, here's maybe the benefits that I want to see or I want it to taste maybe a little bit bitter or not at all? How did that relationship go about?Lopa:With that original relationships, so that was my original co-founder, who was a very, very dear friend and now has a royalty on her formula and we bought her out. We didn't bring out the best in each other in a business context. So that's really good, if you're going to start a business with a close friend, you really want to look at them from the angle of would I hire this person to do these things? And have I ever gotten into significant conflict with this person and how did we do? And because as soon as you're dealing with money, it becomes almost like a marriage, it's way intense. And just our friction didn't quite work, but so she had these herbs that she was already working with. Lopa:And I made suggestions, I was like, I think we should add this. And I think none of them ended up in the final formula, but I was like, it needs to taste good. It needs to be really functional. It needs to have an energy component. It doesn't have to match coffee because coffee, I think is an unsustainable energy spike. But it does need to give people some kind of lift and I wanted it to be gluten-free, have no natural flavors, anything like that. So it's just herbs. And she went to town, we now have a herbalist on staff who is a clinical herbalist and he has reformulated that same formulation probably 40 times or something. And some of that is we've done some major reformulations to just continue to improve the taste and continue to improve the functionality. And then sometimes there's like, oh, this herb has a sustainability consideration and so we're going to swap that out and, oh, we're going to change it to a different source.Lopa:And then that source has a different taste. And now we have to adjust everything. But we actually taste every single batch of herbs and reformulate every single time based on the strength of the harvest of the herbs because you're always adjusting for climate and things that are totally out of our control and we want to have a consistent taste.Stephanie:Yeah. I love that. So the one thing I want to talk about too, and understand more is the industry as a whole around adaptogens because I feel like that word now it seems like it's on every product. And sometimes I'm like, well, how do I know what an adaptogen is? Is it real? Is it not? Because it seems like a trendy thing. And how did you think about that when entering into this industry?Lopa:Yes. Oh man, don't get me started. So first, how do you know what an adaptogen is? And is it real? So these are herbs that have been used for thousands of years in traditional context, in [inaudible], in Chinese medicine. And then in the 1940s, a Russian scientist named Nicola Lazaroff, there we go, thank you. He was basically tasked with giving Russian super soldiers and athletes an edge without a crash. And so he went to work studying all sorts of substances, including herbs and fell on these types of herbs, and he was like, oh, wait a second. This does give them the edge. They can go longer, harder, faster, more, and then they don't have a crash after the fact which is what happens with stimulants. And that's the issue with coffee is you get that crash in the afternoon because it's a kind of an unsustainable lift.Lopa:And so he initially started working with eleuthero which was the original adaptogen. And there are over 3000 studies on eleuthero, it's one of the most studied herbs and all through his research. And that term was coined, I believe, in the early 1950s. And so in order to be called an adaptogen, a herb needs to, we call it the four Ns, it needs to have a normalizing effect on the body. So it helps balance, helps you find homeostasis against environmental, physical, emotional, mental factors, all kinds of stress. It needs to be non-toxic in normal therapeutic doses. So it has to be basically safe. It's not going to, basically safe for most people. It needs to be nonspecific in terms of, there are many herbs where this herb is very good for the liver or this herb is very good for the blood.Lopa:These are herbs that work systemically and holistically in the whole body. And then that relates specifically to number four which is neuro-endocrine. It needs to have an impact on your neuroendocrine system which is your nervous system and your endocrine system coming together. And both of those, I want to go a little bit into the science, but so you have two main pathways that your body uses to communicate that you're under stress which is your hypothalamic pituitary adrenal axis and your sympathoadrenal system, hypothalamus pituitary adrenal axis is HPA. And the HPA axis is how your hormones tell your adrenals that there's a stress issue. And then your SAS is neuro-transmitters. And these herbs strengthened those two systems, literally like exercise. So they say that it mimics stress. But it's actually in a good way.Lopa:It's a eustressor. So it's actually like exercise is stressful for our bodies but it's in a good way, because we're getting stronger, we're getting more resilience, all of that, we're getting more flexible. And so adaptogens are literally doing that to your body's stress response system. So they have to have that neuro-endocrine impact as well. And this is also really interesting, just seeing adaptogens trending so much, many companies out there, I think, do not understand that there is a scientific criteria. It's not a marketing term. And there's actually a pretty small class of herbs that are scientifically substantiated as being adaptogens.Stephanie:Yeah, I was going to ask like how many are out there that have that claim against them?Lopa:Yeah. So it depends on who you talk to and who you look at. And we're actually working on coming out with a whole here is the definitive adaptogen guide. Here's what actually has the scientific backing. Here's why we chose these particular herbs based on these scientists and based on what we know and here's the list and here's what gets adaptogen washed. And this is a term that we've coined adaptogen washing where somebody calls something an adaptogens and it's not. So there's about, I think it's 39. And that number is changing based on the science. Sometimes they'll do a few more research studies and be like, oh, actually this one drops off the list or they do a few more research and they're like, okay, this one's definitely on the list. But depending on which scientist you talk to, there's either nine or 12 definitive adaptogens and then roughly 20 to 25 other probable adaptogens or secondary adaptogens.Lopa:And to be generous to the industry, we call anything that is probable, possible, secondary or primary an adaptogen. But many things that we see get mislabeled as adaptogens out there are Chaga is not an adaptogen, lion's mane, all the functional mushrooms, people are like, functional mushrooms are adaptogens. Nope, there's just two. And that is cordyceps and Lingzhi.Stephanie:I love Lingzhi.Lopa:Yeah, turmeric is not an adaptogen. Actually there is one other mushroom that's very little known called [inaudible], I think. But yeah, Chaga is not an adaptogen, lion's mane, turmeric. I've heard Matcha be called an adaptogen, [inaudible]. People just kind of throw it on anything. And this is an interesting case of an industry growing because we're overstressed as a culture. And this was going back to one of your questions about did we know what we wanted to put in that cup? And were we aware of that? We want to put the best stuff ever in a cup and adaptogens are the best stuff ever especially as a superior way to stimulate yourself that's more sustainable. And I believe that they're trending because people need them. That's what's happening right now. And there's a pretty uneducated consumer base.Lopa:And so there's a lot of knowledge to understand. And adaptogens tend to grow in really extreme environments which is why they're expensive. They grow on the tops of mountains, in desert, in these kinds of contexts. And it can be hard to actually get a full harvest out of them in the same way as like you could for other herbs.Stephanie:There's definitely a lot of education needed around this space. And it seems like so many new things are popping up. I mean, I was just at brunch the other day where my friends were talking about Ayurvedic diets and oils to use. And I mean, it was so much, I probably was like oh my gosh, I don't even know how to consume all the things you're telling me because it feels like everything I'm doing, I just never knew about any of this. Well, the same thing with adaptogens and understanding what that is. And there's a whole revolution, I think, of this new kind of nutrition and dieting and way of thinking that is going to take some time to educate the consumers on what that actually is and who's a phony and who's real and what's an actual real product or not.Lopa:Yeah. And what's actually going to have an impact. It wouldn't be such a problem, I think to have adaptogen washing if it didn't like also devalue the herb itself. And to another point, if I gave you something and was like, this has CBD and it doesn't have CBD, you'd be like, what the heck? And some people do call CBD an adaptogen, it's not, and that doesn't make those herbs any less amazing. Just don't mislabel them.Stephanie:Yeah, just use the right words.Lopa:Yeah.Stephanie:So yeah. I completely agree. So when you're starting this company, a lot of founders start out and they're really excited. And then sometimes they're kind of like how's this going? Is this my thing? Get a little distracted, and I want to kind of hear how your journey went with getting really excited about this, knowing you had a solution to something, what did that look like after you had landed on, I want to start this company? Was there any hesitation ever or wondering is this even my thing?Lopa:Yeah. Yeah. I think that's pretty normal. I hope to normalize that for people like, I've definitely had entrepreneurs come to me and be like, I'm not sure if I want to do this anymore and I'm like, that's okay. You'll have those days. It's really hard to create something. And yeah, I mean, my trajectory, let's see, that first two years there was a lot, well, the co-founder conflict really kind of clouded, yeah, my situation for a little bit. And so I was like, well, maybe I should do something else. And maybe I should focus on other things. And I just kind of kept coming back to this and I just kept being like, this is a good idea and I feel like it needs to happen. And I couldn't believe that there wasn't something like this out there. And then, I mean, it's been stressful.Lopa:It is a lot of work and learning how to run a business while running a business is hard. If I were to do this all again, I'd be like, oh, wow, this is going to be a lot easier going forward. I've been the co-founder in a few businesses, but it's very, very different to be actually at the helm. And the buck stops at you kind of thing. And yeah, work-life balance has been tricky. I have two kids now. I actually hard launched Rasa when my second son was four weeks old. Tough planning. It didn't quite go to plan as I'd hoped. And there's definitely a sense of the business would take as much energy as I would possibly give it. My kids would take as much energy as I would possibly give them. And so there's this feeling of, it's never quite enough.Stephanie:The mom guilt. The mom guilt is so real. I feel that [inaudible], yeah, I'm in the house recording. My three kids are usually on the other side of the door and I'll just be like should I be out there with them and having to be like, no, boundaries. Most people, well, not now, but used to go to an office and be away and that's okay. You got work to do. And yeah, work-life balance is definitely a struggle especially working at home now in the same presence as kids and family members and pets and all of that.Lopa:Yeah. We actually originally made the Rasa headquarters out of our garage so that I could be closer to my kids. I just wanted to be able to breastfeed for a bit, put the baby down to a nap, come back. And so we were in my garage until last September. It worked great for that time. And I was like, well, we're running a $2 million business out of my garage. This is solid, it's a small garage. It's not like a big old thing. But it was my garage. We had a storage unit in the back. We had a shipping container in our driveway. We had a shed, it was in all of our basements, pretty much every room had something Rasa-related. And so I was like, all right, we got to get out of here.Stephanie:Yeah. Your neighbors are like, what's this girl doing over there?Lopa:I know. They were like, this zoning. It was not up to code, but we're out now. So forgiveness rather than permission.Stephanie:Yeah, yeah, I agree. So I want to talk a bit about Amazon too because I saw that you were part of the Launchpad program, what do you call it? And I haven't had anyone on the show at least that I know of who's been a part of that. So I want to hear about your experience being on that and spreading the word about Rasa and getting in front of new customers and just being on Amazon in general.Lopa:Yeah. I mean, Amazon in general, Amazon has been a really solid channel for us, which is part of why we went with the Launchpad program. It's been just very consistent. The growth has been pretty steady and predictable. The customers there have been great too. We have some really consistent customer retention on Amazon which I think is not what we really expected. We have a lot of subscribers there. And so we were on the Launchpad program for about a year. We actually are just in the process of pulling out of it. They do take a 5% cut and basically, I think if you have somebody on the team who's really managing it closely and is really taking advantage of every single opportunity that they have, I think it's probably a really good program. We did not have that.Stephanie:What are the opportunities that they provide within that program?Lopa:Yeah, there's a lot of promotional potential. Some of those come with additional revenue cut. Some of those just require additional marketing planning and that sort of thing. And I'll say we have tended to... We actually for about the last year have really under indexed on Amazon. I think we could have autopiloted it. And we were like, oh, well Launchpad will be good and blah, blah, blah. So we may actually go back to the Launchpad program once we have our Amazon growth strategy a little bit more, but a lot of promotional opportunities, get on the front page. You get chances to do extra deals. They have the lightning deals and I don't manage the Amazon super closely. So our Amazon guy could tell you a little bit more, but yeah, a lot of emails came through where I was like, huh, we should probably do that, but we don't really have time. We don't really have the marketing bandwidth.Lopa:And I think now I look back and we're like, well, we want that 5% margin back. We can put that into ad spend. And I think that that's going to be a better use of that capital at this time. And if we had actually been taking advantage of all those emails that came through, you can get a dedicated account manager who will help audit your ad spend and all that stuff. If we were doing that, I think it would have been a great program for us. And it was positive, we've seen growth, but not quite enough to warrant 5% on every bag.Stephanie:Yeah. Yeah. That's quite a hefty margin to take out. For them to do-Lopa:On top of their original 30%, yeah.Stephanie:Ooh, that's a lot. So you pulled back to focus more on ad spend. I mean, what kind of channels were you relying on to get the word out? Because even though it is a big trend around this industry, I still feel like it's pretty niche to get in front of the right people who understand it and are ready to buy around this. I think it might be a little harder of a sell to get in front of someone who has to do the research like me to be like, well, what is an adaptogen? Is a good for me? And how did you go about finding the right people in the platform that'll work for you?Lopa:Yeah, well, we're really going after the coffee market and adaptogens are the way that we're doing that. So adaptogens right now, it's a $25 billion industry, but most of that's in Asia and because they have a cultural context around using these herbs in daily life that we just don't have. And so we are actually bringing a cultural context for these herbs through the coffee ritual and coffees is a $465 billion market. So we like that TAM a lot better. So that said, most of our customers are actually coming to us for a coffee alternative and then they're like, oh, it actually supplies all these benefits as well. And I think that's one of the things that we've been kind of working on and finding our positioning and our messaging in terms of yes, it's a beverage and it's delicious and it's intended to replace entirely or replace partially your coffee ritual.Lopa:But then it also has all these ancillary benefits, not ancillary. I mean, we get incredible customer reviews that say that it's just life changing. And so I think there's a way, and I think that's part of why we get an amazing long tail retention on our customers because we're delivering on more than they expected in terms of the impact. But most of our customers, we've been pretty heavily focused on Facebook. That's been our major scaling channel and that's a really interesting context right now because the iOS 14 change. And I think also with the pandemic ending, the buying patterns ending we hope, the buying patterns are shifting a bit as well. And so people are going back to their third spaces. They're going back out in the world a bit more.Lopa:And CACs are only going up. They're not coming down ever. So we sort of had a little... Facebook's been amazing for us. And I have had this little bug in the back of my head for like two years where I've been like we can't put all our eggs in this basket. We had one ad that, I mean, I think this one particular ad had done a million dollars in revenue for us or something. And it was based on something, it was a relevancy score. So in Facebook, they were categorizing by relevancy and it had a 10 out of 10 relevancy and we were like we could just dump money into it and it would just keep returning money. And it was amazing. And then they dropped the relevancy score as a factor all in their algorithm. And it was like our cash cow has died. It just suddenly, because the way the algorithm was prioritizing, it just didn't deliver in the same way. And we were like, wow, we're at the helm or we're at the whim of something that we have very little control over.Lopa:And so we're starting a little bit of a channel diversification strategy just to have a little bit more health in terms of what we're doing in the business.Stephanie:So many companies start out that way that I can think of and I think it's perfectly okay to rely on one channel. I mean, I've talked to a couple where they're like in chat within Instagram DMs, or Facebook chat, that's where our company's at. And I mean, we kind of went through that at mission too. We were very reliant on media and we became the top on there. That was where our business model was headed until one day they made a few changes and we're like, whoa, that just disrupted our entire business. Why are we relying on someone else's platform? We need to get off here and diversify. What kind of channels are you trying out now? And how did that make you rethink, relying on any platform in general?Lopa:Yeah, I mean, that's the thing. If you're diversified, then you have a little bit of a hedge. And so if something changes, you're like, cool, we're going to just flex the lever a little bit more over here. So we've been very under-indexed on B2B wholesale in general. We've never had a salesperson and we just considered it part of customer care. And if somebody came to us and was like, we'd like to order for our store, we'd be great. And that was kind of it. And so now just knowing that you can really scale a business that way, too. We're going to be investing in that a bit more. So we're in like, I don't know something like 600 retail stores at this point and-Lopa:So yeah, wholesale, actually investing in growth on Amazon, PR is something that we've also done almost none of. So actually working to in-house PR, I have come to kind of think of PR agencies as black holes where money goes to die. So I'm really keen on in-housing it. And influencers is also something that we've been very under-indexed on, just haven't put anything towards and it's all been organic, which is great. And we've had a lot of organic movement in all these things, but there's a difference between letting it come to you versus like, okay, now we're going to really focus on this. And then we have some international opportunities opening up as well.Stephanie:Cool. That's amazing. All right. So I know we're getting short on time and I do want to talk about crowdfunding and I know you mentioned you were very excited about that. So I want to dive into why are you guys crowdfunding? Why do you choose that approach? And you also mentioned innovative marketing ideas around that so. I want to hear all the things.Lopa:Yes. Yes. So DTC has allowed this new level of customer relationships and we have a lot of intimacy all across our communications and people always tell us they feel like they're talking to a friend instead of a company. And we love that and incredible brand love as well. And we feel like the logical next step of that is becoming crowdfunded or community-owned. And we've had lots of investors come and knock on our door and be very interested in what we've done and what we've been able to build, bootstrapped especially for a CPG business. And the thing that just kind of keeps coming up and especially for VCs, VCs are very extractive capital. And we actually talk about it internally. Like VCs are the coffee of money.Lopa:Coffee is an extractive energy source for your body. VCs are an energy extractive source of money for your business. And we do a lot of things differently. In our business, our culture is, I think pretty remarkable. We're doing a lot around sustainability. There's a lot of things where we're prioritizing a triple bottom line instead of a bottom line, just the bottom line. And we get nervous about the idea of getting into a relationship with somebody who's like, well, yeah, you can't treat your employees that way and you can't do this and that.Stephanie:You've got to return the fund to be worth it to me.Lopa:Exactly. Exactly. And we know that our customers love the way that we do things and want us to be more and more that way. So we're very excited about that and they just changed the regulations so that you can raise 5 million via crowdfunding instead of just one per year. And so we're very excited about, we're going to be hopefully one of the first to actually close a $5 million round crowdfunding. And some of it, we've just realized like damn, these businesses can be real capital intensive. And we're trying to do this with capital constraints which means people constraints and bandwidth constraints. And then we're trying to do a very high integrity product with a lot of value in the product and compostable packaging and just fair trade as much as we can all across the business and treating our employees really well.Lopa:And all of these different things that just does cost money, cost more. And then we're like, well, we want to grow as well. We want to invest in growth. So we've been basically break even except for investment in growth for a while. And we were like, if we had more capital to invest in growth, we know that the business is financially sustainable and really solid. And so if we just can get that growth capital and so that's basically why we're doing it. And when you're building a brand that people love, going into some of our marketing strategies around this, when you're building a brand that people really love, and then they're also becoming owners of that brand, I think there's a big question about what's secret, and what's not secret.Lopa:And there's a lot of secrecy in the CPG world and in business in general. And we are seeing that the more transparent we are, the more our customers just eat it up. And they love the behind the scenes about the business. And they love just knowing about why we made a certain change in our packaging and stuff like that. That's where we get the most responses. It's kind of crazy. And so we are shifting towards being more and more open about margins, our run rate and including people in these details allows them to be included in this incredible journey of launching this product. And so we're going to be doing a lot more around this. We're kind of working on building the internal content engine to be able to just be a more and more transparent and share more and more about what it takes to do this and the hard decisions and the hard moments where I'm like, oh my God, my kids and this and the business and all that stuff.Lopa:But our customer reviews are incredible, so incredible. We have to be editing them for the FDA. We've had people say that they had a Rasa baby, it's made them more patient with their partners and their kids and all that. And that's why we got into plant medicine. We knew the power of these things. And so I think crowdfunding is a way of getting people invested in the business and having the business actually be like herbs were originally the medicine for the people and now it's going to be a business about herbs for the people as well. And so it just feels like it's really perfectly aligned.Stephanie:I love that. I mean, I think the idea too around transparency, not only does that give your customers things to look at and engage with you, but I think it also invites help too. If someone sees oh, your margins are around this. Let me come in and help you because I think maybe in the CPG industry, maybe they should be around here. I've got this idea around logistics that might help you enhance that. So I think the more you share, the more other people might come in and be able to actually help and want to lift everyone up in the process.Lopa:Yeah. Absolutely. Absolutely. And I think in the industry, that is really valuable. Sometimes there's always a question of how much feedback you get from where. And sometimes you're like, wow, that's a lot of people that want to help and I don't really know what they're doing.Lopa:But I mean, that said, we listen to every piece of feedback too. And I think going back to the cult conversation a little bit, when you get feedback that you don't like, you have to look at it and say like, okay, if 1% of this is true, what part would be true? And then look at that. And that's one of the nice things too about DTC is that we have been able to actually iterate our products very quickly based on customer feedback. And I think having more transparency also means that we're going to be able to crowdsource product ideas and reformulate things to match people's needs more and stuff like that which we're really excited about.Stephanie:Yeah. Yeah. Super exciting. All right. Let's do a quick 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?Lopa:Yes.Stephanie:All right. What's your favorite Rasa drink to enjoy in the morning?Lopa:Super Happy Sunshine.Stephanie:Okay. Awesome. If you had a podcast, what would it be about and who would your first guest be?Lopa:It would be about cultivating energy intelligence, emotional intelligence but energy intelligence. Yeah. And my first guest is a great question. I have not even thought about that. I mean, if I could just wave a magic wand, I would actually have Brené Brown because we don't think of the way that we hold ourselves in our vulnerability as being actually kinks on our energy. And I think that her work around vulnerability and shame is actually very energy liberating.Stephanie:Yep. Yeah. I love her. What's up next on your reading list or your podcasts list?Lopa:Oh man. I have such a long list. I'm in the middle of The hard thing about hard things by Ben Horowitz. And I'm also reading a book about the ancient Indian martial arts that I practice called [inaudible] and I'm in the middle of like five books right now. Another great one, oh, just Hunt, Gather, Parent.Stephanie:Oh, I'm reading that now.Lopa:It's so good.Stephanie:So good. Yeah.Lopa:Oh my God, so good.Stephanie:It makes you-Lopa:And it's working.Stephanie:[inaudible] parenting in general like oh, why are we basing our parenting advice off? What does she say? The past 100 years or something when there's time-tested things that work for thousands of years that we can tap into and around the stress of the parenting right now is only on essentially the mom or mom and dad where we're doing the same work that used to be 15 people, grandparents, cousins, aunts, and uncles. And I'm like, there's going to be a shift though. I think it's going to start heading in that direction again.Lopa:Yeah, I think so too. And on the podcast, Fred, I'll say, I actually was looking at your list of podcasts and I was like, oh my God, I need to be listening to all of these. So well done. I love business-Stephanie:[inaudible] podcast, hey. I love that. Yeah, check them out. They're good ones. Launching new ones all the time too. And the last one, what is the best piece of advice you've ever gotten? It can be business, personal or from the cult, whatever comes to mind.Lopa:Best piece of advice I've ever gotten. Lopa:What comes up is that purpose is a red herring and that so many of us, I think in this, it may be a little bit less for your audience. But I think that this quest for what am I supposed to do and what is my purpose? And I can only really do something once I have my purpose. The advice was stop wallowing and trying to find your purpose and do something. And you will find your purpose in the process of acting. You will find the things that don't feel aligned and then you'll adjust. And so it's about help someone and help something and you'll find purpose in the process of doing.Stephanie:That's amazing advice. And that's actually perfect for our audience right now. I mean, people trying to start businesses and I mean, you probably went through this too. I know I have of, is this my thing? Am I passionate about this? Do I want to do this for the next 100 years? And I love that. Just start doing it and you will figure it out.Lopa:Yeah.Stephanie:That's perfect. All right, Lopa, well, I've loved having you on. It's been such an engaging conversation. It's really fun to hear about your life and Rasa. Where can people find out more about you and your company?Lopa:We are at wearerasa.com and we actually have a discount code for you guys. If you use the code upnext, you'll get 20% off your order. And we're also on Amazon and we're on Instagram and Facebook at We Are Rasa.Stephanie:Amazing. I'm definitely using that code. I cannot wait to try it. So thank you so much for joining us. We'll have to have you back for round two to hear how the company is going because this is such a pleasure.Lopa:I would love that. Thank you.
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.
In-store sales. Ordering for delivery. Buy online, pick-up in store. With so many buying options accessible to consumers, companies are now facing many different kinds of orders to manage and get right. In the restaurant industry specifically, there has been a huge upswing in the number of people ordering online, especially through apps such as Uber Eats, Grubhub, and Doordash. And that's nothing compared to the number of point of sale systems that are being used. Moving orders from an app or online system into a physical point of sale is a process that's prone to human error, but for so long that's been the only way to do it. Zhong Xu and Deliverect want to change that. On this episode of Up Next in Commerce, Zhong explains how an integrated, cloud-based platform is taking the pain out of managing multiple ordering and POS systems. Plus he discusses how the real world and virtual world will start to blend together more and more as brands invest in digital-focused capabilities. Enjoy this episode. Main Takeaways:404 Error No More: There are thousands of point of sale systems and all of them require humans to re-enter online orders perfectly into them before they can be made and delivered. This leads to errors and dissatisfied customers. Integrating the POS and ecommerce systems is one of the most effective ways to reduce those errors. The Real And Virtual World: As restaurants reopen dine-in services post pandemic, they are still keeping an eye on the ecommerce space. The rise of the digital consumer has made it so that restaurants are now looking to create virtual brands with specific functions and offerings for their virtual audience. And sometimes that means creating or investing in a physical space that is only used to fulfill online orders.Addition Without Subtraction: Even though there has been an uptick in delivery and curbside pick-up orders, restaurants are still seeing strong in-store dining numbers. This means that restaurants can invest in delivery and ecommerce tools to improve the customer experience without worrying that doing so will cannibalize in-house dining.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, co-founder and CEO at mission.org. Today on the show, we have Zhong Xu, the co-founder and CEO of Deliverect. Zhong welcome.Zhong:Hey, welcome. Thank you. Nice to be on your podcast.Stephanie:I am very excited to have you on. So before we dive into Deliverect, I was hoping we could start a little farther back in history, when you were building your first company at age 17. I think that'd be a fun starting point to hear what were you thinking back then? So, then we can see how you got to Deliverect.Zhong:Yeah, exactly. I think Deliverect today is quite a big company, as we serve customers in over 30 market. Especially the last year, we just processed over a billion dollar in sales. I think that's quite exceptional for a company that young. That being said, the reason we can so quick is due to our couple of decades almost experience in the hospitality space. So, I was pretty much born in this space, as a very young [inaudible]. I started helping restaurants to go online, right? So, making their first website and so on and that's almost, I think 20 years ago. So, I'm very early on the internet timeframe and the reason why I got in that space is actually because my father has a point of sale company for Asian restaurants. So, especially if you're Asian, a lot of people know your father will always say, "Hey, you can work, right? You're young, you should get out there, earn some money, do your part." So, that's how I enrolled into hospitality business and that was my first business.Stephanie:Very cool. So, you were building websites for restaurants and then, did you start seeing issues they were having and is that what led you to building Deliverect to where it is today?Zhong:Well, it's actually quite a funny story, because of that, I never wanted to take over my father's business. So, I said, "Hey, maybe I need to study IT." So, I went to study software engineering, right? Before I went into the restaurant space again, I said, "Hey, there's something out there for mobile applications." So, I created mobile websites and mobile apps prior to the iPhone. So, I feel [crosstalk] and so, when the iPhone and the first iPad came out, I felt it was perfect timing to disrupt that side of business, especially when point of sale was very hard to use. It was a legacy system, not cloud-based. So, actually in 2010, 11, I co-created the first iPad point of sale in Europe, one of the first 3000 apps on the app store back then.Zhong:So, you can imagine how that grew and just in a couple years I grew that company quite quickly. It was called POS iOS. That name you wouldn't know, but I merged POS iOS in 2014 with now a public company called Lightspeed, right? So, we pretty much ran the global hospitality division of Lightspeed, prior to their IPO. So, we were well entrenched in scaling this and one of the things there, of course we are always in contact with restaurants around the world. At the same time, the same thing happens. The first time I did this was really solving the pain of cloud-based and tablets and old hardware, but in 2016, 17, we saw that restaurants were struggling actually managing their online sales, right?Zhong:And it was quite funny, because most restaurants had said back then to me, "This is never going to happen, the offline to online transition. Yeah, yeah. You have this in retail, but that's clothing and that's shoes. We're creative people. It's about warm food, about service, never going to happen." Well, suddenly you have these companies like Uber Eats and DoorDash, GrubHub and hundreds of others popping up, where you quickly saw that transition happening. So, early on, these customers of us said, "Hey Zhong, you need to help us. This wave of offline to online is apparently unstoppable, but we need a partner that can help us to make that transition." And Deliverect.Stephanie:Got it, got it. So, essentially we have all these restaurant ordering apps, like you said, Uber Eats and all the others that exist. And they were all coming at the restaurants a mile a minute and they were trying to manage them individually and you essentially consolidated that into one point of sale system, so that the restaurants could just interact with one portal that would then talk to all of the delivery companies, did I get that right?Zhong:You nailed it. It's really a game of whack-a-mole, as you can imagine, if you're running a restaurant. It's all very dense during your service, right? Where you have hundreds of orders coming in on all these tablets. If they all start to light up, you need to accept them. You need to take the order, re-key in your point of sale, send it to the kitchen, but even when the order is done, you need to go to any of these tablets and you need to find out what order it was, to dispatch the rider.Zhong:So, the complexity of this is enormous and I think as we go, the number of online channels or restaurant need or we'll have, is only increasing. Because it's not even about these delivery companies these days. You need to have an app for curbside pickup. You need to have a QR code at the dine-in app. You need to be on Google, Facebook and so on and so on. So, it's enormous.Stephanie:What are some of the issues you're seeing with restaurants, when you're coming in there and showing them, "Here's how to come online. Here's how to make this process work"? What are some of the hurdles for them to even implement this software? Where's the hold up sometimes?Zhong:Well, most of the times they can't believe what we do, because it's almost magical. When you're used to all these systems and suddenly you removed all these tablets and it just works, right? So, it's quite magical. I think the hurdle is, one side connecting with all these online players, but as well, very seamless with every point of sale they will tap. And the reason why is, in the hospitality space, you could say, "Hey, the online channels is fragmented." So, you have a lot of delivery companies, but actually the number of point of sale is way more fragmented than online players. There's literally not thousands but 10 thousands of point of sales out there and it's still what runs the restaurant. So, we connect that seamlessly through APIs, but also it's not just getting the order in your kitchen, but as well, working with them to do menu management, having automatic stock management, controlling the flows.Zhong:For example, when it's really busy, we will be able to slow down certain online channels to cover the kitchen time and the result of this is quite astonishing and it's threefold, right? One side, we can on average... Pre-COVID, because with the pandemic, it was a accelerated. We saw that the average restaurant was increasing 25 to 30% of their top line revenue alone, implementing us. During COVID, it was double, triple and quadruple, but no one knows why. And the other two things where it's important is, we reduce the error rate for the end customers, right? Maybe you have experienced it, but if you order some food, once in a while... Actually, it's between five to 8%. So, one out of 10, we get us a mistake. Someone didn't deliver what you wanted. You wanted the vegan food and you got something with meat and so on, right? So, we can reduce these errors by 80%. So, that's massive. Finally, with all these automations, it saves a lot of labor costs as well.Stephanie:Got it and how are you reducing the errors? What does that look like? Is it something that they're keying in the wrong way? Is that something the customer is doing or the kitchen's doing? What does that look like, to reduce the amount of errors, because I've definitely I've had that happen. And then, I've just been like, "Oh, this didn't arrive." And then, Uber Eats just refunds me and I'm like, "Hmm. Did you know it didn't arrive? How do you trust me? I don't know if I would even want to trust me saying that." And it's definitely very vague behind the scenes, of how they even view that?Zhong:Yeah. There's a lot of details, but it actually started with the beginning. Often, once a restaurant are not using us, the online menu that they have, they have one called Uber and other players they have inputted. It's not up-to-date right. So, imagine they don't have certain products or ingredients. Though they can snooze, but they cannot change the menu, the content of it. So, the menu on its own is [inaudible]. Second, when it's busy, they can't follow the flow of that stock. So, if it's not automated, you probably are ordering stuff that they are already sold out in restaurants, right? Because online, you have a lot more people ordering and then, with the in restaurant sales, they are always going to provide the customers in front of them the food that you online. So, that's the second thing.Zhong:A third thing that affect massively these error rate is, once you don't have it integrated, it comes on these tablets. You accept. There's an extra ticket printed by Uber Eats, DoorDash, GrubHub. They need to take that and re-key that in their point of sale perfectly, right? And that's where a lot of error happens. Sometimes the top line items, but even worse, when you put a note in there where you say, "Hey, I'm allergic to this and that. I want this and that," it causes a lot of trouble to re-key that correctly. So, if you take only these three things, it's quite massive, right? Imagine hundreds of orders. Even if you would do it, you would make a lot of mistakes.Stephanie:I can definitely see how human interaction always causes mistakes, of course. And I'm assuming it also integrates with the point of sale system to also run the restaurant, right? The one that the servers can use outside of the delivery, or are those two separate?Zhong:No. So, it integrates them directly with our current system, right? Because if you have a restaurant, you have kitchens, there's a lot of printers, kitchen screens. You want to make sure the workflow is seamless, because actually what's funny is, the throughput of a restaurant it's never boggled down by the kitchen. The kitchen can make a lot of food most of the time. It's really the front of house where, if you have customers standing in front of you and in the meantime, you have seven tablets pinging all the way, it's impossible to manage. So, we reduce all of that hassle.Stephanie:That's great. Yeah, I used to work in a restaurant. Starting in 14, I was working at Outback Steakhouse and worked in restaurants the entire time and can definitely say that's very true. The front of the house can get crazy, when the back's waiting on you to put in the order, help the customer, bring it out and get it out of their window, whatever it may be. So, I'm sure you see a lot of trends behind the scenes with working with so many restaurants and I've heard quite a few things. COVID hits, of course less people going in restaurants, more people ordering, but then also more people cooking at home. So, a lot of things kind of shifting. What are you seeing today, now that we obviously went through the big spike of everyone who wants to order online and order from restaurants probably has tried it by now and some of them are falling off. Maybe some new people are entering, but what are you seeing are general trends in the industry?Zhong:Well, I see it's actually picking up. One of the things you mentioned, everyone has tried. For example, during COVID a food status pre COVID, if you look at age group of 55 years and above, less than 10% has ever tried delivery, right? And now, that number is over 35%. So, it shows you that my father, grandfather, grandparents, everyone is using it.Zhong:So, the adoption rate is quite high and what you see is that, during pandemic, a lot of restaurants focus only on delivery, but now with the reopening, you see some restaurant doubling down, because they want to handle their in-dine customers. But at the same time, you see a lot of more restaurants opening multi-brands, right? One physical restaurant saying, "Hey, why don't I create virtual brand, that I only sell on these online platforms, but it's cooked in my kitchen? As well, the exponential growth of dark kitchens, these kitchens with multi-brands everywhere. Especially, as if I look at our numbers, I think the delivery space is only accelerating and what's good for this space is, it's on top of the dine-in. So, it's one is not cannibalizing anymore, the other sales, right? So, it's really on top of it.Stephanie:Got it. How do you view these dark kitchens, because we talked about this in a previous episode with Shake Shack, I believe and she kind of mentioned that she thought this was... I think she said a quick trend that might work for a little bit, but then people are going to want to stick with brand love of a certain company. They know it's cooked a certain way. You're only going to be able to use that model for so long. How are you viewing that right now?Zhong:I think that's still going on quite strong, right? There is a difference of... I would stay pure tech want to be thinking, "Hey, this is a fun idea. Me as a startup mindset, I'm going to implement a kitchen." It's just pure number game. That, I'm a lesser believer of, because what you see as the successful dark kitchens, are ones that are really restaurant operators that create amazing brand, amazing experience and at the end of the day great food, right? Sometimes people in that space forget it. It's like, "Hey, it's numbers.Zhong:I can make it work." So, people that do that well can expand quite rapidly, right? Because the cost of setting up or reaching these customers are way lower. If you want to do a restaurant that's maybe [inaudible] a half a million dollars, if you started a dark kitchen, it's one fifth of that. So, what you would see is that even established restaurants are having a dual model, where they say, "Hey, in the cities, I'm going to have my flagship restaurants, right? A couple of them, where you have the full experience. In the meantime, around that restaurant itself, I'm going to open a lot of these dark kitchens, so that you are at home wherever you are, can still order food." So, that hybrid model is really working well.Stephanie:Mm-hmm (affirmative). I wonder if they can eventually share kitchens in space and then, turn it on when you need it. And then in the meantime, let another brand have it. I'm even thinking about two brands, fast food chain. It's like Popeye's and MacDonald's in the same building. And in one way, I'm a little suspicious of that, because I'm like, "How do you all know how to make the same thing in the same building?" But it's also an interesting model. I think about it, like why rent an entire space if you only need it when you have peak order times. And then, anytime outside of that, it's just a commercial kitchen that anyone else can enter into.Zhong:Well, you actually have that. There's quite some of these concepts, almost a we-work of kitchens, right?Stephanie:Okay.Zhong:I think in these cases it would be, you rent the space because you don't want to open and set up your own kitchens, but then you would still put your own chefs in these places, right? I think there's also models where these kitchens provide you A to Z. I think that works well, if you're established brands, with real procedures about how to cook food. If you're experimenting, that's a bit harder. But that being said, we see a lot of success in the US. For example, in New York, we run Mealco. That's a very dark kitchen brand. They have a lot of brands. In LA, you have [inaudible] brands. Established restaurant chains like SPIN right, where you play normally ping-pong, but they run it at the same time in these kitchens, 8, 9, 10 brands, right? Because it's really complimentary and allows them when it's even not busy, to sell their food.Stephanie:Yeah. What kind of trends do you see overseas that are different than in the US, or vice versa?Zhong:I think it's quite a global trend. Even in Europe, Asia, Latin, as well US, you see the same trend popping up. What I do see it's interesting is, there's a lot of models, especially in the dark kitchen. People are trying. So, renting kitchens seems to be hard. Franchising their brand seems to sometimes work, where you say, "Hey, I have my brand. Any unutilized kitchen space or restaurant can take my brands and just sell." That seems to work. But as well, people that own the full stack, right? I think it's a bit too early to see what of the multiple models really will win, but that being said, I think each of them has massive traction. And that's why, if you look at market sizing, the size of dark kitchens is a trillion dollar business, depending on who you ask, right? So, it's a massive opportunity.Zhong:I think a second trend what's very interesting is the growth. As well, you see in the US, as well in Europe, of groceries, FNCG and CPG. So, for example, wherever in the world, you can order a Ben & Jerry's ice cream, right? You take your phone, you order Ben & Jerry's ice cream at 11:00 PM when you come back from a date and you just need ice cream and it gets delivered within 10 minutes. And you can do that in every city in the world. That being said, you will never find a Ben & Jerry's store so close by. So, even the rise of dark pop-up locations or delivery locations or dark fridges exists, right? For example, we power all the [inaudible]. So, as you go, you're going to see that perishable foods in general, is going to be very available and it's all about the convenience of it. Whatever you want, you click and you're going to get it.Stephanie:Yeah. I do see, it probably depends on where you're at in the country in the world, but there are definitely a lot more consumers now, who do care about the brand, the ingredients, where is it being sourced from? How are you going about growing those materials? It seems like a new trend. That's what sometimes makes me wonder about the dark kitchen trend, because I think a lot of people want convenience and being able to get it quick and easy and cheaper, then it seems like a larger proportion of people now are like, "I want to actually understand who's behind this food and how was it grown?" And all the details that maybe a lot of people didn't think about a decade ago.Zhong:Exactly and that's why one of the things I mentioned is, I think if you want to be successful, you need to be that restaurant operator. You need to be able to convey the complete story and say, "Hey, that's where we source the food. That's how we cook it. That's how we define quality." So, that side of it will work. If you're just there to produce mass produced food and want to have a quick buck and to earn, I think that's quite hard, right? Especially, because it's a very low margin business restaurant, so you better do it well.Stephanie:Yeah, yeah. So, when it comes to point of sale systems in general, it seems like this is great obviously for restaurants, but there's a lot of other applications, because I can even think about a lot of delivery apps being like, "Oh, you need this for maybe Home Depot and you need this from Costco," and offering to pick up from many places. How are you viewing the general landscape of point of sale systems and where it's headed?Zhong:Well, so that's why we are a bridge above the point of sales, because that's really fragmented. So, for a point of sale, especially a lot of these older point of sale that are not cloud-based, it's very hard for them to process online orders. And that's where we come in. But on the other end as well, we have a dispatching product that allows any restaurant or any business actually to deliver their food or drinks or whatever perishable thing they have, within 10 minutes, because we connect with all kinds of third-party delivery companies like DoorDash Drive, Uber Direct as well, all the local ones.Zhong:So, the convenience side of it is going to be crucial for these restaurant, right? It's going to be the future is going to be really decoupling ordering from delivery. You will not per se care how you ordered it and you don't care who is bringing it, as long as you get it right? So, you can imagine you have a Google Home or Alexa and you say, "Hey, bring me some salad from that restaurant." And it gets processed and 10 minutes later, someone rings you up at the door and gives you that salad. So, we can really power that transmission of that world.Stephanie:Yeah. So, essentially it doesn't matter if it's restaurants or anyone else, first step is everyone needs to be cloud-based, so that then you can plug into them and help control the top level experience. So, then the consumer doesn't even know and doesn't have to know what's going on behind the scenes? That's usually how most technology evolves anyways, but you can essentially go anywhere, that's what you're saying?Zhong:Yeah. What we are doing is really creating that backbone of on-demand foods, right? So, creating that [inaudible] restaurant and the reason why I was adamant to start Deliverect, is to my personal experience, right? My father's system, the old point of sale still exists, right? Even after I created one of the most advanced iPad point of sale, I think I converted the three of his customers to that system. So, what that tells me especially in the point of sale space, there's a lot of servicing fragmentation and people have a low tendency of changing systems. That's why in enterprise restaurants, all of them you still see these Microsoft RES 3700 of 30 year old, right? So, that's why we are building that layer, so that any online player can have access to a physical restaurant. In the benefits, it's really benefiting the restaurants, because they don't need to change the system, but still process and grow online.Stephanie:Mm-hmm (affirmative). What did the switching costs look like for some of these restaurants, if they go through and upgrade everything, I'm guessing there's employee training? What does the cost look like and then, I'm sure you know the ROI numbers too of employee efficiency and helping out with inventory and all that, what did some of those numbers look like?Zhong:For example, utilizing Deliverect, there's no switching cost, right? So whatever point of sale you have... So, we are integrated over 150 point of sales at the moment and we're adding a lot per month. [Crosstalk]-Stephanie:What if its an old one, that's cloud-based? I'm thinking of some of the restaurants I worked in, I know they weren't cloud-based they were from the nineties.Zhong:So, that makes us unique. We actually, you know, for example, Microsoft RES 3,700. We create tunneling. We set up the software to make that cloud-based, right? So, making [crosstalk] online, is something that we also do. So, that allows you to save really that investment. If you are a small, medium business, one or two restaurants, you probably can switch because you want to have ease of use and the investment buying an iPad is not too hard. But honestly, if you're a restaurant chain, that's a massive move. You're talking about millions to replace and there's also a lot of risk involved, right? So, instead of doing that, if you just deploy Deliverect, you have a full system that allows you to sell online or offline channels and you're fully cloud-based.Zhong:And like I mentioned, the ROI is huge, right? So, whatever top line revenue, we grow at 25, 30%. That's a minimum, right? All of our customers are doing more than that. Second, like I said wastage, but to quantify it, an app or a restaurant that does normal delivery are doing a month, a thousand orders. If you have 8% error rates and per order that's 80 orders, right? If the average is $50 that's a lot of money that you could save so that's one side. And then, finally labor costs. We can reduce that significantly. You can almost save one out of four of your staff, right? So, they can do something else, right? So, that's important.Stephanie:Very cool. Are there any technologies right now that you're watching to integrate into Deliverect? The one thing that comes to mind is crypto and I know even back in 2018, a lot of people were talking about crypto and point of sale systems and how to think about that. Not only accepting payments, but also the back of how it even functions. Is there anything that you guys have on your radar that you're kind of watching right now?Zhong:Well, crypto is interesting, right? I think de-centralization of payments would be interesting. Especially, I think in restaurants, it's a quite high processing fee they pay, especially if they're selling online, right? There's transaction fees. Honestly, I do not think today the technology... The technology is there, but maybe the solution is not there yet to do mass payments, as it's quite heavy to mine these coins. If you want to do like us, where it's millions and millions of transactions on a month, I think that's quite a heavy to do, but we're watching that space.Zhong:I think more interesting for us is, as we have a lot of info about a lot of sales channels is providing or a CRM or a really a customer relation management tool for our restaurants, so that they can manage wherever you're ordering, right? So, maybe you ordered today on Uber Eats and tomorrow on DoorDash and the next day on their own websites. Well, they can say, "Hey Stephanie, thanks for ordering on our website. We're going to give you a promotion or a extra dish." Right? So, these are the things I think, where it's going to really help these restaurants to increase their margins.Stephanie:Yeah. It's like going into an omnichannel world with these delivery systems, so they actually understand where you're coming from and where you've been? And it also seems like there's a lot that they can do around sensors, around inventory and stock. You mentioned that you can connect that with your company product, but also just thinking, how do you do automatically where instead of someone saying, "Oh, we're out of this item or we don't have this product today," it's automatic, because it sees the ingredients getting low. And it's like, "There's nothing coming on the trucks today, so we just have to say green beans aren't on the menu today. So, sorry." And then, it just updates automatically. That's the world I think is coming.Zhong:Well, in the ice cream example, we actually do that. So, once that shop is running low on strawberry. So, first of all, we ask the local vendor to ship more strawberry ice creams, but second of all, we can automatically snooze that product for an hour. We're saying, "Hey, it's out of stock." Right? So, providing all these restaurants operation tools is something that we also care about, because that's how we're going to help these restaurant owners as well.Stephanie:Yeah, I love it. All right. And then the last thing, where do you see Deliverect heading? What are you excited about over the next couple of years?Zhong:Although Deliverect only exists for a two to three years, I think we are only on day one of this offline to online transition. The motto of Deliverect is not even conquer the world, it is conquer the galaxy, right? So, one day we'll be the first that delivers a burger to the moon. That's our motto.Stephanie:You're going to be on Mars [crosstalk]-Zhong:To speed up his colonies. But all jokes aside, I think that's where our ambition is. I think you really need a player like us that stands with the restaurants, power them and allows them to really be successful and thriving online without a different agenda. So, as we go, we want to expand regionally in all sorts of countries and continents and add as many channels as we can, as well point of sale for these restaurants, so that they can thrive online.Stephanie:Very cool. All right. Well Zhong, thanks so much for coming on the show and giving us a little behind the scenes about what Deliverect is all about. Where can people find out more about you and your company?Zhong:Well, you can find a lot of info on website deliverect.com or a link me up on LinkedIn. I'm [inaudible] users. So, no worries if you want to send me a message there.Stephanie:Amazing. Thanks so much.Zhong:Thank you for your time.
From starting a hedge fund to owning the DTC beauty market in China is a career path you don't hear too often. But that's the winding road that Julian Reis has traveled and along the way he's picked up some critical intel about the ecommerce world and Chinese trends that he shared with me on this episode of Up Next in Commerce.There are a bevy of factors to take into account when entering the Chinese market. From the vast differences in the way consumers shop in China to the sheer volume of consumers that can make a huge boom in sales in a matter of moments, there is a lot to contend with. And how does a brand even get in front of a consumer without traditional ads or email marketing? And what about social media? Or regulations? Julian explains how to take all that information into account and build an ecommerce strategy that lets you win abroad. Plus, he dives into how his company, SuperOrdinary is working with top skincare brands to enter the Chinese market, and some of the experiences that can be expected when embarking on this new path. What a fascinating discussion that was so different than any interviews I have had so far, enjoy!Main Takeaways:It's All Chinese To Me: Brands might want to expand to the Chinese market and believe that there is a huge opportunity there, but rushing into the market without doing the proper research could be a huge mistake. Despite the fact that a lot of information is censored in Chinese, consumers there still find ways to access the content that is important to them. Brands need to get more social awareness, learn about what Chinese consumers are interested in and let their actions reveal whether or not you have a product-market fit before trying to make a splash in that market.Platforms vs. Pages: There has been a bifurcation of ecommerce between platforms and webpages. The debate about where to invest more is coming down to how you see your customers acting. SuperOrdinary's theory of the case is that platforms are the way of the future because at the end of the day, customers spend more time on Amazon and Tmall than on a company's website. Therefore, more focus should be on creating content that drives engagement on those platforms. Boom and Bust: In China, the volume of consumers is so much higher and there is so much more emphasis on influencers and celebrities, that if something goes viral, a brand could do millions of sales in a matter of seconds. Being prepared for that kind of boom is very different from working in the U.S., where you prepare for steady growth over a longer period of time.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 Julian Reis, the CEO and Founder of SuperOrdinary. Julian, welcome.Julian:Thank you, Stephanie. Lovely to meet you.Stephanie:I'm happy you're here. I'm glad you're not in Hong Kong. I was a little bit worried at first. Like, it's got to be 2:00 AM for this guy, talking on the show. I mean, I would have also appreciated that, but that's okay. Before we dive in to SuperOrdinary, I want to hear about your background because you have a very fascinating background, and I want to hear what led you to the beauty industry.Julian:Great. Thank you for having me. Well, first of all my background, I'm half Australia, half Chinese Portuguese. I was born in Australia, and at the tender age of five I moved to Singapore, where I followed my parents. My dad was working for Pizza Hut. And my twin brother, who's identical, we grew up in Singapore and we kind of were brought into this world to experience all these different cultures, and really thank my parents for giving us such an international upbringing. We all went to these international schools in Singapore, and then Hong Kong, and really got a flavor for all the different Southeast Asian countries growing up. I went to study in the UK to confuse myself even more, and studied economics at University of Nottingham. And Justin, my brother, was in London at the London School of Economics. And we kind of had these parallel paths where we didn't know what we wanted to do after university. And I was always intrigued by the financial markets when I was at university. I always thought that ... This was at the time when we still had analog Internet, dial-ups. I was always curious to see how people were thinking about this global economy.Julian:I applied to probably 150 jobs after university, and got very disheartened that I couldn't move to Tokyo, which I had this dream to always live in Japan. And I found myself finding a job eventually in New York, at J.P. Morgan. I was one of 3,000 applicants to the markets training program, which was a rotation through JP Morgan training program. And I still don't know how I got it, but I was so thankful. I went to New York without even an interview, and basically phoned from downstairs and told the graduate recruitment officer that, "Hey, I'm downstairs. You might as well see me." And suddenly, I got the job. I feel very, very lucky for that.Julian:Went from there to, as a trader, I was trading derivatives in fixed income, which is straight derivatives. And that really started to shape my career, about thinking about the macro markets and how you need to think about the world. And after three years, I moved back to Asia and found myself working at Deutsche Bank and building my career as a proprietary trader.Julian:And then I realized that I would love to try and build my own business. And in finance, you either work at the lease investment banks as a trader ... Because the idea of a hedge fund was still very new. And when I was 27, I decided to go alone and start my own hedge fund. And tried to rustle up as much money from my friends and family, and realized I didn't have that many friends and family. And started my first hedge fund, which was called Pagoda Capital, which was one of the first macro funds in Singapore. I got acquired by Tudor Capital a year later and became CEO of their Asian business, building out their macro strategies in Singapore and Australia.Stephanie:How did they want to acquire you after a year? What were you doing? You must have been doing something amazing.Julian:You know, it was kind of interesting at the time because we were one of the only funds in Asia doing what we were doing. And there clearly was ... And this actually dovetails into what we're doing now because we saw this opportunity to build a business around the Asian markets, and many of these big, large, successful brands or hedge funds in US wanted to get exposure to this market. And the way they did that was find like-minded individuals who were trading, and eventually we came together and built this business. And Paul Tudor Jones is still, to this day, one of the guys I idolize the most in the world. And that gave me my introduction to the financial markets.Stephanie:Very cool. Okay, so your hedge fund gets acquired. You're working there for a bit. And then what?Julian:And then what? I moved to the UK again, working at a new hedge fund which I founded. And I realized that the common thread to all of this was that I really enjoyed building businesses. And I really felt like from zero to one when you're building a business, it's all about hiring the right people and building successful partnerships. And after a couple of years of working in the hedge fund industry, we entered 2008, which was obviously the financial crisis. And what became really apparent and important to me was that this was not sustainable, and that it was really exciting to see what other opportunities there were for me in my life. And at the time, was a very difficult time because to change out of a career or something that you'd been trained in to move to a completely different industry was very scary. And I thought long and hard about making that decision.Julian:And I met this lady who was starting a Groupon startup, and I said, "Listen, if you decide to do something in beauty, come back to me because I think there's a really big opportunity." And I started to see that the Asian population or the communities were really interested in foreign brands. And I was a founding investor of a company called Luxola, which was the ecommerce 1.0, distributing brands in Southeast Asia. And after two years, was acquired by LVMH to become Sephora's digital presence in Southeast Asia. So, really got an understanding about learning, about building and investing in the beauty side.Julian:And then I thought, well, why not try my hand at building my own brand? So, moved to the US to start a brand called Skin Laundry, which is a skincare brand focused on disrupting services. And really proud of what Skin Laundry has become today. It's now in five countries around the world, in the Middle East, London, Hong Kong and all throughout the US.Stephanie:Did you sell that?Julian:No, I didn't. The brand is still operational. I still remain one of the largest shareholders in the business. But really brought a management team in to really accelerate the brand. I think it's a very unique concept, and continues to be a loved brand by the customers. And I think by working and building a brand on that side, really started to, when I was back in Hong Kong and I noticed in China many of the brands that we were exposed to whilst we were in the US were not available in China. And that's where SuperOrdinary was born.Julian:I moved to Shanghai three and a half, almost four years ago now. And kind of just wanted to study how brands are being bought and sold in China. And then the light bulb went off and said to me, "This is an incredible opportunity. All these digital native brands that we see in the aisle of Sephora and Ulta and Mecca, why aren't they available?" So, I started the company and started hiring my first-year employees in a country that I had very little experience in. And I didn't speak the local language. I could only speak pidgin Mandarin. And I said, "Well, this seems like a big enough challenge. Let's go."Stephanie:That's a niche, [inaudible] opportunity. All these brands should be in China but they weren't. I mean, what are some of the top reasons why brands maybe don't even think about bringing their products to China? Because from the outside, it does feel scary, and regulations. And does the customer there even want what we love here? Seems like very different things that they love versus maybe what I might like. What are some of the reasons that you hear brands are like, "I've never thought about that before"?Julian:Well, I think the first thing which you kind of touched upon is the regulation. First of all, animal testing is obviously something that many of the brands, or most of the brands in our portfolio, goes against the DNA of what they believe in terms of cruelty-free. Luckily on May the 1st, animal testing regulations now be announced to have gone away, which is incredible because it just opens up this huge, untapped, physical market domestically.Julian:I think because of that restriction, it was very difficult for brands to enter China, and so everyone hears of these stories about Chinese tourists coming overseas and bringing back suitcases of products in the suitcases, and reselling them locally. And I think what happened was that the government obviously realized that this was happening and said, "Rather than smuggling products into the country, let's create a channel for these products to enter the country on a legitimate basis, and let's make sure that they're real products, authenticated, they're registered, and then they can be sold."Julian:But in order to do this, this channel which we call the cross-border channel, only limits the amount of products that you can sell to an individual consumer in China on a given month or a given year. There's a quota in terms of absolute R&D value. Whilst it's an exciting channel and it continues to grow, represents close to 20% of the ecommerce market, obviously there are restrictions for that. We started our business as a cross-border business which allows us to work with brands anywhere from Farmacy to The Ordinary, to Drunk Elephant, Supergoop!, and we really have an incredible partner portfolio. And to be able to build their presence in China by creating a profile for them on social media in all the different channels, on Tmall, and really build a brand from zero and continue to grow them there across multiple channels. That's how we started.Julian:Now, we currently have globally close to 300 employees in the company now, most of which are based in China. And I think what we do as a business is really provide that one-stop-shop service where we really build your brand. Where we call ourselves not a distributor. I would almost call ourselves the general manager of your brand in China, because we do everything that you would do as a brand owner by operating your brand in a foreign market.Stephanie:Yeah. What are some of the tests that you do to figure out what the market here even wants this? Because that seems like a big thing. If a brand comes to you and they're like, "I'm selling this," and you're like, "That might not even go well here." What are some things that you think about if a brand should even try to enter China.Julian:Yeah. I think, I mean that's the million dollar question. And I think what we do, we've gotten a lot better at it because I think the consumer there is very discerning, even though a lot of the information about that brand is not readily available on Chinese social media. There are ways to get it, and people do find out about it. What we typically do for any brand that wants to work with us is really have initially a conversation to really understand what the point of difference of the brand is. And really just see if there's a product market fit. We do a lot of desktop research around the brand, not only in its home market but in China to see how big that opportunity is. If someone comes to us and says, "Oh, we want to launch blonde hair dye in Shanghai and we think it's a big market because it's big in the UK," we have to question is there a demand for people to dye their hair blonde.Julian:And I think that's what we do, and we've gotten better at, is we test a lot of the products within our team. We have experts in each of the categories that we manage who really are our first port of call in terms of trying to see if there's an understanding or a demand for this product. Remember, all these brands have zero social awareness, and as the market's got more and more expensive to launch a brand, it's really important for us to make sure that if we get behind it, we're going to be able to spend the marketing dollars to get the brand to where it needs to be for it to make sense financially.Julian:After two weeks of very deep due diligence on the brand, we'll go back to the brand founder and say, "Listen, we think your hero product in America is this, but you know what? Actually in China, we think it's A, B and C." That helps us have this conversation and once we get to that point where we think that there's an alignment, we then start working on financial terms on how we would work together.Stephanie:What's interesting is that your background in the hedge fund world seems like it would be so helpful when coming and analyzing brands, and looking for opportunity.Julian:That's right.Stephanie:And looking at competitors and stuff. I mean, it seems like a perfect fit of how you came about even into this world, which is really fascinating.Julian:I think the hedge fund world really gave me an appreciation of data, and really thinking about data in a different way than I would normally do. For us to, whether it's analyzing the influences that we work with, or analyzing the livestreaming broadcast that we'll do tonight with Austin Li, or analyzing LTV and CAC on the brands that we manage, it's really become you're heavily reliant on it because if you don't rely on it, then you start to not make better decisions.Julian:And what we've done at SuperOrdinary is using that data that we give our brands, our partners, visibility into the consumer in China. And that gives us informed decisions on what products to make next. And I think that's really exciting for our brand partners, to know that this product, this moisturizer, may be too viscous on the skin. Or, this tint doesn't blend well with this lipstick shade. It's too bright. All of this information helps guide their product development. And for us to be successful, they have to be successful in their product development. So, data has become a really big part of our business model.Stephanie:Is there a different way they have to go about collecting the data there? Versus in the US, maybe you would do surveys, you would just directly ask, you would do your email marketing stuff. How would you go about collecting that data in a way that keeps you safe?Julian:Well, I think everything you learnt about business in the US market, you leave at the door when you walk through Shanghai Airport. And I think that's where you have to really come in with eyes wide open to say, "How is the consumer interacting?" First of all, there's no websites in China, so you're working through these platforms. And we have a market in the US where you have a very large amount of websites in the US market, whereas in China you have zero websites. But you have all these platforms. The world's bifurcated between platforms and D2C websites.Julian:And our view at SuperOrdinary is that platform is where the markets head to. The websites are where you discover your brands, you learn more about the content, you go to Instagram, you go to Sephora. But at the end of the day, where do you gravitate to? Well, where you're buying your products, on Amazon, on Tmall, on Lazada. And this is where I think we really try to create this vision of where SuperOrdinary is headed. And it's very important that our brands believe in this strategy too, because this is the direction we think beauty is headed.Julian:In China, I think to your question collecting data, the data that we get is readily available. You can see what people's revenues are by looking at Tmall data. But I think what's interesting is that we have a lot of other platforms, like the equivalent of Reddit and Quora that allow us to see what people are asking about brands. They're looking up ingredients. They're looking up what squalane means. They're asking what hyaluronic acid does to your skin. And that kind of data there is really important.Stephanie:I mean, how would a brand even think about getting in front ... I know you're talking about platforms and different ways to think about it. So any brands here are used to paid media and email marketing and Instagram and all that, so I know you have to just completely turn off all those ideas and start from scratch. How should a brand think about entering a new market? Even trying to get their product there is one thing, but then trying to get the word out, especially if they aren't working with a firm like those. How would they even go about that?Julian:Well, I think that historically, when a brand has entered the market it had a number of choices. One is to go through a multi-brand website that sells products and posts it into China. The problem with that is that your product may or may not get to the end consumer, so there's a lot of risk. That channel is obviously a very small one.Julian:Two is to go in it alone. Go to China, hire a team, spend 10 million dollars. Really go nuts. And after five years, you'll have lots of learnings. Pretty much what I've done, and figure out oh my gosh, there must have been a better way to do this. I'm not only spending a lot of money, but I'm losing time.Julian:Really, the way we approach our playbook ... And it is a playbook, because it is after many years of learnings, is making sure that you focus on the brand and what it stands for, making sure that the messaging behind the brand is consistent. You don't want 16 different platforms saying 16 different things about your brand. And also, the other thing is there's no such thing as seeding. You can't just send out 100 packages and expect to receive 100 posts. So, it opens a pay-per-play environment. And that's because the cultures are very different, too. Understanding the culture is very important to know where is your consumer spending most of the time? I think it would shock most people that 88% of the beauty market is Gen Z and Gen Y, Millennials. And more than 50% are purchasing products on their mobile phone. And they're looking to spend more and more on skincare and color.Julian:I think understanding that just helps you frame how do you, again, those consumers. Where are they spending their time? They're spending their time on TikTok, or Douyin in China. They're spending their time on Little Red Book to discover ... And so we at SuperOrdinary have a very large team now that speaks to over 40,000 influencers or KOLs, directly or through agencies. And I think because SuperOrdinary has a very exciting portfolio of brands, we're able to authenticate the types of brands we work with. So, we're able to work with the very best livestreamers in China. We're probably one of the most active in the livestreaming area. And that creates a lot of awareness around the brand.Julian:Building a brand from zero to one is the hardest part. It's the most expensive part of the curve. And then year two, year three should be easier. Getting it right is very important, so providing a very concise go-to-market strategy, making sure that the messaging, whilst it's in local language and it feels local to the consumer, is not different to what it is in the US. We don't want to be talking about a brand and not be in line with the brand guidelines, but making sure that the emojis, the hashtags, the cute names around the products really make sense to the local consumer. There's a lot of hard work that goes in before we even launch a brand. It's not just putting it on Tmall and then putting a price, which is traditionally what a lot of the local TPs have done. We really feel like you have to take a much stronger brand view about building that channel.Stephanie:Yeah. I mean, totally agree. What are some of the biggest surprises, maybe, that brands have? When you're going through and you're working with them and maybe you say, "Okay, but we need to do it this way," or, "This is what they're expecting," or, "Influencers are the way here. It's not just a nice to have like it is here. It's like, this is the way to go." What are some of the surprising things that brands maybe aren't expecting when you work with them?Julian:I think volume. Volumes can get big very, very, quickly. It's not uncommon that you will enter a livestreaming event and will do 3 million in sales in 20 seconds. The market is that much bigger. But at the same time, in the US we're used to growth, very steady, 10, 20% every year. And that's achievable. And in China, something could happen where a very big celebrity will go to London and find your product and talk about it, and then boom. It's all gone in China. You cannot find it. And it's just because the absolute size of the market is that much bigger than the US, and that when the community is all on their phones buying and following these influencers, it's very much an influencer-led market and celebrity-led market. I think that shocks a lot of brands. Why doesn't it have some steady growth?Julian:I think they also realize, the shock, the difference is that it's how text-heavy the interaction with media is. While here in the West we're very visual, in the East it's very much about information. Before you even get to the ingredients, there will probably be seven pages of text telling you about the product, the storyline. And then at the end, there will be some more information about the product itself. It's really important to realize that's how they shop. I think that's another one.Julian:I think yeah, I think also the market there moves very quickly. It's very saturated as well, because everyone sees China as almost like the Holy Grail during the COVID environment. I can't tell you the number of times people have asked me, "Oh yeah, this is a must have." Also, I think on the downside is just measuring people's expectations lower. Just because it's a big market, doesn't mean your first year you're going to do 10 million in sales. It's really about it takes time to build a brand. Five years, minimum, in the global market, so why should it be any different in China? My advice is really be patient with your brand. If you give it the love and tender, loving care over the next five years to make sure that it's there in five years. You don't want something doing this and doing this.Stephanie:Yeah. I mean, that's what I was kind of thinking when you said okay, you could do 3 million in sales in a matter of seconds. How could a brand think about setting up maybe a longer-term strategy there? Because when I'm putting on my US-centric view, I'm like okay, you've got SEO stuff, you're getting to the top and you start ranking, and then people see you more because you've proved that you're best long term, and Amazon do the same thing. And there, it feels like if it's so based on maybe influencers and celebrities, because you can have these blips of when you can get in front of people. How do you maintain a brand there long term, where it's not just crazy sales and then to until you have your next celebrity or influencer talking about you again? How do you think about that?Julian:I do think that's a billion dollar question. Really believe.Stephanie:I do those in my head, billion dollar questions.Julian:Because I feel like China has gotten to a cycle or a rhythm of doing shopping festival after shopping festival, whether it's 11.11, 12.12, 618, Secretary Day. These events become so gravitational for the consumer because they know they're going to get the best offers on those days. Naturally brands, if you don't participate in them, you miss the traffic which helps get you more and more awareness.Julian:I think channel dispersion is important because you don't want to be so focused on one channel versus the other. But I think with the opening up of the market with the removal of animal testing it's going to allow us to become a much more measured approach. And what I mean by that is just imagine if you could only sell your brand through Target. And you live and die by Target's traffic. Of course you're going to play along the rules that Target might have given you to go and say, "Oh, here you go and sell that."Julian:If you can imagine that you can leave Target now and open up in all these different retailers in the US, now you have a lot more control about your brand. Just like that in China, I think we're going to have this opportunity to build brands in a much more succinct manner, and open the doors that we think best represent the brand and not have to scattergun it through all these different social channels.Julian:And also, it's fair to say that the consumer now will get to touch the brand and the product for the first time in these physical stores. And it's not just Sephora. There's seven to 10 other competitors in China which have got insane new retail experience, so I think the market there is 10 to 15 years ahead of the US in many ways. And that's another shock to most brands, is like, "Oh my God. This really, truly exists?"Stephanie:Yeah. What are some of these experiences that are so far ahead that maybe we should be looking into?Julian:Yeah. I think the consumer, when they go to a retail store in China, traditionally you go to a Sephora which is really much about it's glossy black, it's got music, you've got these beauty assistants that will come in and they would really sell you the product. China has also gone the other way, where they've removed all the beauty assistants and you go in there and it almost feels like a ghost town. But you get to try all these product and sample sizes. There are examples of that. And there's a shop called Harmay, H-A-R-M-A-Y, you can Google it, have a look. It looks like a museum. And they're 10,000 square feet, and it's very Instagram-able. That's a word. But it's one of these things that I think has really changed the way that people are interacting, because people want to drive traffic towards the door, there has to be a reason. Especially when you can buy everything online.Julian:I think that's really exciting. And I think I always get asked the question of, why is livestreaming working in China versus US?Stephanie:Yeah. That's a big one. Whenever people have come on here and talked about ... We had one guest who taught Harvard, and they brought a livestreamer from China over to show how many Harvard t-shirts they could sell, or hats or something. And it was insane. But then also it was like, I don't know if that would work here. I don't know. I just doesn't feel like a similar market around how it was happening. I don't know, it just didn't feel very familiar.Julian:Yeah. I think culturally, in the US and the West we don't like to be sold to. And that's why Instagram is very much a place where you build relationships with the other person. I think that's fundamentally where the big difference is. And remember, livestreaming in China is a business. These livestreamers are starting work at 6:00 PM and clocking off at 2:00 AM, and they do that 365 days a year because it's a business. And they have tens of people underneath them that are helping them bring in product to talk about. I think when you think about this is your starting block, and when you think about in the West, I don't think people will approach livestreaming in the same manner.Julian:I think at the end of the day, the winner in livestreaming in my view is that it will be the platform. I would make a bet that Amazon would probably be the leader eventually, because they're the ones that are going to be able to fulfill and deliver multiple brands and multiple products to the consumer in a very fast fashion. However, it's exciting to watch all these new platforms come about into the space.Stephanie:Yeah. Are there any other trends that you see happening in China right now that you're like, this could work in the US? Or, this should definitely be brought back because people would love that here?Julian:I think China's done a really incredible job of cross-collaborations with really interesting partners, like very nonsensical to the West. I don't know. In the West, you'd see a clothing brand pair up with a skincare brand. But in China, they'll go KFC will do something with a perfume brand. Or, a bubble tea will work with Fenty Beauty. Really, they like to think out of the box in the market, and I think that's really exciting.Julian:I do like the idea of sampling. I think sampling is something that the US has always been involved with, these boxes that get delivered to the customer and these subscription boxes, whether it's Birchbox or BoxyCharm and all these different ones. In China, I see that there's this interest to go and try sample size products at stores. I think that could eventually translate over here, and I think that would be well received.Stephanie:Yeah. I mean, I think about Costco. I wonder how much business they've lost because people like samples.Julian:They do, yeah.Stephanie:I mean, yeah. It seems like there is the stores that are okay with letting you try everything. And I know COVID mixed that up a bit and made it harder to do that, but I wonder if it will lean heavier into that because they think that's such a great way to sell. But it seems like some brands are kind of stingier, like I don't want to give this away for free. And it'd be interesting to have a case study of like well, when you get a sample, here's the ROI and the LTV just based off that one, little, teeny sample that you did give away consistently. Not just once a week when you send someone in to be an ambassador.Julian:Yeah. No, I think that's really exciting. I do love the idea that I think the US is incredible at creating these ideas. [inaudible] has done a great job and really given the consumer a more accessible way to try products. But we have to always ask ourselves the question, what's going to drive the end plus one customer to go to the next multi-brand beauty store? And I don't know about you, but how many times do I get ... I'm buying my groceries online because I don't to go and queue up. I mean, this is the trend and it's accelerating faster and faster.Stephanie:Yeah. Yeah, I agree. The one thing I'm thinking about now too is that it feels like in some ways, the US and Chinese buyers are the same, and in other ways very different. Thinking about the sale aspect where it's like, that's big in China. And actually, it's kind of like going away here. Why are we doing these Black Friday events? There's no point. And that's once difference.Stephanie:And the other one I'm thinking about is all these new D2C companies popping up where you see consumers here kind of falling in love with the brand, which is very different than maybe even five years ago. And maybe you didn't always know who the brand was behind the product. Are the buyers in China similar, or are they not really open to new brands? Or do they not really want to hear about the story? What are the differences there?Julian:I think for example when we started SuperOrdinary, we saw this opportunity to bring clean beauty into China. Which at the time, there was no social listing around clean beauty. If you checked out clean beauty packaging, clean ingredients, there was really nothing there. And that was very important. I think the US, where they're ahead of China in this respect, is the brand story, the mission behind it. What does the brand stand for? What's the why? I think those types of ideas are becoming more and more important in China. We're starting to see brands really care about the environment, the packaging, what they do. The say/do ratio, we call it. Julian:But I think one of the learnings we had, and it's why I think SuperOrdinary, we moved to the US to really build out the Amazon business. Because we saw the opportunity of what we were doing in China and reapplying that to beauty on Amazon. Everyone knows the story that there are rogue sellers on Amazon. There's plenty of opportunity. And over one third of all beauty purchases are now on Amazon. And it's like this dirty, little secret we all know. We're all purchasing our toilet paper, our mineral water on Amazon, so why don't we buy our skincare?Julian:We set up a team. We have a team just under 25 people here in the US focusing on building brands, the story, making sure their D2C websites look exactly like they do on Amazon. And it's just been really exciting, because in five years' time from now, I think if you ask yourself the question, "I want to buy a product today and I want it on my doorstep in 30 minutes, who's the player that's going to be able to do that?" And it's not your own D2C website. It's really the part that can actually have the tentacles everywhere that's going to be able to do that.Stephanie:Yeah. Yeah. That's going to be huge. All right, well with a couple of minutes left let's shift over to the lightning round. Lightning round is brought to you by Salesforce Commerce Cloud. It's where I ask a question, and you have a minute or less to answer.Julian:Oh, wow.Stephanie:Are you ready, Julian?Julian:Let's go.Stephanie:All right. If you had a podcast, what would it be about and who would your first guest be?Julian:I would invite Anthony Bourdain. I just think he's the coolest guy, and I really enjoyed his international aspect on traveling and eating. I love eating.Stephanie:Yeah? He'd be your perfect guy?Julian:Yeah.Stephanie:So, a show all about eating and food, then. I like that.Julian:Yeah, exactly. Definitely nothing to do with ecommerce.Stephanie:Yeah. That's good. Well, when you want to stay on top of new trends that are popping up, how do you stay on top of that? Where do you go? What are you looking at? Yeah, how do you know what's hot?Julian:I'm lucky enough to have three boys, who are 16, 14 and 12.Stephanie:Oh, so they know.Julian:Who keep me on my toes, yeah. I actually ask them, and they find everything on Twitch. I usually ask them, and then they frown at me like, "Dad, what are you doing in makeup?"Stephanie:You can ask makeup stuff on Twitch? Wow. That might be a new-Julian:Yeah, it is. It's true.Stephanie:What do they ask?Julian:Well, they just find out ... They know everything from men's grooming, and they get targeted. And it's so funny, because the young one, he said, "Dad, what's manscaping?" I'm like, "Where did you learn that from?"Stephanie:We'll talk about that later.Julian:I'm learning about new projects and new things all the time.Stephanie:Oh my gosh. That's awesome. That could be a whole, new trend there. Go on Twitch. Ask the people. They'll let you know what all the trends are.Julian:That's right.Stephanie:What was an idea that you thought was brilliant but ended up failing?Julian:Oh, I've got so many of those. I'm trying to think of the one that's the least embarrassing.Stephanie:You have embarrassing?Julian:During COVID, I was like, wow. I was thinking about everyone is staying at home. Everyone is on these Zoom class, why doesn't people create comfortable clothes? Maybe I should start a pajama company. And I quickly had a handbrake on that. So, I didn't do that. But I've also done other things. What else did I do? I invested in a pool cleaning company back in the day, and that was my first, real investment. And I had a very big learning from that because I gave them all the money upfront. And the second day, he never showed up for work. I'm like, "Huh. That was a bad trade."Stephanie:Never saw that dude again? Oh my gosh.Stephanie:All right, what's up next on your reading list?Julian:On my reading list. I guess I'm a creature of habit. I think one of the books I wish I read 20 years ago, it was available, was Ray Dalio's Principles.Stephanie:Yes. So good.Julian:I think he gives you this honest look at yourself. It's very introspective. And tells you how to build teams. I recommend everyone in the world to read that book over and over and over again.Stephanie:Yeah. He's such an interesting person. All his philosophies, and I think yeah, he came and spoke at Google when I was there. And just how he thinks about rating his employees, have you read about this?Julian:Oh yeah, of course.Stephanie:You get a rating.Julian:I know.Stephanie:And if you're this level, you actually just probably shouldn't speak up until you get to this level, but everyone gets access to everything.Julian:I know. The scorecard is like a baseball card. I mean, but it gives you a very different perspective about radical transparency. And also, teaching you how to take constructive criticism in a positive way, knowing that collectively the information in the room will allow you to make better decisions.Stephanie:Yeah. Yeah. Love that book. Well, awesome. Well, Julian, I've loved having you on the show. If people are trying to get into China and they're looking for help, where can people find out more about you and SuperOrdinary?Julian:Yeah. We have a website, SuperOrdinary.co. Not .com. Thank you, whoever took that website away from us. We'll find you. Or, reach me on JulianReis, R-E-I-S, @SuperOrdinary.co. Really, thank you so much, Stephanie. You're wonderful. It's so nice to speak to you.Stephanie:Thanks so much. It's been awesome.
The future of commerce is being built all around us, and while so much of the industry changes on a daily basis, there are still some fundamental truths that anchor brands and allow them to find success in the digital and retail worlds. On this roundtable episode of Up Next in Commerce, I got to dig into exactly what those foundational elements are with Mike Black, the CMO of Profitero, and Diana Haussling, the VP and General Manager of Digital Commerce at Colgate-Palmolive.This was such a great discussion that touched on so many different topics that brands big and small should be paying attention to. For example, what are the three key levers that influence ecommerce sales? How should you be developing KPIs that will actually mean something and lead to more profitability and growth? Why is omnichannel the way of the future and what channels should companies be investing in? Mike and Diana have the answers, which they have gathered through long and impressive histories in the ecommerce world — Mike worked at Staples and Nielsen, and Diana has held roles at places like Campbell's, General Mills, and Hersheys. These two really know their stuff and they were so much fun to talk to. I hope you enjoy it as much as I did! Main Takeaways:Pulling the Right Levers: There are three basic levers that influence ecommerce sales: availability, findability, and conversion tactics. If you can't ensure that you reliably have products to offer people, that those people have an easy way to find the products, and that they are given reasons to actually make a purchase, you won't be able to grow or increase profits. You Reap What You Sow: Being a first-mover on any platform is one of the investments that has the highest potential payoffs. Companies that took Amazon and Instacart seriously from the get-go have created a huge advantage for themselves in the ecommerce space. By having a head start in one place, you also free yourself up to explore elsewhere while your competition tries to keep up in the first spot you've already dominated.You Want Them to Want You: As a brand, you have to firmly establish a value proposition to present to customers, especially when you are trying to extract information or gather data about them. Give customers concrete reasons to want to engage with your brand and earn their trust so that they are more likely to keep coming back. Then use the data they give you to provide even better experiences and products over and over.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, everyone. And welcome back to Up Next in Commerce. I'm your host, Stephanie Postles, CEO at mission.org. Today, we are back with an awesome round table with some amazing folks. First up, we have Diana Haussling, who currently serves as the VP and General Manager of Digital Commerce at Colgate-Palmolive. Welcome.Diana:Thank you so much for having me. I'm super excited for this conversation.Stephanie:Me too. And next we have Mike Black, who's the CMO of Profitero. Mike, welcome to the show.Mike:Thank you very much. Also, very excited.Stephanie:Yeah. This is going to be a good one. I can just feel it. I can see the energy between you guys. I can see you got a lot to say. So, it's going to be a good one. So, I would love to start as I always do with a bit of background so people know who we're chatting with. So, Diana, maybe if you could start with… I see you have a long history in the world of CPG work for… I mean the most well-known brands that I can think of, and I was hoping if you can kind of go through that journey a bit?Diana:Yeah. So, I've been lucky enough to work at four major CPG organizations. I cut my teeth with Hershey in sales and really was able to understand, not only retail, but direct customer selling. Moved over to General Mills where I stiffed my toe in the water in marketing. Loved working on those brands and getting a taste of a larger organization. And then I shifted to Campbell's where I spent the bulk of my time. Campbell's will always have a special place in my heart.Diana:I spent a lot of times there, ping-pong back and forth between marketing and sales. I created a couple of roles for myself. One of which was the lead of e-commerce, where I established the e-commerce organization there before leaving and coming to my new love, Colgate-Palmolive. Super excited to be part of the Colgate family. I lead a digital commerce team called the Hive. It had that name before I got there. But I'm attributing it to the Beyonce now that I'm there.Stephanie:I love that.Diana:I'm so super excited to be at Colgate. There's just a ton of energy and growth around e-commerce and our primary focus is on digital transformation which is a perfect segue for this conversation.Stephanie:Yes. I can't wait to get into that. All right, Mike, a bit about you.Mike:Yeah. So, I started my career in retail. I started my first real job was at Staples, the office products company. And I was responsible for public relations there. Opening new stores in different markets, and really got a firsthand look at how retailers, traditional retailers were being disrupted by e-commerce. The time that I was at Staples was right at the time that Amazon started to make its ways. And I could see the impact of that just in the way that Staples was going to market, and they started to really dial up their own e-commerce efforts to combat.Mike:So, it was really interesting to see that pivotal moment inside from a retailer, classic brick and mortar retailer go through that transformation. So, I started my career there, then I started working in startups. And I eventually found my way to Nielsen. So, I worked in the part of Nielsen where we tested new product innovations for CPGs and worked in their measurement and analytics. And while I was at Nielsen, that's my first exposure to e-commerce and first exposure to this new emerging space of analytics.Mike:And I knew this was the place I wanted to be. It was in the e-commerce space, the intersection of e-commerce and data analytics, and that led me to Profitero where I am now. And we're getting to work with smart people like Diana who is someone I listen to her speak, and then I take notes. And then I sort of borrow some of her wisdom, and she's someone I'm always learning a lot from.Diana:Right back at you, Mike. And if you don't follow him on LinkedIn, you should, because he leads all social for Profitero, which isn't in his CMO title.Stephanie:Wow. I like this. Diana's like your hype woman. So, this is a good match we have here.Mike:The feeling is mutual.Stephanie:Yeah. That's awesome. So, Diana, I mean I'm thinking about you starting an e-commerce team at Campbell's. And then coming to Colgate where they already kind of have one set up, and I'd love to hear a bit about what is it like now versus then? Because I can just imagine you being like, “This is important everyone and I need some budget for it and this is going to be a thing.” Whereas now, it's like obvious. Like, “Yeah. Jump in. Let's go deep and spread the word.”Diana:Yeah. I think, and I'm sure this will ring true to a lot of my fellow CPGers and the struggle on the e-commerce business. If you're at an organization, and this is a completely new space, but you have leadership that definitely sees the potential and the opportunity, it really becomes on you to not only operationalize, but really help leaders understand how to translate e-commerce, how to translate digital to a P&L, to growth projectors, to a strat plan. All those things CPG people are really comfortable with.Diana:And then also to really think about not only what your org needs to be like to get things off the ground, but where it needs to go in the next three years. And typically, you're not in the position where the organization truly understands how to make that work. So, there is a kind of this hybrid role that digital commerce folks have to play in emerging organizations where they're really helping folks navigate, what IT support do I need? What supply chain support do I need? Where should everything sit?Diana:And you can do it on your own, but you can also partner. So, there's a number of groups you can partner with. I happen to know that Profitero has done a lot in this space, and they have, basically, a journey for organizations that you can leverage. But it really is like starting from scratch and building a case for growth. I think the biggest question that you get when it comes to just starting up in an organization is how is this incremental to the business?Diana:And my pushback to that always is, it's not about incrementality. Incrementality is a bonus. It really is all about protecting your base business, going where consumers are going, and ensuring that you future proof your organization for the reality of what our new world is, which is omni. It's slightly different when you come into an organization like Colgate who already has a established e-commerce team or Center of Excellence.Diana:I definitely feel like I came to the land of the willing. Everyone, from the top down, is really excited and energized by the space. And that it's energizing, but it also means you have to redirect all of those good intentions and positive energy to the right focus and the right goal. So, some of the work when you're in a more established organization is really, how do I harness all of those resources when they are abundant? And make sure they're spent in the right places and they deliver. Because there's going to come a time where leadership is going to look back on that cash that they threw in e-commerce, and they're going to say, "What did I get for it?" And you better have delivered on it.Diana:I think the other piece is making sure you understand how to integrate across the organization. It's important to have a strong center, but it's even more important to make sure everybody understands the role that they play in digital, in e-commerce regardless of if they're on the badass teams like the Hives of the world.Stephanie:Yeah. I mean the one thing I hear a lot of brands struggling with though are around metrics. I mean from working at bigger companies in the past, I've seen people kind of come up with KPIs in a way that, it's kind of made up. Stephanie:So, when thinking about big and small brands thinking through like KPIs and metrics, feels like kind of a messy world where when you get to the bigger organizations, some of them can start to feel like they're just kind of being forced. Like, "Oh, see, we have it. And if you look in three years, maybe it's like not even relevant. And then the smaller companies are like, "Well, how do we even start?"Stephanie:And so, I'm wondering, how do you go about even thinking about developing KPIs, thinking about brand building, thinking about conversions. Is there some kind of allocation you had going into it of like, "Here's what should be spent on just holding down the fort, and here's what should be spent on acquiring new customers and thinking through the LTV and everything."Diana:For me, that's a marriage between two points. It's the external data and viewpoint. So, where do you have an actual right to win? Where are the white space opportunities? And where are their growth that you're not getting your fair share of? Really understanding that industry landscape is really critical to forming your strategy.Diana:What you want to avoid is just forming a strategy that's based off of internal goals and objectives, because you may not be able to deliver against that. It's a marriage between the two. Then, it's getting really clear internally on what winning looks like. There is a high cost to acquisition, but there also is a huge penalty if you don't ride the momentum and the wave of growth while it's happening.Diana:I use Skype and Zoom during the pandemic as an example of that. Skype had a foothold on the industry. Zoom came in out of nowhere and won the pandemic. You don't want to be Skype. So, how do you ensure that you position yourself and your brands, so you not only understand what the CEO and the board wants you to deliver, but also you're pushing on what are the right levers in order to get there? Because your brick and mortar business is not going to mirror your e-commerce business. It's going to be slightly different.Diana:And then you have to understand those points where there's intersection. So, right now, we're seeing growth across all modalities or modes of shopping. So, there is this real digital impact on the physical brick and mortar footprint. And the onus is on the digital commerce team to make sure they understand what that impact can do, and they're not only influencing the KPIs that drive e-commerce, but they're helping the brick and mortar business understand the KPIs they need to maintain competitive edge. But also to hold their shelf space, their promo space, and their capacity within the total retailer environment.Mike:Yeah. Just to build on what Diana said. I've noticed a shift just in vocabulary and positioning in the last probably three months with e-commerce leaders. They used to really talk about e-commerce as e-commerce, and it was really about winning in that channel. And I've noticed this language shift towards now repositioning around this idea of digitally influenced sale, and taking credit for all the work that you do online that drive sales.Mike:And you think about it, most, and it's true. Most shopping experiences are happening much… Even if you go in a store, you're researching online, you're looking at content. You're doing a search to see if it's even available at your local Target. And what comes up in that digital experience is going to dictate whether you go to that store or not. So, it's just so much more impact that I think goes into your e-commerce that I don't think e-commerce leaders were really fairly taken credit for. But I noticed this, Diana, you probably… And it sounds like you're starting to speak this languages.Mike:It's like almost every sale is digitally influenced now. And so, that investment, I think it breaks down the barriers between the brick and mortar teams when they start to realize that their success isn't independent. It isn't just e-commerce and I don't have to care about it. Actually, will have a full cycle, and you see some retailers, really, I believe the sticking point comes when you have a retailer like Walmart who starts to say, "Hey, you have to talk to me in the language of omnichannel."Mike:And now, when they set that tone and being as influential as you are, I see them starting to drive this different consensus. So, I think the metrics have changed in some ways, the language has changed and I think we're starting to reframe that it isn't just e-commerce, but just commerce now. And I think that's going a long way.Stephanie:Yeah. That is why we label the podcast, Up Next in Commerce, because we knew, we saw the writing on the wall, so just several notes, we were first. So, how are you going about even thinking about that tracking? I mean if you're saying a sale is digitally influenced, in my head I'm like, "How? How would you even know that?" So, what are some ways, either Mike that you see brands kind of attacking that problem or Diana, how's Colgate thinking about that?Diana:Mike, you got this one. This is your [crosstalk].Mike:Yeah. I'd say like basically, I mean the way that we think about your metrics really goes down to the levers, right? The levers that influence your sales in e-commerce, really comes down to like three basics. And there's some, the one is the first lever. Most important is that you're available. So, that your product is even listed and it's not out of stock. That was a major issue last year, and a lot of brands are still feeling that repercussion, and that has a lot of impact.Mike:So, if you go to Amazon, and you're looking for a particular product, it's not there. You better believe consumers are going to switch, and we saw that switching, and that switching is very painful online, because the loyalty can go, and then you don't have that repeat. So, first and foremost you think about, "Okay, we got to be available." It's just like being in store. You got to have the product there on the shelf.Mike:Then, the next big lever is being findable. And that's what's really interesting, when you're in a traditional store, you walk into a store, you knew that your product, you sold it in at the beginning of the year, the planogram. That, yeah, your product was going to be on the shelf, and they're just going to replace it. But in the digital store that changes every day, and we've done like 24-hour video views of search results on Amazon, and the products are just changing constantly shifting.Mike:And so, findability is really being keen to what terms your customers going to search for, and then being there all the time in the top of the results, and we have seen that if you're not on page one, and sometimes not even in page, in the first five spots, you might as well not even be there, because you're not findable. So, that's like your second lever.Mike:And then your third is really about your conversion levers. Having that content and having those reviews, and that's probably one of the most transferable things between the online and the offline experience, because there's so much discovery and learning and research is being done, and that's one of the things that Amazon has done a great job and recognized, they've given consumers so much real estate, so much space. Places for videos, place for content.Mike:And I think most of us, if we're going to look for a new product, we're going to start on Amazon. We're going to soak in that information and make informed decisions. So, if you look at it, it's all right. Well, my end game has got to be available. I got to be findable, showing them a search. I have to have good content. And then if those things are true, you start to gather metrics, and that's actually what Profitero is doing is we're able to help brands understand across all the sites you're selling. Are they available? Are they findable? Are they converting? And ultimately what we know is if you pull those levers, and you optimize those levers, your sales are going to grow, and you're going to outpace the competition.Mike:And to Diana's point, the very, very important thing that grounds all this is having a sense of your competitive growth, because you need to be able to define, like Diana said, not define success in your own terms. But you have to be able to see how your competitors are growing in that category, and if you look at 2020, everybody grew, pat yourself on the back. But if you knew that your competitor grew at like 2x or 3x, that's a wake-up call, there's something you're not doing that they're doing. And so, it's really important that you balance those tactical levers of the shelf with just this overall having sales metrics and not just looking at your own. And these are all data points that are now available through technology and Diana can speak about how they're actioned.Diana:Yeah. I would say the digital commerce starter kit is definitely, first and foremost, digital shelf health and discipline. That's a game changer. If you're not winning there, and you're not going to win, we spend so much time as marketers really focusing on our packaging and understanding the importance and the value of packaging.Diana:Well, in this new world, the digital shelf is your new packaging. It's your new end cap. It's your new aisle. So, how do you think about digital shelf and the discipline there really is going to translate into your competitive set, because now consumers can define what that competitor set is. It's going to really define your conversion rates. Does your content help consumers really understand how to use your product?Diana:And it's also going to impact your ratings and reviews. Does your content enable your consumers to have the experience that they're expecting when they see you online? So, it really does fuel all of the potential for your growth. And I said once you have that starter kit up and running, then you really have to take a step back, and think about, what are the other KPIs? We tend to really focus on marketing and sales when it comes to digital commerce. But this game is won and lost with supply chain, IT, and finance.Diana:So, starting back with supply chain, IT, and finance and setting yourself up to be profitable, to be deliverable, and to be flexible is really how you can break away from the pack.Stephanie:Yeah. I love that. What are some surprises? And maybe Mike this is a question for you. What are some surprising platforms or channels when you're talking about, everyone did well, but some brands maybe did double or triple compared to other ones? What are some surprises there that you're seeing or things that are happening right now, you're like, "This platform's kind of popping up or people are pulling off of this one?"Mike:Yeah. Well, just specifically in terms of platforms, I think, well, in terms of like retail platforms, I think part of it is I think last year was really about the relevance of certain platforms jumped up. So, I think most brands that took e-commerce seriously, took Amazon very seriously from the get-go, I think last year Instacart became the platform that everyone's, especially in CPG space said, "Okay, this is serious now." People were going there first and foremost, it was a lifeline in terms of getting delivery.Mike:And suddenly now, what that creates is an opportunity to be first in market. And I think there's an advantage with any platform to be the first mover, and there's reasons why. Amazon's a good example of a platform that favors brands that have good sales history. So, if you excelled, really, if you were like the first let's say pet brand a couple years ago to rock Amazon, what happened is that you were excelling at all your execution, your sales are going up, and you start to organically just get higher placement, because Amazon favors brands that are relevant.Mike:And so, if you're really selling, they're going to give you that top space. And you see that same dynamic in Instacart, and in grocery too, because what happens is on a grocery site, people usually buy groceries off a list. And so, the first time they place orders on an Instacart or grocery, they're building their list. And then the next time it's a reordered list. So, there's a huge advantage to be a first mover on a platform and to build that purchase history, because it drives your repeat rates.Mike:And so, what we saw last year was just a lot of brands stepping up, and saying, "You know what? We're going to capitalize this. We're going to be early. We're going to invest in ads. You were going to get it, get that top of mind share." And I think they're going to reap the rewards now for the rest of year. So, you can look at it from a platform perspective, sometimes being first to market on these platforms, taking e-commerce seriously can give you a long-term sustainable advantage.Stephanie:I wonder if consumers are changing because of this past year or two, it seems like consumers are looking for the newer thing, the D2C company that's kind of like just saw it on Instagram. I feel like even myself, I go to Amazon, I see a lot of brands that I know. I'm kind of like, "Ah, keep scrolling." I've known of these brands for 10 years. Of course, they're number one. They've been around a long time. Let me find this deodorant that just popped up. Oh, cool. It's natural. It has all the things that I want, but it might be pretty far down or I'm even getting to a place where I'm kind of skeptical that Amazon might not even have it. And I might just need to go to the website or maybe go to, I don't know, Target and browse through and try and find it. What are you guys thinking around that?Diana:I love everything that you're saying there, but the insights background in me is super excited around the fact that we all went through a life change at the same time. So, if you think about that, typically, when you have a baby, your consideration set changes, your lifestyle changes, which are open too. New households with second babies tend to buy a washing machine within that first week that they bring that baby home, because they're like, "Crap, I'm not dealing with all this laundry on my own."Diana:But we all went through that change, collectively had a baby at once and changed how we operate, how we think, what we're open to, what our consideration set is. So, insights teams out there should be real hype right now, because it's an opportunity for them to really take a deep dive in and rethink brand positioning and audiences. So, exactly what you're talking about, people are more open or more exposed or they realize how connected they are to certain brands, and then they were willing to go direct to that brand to purchase those items to ensure that they were getting, and they're going to sign up for subscription because they're not going to be out of that brand like they were, toilet paper, those first few weeks of the pandemic.Diana:So, I think it's a huge opportunity for brands to really think through, really around who your audience is, your target audience is? Are you capturing them? So, this is your defense strategy. Am I getting them? They're switching from platform to platform. I was getting them when they were going in the brick and mortar store, am I getting them when they're going into Instacart? Is my item showing up? So, making sure you're getting that first basket because the first basket is everything.Diana:Then, there should be a real acquisition strategy. Who do I have the right to go after because now they're open to me, they're open to my brand or they're open to new things and ideas? And that's where brands can really leverage their suite of their portfolio to really drive that cross shop. So, I think this is a huge opportunity if brands jump on it to really connect with consumers. I never used to work out before the pandemic, but then when I was stuck at home, in the same room that I sleep in, and then working in. I was like, "Well, I need to do something."Diana:Peloton got me. I don't like working out. I like the community. I like the gamification. I want to pretend that I'm one of their instructors with the jewelry on and super cool. And I'm not, so they totally got me. And now I'm working out three days a week. That's a whole habit that I never had before, and so it's just ripe for opportunities for brands to not only grow within their traditional channels, but to acquire new consumers in new channels.Stephanie:Yeah.Mike:Yeah. Just to build on that. There's no single consumer anymore, and there's no single retailer. I think there's, me personally in my own house, takes… We shop at eight different retailers to stock our house now online. There's certain things that Target does well, there's certain things Amazon does well. There's certain missions, when I'm in discovery mode like you described, yeah. When I want to go find something and be inspired, I might look at Amazon.Mike:When I have a mission where I just need to stock up, I might go to Walmart. I might go to BJ's or Costco. So, what's really interesting and what's really challenging is you can't just… The brands that are going to win are the ones that can do this well at scale effectively. They recognize that their consumer is everywhere, that they're shopping for different, in different occasions. Convenience, different factors, and they realize like you have to be everywhere, you want to be available and you want to show up.Mike:And I think that's the next play, and that's what makes omnichannel really exciting is you have those brands that maybe nailed Amazon, and they're comfortable, but the next level of this game is, all right, now we have to operationalize this at scale across all our retailers teams, and those brands that are on top of that in making those driving that change, internally to be there everywhere. Those are going to be the ones are going to pick up that market share in the next year, and next two years.Stephanie:Yeah. I mean how do you think about for brands needing to be everywhere? I mean I'm thinking about like you said, the shopper, when I'm at Costco, I'm in a different mindset. And I might want to see a slightly different version of a product whereas when I'm on Amazon or when I'm in Target which feels higher end maybe than a Walmart. How would you think about a brand should handle that now that they have to be everywhere, but also have very different consumers everywhere in a different mindset depending on where they're shopping?Diana:I mean that's where portfolio roles and retailers segmentations really come into play. It's not the sexy work, but it's the work that has to be done. And it can't just be done at a very high level anymore, it really has to be done at the SKU level, because there are some multi-packs they're going to pop in certain modalities at certain retailers, there's some SKUs that just have a better fit. The brand teams that are able to really get that portfolio role and customer segmentation right are going to be able to invest to win, because as retail media costs grow, the cost of service grow, dollars, that bucket of dollars hasn't gotten any bigger. So, it's about being smarter about how and where you invest and really thinking thoroughly through how what you're expecting to get from that dollar.Diana:So, sometimes it's going to be a ROAS, sometimes it's going to be data, sometimes it's going to be something else. But really having clear business objectives for every dollar that's spent.Stephanie:Yeah. I love that. Mike, anything to add?Mike:Yeah. No. I think, Diana, like portfolio strategy is it's funny like there's been this like sea change I think when early stages of e-commerce or at least my observation, there's so much excitement that you get the marketing teams are just spending dollars, right? It's about growth. We're just going to buy some ads. And then all of a sudden, you see this diminishing returns. All of a sudden the things you were spending ads on, oh, they're always out of stock or they're getting de-listed.Mike:And that's a symptom and really it's like this idea, and you mentioned Diana, it's like marketing and supply chain are the best friends in the e-commerce. It's a weird thing because I'm a marketer, and you think, but it has to be because unless… You almost have to flip the funnel. And I thought it's like you got traffic, you get conversion. And then you get to like profitability. You have to flip it. And I think that's the flip now is thinking about your portfolio from consumer dimension, profitability dimension across your retailers. If you don't set those clear lines up, you don't set that definition up, this has a downstream effect.Mike:And you see this a lot on retailers where it's like, "Okay. Well, I have the same products everywhere, so what happens?" Well, if Walmart drops the price, Amazon drops prices and suddenly that thing that you're spending ad dollars on, you can't even, it's not even there. So, I think this is like the next generation is like almost like, "All right, let's break it back. Let's work backwards now. Let's start fresh, and let's build that from the portfolio."Mike:And then, once we make that clean, we're just going to see this uplift and our cost to serve, our cost of marketing is going to be super-efficient versus just throwing dollars at it without a strategy.Diana:That's not just for the manufacturers. I also feel really strongly that that benefits the retailers. They don't want to comp prices back and forth. They want a unique value proposition for their consumers. So, how can you help the retailers achieve their objectives? If Kroger's going after young households, and young families, what's your solution to help them go after them? If Target's going after the black consumer, how are you helping them capture as many black guests as possible? How are you really thinking about not only the strategy, so it benefits you, so it also really does align with your retailer strategy?Diana:That's how you create a win-win scenario, and you avoid the competitive pricing pressures that we're all experiencing right now.Stephanie:Yeah. How do you find a good partnership with these retailers? Because I'm sure when they have so many brands they're working with and everyone probably wants to talk with them a little bit differently, and they have different ways that they want to help them or work with them, how do you think a successful partnership looks like or what does that structure look like?Diana:I think this is why the digital commerce space has to exist in this kind of hybrid world, because I feel like marketers take a really consumer human first mindset. Sales people tend to be very like sales for sales focus. In the middle you have to be this hybrid. I do take a customer first approach to an extent because you have to understand your customer strategies. Target's earnings call just came out this week or last week, and they talked about how 90% of all their sale is digital or physical are coming from stores.Diana:That's an insight for me to strategy. So, if I want to win at Target, I've got to understand how they tick, how they operate, and how I can help support their strategies, and their executions. So, it's really that intersection between, what our brand teams are trying to accomplish? Our sales teams targets, and our retailer strategies, and where we can actually play.Diana:From a Colgate-Palmolive perspective, I'm not going to be able to help them win in every single element of their strategy. But there are areas that I am going to be able to help them lead or give them a perspective that can influence other sections. And I think the more and more we play those roles, the more valuable that you show up to a retailer, the more inclined they are to partner with you.Stephanie:Yeah. I mean I feel like that's a life principle. You just did your research on the brand, the company, you looked at their investor reports, you look into the background of the people, and instantly they're like, "Oh, you kind of already know that I don't have to bring you up to here, you're already here." So, now we can get going, which is awesome.Diana:Basically all can be boiled down to the same dynamics of the dating relationship. Sometimes you go to the sporting event because your significant other likes it, and then sometimes they go to the thing that you want because you like it. And then if you have a mixture of alcohol and sports, you got me. So, there you go.Stephanie:I love that. I love that. Cool. Well, the one thing I want to kind of touch on too is around the world of marketing right now. So, I've talked with some brands that have had to kind of always work in a scrappy mindset. One of them was Anheuser-Busch where they're like, "Yeah. We can't ever have this one-to-one relationship. We always have to do other things to be able to reach our customers because we actually can't directly talk to them."Stephanie:And it makes me think brands like that might be pretty far ahead with all these changes to ads and privacy and retargeting and all that. What are you guys thinking is kind of like what are brands missing right now? What should they be doing to continue to have a close relationship with their customers and not lose out when they lose access to a big ad pull that maybe they're not going to have anymore?Diana:For me, I think it's a balance. I think you have to think about your consumer touch points across the board. Everyone's talking about the cookieless environment that's looming. We're all hoarding data. But I don't know how actionable everyone's making it. So, I think it's really around taking a step back and what's your learning agenda.Diana:You want to connect with consumers, but what's the value proposition for them? What's the benefit? And I think brands really have to think about and understand, if I'm connecting with consumers, what value am I providing them? And why should they give me their information? Why should they want to connect and engage with me? And if you haven't established that, then you haven't earned the right to have their information or their contact, because it really is all around creating a delightful experience for them.Diana:I think understanding all of the data inputs that you have and really thinking hard around, how do you leverage them to feed strategies, not with just within the silos of the space? But how do you integrate them so you're feeding your traditional media strategy with your D2 insights? You're feeding your supply chain strategy with some of the ratings and reviews that you found, even your R&D innovation.Diana:So, it's really around being mindful and thoughtful about all the touch points that you have and being able to action against them. But I think for most retailers and manufacturers, if you don't have a strategy to think about how you're going to leverage your data, and you haven't, you're going to miss the boat, because everybody's gearing up, and it's what's happening now if you want to stay ahead going forward.Mike:Yeah. And just to build on that. I think totally it depends on the consumer and what's relevant. But I mean generally, I think what I'm seeing from some brands a little bit of higher level thinking in terms of how they're engaging with consumers, even on social media. I noticed there was a time period where I would go on Instagram and I saw these ads. They're very tactical. There's just like these product ads like, "Okay, buy this widget, buy this thing."Mike:And you still see these display ads, but then I've seen a lot more ads are just more, they're helpful, their content. I'm a pet owner and I wasn't going through my feed and I saw those, it was an ad, but it was from a pet company, and it was really supposed to be like how do you, what are the attributes of a healthy pet? It was kind of an interesting, intrigued me. I have an aging pet, so I just think there's a lot more creativity, you can't… I think it's easy in e-commerce to get very operational, but you can't underestimate the power of creative and how important creative is.Mike:And I think there's a lot of brands that I've seen challenger brands that are leveraging humorous videos. They're really doing things viral on YouTube, they're building a personality around their brand. They're getting up on TikTok. They're leveraging every touch point they can at the top of the funnel to build, to be creative, to stand out. And now what that's doing for them is now they're training consumers to go to Amazon and type their branded, not type a general category keyword.Mike:So, I think what's happening is the mediums are changing, maybe it's not television maybe it's not that, but there's so many more tools for marketers and very agile to still tell stories. And so, I think storytelling is going to be, has always been important. And I think that brands that are going to invest in that and make sure that they're using all these other new platforms these video platforms are going to really be well positioned for the long term.Diana:Yeah. And I think what I heard from you too is this authenticity. And what consumers are really looking for because I feel like now especially within Instagram, people want to be sold to, to an extent, but they want to be sold to for me. I want you to understand who I am, what I want to see and deliver it to me the way that I want to." But I think people are also really looking for real content. So, a lot of the slick and shiny campaigns that work on TV, are not going to work in social. So, really understanding who your consumer is and how to speak to them in an authentic way. But also be able to convert them in three seconds or less.Diana:So, how do you make that from something content, how do you really think about making it real? Especially if you're talking to Gen Z, how do you talk to them so it feels like they're talking to their peer group in a very authentic way? Is really critical. And then, how do you make it every single touch point the opportunity for consumers to buy? Because the funnel as we know it, has really collapsed in a lot of places and consumers are coming in and out as they choose, and if you're not able to make your social shoppable. Then, you're really going to miss a lot of opportunities to drive conversion and acquire new audiences.Stephanie:Yeah. And I love the idea around storytelling. I mean that's kind of what our whole company's been built around is like this is what humans look for. And I think there's this really big opportunity in companies that have been around for a long time, like Colgate-Palmolive. I think since 1806, the story behind that maybe has not really been around of like, how was it founded?Stephanie:I mean we had on UPS the other day, and we were kind of going through the history of UPS. I'm like, "Whoa. They need to talk about this more." I mean founded by like a 19-year-old guy, and here's how like it even started with this bike delivery. They were on their bikes delivering things, and what it is today and all the pivots they've had to go through. And I think kind of getting back to those storytelling routes, especially for the more historical brands not only will kind of… I mean people want to hear those stories. I just don't think big brands tell it enough in a way that connects with people now.Mike:Colgate was the original startup.Stephanie:See?Mike:Right?Stephanie:This is what I want. This is the connection I need.Mike:1800 startup brand, right? That's a challenging brand.Diana:Well, you talk about purpose driven brands. I do think a lot of these more established CPTs don't really know how to tell that story. I think there was a time period and several years ago when like it was just something you didn't do, and if I look back on all the organizations I worked at that do a lot of good for the communities in which they serve, that wasn't the story that you told. It wasn't like the thing. But now people are expecting brands to have a purpose, and they are using their dollars to determine if that purpose is worthy or not.Diana:So, if you're not talking about it, then you're not going to get those dollars. And Gen Z is not having it at all. They expect you to stand up and not just talk the talk, they want to see you walk the walk and they also want to see what your executive leadership team looks like.Diana:And I think consumers are also expecting the role of big corporations has shifted. How are you making this world better? How are you involved in social justice? What is your role? I'm super proud of Colgate for launching a recyclable toothpaste tube that then they gave the technology to everybody in the industry, so now everyone can do it. Those are the type of we're here for the good of the planet, we're here for the good of society, and we're going to be good corporate citizens and contribute to that. That's what the consumers want, and those are the stories that larger CPGs have to start telling.Stephanie:Yeah. I love that. So, when thinking about, earlier we're mentioning like you kind of have to be everywhere. And one thing that I also wanted to get into was all around agencies. We've had on amazing companies, one, was this company avocados from Mexico, and they talked about we've been like the number two or three commercial in the Super Bowl, and we have all these crazy things that we do that really drive, not only conversions, but awareness of our brand and they're selling avocados.Stephanie:They said our agencies are the ones that really, we vet them. They're amazing. They helped us get here, and I'd love to hear your take on, in a world where you have to be everywhere, how do you find agencies to work with that'll help get you there?Diana:For me, I've worked with so many great agencies along the way. And what I found is for me agencies are always an extension of my team. I'm expecting them to push us to make us better. I also really want to empower them to bring us awesome, creative, and make us feel really uncomfortable, because that's when you know you're onto something, especially when your boardroom feels really uncomfortable. That's when you know you're really onto something.Diana:But I think in this new digital commerce age, it's important to have an integrated agency model, because there are different agencies that are good and serve a purpose for different things. You do need those major creative campaigns, and yes, the Super Bowl is still important to some brands, but there's kind of the day-to-day operations, and also the ability to really think about digital commerce and the integration with shopper marketing and understanding how different retailer dynamics works, and how to leverage the data that's critical.Diana:So, agencies that not only know media, but know performance marketing but also understand retailers are really going to rise to the top right now, especially as more and more media dollars are shifting to retail media. Now those agencies that can work together, so from the big campaign to the Super Bowl ad and bring it all the way back to the Kroger, the Walmart, or the Target. Now that is just perfect.Mike:Yeah. I mean agencies from my point of view are, they are an extension and what they're often doing is they're acting on the data and insights that maybe a e-commerce team isn't equipped to act on yet. And so, I think the best agencies are the ones that make data their differentiation. So, for example, you could have a handful of agencies are all really good at spending your ad dollars. But there will be a select few agencies that know how to get that extra edge from some data, maybe it's incorporating some out of stock data or competitive search data, and you want to find those agencies are always pushing the boundary for you.Mike:They're not just managing on the basic models of ROAS, but they're actually looking at, what are these new things we could do? A test and learn, how do we advanced your ROI? Actually show that the ads are growing market share. How can they use data? And I think that's going to be a big differentiator, especially since digital shelf data, e-commerce data, it's still new for a lot. But I think you're going to see the separation where you find these agencies that are data-led, data centric, and I think there's a huge opportunity. To Diana's point, where first wave of digital agencies were very Amazon focused. There's such a huge gap in skill set right now in like the traditional shopper marketing for digital commerce that I think agency are perfect position to start becoming your extension of your Walmart, your Walmart digital operators, your Target.Mike:I think that's where you're going to see a lot of agencies flourish is where the maturity to actually pull those levers still isn't there. They can come in and be leaders. So, I look at agency on two dimensions who is really driving digital data driven decisions, who are ones that I can really scale with beyond just the Amazons but into that next tier flywheel that I want to go. Who's going to lead me there, lead my thinking, and help me be the market share leader on that next platform?Stephanie:Yeah. I love that. Are there any tests that you do when hiring agencies that you're like, "This will let me know if you're what I need, if you're well-rounded, if you can kind of plug in with other agencies and cover everything?"Mike:Well, we work with a lot of agencies. We don't hire them but we partner with them. So, one of the things that we do when we… We've tried to build an ecosystem at Profitero of like-minded agencies that are data-led. And one of the things that we're trying to do is make our data accessible to all these agencies to be able to do things. So, what I've seen is agencies that are really going to, that show the most promise is the ability to be willing to do some test and learn stuff, to pick up some data points from the digital shelf and say, "Hey, we're going to try this."Mike:We're going to say instead of just putting our ad dollars across every product spread it evenly on Amazon, we're going to actually shift and we're going to stop spending on the products that aren't converting well, and we're going to shift it to these products that are converting well. We're just going to shift it up and we're going to try to see what happens. So, for me, for my perspective the agencies that we've been vetting and really partnering with and saying that these are best of class are the ones that are showing that competency and that ability just to try some different things and experiment and find a model that they can repeat.Diana:Yeah. I would say when I think about it from a digital commerce perspective, especially from retail media. I'm really looking for an agency that not only understands media, but they also understand the impact on sales. So, if you think about Amazon and getting the flywheel going, if you're pushing ROAS, if you're pushing certain levers that impacts your profitability, it impacts a lot of your negotiation power with Amazon. So, you need to be able to keep your ROAS to where it needs to be in your other traditional media KPIs while keeping top line going, which can be expensive.Diana:So, that's very critical. So, having somebody that understands that. Also, someone that understands the nuances and the inner workings of Walmart from a media perspective but also that my sales team then needs to go to a buyer or a DMM and sell this program in, to not only get more, whether it's more displays or get them engaged and excited about it. But it's not just a pure media place. So, an agency that understands that from a digital commerce perspective is really critical.Diana:Then, when it comes to more of our traditional content and execution, I like to do what I call media to shelf. So, regardless of who the partner is and most agencies can do this. It's how you can integrate and work with other agencies. So, the idea can come from either side, either the traditional creative agency, the digital commerce agency, the shopper agency. But how do you take the lane that you play in and make the concept work across all? So, how do you take that idea and make it so much bigger? Because our funding models are not changing, our buckets are not getting any bigger. So, we have to make every dollar work harder.Diana:So, I need a traditional media plan that not only drives awareness, but also can pull through to the digital or physical shelf. And I would say a measure of good traditional agency, for me, it's make or break by the creative director. They really do enable the work to either deliver on the brief or exceed our expectations and deliver on our business objective.Stephanie:Yeah. Love that. All really good points. All right, with a couple minutes left, I want to shift over to the lightning round. The lightning round is brought to you by Salesforce commerce cloud. This is where I have a question, and you have one minute or less to answer. Are you ready? And I'll just kind of go back. Both have to answer the same question, so.Diana:Oh, boy.Stephanie:All right. Diana, you first. What's one thing you don't understand today that you wish you did?Diana:I don't understand why sales and marketing are so separate. I wish I could understand why each side didn't understand the other, but hopefully one day, we will be able to create, take the healthy tension and build a stronger digital commerce organization as a result.Stephanie:I love that. You and a lot of other companies, so. All right, Mike.Mike:Bitcoin.Stephanie:All right. You haven't even looked into it yet? I feel like now's the time to get in.Mike:I've tried and I get so confused, but I just have this fear. I have this waving fear of missing out, but then I realized that people are losing a lot of money too. I just don't understand how it works.Diana:I want to do over.Stephanie:I liked yours. What? You want to do over, Diana?Diana:I want a do over. You know what I don't understand? Why can't we have side parts anymore? I don't understand that. I like the side part. It fits my face frame. Why is that not cool anymore?Stephanie:Man, I feel like we can have more. Let's just stay on this question, so many things. All right. Next one. Something wise my elders taught me. Mike, you first.Mike:Something wise my elders taught me. Man, sorry. I totally blanked on that one. So, can you ask that question again?Stephanie:Yeah. Something wise my elders taught me.Mike:Yeah. I'd say that really it was hard work. That just sounds kind of lame. But I learned pretty early that no one's going to give you anything in this world, and you have to work really hard, and my dad was one of the hardest working people I know. He was an auto body worker and put in a lot of hours and really kind of like taught me this blue collar approach that I try to bring to my work. I love working. I've always learned to work hard and I try to always ground myself in that work ethic whatever I do. So, that's something that my elders taught me.Stephanie:I love that. All right. Diana, you're up.Diana:So, for me, I'm a black woman in America and a first generation from Caribbean parents, so it's really about using my voice and my power to have the courage to make space for people who look like me or people who don't have their voices heard. So, I'm really grateful for having parents, but also ancestors that taught me and showed me how to do that. YStephanie:Yeah. I love that. All right. If you were to have a podcast, what would it be about and who would your first guest be? Diana, you're up.Diana:Oh, shoes.Stephanie:A podcast on shoes?Diana:Yeah. My podcast would be on shoes and it would be Sarah Jessica Parker.Stephanie:My space right-Diana:It would really just be for me and a way to get new shoes.Stephanie:I'm so confused.Diana:Literally the whole angle of the podcast would be to get free shoes.Stephanie:Just need shoes. [crosstalk]. Okay. Who would your first guest be?Diana:Sarah Jessica Parker.Stephanie:Okay. I love it. All right. Mike, you can't top that one, but if you want to try, what would your podcast be about and who would your first guest be?Mike:Cannabis.Stephanie:Okay.Mike:And it would be probably, I don't know, Willie Nelson.Stephanie:What would you guys be talking about or would you [crosstalk]-Mike:I'm fascinated by the business of cannabis. So, it's something that I've studied for a while. I started to do a little bit of research on it back in Nielsen, and this was like way ahead. But I'm fascinated by how an industry can just go so mainstream. How can one part be so regulated, then all of a sudden go mainstream? And I'm fascinated by brand building in that space and how brands are building, and even like huge bevel companies are getting in this space now. So, we're like fascinated about the entrepreneurs in that space, the ecosystem of that space, and if I had a separate podcast that was totally unrelated to anything I did, it would be about that, because I think that's like, that and Bitcoin, those are two booming things right now.Stephanie:You could just blend them all together.Mike:Yeah. Right.Stephanie:I thought you would say you would be in it for the free weed. Yeah. Give me free weed.Mike:Samples, yeah.Stephanie:Diana's shoes.Diana:Yeah.Stephanie:Lobby sitting pretty.Mike:Right.Stephanie:So, I'll send you Bitcoin for the first time, and then you'll have to go deep into the wormhole.Mike:Yeah. I'm really opening my heart on this podcast.Stephanie:That is why you're here. That's why you're here. All right. And then, the last one. I want to know how you guys stay on top of your industry. So, maybe, Mike, you first. What are you reading? Newsletters? Is it books, podcasts? What do you do?Mike:LinkedIn. I basically follow a set of people. On LinkedIn there's a group of about 15 to 20 people that I just trust that curate. They curate on a regular basis all the breaking news that I could just go to LinkedIn and I know that at any given moment, I'm going to find something that's really interesting on a different perspective. Yeah. That's my go-to. I wake up in the morning and look at LinkedIn. And then I think about, "Okay, what could I do to add value to LinkedIn that day?"Mike:And LinkedIn has become one of these like platforms that I managed my life around. I never thought it would be like that. But it's become like a valuable news source for me.Stephanie:That's awesome. All right. Diana, how about you? How do you stay on top of everything?Diana:For me, I'm fueled by curiosity. So, similar to Mike, I'm on LinkedIn. He's in my top 20 list of people that I follow that I get content from. I listen to a ton of podcasts, this one also. I am an avid reader of papers and research. So, whether it's from Kantar, Profitero, [inaudible], Edge, you name it, you've got to stay on top of it.Diana:And then it's really about networking. So, I have this mantra like I'll say yes. So, if somebody invites me to a round table, I'm going to go. If it's a bad experience I don't go back. But like I found this small community of e-commerce and digital commerce folks that I can just call or text or get information from. And a really cool thing that a bunch of women in e-com started is basically women of e-commerce, and it's a group of 25 of us, and we connect on a regular basis. But we also bought, each brought in a mentee. So, it's just ripe for learning, and Sarah Hofstetter, the president of Profitero is one of the members as well. But it's just such a great place to feed my curiosity.Stephanie:I love that. I see only more of that happening, these micro groups popping up. I know that that was something that I started experiencing here which is like women all being part of like a group text, which I was like, "Is this going to be too much?" And now, I'm like, "This is the best text thread I've ever been in." And it probably wouldn't have happened prior to this past year or two. That's amazing.Stephanie:Well, Mike, Diana, this has been such a fun round table. We'll definitely have to have you back for round two, because I'm sure a lot will change quick in a matter of months. But where can people find out more about you? Mike, maybe let's start with you.Mike:LinkedIn.Stephanie:Of course. And then, you just go to Diana [crosstalk]Mike:Yes. If you want to find me, you want to talk to me, that's the place to go. I'll be pretty responsive.Stephanie:Yes. All right. Diana.Diana:You can find me on LinkedIn as well.Stephanie:Cool. All right. Well, thank you guys so much for joining. It's been a pleasure having you.Diana:Thank you so much for having me.Mike:Thank you.
The relationship between a brand and an influencer is a two-way street. And even though that sounds obvious, even the most successful brands and influencers are struggling to see ROI from their content.Tessa Barton, AKA Tezza, has experiences on both sides of that spectrum. She is an influencer-turned-entrepreneur, whose company — also called Tezza — has seen its ups and downs in the five years she's been working on it. On this episode of Up Next in Commerce, Tezza explains how she went from cold reach outs to Urban Outfitters to leveraging a following of more than a million people to building a company all on her own. She discusses how both brands and influencers should be thinking about putting their best foot — and content — forward and what kind of creative and distribution process has had the most success. Plus, she talks about the lessons she learned when she launched her very first product expecting immediate success and then being able to count her orders on one hand. She turned things around, though, and you'll learn how she did that and more on this episode!Main Takeaways:Show Em What They're Working With: In a world where everyone wants to be an influencer, brands need to know that whoever they invest in will be worth it. With brands being more scrupulous, the smart content creators and influencers are being more proactive and showing exactly what kind of content a company will get when it partners with them.Only One DM Away: Thanks to the myriad of platforms and channels companies operate in, there has never been a better time to get in touch with them on a one-to-one level. This connectedness is a mutually beneficial scenario because customers, potential partners and brands are all only one message away from forming a lasting relationship.Talk Their Ears Off: Even the biggest influencers in the world can't just come out with a product and expect to sell out in the blink of an eye. Selling is a constant action, and whether you are a brand or an influencer, you need to constantly be putting your products in front of people, talking to potential buyers, gathering feedback and data, and pivoting as necessary. Then you have to do that all again.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, I'm your host Stephanie Postles, CEO at Mission.org. Today on the show, we have Tezza Barton, the CEO of Tezza and the Tezza app. Tezza, welcome.Tezza:Thank you. I'm so excited to be here.Stephanie:I'm excited to have you. I think this interview, I'm just going to be saying your name a bunch of times, should be very interesting. You'll be like, "Stop it."Tezza:It's very confusing, I'm sorry.Stephanie:I like it and I actually think its branding is on point. I want to hear a bit about your background, because I was looking through your social presence and the things that you're doing. You obviously have a very big following, I think on Instagram definitely over a million, right?Tezza:Luckily, yes.Stephanie:You've got a lot of fans, a lot of fans of Tezza. So I wanted to hear about how you got here and what was that journey like.Tezza:Totally. Where to begin? I grew up in Salt Lake City, Utah, so I loved just living in the outdoors, being really close to nature. My entire family is full of just artists and creative people, so that was just always something that I was lucky enough to be in front of and around and welcomed by. I think as I got older, I didn't really realize how special that was and how impactful that would be on my life, and how a lot of other people just were turned away from that. This was a really beautiful experience, both my parents were entrepreneurs and started their own businesses, so that was just like what life was to me.Tezza:So I was super lucky, and I remember when I was 16 I had this just, I was like, "I'm going to be a fashion designer." I really was so obsessed with fashion design and creating and selling all my own looks and things like that. Then I picked up a camera to shoot the looks I was creating and I was like, light bulbs went off, "This is amazing, I can actually capture so much more than just the clothes, but the storytelling and all that stuff." Which really got me excited, and from there it was like an explosion in evolution of just figuring out who I was as an artist and creator. I did go to school for fine art and photography, where I really dug in and learned more about just ... I guess honing in on my skills.Tezza:That was right about when the whole Facebook, Instagram boom came about. So for me, I was blogging since I was 16, I was always on I guess social media in some way trying to create, just to get my work out there. I honestly was using it as a portfolio, a way to get clients, a way to just be seen. I think I was super lucky, I remember feeling like, "Gosh, I don't even have to have a website, as a 16 year old, I can just post it on Facebook and people see it and people want to interact." So that just became the way I worked, and in college, Instagram came out and really my dream was to work with all these amazing brands. So I was like, "How can I help them create content?" No one knew how to create that much content.Tezza:So I would just message local brands and I was like, "How can I be your just main photographer? I'm going to help you create 60 different pictures that all look different that you can have this awesome Instagram feed." So that became my side career while being in college and playing in a band and all of this stuff. So I used that as just a way to build also a following in the community, and people often would talk about my page as like a TV channel. They're like, "This is like a series. I can't wait to get the next series that comes out." So I used it as a professional and just a personal platform, and not necessarily using it as monetizing to work with brands, but more as just a photographer.Tezza:Then I remember I was like, "I'm just going to move to New York." My husband and I were like, "Let's just go, we have no reason to go, but we need to go. I don't even think at that time the word influencer, it wasn't a thing, but that's really where I just saw like, "Oh, wow. I can actually work with these brands. I can get them to hire me as an individual." I really just loved the storytelling, that's what I wanted to focus on, so I leaned in and decided I was going to use this and try and monetize my Instagram, if you will.Tezza:That was the beginning of where we are now. So it's just been an evolution since then, but I can get into I guess, why and how we started the businesses from there. But that's the gist of the story.Stephanie:I love it. So in those early days, how did you convince brands to work with you? I imagine you being in New York and just going to a brand and being like, "I have a great Instagram, I've got some good followers, pay me." What did that process look like and how did you catch the big fish in the early days?Tezza:Totally. I remember, and I still do this to this day, I'm not going to lie, but I remember the first big client I really wanted to get was Urban Outfitters, this was back in the day. I was like, "I just know I can create the kind of content that will not only sell their products, but my audience would just love and be attracted to." So I would basically buy their products and I would create, I would go so hard and create amazing content that I knew they would want to see, and I would email it to them, I would tag them, I would DM them. Finally, after months of doing it, they were like, "Oh, my gosh, yes." Then all of a sudden they were hiring me every single month to create for them.Tezza:So that always has been a part of my strategy, even with high end brands like Michael Kors or whatever. I think just as an individual or creator showing what you can offer a brand, what you can provide and why you'd be a valuable asset to them, whether it's amazing imagery or you can drive sales or you're just the biggest fan in the world of the brand. Those are all tactics that I think brands actually use and look for when hiring creators and influencers.Stephanie:Yeah. I like that, show value up front. So with this much content that you're creating, especially thinking about sending samples of what you can do, what does your creative process look like when coming up with these campaign ideas? You were talking about banging out six feet of photos, that all look different but have a similar theme and really sell the product. What does that story-boarding and creative process look like to be able to come up with something that connects with people and also keeps the brand's image at the forefront?Tezza:Totally. I think, look, I'm somebody that likes to consume products and most of the time it's because an image captures me and I'm like, "I want to look like that. I want to feel like that." So when I'm about to create any kind of content, I take a step back and I'm like, "What story am I telling? Who's this girl? Where is she going? How is she feeling?" Whether it's a personal project or I'm creative directing a campaign for another brand, because I think those can be a little bit different.Tezza:But I think if you can take something, just even a little bit of the extra mile and do a little more storytelling than just standing on a blank wall, which also that can drive sales too ...Stephanie:That can be so vogue. I have no idea, do not ask me.Tezza:That was a great line. It really can. I think there are so many ways, but I think the one thing I notice and the reason I ever started to really even become, have any sort of traction or growth, is because I definitely lean into just the storytelling aspect and making a piece of content that lasted a little bit longer than just that five seconds of scrolling on a feed, but somebody might want to repost it, somebody might want to recreate a picture like that because it made them feel something. It lives on Pinterest, that's how I focus and think about my content.Stephanie:Were you also focused on distribution? You can make these great pieces of content, but how did you get it in front of the people that they wanted to? Was it just focused on your following, or were you trying to find new ways? Like Pinterest, maybe you weren't there before, you're like, "I'm going to go here, I'm going to try YouTube." What did that look like to really get that content out into the world in a way that could potentially go viral or scale?Tezza:Totally. I think if you can be on as many platforms as possible, you should. It's definitely difficult, I even struggle with it myself, but I use my blog and Pinterest were a huge, huge way of existing and growing my audience outside of just Instagram. Because so many people would be like, "Wow, I discovered you on Pinterest. I didn't know that was your photo, I've been seeing your blog over here." So I think having the conversation, TikTok is an amazing way now, YouTube is an amazing way now. On top of that, I think another amazing thing you can do is collaborate with other creators and influencers. That is huge for just combining audiences and being able to share each other's audiences and messages and build your own brand.Stephanie:Yeah, yeah. I love that. So when thinking about these big brands partnering with you, I always ask the brands, "How do you think about ROI with influencers? Do you think it's worth it? How do you find an influencer is good for your brand?" What's nice about this conversation is it's on the other side of the table. So I want to ask you, how do you think about working with a brand, what's a good partnership look like and how would you advise them on thinking about is this going to be a good fit, will you get the ROI that you want?Tezza:Right. I think ROI, that's always the hot topic, the hot conversation, but there are so many different ways to think about using an influencer. It's like when Doritos does a commercial on the Superbowl, obviously there are so many things that does. Vibe, culture, conversation, visual, you don't know how many people are going to go buy Doritos after you watched that commercial. But I think the benefits of using an influencer is that you're hitting personal, usually an influencer's community is pretty personal, they've stuck around for hopefully many years, they trust that person.Tezza:So I think you're hitting those trust points, and I think personally the most success and the best success in conversations I've had with brands as an influencer is when, even if I'm the biggest fan of a brand and they just send me an email and they're like, "We just want you to post, here's how much it's going to be, here's the brief, done." I'm like, "Okay, cool." But if a brand sits down with me or has a phone call and they're like, "This is why I love my brand and this is why I think you're going to be a good fit, and this is why I'm passionate about this project and this new thing that we're launching." I'm so hyped, I feel so much more connected to that brand, I'm going to spend 10 more hours on that piece of content than I am if it's just too quick and there's no heart in it.Tezza:So I think just as a brand, if you can find influencers that not only love your product and want to talk about it, but actually connecting with that person, that partnership is going to ... It will just go longer and they'll talk about you even more after than when you just pay them, because they're excited about it too.Stephanie:Yeah. I love that. That's such a good idea. How do you pull in whoever you're working with so that they have heart in it? It's not always just about the contract and the hours, all that. People will probably go the extra mile if they've personally committed to it. I know when I was talking to someone from Anheuser-Busch on this show and they were talking about a partnership with Travis Scott and they were like, "He's not just an influencer, he's shaping the product. He's shaping the creative and he has a very vested interest in this entire campaign. It's not just him posting once on Instagram and then walking away." It's a whole thing, and that to me is what you want. I don't know if enough brands think of it that way and think of the longer term benefit and have actually pulled in the people that you're trying to help spread the word in a way that's meaningful to them.Tezza:Totally. I think another example of that, and this is a brand that I've worked with for many, many years and we built just honestly the trust, kind of to what you're saying, I think it's actually using an influencer as a creative and a creative director. I worked with TRESemme for so long and my content always performed really well, they loved the direction I took things, the amount of time I spent on things, and so after a few years, they started to hire me as a creative director and photographer for the brand and I got to shoot other influencers for their campaign. That became a bigger part of the story, they helped tell that story.Tezza:So I think, think outside the box. Use these creative people to your advantage, because we're sitting here. That's more exciting than just a quick post, and I think everyone's just craving just personal touchpoints right now, so anything you can do like that is going to be just a level up from just a post.Stephanie:Yeah. What did that look like behind the scenes with TRESemme when you were acting as a creative director and you were behind the camera, instead of making your own posts for them? What did that look like?Tezza:So much fun, not going to lie. It was a blast.Stephanie:Sounds fun.Tezza:Yeah. I think we had six different girls and I got to help choose the influencers and really come up with different imagery that would bring to life not only the TRESemme content, but the influencers' content. So I think because it was coming from also the influencer side and not just the brand side, there was so much more value in thinking about it that way and really trying to bring to life two different brands. Influencers basically have their own brands, so I think finding that storytelling is really where beautiful things start to happen.Stephanie:Yeah, yeah. Very cool. Which brands to wish to work with in the future? Are you hoping to one day partner with?Tezza:Oh, gosh. Way too many, so many brands.Stephanie:We've got to put it out there so the universe answers your question.Tezza:Yes. No, totally. I think personally, I would love to work with ... I did a small campaign a couple years ago with Canon and I'm a Canon fanatic. I love cameras obviously and I used their products for years. So when I got that campaign and I got to use a new camera coming out and I got to create content that was going to be in a photo gallery and all this stuff, it was such like, "Wow, this is my dream collaboration." So I think working with not only just camera brands that I love, I would love to work with Fuji or anything like that, but also working with just artists.Tezza:I would love to work with, I don't know, like a musician. I think it would be so fun to be like, "Okay, I'm going to come up with your next music video and Instagram strategy and let's get into it and get creative." I just love that kind of stuff, so anything like that would be a dream. But real, real talk, my dream would be like Gucci, okay?Stephanie:All right, it's out there.Tezza:It's out there.Stephanie:... Will be next, now you've put it out into the universe.Tezza:Yes.Stephanie:Let's jump over to Tezza now, I want to hear about your company, I think it's super interesting hearing how you built up this following, you have a lot of people who like your work, they love your creative direction. Then you go and you create an ecommerce shop and then you create an app and I want to hear what was that process like going from building a community and focusing on that to them being like, "And now I'm going to build a full-on ecommerce business and app."Tezza:Totally, yes. So many mistakes, I'm like, "How do I even get into the beginning of it?" I think for me, I wasn't setting out to be an influencer or just even an entrepreneur, but I always just loved ... I had this motto, which was the art of life, that was like, "This is my goal in life." Because I grew up in this family of creatives and people that always were supporting my art and helping me fuel my art, I felt like, "Gosh, not everyone has this opportunity and I want to do that for other people."Tezza:So I want to inspire everyone to find their inner artist, because I feel like everyone is creative, everyone has the ability to create art, but they don't always know that. So that was like my mission, and so then everything that came after that was to support that idea. I was fortunate that every product we've started has been from actual interesting questions that we were getting, it wasn't like I was like, "I have this random idea and I want to make a thing, so let's just figure it out." For example, our first product we ever launched was our collage kitsTezza:That idea, when we started, it was not there, it didn't exist. But so many people, we had so many images on our walls and they were like, "How did you do this? Where do you get these cool pictures?" I was like, "Wow. I take all these pictures, I could create this kit." So that was my first physical product ever and wow, we had no idea what we were doing. We just called a printing shop in Wisconsin, we were just trying to figure it out, we did it all out of our studio apartment in New York. The interest was there, when we announced what we were launching, people were like, "Oh, my gosh. This is genius."Tezza:I was like, "Yes, we're going to make a lot of money. This is going to be amazing." Then we put it up on the site and we got like two sales. We were like, "Okay, so this is a horrible idea." It really was a lesson that just taught me so much that I implemented ... It was just like, "Wow, you do have to talk about something so many times." It doesn't matter, even if you're an influencer, even if the interest is there, you just have to talk about it. You have to get it into the right hands. You have to constantly be presenting the idea. Especially now, I think we're inundated with so ... We're seeing so many products all the time, so how are you making it personal? How are you telling the story? What is the product? Why does somebody want it? Why is it going to benefit their life?Tezza:So that really, after doing it for two years in our apartment and making all those mistakes, we finally found crazy success with that, after grinding away at two years.Stephanie:What did you do? How did you go from having two sales and you're like, "Wah-wah," to then finding success with it? Because I can tell now just by looking at them like, "There's no way you're not selling a bunch of these." Collages are so on trend right now, everyone is trying to collage walls with the pictures and then trying to organize it. I tried to do it, it literally took me a week and I was this close to giving up. So what did you do to hit success with that?Tezza:I think like I was saying, just talking about it way more than we thought we had to. I didn't know how it worked, I never have run ... I didn't know you should be doing email campaigns or I should be ... That every person that is interested in DM-ing, I need to be DM-ing back. Really supporting the community of it and helping people, just making it an easier part of conversation, and then also just getting it into the right hands and having those people love it so much that they want to talk about it, that's always been influencer marketing.Tezza:An influencer, I say that, I think everybody's an influencer. You could have 10 followers, and heck, you might be influencing those 10 people major. So all of a sudden [inaudible], but I think how can you have those organic conversations and find people that are actually interested? The second we did, it circulated and circulated, and circulated, and we never really had to ... We don't overthink it now, but I think that was a really interesting learning process. On the flip side of that, we launched the app, it's been I guess a little over two and a half years now, so two and a half years ago, and that was a similar product where we launched that out of just interest.Tezza:I was a photographer, I really had a super specific aesthetic and so many people were like, "How can I do this? How can I be a better photographer?" So I was like, "I want to be able to help everybody do this. How can I?" I could sell my lightroom presets, which I was doing, and I had great success with that, but it was so limited to people that I could reach and I was super lucky that my husband was a developer. So we were like, "Let's just sit down and see if we can build an app." We were two kids in a studio apartment, who knows what we were doing? But after a year and a half at midnight grinding away trying to figure out how to build a photo and video editing app, we finally got it up to work and it was so raw at the beginning.Tezza:I remember when we launched, it had so many problems. It's such a different product than an actual physical good, but equally you have bugs and you have just a million types of phones that it has to work on and all of these things. So it was a very humbling process, but I think we've benefited, because we knew who our consumers were and what they wanted and I had built such an honest and real relationship with that initial community that wanted the app, and so they were willing to work with me and we worked through the bugs, and that's still how the app works today and we were really able to grow it because of those initial core people that just wanted it and thought it was amazing and were willing to get through the mistakes with us.Stephanie:Yeah, yeah. That's nice and it's good to have a community that is willing to chip in like that.Tezza:Yeah.Stephanie:You get the Tezza app, which is a photography editing app, and you've got Tezza which is an ecommerce shop, how do you think about uniting both of those and sending traffic both ways potentially, or not at all? Do you keep them as complete separate companies and use cases? How do you view the branding on everything you're doing?Tezza:Totally. Just to be honest with you, it's been I feel like a quick five years where I'm like, "Wow, we just did so much." We didn't have time to think, we were just building and doing stuff that we wanted to make. All of a sudden, last year was a very important year for us and in a way grateful for everything slowing down, because we were able to take a step back and be like, "Okay, what are the brands that we're building and how do they work?" So now, we are really passionate and excited about combining those two brands together and really focusing on having art in the physical and digital space, and really just helping and inspiring creators, whether it's making your home a more inviting amazing space, or you're able to create really amazing artwork and be an amazing creator by using the app.Tezza:Then on top of that, we're doing so many different collaborations this year, once again in the physical and digital space, by working with other artists and bringing to life their work through art prints and things like that, and then also within the app. So it's a really exciting year, I feel like we're finally understanding the brand that we're building and I now finally see where we're headed. So that's an honest answer, I think we're still growing and figuring it out and we're such a small team, it's me and my husband and our assistant. So we're growing, we're trying to get bigger and better, but it's been a good year for sure.Stephanie:Well, that's impressive how much you all are doing with just the three of you. Yeah. That's a lot of work. What are you thinking about the NFT trend right now, especially hearing about how you're doing digital art? I'm just imagining, are you going to put it into an NFT, put it on the blockchain, do something like that? Sell it that way? Is that something that you guys have even talked about? Because it seems like you have a good opportunity, especially since you're one of the creators who is making some of this amazing art. People are willing to buy your collages with just your photos. Have you thought about creating scarcity around that potentially and having it in a digital format that people can own?Tezza:Totally. I think it's a hot topic right now and something that we're dipping our toes in and actually trying to figure out an interesting way to go about it. I'm not exactly sure if that will evolve to be the way, I think we're going to see a lot of different things pop up like that. So I don't know. Honestly, I feel like a newb, is that, I don't even know, a word to use on that space?Stephanie:Yeah.Tezza:But I think I am excited to see stuff like that, I think there's a lot of value. I like the idea that an artist can get, as a piece of art goes on and on and gets passed on, an artist actually would still get the commission from something like that. I think that's a beautiful thing and I think it's similar to music. I think music is going to change and evolve a lot over the next little bit, and so I'm excited to see where it's all going. I think all these worlds are about to come crashing together.Stephanie:Yeah. I was just going to bring up music, because I know you were in that world for a bit, to me it just seems like a no-brainer. Why wouldn't you put your music somewhere that can get properly valued and bought and respected in a way that it hasn't been previous? I just so many use cases where I do feel like there was obviously a very big fad, it got a little crazy, you can't just be like, "NFT solves the world's problems, it just needs to do everything and I'm going to put my pen on it, I'm going to digitize this." It's definitely gotten a little out of hand, but I can see a place where there are really good use cases around ownership and giving artists what they deserve, which is really cool.Tezza:Totally. I think just more artists are becoming independent, even with TikTok, the things that has done for small musicians that could never get the viral reach or anything without a label or all these people behind them, I think there's so many cool ways that are coming up and Instagram alone I think has been just an amazing place for independence and artists to be able to sell their art or find a community. I think about the people I've connected with. My favorite thing to say is just, because it blows my mind, because it still happens to me all the time, is like you're one DM away from a CEO of something amazing that you're super interested in.Tezza:So if there's a brand, a person, a musician, whatever it is that you are like, "I just have a question." Probably just send it, because you might get a response and it might be from the actual person that you want to get in touch with. So I feel like there's so many quick touchpoints that are coming more and more accessible. I think we're in an exciting time. I know it's also like there's a lot of negative things people could say about it, but I think that's the positive side of it.Stephanie:Yeah. I like to focus on the positive side as well. I love that, you're one DM away from whatever you want. How do you think about collaborations? I know earlier you were talking about collaborations with brands, it seems like that could also get tricky and a little sticky, depending on who you're working with. So how do you view having a collaboration and a brand that's going to work well and not get to a place where you're both rubbing heads and trying to figure out who is doing what, what's a good collaboration?Tezza:Right. I think we touched on this earlier a little bit, but actually having just a real conversation about the goals of not only just the brand, but as an influencer, what works and what performs well for you. So having that laid out almost before you get into what the collaboration's going to be about is important. Then when a brand sends me a brief it's like, "You have to say these exact 45 things." So this is an infomercial and even if I love the product, my community is going to swipe away. So I think really as a brand, if you can try, I know it's hard because trust me I run a brand too and sometimes you're like, "But we need to hit these talking points," which I understand, but just taking that extra step and making sure it is coming from a personal place and voice is the special sauce.Stephanie:Yeah. I agree. What kind of platforms are you most excited about right now? What are you dipping your toes in that maybe other people aren't even thinking a bout exploring? Or where are you seeing a bigger following than you even would have expected happening quicker than maybe other platforms? What are you bullish on right now?Tezza:I know everyone's saying TikTok, but it really is like the early days of Instagram where there still is that discoverability. I don't think it's going to last too much longer, so that's why if anyone isn't dipping their toes in that, I would say just jump in for a year and try everything. Don't try what you're seeing, just try something new and different. I think people are craving just something that's super different, so that's one area.Tezza:I think also, this is a vaguer area, but this is where I find a lot of success in the platform is more like combining, collaborating with other artists. So I think everybody has such a strong community these days, whether it's a brand, an influencer, an artist, whatever it is, so how can you marry those two, that relationship to really actually combine your followers or your community and the ideas that you share as brands? I think that's almost what I'm excited about in just commerce in general, because we're doing this on a personal level and with brands and things like that, but I think massive, massive brands are doing that. Street style brands are doing it with random cool artists that live in LA that want to be discovered, and I think that brings so much more heart, like I said, into everything that you're doing. So I think that's almost like a new, not platform, but way of collaborating and trying to grow, if that makes sense.Stephanie:Yeah. Yeah, that completely does. I love that. All right, well let's jump 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?Tezza:Oh, boy. I'm nervous, okay.Stephanie:You'll do great. All right, first one. What's up next on your reading list?Tezza:The Adventures of Calvin and Clay, is that what it's called? Wait, Kavalier and Clay. The Amazing Adventures of Kavalier and Clay. I don't know, but my husband's read it like four times and he's like, "It's just beautiful, it takes you into this world." It's on my list just because I hear him talk about it so much.Stephanie:Wow. It's like 1900 almost five-star ratings on Amazon. It looks like a comic book, but I would be down with that.Tezza:It's an escape, not necessarily, I'm not going to learn, it's not a business book.Stephanie:All right. Hey, if it's good enough for someone to read a couple times, I'm down. That's cool. So when you want to get into your creative head space, what do you do to do that?Tezza:I love to watch old movies or look at vintage magazines. I get inspired by old things. I think we can feel ... I get overwhelmed almost by how much new stuff is going on, but sometimes I like to look back and be inspired by things that were done before and see where new inspirations have come from. So I just love old movies and books and magazines and things like that.Stephanie:Yeah, me too. I think it's always a good fun way to get brought back to where things were and then incorporate that into certain things that maybe people forgot about, which is always a fun feeling. If you were to have a podcast, what would it be about and who would be your first guest?Tezza:Great question. I think it would be about art and I've always wanted to have a podcast called either the art of life or starving artists or something like that to break down the walls of just what being an artist actually is and showcasing just ... My husband, for example, he's a developer, I always made fun of him for not being the creative one, but he's so creative and developing is creative. I was being a critic, I was judging him and now I take it back. So I feel like there's so many things like that, that I would love to talk about and so many cool people I'd love to interview.Tezza:But my first guest? This is going to be so lame and cheesy, but I would love for it to be my mom, because she's the most fascinating woman. I haven't even sat down and asked her all the questions I want to ask her about. She has five kids, she started an amazing interior design business from the second I was born, and never seems to be stressed out or not have enough time for everybody. I don't understand. She's just on another level. So I would love to interview her first.Stephanie:That's a good one. I would listen to that one as well, so let me know when that's up.Tezza:We'll see, stay tuned.Stephanie:Stay tuned, everyone. Who is your either favorite artist you're watching or fellow influencer?Tezza:I'm going to say this for people that are out there looking to become influencers, because I think she is doing a really great job at growing platforms, which is really hard to do right now, so I look up to her for this. But Brittany Xavier, she is an amazing influencer and I've just watched her change her brand over the years, and really go after the brands she wants to work with and also grown literally everything from TikTok to YouTube to millions of followers in short periods of time. She just does such a focused approach, and I think for somebody that's trying to become an influencer or wanting to really grow and find the community, she's just an interesting person to observe.Stephanie:That's a good one. All right, what is one thing you don't understand today that you wish you did?Tezza:How to scale a business. I feel like, I wish I went to business school sometimes. But sometimes there's benefit and I know.Stephanie:You're in it right now.Tezza:I know. I'm in the business school, but sometimes I'm just like, "Wow. I don't even know what to do, where to go." But it's fun, I don't know, figuring it out.Stephanie:You will learn so much more by just doing. Well, if I have to circle back in like a year and you'll be like, "Look at all the progress, look what's happened."Tezza:Exactly, exactly. Can't wait for that day.Stephanie:All right, then the last question, what one thing will have the biggest impact on ecommerce in the next year?Tezza:I think we're in a time where everybody has to take a step back and look at what they're doing, what they're giving as a brand, whether that's anything from sustainability to actually being of importance. So I think, though we're having these massive brands like Amazon and Walmart who run so much of ecommerce, I think there are going to be so many small brands that are coming up that have so much more meaning and thought behind them. I think we're just barely tapping into this new generation of young YouTubers that have insane amount of impact and following and community that I don't even understand. So I think they're going to be leaders in ecommerce and products and I'm just excited and curious to see where that goes.Stephanie:Yeah. Awesome. All right, Tezza, it's been really fun having you on the show. Where can people find out more about you and all the cool things that you're working on?Tezza:Thanks so much for having me. Yes, you can go to ShopTezza.com or LelloTheLabel.com, that's my sunglasses brand. Then also in the App Store, if you type in Tezza you will find our photo and video editing app, and on Instagram, Tezza, T-E-Z-Z-A.Stephanie:Good handle. All right, well thanks so much.Tezza:Thanks for having me.
Traditional retailers are facing different levels of competition from all these new ecommerce brands that have popped up recently, and are now being held to new customer expectations that many predicted wouldn't occur for years. Because of the acceleration of digital platforms and online shopping over the last 18 months, brick and mortar stores are in a scramble to catch up or risk being kicked to the curb. Helping retailers take charge of their digital transformation journey and get in on all of the online action is Sensormatic, which serves retailers with IoT technology to help them with things such as inventory intelligence and accuracy, gathering shopper insights, converting foot traffic, and more. Subramanian Kunchithapatham (KS) is the Vice President of Engineering at Sensormatic and he's been up close and personal with the brands as they implement the new technology that will allow them to compete in a digital world. On this episode of Up Next in Commerce, KS tells us what he's been seeing in the world of retail and how he anticipates the industry changing in the coming months and years. For example, he gives us the scoop on how Sensormatic partnered with Intel to turn already-installed store cameras into an A.I.-powered Smart Hub — basically an intelligent store that can provide insights into occupancy, foot traffic, track inventory, and even provide a personalized experience for customers if they have opted in. Hear all about that solution and others on this episode!Main Takeaways:So Trendy: Retailers have a number of new trends to keep up with if they want to compete with ecommerce. Thanks to the rise of online shopping, consumers are experimenting with and discovering new brands more than ever before, which means the customer loyalty traditional retailers have enjoyed is crumbling. Additionally, when consumers do show in-store, they want to do more than just shop, they want an experience. Retailers have to adapt to meet these new expectations by offering new omnichannel and cross-platform shopping experiences to meet customers where they are.Train, Train, Train: To digitally transform any organization means that there has to be an investment of not just money, but time. Employees need to be trained on new technology and strategies for using the data you gather, and the A.I. or machine learning systems you put in place also need time to be trained on the types of data and information they should be gathering and presenting to create the most value.A Future Full of Livestreams: Recently, retailers have been experimenting with the concept of livestream shopping — a brand will livestream an event and promote items, and those watching the livestream can buy the items right from that screen. This type of interactive and streaming shopping experience is going to become more popular as technology continues to advance and as the younger generation pushes that expectation forward.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, your number one show for all things commerce. This is your host, Stephanie Postles, CEO at mission.org.Stephanie:Today on the show, I have the pleasure of chatting with KS, who's the VP of Engineering for Sensormatic Solutions, part of Johnson Controls. KS, welcome.KS:Nice to meet you, Stephanie. How are you?Stephanie:Good. How are you?KS:Good.Stephanie:I'm really excited to have you on the show. I was looking through our doc and I'm like, "There's so much stuff that I want to talk to," because I haven't had too many people on the show, with a focus on retail, so let's dive right in. I want to hear, what is Sensormatic Solutions and what does your role look like, there?KS:Yeah. Sensormatic Solutions is a technology company serving retailers globally. We provide IoT technology for retailers. Right from the edge to the cloud, we have several solutions focused on retailers, on the loss prevention side. How to prevent theft in the store, and the inventory intelligence focused on inventory accuracy. Then shopper insights which is focused on what is the foot traffic and how are we converting the foot traffic?KS:The top of all those things, we recently launched a new retail platform called Sensormatic IQ. It's a connected intelligent operating platform that unifies several systems that we put out for retailers. In addition to that, it helps you to connect third-party systems as well as retailer systems.KS:That's the digital journey that Sensormatic has done, and that's what Sensormatic does for global retailers. My role is for product development. A lot of technology transformation within the company has been driven by me.Stephanie:Over these past couple of years, what does the transformation look like? Especially when it comes to retailers, now probably welcoming technology into their locations, where maybe a couple of years ago they're like, "Oh, do I even need this? You really have to convince me," where I feel like, now they have to transform really quickly. Stay up with all these new E-commerce brands. Figure out how to get access to the same kind of data that these B2C companies can get instantly. What does that transformation look like?KS:Yeah, if you really look at the retail industry per se, it's the most digitally disrupted industry, right? There are lot of digital transformation that was happening in retail, much before the pandemic actually. Almost every retailer was looking at digital transformation.KS:The primary reason is, more and more online sales happen. When you look at brick and mortar stores, how do you stay relevant in the brick and mortar space? Because of that there was digital transformation that was ongoing with most of the retailers.KS:The pandemic, what it has done is it has accelerated the digital transformation. Now if you really look at, because of the pandemic, you see more need for unified commerce and more need for self-checkout. They like to see that the store is more healthy and safe. Those kind of needs are driving now. Sensormatic as a company, we have operated for over 50 years and we have a very rich heritage of delivering innovative solutions to solve a retailer's best business problems.KS:Even now, as we are going through the pandemic, we are working on new, innovative solutions, right from sensors to systems to software and AI-based offerings. Looking at, how do we help the retailers handle that disruption that has cast in the industry, and come up with new offerings so that they can proceed with their digital transformation journey?KS:If you really look at shoppers today, what the pandemic has done is, most of the people who have never shopped online, they're forced to shop online. Now, once you start shopping online, you get used to shopping online.KS:Now when you start shopping online, now that is one thing, where the online shopping has increased. Second thing is, when you start shopping online, what you realize is, you may be loyal to your particular brand. Now suddenly you have many more choices. Because you're not going into the particular store and you're shopping online, you have many more choices.KS:Now people want to experiment. Because they want to experiment and it is easy for them to experiment, there is a shift in loyalty that's happening, actually. That's causing troubles for some of the retailers, when people want to shift from their brand to another brand.KS:The other trend that you see among the shoppers is, no longer, shoppers want to really come to store and then only shop. They expect retailers to meet, wherever they want to shop, however they want to shop. Whatever time they want to shop, you need to meet them at their convenience, and not a shopper coming into the store and making.KS:Some of these trends, what happens is, for you to address some of these trends, then every retailer needs to adopt technology at a faster pace. If you have to shop anywhere you want and then, any time you want and then, any place you want. Then you want that item to be delivered to you, or you wanted to come and pick it up from the store, we call it as buy online and pick in store.KS:If you have to enable that, the retailers need to embrace the technology. If they don't have the technology embraced then they cannot deliver that kind of a customer experience. When you don't deliver the customer experience, then the shoppers are going to shift loyalty and go to whichever retailer who can provide that experience.Stephanie:How do you make sure retailers aren't, maybe scrambling to keep up, because I'm thinking, a lot of times if a brand or a big company's lacking or falling behind, and then they start just grasping for everything. "Whatever technology's out there, I'm just going to do it all."Stephanie:Often times, maybe some of those are just fads. How do you guide retailers on, "This is something you're going to need for the next 10 years. This is the way of the future versus this, maybe you don't need virtual reality for everything right now. Maybe that's a fad and it's only for certain brands"? How do you guide them around what's important?KS:Yeah. Actually you can divide it into two parts. One is on the shopper's side, if you really look at it. If I'm a shopper and I want to shop anywhere and everywhere I want, now increasingly, you see that retailers are adopting a messaging app-based shop.KS:If I'm on the Snapchat and messaging to you, by the way, on the side, I'll be able to shop. Even on the messaging app-based shopping, there are one of the retailers, Levi's who recently launched a Bitmojis. All the emojis, they call it as Bitmojis.KS:They dress up the Bitmojis based on the Levi's collection. As you are in the messaging app, you can pick something and then shop. That's on the shopping side where they're looking at, "How do I leverage technology to go shop?"KS:When it comes to back end, once I shop, then whatever item I shop, and if I say that I'm going to come to this store near my home and pick it up from that store, that item should be there in that store. You don't want to have your inventory accuracy. If you don't have all the right information correctly available, the shopper, when he or she comes to the store, they're not going to find the item.KS:We call this as a precision retail. Sensormatic side, having all the technology that will enable the shopper to get the best experience when they go do the shopping, either in online. If they can do the shopping online, and come to the store and pick it up, or you go to the store and order it, and it gets delivered to the home.KS:The retailers need inventory information, accurately for them to deliver the best experience for the shopper. The technology that enables that, we call it as precision retail, because if you don't have very precise information in the retail operations today, you'll not be able to enable a better customer experience.Stephanie:What are some of the things that you think are pretty basic, that all retailers should have? Inventory management seems like a no-brainer. Also, seems like something a lot of retail locations struggle with. What are some of the other things that's, you need to have these five things to succeed?KS:Yeah. I would say that, definitely accurate inventory is a must. You cannot survive without having accurate inventory. Also, a easier way of meeting the customer wherever they are. If you have to meet the customer wherever we are, you need to provide multiple channels for me to shop with you.KS:I should be able to shop from my mobile app, or I should be able to shop from my desktop, or I should be able to come to the store and shop. I should be able to experience. If it is an experiential items, people would like to come to the store, have a very good experience of the item, then make the purchase process easy. Some of those technologies will become important.KS:The next one would be self-checkout and mobile checkout. It has become more prominent now because customers do not want to touch, they do not want to interact with the people. They would like to come in, look at the item, and then purchase and have a frictionless checkout. Frictionless checkout becomes an important technology implementation for retailers to learn.KS:If you take it little bit as part of an experiential store, you need the higher technology in terms of, you need to have much better bandwidth in the store, for you to have a good, digital experience. 5G technology will play a bigger role.KS:Also, experiential stores will have to provide more appropriate content and more appropriate digital experience and digital engagement in the stores. Digital engagement technology is going to be more important.KS:I forgot to touch upon, when I said inventory accuracy, you cannot get to a better inventory accuracy without having an RFID-based solution, at least in apparel retail and some of the other retail categories as well. RFID plays a important role in getting to a higher level of inventory accuracy. RFID technology will play a big role.KS:If you go further, there are going to be other technologies in the supply chain, and back of the store operations. You'll see that robots are playing a role. Not every store and not every category of the retailer will be able to leverage, but there are certain categories, robots will play a bigger role.KS:Then the technology that will enable ease of last mile delivery and then confirmation to the customer. For customer who are ordering online, they're getting delivered with one stroke. Again, that becomes very important.Stephanie:Awesome. What are some of the things that hold retailers back from doing this, because I know when I was talking with Joe from Intel, he was saying, "RFID can solve a lot of problems. Also, retailers, it's hard to get them to do that. There's so many solutions all around, but it's hard to get them to actually implement the technologies, to track the inventory, to track traffic, whatever it may be." What's the pushback?KS:Yeah. I would not call it as a pushback. I would say that most of the retailers, if you're a brick and mortar stored-based retail, and today, you have lot of business processes, well-defined in the store. How do you operate?KS:Now when you implement a RFID-based technology for getting a better inventory accuracy and better tracking of merchandise movement in the supply chain as well, now they need to change a whole lot of business processes on the retail side.KS:When they have to change business process, that means it's a change management in the organization. They need to manage that change more carefully and they need to retrain their employees with the new changed approach on how they are operate.KS:All those things takes lot of effort, and it costs money to get the employees trained as well as, and it also takes time to implement the technology. They need more tech-savvy associates also, in the store. All those things will require effort and money.KS:Whichever retailer has gone forward, and we make life easier for many of the retailers who wants to pursue RFID-based inventory implementation. I would say that you got a retail industry experts in our organization who can help the retailers to navigate this process very less painfully. Then we can help in, how do you transform the business process? How do you go about implementing it? What are the best ways to do it?KS:We bring in lot of best practices in the industry, to help with the retailer, and that's how we solve. We do have many customers whom we have really helped go through this transformation, and then migrated them to RFID-based inventory.Stephanie:What are you most excited about? When it comes to all the things you just listed, what are you really passionate about, that when you talk to a retailer you're like, "This is the way forward"? What excites you most?KS:Yeah. I would say that, it's really, look at AI technology today, it has disrupted every industry, not just the retail. I'm really fascinated about how it is getting adopted within retail.KS:If you really look at it, in the past, almost all the retail stores, retailers have implemented loss prevention security cameras. These are IP cameras for security surveillance. That's what it was used for.KS:Now suddenly with the advancement of AI technology, now you can leverage the existing IP cameras in the store, and then put in ... They call it as a Smart Hub. We partnered with Intel and developed an AI edge IoT box, an appliance. We call it as Smart Hub. That box, you put it in the store, connect all the camera streams to that store. Now suddenly the store becomes the most intelligent store.KS:You can do whole lot of use cases and whole lot of pain points which you can solve for the retailer. For example, given the pandemic time, we looked at, during the pandemic we partnered with Intel. We have been partnering with Intel for almost two years, and we accelerated this development with Intel and started developing occupancy tracking solution.KS:People wanted to have reduced number of shoppers in the store. They wanted to have mask compliance. People should be wearing mask. Then all of the shoppers should be maintaining social distance. All these things are new mandates, and the retailers wanted to maintain the health and safety of the store.KS:We quickly accelerated our AI partnership with Intel and developed this occupancy, social distance and mask detection solution in that while. Not only that, now that we have our Smart Hub, the Intel-powered Smart Hub, that Smart Hub enables you to develop lot more use cases.KS:Now if you are a loyal shopper to the retailer, and if you've opted in and if you're a loyal customer for that retail store, now since you've opted in, the moment you enter the store, I know that, "Hey, Stephanie is walking into the store. She is the most VIP customer. I need to handle her better. I need to address her needs better."KS:We can go and alert an associate to go address to Stephanie because she's a VIP customer. That's one option, one example, I'm saying. This opens up lot more newer use cases and newer ways of engaging the shoppers in the store, just leveraging the existing security cameras.KS:If you really look at other AI technology, all these stores have whole lot of sensors, and these sensors generate data. We put whole lot of sensors from Sensormatic. We generate lot of data. We generate data from inventory. We generate data about strength. We generate data about foot traffic, plus we have lot of camera-based, vision-based data.KS:Now, combining all this data, again we can apply artificial intelligence on the top, machine learning models on the top and deliver very, very prescriptive insights to the retailer. That's the direction we are headed now.Stephanie:I'm imagining a dashboard where you plug in a lot of your cameras. You're getting these insights. What would that dashboard look like for a retail worker who could just go up and look. It's like, "Okay, you need to close the door. You're at capacity, or you need to go and restock this one thing right now"? What does that look like, behind the scenes?KS:Yeah. Actually, take the example of an occupancy. If the retailer can specify, what are the allowed occupancy you want to permit in the store, and then configure that in the system. Then the cameras of the entry and the exit can keep counting how many people are walking in. We can also put a display at the entrance. It can show a red or a green indication.KS:Green means, the shopper can go in, and the red means, shopper cannot enter until it turns green. That's a simple indication. What happens is, there's whole lot of dashboard. Once you have all these data, you can create a whole lot of dashboard and provide.KS:More and more if we look at retail, they don't have enough resources to take care of the store efficiently. The pandemic has put lot more demand on their associates, to do more work, because they need to ensure the health and safety. They need to take care of several other things in addition to their job, which they used to do before.KS:Now nobody has so much time to look at dashboard and come to a decision. We saw this need, much ahead and that's where we have put together a strategy and executed our strategy to launch the Sensormatic IQ platform.KS:Now what happens is, as part of our platform journey we can take all this data. We can apply artificial intelligence, machine learning models and predict what is going to happen. Then once you predict what's going to happen, then we can prescribe an action. That prescriptive action, we can deliver it in the retailer's handheld device or any form, where we can push it to the device saying that, "Hey, now your back door is open, or your fire entrance is locked," or something like that.KS:If you see that in this particular hour ... Let's say I have the historical data of this street. From the historical data I can tell you that in this particular hour, there is a possible organized retail crime can come and hit this store at this point in time.KS:I can send an alert to this retail as a protection manager saying that, "Hey, you're likely to get hit with an ORC crime today. You may want to take a preventive action, and these are the possible preventive actions you can take." You can prescribe exactly, where the retailers need not look at the dashboard and deduce that information and come to that conclusion.Stephanie:Well, that's good. It seems like it would be so difficult to come up with prescriptive outcomes for retailers. I'm thinking about these models that you built in the background, and you've got one that has seasonality. You have another one's being hit by the pandemic in a bad way. The other one's in a good way.Stephanie:How do you think about training these models in the back end, so it works for everyone and gives outcomes that's not just being trained on false data that's, maybe a little blip?KS:It's a very good question actually. Now what happens is, there can't be two differences. Not every retailer will have the same model. The nature of AI itself is like that. You need to retrain the model based on the context.KS:It's not a long time. You take two to three weeks of training in that environment. Collect data and retrain the model for that outlet. That is one. That's bound to happen, when you deploy it. The other thing is, other interesting thing you'll see is, take the example saying that, for retailer A, I say that, "This particular hour, you're likely to get a ORC, crime event happening."KS:Retailer A and retailer B, both are likely to get hit with an ORC at a particular time, but retailer A might respond to that differently. They may want to respond to that differently, whereas retailer B might be want to respond to the same prediction differently.KS:One might say, "Hey, I want to shut down that entrance for an hour." I'm just telling hypothetically. Another might say, "I want to push all the high-value items that are closer to that entrance, to the back of the store." You can take two different actions for the same prediction.KS:That's why any prescriptive action we work on, we need to work closely with a retailer to understand what is their context. For that context, how do you have to respond, and then put that prescription into the implementation for them. It has to be a joint coworking with a customer to make it happen, actually. To make it successful.Stephanie:Yeah. Yeah. It seems like every retailer needs an in-house data scientist who can plug in a few inputs of, "Okay, we're running a local ad campaign this week. It's going to be very different. There's a parade coming on by. Everyone's going to want my Matcha tea."Stephanie:Being able to add their own little inputs that, maybe a model cannot pick up on. You always need human input into any kind of model.KS:Yeah. That's true.Stephanie:Yeah, but the training part seems tricky, when it comes to thinking about, how do you implement retail workers and make sure they're thinking in this data-oriented way? How do you train them? Seems like a hard problem for retailers.KS:Correct. That is where technology companies like ours can play a major role, I would say, that you have to take the complexity out of the retailer. Try to understand the context and then make it easier for them to embrace some of these new technology solutions. That's where we have to do all the heavy lifting, and support our customers.Stephanie:Cool. I want to talk a bit about ... I was reading an article about how you guys, and you were shifting the company from this hardware model, to moving to a more SaaS model with your products, but also Outcome as a Service model.Stephanie:I want you to touch on that a bit because I though it was super interesting. You hear the world where everyone wants to be a SaaS company, of course, right now. That's the way of the future, but the way you explained it, I thought was really unique and interesting about how it's outcome-oriented. I was hoping you can touch on that, a bit.KS:Yeah. Definitely, as I said, Sensormatic has been transforming our portfolio across the board, right from sensors to systems to software to cloud. We did do most of our hardware portfolio. We can ensure that, now, even if you have bought it in the past, we can go back to the customers, some of our old hardware.KS:We have a mechanism to connect our old hardware, IP-enable them and connect to the cloud. We have invested quite heavily in terms of, how do you IP-enable all the hardware and take the data to the cloud? That's done.KS:Now we do get the data for our loss prevention portfolio. We get the data for inventory, and traffic portfolio. Almost all of them have a SaaS offering, and we actively sell all our SaaS offerings in the market.KS:Now, we also built a data lake on the top of all our SaaS offerings. Now, we get loss prevention inventory and traffic data coming into the common data lake. Now that I have the data, which I can correlate between traffic to inventory or traffic to loss prevention. All those correlations, you can do and come up with predictions and then prescriptions as well.KS:There's still, all the SaaS offerings, like any other Software as a Service, we deliver that. When you talk about predictive prescriptive offerings, now what we can do is, the example, previously I gave. You don't want the retail associate to spend time analyzing the data and trying to keep the business context in mind. Then try to solve whatever is the business problem that he has to solve.KS:The only way the retail associate is going to solve the business problem is by taking an action. That action is an outcome, and it's for a business outcome. We will be able to go, analyze the data on behalf of our customers. Based on their context, by taking their contextual input and then come up with a predictions and prescriptions that are specific to that particular customer.KS:When they act on those prescriptions, they're going to get a business outcome. So you can ensure that whatever business outcome they are trying to solve, you can enable that using our technology.Stephanie:Got it. Very cool.KS:When you're able to do that, you call that as an Outcome as a Service, where you say that, "Okay. Now I'm not talking about technology. I'm not talking about SaaS. I'm just going to deliver a set of outcomes, and then that's what you're buying from us. For us to deliver that outcome, we have to use several sensors, systems, software, AI model, everything, to get to that outcome."Stephanie:Yeah. I love that. I think of so many different consumer SaaS companies where it's like, you buy it, you get into this subscription. I'm locked into a year. Then it's like, you don't really use it. Sometimes you don't even know how to.Stephanie:I think of some of these big BI tools where you get in there and you're like, "I don't ..." Then you're locked in. It's so nice, entering into a mindset of, "I'm going to actually have something that shows me a solution right away, how to act on it. I don't have to put on my data hat and start analyzing it and figuring out correlations. I'm going to have something at least guiding me on where to even start thinking about that," which is awesome.Stephanie:Do you see any new shifts or things popping up right now, in the world of retail that, maybe you weren't even expecting a month or two ago?Stephanie:You're like, "These are some new requests that are coming in from clients, where they're trying to understand X, Y or Z, or they're trying to understand this new omnichannel world." Is there anything new that, now you're like, "We need to build this. We need to get on this right now"?KS:Yeah. I would not say as it's directly coming from the client, and I will just tie it back to the shopper behaving trends that we are seeing. How that's going to be the norm in future, and then how it'll shape the retailer.KS:If you really look at it, everybody is looking for a unified experience. I should be able to buy online, and then pick it up in store, or curbside pickup.KS:Now, BOPIS and curbside pickup, we see that many shoppers, for the first time, they experimented with buying online and picking it up from store or curbside pickup. We have seen some surveys, one from Sensormatic, one from NRF and another from McKinsey. All these surveys indicate that more and more shoppers will go for BOPIS or curbside pickup-based fulfillment.KS:This is going to be a norm. You'll have to support it. not everybody is implementing it today, but you'll see that more and more retailers are going to go and implement that way. The other thing, other interesting trend we have seen during the pandemic is livestream-based shopping, where you do a livestream of an event. Then as part of the event, you wear all the fashion clothes that you want to promote. Then people who are watching the livestream can click on the items and then they can make a purchase.KS:Okay, now we saw Walmart do in partnership with TikTok. We saw also, Nordstrom do an event like that. More and more retailers are experimenting with the livestream. I believe that in future, more and more retailers will try to embrace this livestream-based shopping, more than what you see today. I can only dole out some examples now, but one or two years down the line, you're going to see more and more happening in that side.KS:The other area, also catching up is, there are retailers who had big format stores. They are shrinking the format to the smaller format, or experience-only stores. You don't see many doing that, but you see few retailers doing that.KS:The experience-only stores, you have items you'll not be able to buy. You'll not be able to pick the item from the store. You can go to the store, you can experience the item, touch and feel. There will be lot of digital experience to augment that.KS:Then at the end of that experience, if you decide you want to buy it, you place the order. The item will get delivered to your home. That's an experience-only store. That's another concept that's just picking up.Stephanie:Yeah, but the shipping has to be good on that, because to me, I feel like so many shoppers are like me, where they need it quick. If I'm going shopping somewhere, I'm like, I probably want it that day. I love the idea of, the inventory's there for you to try on and see what fits, and get the experience, but I also want it that day, if possible. One-day shipping. Is that so much to ask?KS:I get it. Yeah, I think there are some who'd like to experience, and then they're okay to get it delivered to home. On the same day, if it gets delivered, that's again, that's why we call it a precision industry. They have all the inventory. If they have everything readily available in that area, they may be able to deliver few on the same day. Right-Stephanie:Yeah.KS:... if they go down this path. Smaller format is like, again, bring in more digital experience. Don't consume too much space, and provide a more digital experience. Then stock and operate with a smaller format. That's another trend that's happening.Stephanie:Yeah, which is nice because it feels like there's a lot more opportunity to beta test and see what could work at a much smaller scale than, maybe a couple of years ago, where these retailers are like, "Go hard. Open up a big shop. Have all this inventory." Then they're like, "Darn, didn't really predict that well. This might not be the perfect location for it, or there's not as much foot traffic as I might have thought, because Blue Bottle just went out of business," or whatever it might be.Stephanie:It's nice to be able to have a little testing ground, and then pivot if needed. Consumers are actually okay with that model, I would think, where, maybe back in the day, they weren't.KS:Yeah, yeah. Also, you see another interesting trend that's happening is, now for retailers who are embracing the omnichannel experience where their shoppers can buy online. They're converting some of the stores into a fulfillment store. That's what led to BOPIS.KS:Another trend you'll see is dark stores, where they're converting some of the stores to be, completely a fulfillment center.Stephanie:Yeah.KS:There is no store experience there. You only go to that store to pick the item that you've ordered and then walk out, actually. That's another trend that's happening actually, to support the unified commerce experience.Stephanie:Yeah. What kind of industries do you think are fit to pull that kind of model, because I feel like there are some stores where ... Is there ever a good experience when you go on to certain stores you're like, "It's probably a hard no for this kind of store. I just need to get what I need to get"?Stephanie:What kind of industries do you think, it would work well to just have your store as a fulfillment center versus the Urban Outfitters of the world, you need the full on experience?KS:I think if you really look at, Whole Foods converted one of their stores into a dark stores.Stephanie:Wow. Whole Foods is an experience though. How could you do that?KS:The problem is, it depends upon what you are comfortable purchasing online, without experiencing. Then if you have that, then you can go and pick it up. You know all your standard items, what you normally buy, and you have experienced it already.KS:Now you don't want to waste time going into the store. You just order it. I don't want to waste time and go pick it up, and walk out.Stephanie:Got you.KS:There are items that are very standard. There's nothing much to experience, go down this path. There are items that you have experienced once. Now you like it and you don't want to change anything. You're certain about it. Go order and just pick it up. Those are the areas where it'll pick it up.Stephanie:Yeah. Yeah. Got it. Do you think live streaming is actually going to penetrate the U.S., because I still just don't ... I feel like, actually, people here are getting burned out from live stuff. Clubhouse was big, everyone liked it. Now everyone's like, "Oh, so much work. I have to be on the entire time. I have to think hard and really jump on that deal, if it is live."Stephanie:It just feels like we all got in this stressful rat race of everything live. Now it seems like people are pulling back to the more, at least TikTok. Little bit more preplanned, Instagram, Pinterest, of really think about and be more mindful about their purchases.KS:Correct.Stephanie:Do you think that's coming here?KS:It is coming here. I feel that the Gen Z, even today, it is ... If I go to my son who is 18 years old, I can never take him to a retail store. They still prefer to shop everything online. They would like to see it online.KS:For a certain segment of shoppers, there may be a segment of shoppers who'll still be interested in shopping through livestream or shopping through the app. There will be certain shoppers who still feel comfortable, because we all grew up in an age of going to the store, and experiencing it and buying it.KS:We are more in need for a socially, going out and interacting and getting it. Such shoppers will continue to go to the stores, but there will be a segment of shoppers who'll continue to buy through livestream. Even if everything becomes normal, 100% of stores are open worldwide, there may be a segment of shoppers who'll shop, I feel.Stephanie:Okay. Yeah, that'll be interesting to watchStephanie:All right, well, let's shift over to the lightning round, if we can. The lightning round's brought to you by our friends at Salesforce Commerce Cloud.Stephanie:This is where I ask you a question, and you have a minute or less to answer. Are you ready? Yeah.Stephanie:Okay. What's the nicest thing anyone's ever done for you?KS:Oh. Anybody who helps me. I grew up in a world of gratitude. Anybody who does any remote help, I feel nice about it. Even small things, I feel very nice about it actually. It may not be a bigger thing.Stephanie:Okay.KS:There are a lot, actually, if you really ask me.Stephanie:All right.KS:I would say, I'm blessed. Every day, I get so many gifts in terms of people helping me.Stephanie:I love that. What's one thing your kids have taught you, that made you shift your idea on E-commerce or retail? You talked about live streaming, but what else have they taught you recently, that you're like, "Whoa, mind-blowing. Never would have thought about it that way, but you're 18, so you know everything"?KS:Yeah. If you ask me, I cannot buy a shirt or a pant without getting a feel for the cloth or fitting. Without getting a feel for the apparel. My kids will not even blink their eye in terms of ordering it. By looking it online, and ordering it online.KS:Even after they receive it, and if it's not good, they don't mind quickly returning it as well, actually. I find that as a hassle, but I learned from my kids that, it's a way of life. The first time I could sense that E-commerce is going to get adopted in a big way was from my kids, I would say.Stephanie:Yeah, that's great. What's one thing, or piece of technology that you don't understand today, that you wish you did?KS:The technology of 5G as well as, currently, people are talking about 6G. I used to work in a telecom industry. I used to play close attention to these two technologies. The pace in which 5G took, caught me by surprise. Then I had to go catch up.KS:Now I'm getting tuned to all the 6G news which people are pushing. Now I'll pay more attention so that I don't do the same mistake I did with 5G.Stephanie:How do you stay on top of all of the E-commerce trends? What do you read? What do you listen to? What do you do each day, to stay on top of that?KS:Yeah. I subscribe to a lot of ... Now today, gathering information is not a problem at all. I subscribe to all kinds of thing. You get McKinsey, Deloitte, Sears-based retail and so many other retail subscriptions and technology subscriptions.KS:Best time for me to catch up on that is mostly in the weekends. I spend couple of hours looking at all the things. That's how I catch with the technology and the trends.Stephanie:Well, KS, this has been such a fun interview. Where can people find out more about you and Sensormatic Solutions?KS:Thank you. Thank you, Stephanie. It's a pleasure talking to you. Hope to talk to you again.Stephanie:Yeah, yeah. Tell me where people can find you though? Where should people look up Sensormatic Solutions?KS:People can find me in LinkedIn, and the company, Sensormatic Solutions' webpage as well, they can find me.Stephanie:Amazing. Thanks so much.
That first online sale plus the first time a retailer agrees to carry your product are always exciting. But when you can't meet the demand of your online customer base or your design process is slowed and shipments are delayed, that's when the headaches come twofold. But when your mission, and your product, is something you truly believe in and think can leave a lasting impact, you take all the good with the bad and keep on pushing forward. For Stojo, a company that produces collapsible, leak-proof cups and containers, there have been wins and losses of every kind, and CEO Jurrien Swarts has been riding the waves as his company tries to get a piece of a $22 billion industry. On this episode of Up Next in Commerce, Jurrien takes us through what it has been like to design, launch, and distribute Stojo's game-changing product. Plus, he guides us through how difficult it is to scale and market a business, and what it takes to make hard choices like laying off and rebuilding a staff. Enjoy this episode!Main Takeaways:Digging the Design: When it comes to delivering a product out to the market, it has to work in a number of different ways. The internal team needs to be invested in the design and believe in that product, but you also have to be willing and able to take outside feedback from customers in order to iterate and expand. Find stakeholders who can contribute in meaningful ways and trust them to keep making the product better.Punch Above Your Weight: Sometimes you have to get scrappy and find ways to compete without the help of big budgets or a ton of staff. In these instances, there are avenues to explore that offer high returns for very little investment as long as you can find the right partners. Influencer marketing is one of those areas and, when small companies make the right connections, they can compete at or above the level of any big brand.Sharing is Caring: In the past, it was uncommon and even frowned upon to share information, best practices, financials, or anything else that could be seen as a competitive advantage. The younger generations, though, value transparency and many DTOC and DTC brands that are run by millennials and Gen Z are embracing the idea of information sharing in order to help themselves become more data-driven.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. I'm your host, Stephanie Postles, CEO at mission.org. Today, I'm chatting with Jurrien Swarts, the co-founder and CEO of Stojo. Jurrien, welcome.Jurrien:Hey. Thanks for having me.Stephanie:I'm excited to have you on. I was looking through Stojo a bit and your background. What was very interesting to me... You can tell me if this is wrong, but I saw a quote where it's like you and your co-founders were reading 4-Hour Workweek and that's how this came about, which to me was wild because everyone's read 4-Hour Workweek, but I've never actually heard of someone creating a company based off that model. I wanted to hear a bit about what was going on back then. Tell me the whole story.Jurrien:It's kind of wild. I was at Credit Suisse and had a colleague. He was actually my manager. We got into this habit of going for runs every day during our lunch hour and we had this two-guy reading book club going. One of the books that we eventually got to was Tim Ferriss' 4-Hour Workweek.Jurrien:If you read it, you could either create something because you're a creative, which today I'll call myself a creative but at the time, I was like, "I'm not a creative. I can't sing. I can't write. I can't..." They were like, "But you can also make something, preferably in China," I think was the guidance. I said, "Well, I speak Chinese. I've always had a thing for product and design. Just personal interest. Why don't we see if we can come up with one of those?"Jurrien:So we started to brainstorm and a few weeks after having read the book, or even maybe a month, Alex comes in and he goes, "I got the perfect idea. How about a collapsible coffee cup that goes in your pocket so it's easy to take with you on your commute and travel?" I was like, "That's not a great idea." I didn't really like it. I was just like, "Whatever."Jurrien:Another couple weeks pass by and I was actually in the shower, where I have a lot of aha moments. What's funny is the more I talked to other founders and other people, a lot of people have a place where they have their aha moments. For me, it's driving on the interstate long-haul between home to whatever or in the shower.Jurrien:I had a vision of my grandmother's daycare setup where she used to have the dishwashing rack. She'd always have the baby bottles lined up, taken apart. If you're familiar with those, they have a plastic reservoir, a plastic collar and a silicone nipple. It creates a leakproof type of seal with the screw on. I realized that if I took a collapsible dog bowl or [inaudible] type cup and put a lid on it like that, we actually could create this leakproof coffee lid that would actually help make this thing work.Jurrien:When I had that discovery, did some sketches and figured out that "Hey, we're on to something here." That's how it all started. That was 2011.Stephanie:So let's get back to your aha moment in the shower. You're like, "I know how to create a collapsible cup that won't leak." What did the process look like after that?Jurrien:Again, dating it 2011, '12. Rapid prototyping was just becoming a thing. They had things like the first 3D printers, et cetera. When you're making a durable good, you have the industrial design thing, you have the CAD files that have to get developed. When we went and priced that out, we were getting quotes of $30,000 to get to a prototype and maybe one or two iterations, way beyond the budget of what are significant others were going to allow us to spend. My co-founder, Alex Abrams, was the guy that I worked with at Credit Suisse. When we got that price tag, we knew there was no chance that our wives were going to sign off on that. We were just like, "Okay, this is done."Jurrien:A month later, Alex is at a Halloween party with his kids and he runs into Ben Melinger, who he was a fraternity brother at UPenn with. Ben had been a consultant and quit that job to work on a concept he had for a water bottle. He self-taught himself how to do CAD drawings.Jurrien:We said, "Ben, how's that water bottle going?" He's like, "I don't really know how to get it launched," et cetera. "Well, we have a project for you if you're interested." He said, "Sure," and so we made him an even partner. He did the CAD for the free, and then we started prototyping. That's how we took it to the next level.Jurrien:I guess for anybody who wants to do a product design thing, if you don't have the money for a designer and industrial engineer and you could expect to spend anywhere from 20 to $50,000 just to get that design work and prototyping done, find a co-founder who can industrial design and bring them in. It's the best way to do it because there's going to be countless iterations. You want somebody who's really vested in the product to make sure that what you come up with is really exceptional, and it's not just somebody who's doing it as a consulting gig and just wants to check it off their list and move on to the next project.Stephanie:I was going to ask, then, about how do you view... Especially maybe back in 2011, it's definitely probably newer but now, it seems like everyone is doing that, launching [inaudible], getting prototypes quickly. Do you feel like it's in a different place now, where you can maybe just go on an Upwork and hire someone to create 20 different designs for you? Do you think the world is different now where you might not actually need to find a co-founder?Jurrien:Yeah, I definitely think that. I mean, I think the power of Upwork and 99designs, things like that, is that it's open to folks who are living in areas of the world that are much cheaper to live in, and so you can actually get incredibly work out of Eastern Europe, out of parts of Southeast Asia, Asia. I've definitely gotten lots of help there.Jurrien:It comes down to your aesthetic and your attention to detail and your ability to curate and manage that process. But for anybody starting out, I'd say go for it. What do you got to lose other than some time and money? Usually, you get really good learnings from that stuff. I think that's totally a viable place to go. The other one is if you're college age or recent graduate and you had an engineering school in your school, you might have people that you can find that way as well who'd like to do it just for portfolio building, or just maybe you want to start a company together.Stephanie:Love that. What was your first sale like? Do you remember getting that first sale?Jurrien:Well, yeah. We had two first sales, if you will. We're an omni-channel business. We have our website and we do Amazon, and then we sell to brick and mortar retailers.Jurrien:The first sale was when we launched our Kickstarter in June of 2014, when we got that first backer and then the euphoria around that, having created a product, done a video, put together a campaign and then pressed Go was... It was really, really incredible.Jurrien:And then what was the fun thing about that was we went from zero dollars and passed our goal of 10,000 prior to midnight that same day. That was really great. Ultimately, we did... I think it was $128,000 on Kickstarter, so 12, 13 times what we'd set out to raise, which was... We needed the 10K to cover the tooling. That was really exciting.Jurrien:And then when we actually went commercial... So I left my job at Credit Suisse in the summer of 2015. The coolest thing was when the MoMA Design Store buyer came and found us somehow—probably through Kickstarter—and asked for samples. And then they actually bought our cup, and so we were being sold in the MoMA Design Store. It's like our first retail relationship. That was really special, as somebody who cares about art and design.Stephanie:That's awesome. So then after you were there, is that how other stores... You're in Anthropologie, I think Whole Foods. Is that how they found you, by just having that first retail customer, or did-Jurrien:No.Stephanie:... you get those partnerships in other ways?Jurrien:I mean, that was a slog. 2015 until May of 2018, I was a one-man band. My co-founders kept their day jobs and were involved in various ways, but for all intents and purposes, I was the one that I was all in. I had to learn and teach myself every aspect of the business.Jurrien:Frankly, I wasn't very good at the sales part of it. We got a little stop-start with Bed Bath, but our packaging wasn't quite right. We had supply chain issues just because of cash flow. We didn't have the right merchandising.Jurrien:It took bringing on a professional consultant, who's actually still with us today, is great, who really knew the retail category and specifically hydration and coffee tumblers. It's a pretty big category in the US. It's like a 22 billion-dollar segment.Stephanie:Wow.Jurrien:If you think about it, every major retailer, gas station, dollar store, every store is selling hydration. Getting somebody who really knew how that worked and then just slogging it out for a bunch of years, going to the trade shows, getting press where you can, evolving our product... We started with a 12-ounce cup, which was great for New York City-based commuter who goes to the corner deli and gets the 10 or 12-ounce cup of coffee that's the standard coffee in New York City. It also really works out really good for the UK, Australia, countries where they drink smaller beverages. But guess what? In the US, most people drink 16 or 20 or 24-ounce coffees. Our cup actually wasn't really optimized for scaling in the United States.Jurrien:It took until 2018 until we introduced what we call the biggie, the 16-ounce cup, and we added a straw because southern part of the country actually drinks a lot of sweet tea, iced tea, iced coffee for most of the year. Moving away from a hot-only, small, single-serve cup of coffee to something that's more common to the US market, that really helped propel us.Jurrien:And then we also moved away from... We started with some really primary colors. When I decided I was going to start a brand and really grow Stojo into something, I really liked how S'well approached the market. The way that I saw that play was they went hard after a very certain demographic, the [inaudible], female, millennial, Gen Z consumers. I saw that we could probably do something like that.Jurrien:Being in New York City, Brooklyn, I thought that's a pretty natural fit for me to target that demographic and try to have my sustainable product be almost like a fashion accessory. When we did that, that's when I think we started to appeal to the Anthros, the Madewells, the Food52s, the Whole Foods, et cetera.Stephanie:How did you go about that? Because I look at companies like S'well and a lot of the brands that are in Anthropologie and I'm like, "How they got there is so much through marketing." I mean, you can walk in maybe a TJ Maxx and see tons of S'well style [inaudible], stuff like that, where oh, looks pretty similar but the way they did it, like you said, attracted a certain kind of customer where it's like, "I'm a fan. I'm not going to [inaudible]."Stephanie:How did you go about it to become like that as well? What did you start implementing? What kind of marketing were you doing? What did that look like?Jurrien:A lot of it was, I think, just intuitive in the sense that since a very young age, I was always a consumer of brand. I liked brand. I would buy products based on their aesthetic, their utility, but also what the company's doing and saying.Jurrien:One of my favorite brands of all time was United Colors of Benetton. What appealed to me growing up in a really small northeastern mill town which was predominantly white, almost 99.9%, was seeing this just calico quilt of different representations of human beings and bright colors. Everybody in the photo shoots always looked like they were having a great time. I was just like, "Yeah, man. That's what I want in life. I want to be around beautiful, different people," et cetera. Jurrien:I think that always stuck with me. When it came time for me to helm my own brand, what I wanted to do... And I was also watching things like TOMS, Honest Company, looking at the Acumen Fund and their activities. I came from Credit Suisse where I was tangentially involved in a lot of socially-responsible investment activities for clients. I said, "You know what? I want to build a brand that does this, that's mission and purpose-driven."Jurrien:On the one hand, I have my sustainability message, and then I have control over the storytelling and the imagery that I want to put out there. What I want to do is appeal to people who want to support brands that they think are conducting themselves in society in the right way because it's the right thing to do and not because they have to do it or because it's the most expedient or the most profitable thing to do. I think that's the stand that I took, and then the rest was more... Because we're bootstrapped, I got a little bit more sophisticated in terms of the look and the feel of Stojo every year as I was able to hire people and bring on professionals. When we were shooting our own photography and I was doing my own graphic layout in PowerPoint, it's a very different look than when you start actually hiring designers and paying for photo shoots and then leveraging influencers, et cetera. There was an evolution.Stephanie:It seems like to build a brand like that, you have to rely pretty heavily on influencers. When I think about some of the brands that have really shot up recently, it does seem like that's one of the most strategic angles, to partner with someone who has your values and ideals and also the audience you want to reach. Is that a big part to your marketing playbook, or just a small part of it?Jurrien:It's huge. But interestingly, we've only really started intentionally and systematically, strategically, tactically flexing into that since, I'd say, August of last year. What happened was the height of the pandemic, we had to let go of half of our staff. We were about 20 people. We cut back to 10, to the most necessary. Really hard to do.Jurrien:But when we did that, one of the things that came from that was that we let go of our CMO, who was very high salary, recruited from a big place. The remit that he had was to help us scale this really quickly. We thought we were going to scale a lot faster than we ultimately did.Jurrien:When that all fell away, I just partnered up, actually, with my romantic partner, my life partner, Megan. She joined the team as a fractional CMO brand creative lead and she started implementing all these things.Jurrien:We were like, "What are we going to do with no budget? How can we do this? We got to get really scrappy. We don't have any money to spend. We have to be breakeven or profitable every month we can."Jurrien:The influencer strategy is one of those things that if your brand has the right market acceptance and fit and you can relate to the right individuals, it's a really, really interesting way to go. We've had a bunch of success there, but we're really still only getting started. But there's definitely a ton of brands that are those challenger brands that have done a lot of incredible work utilizing that. We're always watching what other people are doing and learning from it.Jurrien:Frankly, there's a lot of us who are starting to talk behind the scenes, management teams and making intros and talking to each other at roundtables and just sharing a lot of data and information. It's making us a lot more scrappy, successful. We're starting to punch above our weight, I think. A lot of DTOC brands are doing that.Stephanie:Yeah, because I was going to say it feels like the DTOC world is much more eager to share best practices and talk behind the scenes versus... I mean, we have podcasts covering basically all the C-suite and I hadn't really heard of a bunch of CMOs getting together and talking about best practices or the first 90 days, or CIOs. It seems like it's harder to do there, then all these new DTOC brands are like, "Let's all work together."Stephanie:How are you finding that community? Why do you think everyone's so eager to work together and share successes and failures?Jurrien:Well, I think it's structural and it's generational. If you got a big incumbent brand, they are recruiting from a very well-known set of folks in the C-suite. They've been doing what they're doing and it's working. They're sophisticated and they know their stuff.Jurrien:It works for them, given their size and scale. When you have billions of dollars in revenue and you're like, "My marketing budget is 10% of revenue," you know what you've got month to month, quarter to quarter. When you're a millennial or Gen Z-run brand, a lot of us just started doing it out of hey, happenstance from necessity.Jurrien:There's a lot of studies out there that if you're reading the blogs in Medium and LinkedIn and stuff like that that talk about... Even the New York Times, Wall Street Journal talk about how millennials are way more willing to share and talk about their personal finances, their negotiating tactics, how much they're making per salary, how much they paid for their house, their car.Jurrien:I think there's a lot of us understand that being transparent... And we kind of chatted about it a little bit about my personal approach to it before the show. When you share information with other people, if you're doing it to brag or whatever, that's one thing, and I think the older generation always thought that sharing is distasteful. You don't do it. It's not done.Jurrien:But I always ask, "Well, I don't know these things. You know these things. I'm asking because I'm trying to gather information and make data-driven decisions." DTOC brands and really good startups are all taking in data and tracking KPIs. They're making data-driven decisions. Not to say everything's data-driven, but there's a lot more of it.Jurrien:In our industry, everything's pretty opaque. I don't have the money to spend $10,000 for research on this one little thing, but I can certainly hop on a call, have a beer, share a coffee with somebody and just pick their brain.Jurrien:I think a lot of us are starting to do that. When you lead with vulnerability, transparency, authenticity—which these are all values we share and aspire to in our team, and it's part of what Stojo's about—and you say to somebody, "Hey. I don't know everything. I'm here to share anything you might need or want to ask but today, you have some information that I need. Would you be willing to share it? This is how I'm going to use it." 90% of the time, people are super thrilled to just be connecting on a real level and finding somebody that "Oh my God, this person respects me. They're a peer. I can help them and they can help me."Jurrien:It's a beautiful thing and it's really a metaphor for where we need to go as a society, is instead of thinking about everything as zero-sum games, just talking about how do we all get to happiness and balance and Shangri-La or whatever... I'm overstating a little bit, but this idea of just because I'm winning doesn't mean you have to lose. We can all win. We're going to be around for a long time. Who knows? Maybe one day, we'll collaborate together on something, et cetera.Jurrien:I try to foster that as much as I can. I really encourage people who are on the fence about hey, will this make me look weak or naïve or whatever, don't let that get in the way. Just think about what you have to gain, which is information that you didn't have before you asked the question and took that chance. What do you have to lose? Somebody that you don't really know is going to, I don't know, talk about you or-Stephanie:Not respond?Jurrien:Yeah, exactly. Or say no. I think training yourself to do that is part and parcel with becoming an entrepreneur and a leader.Jurrien:We shared our parenthood. The cool stuff about a lot of what happens in a startup environment and especially in me as a CEO, it's very similar to being a parent. You're kind of the CEO of the household. A lot of the stuff you're strong at or weak at extends to both areas of your life. You can actually get a lot of learnings and personal growth through comparing and contrasting methodologies and approaches at home and at work.Stephanie:I think there's not much of a separation between those two, especially now. The other day, I did this human design reading and test. Have you done this before?Jurrien:No, no.Stephanie:You might like it.Jurrien:Sounds awesome. Tell me more.Stephanie:Essentially, it tells you, "This is the design of who you are and how you might operate." I'll send it to you afterwards, actually.Jurrien:Oh, please do.Stephanie:You would really dig it. You need to have someone who understands how to read it, but it was very applicable to life and with kids and your partner, and then also thinking about business. It was saying certain things to me that I think I never had words, of like I felt a certain way, but then when she went through and was like, "Oh, Stephanie, you are an unconscious alpha. You need to lead in this kind of way, but you don't feel like you should be an alpha." I mean, it sounds a little woo-woo, but everything she has gone through I was-Jurrien:No, it doesn't sound woo-woo at all.Stephanie:I was digging it. It made me rethink how I even thought about myself when it came to work and life and just how it's all one and how to approach it in a completely different way than five years ago where it's like keep it separate. Don't try and mingle them together. That's when it gets messy. It was great.Stephanie:I think that's where the world's headed. Certain people are trying to just adjust to that new way of thinking now and is this even okay. It's okay.Jurrien:I love that. Please share. When say that, it's interesting. There's a lot of dogma that we are raised with as children that worked for the prior generation, or maybe it didn't, and we're stress testing everything nowadays.Jurrien:The one good thing about all the information sharing and the putting everything out there is that you get to try and think about and discard things a lot faster. You don't have to be pretty about it. I think this rapid prototyping and hacks approach that started with startups is now spilling over into dieting... Or not dieting, just the way you eat, the way you live, the way you sleep, the way you relate to your family and friends. I think it's going to bring about some really rapid shifts in human consciousness for the better.Stephanie:I mean, the whole world is changing that way. I think that's where any bubbling up around... Even the US right now is having issues because people are starting to... They're meeting people 3,000 miles away. They're finding their community in different ways. It's not all just based off like, "I live here" anymore and we're the same within this one city. I mean, now people are thinking very different and finding their communities and having more of a voice by coming together more than we've ever had before.Stephanie:The whole world's changing so rapidly and people are trying to figure out, "How do I keep up with this? Do I stick with our roots of how my parents' parents' parents have always done it this way, or can I expand and do something different and live like a nomad and go where I want and find my people and have an impact on the world in a different way?"Stephanie:So tell me a bit about was there an inflection point with the sales at your company where it's like you were a solo person for a while, your other co-founders were working full-time, you were trying to build these partnerships and you're like, "I need a consultant that can help me with retail." When was there an inflection point where you're like, "Whoa. Now, we're off to the races. I need to hire. I need help"? And how many [inaudible]? What was that level when you're like, "Now, we're about to go fast and I need to hire [inaudible]"?Jurrien:Let me give everybody just a really high-level overview on what happened from 2014 to today. We raised capital on Republic, the crowdfunding site, so a lot of that information is public to the extent it's appropriate and stuff.Jurrien:So we were bootstrapped. I started with 125K from my family and a friend, just a small little check to get started, plus the 128K that we did on Kickstarter. Before that, I think we each chipped in 10K. I think we had 20K and then we did the 128 capital raise. We did another failed, but 20K Indiegogo in 2016. Raised 125 in capital, then did a small bridge round before I raised my first round. I'll just lay that out because I think it's instructive and informative for people who don't come from the typical equity-raising background.Jurrien:In 2015, I had a half year of commerce. That was internet and online. We did about 200K in sales. The next year, we did 340,000. The next year, we did 405,000 or something like... I can't remember the exact numbers. This is all me by myself, so 2015, '16, '17.Jurrien:In 2018, we came back from some trade shows. The houseware show happens in the spring in Chicago and in Frankfurt. I actually got some international distributors. Suddenly, the orders started coming in from them because Asia and Europe were actually ahead of the curve over the US in terms of buying into sustainable, reusable products. We actually started getting distribution in foreign countries.Jurrien:The orders started coming in and there were too many. I'd just had my second child, who was not even a year. I wasn't getting sleep and I was just overworked, just dogging it. I had to hire a person.Jurrien:I hired Jake, our COO. He's still with us today. He came from MALIN + GOETZ. I brought him in. I interviewed him on a Friday and I had him at work on a Monday. I was like-Stephanie:Wow. When you know, you know.Jurrien:... "Dude, I need your help." Yeah. I just was like, "This is the guy. I want him in here." He started on Monday and he took over all these purchase orders that had come in.Jurrien:We thought we were going to do a million dollars in 2018. We ended up doing 2.7 million dollars in revenue.Stephanie:Wow, wow.Jurrien:That's when I was like, "Okay, I have a growth trajectory here that will look good enough to investors to try and raise a small C round." I did a pitch night at WeWork, where I was using their offices. We ended up getting I think second place in this pitch. They made a 75,000-dollar investment. With that, I was able to raise basically about 700K, which brought my lifetime capital raise to a million bucks.Jurrien:From there, we hired the team in 2019. I got somebody focused on sales and marketing. I got customer service. I got a designer. And then we ended up, at the tail end of the year, bringing on after we did not get picked to go on Shark Tank... Because we were holding for that to see if we got an investment. They passed on us, and so I decided, "Okay, I'm going to plow ahead and then beginning of 2020, I'm going to raise another round."Jurrien:We were able to get to 6.5 million in revenue, 6.5 or 6.7 in revenue in 2019, and had a team of 10. And then the plan was to raise our mini A or our next seed B or whatever you'd call it. We didn't really fit in a good category, but we're going to try and raise two to four million dollars at the next level evaluation.Jurrien:So I started hiring the team out. That's how from January to April 1st, we hired and we were at 20 people. We'd extended the last two offers right before the pandemic hit, and they were set to start on April 1. I think we gave them their offers the week before the pandemic hit. They were going to start two weeks later. We're up to 20 people and we're on a trajectory where we thought we were going to double revenue again. What in fact happened was we were unable to grow year over year in 2020.Jurrien:We'd hired a team that was supposed to preside over a 14 or 15 million-revenue company and we were going to be a six million-dollar revenue company again. We had to cut the staff. It was really, really difficult to manage through that. I'd never done that before.Jurrien:That's where we're at now. We're at the 10 people range. We're starting to hire again. We're pretty confident that we're going to have a doubling of revenue again this year. It's looking like a really strong year. We have some amazing launches coming up, et cetera. We're starting to build.Jurrien:What was kind of a blessing in disguise was that when we cut back the staff last year, we realized that what we really needed to be much more scrappy was a different kind of a team than I had envisioned. A year ago, I was one person. I'd never scaled before, never managed that many people, all these things.Jurrien:Today, where we are today is we know much more what we need, and we have agencies to fill the gaps where we don't have justification for a full-time head. Now, our forward-looking hiring plan is much more based on profitability, certain KPIs that we have and then just very real needs that we've already established because we have agencies and we're paying them X. We know when that expenditure gets to this, then we can justify a full-time head. There's a lot of great learnings from going through that, even though it wasn't easy.Stephanie:Sometimes I think those forced adjustments end up being the best learning... I mean, we had to go through the same thing at my company had to lay off half the team not due to COVID. It was back in 2019. At the time, it felt like the worse thing that could ever happen, crying on the phone. Most of these employees were my friends.Stephanie:But now, looking back and being like, "So many good lessons in that." [inaudible] how to hire, like you said. Do you actually need a full-time employee? How do you justify an FTE versus an agency versus having a one-off contractor? It ends up being a hard lesson but longterm, sometimes companies that go through this blitz are able to come out on the other side stronger than before.Jurrien:Very much agreed and actually, I'll call something out again, I think, for the benefit of any listeners who are those entrepreneurial-minded, startup type people shooting for the sky because I'm one of them. That's why I'm sitting where I sit. If you talk to investors, a lot of times investors are not those people. They're actually the pragmatists and the realists. They've literally seen thousands of businesses like yours do either one of two things. They're usually much more disciplined and pragmatic. I think a lot of times, COOs, CFOs, those type of people also tend to have those personalities.Jurrien:What ends up happening is as an entrepreneur who's like, "I just need to make sure that we don't stall. We got to get it done. I have to make a decision now so I can go on and do the other 50 things on my plate," a lot of times there's a lot of inefficiency in that decision-making process. It's just guessing. What has to happen over time is the company needs to be run less on the seat of the pants and less on intuition and much more on discipline and just time-tested tactics of sound business principles.Jurrien:That's what, at a very high level, happened to you in 2019 and what happened to me. As a founder going through that injects you with a sense of realism and it matures you.Jurrien:It gives you wisdom, I think, that prior to that, because everything was on the up, you didn't really have that. You didn't have time for naysayers. You were defying all odds. Now, it's like no, it's not just about my vision and me anymore. It's actually a company and I have a responsibility to all these people. Accounting principles are going to define whether or not I'm still a business a year from now. I have to listen to those.Jurrien:I think that's the shift that can happen. It's really powerful when you go through that lesson. Your company doesn't implode. You come out through the other side of it. Those are learnings you're never going to unlearn.Stephanie:Yep, yep. I also think the emotions lead the scene where it's like during the time, you're just like, "Horrible," crying, the worst. Thinking about it now, it's how I would even operate, it's like you just... It is a cut-and-dried thing. You've got good margins or you don't. You're profitable or you're don't. Here's your [inaudible]. If it's not there, it's not there. There's no amount of friendships and feel-good anything that's going to fix that-Jurrien:Exactly.Stephanie:... I think, was one of the one of the top lessons for me.Jurrien:That actually ties back to that point that I made: if you don't take care of yourself first, you can't take care of others. If the company isn't sound and it can't pay its bills and keep the lights on, you can't employ all these lovely people who of course depend on you and trust in you and rely on you. But you have to make decisions as the leader in ways that will keep the boat afloat or keep the greater good going. Sometimes, you unfortunately have to make decisions that aren't popular, you don't like, you feel terrible about. But it's not about that.Stephanie:Thousand percent agree with all of that. I know we are running out of time, but I want to do the lightning round with you because I think you're going to have some epic answers.Jurrien:Oh, geez. No pressure.Stephanie:Uh-oh. Lightning round's brought to you by our friends at Salesforce Commerce Cloud. This is where I ask a question and you have a minute or less to answer. Are you ready?Jurrien:I think so.Stephanie:All right, first one. I'm secretly curious about what?Jurrien:What the profitability metrics are of the top 20 DTOC brands.Jurrien:The real deal on the numbers.Stephanie:That's a good one, I thought, though. Something wise my elders taught me was...Jurrien:To always make eye contact and listen to what the person's saying and give it a moment before you respond.Stephanie:That's a good one. You're very good at that. You made eye contact the whole time. Good job. What's up next on your reading list or on your podcast list? What are you diving into these days?Jurrien:Jesse Pujji did a podcast, Invest with the Best, I think it is, where he was talking about his approach to performance marketing. I've listened to it twice and I want to hear it again because it's so thick. That's one.Jurrien:Then there's this other podcast that I can share. I'm terrible with names and remembering things like that, but it was two of the original folks, the early hires at Amazon. They talked about the Amazon memo and narrative and the PR/FAQ approach. We're actually employing that at Stojo right now. Again, very incredible paradigm shift in the way of managing and sharing and presenting information and coming to decisions. So two things I'd highly recommend to people.Stephanie:Cool. I'll have to look that one up and drop it in our show notes. What do you when you want to feel more joy?Jurrien:I like a little bit of cannabis as a night cap and I really like to run.Stephanie:Nice. All right, and the last one. This may be a little bit different than cannabis, but same same. What's one thing that will have the biggest impact on e-commerce in the next year?Jurrien:Oh, that's funny. I think the battle of Facebook-Apple. I'm really interested to see what happens there, how we figure out how to continue with attribution and respect people's rights to privacy.Jurrien:My gut, if you think about the right thing, is we should attribute a commercial value to everybody's data. I as a individual should have the right to monetize and share that data. People should pay for it. Because I'm okay with people having my data because I think it leads to better decision-making and better functionality of the whole machine, but I want to know who's got it and how they're using it. I think there should be value for it for anybody.Stephanie:I agree. All right, Jurrien. Well, it's been such a fun interview. Thank you for coming on the show. Where can people find out more about you and Stojo?Jurrien:God. Look me up on LinkedIn. Check Stojo's Instagram and our website, obviously, and then give this podcast a listen.Stephanie:Yes. Do it. All right, well thanks so much for coming on. It's a blast. Been a blast.Jurrien:Thanks so much for having me, Stephanie. And Hilary, thanks for your work on the back end there. Really appreciate it.
It’s not easy to keep a digital audience engaged. And it’s especially hard when the product you’re trying to engage them with is … produce. And yet, Avocados From Mexico has set a gold standard for what it means to build a funnel and engage an online audience and it has somehow found the secret recipe for success (and also guacamole).On this episode of Up Next in Commerce, I was excited to talk to Ivonne Kinser, the Head of Digital Marketing and Ecommerce for Avocados From Mexico, and learn her many tales about how the company has used out-of-the-box ideas to take something that rarely gets marketing love — produce — and turn it into must-engage-with content. She took us behind the scenes of creating one of the top digital campaigns for multiple Super Bowls, and she dove into what the future of digital marketing looks like, including why Avocados From Mexico has been ahead of the trends when it comes to things like NFTs and blockchain. Enjoy this episode!Main Takeaways:Impressions Matter: Impressions are a metric that often is hard to really judge the importance of. But when you can correlate impressions to search activity, it becomes clear that building an awareness of the brand through impressions and exposure can drive conversations on social media. This in turn leads to more Google searches and native activity on a brand’s page.Eternal Iteration: You have to iterate constantly in order to adapt to changing consumer behavior. Constantly changing your platform is not a signal that your platform is failing or wrong, in fact it’s a sign that you are staying on the cutting edge and trying to meet consumer expectations at every turn.The Powers That Be: When setting a path for the future, it’s important to differentiate between trends and fads that will come and go and the forces that will actually drive companies and consumers toward a new way of operating long-term. For example, rather than get caught up in the hot new social network or gaming platform, think about investing in the technology that powers that network (A.I., ML, 5G, AR/VR, etc).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 Ivonne Kinser who currently serves as the head of digital marketing and ecommerce for Avocados From Mexico. Ivonne, welcome to the show.Ivonne:Hi. Thank you for the invite.Stephanie:Yes. So happy to have you on. I think I just spent an hour going through your guys' website and then I got hungry and I realized it's probably not best to have avocados and salsa right before an interview. So let's see how it goes, I was willing to take the risk.Ivonne:Maybe it's a good thing because you can always get... Go for an avocado.Stephanie:Yes. Yeah, I agree. So before we dive into Avocados From Mexico, I was hoping you could touch on your background a bit. I saw that you moved from Venezuela to Dallas in 2001 and I thought that would be a fun point to jump off on hearing a bit about what inspired that move and what brought you here.Ivonne:Yeah. I mean, if you think about it now, that was a long, long time ago. I came and my first job here actually in Dallas, I have been here for over 20 years or 20 years this year actually. And I oversaw over 20 countries, the campaign of or the advertising for American Airlines across 20 countries in Latin America. And I was there for a long time, I think relatively I was there for about five years before I went to the resource group in Dallas and then I started going from agency to brands and brands to agency.Ivonne:I like both sides of the business until a point where I made a decision and I really liked to stay on the brand side. So I stayed there and right now I have been with Avocados From Mexico for seven years now.Stephanie:Wow.Ivonne:And counting. Yeah.Stephanie:That's amazing. So what pulled you to Avocados From Mexico? Because when you look at your background and what you just went through, it seems like such an interesting jump and what was the draw there?Ivonne:It is interesting. That's a great story. My career is full of stories but this one is one of my favorite ones because I have... I was also on the brand side with American Airlines after managing their account on the agency side, I went to the brand then Haggar company, Haggar Clothing then for a while I even go on my... I went on my own. I was very curious about entrepreneurship and just implementing my own ideas. It went great. It was on the fashion side, it went great, but I really missed the security and the stability of the corporate world and is when I went back then and went to Haggar Clothing and then Avocados From Mexico. But to your question my point is that fresh produce was nowhere in my experience or in my career.Ivonne:I was in transportation, telecommunications, fashion, apparel, retail, never even like the minimal experience in the fresh produce category and then the recruiter of Avocados From Mexico contacted me because they were studying the company actually, which is the marketing arm of two organizations, the growers and exporters of Avocados From Mexico in Mexico and the importers and the Packers and distributors of Avocados From Mexico... Hass avocado in the United States, they came together and created a marketing arm to market their products, avocados coming from Mexico. So at that point they appointed the president who is my boss, Alvaro Luque and he has been there from the beginning 2014, 13, and the recruiter contacted me and asked me if I was interested in going and speaking with them, with Alvaro and I was like, "What? What am I going to do with avocados?"Ivonne:I mean, I have... And that was before the first Super Bowl so I didn't even know that brand existed or anything. And she said, "Just go and talk to him and if you're not interested then fine, but I think that you would like it because it's a very entrepreneurial organization, is a very forward thinking and he is looking to really make an impact in the marketing industry." So that got me curious and I went and talked to him and yes I was fascinated with his vision. He told me the magic words. He say, "I want someone who... I'm looking for someone to build the digital marketing department from the ground up." And when I told him like, "Why me? I don't have any experience in the category."Ivonne:He told me that he was not looking for someone with the experience but he was looking for someone with very good solid expertise in the digital marketing side of the business who was very creative and who would be able to do what nobody else has done. And those are my magic words. I'm very creative. I love creative freedom and do exactly that, what nobody else has done. And besides is one of the very, very few cases in marketing where the marketing budget increases year over year because it's proportional to the sales volume and the sales volume of avocados have been growing year after year... Year over year since 2007 and especially since 2013. So I was sold.Stephanie:That's great. Yeah. I mean, such a good story and it's so interesting too when I think about other produce items in a grocery store, you would never even think like, "This avocado bag has a whole content strategy behind it." And they do Super Bowl commercials and like the stuff that you guys are doing to me seems so innovative. You're taking all the risks, you're trying things but what did it look like before you joined? How were they marketing and selling avocados? What was the landscape before maybe they entered the digital world?Ivonne:So when I started there, that was 2014, there was no digital marketing department per se. I mean, we were doing... We had a social media and we had a Facebook page and we have a few bloggers creating content, but I think that was about it. And then I started in September and my first assignment was okay now you have to build up Super Bowl digital campaign. And I was[crosstalk 00:08:43] okay. Yeah, whatever that means, right? But what has been very exciting about it is that we were talking offline before there was no preconceived notion of how a marketing practice should be. And that was... I think that is what has allowed us to do everything that we have done because nobody has ever say, "No, that's not the way we do things here." There was nothing.Ivonne:So we start creating, at least I can speak for my department that I started creating the marketing department that I thought and I think right now that is the right for these time. And one of the things that a lot of companies do is to become complacent and keep doing things the way they have been doing it for years without even realizing they are doing them. In our case, there was nothing. So it was a blank slate for us to build whatever our imagination can see. And like I was saying, my first assignment was... Was in September, I started in September, right? Super Bowl is next February and building a campaign, you can not build a campaign in just two weeks. So what's literally my first assignment is now you have to build a Super Bowl campaign. And it was the first time we went to the Super Bowl with a TV spot.Ivonne:So I did what I thought that it was best and not knowing or having an experience of what even means to be a winning Super Bowl campaign, right? I just did... Put a lot of love and passion into that but the best I could. And then I remembered that the very next day after the Super Bowl I had a call from one of my agencies and says, "Congratulation for the digital campaign." And I said, "Why? What for? What happened?" They say, "It was number two after Procter & Gamble."Stephanie:Wow.Ivonne:I said, "What does that mean?" And then it was in terms of the most social interactions, the campaign with the bigger bus after Procter & Gamble, imagine that. And that was the first year. After that we launched six more and every single year we were either the top one digital campaign or top two digital campaign. Of course now I knew, "Okay, somebody is measuring this. We're very competitive." So and then we purposefully look for that first and second place but the first year happened just spontaneously. We didn't even try.Stephanie:I mean, I want to dive more into that because I just watched your Super Bowl commercial from 2020 and it was so funny about what your avocado needs. It needs a helmet, it needs a baby carrier for it so it gets more skin to skin contact. I mean, it was really good, writing and super funny, which I feel like sometimes I don't always laugh at things. It actually was giving me a good belly laugh and I want to hear how you go about developing content in a way that you did especially with your Super Bowl commercials that are winning awards and coming in number two, how do you guys even start creating that campaign from scratch to make it connect with a lot of people?Ivonne:Yeah. You know that... I will say the most challenging thing about the Super Bowl is connecting that content across the different departments and disciplines because the concept of the TV spot comes from the brand team and the brand agency. So and I have my team and different agencies. We're like I mentioned before, we're very entrepreneurial organization. So pretty much every lead of every department gets to choose their advertising partners, whomever you feel more comfortable working with for whatever reason based on expertise or closeness or whatever it is. So then we have to... When the brand team define what is going to be our theme and they go to market to test three or four options and then they decide this is the commercial we're going out with. Then they give that to the digital team, to my team and I share it with my agency and we start concepting the digital campaign. And the digital campaign have to be able to stand alone and live on its own, stand up on its own but it has to have some connecting tissue with the TV spot. It has to look like the same story.Ivonne:But that is a huge challenge because how can you bring a story that in TV is 30 seconds and transform that in an experience that it has to keep users engaged for three weeks, because that's the time when we launch the digital campaign until the game day is about two, three weeks. So it's a big challenge. And we have... We develop all the experiences in digital with that connecting tissue in mind but created for digital audience is not only for them to watch, but for them to experience, to play with it, to interact with it, et cetera.Stephanie:Yes. How do you think about building out a call to action that gets people to go back to your website? Because oftentimes I watched these Super Bowl commercials and I definitely have more brand love towards the brands that make really good engaging or funny content. But I don't know if I've always felt drawn to go right over to the website. How do you think about making it a funnel that's actually going to convert and pull people into your avocado community?Ivonne:Yeah. Yeah. I'm going to tell you the story, I tell you I have many stories about the Super Bowl but let me tell you one that will illustrate a great, great example. Years ago, we also had a float in the Thanksgiving Macy's Parade and it was the same dynamic. The brand team who also manages PR has this project or this idea to go do the Thanksgiving Macy's Parade with a float. So we had a float then the CEO comes to my team and say, "Hey, we're doing this in brand so what you guys have to do is to create a digital campaign to go with this float in Macy's Thanksgiving Day, but it's going to launch three weeks before then we start concepting." So what we did is how we can do so users keep coming back after three weeks, every day, right?Ivonne:Because you want them to go come every day and participate every day and interact every day. So what we did is that we develop an interactive map and the story was that we're bringing the float from Michoacan, Mexico from where our avocados come from all the way to New York and you will see how... Stopping in key cities across the United States from Mexico all the way to New York city. So in each city we have videos, we had what are we doing in that video, in that city, et cetera, et cetera. But the key was that the only way the float can move is when users tweet or hashtag. So the more they tweet the faster the float goes to New York and we know that we have to be in New York by a certain day.Stephanie:Wow.Ivonne:So that was so exciting. I mean, users were so excited about it that the day of the parade, when we were monitoring the conversation online and you could see the excitement and users saying, "That's my float." And that was the most rewarding feeling because they felt that was their float because they brought it from Mexico. And just to wrap up the story, we deliver more impressions of, or campaign than the Macy's Parade hashtag, imagine that and-Stephanie:That's impressive and crazy.Ivonne:Yeah. I mean, we're just... Have the power of engaging the audiences, they work on your behalf and because we don't have the dollars that the multi-billion dollar brands have to compete in this type of competition if you call it, like the Super Bowl, for example. But we still have been top one and top two in terms of the most talked about brands and it's because we engage the users and they do it for us.Stephanie:I mean, that's why when I was digging into this Avocados From Mexico company, it was so exciting because at first I'm like, "It's a company about avocados." And I started seeing all these things you're doing I'm like, "They are really pushing the limits when it comes to marketing and being super creative of how to pull people into these funnels and get them engaging." And, yeah, it's super impressive. How do you think about the ROI around a Super Bowl commercial versus a float in the parade? What should the ROI look like or what should companies be going after when thinking about these really big moonshot level marketing campaigns.Ivonne:So every company is different and every company has different goals, right? But we don't manage or sales, we're a marketing organization but our job as a marketing organization we have two objectives that which is, build the brand Avocados From Mexico in the US and increase the demand of Avocados From Mexico in the US. So when we create these campaigns that has an enormous boss what we want to do is to put avocados top of mind. When you have, and I give you the examples of Super Bowl campaigns, when you have, for example 7 billion impressions that was a Super Bowl this year, 7 billion potential impressions on social media. Yes. I mean, you can tell the consumer heard about Avocados From Mexico a whole lot. So when they go to the grocery store, you're top of mind and and our conversation of course is very strategic.Ivonne:So we wrap our conversation around a fun story but really in the core of it, there's recipes, there's conversations about how to consume the avocado. In Super Bowl, for example, we say guacamole, we talk a lot about guacamole and Super Bowl. There's a research company called YouGov, the previous two years they did a survey one month after the Super Bowl and they publish their results and they say the winning brands one month after the Super Bowl. And Avocados From Mexico also is among the top one or top two in terms of purchasing tension increase even a month after the Super Bowl. So, and another thing is when you go and see... We're talking about billions of impressions in social media, right? And then you may think, "So what is even an impression? Who cares?"Ivonne:But it is important because that huge conversation that happen in social media is just a reflection of users engage talking about it. And when we go to, for example, and check the Google trends, how the searches for Avocados From Mexico, the brand, the brand name, the search for the brand name the peaks overlap. When our conversation on social media is very, very high, you also see those peaks of Avocados From Mexico, the brand name search is very, very high at the same time. So, yes, I mean, all this huge conversation that we create with campaigns like Super Bowl, Cinco de Mayo and Thanksgiving Macy's Parade, it really impacts the interest for the brand. So going back to our objectives which is build the Avocados From Mexico brand in the US check and increasing the demand of Avocados From Mexico in the US check, because we have seen also how these YouGov for example, is one of the companies that have shown the increase in purchase intention.Stephanie:Yes. Yeah. That's amazing. So, I mean, thinking about all these marketing campaigns that you've done, what is one of the more risky ones that you've done that actually ended up working where maybe people on your team were like, "It's not going to pay off."Ivonne:Yeah. One thing that I always start thinking even a year before the next Super Bowl is what kind of technology I'm going to integrate in the activation. I think that we live in a world that is dominated and I say this in a very positive way, I believe in technology as a positive force to move the industry forward. So, and there's new technologies every year and I see the technology not as a shiny object, at least not all of them but as a... Like I says, is what is moving the world forward and the marketing industry forward. So I start thinking about what technology I'm going to bring the next year. So last year and it was actually that campaign that you referred at the beginning, I wanted to bring the Vatoms that actually right now are super, super popular right now.Stephanie:What are they?Ivonne:NFT or they call it also NFT. Have you heard about NFT?Stephanie:I mean, I've heard of NFT is in the non-fungible tokens-Ivonne:Yes[crosstalk 00:24:25]Stephanie:Okay. Okay.Ivonne:Yeah. Yeah.Yeah.Stephanie:Al right.Ivonne:So then those are super, super popular right now in 2020. 2020, the other name is Vatoms.Stephanie:Okay.Ivonne:In 2020, we actually were the first... One of the first brands that use that as a marketing tactic and we were the first brand to put one of four advertising assets in the blockchain and that was even before everybody[inaudible 00:24:59]Stephanie:Wow. That's so early. You guys are ahead of every trend, basically.Ivonne:Yeah. I mean-Stephanie:Have you done AR already. I was thinking you have to probably have an Augmented Reality experience with your avocado. You guys have done everything.Ivonne:We did, actually was part of that same strategy. So what happened is last year I say, "Well, I want to do something with NFT, let's call it NFT even though we call it Vatoms last year, but NFT and we did, but what it makes so challenging to be early adopter or a trail blazer that you're bringing something that it hasn't been done before is that it's really, really hard to explain and sell the idea within the organization is like we're putting money towards these, we're allocating budget toward these and it's something nobody has done before is that going to work. And honestly, the answer is, I don't know. I mean, how can you know? You don't know if it's going to work but what we do is when we experiment with that kind of things, we experiment cheap as much as we can and we are really well prepared to pivot if we need it.Ivonne:So my agencies, and when I select my agency partners, it has to be someone that is extremely fast moving that or adaptable and can choose with a call cheap directions because if not, it wouldn't work for the type of approaches that we take. And when you can move that fast and when you have partners that can move that fast, the risk is minimal because we're in... I mean, in the digital space you can course correct in real time and you're going to be fine. The problem is when you don't have the right partner that can move that fast and you know that the campaign is failing or there's room for improvement or it needs to be optimized and you cannot react quickly. But it was a big success in terms of the, it created a lot of buzz and a lot of... Media talk about it and a lot of consumers came and visited our site and participate in our games too because of that.Stephanie:Yeah. That's amazing. So tell me a bit more about the NFT strategy. I mean, I understand the concept of them putting on the blockchain a scarcity thing, limited quantity but what were you actually putting on the blockchain? And are you going to do it again in 2021 now that more people understand the concept of it because of the NBA top shot stuff that really put it on the radar of a lot of people who maybe wouldn't have known about it before?Ivonne:Yeah. So what we did is a mix between Augmented Reality, actually it started... The idea started with Augmented Reality so users will sign up to get at the UTA wallet and then they will go to Google Walmart, for example, and then they will find avocados, digital avocados all over and they will capture the digital avocados with their mentor reality and save them to their data wallet-Stephanie:Like a Pokemon Go kind of game.Ivonne:Kind of. Yes.Stephanie:Okay.Ivonne:Exactly. Exactly like that. So they will call it the avocados and then exchange it for every avocado that they collect is a point. So it was part of a big game. So, but when one of those was a crown that you also saw in the TV spot and that crown also, we place it in the... To develop these kinds of objects, it requires special coding so we coded and somebody... And then users will participate to win it and the winner, we will send them the instructions and it was an object that could be placed in the blockchain and they could then sell it or collect it or save it for later or whatever they wanted to do. So it was like testing the waters without going all in but we want to do one. I think that's one of our goals as a company is just, if anything is going to be tested out there in marketing, in the fresh produce industry, we want to lead that.Ivonne:And of course we saw this is coming at some point. In fact, it came a year later but we know this is coming, this is common in marketing so we have to do this. So we did that the previous year, just to name another technology, we built an experience with IBM Watson, the artificial intelligence and that's another great story because it was such a creative implementation of Watson that even IBM contacted me and to her, "How do you guys do this? Tell me the story," and whatever. And then they send an email to all their subscribers using our campaign as a case story like, look how creative Avocados From Mexico is using Watson in a marketing campaign, because it was a totally unexpected application of what so now artificial intelligence tool.Stephanie:Wow. I mean, you're basically giving you a peek into the future, just thinking I want to know what you're thinking at all times, because you probably are thinking two or three years ahead of what other brands when it comes to a marketing and technology perspective are even thinking about right now. So what are you focused on over the next year or two? What are you guys betting on that maybe other people would look at, you'd be like, "Ivonne, that's definitely not going to play out. No one's interested in that." What are you guys shooting for right now or focused on building from a marketing campaign perspective.Ivonne:Yeah. So two things I want to say about that. First, let me tell you, we're in the middle of planning 2020, 2022 planning our fiscal year ends in June and it starts in July, so we're right now are planning processes in full swing. So any ordering process is six months. So in one of the first meeting, the opening meeting where I get to talk to my team before they start even thinking about what are we going to do for next year? I wanted to make very clear where has to be our focus and I told them and something that is... I think is served as a guide, when we look at the future, we need to see what are those forces moving us toward the future. Instead of looking at what is trending because I wanted them to differentiate what are the trends and what are the forces. The trends are now and they may fade, but the forces are what is going to build the future. In this case right now where we are, I will say the forces are definitely artificial intelligence, machine learning, data, 5G is going to change the way we consume content and the way we consume video.Ivonne:The trends, for example, on the other side are I will put gaming in that side is trending right now. I will put in home fitness, I will put... It's a trend, it may be permanent but it's not something so transformational as it is artificial intelligence, data and machine learning. So what are we focusing in the future? We choose to launch a platform called Avocado Nation, is an intelligent platform with artificial intelligence and machine learning engine at the core of it. We call it the next fix of avocados because it has the same intelligence power, obviously much smaller than Netflix but it was... The inspiration was the way Netflix deliver personalized content to their consumers. And as most of the content production companies, they have like 30% success rates in the shows that they put out there. I believe that the last number that I saw for Netflix is like 70% and it's because they really, really relied on that intelligence.Ivonne:So inspired with that, we say we want to create the Netflix of avocados and that's just one of the portions of this intelligent platform. And we have right now over 100 videos our goal is to get 2,000 videos eventually. And it's videos like any format, short videos, long videos, funny, serious of videos that it could be... It could go from a dating show to a recipe show, all kinds of videos to give the consumers a variety of content for them to interact with and in the meantime, the machine is learning from those interactions and helping us to make predictions in the future about what is the content that our first party data is more engaged with.Stephanie:Yes. Yes. I was just going to say the first party data access is probably... Is that big driving force behind creating an entire platform like this.Ivonne:Big driving. Actually, that was the purpose because with all third party cookies going away and all that, we have been working on that for several years now. And right now we have over 100 million users on our consumer data platform and we have a costume audience, that's our core audience, about 30 million consumers. So we already have... Again, we have been preparing for this since 2015 talking about looking toward the future and when all this happened and a lot of brands are scrambling to get ready quickly, we already have our audience. You never complete with... I'm the one building my audience. That's something that the machine keeps learning, the algorithm keeps learning but we're in a very, very good shape in terms of first party data.Stephanie:Yes. I think it's interesting too that you approach the platform in a way like an AI first focused way where I talk to and hear from a lot of brands and many of them are very focused on content, creating their own series and figuring out how to make that work for the company. But it's very interesting hearing that you're essentially approaching it like a Netflix style model and even thinking back to... I don't know if you remember the earlier Netflix days where when they started coming out with their own originals and people were like, "They're not good." It's like the whole time they were just using that as training data, they were learning what we like. They were learning what makes for a good series, what kind of format are people looking for? And I love how you guys are approaching your platform with that as a focus first instead of trying to figure it out afterwards and figure out, "Why aren't people interacting? Why aren't they loving this series?" Super smart.Ivonne:Yeah, exactly. And you know what? I have my agency, I have several agency partners but I have one that is over all the development and optimization of the website, et cetera. And I told them, "This is an ongoing project, is going to be always an ongoing project because... And I want to iterate every single week because the algorithms are learning. And as we learned about how users are interacting, there's always going to be something to optimize and change and improve the user experience and the user journey. So it's a mind shift because you are iterating and calling it changing, tweaking, it doesn't mean that the platform need is broken, it means that there's always, always, always the consumer behavior is changing and if you forget about that and just launch something and leave it, is going to be outdated next month. So you have to change as your consumer expectations and preferences change all the time, it never stops.Stephanie:Yes. How do you want... I mean, when thinking about your employee base, it sounds like they're working on a ton. You can be working on Super Bowl commercials, you can be working on day to day, like traffic generation. You can be working on an entire content platform where maybe you're trying to bring on new musicians and getting new series created. How do you instill a sense of creativity and an entrepreneurial spirit in them so that they're willing to jump around and work on all these things?Ivonne:It's just a lot of fun. I mean, I think that is... I work with seven agency partners because I think we do so much and every one of them has a specialization in one of the digital... The areas of digital and all of them I think say that Avocados From Mexico is their most fun account. And is one, because it's a fun brand but also because also they have a lot of creative freedom. I really value creative idea that is also strategic. We're very, very strategic. And as long as it ties to the strategy, the sky is the limit, their imagination is their limit. And then we really have fun bringing these crazy ideas. And we do so much that is impossible for one person to bring all the good idea. So everybody has the opportunity to participate and to lead and manage their own projects and they work also very collaborated between all of them and all the agencies, it feels like one big agency working together but it's really different partners.Stephanie:Mm-hmm (affirmative)Ivonne:And it's all about ownership, when people feel the ownership of a project it's amazing what they can do.Stephanie:Yeah. That's awesome. So do you have any advice around working with agencies? Because we've heard from quite a few people that a lot of them have worked with agencies, they didn't have good experiences they ended up the creative and the branding and marketing campaigns back in house. And so how do you go about making sure that you're setting up a great partnership and finding these agencies like these that you speak so highly of?Ivonne:I believe that the agency choice is such a personal choice. Let me explain, the person that is... Or the company culture, the culture of the team, this agency is going to work with internally, the decision maker within the organization has to be a perfect match with the agency. And with that, I want to say, there's not a perfect agency for every... There's not a one pit soul. And I'm not talking about, there's great, great agencies that may not be a good fit for certain people or certain companies. In my case and in the case of Avocados From Mexico, just because we have the freedom to slate the partners we want to work with, they are a perfect match. And I think that makes a difference.Ivonne:So what is my criteria, is that they have to be a very, very creative agency, which of course, any agency should be, but it's a different kind of creativity. They have to move fast, they have to be nimble, they have to be a non-conformance. They have to be... There's so many things that it wouldn't work for us if it wouldn't be that way. And I think that every... That freedom that we have to select our partners should be... Any company should have it because it's like selecting a life partner or selecting a business partner is someone you really, really have to compliment each other and fit perfectly.Stephanie:Yeah. Really, really good advice. All right. 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 to Ivonne?Ivonne:Yes. Stephanie:All right. Hard one first, what one thing will have the biggest impact on ecommerce in the next year?Ivonne:Data.Stephanie:All right. Tell me a bit more, what are you thinking around data?Ivonne:Well, data, and I think that companies... Any company, any technology company that has anything to do in that feel of ecommerce is really, really fast right now creating the new best solution. There are things they are working on right now that are going to come out next week or in a month or two months that doesn't exist now. And they are building all that based on data they are capturing now as we speak. So I think that data is going to be the big driver for technology capabilities, for how the technology is and users are going to interact with each other. And there's so much data out there that we are learning right now how to organize it and how to activate it. And that knowledge is what is going to be used to build the next generation of ecommerce tools.Stephanie:Yes. Love it. When you want to get into the creative mindset, what do you do to get into that-Ivonne:I walk.Stephanie:You walk?Ivonne:I walk in nature. It's very unfortunate what happened to the world in this last year. A lot of people... So really sad consequences but I can tell you in my case I think professionally speaking, it was my best year ever. It was my most creative year, my most productive year because I realized that the way I create is by being close to nature and being with my own thoughts and using that reflecting on things that I talk with people in the industry, things that I read but then going back and retrieve and reflect on those things. And I think definitely, I think that everybody should have that space to let their creative power to work on[inaudible 00:46:44]Stephanie:Yeah. I love that. I feel that I also... Yeah, I get very inspired when I'm just out walking and hiking and yeah, I think that's definitely a way to jumpstart that.Ivonne:Yeah. And I like to, I go on a bike, right now that it's getting warmer here in Texas is biking time again and I think my best ideas come when I'm on the bike or when I'm walking, because you don't have interruptions, you don't have a phone ringing, you don't have texts, you don't have anything. So it's you and your thoughts and the brain is an amazing machine that is processing everything that came in at some point and organizing it and making sense of it and coming up with new outputs.Stephanie:Yes. Yeah. You just have to bike on down to Austin, when you get here, we can go on a hike and we'll be super creative and you'll be really in shape so...Ivonne:Awesome.Stephanie:It'd be great.Ivonne:Love to.Stephanie:If you had a podcast what would it be about and who would your first guest be?Ivonne:That's a hard one. I think it will be definitely something related with technology. It will about disruptive technology and new shield solutions. I don't know exactly it doesn't come to my mind what will be my first guest but I think that I would love to interview a woman in technology. I think it's a field where women are being very successful but it was not until recently that they really had a place on the table in that industry. So it would be very interesting to learn how that has been and how it feels to be one of these top technology companies, preferably if she is a founder of a technology company and see how she leaves and interacts in an industry that only until recently became recognizing female as leader.Stephanie:Yes. That sounds like a good one. I would for sure listen to that. Well, Ivonne, thanks so much for coming on the show. It's been really fun to get a peek into some of your marketing and digital strategies and yeah, it was just really fun feeling like I had a chance to glimpse into the future with you. Where can people find out more about you and Avocados From Mexico?Ivonne:So we, Avocados From Mexico on Twitter is Avos From Mexico and about me, I have the same in Twitter, Instagram, Facebook, LinkedIn is all Ivonne Kinser, I-V-O-N-N-E K-I-N-E-R.Stephanie:Amazing. Thanks so much, Ivonne.Ivonne:Thank you.
The online buying experience is always evolving, so it’s table stakes for companies to be on their toes and ready to adjust when the market tells them to. Especially when the company we are chatting about today was founded in 1948! But being prepared to adjust and actually making it happen are two different things. At DICK’S Sporting Goods, its customers, who are referred to as “athletes” are truly running the show, and Scott Casciato, who serves as the VP of Omni Channel Fulfillment & Athlete Service at DICK'S, is the man who takes their needs and delivers a seamless experience to them via DICK’S ecommerce platform and throughout their 700 retail locations. And with their ecommerce sales increasing by 100% in 2020, Scott and his team have had to rethink many things like: how to scale up operations during peak seasons, why testing every iteration on the website is key, how to perfect the buy online pick up in-store experience, and determine how to take their athlete's feedback and transform it into a funnel for change. This episode brought back a lot of nostalgia for me, thinking about the days of wandering the aisles of Dick’s in my high school days looking for a new lacrosse stick or soccer shoes. So it was fun to hear about how much has changed, and what investments the company has been making lately in creating the best customer experience possible for its athletes. Also, tune in to the end to hear Scott discuss the importance of great vendor relationships, how to future proof logistics, and the new in-store experiences that Dick’s is betting big on. Enjoy! Main Takeaways:The House Don’t Fall When the Bones are Good: Having a strong foundation is the most impactful thing a company can do to prepare for surges in traffic that might come during peak seasons or after highly-successful campaigns. You have to do the work, go through the load tests and constantly be improving the technology stack because there are no shortcuts when you are creating a scalable platform that can withstand anything you throw at it. With last year being a perfect case study to reflect on, dive into the data and pivot if needed so you’re ready for the surge!Bet On It … Then Test It: Building out an online experience that works requires constant testing. You can plan for outcomes and bet on how you think people will react, but until you test it, you can’t ever be certain. As Scott mentioned, following the path the data reveals can be surprising and sometimes opposite of what your intuition is telling you.Experiences For The Future: The shopping experience is going to continue to change, and the strongest companies are planning for the future by paying attention to trends and then creating experiences — both in-person and online — that will drive engagement with consumers and build trust and confidence in the company’s authority in the space. By investing early into an experience or a specific market, you set yourself up as the expert in that specialized vertical and become the retailer of choice for consumers.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@mission.org. Today on the show we have Scott Casciato, vice president of Omni Channel Fulfillment & Athlete Service at DICK'S Sporting Goods. Scott, welcome.Scott:Thanks for having me. It's great to be here.Stephanie:I'm really excited to have you. So I have this deep love of DICK'S Sporting Goods because there was a location in my hometown, eastern shore of Maryland, which I feel no one even knows where that is on a map. But back in high school, I would go almost every week and just kind of peruse through the aisles and look for new lacrosse sticks and shoes. And I didn't really have much money, but I remember just loving the experience and being there probably for three hours with friends, just kind of hanging out. So I was so excited when I saw you guys on the lineup where I was, "Yes, something I know well."Scott:Was that your sport growing up, lacrosse?Stephanie:Lacrosse and soccer.Scott:Nice, nice. That's great.Stephanie:Deep love there. So I'd love to hear a bit about how you got into this industry, because you had a funny quote where you said, "I don't know how I really ended up here," and I'd love to start there, how did you become the vice-president of Omni Channel Fulfillment & Athlete Service at DICK'S Sporting Goods?Scott:It goes back... I spent the early part of my career in software, supply chain software, and kind of even on the sales side, then moved into the operational side and then got into management consulting and did a tour duty in the management consulting ranks. And I got introduced to the founder and co-founder of a company called ModCloth that I was with previously. And they were looking for somebody to run fulfillment and customer service. And I just said, I don't know anything about, I mean, I know supply chain, but I don't really know anything about direct consumer fulfillment at the time. And the founder of that business was, "Yeah, I know, but you're smart enough to figure it out." Right?Scott:So and I have a bent for really high growth, high speed businesses, and it just kind of the way I grew up in my career and that was a really great opportunity. So I did that and I spent five years there scaling that business really significantly, hyper growth phase and it was awesome. I learned a ton about fulfillment and service. And then about five years in, I had this great opportunity to come to DICK'S. And the thing that was really interesting to me is, the question was how can we build a great service organization for DICK'S Sporting Goods? I'm like, "Wow, if I could do it at a much smaller company, what would it be like to come to such a great brand and try to do it here?" And and we did, right?Scott:And so we spent a lot of time building that for the first four years of my time at DICK'S and then had an opportunity to take fulfillment on. So it's interesting that I have some of the aspects of that, that previous role that I had only, a scale that is much larger and just been very, very fortunate to be with such a great business. And it's been awesome to work with the team at DICK'S.Stephanie:Okay. So you are leaving ModCloth, I mean, that's like strictly ecommerce and then you're coming to this, I would say very omni-channel company. I mean, you have over 700 locations across the US, quickly moving to digital, at least over the past couple of years. Tell me a bit about what that transition was like?Scott:I mean, and at the same time we were really building... We were just starting our transformation to building our own technology. So it was a massive... It was basically rebuilding what we had already had from an ecommerce business perspective. And I think fundamentally a lot of the things that I came in and the tools that I had were relevant, right? How you scale a business. I mean, that stuff is somewhat the same. I think one of the biggest changes was or a few of them were one, just having more teammates that knew a lot of stuff that could really help and drive the initiatives and the progress forward, whereas in a much smaller company, right? It's you're wearing so many different hats and you're doing so many different things here.Scott:It was a shock to me to say, oh, there's somebody that can help with reporting or data analytics and help us with these answers. So that was awesome. And then I just think we were all learning, right? So we were learning what we needed. We were learning what we wanted to be in customer service, we were learning what we wanted to have in terms of digital capabilities. We were learning how to run that business as we were deploying new technology, right? So how do you do pricing online appropriately? I remember a lot of conversation. How do you display things? What's the right... How do you check? What's the right checkout flow? And then we had, as all businesses do, you have to make a lot of trade-offs because it may not be the most elegant thing right at the beginning, but we just got to get it up and running, right?Scott:And so having those conversations can be tough, right? Everybody, and especially our business, we just have this DNA where we just relentlessly improve, right? And so it's tough to launch something and know that it's not the perfect solution, right, and then making sure that you go back and you iterate and you keep going, right? We just did that for a long time. But it was a lot of fun and it's really tiring, but it was a lot of fun.Stephanie:So that's amazing. What was one of the maybe projects or things that you felt most strongly about that you got maybe the most pushback on that people are like, nope, that's not a good idea?Scott:I would say, well, we had a lot of conversation about how we were going to set up, for example, in my world, we were going to set up customer service. And we continue to evolve that. I think it wasn't that people were saying it's not how we want to do it, I think it was really more what I was saying about, we want to own more of that customer service experience, right? So we had always been outsourced. And as we moved, as we did the transition, and our previous outsourcer did a great job. And as we move to the next wave of that evolution, we decided we really need to keep an outsourced view in some form or fashion of customer service, but we really wanted to try to start to build our own, right, because we were, "Wonder what we could do on our own?"Scott:So this conversation about, [inaudible] how do you scale for the hockey stick effect that we have at holiday, right, while maintaining the great experience that we have? And we want to in source, but then we want to scale a holiday. We just had a lot of spirited debate about that. So that was part of that conversation.Stephanie:Very cool. And so are you guys kind of now balanced approach when it comes to customer service, depending on what's incoming and how to route it?Scott:Exactly. Right. So we have a team of internal service people that take various types of contacts, and then we have a few outsourced partners that we work extremely closely with. And we balanced the volume across there. And then at holiday time, we scale up across all. And so it's turned out to be... And we're measuring that experience relentlessly. So it's been a great symbiotic relationship, I think, across all three of those.Stephanie:Well, now that you've touched on holiday, I do kind of want to go into peak season and maybe talking about, I mean, you mentioned that you went through this big technology evolution and implementing new things to try and get to where you are now, what did that look like, especially when it comes to preparing for big surges? I mean, I saw your ecommerce I think went up 100% in 2020 or something, so you guys have had massive growth. What did it look like behind the scenes to prepare for that plus peak demand?Scott:I think it's been this... We're very happy that we started when we did, right? when you think about what happened over the past 12 months and what has happened in the ecommerce world and the growth that everybody has seen, we're fortunate that we started four years ago down this path. Because the foundation that we built really allowed us to scale this year really quickly. We've been through all the load tests dynamics that you go through at holiday, we've built the technology stack that can support the traffic that we knew that we were going to get. We've been through the trials and tribulations of how to test, what to test, where to find the failure modes, and we've got really talented people that work on that stuff every day. We've built controls internally to manage where things might not be working appropriately and to be able to balance that.Scott:And as you think about what happened last year, specifically with curbside, it is the example of, it took us four years to become an overnight success type of situation where [inaudible].Stephanie:[inaudible].Scott:Right.Stephanie:[inaudible]. Who knew?Scott:Totally. So I think it was scaling for holiday. We scale every year for holiday. I think last year was one that we didn't quite know, nobody knew what was really going to happen. But I think we over-prepared, and we executed an extremely successful holiday because we just had every... It was so great to see everybody so engaged in solving that challenge and really thinking through every aspect of what might happen in holiday from fulfillment through the web traffic through customer service. And we really came together as a team and figured out all the ways that things could go right and wrong and covered it all. And we had a great holiday season because of it.Stephanie:That's great. So what areas do you think businesses are maybe under-prepared? Is it in the fulfillment piece? Is it in customer service? What are some of the top pillars that you guys covered down on that maybe some people might not be fully prepared for?Scott:I think that we do a great job in measuring and really paying attention to the athlete experience across all measures, right? I think we've pivoted from, I think historically in most businesses have been in a place where you manage internally, right? You're managing things like conversion or traffic or speed to athlete and things like that, and to be the customer, traditional service levels and customer service. I think those are all important, but I think if you take the outside in view, right, and you're looking at things like how are we measuring the experience, what's happening to that customer when they're out there and they're buying from us? But are they buying from us again, right, as an articulation of their commitment to the brand?Scott:And then how do we influence that purchase behavior? And how do you think expansively about that in terms of not only the shopping experience online that they have, but the post-purchase, the delivery experience, the customer service experience, how are you really measuring that data and getting good information and causal information to figure out how you can drive really great lifetime value? And I think we do that and we're really starting to do that really well across our business. And we've gotten so much support for that outside in view, across our leadership team as well that it's become a real engine of thinking across our teams.Stephanie:I mean, it seems like that holistic view is really hard for a lot of companies to get to though. I mean, I hear about a lot of companies trying to consolidate their tech stack, marketing stack, put it all in one area that things actually are connected and you can have attribution and you can see the LTV. How do you guys think about having that view that allows you to make decisions?Scott:I mean, I think that it's philosophical at some level and don't get me wrong, it's hard because I think when you look at the business on a day-to-day basis, all retailers, right, especially those that are public are driving towards hard goals. We take a much longer term view of things generally across the business, which is really refreshing and great. And so it allows us to really make good decisions. When you think about what we're measuring, how we're investing, we're not investing, I mean, obviously we care about the quarter and we care about the year, right? Don't get me wrong, but I think we're making investments that are in the long-term interest of this brand and our customers. I think, we're a really large small business in that regard. And I think we've been able to energize our teammates to deliver that experience on the front line, but also make the investments on the back end of the house that allow us to do that.Stephanie:And I see you guys have been making some big tech investments. I saw, I think Commerce Hub, you did a multi-year deal with them. And I saw something about the vendor partner program that you have. We can kind of plug and play into a bunch of vendors and have an endless aisle. And I was, wow, that could be game changing to be able to pivot quickly and offer, get to the consumer, right, wherever they are, whatever they need, especially in times right now where it's very uncertain. So it seems tech is a big piece of that, towards that investment philosophy right now.Scott:It is.Stephanie:How are you figuring out what you need and how to put the proper pieces in place?Scott:I think we have over 500 vendors in our drop-ship program. And connecting to it has them, and understanding what the inventory is, and getting them to send us the right inventory, and then order information back and forth in real time is incredibly important, which is why we made the investment in Commerce Hub, it has been a great partner for us for a few years now. And it's easy to use. So I think that's that was great for that aspect of our business. I think our vendor relationships are super strong and we're fortunate that we have them because it allows us to be really creative in the way that we go to market. Scott:And I think we're also continuing to build great brands internally, right? And so if you think about, we just recently launched our first brand and it's been a great success so far. It's great stuff. We had got our [inaudible], if you haven't tried it, you should.Stephanie:I haven't. [inaudible].Scott:That's awesome. It's a partnership that we did with Carrie Underwood about six years ago, and it's quickly become our number two selling women's line.Stephanie:Wow. That's awesome.Scott:And then we launched our DSG brand a few years ago, or a year and a half ago, which is really a value-driven brand and with very high quality, right? So when you think about the continuum of our brands, we have very specific and different strategies and they're complex depending on what we're trying to achieve within a given brand or category within that brand. But I think we're fortunate that we've built such great lasting relationships, because again, I think it gets back to, we take a longer term view of things and we really, I think we treat our vendors as partners.Stephanie:Yep. So key, especially in this industry where so much is happening, so much is changing quick and people can get burned really quickly too.Scott:Right, right, right.Stephanie:It also seems being able to plug into a vendor system like that is important, especially around... It seems a lot of companies are doing private label type of things and launching their own brands. I mean, it's not fully reliant now on the big brands and being able to have that flexibility to pull people into your ecosystem that maybe could have never sold at a DICK'S Sporting Goods before, that seems amazing and really allows access in a way that wasn't here maybe five years ago.Scott:It really does. We're always looking for those bets to make with new and upcoming brands. And our vendor director job channel is a great way to sort of test some of these things. So that's definitely, you hit the nail on the head for us. It's a strategy that we actively have and it's nice because my team who manages that part of our business we'll work with our merchants to say, "What could our strategy be with the supplier or partner X?" Right? Some of these folks are small businesses that can't handle our volumes. So if we buy a little bit more, we can test some of them or we can test it in the vendor direct channel. So it's been a real tool for us.Stephanie:Testing's interesting too. I could see kind of doing AB test quickly and see if people like this product and if they like this one more, okay, here's what we're going to go. Maybe we'll circle back with you next year in a much less risky way to bring people in.Scott:We've gotten really good at testing and specifically on the site with how we're thinking about the experience online. And we test almost everything these days, right? I mean, there's some stuff that I think is just go do things, some go do things that we do. But I think generally speaking, we've really developed a muscle around building an experience and testing it and iterating on it to figure out what's really resonating with the athlete most. So everything from shopping experiences on our site all the way down through the conversion funnel to fulfillment, right? And speed and how we're communicating with our athletes.Scott:So I think we've learned so much, and I'm like constantly reminded when we get these, we all kind of make bets, right, when we launched these tests like what do think's going to happen? And I think I'm wrong so often, it's so important to test.Stephanie:Yep.Scott:Good. Because what you think the consumer is going to do they just don't. And even when you think about surveys, I think there's this everybody lies concept, right? And it's true...Stephanie:And depends on what state they're in or where they're at in the day.Scott:Right, right. So I think it's just so invaluable to us.Stephanie:And we do surveys on the show sometimes just to see who do you want on, and how am I doing? And it's, well, it's depends on probably where that person is, if they're happy, if they're sad, it could be different depending on the place that they're in.Scott:For sure.Stephanie:So what's an example of a test that you ran where you were so sure, you're like this one's going to win, everyone was kind of on board with one scenario winning and then the results come back and everyone's wrong?Scott:That's a good question. We just ran one recently that I did win on, which is the one that was top of mind for me coming into this. Let me talk about that one for a second. So the one we launched on same-day, we're trying to figure out what are our athletes appetite is for same-day services. And we did definitely get a lot of engagement on the test. I kind of thought it was going to be more than it was, but it was still interesting, right? So I think that's something that we're going to continue to have conversation on.Stephanie:They wanted it, the majority of the [inaudible]?Scott:I think they did. It wasn't as much as I would've thought, really.Stephanie:Because that's an interesting one that some people on the show said, people just want to know when it's getting there, they're okay if it's not same day, versus if it's more of a commodity product, you better get it to them the same day. And to kind of seems it depends what it is and how much delayed gratification someone can have on it, it depends, it seems.Scott:Yeah. Some of the tests that I think that we've run that have been less intuitive, I just think how products are set up on the site and how people search, right, and find products like you would think that sometimes when you put the best or most visible sort of notable product of the top search results, that's going to create a better conversion and sometimes it just doesn't, right? So it's really people come in I think with a lot of intent around how they're shopping and sometimes what you think is going to happen just doesn't because I think there's so many different ways that people shop.Stephanie:Yep. How do you think about shifting the website either, from what you learned from last year or when you're approaching peak season, are there certain key elements that you adjust knowing that maybe the consumer's are in a very different mindset than they were at any other time in history probably?Scott:Yeah. I think I can speak more to the way that we think about fulfillment in this regard. I always, I historically had thought, that's another example of what I thought was going to happen. I historically thought that during, for example, Black Friday weekend speed was really important, right? I need it, I want to get it fast. And it turns out that weekend in particular speed is not the most important, getting what you want is the most important, right? So getting the deal is the most important. I think it makes sense because most people are thinking, I've got three or four weeks that this thing can get to me. I'm not super concerned to get it next week, just to make sure that I get it, right?Scott:So that's one that we adjust in terms of making sure that we're really being honest with how we're going to fulfill. Thankfully we've got an extraordinarily resilient fulfillment network and we do really well in speed and but historically had been surprised as we've really measured that one over Black Friday weekend. It's really about getting the deal, not the speed.Stephanie:Versus Christmas when everyone's probably last minute shopping, it's probably opposite.Scott:Very different.Stephanie:Okay.Scott:Very different. And as you get into December and you get through towards the ground cutoffs and you get, depending on what's happening, the speed becomes a real issue. Last year was was nuts. I mean, FedEx was running commercials, right? They talked about the speed or buy early. And we definitely saw a little bit of a shift in terms of how people were thinking about buying.Stephanie:So how are you building up that resilience fulfillment network that you mentioned to be able to basically say I can offer anyone the endless aisle, we have unlimited of these, in one moment and then be, okay, now next month got to go, got to be there in three days or less type of scenario?Scott:I think you mentioned it when we kicked off the show, it was we've got over 700 fulfillment locations when you think about our store network, which is a blessing for us because it allows us to really, not only be closer to our athlete and get things there faster, but also allows for a lot of flexibility when... It's just load balancing, right? When you think about a business that has a couple of three, in my past one fulfillment center, when that thing gets backed up, or you have a labor problem or you have whatever the case, would be trucks that don't show up on the receiving dock or the outgoing dock, you're kind of backed up, right?.Scott:And so while that definitely happens across everybody's network, including ours, having all of these different nodes that are moving product out each and every really helps mitigate the risk. And so it also helps us, at peak time, it helps us staff up and get stuff out. And we have we've built a really sophisticated way to manage the way that orders are routing. So we're able to identify where we might have congestion points, for example, and try to proactively avoid those as we see those things happening, right? So we can move orders to one node or another, or block a node if we've got a weather issue or something, or we've got, in the fall when you have hurricanes in Florida, right, or in the Southeast, we're able to really change the way that our orders route to get product out of different places that aren't having those issues.Stephanie:And is that kind of done in the background where it's looking at all these different inputs and then kind of making decisions that you can come in and adjust if you need to, but it's already routing it for you in the background?Scott:Yeah. So part of it's automated part of it's people, right? And it's still a lot of people, right, washing the switches each day. But we've got a great team of people that are communicating, we're communicating out of our stores to my team and fulfillment. We're communicating from my team into stores and we're using the technology that we've built to really manage the capacity and the inventory across the entire network.Stephanie:It seems that is so important too you when you essentially have two business units when it comes to fulfillment, you've got your store locations with one set of data, inventory is probably very hard to track because it's always getting grabbed, it's always getting shipped out, and then you have just maybe a fulfilment center that's a whole different beast probably. How do you get to that consolidate view? Is that part of the backend tech that's kind of looking at it at a higher level, treating it all as one?Scott:It is and it's definitely complex for the reasons that you noted. And it creates, sometimes it can compromise how close we can get to the athlete if we think we've got a unit in Austin, Texas and we actually don't. The fortunate part is instead of canceling that order on you or that unit on you, it's going to go to maybe it'll go to a Dallas store, right? And we can still stay pretty close to you and get it to you. And we're also trying to look at things like, how do we keep packages together? Of course, anybody that's listening to this that manages freight will say, yep, really important from a cost perspective. And frankly, even from, as I mentioned earlier, that athlete experience, people want to get one box, right? I don't want to order three or four different things and get three or four different boxes. And sometimes that's unavoidable, but we're trying everything we can to not let that happen.Stephanie:Oh, blessing.Scott:Totally, right?Stephanie:I get, one company I'm not going to mention their name, they will send a can of soup, anything a bone broth. I mean, it's in these little bags and they just come one at a time. I'm like, "Oh my gosh, I just would have rather just gone to the store and picked it up myself than getting random of one item at a time."Scott:It's so wonderful when the customer experience need and the business need align, right? So when you think about, nobody wants to ship more packages to you, right? We want to get it to you, we want to get to you fast and we want to get it to you in one package. And that's also a great experience for you. It's the same thing we talk about with customer service, which is a traditional metric that people manage as average handle time, right? How long are [inaudible]? And I'm so careful, we collectively are so careful with this metric because it can be so disastrous to the teammate that's on the other end of the phone if they think they're being managed to a handle time, right? I don't want to just get you off the phone, however, and you need to use it for all kinds of different scheduling and making sure you have enough people on the team.Scott:But what's really aligned is generally people want to get to an answer pretty quickly also, right? I want to have an efficient, valuable use of my time. I want to get to an answer and then I want to move on with my day. So that's another example of where if we can do it right and align those desires, we're going to create an awesome experience.Stephanie:The unintended consequences, pizzas is such a tricky thing with thinking about designing roles and KPIs. I mean, I'm doing it right now. I'm thinking about sales and building a sales team and being like, oh wait, this might incentivize bad behavior.Scott:You got to really think about it, right?Stephanie:You just think really strategically about it.Scott:The outcome or the impact is very different than the intent in some cases.Stephanie:Yep. Are there any external inputs right now that you think companies aren't preparing for? I'm thinking about the algorithms that are kind of running everything behind the scenes when it comes to your fulfillment and things like that. Is there anything that you guys are watching now that maybe you weren't watching a couple of years ago and letting it help influence how things are routed or how things are kind of being redirected, anything like that?Scott:I mean, I think we're constantly trying to get to be more precise, and we're very fortunate that if everything goes right, we can get you an order really, really quickly. So we're really trying to pay attention to, where are things not going perfectly and we've called this thing the perfect order, what's our perfect order, right? And how do we get more of those? So we're spending a lot of time thinking about how we can perfect our fulfillment network. And I mean, it is, as you can imagine, just an infinite number of variables that dictate how this thing goes. But we're working a lot on that. I do not think that...Stephanie:[inaudible] like local stuff, because that's something that kind of came to mind. You're paying attention to weather and higher level things are you down in the weeds of, okay, well there's a festival this week here so that means... Is it that [inaudible].Scott:It can be. I mean, for example, when we're doing a hot market event, so Super Bowl, NCAA Tournament, they're national events, but their inventories largely local, right? So we're really paying attention to what the traffic is doing and the inventory is doing it at those local levels for sure.Stephanie:I'd love to talk about events a bit because I know that's a focus is the athlete experience online and in person as well. And I saw that you guys are opening more retail locations. You're opening, I think I saw a golf center, I soccer center, I mean, these full on experiences. And I'd love to hear how you guys are thinking about that.Scott:I'm glad you mentioned that we're really proud. We just opened recently the House of Sport up in Victor, New York, which is an expression of what we think the future can be for DICK'S Sporting Goods. And it's really an experiential retail location. So you can go in there, obviously we've got golf simulators and we've got fitting in there. We've got rock walls to climb. We've got an outdoor fitness field where we're doing things and we're engaging the community in different ways. So we're running clinics and figuring out how we can get local teams into their... Engaging in the community in this way has been a part of our brand since 1948, right? So I think, if you read the story of DICK'S and how we were involved in the Binghamton New York community, when the business was founded, it'll give you a sense for why this is important to us.Scott:And we just believe that, we say it all the time, we believe that sports makes people better. So how do we think about engaging in the community where we're at? We've done this forever in community marketing, and you see how we donate equipment to local teams and so forth. This is kind of another evolution of that, where we think we can make a big impact, we can change the way that people think about retail. And I think it'll quickly get to how do we merge the online and the brick and mortar or traditional retail experience? So I think that's a place that is really exciting to us right now.Stephanie:I was just thinking about, how do you create, you have a view where you know this person came in to this event and they were using the golf simulator, and they really liked this club. And then they either bought in store or maybe four weeks later they ended up online and bought the one that they were using? Do you feel you're moving in a direction where you're going to have that viewpoint? And it's not a hard time to get there.Scott:Yeah, I think we're getting there. I think we're really focused on data and analytics, right? And so I think our ability to stitch together these experiences, we're building that muscle. I don't think that we're totally there yet, but we've got really smart people that are thinking about this. And I think we're moving in that direction because that's the key. We're not really worried about what channel you buy in, right? I think it's more about, are we the retailer of choice for you, right? And however that experience, the experience that we can build for that, it's important to measure it because then I think it unlocks the investment in the targeted areas that are going to drive more of that for our athletes. So I think that's where we're really focused.Stephanie:Have you thought about creating essentially kind of a guide shop, but you have the soccer experience or something, and then just a small shop where maybe you can look at a few other things, but then essentially you're going back online to order whatever you played with and got to experiment with, or are you doing full on retail location as always, and then often this area we're doing our experience center?Scott:We haven't done really pop up experiences, guide shop experiences like that. We're moving more towards, how do we create a more scaled experiential experience in store and then how do we measure that in terms of who might go online to buy.Stephanie:Mm-hmm (affirmative). I love that. I'm excited to see... I need to visit one of those stores, especially the soccer one. I mean, I don't know what it's going to be happening there, but I want to be there.Stephanie:I want to hear, which I feel you'll have a great answer for is what are you all most excited about right now over the next one to two years? What are you most passionate about?Scott:We're excited about a lot of things. And as usual, we have a very full plate. So I think things that we've already deployed that we'll continue to refine, things like our curbside program or a buy and pickup in store program for online, we're really excited about that. That's got a long runway of improvement, enhancement, and creativity that's going to be placed into that program. We are really excited about this merger of... I'm really excited about the merger of stores and online specifically around becoming a trusted advisor to our athletes. So if you think about the breadth of the teammates that we have, and when you walk into our stores or you talk to our people online, everybody's got a passion, right? Your passion is lacrosse and soccer.Stephanie:Mm-hmm (affirmative).Scott:How do we think about unlocking that potential, right, in terms of then being able to help our customer, whether that customer is buying first player pair of soccer cleats for their son, to getting ready to play club soccer, to getting ready to go off and play soccer at a D1 level or beyond, right? So how do we look at that continuum of expertise and really become that trusted advisor, both online and in our stores? And I think that is incredibly exciting venture. And we do it well today. I think there's an opportunity to do it even better. So we're really excited about that. We're really excited about the assortment, right, that we're going to continue to launch online. I think it's going to be differentiated. I think it's going to keep our position in the market really strong.Scott:So I think the product that we put in there, the expertise that we put in there is going to be differentiated in the market, right? And that I think is probably more incremental and more incremental expression to the core business. And then we're going to continue to press. Game Changer has been a great business for us for years. And that team is great. And they continue to build a technology that service the baseball market. But we're always looking for different ways that we can expand or innovate across the industry.Stephanie:I love that, you know what? We need like, what do you do after college? I always think about that and I'm like, I loved playing sports. But then you start working, and then you have kids, and then you're, I still want to play, but how do I get back into it? And something is missing there, Scott. [inaudible].Scott:No, but I love... So that's who we want. That's another sort of persona that we really want to love to serve in our stores. Because I'm one of them.Stephanie:I'm your person.Scott:Right.Stephanie:We're the people.Scott:We're the people. And I think what we want to be able to do, I love talking about this. I think in our stores and online, our ability to listen and inspire, right, how do we help you meet that goal, right? "Hey, I'm doing a couch to 5k first time. I'm starting to get active." Or, for me, the 5'8 guy that always had a dream of the NBA that never came to fruition because my vertical is about that high. I still play. I want to make sure that I can get all the gear that I need to be competitive, right, or to achieve my personal best.Scott:So I love the fact that we can really positively impact people's lives in that way. And I think we want to make... I would love to make sure personally that anybody that walks into our store and knows that we're not just a sporting goods retailer, right? I think we want to make sure that we're helping, we want to facilitate you achieving your dreams. And then we talk a lot about that internally. So if we can translate or transmit that feeling to our athletes, I think that's really powerful.Stephanie:And also makes me think about creating custom leagues too, where it's, this is a different kind of league. It's not the traditional school. It's not even people creating their own volleyball leagues. It's we are a part of this. We're making sure that this can happen for people who struggle to even find those networks. I mean, I know back when I was in DC, I looked for where's some other women who play lacrosse? I don't really want to play with guys who are going to be checking me and I count find it, super hard to find. I mean, it's easy to find some sports in a community setting, but it's very hard to find people in certain other sports settings.Scott:You're right. There's a social, I don't want to, careful to say social network, but there is this idea of how do I plug into people that are me within a certain geographical area, right? That would be interesting. That's really interesting. Thanks for that one. Let me...Stephanie:Take it back to leadership. We just need a parenting kit. It's, here's everything you need so that we can go play our sports and then your kids are entertained. They get many lacrosse sticks. You go there and then I'll go off on my own so I can actually play, give me the kid.Scott:I love that idea.Stephanie:I want to think like such parents. Anyone who's not a parent is probably, "What are y'all talking about right now?"Scott:What are you talking about? Yep.Stephanie:Yep. All right. So 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?Scott:I think so.Stephanie:Okay. So I'm sad, I haven't asked this yet and don't know this, but what is your favorite sport?Scott:Basketball.Stephanie:Oh, nice.Stephanie:And who's your favorite sports team?Scott:It's always been the Chicago Bulls since back in the day, which is probably blasted me because I live in Pittsburgh. So to not say football and the Pittsburgh Steelers is a problem.Stephanie:You'd probably get egged.Scott:Probably. But they're close second.Stephanie:That's good. What is the nicest thing anyone's done for you?Scott:Oh, wow. I'm going to struggle. I'm going to go to my kids. I think my kids being, this is going to sound so cheesy, but it's so serious. The way that my kids treat other people with respect and kindness, I think is the thing that comes to mind for me first. And I know that's probably not the answer that you would normally get.Stephanie:Nope, I like it.Scott:To me that's pretty important. So I'm really proud of them. And I think that's probably the best thing that somebody could do for me.Stephanie:I love that. There's so much you can learn from kids. I think about that all the time. So I'm the person who is here for those cheesy kind of kid answers. You're in the right space. What's one thing you don't know that you wish you understood better?Scott:American history comes to mind?Stephanie:That's a good one.Scott:I don't think that's on topic, but that's the first one that comes to mind.Stephanie:When you want to feel more joy, what do you do?Scott:It's going to sound crazy. I tell people, thank you.Stephanie:Mm-hmm (affirmative).Scott:Right. So I just believe that there's a lot... I get a lot of energy from being grateful, right? And so that's what I do. If I'm really feeling a little down or if I'm really stressed or some of the times the way that I work out and I get the endorphins mode going, that's one way to do it, and the other way is to be grateful for things. So I feel that's the way I get a lot of energy.Stephanie:I love that. All right. And then the last one, I mean, it seems you guys are very much ahead on a lot of things within the ecosystem. What do you do to stay on top of the trends? Are you watching other companies? Are you reading things, what are you doing to stay on top?Scott:I think it's a combination of experiencing and reading. I don't read nearly enough, it's hard, right? There's so much the content that comes out and not enough time. So I'm trying to just experience things out in the wild right? I'm talking to a lot of people, whether it's parents at a game or if it's just my own experiences online, and I'm trying to translate that to what's happening and why companies would do things a certain way. And then my team is doing the same thing. So I think we're trying to stay close. We're trying to stay close that way and certainly reading and engaging in conversations like this also kind of help.Stephanie:Good. That's awesome. Well, cool. Well, Scott, thank you so much for joining us. It was really fun to hear all about what you guys are up to. Where can people find more about DICK'S Sporting Goods and find you?Scott:I think www.dickssportinggoods.com. For the story of Public Lands and Golf Galaxy, and you can find me at LinkedIn, on LinkedIn.Stephanie:Amazing. Thank you so much.Scott:Thank you so much for having me. It's been a great time.
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.
The RailsConf Scholarship Program (https://railsconf.org/scholarships) 03:12 - Tram’s Superpower: Getting 8 Hours of Sleep Per Night! 04:08 - Leah’s Superpower: Being a Companion to Long-Distance Runners 04:55 - Stefanni’s Superpower: Doing Things She’s Terrified of Doing 05:34 - Being Afraid and Grappling with Self-Doubt * Asking Questions and Being Vulnerable * Call-Out Bad Behavior 12:34 - Team Psychological Safety 17:20 - Education & Learning Environments; Tech Journeys * Ada Developers Academy (https://adadevelopersacademy.org/) * The Turing School (https://turing.edu/) 27:52 - Making & Noticing Progress; Comparing Yourself to Others * The Confidence Code: The Science and Art of Self-Assurance---What Women Should Know (https://www.amazon.com/Confidence-Code-Science-Self-Assurance-What-Should/dp/006223062X) Reflections: John: Finding new ways to be of service to other people. Leah: What can we proactively do to make our space safer and more conducive to diverse thought? Mando: It’s okay to make mistakes and not be perfect. Steffani: How common it is to openly talk about these things in the Rails Community ❤️ Tram: Representation matters! Humanization and inclusivity. Calling people out. Lending Privilege -- Anjuan Simmons (https://anjuansimmons.com/talks/lending-privilege/) Transcript: JOHN: Hello and welcome to Greater Than Code, Episode 235. I’m John Sawers and I’m here with Mando Escamilla. MANDO: Thanks, John. And I'm here with three RailsConf scholars who are going to be joining us today, which I'll like to take turns introducing yourself, maybe starting with Leah? LEAH: My name is Leah Miller and I’m a Platform Engineer at Highwing, which is an insurtech startup based out of Denver. Before making over the switch to tech, I spent almost a decade in the insurance industry primarily working as a production underwriter. In my spare time, I enjoy running and craft beer and frequently, the careful combination of the two. I’m also a new dog mom to a rescue pup named Orla. MANDO: Great. Tram, you want to go next, please? TRAM: Yeah. So hi, everyone. I'm Tram Bui. I’m currently attending Ada Developers Academy, which is a tuition-free coding program for women and gender-diverse folks in Seattle. The program includes an internship match with a Seattle tech company. So currently, for my internship, I work as a Developer Relations engineer and what this means is that I try to make it easier for Rails developers to deploy their apps to the cloud. Outside of coding, I try to maintain it and improve my high school tennis skills. I also like to read books and also, thinking about my next great public transportation adventure and volunteering for local nonprofits. And then Stephanie, I can pass it on to you. STEPHANIE: Hi, I'm happy to be here. I'm Stephanie and I've been working with Rails for the past 4 years, but now I'm trying to transition from dev full-time to having my own projects. And besides software, I also like to talk about plant-based diet, financial independence, and mental health. Also, if you have noticed my accent, I'm from Brazil, but I live in Vancouver, BC and yeah, I'm really happy to be here. JOHN: Awesome. Welcome to the show, everyone. So this is just a little setup here. Not every year at RailsConf, but most years at RailsConf, we do have a special episode where sometimes, we've got many of the panelists are together and so, we can record in the same room, which is obviously very novel for us. This year of course, it's all online. One of the things we’ve also done is bringing in some of the people who are part of the RailsConf Scholar Program, which is the program to expand access to tech conferences to people that are underrepresented and to give them some guidance on how to make the most of their experience at the conference. We always think it's great to get the opinions of people that are brand new to this industry and see what their perspective is on everything. So we're going to start off with our usual question which is what is your superpower and how did you acquire it? We can go really in any order. Who would like to go first? TRAM: I can go first. So my superpower would be the ability to get 8 hours of sleep a night [chuckles] and I think I acquired this power – I think I was very just like, I loved nap time as a kid and I grew up knowing the importance of a good night's rest. I think for me to be my best self, that’s one of the big things that I need to have. I think growing up and going to college, it was very like, “Oh, sleep is not important,” but I always had noticed the importance of sleep and I think it does hustle economy, too. People are very fast to just cast aside and was like, “You can sleep when you're dead,” but I'm like, “No, if you don't sleep, you will die faster.” So I'm going to take every opportunity that I can do at least get a full night's rest. LEAH: I am so jealous of that superpower. [laughs] I think mine feeds into a little bit of the opposite of that, but my superpower is the ability to keep people company when they're running through the night during a 100-mile races, or ultra-marathons. So people running it 3:00 AM, 4:00 AM, getting really down, needing someone to lift them up, I can run alongside them and sing, or just be a companion to keep them motivated. I think I acquired this skill from being a middle child. I spent a lot of time just entertaining myself and being pretty independent and if you can entertain yourself, it's pretty easy to extrapolate that to others, keep people going, so. [chuckles] STEPHANIE: I would say that my superpower currently is a work in progress actually, but it's doing things even if I'm terrified of the way I always struggled a little bit with self-confidence. How I acquired that, I actually had to go to therapy first to build the foundation, but now I think I've been getting pretty good at it and the feeling of doing the things that you're scared at the end is a really good feeling. You feel like a superwoman. [chuckles] JOHN: Oh, those are all such great answers. I want to dive into each of them, I think oh, my thoughts are jumbling up because I want to ask questions to all of you. Well, I think I'll start with Stephanie. That's an amazing superpower and it's definitely going to serve you well. It's something that I've had to learn as I develop my speaking career at the same time. Even just thinking that it was possible for me to get up on stage and do that, that took a while to get there and then actually doing it also took a lot of practice. So certainly, that's going to be awesome. MANDO: Yeah. It's so easy to just keep doing the things that you're good at and try to ignore, or maybe push off the things that you're not so good at, or you don't have that confidence in, Stephanie, like you were saying. It's funny, I keep relearning this lesson over and over again, there's this project at work that I've been putting off and pushing the JIRA ticket over just because I kept telling myself that it wasn't important and that I could do – other things were higher priority. It's just because I was kind of scared, but I wasn't going to be able to do it as well as I could do the other things. I just had to sit down and do it and then I pushed up the PR and it got ripped to shreds by the other wonderful, [laughs] amazing engineers that I work with. But it's good. I didn't die. [laughs] So it’s funny how we have to keep learning these lessons over and over again sometimes, I think. JOHN: Yeah, that reminds me that there's a related skill in there also, which is realizing when you were afraid of something. Sometimes you think, “Oh, it's just not important that happened right now.” MANDO: Yeah. JOHN: As an excuse, but once you realize, “Oh, I'm actually afraid of how this is going to go.” It allows you to approach it differently. You can be like, “Oh, okay, well that's what this is. All right, then now I know how to like face it, head on rather than pretending it's some other reasons.” So I think that that's really important as well. MANDO: Absolutely. Yeah, and it took me a couple of days to [laughs] realize that that's what I was doing and it wasn't until that was the last thing I had to work on for the sprint after I had reshuffled and moved everything over and then looked at my other teammates, JIRA boards to see if they had any stuff that I could help out with [laughs] that finally I was like, “Well, okay, I guess I'll just do this one.” TRAM: Yeah. I think sometimes for me, the anticipation, or the thought of it is even scarier than actually doing the task itself. I've had this happen to me so many different times. For instance, with the podcast, I'm like, “Yeah, this is something that I want to do because I like listening to podcasts,” but I was like, the nervousness and the scariness of putting myself out there and just thinking about it leading up to this moment, it's so much scarier than actually being in the moment and talking with y'all. So yeah. LEAH: I think part of it, too is recognizing that your feelings are not existing in a vacuum. There's other people that experience the same insecurities, or just going through what you're going through. We were interviewing someone a couple weeks ago at my company and just talking about the stressors of being from a bootcamp and being hired into an engineering organization as either a junior developer, or a mid-level developer, or whatever level, but just knowing that your background isn't a CS degree, or it's just a little bit different than what other people have. And then having that insecurity of I'm pushing up a PR and then are 20 people going to make comments on this and then that gets pushed to Slack and everyone sees all 20 comments. Am I going to be laughed at, or looked at as less than? So it's just nice to express that to someone else and have them regurgitate the same feelings, or just reflect back to you that you're not the only one who's having self-doubt in that way. MANDO: Yeah, and it's tough for me at least to remember sometimes that I come from a very different place privilege wise than other folks on the team. So it can be a lot easier for me to do stuff like, just push this PR up and ask for comments because my experience may be very different than someone who doesn't have my same background, or the amount of experience that I have, or the kinds of relationships that I may have with other folks on the team. I strive to help create spaces whether at work, or wherever where people can feel comfortable asking questions and not worrying about people coming in and being overly critical, or negative, or whatever. But my lived experience is very different than others. That's something that I need to keep in mind that you can't always just assume good faith that everyone's going to treat you the way that you would maybe treat them and I have to actively work and actively communicate to people that this is that kind of place. JOHN: Do you find that there are specific things that you do to communicate that, or at least to make that ambiently knowledgeable to the other people in the team? MANDO: That's a good question. I think the easiest thing you can do is make sure that you're modeling both sides of that behavior like, asking a lot of questions, putting yourself in vulnerable situations, and then also, making sure that you always jump in and respond positively when others do that so that you can help set a baseline. I think of what the behavior should be and what behavior is expected, and then the second thing is always making sure to call out behavior that doesn't hit the bar. I can't remember where I first heard this, but my buddy, Jerry, he's the one who always drops the phrase to remind me, he says, “It's as simple as saying, ‘We don't do that here.’” It doesn't have to be a big deal. It doesn't have to be a huge problem, or anything. Just when there's behavior that you don't do here, you say, “We don't do that – [laughs] we don't do that here.” It's as simple as that. LEAH: I love that. MANDO: Yeah, Jerry's awesome. JOHN: I think this is a really interesting topic because I'm always looking for examples of ways to make that easily communicated in a team environment. So have any of you had experiences where maybe someone else on the team was able to communicate some thoughts of psychological safety, or things that made you more comfortable being who you were on the team? LEAH: So I can speak to the team where I work. We're a startup. We have about 15, I think maybe officially 16 people now and we have, I think just hired our fifth female to join the team, or a fifth non-male to join the team. We have created just a private channel for all non-males on the team in Slack where we can communicate with each other and we've set up a happy hour once a month where we can meet. You don't have to drink alcohol. You can just sit and chat and we just have an hour set aside where no conversation topic is off limits. It's just really helpful to just set aside that time where there's no outside influence and it's just the five, or six of us, or however many there are right now [chuckles] who can join and just chat through what's a win for the week, or what's a struggle for the week. I think part of it is giving each other the space to express what's going well and also, express what's going wrong, and then see if others of us on the team can be a champion for the other person and just offer support where possible, or step in when something's happening that we need to maybe put a stop to. Our private channel is lovingly called The Thundercats, [laughs] which I'm pretty fond of. MANDO: [laughs] That's fantastic. You make it almost sound like a union kind of [laughs] where y'all can have this place where you have this ability to do collective action, if necessary. I think that's just fantastic. That's amazing. LEAH: And I should say that the men on our team are fantastic. So this is not like a – [laughs] [overtalk] MANDO: Of course, yeah. LEAH: Escape hatch like, we're all upset about stuff, but it's just nice. Regardless of how wonderful the men on the team are, it's nice to have a space for not men. [chuckles] STEPHANIE: Yeah. I think that for me, from my experience, the one that I was more comfortable with was at my first Rails job. It was still in Brazil and the team was totally remote and they did lots of peer programming. They did a great job in onboarding people, but peer programming was way more than onboarding. It was a common practice and I was just like, “Wow, this is so cool.” You could learn so much more beyond just a code and besides that, I felt really comfortable in seeing that no one was scared of doing anything wrong like, there was a really good communication. So I think that the main thing that needs to be worked at, when you're working in a team, is to make sure that everyone feels safe to do their stuff and they don't feel like, “Oh, I'm going to be judged,” or “I don't want to try this because I don't want to have to handle with anything from management,” or whatever. So maybe having that feeling, “Oh, we make mistakes here. We are humans, but we try to make the best to learn from them.” That's a good way to improve this team behavior, I guess. [chuckles] JOHN: So you were able to see the other people on the team, that you were paired with, making mistakes and being okay with it and just that became obvious to you that that was the thing that happened all the time and it was fine. Right? STEPHANIE: Yeah, and especially because I was also self-taught. I actually went for computer science for one year, but I dropped out. I always had this idea that people with more experience, they know everything. [laughs] That was like a mindset that I changed and it made me feel way more human, more than anything at first, and that's when I started seeing how much it's important to think of your team and how much that affects everyone and in your company as well. MANDO: First of all, shout out to comp sci dropouts. I made it just a little bit farther than you, but I know exactly where you're coming from. I had that same thing in my head for a very long time that these folks with their degrees obviously must know so much more than me and I have no idea what I'm doing. That's one of the things that I've always loved about the programs, like the RailsConf Scholars, is that for me, one of the things that helps combat that imposter syndrome thinking is working with folks directly who are earlier in their careers, or have less experience. So not only do you get to help them, guide them, and show them things and stuff, but it really does help serve as a reminder of all the stuff that you do know. There's nothing better than talking about something with someone, being able to explain it to them and help them, and then you walk away and you're like, “Oh yeah, I do know some things, that's kind of nice.” TRAM: I think in talking about dropping out of a major, or switching majors, my experience and my journey into tech. In college, I was quite afraid. I had a requirement to take a CS class, but hearing all these horror stories from other people made me delay taking it. I actually took my first CS class, my junior year of college and while it was really challenging, I definitely enjoyed it way more than I thought I would. But since I took it too late in my college career, I couldn't switch my major, or couldn’t minor, or major in it and that really stuck with me because, I think going and finding the ADA Developers Academy, which is a coding program, it’s like it was my second chance at doing something that I wanted to do, but didn’t have the time, or didn't have the confidence to do in college. One thing that is nice, that I keep thinking about, is that even if I did do a CS major in college, that environment instilled with the competition of it and instilled with, I guess, people who may think that they know more than you may have not been conducive for my education. But what I really enjoy about the current coding program that I'm in is that it's all women, or gender diverse folks and we all come from all different walks of life. But one thing that we have in common is being really empathetic to each other and that environment, I think made all the difference in my ability to learn and to see that there is a community that would champion me and that would also try to uplift other people. JOHN: Yeah. I think that highlights the importance of that initial learning environment. If your first exposure to tech is a weed-out course when you’re trying taking CS in college, you're probably never coming back to it. But having an environment that's specifically designed to actually be supportive and actually get you through learning things can make all the difference, really. MANDO: Yeah. My oldest son is going through a computer science course, or computer science curriculum at UT Dallas here in Texas and his experience is a little bit different, I think because of the pandemic and he doesn't have that in-person structure. Everything's different. He's not having in-person classes. So it's forcing it to be a little more collaborative in nature and a little less kind of what you were saying, John, like waking up at 8 o'clock in the morning to go to some 300-person weed-out class. I think it has served him a little bit better having things be a little weird in that regard, but it is funny to see how little the curriculum and set up around getting a computer science college degree has changed in the 20 years since I took it. That's a shame and I think that that's why the places like ADA Developers Academy and other folks who are showing people and especially employers, that there's different ways for people to get these skills and get this knowledge as opposed to a strictly regimented 4-year, whatever you want to call it, degree program. Leah, you came into technology, you were saying, through a different path other than your traditional computer science degree? LEAH: Yeah. So I majored in math in college and wasn't exactly sure what I wanted to do with that and when I graduated, it was 2009, to age myself. [chuckles] It was 2009 and the economy was not doing very well and a lot of my peers were really struggling to find jobs. I went for a leadership program at an insurance company and ended up staying there and moving to Cincinnati, Ohio, which I had no desire ever to go there, [laughs] but it worked out fine. I ended up in this insurance company for almost 10 years. Met some really wonderful people and I got to do a lot of really great things, but just kept having that question in my mind of if it hadn't been a poor economy and if it hadn't been whatever factors, could there have been another path for me? I just kept thinking about what I enjoy doing at my job had nothing to do with the insurance side of things. I found that I got really into writing Excel formulas, [chuckles] those were the days that I was having the most fun and I was working remotely, living in Charleston, South Carolina at the time. After chatting with a few friends, I found the Turing School of Software & Design out in Denver. So I quit my job and moved out to Denver and two days after I moved there, I started the bootcamp program. After an entire week of school, I still hadn't unpacked my bag of socks and several other things from my car. So it was just kind of a whirlwind, but I picked Turing because they had an emphasis on social justice and that was really important to me and I think it served me very well as far as being able to meet a lot of people who are like-minded—who also picked Turing for similar reasons—just wanting to better the community and be a force for good with technology. So yeah, that was my rambling answer. [laughs] MANDO: I know that I struggle a lot with knowing the “good programs” and the not-so-great bootcamp style programs. Like anything else, when stuff becomes something that's popular, it attracts folks who are speculators and usurious, I guess, for lack of a better word. [chuckles] So you hear these horror stories about people who go through and spend all this money on bootcamp programs and then can't find a job, don't really feel like they learned the things that they were supposed to learn, or were told they were going to learn. It's nice to hear good stories around those and some good shoutouts to solid programs. LEAH: It was definitely stressful and we had a hallway that we deemed “the crying hallway.” [laughs] But I think it did serve me well and has served many people well in the several iterations that Turing has had over the years. MANDO: Yeah. Just because it's a solid program, or a positive program doesn't mean that it's easy by any stretch. LEAH: Totally. MANDO: I remember one time I was talking with an old coworker and she was telling me about her experience going through the CS program at Carnegie Mellon. This woman, Andrea, she's easily one of the smartest people that I've ever met in my life and she's fantastic at everything that I've ever seen her do. So to hear her talk about going through this program and finding stairwells to cry in and stuff as she was a student really shook me and made me realize that the stuff's not easy and it's hard for everybody. Just because you see them years later being really, really fantastic at what they do doesn't mean that they spent years trying to build those skills through blood, sweat, and tears. LEAH: Yeah, I think one of the things that was hard, too is you have no idea what playing field everyone is starting from. It's easy to really get down on yourself when you're like, “This other person is getting this so much faster than I am,” and come to find out they've had internships, or have been working on random online courses teaching themselves for years, and then finally made the decision to go to a school versus other people who haven't had that same amount of experience. It's another lesson and [chuckles] just level setting yourself and running your own race and not worrying about what other people are doing. TRAM: I totally agree with that, Leah. I feel like sometimes I compare my starting point to someone's finish line and I'm like, “Oh, how did they finish already? I'm just starting.” It can be really hard to think about that comparison and not get down on yourself. But I think it's also really good to keep in mind that we only know our journey and our race and it's so hard to have all of the other information on other people, how they got there. So it's just like, I try to remind myself that and it's like, I think the only one that I'm trying to compare myself with is me a month ago, or me a year ago instead of someone else's journey. LEAH: Totally. JOHN: Yeah, that's actually something I'm trying to build into a conference talk because it's so hard to see your own progress unless someone points it out to you. Especially as you're grinding through a curriculum like that, where it's like you're always faced with something new and you're always looking ahead to all the things you don't know. Like, when am I going to learn that, when am I going to get to that, when am I getting to know all these things like everybody else? It takes extra work to stop and turn around and look at, like you said, where you were a month ago, where you were three months ago and be like, “Oh my God, I used to struggle with this every day and now it just flows out of my fingers when I need to do a git commit,” or whatever it is. Being able to notice that progress is so important to feeling like you're not completely swamped and struggling the whole time; that you're always looking to the things you don't yet know and never looking at the things you do know, because you don't have to struggle with those anymore. They don't take up any space in your mind. STEPHANIE: Yeah. I can relate to that as well. Something that I've been doing that it's working a lot is okay, I look to others, but I try to see what they did that I can try to look forward. Like, “Oh okay, so they did this and this looks like something that I want to do,” but I only compare myself to my past self because it can be really – I don't think it does a lot of good to anyone, in fact, when you compare yourself to others, just for the sake of comparing. But if you do see that as an inspiration, “Oh, look, this person is showing me that what I want to do is possible and that's great because I have now more proof that I'm going the right path.” It definitely takes some time to change this little key in your head, but once you do, it gets so much easier and so much lighter. You see even people in a different way because you start asking, “I wonder if this person is struggling with this as well because it's not easy.” [laughs] So this is something that it's helping me. MANDO: Yeah, that's something that I'm struggling with right now with my daughter. She plays high school softball. She's fantastic, she's an amazing athlete, and she's really, really good, but she's a freshman on the varsity team at the highest-level high school team. So she continually compares herself against these other girls who are like 2, 3, 4 years older than her and have a lot more playing time and playing experience and they're bigger and they're stronger. I keep trying to look for a way to help her understand that, like you said, Stephanie, she can compare herself to herself yesterday and she can look to these other players as inspiration as to what's possible. But what she can't do is get down on herself for not being there yet. That's just not fair at all and she may never get there. There are a lot of other factors, outside of how hard she works and what she does, that will contribute to how she's going to finally be. That's another thing that I have to [laughs] work on just me personally is that we all have our own built-in limitations and we all make choices that set us down only so far down a path. I choose to not keep my house completely spotless because there's only so many hours in a day and I would rather go watch my daughter's softball game than deep clean a bathroom. I'll eventually clean the bathroom, but today, [laughs] it's not going to be cleaned because that's the choice. But yet for some reason, I still get down on myself when I come home after the game and I'm like, “Ugh, why is this house so dirty?” STEPHANIE: Yeah. I think now that you mentioned that you have a daughter, I remember this chapter from this book called The Confidence Code. It’s a really, really good book and it talks about all the reasons women are the ones that more self-confidence and how we can put ourselves to compete. There is a chapter for parents and how you can help your daughters to not go through the normal route because it will happen. Not that much anymore, but we are still, in terms of society, expected to behave differently and the book brings you really good tips for parents. I think you would be nice for you. It looks like you want to learn more about that? MANDO: Yeah, for sure. Thank you, Stephanie so much. I'll take a look at that and we'll include a link in the show notes for that and some of the other stuff. Any and all help [chuckles] is very much appreciated. JOHN: We've come to the time on the show where we go into what we call reflections, which are just the takeaways, or the new thoughts, or the things we're going to be thinking about that we've talked about on this episode that really struck us. So for me, it's a couple of different things. First Leah, you were talking about being a companion to long distance runners, which is something I had never thought about being a thing, but of course, the moment you say it, I'm like, “Oh yeah, if you're running a 100 miles, it'd be nice to have someone keep you a company.” That sounds great and it's something you need to be suited to. You need to be able to run and talk and so, finding new ways to be of service to other people, I think is really interesting part of that. I think the other thing that struck me is we're discussing different ways of increasing psychological safety on the team and the ways that you can communicate that to the people that are there. Those are the things I'm always keeping an eye out for because I always want to be able to provide those to my team and so, hearing your examples is just always good for me just to have even more different ways of doing it in the back of my head. LEAH: Well, thanks, John. Yeah, I think the big takeaway for me is just what can we proactively do to make our space safer, or just more conducive to diverse thought? I think, Mando, maybe you asked the question of what we were explicitly doing at our companies, or if anyone had ever done something explicit to make us feel safer, or invite us to participate fully in the community of developers? I think there is a lot more that can be done to help people feel as though they're a part, or that their opinion matters, or their belief matters and their contribution will only make the team better and stronger. MANDO: Yeah. I think that was John who asked that and then I rambled on for about 20 minutes afterward, so. [laughter] LEAH: Sorry. MANDO: But that reminds me, or that that leads into my reflection. Stephanie was talking about the one of the things that helps reinforce that psychological safety for her was seeing people make mistakes and having it be okay, and having that general attitude that we're going to make mistakes and bad things are going to happen and that’s okay. It's something that Leah, like you, I work at a really, really small startup. There's five people at the company total. So the pressure to make sure that everything is done right the first time is pretty high, the pressure that I put on myself, and it can easily spiral out of control when I start thinking about how long I've been doing this and then the should start to come out. “You should know this,” “You should be able to do this,” You should get this stuff done quickly, or faster,” or “It should be perfect.” I need to keep reminding myself that it's okay to make mistakes, it's okay to not have it be perfect the first time, it's okay to not be perfect. So thank you for that reminder, Stephanie. STEPHANIE: You're welcome. I have to remind myself every day as well. [chuckles] It is a daily practice, but I can guarantee you that it's so much better, things like life in general is so much better, so it is worth it. I think that my takeaway here, not only from this talk with everyone, but also from the RailsConf in general and the Rails community is how common it is to talk about these things at our community. Like, yesterday at the keynote, I saw the diversity numbers and I was like, “Whoa, wait a second. I think this is the first time that I go to a conference and someone is talking about this openly.” I think that's one of the reasons why the Rails community is so important to me and I want to continue the legacy. I think that talking about these names is what makes our community unique and I'm really grateful to be part of the community. TRAM: Yeah, I think my main takeaway is what I've been reflecting on the past few days and this conversation is one thing following the psychological safety theme of how can we have more inclusive and safe environments and like Leah said about representation matters. The people you see around you and the environments that you are in can help you to feel a certain way and when there's such a monolith of people in a certain company, that can make me feel very scared and open up to what I think, or my thoughts are. So I think the diversification of type is very, very important, but also just humanizing people and that's one thing that we can do today is highlight, be open about our mistakes, but also have an environment that is inclusive enough where people can speak up about their mistake and that inclusivity begets inclusivity. You're not going to just say that you're inclusive and don't have actions to back it up. Also, I think what Mando said about calling someone out. Sometimes being a newcomer to a company, I don't feel like I have the power to do that and sometimes, it's uncomfortable for me to do that. So having someone who is in upper management, or someone who has a little bit more power showcase that that's something that they have the power to do, but something that I can do also is really helpful. So that's something that I would try to reflect more on and act upon because it's been a really wholesome conversation and I'm glad to be a part of it. JOHN: Wonderful. Yeah, and to your point, Tram, there's a talk that was actually at RailsConf a couple of years ago by Anjuan Simmons called Lending Privilege. One of his points is that those of us who have the higher levels of privilege, we can wield it for good and we can do things like putting ourselves out there to say, “No, that's not okay on this team,” or to lift someone else up and say, “Hey, you just talked over, what's her name.” Like, “Please Stephanie, say what it was you were going to say,” or like, “Stephanie mentioned that idea tenured 10 minutes ago and we ignored it.” So using that privilege, or the position on the team. I've been at my company for 10 years so I have a lot of social capital; I can use that for a lot of good. I'll post a link to that talk as well in the show notes because I think it's really important concept. All right. Well, we've come to the end of our show. Thank you so much to all of our scholars who were able to join today, Leah, Stephanie, and Tram and thank you, Mando for being here. This was a wonderful conversation. MANDO: Yeah, thanks everyone. LEAH: Thank you. MANDO: It was fantastic. STEPHANIE: Thank you! TRAM: Thanks, ya’ll. This episode was brought to you by @therubyrep (https://twitter.com/therubyrep) of DevReps, LLC (http://www.devreps.com/). To pledge your support and to join our awesome Slack community, visit patreon.com/greaterthancode (https://www.patreon.com/greaterthancode) To make a one-time donation so that we can continue to bring you more content and transcripts like this, please do so at paypal.me/devreps (https://www.paypal.me/devreps). You will also get an invitation to our Slack community this way as well. Special Guests: Leah Miller, Stefanni Brasil, and Tram Bui.
Mini malls, shopping centers, and large department stores all still exist and remain popular despite their digital counterparts But online marketplaces are where more and more brands are gathering to not just sell goods, but to get a better 360 view of their customers, and gain access to sell products from other big name brands that fit their marketplace niche. On this episode of Up Next in Commerce, I explored that idea a bit more with Jason Wyatt, the Executive Chairman at Marketplacer, a business dedicated to creating marketplaces. We dove into the various ways that Jason has seen marketplaces evolve, especially in recent years. Plus, Jason talked about some of the incredible innovation that he’s seen take place thanks to marketplaces — including the birth of Providoor, an Australian marketplace for restaurants that was built as a reaction to COVID-19 and reached a $100 million run rate within 12 weeks. We talked about how the marketplace connections made that possible, and also how the B2B landscape can be revolutionized thanks to marketplaces. Enjoy this episode!Main Takeaways:Getting The Bigger Picture: By creating a marketplace, businesses can get a much deeper picture into the attributes of their customers, while also gaining access to inventory and products to sell from big name brands. The key to success? Curation.We Have A Connection: One of the greatest advantages of a marketplace are the connections that can be formed within them. Especially from a B2B perspective, because for so long those buyers have been left out of the ecommerce equation. They desire the same level of connection and ease that those in B2C have come to expect though, and marketplaces have provided a way to create community and engagement that has made B2B selling and buying much easier.Long Live Loyalty: Big brands have long tapped into loyalty programs as a way to earn customer trust and keep them coming back. By expanding point systems to usage within a marketplace, brands are now becoming even more trustworthy and respected in the eyes of consumers, who can all of a sudden get more bang for their buck. Additionally, the rise of wide-ranging marketplace loyalty strategies will likely become a new way for retailers to attract customers to newer marketplaces.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, I'm Stephanie Postles CEO at mission.org and your host of Up Next in Commerce. Today on the show, we have Jason Wyatt, who currently serves as the executive chairman of Marketplacer. Jason, welcome.Jason:Hi Stephanie, thanks so much for having me on the show today.Stephanie:Thanks for hopping on at 7:00 am. I think you're one of the earliest guests I've talked to over in Australia, so I appreciate you coming on and joining me for a fun chat.Jason:No worries at all. It's just a pleasure to be on the show and talk to your community.Stephanie:I was hoping we could start back in your... way back in the early days when you were 13, because I saw a fun story about what you were doing back then and a little entrepreneurial spirit that was going on, and I was hoping you can kind of share what you're doing back then so people can get to know you a bit before we dive into Marketplacer. This is all around a loan that you got from your dad if you know what I'm talking about.Jason:Well, I might, I was actually... I was a mad sports fan, as the majority of Australians are in this country. And I was playing tennis at the time, if I'm on the right track with this story. And we used to play a lot and pretty competitive. But my brother was a lot better than me, but I used to sort of grab onto his heels, but we constantly used to break racket strings. And we didn't come from this massive affluent family. We come from a family of just, the harder you work, the luckier you get. But dad, what he did do is he loaned us the money to buy our own stringing racket. He just said, "If you keep breaking these strings, well you got to fix them yourself."Jason:My brother and I took advantage of that situation. We figured we had an unfair advantage versus the other tennis players within the group. And then what we actually did is we turned that into a little tennis racket stringing business. So at the age of sort of 13 or 14, we were making a hundred bucks a racket, stringing out sort of four rackets a night and we had a little good business going on. I suppose the entrepreneurial spirit sort of started at a very, very young age where we had a problem to solve and then we solved it for other people.Stephanie:I love that. It definitely rang close to home because I was out in my neighbor's yard, raking, weeding doing anything I could just to earn $5 here and there. And I love hearing about how other people had that itch early on too, and seeing what it turned into later on in life.Stephanie:I'd love to jump into Marketplacer a bit and hear what is it? When did you create it? And what are you guys up to today?Jason:Marketplacer is probably the most fascinating business that I've ever been associated with, because it enabled so much global connection and enables people and businesses all over the world to sell things they don't own and to really supercharge commerce. And the story started back when my co-founder and I, Sam Salter, we just had a simple idea 13 years ago to make it easier for people to buy and sell bicycles. And we created a business called BikeExchange. Think of cars.com for bikes. You're buying a new bike and you want to see everything in one single destination or you're selling your bike and you want to sell it to a community that's a trusted community, has a sense of belonging behind it. And we created BikeExchange. But in doing that we had some really, really big, tough entrepreneurial problems to solve.Jason:We had to come up with a sales and marketing plan. We had to come up with a customer success program, but most importantly, the technology never existed. So, we not only have to be great salespeople, not only a great customer focused, but we had to become technologists at the same time. And we just thought, in everything, in creating a business, in creating a marketplace on a global scale it's a problem that we could help other entrepreneurs or other businesses now actually start to use a platform to enable them to be able to create it. So the story was born out of solving our own problem, out of eating our own dog food in a technology term. But now we help people all over the world in 10 countries solve that marketplace journey, of really just making it easy to connect a customer and community to make it easier for them to sell things they don't own and to supercharge commerce. And I'm sure we're going to unpick what that means in a lot more depth over the next hour or so.Stephanie:That's awesome. What's wild to me is that building a marketplace is notoriously like the hardest thing you can do in commerce. Everyone struggles with supply side, demand side, how to build which one first, and you're not only doing it once. You're replicating it, using your software and doing it with multiple industries. How do you even go about approaching it, especially if it's a new marketplace?Stephanie:You had your bike one, I know earlier you were talking about meal delivery from restaurants, how do you even think about building a new marketplace and solving for both sides of the market?Jason:It's a really good question because we always identify what we consider to be an unfair advantage when we help our clients and customers really figure out whether it's a worthwhile strategic project for them. Because it's a strategic project to go through, that marketplace journey. And the unfair advantage has really been always anchored around two core elements. The first being an existing community or audience or customer base that you know they want to buy more things from you. Or you know you can connect them up in a single destination to improve that customer experience. And the second is more often not the ability to have an in-depth knowledge of the supply base, a connectivity into that supply base and product base. You can actually really exploit the now and explore the future around connecting those two sides of those marketplace journeys.Jason:The evolution and the story of a marketplace has really evolved over time too, from the humble beginnings of a BikeExchange when we first started. It's now in 10 countries, and now we're out around the world and listed on the Australian stock exchange in January of this year.Jason:Thank you, awesome team effort by the team. To really large retailers and brands and, and all types of traditional types of business saying, "Hey, I've actually got one or probably two of those unfair advantages and how can I make it easier for me to grow and drive growth within my existing customer base, without the limits of capital and without the limits of actually producing all of the products, but enhancing my customer experience along the way?"Stephanie:How do you figure out, I mean, how I'm envisioning is that you would probably have like a lead brand who's for the bike one or for the meal delivery one you'd have to have kind a lead person who's owning that marketplace and then they're onboarding other brands as well. And other customers, is that how I'm thinking about it? Because I can't imagine having 20 BikeExchanges where every bike company is, "Well, I want my own marketplace. And I want mine." It seems once you have one, it's probably good enough and you have to be a part of that one.Jason:It's a really, really good question.Jason:There's different types of marketplaces, but the evolution that is really happening at the moment is, take SurfStitch for example. SurfStitch is actually a commerce cloud customer. They're a pure play surf wear brand. They sell hard goods, soft goods and clothing and bus fashion around it. But they've got this community, this tribal community of surfers and they're really a successful business, great growth really, really well leveraged on the commerce cloud stack. But when they looked at their business and they looked at their strategic path, they're constrained by warehouses, they're constrained by the capital, but they had in the back of their mind that they thought that, if we could have the full range of surfboards, instead of only taking 20% of the range of surfboards in all sizes, by connecting up to the wholesaler warehouses.Jason:And then to unpick that to the next layer, when you think about it, a surfer is quite a soulful person. They love the outdoors and are they only surfing? Or are they going hiking on the weekend? Are they exploring the outdoors as well? But I don't want to put a hiking gear in my warehouse. That's too risky, but I could go and connect up to Patagonia to take a full range extension from Patagonia without owning the inventory. So by taking a marketplace strategy or really a growth strategy, what they were really able to do is make it easy for them to connect that to a supplier base, to improve their customer experience and really enhance that 360 view of what that customer is trying to do. Not only from a data perspective, but a product and an experience perspective.Stephanie:Got it. That makes a lot more sense now. And it also just seems the role of curation is so important and whoever's curating the best products and not just throwing a thousand things into one marketplace, really thinking, like you said of, okay, you might be hiking, but you're probably not cooking too. Like I'm not going to put cookware in my marketplace with Patagonia stuff and surf boards. It seems like curation is huge when it comes to that. And also knowing what's trending and what their customers will like is a big part.Jason:Yeah, but it also enables this strategy, the ability to fail fast within there as well. If you put it a camping stove on there or a shower after you go for a surf, to clean yourself off, you haven't bought it. You've had a go at growing in there. It didn't work customers didn't like it. So just turn it off.Jason:With Marketplacer what we really focus on as well, is a really strong vetting engine for the sales force customer and any of our customer community so that they... it's just not a free for all, for all of the products flowing through. It's that ease of connectivity into the supplier base. And then it's the strict controls and measures that you can put in place to enable your customer experience within the marketplace strategy, not just "the everything for everyone" experience. If that makes sense?Stephanie:Yeah, it makes sense. I was going to ask when it comes to marketplaces, how do you guys think about marketplace or versus the Amazons and the eBays and Etsy's of the world that seem like they are kind of creating custom curated collections in a way too. But not as much of a niche level where I would say "Okay, we're going to be doing bikes and here's your community and your people." How do you think about the landscape of marketplaces right now?Jason:It's a very interesting landscape, because it's kind of a bit of a cross matrix at the moment, Stephanie. In that there's B to B, B to C and B to B to C plays within what we're trying to do. And then if you take the types of marketplaces the other way, so all three of those really go across all three gamuts. And then if you take the types of marketplaces, you've got the niche and the tribal based marketplaces, and we put media organizations into that bucket. If you imagine all of the great magazines, like we power lots of magazine marketplaces, where Time+Tide is a good example of a watch marketplace, where they have the beautiful content, they have the trust within the industry. They had a community of people looking to buy watches, but they didn't have that connectivity into the supply. But now they've got it. Another really great example is FishBrain, which is the world's largest fishing marketplace.Stephanie:Didn't know that existed. That's awesome.Jason:I'm not a big fishing person, but think of Strava fishing. Think of a really, really large... I think they've got over 13 million users within the United States now. They wanted that into a commerce play, but they didn't want to own inventory. They didn't have a buyership, they didn't have product developers. It was too difficult to do it. So what they did is they partnered and they connected into the world's best fishing suppliers to create a marketplace. Now that has over 60,000 products to sell that you can just buy.Stephanie:Is there ever a chance of them getting lost. When I hear 60,000 products within a fishing marketplace, how do you get found in that big marketplace?Jason:That's an interesting one. So fishing is probably the best industry to do it because what I have learned about fishing is there's lots of micro products for the local areas. So there's lots of little lures and lots of little different tackles setups, the different communities and different areas. There's lots of niche products within the niche. That one makes a ton of sense to have a really big, broad breadth of inventory within that.Jason:So if you think of the tribe, the addressable market behind people trying to take that convergence of content into commerce and contextual commerce, that space is born for a marketplace. Isn't it? It's an affiliate 4.0 where it can connect into the supply banks. Then you look at brands and retailers and franchise groups and cooperatives. If you actually look at the structure of all of those businesses... Co-operatives and franchise by default are marketplaces. They're a masthead brand their third-party inventory is owned by their franchisees groups. What we're finding in this space is we're just increasing the offering that they can have.Jason:We connect up their franchisees group into a single destination. For example, actually within Australia, we run the largest tire business called Bob Jane T-Marts and Bob Jane T-Marts are a really large franchise group. They're a $600 million business. And tires are a complicated product. They seem simple, but they're incredibly complicated because you've got to match every tire to every car to every wheel ever made, ever sold.Jason:But by creating a marketplace strategy within that, they're really famous for solving one problem. We connected up all the franchise groups via our marketplace technology. But if you think about it, what they really have is car data and car ownership data. What else could they sell a person at the BMW, other than tires and wheels that could enhance their car driving experience? You'll start to see lots of these franchise groups, not only connected in unifying their customer experience, but actually starting to think about how can they enhance their customer experience without the cost of capital burden placed that amongst their franchisees group or cooperative structures and buying groups are in the same bucket.Jason:Then if you just think of traditional retailers, whether they're a pure play or a bricks and mortar or a blend of both. Which the world has a blend of both now, right? There's no real, just pure play or bricks and mortar retailers anymore. So the problem they're trying to solve is exactly that problem we talked through with SurfStitch. How do they enhance their customer experience in store or online. Where they can range extend or category extend, to supercharge their commerce journey within that.Jason:And that last sort of bucket within that is that brand or wholesaler journey. And the brand and wholesaler journey is a really interesting one because it does really touch on those three sort of core verticals that I said at the start being B2C, B2B and B2B2C within that.Jason:The first one's pretty obvious from a B2C perspective, if you're a brand and you can see a perfectly complimentary product, why would you want them to leave your platform to buy it from another platform? Why wouldn't you just connect it up to enhance your customer experience?Jason:If you sell shoes for example, I'm going to dumb it down, but if you sold shoes, how could you connect up with a sock company that had the best brand to associate the shoes with socks without actually owning all of those imagery behind it? And we've seen lots of great examples of that. We actually power the Nokia marketplace. If you're thinking of buying the phone, what other connected product and you put in within that connected ecosystem and Google are a partner of Nokia phones globally now, and all of the Google products is going to be available on the Nokia marketplace.Jason:You can start to see this connectivity piece really, really drive home within that. And then from a B2B2C perspective is how do you not cut out your stockists? How do you find a way as a brand or a distributor in a modern world not to cut them out. Whether it's a marketplace, a unified experience, but what our marketplace platform can do is connect it all up. You can cut your retailer into these third party product sales, but without, without actually going against your traditional business model. And we're seeing a fair bit of that momentum behind it as well. Then the growth space and it's going to be really interesting, because I think that the world is saying how, from a B2B perspective, from a traditional brand, when you're selling to retailers when you're consolidating in a B2B industry, how does a marketplace make sense?Jason:There's Alibaba and then there's not much. The interesting play within there is the unfair advantages to businesses is pretty similar then than it is to a B2C perspective. Their unfair advantage is really anchored around their existing stockists or retailer base that they sell into. They've got a great community of sales representatives or sellers on the floor, who are going around and servicing them. How can they then connect up to other suppliers in other industries that could actually self to that community and we make it easier to do that. And there's a really sort of large demand at the moment behind B2B marketplaces as well. It's an interesting thing to call these things marketplaces. They're not all marketplaces, but what we're doing is we're connecting the world to enable supercharged commerce.Stephanie:I love that. I want to hear a little bit about the revenue numbers. When brands embark on this marketplace journey, what are some stories when a new company starts revising your guys' tech?Jason:It's a really interesting story and journey behind it. I'll give you one example during, during COVID, the world's a different place and we all know that, and there's not much point in delving into what's next after COVID. I think everybody's thinking about what's next after COVID but what we fundamentally know today. It's just a different world. It's a different world than it was in the past. And the power of connection during COVID in a digital sense, drove some of the greatest innovation stories that I've seen for some time. And I'll share the story of Providoor. In Australia, this is a case study we rolled out.Jason:It's nearly exactly this week, last year to the day and a great friend of mine, but a celebrity chef Shane Delia. He owns some of the best restaurants in Melbourne and he's got cooking shows on TV and big personality, vibrant, enthusiastic. Had 150 staff behind his restaurant business at four restaurants, one at the airport. The institution restaurants you know, think of Mamasita in New York. These are like famous restaurants within this country. And he emailed me and he just said, "Jason, I'm stuffed. I've got all of these people, I've got food, I'm just throwing into the bin. I've got leases that I've got to pay, but I've got this one glimmer of hope."Jason:"I've just done a trial where yeah, I'm doing ready, sort of made precut food where the customer just has to finish it off at home. So it's like they're getting the magic of a restaurant quality experience in their home."Jason:And he said, "I've done it for a couple of weeks and I'm selling like $5 to 6,000 a day." And I said, "Well, talk me through the problems that you've sold." And he said, "Well we've solved this packaging, we've figured out how to I get it to the customers with the boxes." He did this in a week, like extraordinary innovation. He's, he's sourced the products, the lined boxes, he's got the dry ice, he's fixed the packaging for this. So the tumor is sort of doing, you know, that those types of volumes in a small way. And I said, "How are you delivering them?"Jason:He said, "Well I've got no choice. My chefs are preparing it, My chef's are driving at 35K around Melbourne, to drop it off at people's doorsteps at 4:00 am in the morning." And I said, "Well, you've probably got to solve your logistics problem in a real quick way. But there's something in this, because there's a demand." You're not doing any marketing, your unfair advantage is you're... I call him a B grade celebrity, he probably thinks he's an A grader. But he's got this celebrity audience that he can tap into. He's got trust within the community. The other chefs will trust him. He's never gonna do anything wrong by that industry or community and customers just loved it. If we could solve a couple of problems, i.e, how do we make it easy for all restaurants to sell in the same way and create a marketplace around it.Jason:And then how can we make it easy for people to get the delivery experience behind it? I think you've got the bones of a really good business. Shane's a pretty good hustler. And five weeks later, we'd pulled every string in the world to get Providoor live. Where the best restaurants within the Melbourne CBD was selling to a 35 kilometer radius of the Melbourne CBD, get it delivered in two delivery slots AM and PM. They would cross stock. The trucks would drive around Melbourne pick up every box. Cross stock it into a single parcel. So you would only get a single parcel. You could order from all the restaurants in one. If you were entertaining in your home or just wanted to release from COVID, or you had a birthday party, or mum and dad couldn't get to the restaurant, then you could actually experience it. And after a 12 week period he was on a $100 million rate. Solving those capital problems.Stephanie:And this was from other restaurants as well that he onboarded onto essentially the marketplace that he created. It started with his restaurant. He brought on others as well. What does the cut look like for him versus the restaurants that are also selling on the marketplace that he essentially established?Jason:Yeah, it was again, really interesting. Shane took, I think it was a 15% slice of the pie. So he actually...Stephanie:Who decides, or you decide when you create the marketplace how much you...?Jason:Yeah.Stephanie:Nice, okay.Jason:It's part of the marketplace platform, when you create a marketplace. We solve all of those commission calculations and you choose, as running that marketplace, what each seller gets, and you can change it by product or category. Now you can do really complex commission calculations, but we also manage all of the seller payouts. You imagine that volume in that period of time, if you're cutting checks, so you're doing individual payments it's un-scalable. So that's why he had to... besides the fact that's why you needed a marketplace platform to, to scale at that rate, but it just shows you if you can leverage those couple of unfair advantages and pull it together in a really neat way and solve a problem, how big you can get quickly.Stephanie:That's crazy. It sounds like you kind of want to make sure you have an audience first or partner with someone who does already have, like you said, that tribe, who's kind of waiting that you can tap into that. How do you go about even convincing customers to come and buy on a marketplace? Are you doing anything around exclusivity where it's if you're selling your bikes or your box meals or whatever on Marketplacer, you can't also sell, I don't know, on DoorDash, do you have DoorDash in Australia? Or something similar.Stephanie:How do you think about creating that moat around the market places that are building up?Jason:I think any business, whether it's a marketplace or not a market place, you create moat. And if you could get the number one selling product of the world and get it exclusive to your business, whether you own it and send it yourself, or whether it comes direct from the supplier. I would a hundred percent recommend that every single day of the week.Jason:In Shane's situation and in Providoor's situation he solved some pretty big problems. No one else in the world, in my opinion, in a five week period could have created this marketplace. And then secondly he partnered exclusively with the logistics company that was an under utilized fruit. You imagined it was a fruit delivery business where they were delivering to corporates, their fruit boxes. And they went from a hundred percent capacity to 0% capacity, but then Shane took them back to a hundred percent capacity. So you've got to, you have to find very innovatively, underutilized, cold, refrigerated delivery network in a really short space of time. He created a couple of really, really solid moats that enabled it, nearly impossible for somebody else to do it in that period. But they were just extraordinary. But the short answer to your question, I'd always promote a moat.Stephanie:So try and make things exclusive, if possible. How do you bring... what are some of these brands methods of bringing their customers onto a new platform? Because that does kind of feel like it could be an experience that might cause a bit of friction of like, "Oh, I'm always used to either just buying directly from your website or just buying from Amazon." What kind of tactics should a brand use if they're trying to convince someone to come and buy on a new platform that maybe they haven't heard of before.Jason:You're talking from the end consumer experience when they're buying from you. It's all around trust in the process. It's in that front end customer experience or any communication around it, it's about building trust and rapport around building a marketplace community. And there's many techniques you can use around that.Jason:Some companies choose not to even say who the seller is on the marketplace. They take a really hard supplier agreement and they say, here's your SLA supplies. If you don't supply under these terms and conditions in these ways, then we're going to exclude you from our community, moving forward. Other marketplaces take the opinion of, "I'll let you rate my supply. I'll let you rate your seller." So it's going to be a customer led trust build up around it.Jason:Other marketplaces over time have put their own sort of ratings and experience... the one thing I'll say around the customer journey when you don't physically own the product is you've got to be really clever and your communicative style. The items might not appear in one parcel, items maybe sent at different times. And if you can bring your customer and community along that journey, they're very attuned to it in this world that you don't get one single parcel from one single vendor every single time and boxes can appear on different days, just as long as the communication strategy around when they're turning up. I mean, the timelines as a customer's experience is really well handled. I think it's a problem that's that's well solved in market.Stephanie:Always good to make sure you're doing it in a trustworthy way where your customers are like, of course I'll go where something's being sold and there's good curated products there. What are some best practices around developing that community and keeping your community engaged and making them want to come to your marketplace that you built up. What kind of tactics do you see happening behind the scenes that are working?Jason:We're seeing at a little bit of scale at the moment, the loyalty programs being attached back into the marketplace strategy. And I think it's a space that's going to be really interesting moving forward, whether it's loyalty or membership economies or subscription economies around it, it's something that's definitely an interesting space.Jason:Take Myer's another example within our region, but Myer's a really large department store. It's the Macy's of Australia. It's the number one department store. They've had some really challenging times, pre COVID and obviously during COVID. Big box department stores, lots of inventory, really expensive leases. And they've kind of been kicked off from every corner. Right. But what they did have is they had an incredibly loyal customer base that actually had a brand affiliation with Meyer, but most importantly had a really strong brand affiliation with the Meyer loyalty program, because it was such a good rewards program.Jason:When they launched their marketplace, they actually gave the customer base the same points that they would earn on Meyer across all third party marketplace products. And you could use your points to buy from all of the third party products.Stephanie:That's imposing.Jason:Exactly. And we won a, I can't say who, but we've won a major global airline at the moment where instead of just being able to book airfares using your airline points, now you can buy 40,000 products using your points, promote burn perspective from your airline miles. So I think what you're going to find is this community of traditional loyalty programs or earn and burn points systems, being able to tap into really broaden their range to become really big, meaningful marketplace strategy, loyalty program.Stephanie:That's super smart. The one thing that's coming to mind is thinking about data privacy and how does the sharing work, especially if you're onboarding other brands onto your platform, I'm guessing I would want access to that customer data. I'd want to be able to talk to them, especially if I'm shipping something to them, or even someone's viewing me as a person that's shipping it to them, even if I'm not really in the backend. What does the sharing of the, maybe customer information look like, in a way that's probably protected and keeps everyone safe.Jason:Say for example, we're talking to the commerce cloud community. If you're a commerce cloud customer, you're the merchant of record in that instance, aren't you? You're always controlling the customer record. You're controlling, you're receiving the funds yourself. But you do have to share the customer address and you do have to share some details of that customer because they've got to receive the items. You've really got to make sure your supplier agreements are quite stringent around data privacy. And then within the marketplace platform, there's a couple of configuration points where you can mask email address and not mask email address. So there's configuration around customer privacy settings that gets forwarded through to that end seller within there as well. But what we actually find is that the broader supplier or seller community is unbelievably respectful of the end customer because they're attuned to selling in this methodology now, and they know if they break or breach those privacy laws or those privacy policies that you set up as a marketplace operator, is that they're going to be cut off and, and they're going to lose that whole channel.Jason:We've had basically no problems of that over the journey of Marketplacer. It's something that's a very small, minimal risk.Stephanie:Amazing. Let's talk a little bit about ads. And I'm thinking about you're this big marketplace. Maybe if you're the fishing one, you've got 60,000 products, I could see you guys having an entire ad unit or the person who maybe is owning the marketplace, starting to create a demand side platform when it comes to delivering ads. And how are you guys approaching that right now with all the brands that you're onboarding?Jason:The world of relevant display and sponsored contents and contextual commerce, back in to market places is a real interesting space. Because if you can not only just send your products to a third party marketplace, but then you can buy specific media around it and launch products within it. It's super exciting. We're actually integrated into Google DMP, and all of those great ad serving systems within that. And what you'll find especially as the world moves into a headless commerce situation, is that the brands can put whatever DMP they want into the commerce cloud headless stack. They can be really quite innovative around, not only just creating traditional revenue streams for the product they own. Not only creating modern revenue streams in the fact that they can sell things they don't own, but now they can actually turn their traditional retail businesses into a media business as well, which obviously comes at a much higher gross margin than physically owning the inventory.Stephanie:Any innovative stories that you see happening around the advertising space within Marketplacer? That brands are maybe trying just new and different things because of the operating model of this new business they didn't have access to before?Jason:The obvious one that just comes to mind is actually BikeExchange. BikeExchange does exactly that every single day of the week. It connects live into all of the retailers. As part of the Marketplacer platform... because some of the problem in the marketplace scenario is how do you make it easy for your sellers to connect? How do you make sure that the inventory is accurate and live? How do you make it so that when a retailer of stock list receives the order, that they can just seamlessly process it, without having, necessarily a billion spreadsheets rolling every direction for everything they sell. We sold that in a really nice, elegant way where if you're on... and if you've got an existing POS system, so point of sale system or an existing e-commerce engine, we built pre-built connectors for the majority of them in the world.Jason:If you're a bike seller selling on BikeExchange and you're on Lightspeed and you wanna send your inventory into the BikeExchange marketplace, it takes minutes. What would typically take hours? Why is this important from a media perspective? It's because then the brands on BikeExchange or Specialized or Trek, or any of the big brands when they're launching a new product, they can actually drive the leads into stores that have stock available today. You can get very clever around your display and media allocation and where you drive the sales to. And a physical stockists level within that marketplace strategy, which is pretty cool.Stephanie:That's huge. I think about the times I try and order stuff Home Depot. And it takes me 15 minutes trying to find what store you can go to pick it up. I'm like, why is this so hard? Just don't show it to me if it's not within 20 miles of where I'm at.Jason:Exactly. And that sort of relevance posts, zip code, allocation and inventory allocation is something that comes out of that marketplace assistant, but it's all structured around live connectivity back into the source seller system. Obviously if a seller wants to connect manually and they've got a few products or they've got a CSV uploader, or they've got a great API, but it's this pre-built connector platform that's enabling our marketplace at the scale at a rapid rate.Stephanie:That's awesome, so where do you all want to be in the next two to three years? What are you planning and prepping for and building for right now, other than scaling and IPO'ing and doing all the fun, things like that.Jason:I think what really drives us at Marketplacer is we just want our customers to grow and to grow in a really sustainable way. Where they can, they can enhance their customer experience. So we've really launched hard within the United States today. We've announced that Salesforce ventures has actually bought a stake in Marketplacer and that enables us... yeah, we're so humbled by it. It's such a great experience to deal with that Salesforce community, but what that enables is any commerce cloud customer globally to now really look at Marketplacer as the way to significantly grow your business and grow your customer experience within that.Jason:It gives us deep access to the Salesforce product team. Gives us deep access to the implementation partner community. It gives us deep access to the actual Salesforce customer success team. What that really enables us to do is to help that Salesforce commerce cloud community grow and connect up to all of these great suppliers, make it easy for you to supercharge that business. And it's a core focus of ours over the next sort of 12 to 18 months, for sure.Stephanie:That's awesome. After hearing all this I'm like, why wouldn't you try this out? Why wouldn't you want to be a part of a marketplace, start a marketplace, so many opportunities and easy ways to scale that maybe it would be hard for single brands to do on their own. That's amazing. Congratulations. That's huge.Jason:No thank you so much and it's a big shout out to how the commerce cloud Salesforce, commerce cloud leadership are thinking at the moment. They're really putting that customer lens first and, and you're trying to grab those trends and you build it back within their community as well.Jason:It takes a little while for you to get your head around it. But when you dumb it down, we make it easy for you to sell products that you don't own. So you can supercharge commerce and grow. That sort of one line, and that sentence can start to really resonate with you. And maybe out of today you're not thinking this is my path, but it might just get those thought bubbles going to say, Hey, what about this supplier? What about this supplier? And if I only had those products, I'd love to try that one, but I don't want to buy it. It starts to connect it all up.Stephanie:Really good way to explain it. All right let's jump over to the lightning round. The lightning round is of course, brought to you by our friends at Salesforce commerce cloud, which they got many shout outs well-deserved throughout this interview. So that is great. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready Jason?Jason:I'm ready.Stephanie:We'll do the hard one first. What, one thing will have the biggest impact on e-commerce in the next year?Jason:I'd like to say the evolution of Marketplacer.Stephanie:That's okay. You do you. You can say whatever you want.Stephanie:What's one thing from 2020 that you hope sticks around throughout 2021?Jason:The ability to put the customer first and solve problems from a customer lens, when there was no other way to do it. And I think that transformative thinking of traditional businesses in that lens is going to put them in a really good light moving forward. We saw the acceleration of five or six years of thinking and thought, and decision-making in the space of six weeks. And just, don't let that go. Don't let that go. Let that stick with you forever. Because I think it's a unique opportunity.Stephanie:What's one thing you don't understand today, that you wish you did?Jason:French. No, I actually don't personally know how to program. I've never been a programmer and it's been to my advantage because I've never got sucked into it, but one day in life, I'd love to actually learn how it all stitches together and works.Stephanie:There you go. Well, that's a good skill to have these days. Let me know if it's hard, I'm guessing it is. If you were to have a podcast, what would it be about and who would your first guest be?Jason:It would probably be about surfing to be honest. And it would have to be Kelly Slater.Stephanie:There you go. That's a good one. And then the last one what's up next on your reading list?Jason:It's actually interesting, because I bought it yesterday. I'm actually reading about gut health at the moment and the benefits of gut health. So I bought the CSIRO gut health book to understand how that can have benefits right throughout your life, from sleeping patterns to energy, to that holistic sort of view that the power of food and what it can do for you or, or can't do for you.Stephanie:Good, you can send me a TLDR of what I should be doing and I'll just listen to you.Jason:It doesn't mean I'm going to do it though Stephanie, this is the problem with reading. You don't always do what you should.Stephanie:We will do it. We will manifest it into our life. We will do it. All right Jason, this interview has been so fun, really a good time hearing about Marketplacer and where you guys are headed. Thank you for coming on, where can people find out more about you and Marketplacer?Jason:Traditional channels marketplacer.com and Jason White on LinkedIn and Marketplacer on LinkedIn.Stephanie:Amazing. Thanks so much.Jason:Thanks so much Stephanie, appreciate your time.
Lindsay McCormick knows a thing or two about pivoting. After all, she went from planning to live in a van and travel around the country selling her sustainable toothpaste bits to launching a transformative and still-growing company that has taken the internet by storm and has left the big brands shaking in their boots. Bite Toothpaste Bits was the company Lindsay never meant to start, but a viral video helped launch her full-time into the world of ecommerce after she went from 6,000-lifetime sales to 200,000 in a single week. Needless to say she could no longer manufacture everything from her living room, and instead was thrown into the deep end trying to find production and shipping partners that could not only make her very specific products, but do so in a sustainable way that stayed true to Bite’s ultimate mission. There were challenges around every corner, but Lindsay navigated through them all, and on today’s episode, she shares that rollercoaster ride of a story . Plus, she explained why she thinks it’s so important to keep content creation in-house, the reason she’s always testing new channels and leaning into video content — I mean, it is what launched her company — and she reveals why she’s not scared at all about the big-name manufacturers making copy-cat products, in fact, she’s excited about it. Hear all that and more on this episode!Main Takeaways:Don’t Fight The Fog: Breaking into new channels means divorcing yourself from KPIs and metrics and walking into foggy and unknown territory. Embrace that journey because not only will you eventually be able to measure success, the opportunity cost of not taking the risk is too costly not to try.Pay It Forward: Going viral comes with its pros and cons. While the huge boost in sales is a dream come true, fulfilling orders becomes a major problem that has to be solved quickly or you risk losing all of your new customers. As a sustainable business and a small business at that, Bite fought many battles to find manufacturers and fulfillment centers to partner with that met all their needs and price points. As Bite has gotten bigger and found the right partners, the company has also outfitted those partners with some of the tools that they can use to help support and grow other small businesses.Teach Me Your Ways: Educating consumers is one of the most important things an ecommerce site needs to do, especially when the product offered is something that requires a change in habit and/or expectations. Customers who take the time to learn will be more likely to repeat orders, and they will also be more likely to be understanding of things like extended shipping times.Make Em Sweat: It can be intimidating to go up against giants in an industry, but showing even a little bit of success in grabbing market share is something that will leave those big guys feeling pressure to make a change. Not only should that be encouraging to you as a disruptor, but in the world of sustainability, when the big guys start making changes, the small impact of a disruptor grows exponentially.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. I'm your host, Stephanie Postles, Co-founder and CEO at Mission.org. Today on the show, we have Lindsay McCormick, CEO and Founder of Bite Toothpaste Bits. Lindsay, welcome to the show.Lindsay:Thanks for having me, Steph. I'm excited.Stephanie:Yeah, I'm super excited to have you on here. I was looking through your background and it looks very interesting because I've never had someone on the show who had a background in production, working on HGTV shows, like all my favorite things. I was hoping we could start there where you tell me a little bit about how did you get into the world of TV and YouTube and what was that like? Then we'll talk about your company afterwards.Lindsay:Yeah, for sure. I didn't actually mean to start a company, which we can definitely get into, but I was working as a TV producer on the show House Hunters, and I was traveling all around the country filming. Whenever you're filming that show, you'd only be somewhere for a few days. So before I got into TV, actually, because I wanted to make nature documentaries and documentaries before even getting into TV, I was a surf instructor and snowboard instructor. On the off season, I would travel and make YouTube, little YouTube videos. That was like, oh my gosh, back in 2011, 2012. It was like at the beginning of YouTube and the beginning of all of these putting stuff online, and it was really fun.Lindsay:But through working as a surf instructor and snowboard instructor, I was seeing the plastic washing up on my surfboard and the climate change impacting our mountains. I wanted to get into media. I had been really, really influenced by a lot of documentaries. At the time back, it was like Blackfish where about really mammals [inaudible]. I was like, "You know what, I think media is this amazing way to tell important stories and I want to learn how to do that." I started at the bottom, I was an assistant and I was making nothing, working insane hours, but I loved it. I worked my way up over the years and then actually got to be producing. I went from shows on Travel Channel to then HGTV. That's what I was doing before Bite.Stephanie:That's amazing. What did the day-to-day look like as a producer for things like that? Because I watched House Hunters, I watched all those shows. What were you actually doing? I saw that you even did branded integration, which to me is very interesting and I want to hear what did that look like?Lindsay:Yeah, I loved it. It was so fun. For branded integration, that was different. I had previously been what was called a show producer on House Hunters. All the shows are they're all different because they need different things. But, basically, you're in a producing team and your team is responsible for an episode, and you basically like there'll be certain amount of teams and you just volley around the episodes. Like your episode one, then another team's episode two, episode three, episode four, and then you come back and you're episode six. You're like one, six, 12. Basically, you're responsible with your team from start to finish to make the episode.Lindsay:It's that would be for show producing I was helping, basically, it's funny because it's actually really similar to running a company because you're just trying to make sure everything happens, get everything together, deal with all the fires that they pop up. I had great bosses, the best bosses, I learned a lot from them. Then for integration, so that's something that I saw a huge opportunity in, and it was basically so now that people are fast forwarding through commercials or in that team going, "Oh my God, what am I in the '90s?" [crosstalk]. Yeah.Lindsay:It's commercials are important, but they started doing something, it was basically like a new work for product placement. That, actually, helped me a lot too now, like that I have a company, because it's understanding how to organically integrate a brand with an episode. So that was my job where basically there would be brands that were paying the network an enormous amount of money to be integrated into the shows that I was working on. I would be the ping pong ball going between the brand and the network and our production company, and actually being on the field and making sure it all happened. And being able to take these abstract concepts that we had figured out and make sure we hit all of the marks to get every shot that they wanted, and then deliver it to them so that it gets placed into the episode.Lindsay:That was something that is really helpful because now we're making videos for our company and I'm like, "Well, we need this, we need that. This is how we're going to experiment and this is how we know if something's working or not." Branding integration, and now it's like content in general. When I was working on that a few years ago, that was like a separate thing, but now it's everything is branded integration. I feel like there's brands are integrating into all this content because they have to, it's so fragmented. Yeah, that's the whole long thing.Stephanie:I love that.Lindsay:[crosstalk] background, but then somehow all came together.Stephanie:Oh my god, I love the background. That's why I was really excited for the show today. When I'm thinking about branded integration, I always think there's still so much untapped potential when it comes to content. We've had a couple people in the show who are essentially creating their own shows and movies and all of that. It's maybe 80% about the story and then they, of course, have their products in there as well and really cool stuff. How do you think about success when it comes to that? When you're talking about now working on that for your own company, how do you know what could be successful, what works? How do you go about approaching that?Lindsay:It's so important. It's so important, and we started from a video. I had selling Bite online. We had a little bit of traction with some vegan and zero waste bloggers. We had a video just go insanely viral on Facebook, and that's really what launched the company. It was like I already knew video was important and now it's literally the whole reason that company exists type thing. For us, we take content and video very seriously. It's not something we outsource. We're an incredibly small team and we still do all of our creative in-house. It's all either being done like the story and everything. Because it's, for me, it's about being able to take sustainable... Like sustainability is an incredibly nuanced topic that has so many details that you have to dig into. But you have to be able to communicate it in a very easy way.Lindsay:I think that it takes a lot of thought to be able to do it in an entertaining, but also truthful and authentic way. I think that's where my background comes in of being able to be like, "How do we take this and basically distill it down into the most digestible way?" We put a lot of time, and I think any brand that's growing right now have all of the things that you outsource. I see it a lot, I'm in a lot of entrepreneurial groups on Facebook and everything, and everybody wants to outsource their creative because it takes so much freaking time. But it's like the last thing you should be outsourcing because it's literally your brand, it's your brand, and it's your vision and it's your voice. I give major props to the brands who are still doing it in-house.Stephanie:Yeah, you're fully leaning into that. You've got your YouTube studio that you're creating. I feel like you're living by that truth, which is great. Let's dive in a bit into Bite Toothpaste Bits, tell me what is the company? I also would love to get into how you started the company? Because I think it's such an interesting story about buying a van and being ready to go all around the country and just having this toothpaste idea and selling on Etsy. I want you to dive into all of that because I think it's really fun.Lindsay:Yeah, and I love, you have done more research than any, I love it, everything in advance. Because I was traveling and I couldn't find an alternative, and it was from that, it was from throwing out those little toothpaste tubes where I was like, "Hey, wait a minute, I have..." When I traveled for my shoots, I had a little go kit. I had my shampoo, my conditioner, my face wash, my body lotion all in a reusable thing. Because I didn't want to use the hotel stuff. I knew that, that was wasteful. But then I was throwing out my toothpaste tube every other week, and I was just like, "This is like a thick plastic. This is not cool." I started looking into alternatives and that's when I learned about all of the harsh chemicals that are in there where it was Sodium laureth sulfate, PEG, artificial dyes and flavors that I don't even use in my body care.Lindsay:I was like, "I'm using this in my mouth. What the heck?" Plus I'm vegan, and I found out that a lot of the stuff, a lot of commercials do these tests on animals and I was like, "Did not know that." So that was the, "Whoa, I want to make sure that this is something that I'm doing everyday twice a day. How can I do this better?" I couldn't find anything that checked all my boxes, and so I started... I think in typical producer fashion, it's like you find one little thing and then you just get obsessed with it and then expand. Originally, I didn't want it to be a tablet, I really wanted it to be like I was trying anything besides a tablet because I didn't want to have to buy a tableting machine.Lindsay:They were even $1,000 and this was supposed to be a hobby, and that seemed pretty obsessive. I was just like, "Lindsay, you have to calm down. You're not going to spend $1,000 on a hobby." I ended up taking online chemistry classes and then talking to dentists and dental hygienists like on Facebook, whoever I graduated high school and college with.Stephanie:I thought you were on Reddit threads trying to figure out the chemistry of toothpaste?Lindsay:Yeah, and I was on Reddit threads trying to figure out how to make drugs because once I realized that I had to make a tablet, I was like, "Shoot, how am I going to make a tablet?" Everything that I was finding online was big industrial like $100,000 machines. No one was giving instructions on how to use the little machine, so I was like, "Who is using these little machines? Who does this?" I was like, "Oh, yeah, drug-Stephanie:Drug dealers.Lindsay:... people who make drugs." I was on Reddit being like, "How do you make ecstasy?" But I'm sure I'm on numerous-Stephanie:Watch list.Lindsay:... FBI watch list, for sure. Well, and even when I bought my machines, I actually had to register with the DEA because the machine that you get, the little TDP-0 and the TDP-5 is so used in these things that they want to track them, which I think is great. But I was just like, "This is crazy. What world am I in?" That was the beginning of that, then figuring out how to make tablets and toothpastes, and it was like, "This was for me." I figured my parents are very supportive, they would use it, and then my friends who also care about the environment, they would. It also needed to be effective. I'm not going to be giving this all to people that I love and then ruining their teeth. It was really there were a lot that was high stakes for me to make sure that it was good. That's how it all started, just in the living room, like bottling everything myself to working this machine.Stephanie:Then you want to go and you buy a van. You want to be going and traveling the country in your van, and I guess the plan was just to sell on Etsy and your friends and things like that. Then what happened?Lindsay:I was fully anticipating, I have a photo of me holding cases of this Vegan Ramen. Because I was like, "I'm going to be so broke. I'm going to start my own business and I'm going to quit my job in TV, where I was making good money and my boyfriend and I are literally going to live in a van." We bought a van, we signed, it was the biggest purchase I'd ever made. We bought this on... It was, what is it? 4/4, no, 8/4, so August 4th we signed the paperwork for this van and started ripping it apart because we were going to turn it into a tiny home. I was in, then I was going to quit my job and we were going to start selling. Then August 8th, Bite went viral, and all of a sudden-Stephanie:Wow, what happened?Lindsay:... it was like the video on Facebook.Stephanie:It was a video?Lindsay:Yeah, so at that was that point, we had the vegan community talking about us and the zero waste community talking about us and women's health had reached out and was like, "Hey, we're featuring women businesses trying to do really cool things. Could you shoot some stuff on your iPhone and tell us about your story and we'll put a video together and we'll probably put it on our Facebook." I was like, "Yeah, no problem." Literally, shot it at 6:00 in the morning before shoot. If you look at it, my hair was terrible, I was barely wearing any makeup. I was on my way to LAX. It was in the bathroom before I went to LAX. Then I didn't hear from them for like a month and a half, nothing.Lindsay:Then on the 8th, my phone started going so crazy with ching, ching, ching, I thought we had gotten hacked or there was an error or something. But it was basically what had happened is that the video had gone up on Facebook a few hours before and just went full steam viral. We went from I had done $6,000 in sales the whole year prior to over 200,000 within a week and a half. It had two million views within the first eight days. Then what happened is that ripple, so then it was like Business Insider wants to make a video and everybody now is calling and I'm just like, "Okay, we're going to make the video, yes."Lindsay:We're just pushing out and then, basically, then what happened too is that the women's health video happened and then it did so well, it got syndicated through Hearst outlets, online outlets. Then it was like Cosmo, Oprah Magazine, all of these started playing it. Then that's, basically, that was the company. That's when we started, and then [crosstalk]-Stephanie:Like that is my van life plan.Lindsay:Well, yeah and I was just like, "Oh my god, we literally moved in with my parents." Because we had already put 30 days in on our house. We had moved and everything and it's just like, "Okay, this is crazy." Yeah, it was definitely, the van, we still have the van. It's beautiful and it's sitting in Pasadena not used.Stephanie:Wow, that's such a fun story. I was getting goosebumps thinking about all these orders coming in. So what was the content in your video? Why did it resonate with people so much? What were you talking about?Lindsay:I think what the was, was just talking about these toothpaste tablets and the problem with toothpaste tubes. I think that was something and it was very much like it showed me in my living room with the machine and it just explained what was in the tablets. There was really nothing special about the video and we've seen other brands in our space try to make it almost frame for frame and it doesn't have the same steam at all. But I think it was just the right video at the right time with the right message. Then I think also is that once that happened, nothing about that video was big. Every single thing is like you go to our website and we've listed out, we're incredibly transparent.Lindsay:Now we're finally getting all of our certifications but we've been doing it even before. It's like palm oil free and all these different things. I think that what it was, is it really just spoke to those people who wanted to be able to make a change and just didn't have an easy way to do it. I think, I guess we didn't even really talk about our product, but it's a dry toothpaste tablet and it comes in a glass jar and then compostable refill pouches. Now that's actually like the refill system is super everyone's doing it in a different way, but we were, definitely, we were the first ones to do it for toothpaste tablets, and one of the first to really get that mainstream in personal care.Lindsay:I think that it was just people were like, "Oh, wait, this makes so much sense." We see comments all the time on it being like, "Why didn't I think of this?" You're like, "Yeah, I know because it's so obvious." But we didn't, no one thought about it, so yeah.Stephanie:That's so fun. Also just your energy and your vibe and that's probably why the video did well. They just see you and they're like, "Obviously, Lindsay is the best." And act surprised.Lindsay:I think maybe I come off very unintimidating and I think people like that. Because it's just I think, and that's something too, and I say this, if I can figure this out, literally, we all can, we all can.Stephanie:Okay, so you have that small scale operation with your tablet maker and then you start getting all these orders. What did the backend look like to keep up with, I think, you said 200,000 in orders in a week or something? What did you do when the prior year you only had 6,000 in sales?Lindsay:It was literally the most stressful point in my entire life. I had, had one panic attack in my life before that and they became a bi-weekly thing and I was just like, "What have I done?"Lindsay:It was insane. Luckily, my boyfriend, who is now my co-founder, we've been together for six years and he has a business background. He was actually running a startup at the time, which we didn't even get into. His startup had to get shut, like they shut down the week that we went viral. Totally unrelated, and so he had a venture backed startup and that was his jam. Then it just sometimes they work, sometimes they don't. There's some time it didn't work, and so he shut it down the same week that we went viral. Luckily, he had to-Stephanie:Good timing.Lindsay:He had time on his hands and he knew how to do this, and so basically he started running the war room. I'm sitting there making the tablets still and he was just like, "Stop making the tablets. You will never be able to make these tablets." He's like, "We need to find a manufacturer. We need to do all of these different things." That's what we had to do. We were back-ordered for two months I was sending out these pleading emails to our customers just trying to explain what had happened. We found a manufacturer, we had to find a fulfillment center. I was still shipping these out of my house. Then we also had to get business insurance. We had to basically set up a company immediately, and we did.Lindsay:It was really stressful, really crazy. My mom actually flew in from Virginia to help. Because, at that point, we had, had to leave our place in West Hollywood because we were going to live in the van. Then we moved in with Asher's aunt and uncle, and then my mom flew out to help, and then we moved in with my parents because we were like, "What family can we live with?" Because we had totally screwed this up. When I look back at those times, it was just it was so unexpected and amazing. It felt like I had this, all up until then, I had this baby bird of a company that before it went viral, I'm trying to keep this thing alive and feed it and nurture it and love it.Lindsay:I feel like as soon as we went viral, it was that baby bird was actually a Pterodactyl or something, and it grew and immediately was trying to eat me. We were just like, "How do we make this work?" Now I definitely feel like we're working with the Pterodactyl. We all understand each other, and it's definitely working way better.Stephanie:That's so fun. Did you keep that, like the growth that you had from that first week where you were like, "Whoa, 200,000," and that week, did you continue that growth and where are you guys at today and how big is your team?Lindsay:Yeah, so when that happened, then the next question is how do we sustain this? Because there are so many companies that have the blip and then go off forever. We were like, "We do not want that to happen." Luckily, we had a Facebook pixel set up. We had all of our tracking set up, so we could do retargeting, which is so important. We were able to just keep the momentum. From that, we were able to do Shark Tank, from that we had way more press opportunities happen, and so we were able to just keep feeding this cycle. We ended up having now this, which is a new site. We were the most cared about video in 2019. Those kinds of things just keep on going, going, going.Lindsay:Then in 2020, I was one of Fast Company's Most Creative People in Business, which also then gave us, for the first time, like street cred, real cred in business. It all just fed into each other. We were, in 2019, there were two of us full-time, and by the end of 2020, there was five of us full-time. By now, in 2021, we're nine and we'll probably be 11 by the end of the year. We're keeping it small, but growing.Stephanie:Yeah, very cool. You got an offer from Mark Cuban on Shark Tank, but you turned it down. What was the thought process behind that and what was that experience like?Lindsay:He's so amazing. I can't believe I turned it down for Mark Cuban, an actual billionaire. When we went on Shark Tank, we had our like what we were going to do and what we were going to negotiate. I, basically, was I knew it was going to be a whirlwind and emotional. My background's TV, it's a high pressure situation and I knew that. I was like the only thing that I can do is... Asher and I had decided what our negotiation was before that, and if we went, we couldn't go over. We were like, "If it goes over, we have to say no," and we couldn't get to where we needed to be, and so we had to say no. But it was also we went on there. The name of the game on Shark Tank now, looking back, is definitely negotiate.Lindsay:We went in being like, "We want a partner, so we don't really want to negotiate." We just want to be like, "Hey, this is what we think is fair." But I think that's not really how the Shark Tank thing goes. But it was such a fun experience.Stephanie:Yeah, that's really, really cool. Now where you guys are at, how do you go about advertising and marketing? How do you get in front of new audiences and keep finding... I mean retaining your current customers, but also finding new people? It sounds like Facebook, you guys are there, you're doing re-targeting. What other channels are you exploring and finding success with now?Lindsay:Yeah, that's the game. It's always finding the new ones, and so I actually put a lot of my time into that. We were on TikTok before many brands were taking it seriously. We're on Clubhouse literally all the time. It's so fun, and we're constantly testing out things while optimizing our bread and butter channels. I think that that's something that is really, really important to do. No matter how big or small you are is to just constantly be trying to have the pioneering spirit on the new stuff, and know that you're not going to win all the time. We are constantly learning like, "That didn't work, that didn't work." But it's like you're looking for the things that do work because it really helps, and if you're the one looking for that and you find it for anybody else, it's really good.Stephanie:Yeah, it seems like it'd be hard to vet if a channel... You think about like Clubhouse, TikTok probably has more metrics now. But how do you think about evaluating if that channel is working? Especially, when you're coming from a background in TV and branded content, and I'm sure all the brands were like, "We need metrics," and you had to really tie to different KPIs. How do you think about that now when it comes to, especially, exploring new things?Lindsay:Yeah, for us, it's we try not to let early channels get dictated by that. Because, and that's exactly what you just, if you're tied to making sure that you immediately see the ROI and having the KPIs, you're not going to be able to find those new channels because it's going to be really obscured at first. But it's understanding, for Clubhouse, it's like this is a way that I like to talk to people. It's a very authentic way. Even though there's no way for us to really track anything, I know that it's really important. Because it's important, we're going to be there. Eventually, we'll find a way to track it. Eventually, we'll be able to see that. That's also why it's put in a different bucket.Lindsay:For us, it's not put in with the same Facebook, Instagram, where it's like, "No, we know what that's going to look like." These things, it's we know they're going to be weird and we're going to let them be weird and just explore and have fun. I think that's really important too is like have fun. Not going into it and being like, "This needs to work." Going into it and being like, "How can we make connections? How can we get the word out? How can we learn and teach?" I think that's been really good for us.Stephanie:Yeah, are you finding areas to do product placements in shows? So I'm thinking your packaging is so beautiful and different and I'm just imagining it being in different TV shows or movies, or just places where you're like, "Whoa, what is that?" Especially, with your background, I'm sure you always see opportunities of like, "We should be there."Lindsay:Yeah, well, it's funny too because a lot of my friends, and we were still in LA, so I'm in a team producing in this world, so it's like, or I was. All my friends are on all those shows, so I'm like, "Well, here's some bite for your shoot. Here's this for..." Trying to get just because that's they need it. I know because I was that, and so it's constantly we at least had it behind the scenes, which is super good and important. Because it's the same people on all the different things. But when it comes to, yeah, getting it on camera, we want to, and there's a few companies that actually do that. But we have not explored that yet, but I love the idea. I love the idea of it. I feel like we haven't really, which is pretty ironic considering my background, we haven't touched TV. We've done everything outside of it, but not yet TV.Stephanie:Oh, wow, I'm excited to see you eventually get in there. I was thinking earlier you were mentioning how you had to find manufacturers quickly. How did you find the perfect partner who also had the focus on sustainability and using the ingredients that you wanted? Because I could see, especially, for, to me, the toothpaste industry, I feel like has just started coming around where people are like, "Oh, maybe you shouldn't have fluoride in there. Maybe you shouldn't have all these other chemicals and ingredients and whatnot." Then if you add on the sustainability piece, it feels like a lot to bring to a manufacturer who's maybe like, "I just do Colgate stuff. That's what I do." How did you go about exploring that and finding people who would fit within your company mission?Lindsay:Especially, at the beginning, everyone said no. It was impossible. It was literally me begging people and getting ghosted all the time. Just being like, "Please, I have like..." At that point, we had a lot of money coming in from orders that we couldn't fulfill. I was like, "I have all of this money, can you please just make my product?" No one wanted to do it, exactly. I was just like, "This is I don't know what I'm going to do." Because not only, as a client, especially when we were small, we were a huge pain. We were asking for, and exactly what you said, they had to be using these very specific ingredients that I had bought from Whole Foods and they [inaudible]. We couldn't go to toothpaste manufacturers, we were going to vitamin supplement anchors. Because we're like, "Who the heck makes tablets?"Lindsay:They had never worked with so many agents, they've never worked with really like any of this stuff. Then when I tried to go palm oil free, oh my god, it was like the end of the world. It was like such, and then we were like, "Oh, by the way, not only do we have this incredibly complicated tablet that we want you to make, and it has to taste good, and it has to break apart perfectly, and it has to also be able to withstand being shipped across the country." So it's like this whole thing, "It also needs to be in glass."Stephanie:Yeah, I was going to say the final piece of glass.Lindsay:Oh my god, and that's not something that they do. This is when you go to these manufacturers, it's like a huge, basically, it's a tumbler. They throw all of the plastic bottles into it and it shoots it out onto the line. That's basically how, I mean, you throw like thousands of plastic bottles. Into this big, it's called the scrambler, into a huge barrel basically. The barrel shoots out the plastic and then the pills get put into the plastic on the line and then it gets whatever. Not only did we have a glass, so it needs to be put on, like hand put on. But then we had these aluminum lids that kept denting because, typically, it's like these plastic lids.Lindsay:When they put them on and the machine, basically, goes through these two pieces of foam, that screws the lid on. When it's plastic, it's fine, nothing happens. But when it's aluminum, it scratches and crushes. Now we have to have people hand tightening our breaking thing. We were like, "And by the way, it needs to cost this." We were like it was so hard. Everyone said no. We finally found one that said yes. Then it's now it's like, "And we like working with small businesses." But then we're like overwhelming them with orders because if we just keep on getting orders. It was hard. It's like people are like, "Oh, they're good problems to have." You're like, "Hey, yeah, but they're actual problems still. We still think it's a real problem."Lindsay:I think that, and even our fulfillment company is it was incredibly hard to find a fulfillment company that will commit to not using plastic tape, so hard. When we finally found one who would even... They didn't even commit, they were just like, "We'll try to use paper tape." We're like, "Okay, that's fine." We were with them until we were big enough, and then [inaudible] companies wanted us. So then it was like, "Oh, hey, we know your plastic free. We bought a paper tape dispenser just for you guys." We were like, "Oh, we'll come to you." That's really cool because now it's there's other brands that are smaller than us that can work with that fulfillment center, and they don't have to have the same battle that we did. It was definitely hard, and the bigger you get, the easier it is.Stephanie:How big? What's that tipping point when manufacturers started reaching out to you all?Lindsay:That's a good question. The thing is, is that we're in a good spot now where it's like, but then what happens is that you then start, you still, then start outgrowing where you are. Because we were working with small, now we're at medium, and it's like, "How does that feel?" I think what we're doing this time, and we're learning as we go, instead of going to a bigger manufacturer, we're actually in the process of setting up other manufacturers around the US. Right now, we're literally made right up the street in LA. But we're going to also have one on the East Coast and then possibly one in the Midwest, and that would be the way that we would do it instead as opposed to going through a bigger. We like working with small businesses. We like supporting that, and so I think that's how we're going to go.Stephanie:Yeah, which I think is probably more helpful when it comes to logistics and shipping and being able to route orders and [crosstalk]-Lindsay:Exactly.Stephanie:... orders from your East Coast facility and, yeah.Lindsay:Right, and we don't offer a rush shipping either because that's the highest carbon footprint essentially. So being able to have a... we have our warehouse here in LA, now we have a warehouse in Chicago, so we can still get orders to our customers much faster without having the rush thing, just fricking sweet.Stephanie:Yeah, that's great. What issues do you encounter with people who come to your ecommerce website and they're trying to learn about it? What things did you have to solve on there that maybe you weren't expecting? Whether it's around like education or how to use this, or what is this and what things are you working on around the customer journey?Lindsay:Yeah, it's a huge education puzzle because it's something that we brush our teeth twice a day, every day, since we're like four years old, three years old. Asking a customer or asking someone to break that whole concept and use a tablet is a really big deal. Especially, we're all on autopilot when we brush our teeth. It's like who's thinking about that. I think that for us, it's trying to explain, it's not only explaining the problem, like the billing toothpaste tubes and the plastic problem, in general, which thank goodness is getting way more attention now than it was previously, which I think is just so important. It's like not only do we have that education thing, but then we have the actual using of the tablets.Lindsay:So you need to pop it in your mouth, you need to bite down, you want to use a wet toothbrush. Then if people aren't getting the foam that they want, it's explaining like bite down a little bit more. This whole thing, very, very hands-on. Then the final piece of the puzzle is the fact that we're subscription, and the fact that we don't use rush shipping. In the world of Amazon where everyone's expecting their thing to end up the next day, ours takes like a week to get there. But it's we're carbon neutral, we offset the carbon. We purposely choose slower routes because it has the least footprint. It's like there's an education piece every step of the way. But, luckily, we have really curious customers who that's important to them.Lindsay:Instead of being penalized for our stuff getting there slow, typically, they're like, "Oh my gosh," as soon as they realize why, they're like, "We get it and thanks for doing that." I think it's definitely a totally different way and way more work the way that we're doing things. But, in the end, it's the most important thing.Stephanie:Yep, and it sounds like you made a conscious decision to not be on Amazon. What was the thought behind that? Was it the sustainability aspect of it, or you just wanted to keep your customers in a place that you can fully educate and bring them on board, or how did you think about that?Lindsay:Yeah, it's funny because I get this question a lot, and I guess, just for all of the reasons why you would assume for an eco-friendly brand not to be on Amazon, is true. At the beginning, I had to make that choice and I did, and then I just haven't changed it. It's not something that we would like... I'm not saying we would never ever do, I don't see us doing it. But if there was one of the criticisms we get a lot is accessibility because we are only available on our own site. We're not in retail and we're not on Amazon. I've done that for a lot of reasons, control is one of them. I know when it comes out of my site, it's not packaged in plastic, it's not I know exactly where it is. If there's a problem with the order, we can look it up.Lindsay:It's this whole it's I like that hands-on approach, but it's not... You do compromise on accessibility, and so that is something that one of the things that we get is you guys are really trying to do the most good, then why wouldn't you make it accessible to everybody by being on Amazon or being in Target? For me it's like, "Well, I'm not ready to think about that yet. Maybe you're right, I'm not even thinking if that's right or wrong yet, but I'm not ready to even look under that thing." But so as of now, no.Stephanie:Cool. Makes sense. Let's talk about product development because I know you have a new whitening gel product coming out, and I want to hear what that process looked like when you were so focused on your toothpaste bits. Is that how... Yeah.Lindsay:Yes.Stephanie:Then shifting over to starting to create new things and listening to maybe customers and what the market wants. How do you think about developing new products and the logistics behind it and all of that?Lindsay:Yeah, new products are so fun. We listen to our customers, I think, obsessively. I'm constantly going through our DMs, I'm constantly going through Instagram. We have places on the site where we're asking for their feedback. It's so important to me to have that really tight relationship with them, and so that's how we knew. We have our 2K servers that we came out with mouthwash and we came up with mouthwash as a direct response to what they've been asking for. We have our toothpaste, it's really minty, but it's not like pow in your face like commercial minty. We do that specifically because there's a lot of people who we want it to be natural mints. You can really only get it so minty, honestly.Lindsay:But also we want it to be just a lighter mint, but what people are asking for is a really pow in your face solution. We were like, "Okay, let's do mouthwash." That's what our mouthwash tablets were or are, and you basically just pop one into in your mouth, you bite down and they're made with nano-hydroxyapatite, just like our toothpaste tablets, so it's good. Not only does that help to strengthen your enamel, but it also helps, basically, it coats your teeth and it makes them look whiter and brighter. Like not only that, it makes your teeth look nice and shiny. It's like minty, it is like in your face.Stephanie:It turns into a mouthwash from a tablet?Lindsay:Yeah, and that was something that was super fun to make. It has similar ingredients, but then we've also used like... We basically put other things in there that just immediately dissolve in water. When you put it in there and you take a sip of water, it just dissolves super fast and gets all over your mouth. Basically, it turns into mouthwash. That was super fun and that was our customers asked for something like that, and so that's what we made. Then we have our bamboo toothbrush, which has castor bean bristles, which is actually really rare. Most bamboo toothbrushes are made with nylon or polyester bristles. So we did castor bean because it will compost down to plant food essentially.Lindsay:Then same with our floss, it's made of PLA, polylactic acid, which gets a bad rep sometimes because it's one of those industrial compostable things, but it's so thin that it's not like the same as when you get like a cup of this made of PLA. But the reason we get that is the only other option is silk and we're a vegan company, and were like, "We're not going to do that." Also soap, but soap floss broke too easily for me. I use all of our products, so I'm like, "If it's not working for me, it's not going to work for our customer." Then our most recent one is our whitening gel, and so that was something that, again, our customer had been asking about because it's whitening, especially, whether it's the lights or the the trays. Those syringes, like the plastic syringes, not like [inaudible], those syringes and the whitening strips are not recyclable.Lindsay:It's like those are going in a landfill and our customer and like me too, you're doing what's best for the planet, but you also you want to be able to whiten your teeth and you want to be able to wear makeup and do these things. We were like, Okay, how are we going to make this solution?" It was actually way harder than you would think because whitening gel, it expands and contracts because of the peroxide in it. When you put it in glass, it's way less friendly than plastic, which will expand with the gel. It was actually quite a hard nut to crack, but it was really fun and we're the first and only ones to ever do it. We launched it last week and it's just sales have been amazing.Lindsay:That was one of the things too that we're constantly trying to figure out, "How much do we order? How is this going to do?" We're like, "We don't have any data and no one's done this before. How are you supposed to know?" There's a lot of gut thinking that goes into what we do as well.Stephanie:I was just going to ask about how you plan for the order management and how much to even make, and how do you think about that when you haven't created a product like that before?Lindsay:I stress our ops guy out all the time.Stephanie:You're like, "You got it."Lindsay:Yeah, I'm like, "We don't know." We, literally, get on the phone and we're like, "Okay, what do we think it's going to be?" Then try to figure out like what's our lead time and how fast? It's always coming up with plan A and then plan B, and then what's the ripped cord plan? What's the perish shoot of like, "We've sold through this in three days. What do we do?" Type situation. Yeah, we're always coming up with those kinds of things.Stephanie:That's cool. Yeah, I'm excited to try the whitening gel. I want to try this mouthwash. Now, I'm like, "I'm just going to spend the whole day just working on my teeth, trying all the things."Lindsay:You and me both.Stephanie:Where do you want to be in a couple of years? What are your goals? What are you guys focused on right now?Lindsay:That's a good question. I really like where we are now in terms of I want to be doing what we're doing, but just bigger. I think that we've seen some really positive things since we've started this journey. I love basically being the thorn in the side of these big companies. I think one of the things that has happened really recently that people think is scary or bad, but I think is actually incredibly exciting is we've seen the big guys, like big pace, like get into our space. They're starting to come out with their own toothpaste tablets. They're starting to launch these things specifically going after our customer. For me, that's the most exciting thing ever because we, as a small brand, can do a lot but we can't do it all.Lindsay:The plastic problem and the reason we're in this to begin with is because the big guys have made unsustainable choices and have been caught in this race to the bottom, and they've been doing these things. For them to see us basically improving out the market, being like, "Hey guys, this works, hey guys, this works." Then them feeling pressured to have to then be like, "Oh, we're losing part of our market share to this little company. This is super annoying. Okay, fine, we'll release a two-face tablet." Even if they're not doing it for genuine reasons, they're doing it, and that's keeping plastic out of landfills. It's showing that people care about these things and it's going to ultimately help the movement.Lindsay:If we're the ones that are there, it's like, "Cool, you guys released toothpaste tablets." We already have like other products that we're releasing that's going to do the same thing in other spaces. It's like, for me, it's I love that position. If we can just still be there on the fringe and still pushing these big guys and showing out that there's a market, that's exactly where I want to be. I just I hope we're doing this but more.Stephanie:Oh, that's cool. I definitely could see these companies coming and trying to acquire you. Then a lot of those brands, I think, need to garner more trust. Like you said, whether it's genuine reasons that they're doing it or not, if they were to take a company like yours and triumph pulled into their own, it'd be great if they could take your best practices and level them all the way up to the top of the company. Might be hard doing that. I'm trying to even think about like what that integration process would look like, and trying to maintain the clarity behind the message and the brand and the mission and everything. But I feel like they're going to come and just try and scoop you up.Lindsay:I don't know. Well, and the whole point is to get... If we can show that customers want this and then the big guys start doing it, that's when like accessibility no longer because as long as they do it right. If they don't do it right, I will be tweeting about the store [inaudible]. Yeah, as long as like they're... and it doesn't, and that's the thing too is for sustainability it's like, "Yes, I would love that we all want to save the planet and we all want to do this." But also if your company's behaving in a legitimately sustainable way, just because you see that there's a market opportunity, that's the same to me. Because the at the baseline, it's still helping the cause. I think that's where we're really trying to push. I really want that.Stephanie:That's cool. Amazing perspective. I love that. All right, well, let's hop over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud, our basic sponsors. This is where I ask you a question and you have a minute or less to answer. Are you ready, Lindsay?Lindsay:I'm ready.Stephanie:Okay. What's the nicest thing anyone's ever done for you?Lindsay:Oh my gosh, that's a really hard question.Stephanie:You can take time to think about it though.Lindsay:Yeah, I got a minute. I got one minute.Stephanie:While I drink my water.Lindsay:I guess the nicest thing anyone's ever done for me. With that, is that I'm thinking of so many different things. I'm not like, "Oh, I can't think of one thing." I'm like, "I'm thankful for so many different things." I guess the first thing, though, and I think it's because we were just telling the story. This is going to sound so cheesy. I really think the amount of for [inaudible], like first customers gave us at the very beginning when I was sending these emails being like, "I'm so sorry that I have your money and I can't deliver your product for two months." They were like, "It's cool." Like that literally would bring me to tears.Lindsay:I would get those emails and I would be crying on my bed, and Asher would be like, "What's going on?" I'm like, "This customer said it's okay." Because that was a really stressful time. I'm sure there's like way more meaningful things, but that's the first one that came to mind.Stephanie:I love that, yeah, not cheesy at all and that's awesome. What one thing do you not understand today that you wish you did?Lindsay:One thing that I don't understand today that I wish I did? I guess like investing or something. The first thing that he said, I was like Bitcoin.Stephanie:We've had people say that.Lindsay:[inaudible] let's bring them down. Just putting too much time on Clubhouse, okay.Stephanie:Yeah. Hey, there's Bitcoin clubs, you can just hop in.Lindsay:Yeah, I know, but I don't think that would help me understand it.Stephanie:You can get up on stage, just ask all your questions and you'll be good.Lindsay:Yeah, I think that was like maybe if I did one understand that actually I should probably think of more meaningful things. But, yeah, I'll say that. I'll say that for now.Stephanie:Okay, cool. Another question, I feed my creativity by doing?Lindsay:Going on a run.Stephanie:Going on a run?Lindsay:Yeah, random, but that I know off of that [inaudible].Stephanie:If you had a podcast, what would it be about and who would your first guest be?Lindsay:Oh, I love that. I would love to do like sustainable journey type one where it's a... but it would need to be done in a non-boring way, which is why I haven't done this yet. But I would love to have, honestly, I would just love any excuse to talk to Jane Goodall. I would literally start podcasts to just talk to Jane Goodall. Yeah, I would just basically orchestrate a way to have a podcast to talk to her.Stephanie:I love that. We are working on potentially putting together a sustainability podcast and looking for a sponsor right now. Anyone out there you can get in, and Lindsay is ready to hop in and talk to Jane. We already have everything set up.Lindsay:Yeah, any time. Any time.Stephanie:The last question, what one thing will have the biggest impact on ecommerce in the next year?Lindsay:What one thing will have the biggest impact on ecommerce in the next year? I'm thinking, this is important. I would have said the iOS thing, but we've already been through that and that didn't really do all that much. I would say the incredible amount of brands that are starting up and the competition in the way that that's going and brands'' abilities to adapt and what we were talking about, pioneering those new acquisition channels. I think that will be the biggest make or break moment for a lot of the brands that have popped up over the last two years. I hope that continues to go up and stuff.Stephanie:Yeah. That's a good answer. I do sit there and wonder like how is this going to play out with all these new D2C companies popping up so much competition? How do you stand out? It'll be interesting watching.Lindsay:Yeah, it reminds me of what happened with TV in a way where it was there used to only be those channels, like certain channels. Then, all of a sudden, the internet came and then it was really fragmented. Then there were so many and you're like, "Where are all the eyeballs? How do we get eyeballs?" It's like the same thing, but with brands. It's cool. It's a good thing for the customer, that's for sure.Stephanie:Yeah, I agree. Well, Lindsay, this interview has been so fun. You're a blast, of course. We'll have to have you back for round two, hopefully, in the future. Where can people find out more about you and Bite Toothpaste Bits?Lindsay:Yeah, on our website, so it's either bitetoothpastebits or bitetoothpastebits.com. They can come to us, and then on social media is just @bite, so B-I-T-E.Stephanie:Amazing. Can't wait to try everything out and thanks for joining us.Lindsay:Thanks.
One of the hardest things to do in ecommerce is creating an online experience that truly showcases every aspect of a product. This is especially true in the world of luxury goods, where allowing customers to touch, feel and admire the craftsmanship of a product. And at the same time they are expecting an indulgent in-store experience which is tantamount to the story of the brand. Just the in-store experience can serve as the main selling point and create word of mouth like no other. Throughout his career at places like Brunello Cucinelli and Boggi Milano, Fedele Sforza has had to meet that challenge head-on and figure out a way to create a luxury ecommerce experience that matches and works in tandem with the luxury in-store experience. On this episode of Up Next in Commerce, Fedele tells us exactly how he’s been able to do just that, and he explains why ecommerce leaders have to be evangelists within a traditionally retail-based environment. Plus, he details how to use data and technology as a window into the needs of your different customers, which you can then leverage to create personalized shopping experiences across channels. Enjoy this episode!Main Takeaways:Showcasing Luxury: The in-store experience is a much easier place to showcase luxury items and create a one-of-a-kind, high-end shopping experience. Online, there are fewer ways to showcase craftsmanship or cater to a consumer. But it’s not impossible, and it should be a priority to create a personalized and extravagant experience online that can match or work in tandem with what happens in-store.Friends, Not Enemies: When a company begins to prioritize and invest in ecommerce, often the retail side of the business sees that as a threat. An ecommerce leader’s job is to be an evangelist and show the ways that both retail and ecommerce can work together, share data, and create experiences that cater to customers in a more personalized way. If that collaboration happens, not only will customers have a better experience, but the business will see a boost on the bottom line because sales are being optimized across all channels.Curating Connections: Rather than making a list of channels in which you have to market, start to think about finding ways to form connections and create experiences with customers in the places where they want them. Not everyone is in the headspace to buy something when they are scrolling through Instagram, but they might be interested in purchasing something when they are at an event with friends. You have to find ways to connect with people in all places and in unique ways so that you are top of mind whenever they are actually ready to purchase.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, your number one stop for all things commerce. I'm your host, Stephanie Postles, CEO at Mission.org. Joining us today is Fedele Sforza, who's currently working as an ecommerce and omnichannel consultant, working for large and small companies. Fedele, welcome.Fedele:Thank you. I appreciate your introduction.Stephanie:I'm excited to have you on. I was actually about to namedrop all of the companies you've worked on ecommerce back in the day, but then I was like, "I should just let you do it, because I don't want to botch that." So, could you walk through the places you've been and how you've got to where you are now?Fedele:Yes. Since we started, I've worked for fashion companies in Italy where, as well, we have a lot of them. I started at the company which was in the denim, it's called Dondup. Fedele:Then, I worked for Brunello Cucinelli, which is a big company already known all around the world for its craftsmanship. It's a luxury brand. There, I worked, in terms of creating digitalization in the company, not just ecommerce, not just the website, but also creating a sort of experience of luxury, which is the most difficult thing usually.Fedele:When you have the possibility to create an upper-level experience, you are doing well. It's always difficult to communicate a product like that, with that price point. With all the technologies that we had, we did quite good, trying also to personalize in an artisanal way, which is something a little bit different from a lot of companies now. I did the rollout, also, of the entire ecommerce worldwide, using Salesforce Commerce in that case. We connected also the part of the service and the Marketing Cloud for the automations. There, we had also the part of omnichannel, which means, in that case, return in store, pick up in store, and all these kinds of activities.Fedele:I worked for Aspesi, which is a small company, medium. Core business was the outerwear, female luxury outerwear. So, the company was starting to adapt themselves to the commerce, selling on line, ecommerce. In that case, I had the opportunity to create a sort of alignment with, also, all the marketplaces, like, for example, Farfetch and also some other retailer online, which is the most difficult thing, when you would like to find a balance between your buyer to consumer sell, and the other kind of selling, like from marketplaces and direct to consumer retail as well.Fedele:And then I went to Boggi Milano. For me, it was a good opportunity to experience very well the omnichannel part, Boggi to run this store around the world. The great thing was trying to connect a single view of the customer in order to give the same experience everywhere.Fedele:I think the possibility to use all the digital platform was very good for me. I think that was a great experience in order to understand how to create a loop in the journey of the customer, and that's Boggi Milano. Then, I decided again to jump from the place. I take the opportunity to move by myself after a while, because I had a lot of requests from companies to help them to create a sort of next-level image online and giving them the possibility to create their business online; which is something especially for a startup that seems difficult, but actually, after a while, a startup is sometimes better also than working in a complex ecosystem. It's starting from scratch. And now, here I am.Stephanie:That's awesome. I mean, obviously you've had a ton of experience. I want to hear a little bit about what the landscape looks like in Italy when it comes to ecommerce. Because a lot of these companies you've worked for ... I mean, Boggi Milano, I think, has been in business since 1939. You're tackling companies that have been around for a long time, probably have certain things set a certain way. What does the ecommerce landscape look like in Italy, where maybe it's different kind of challenges than what we would see in the US?Fedele:I think that Italy is now getting faster on the road of innovation. I think pushed from this situation probably. What I saw is that usually you arrive in companies, especially in the clothing companies, where there already some systems that you should try to adapt in a sort of, let's say, your way to work with that kind of processes. Fedele:In this way, I think that people understood the importance of the ecommerce and not just like a window, because that's something very old, but like something that it's a sort of place where you see all the results of the work of the entire company. I think it's not just a part of the brand image, but also of the strategy of a brand, the positioning, etc.Fedele:Usually, especially in the companies where you find a lot of craftsmanship, you need to adapt the experience that you have online. Especially in companies that are in the luxury, you need to show to the customers that part of the experience. Especially in the image online, sometimes you are struggling. In this case, you try to find the way to adapt the model that, for example, store managers are using into the stores, for example, which is something that is trying to do storytelling. And that's something that you bring also online, not just to put in some contents into the online store or the website, but also understanding that maybe if you can try to personalize each kind of content for each kind of customer.Fedele:For example, I had the opportunity to, especially in the last year, use content specific for [cross-saling]. When you know already that the customer is more into, let's say, trousers, it's better if you stop communicate them shirts, for example. Maybe they already have a shirt, no? In that case, you can use the marketing automation to figure some email directly to them. Maybe you understand, for example, that they don't like to receive emails. Maybe you use another channel, like it could be ... Another channel in advertising, or it could be ...Stephanie:Texting.Fedele:... For example, texting. Or, maybe, I think the next level will be something that is more direct. Because especially in the luxury stores, usually each store manager [inaudible] of a customer. And the same way, if you imagined ecommerce like someone that is an ecommerce manager, like someone that is managing customers in terms of information, and maybe helping them directly find something they really want. Not pushing them with email. We receive already tons of email, no? It's better to find a personalized way.Fedele:For example, in this case an idea could be live shopping, personal shopping, which is something very interesting that probably everybody will adopt in the future.Stephanie:Yep. The one thing I want to circle back to is around selling luxury goods, because we haven't talked too much about that on the show and I want to hear how you approach that from an ecommerce perspective and how you actually showcase luxury. What are you doing when it comes to the ecommerce presence and maybe what things are you pulling from retail to support that, or lessons that you're pulling into ecommerce to show that this is a high-value item, it's worth the money, here's why?Fedele:The first thing that ... I know that could be obvious, but it's the first thing to do usually, is to create digital assets that are really powerful. For example, in one case in Brunello Cucinelli, if you go to the website, you can see that images on the product are very well-done. They are not just normal images like, for example, could be in a normal platform that you find online everywhere. They are trying to give the projection of the product, the quality of the product, for example. Especially for a product that is maybe more than 1000 euro, it's important to understand the feeling.Fedele:Another thing that is related the image of the brand, in this case, is also the lifestyle. You are not just selling, for example, a shirt, a sweater, or knitwear, whatever: you are selling an outfit, you are selling a part of the experience of touching that kind of item. Usually, with this part of the image, you help the customer following them through the services that you have the possibility to contact them. For example, understanding what kind of item they like more and maybe during the session of purchasing, following them, through a chat, for example, that could be interesting. Understanding the pages that they are maybe not browsing and maybe skipping and understanding better when they talk.Fedele:I think one part of this could be the conversational part, also, if we want to resume it. This would be something that will be stronger and stronger, probably, in the future. This is something that usually helps a lot, like storytelling directly, which is live. And not just that, because I think that also the possibility to give the emotional [inaudible], someone that is talking to you, it's something also important. We see mainly, in the websites that you can browse actually, people that maybe they are going around without maybe purchasing, just browsing, browsing, browsing.Fedele:The most effective thing that I used usually was putting conversational chat, could be, for example, that maybe as [inaudible]. It means that, for example, understand that you are in the product page that you would like to buy and maybe in that case there would enter an agent that could be not just a service agent, but a personal shopper, which is something that knows the product, for example, and could tell you something more. Not just giving you information about shipping or returns: something more that is related the product, specifically.Stephanie:I was just going to ask about that. I could see, for a luxury brand, you can't just put bots and conversational bots on the website: people going there are probably looking for that in-person, curated experience that they would experience when going into a retail location of maybe a Boggi Milano. How do you think about having customer service on the website that kind of replicates it, to something that they would experience when they go into the store as well?Fedele:Probably will be a sort of mix of the two things. One of the things in the future that we will see is that probably people in the stores will help the selling online. Let's imagine how it in a technic way could be a chat that is popping up and when this figuration knows that probably there is a person that is a hot lead, in that case maybe there will be someone in the store that knows that this is the customer, maybe logged in. And in that case, there will be ... Or one person that in the store is using, I don't know, an iPad or maybe a smartphone or whatever, understanding the customer and giving him all the information that he needs about the product, for example. So, there will be a sort of, also, optimization of the sale agent or people that are standing into the stores, for example, merging all the information about the product and information about the customer in this case. Fedele:But regarding this typing of selling was called before show- rooming, was something like that. I think that more and more it will be applied to all the kind of customer. The most difficult thing is also approaching, for example, to a kind of customer that is not digitalized. In that case, no ... In this case, maybe the best thing is trying to contact the customer, helping them maybe to book an appointment and giving the possibility to going to the store and maybe after that trying to give them the possibility to try the selling online.Fedele:One of the things that probably we will see in the future is also the part that stores should not be anymore warehouses, just warehouses, but will a sort of experience point. In this case, you will merge probably what you have online with the offline.Stephanie:How are you advising brands to do that now, especially when maybe things are starting to open back up? I know you're talking about having these pop-up shops and maybe a guide shop you can go in and try stuff on, but what are you advising around how to think about it over the next year or two, of what's going to work?Fedele:Talking about this part and what I was saying, for example, one of the struggling points is the warehouses should be all around. You cannot have just one store with this item. Probably, in the future warehouses will be hybrid, let's say fluid, where all the customers could see online what they had; probably, also, into the store. For example, one thing that could be, and I experience that is very helpful into the store, is having an iPad with the entire catalog, let's say a replication of the ecommerce, somehow. In this way, selling what you have not in the store, but selling what you have into the online warehouse. Online means everywhere, probably.Fedele:I think that the best thing is not having a stock that is stopped in one store, but a stock that is moving from one to the other store, in order to have the largest possible SKU numbers in terms of stock options. I think that another thing is the training of people into the stores, for example. Giving them the possibility to understand that behind the digitalization there is not the cannibalization of the store. There is something that could be another way to sell something that you probably don't have in the store. It's another way to, let's say, something that would become a sale agent 3.0 or 4.0; I don't know how many numbers we are having now. Helping them to become more tech-advanced.Fedele:Especially in Italy, when you go in the store, maybe you see people too much connected with the store, with what they have into the store. But they are not thinking that maybe they could understand if a customer is a loyal customer, what kind of item he bought, what kind of size preferences he has. It's something that is happening already probably into some online stores, but not yet in everywhere.Fedele:One thing that I will see, next trend will be ... Sorry, if I say the name is [digitalization]. When the store becomes digital. Especially in Italy, I saw a couple of stores that are starting to become more and more like that. It's like Adidas and Nike, for example. They are using a lot of part of NFT, virtual reality, and all these kinds of aspects that will be helpful for each person that is going into the store. There are a lot of possibilities now; I think that our role is to help brands to start to approve these kinds of digital assets and putting in the store to give you an extra experience.Stephanie:Yeah, I was just going to say that it seems like especially for luxury brands, figuring out what kind of experience your customer wants and what's going to draw them in ... I'm even thinking, back in my California days, there was this one little strip that was like a street and all the shops opened up, and they all had wine, so of course I'm going to be there, and appetizers. And I remember the different kind of events: some of them have bands, and it was all very unique depending on what the items were and what they were selling, but it left a really good impression. And every year I'm like, "Oh, I need to go back there." I forget what it's called, whatever the name is. But I would go back there because of that experience and then have really good brand awareness. "Oh, that was the one that had the really good cheese board and wine, and had the band playing." Or whatever it was.Stephanie:How do you think about luxury brands creating events like that and experiences that match what their customers want? Or maybe creating partnerships that they weren't doing before this?Fedele:I think that one part of this kind of asset that we're still exploring is the content personalization. Actually, I didn't see yet, for example, a website that is adapting to what you really would like to see. When you have your experience, for example, it's like, for me, I like wine, too. When I go into wine stores, they know that I like strong wine, something [inaudible] with a full body. And the sales assistant knows already that probably I don't like some other kind of wines.Fedele:This is something that probably in the retail is working, and the retail will having extra information with the data, through the iPad or whatever. Already there are in place these kind of things. The good opportunity for the stores online is the fact that they have data probably and they maybe just need to convince a little bit more to have the navigation logged, for example. But they are not yet adapting the experience of browsing into the store with the content personalized for each one.Fedele:I think that the next big thing is this one. Not just the content that are, let's say, set with some rules, already preset, but something that works with artificial intelligence. There are already in place some tools and platforms that are working in this way. I talk about Salesforce, because it was one of my experience. Salesforce ...Stephanie:Tell me more about that.Fedele:... As Einstein and the next best option, for example. Well, already has data, already has data about the navigation, already has data about the content that the customer would like to see and the content that they skipped. Already has data regarding the purchasing. Already has all the information. What you need to adapt is the system [inaudible] and front-end and back-end as well that create this kind of experience that is unique for you, removing all the other information and images, whatever that probably that customer doesn't want in general.Fedele:This is also very powerful, because think about conversion rate optimization. What is the higher way to create better conversions? Removing all the friction, removing all the aspects that the customer doesn't want. All this information already exists. I think we are still missing the real personalization of the contents. There are still people, probably, that they don't like, they want just to browse. There are stores that are full of these non-personalization possibilities. There is place for everyone, probably.Stephanie:Yeah. I don't know much ... I know Salesforce. Commerce Cloud has Einstein, but tell me about when you were thinking about implementing AI, especially for a company with maybe quite a few products. What did that look like? What were you trying to solve and then what did the process look like to actually get that going? And then what kind of results did you see? Kind of like a mini case study.Fedele:I think that the ... For example, in case of Salesforce, let's think about one possibility, which is [inaudible] of the product, of prediction of the, "You may like this." Usually when you go on the website and you see, "You may like this," usually is not something that you like.Stephanie:Yeah, like, "No, I'm good, actually. I don't need a toothbrush along with my t-shirt."Fedele:Yeah! I think that two parts of the possibility of content personalization are these, in specific way in the products: you have all the data that helps you, for example, to understanding what kind of item would like this person. In that case, you can really give personalized content that you could like. But not just that, because it's not just into the website. Also, connecting, for example, the marketing information, let's say Marketing Cloud in this case, could give you the possibility to send email, which is the channel that we all use, sometimes we abuse, but more personalized. Not just putting any item. No, you find the new collection. Oh, okay.Fedele:Could be better to say, "In the new collection are the items that you always looked for. It's this." And maybe, "Wow, you understand it is this." Okay. Not enough. You can connect those to the automation to, for example, advertising with the personalized content. I had the opportunity to see some tools like, for example, I don't want to say the name. But there are some tools that are working very well already with the banner personalized into the content. They personalize the image and also the tone of voice and also the copywriting in the banner.Stephanie:Wow, that's cool.Fedele:Yeah, it means that you can see really ... For example, I saw some luxury brand that they used an impersonal form to talk with people. Maybe sometimes they could understand that a personal form in [A/B] testing could be better. In this way, maybe they could perform this kind of A/B testing using personalized content, like, for example, in the banner and whatever.Fedele:There are already these kinds of aspects and it could be very good. Another point that we saw before, for example, could be that maybe this person is browsing every day, because at the moment stores are closed. He's browsing every day and probably is really interested in one item. Could be maybe if you try to push one of the sale agents to talk with him, if he knows him, and understand in some way if he needs help buying online, for example. Or maybe convincing that you could buy; maybe you can also return. Or maybe, "You take it and when we reopen the store and you try the other size, whatever."Fedele:There are already these touchpoints. They're important for each company to put all together these touchpoints. Sometimes, in my experience, I found a universe when you arrive. Data everywhere.Stephanie:I was just going to say. A lot of companies we've talked to, it does feel like things aren't very connected. I mean, how you're saying you take Salesforce Commerce Cloud, then you plug in their Einstein, then you plug in Marketing Cloud, and you've got this whole suite where the data's all talking to each other, informing ad campaigns and marketing campaigns, and it all comes together. A lot of companies we've talked to, like you said, it's a universe and marketing team's not talking to the tech team, who's doing the ecommerce implementation, who's not talking to the ads team. It definitely seems like there's a lot of room over the next year or two to bring everything together and maybe reduce the tech stack so it's more uniform and connected than trying out all these one-off tools here and there that create individual databases that are hard to tap into.Fedele:Yes, I think that, as I told you before, our role sometimes is to be an evangelist into the company. Really, sometimes is also the more human part of being mediator in all the roles. One of the difficulties that I found in my previous experience is also, for example, talking with the production department or talking with the retail departments. Sometimes, especially for the ecommerce, we were seeing we are against the retail. Now that they understood that we are servicing them, because we are the biggest window, if we think about a website. They are understanding that we could also collaborate somehow.Fedele:For example, some data that we are collecting, they could be helpful also for the production team. Sometimes they come to us and they tell us how many views has this product, to understand, how many returns we had with this item. "We had too many." Okay, maybe next season we don't do this. And this will adapt, also, the model of a production system, which is something very powerful, actually. So, we are a sort of mediator sometimes, because we are in this ...Fedele:And when I talked about a digital mindset is something that would be really helpful. Also, for the human resources, starting to find people that are really mediators, but also they are innovators somehow. Also, in a little part, a little digital specialist or whatever. But at least they know what they are doing. This is something that is happening now: we are forced to stay at home and we use a lot of technologies devices. Maybe my father now is more evolved than me, probably, somehow, when he was condemning me about staying a lot on the computer, but now is working more than me. He's using digital more than me sometimes.Stephanie:A fast-changing world. A lot of people are jumping on that maybe wouldn't have otherwise. The one thing that I have started to think about is, because things are moving so quick and we're all at home and behind screens, I think there's an area where we can lose touch with the human experience and what people are seeking when they go to a retail store. I'm even thinking about when you were saying about how someone's browsing every day on the website and maybe a customer service person should reach out.Stephanie:But imagine if you take it a step further and you come back the next day and it's the same one. Like, "Oh, Stephanie's here again." "Hey, welcome back. Any new questions today? I know we talked about this yesterday." But thinking about why do you go into retail? Sometimes it's fun to see the same person, where they have context with you, where they know what you maybe already bought in a more personal way. Same coffee shop person, where it's like, "That's my girl! She always knows how to make my coffee." But thinking about how to bring those kind of experiences online, I think, is something that's maybe been missed because we've all behind screens and not as much in-person interactions, where we're kind of forgetting, "What do we seek when we go in person and want to go into a store and meet someone, and talk to them?"Fedele:I think that I did the thesis of my master's degree that was regarding social media in this case, social media relationships that matter. I think that the point is really knowing the customer. Think about back in the years, we started to talk about not anymore the brand at the center, but the customer at the center. I think we like to put the customer at the center, but at the same time we like to put, especially in the fashion sometimes, the brand image of the brand at the center and then the customer. I think this way we need to put again the customer at the center, understanding whatever he likes and creating this better relationship with them.Fedele:What you told is something that is really important, especially considering what is happening in the stores. I think probably the other point is not creating a service theme, but a personalized system theme, so people that they ... Like is happening in the stores, a portfolio of customers where they really study the customers. Also, in my experience, especially in the startup, I start really looking at each order that is coming from each person that is coming to understand what they do, what they like. This is good for me because it helps me to understand where I should improve something and how, maybe, I could talk with them. What is the tone of voice? What kind of aspects I should touch when I talk with them?Fedele:This is something that is not just a segmentation, but this is something that is more related fluidify the relationship that you have. In the past, I think we had too many [inaudible] behind one cluster, another cluster, etc. Now, I think that with the artificial intelligence, we have more possibility to predict some kind of aspects regarding the customer and doing some actions that are really being connected with him. I see one thing that could be strange in one of my previous companies, for example, we used to try to do some kind of upselling writing after looking at the order, understanding that we, for example, sending an email with the followup. "We are preparing your order. We see that you bought this and this. We would like to thank you, blah blah blah, and we would like to suggest this kind of matching." And there's also written, handwritten sometimes, whatever it is. And giving him, also, the possibility to, for example, see the outfit preview through the email, whatever it is.Fedele:Usually it happened that the customer starts to understand that you really are focused on him. He didn't not just buy online an item; he bought something that is an experience personalized.Stephanie:Oh, I like that. I don't think I've ever had an email ... At least from where I buy. Maybe I don't buy enough luxury things; I definitely don't. But maybe that's why I haven't seen that, where it's like, "Oh, you bought this shirt, here's a pair of pants that go well with it, and shoes." I've never seen that level of personalization, which I actually think would be helpful, instead of just, "Oh, hey, Stephanie. I'm going to personalize your name and what you bought." Going that extra level to be like, "Here's how to complete the outfit," or, "Here's how to actually wear it," or what to do with it. I don't know. That's way different.Fedele:It's a sort of personal shopping. It means that you have people that really knows the product, knows the collection, knows everything of that. You need also a sort of human touch, and also for who you can do that or not.Stephanie:Mm-hmm (affirmative). And not making it just be the stock image that was on the website. Like, there was already an outfit; I don't want to see that one. I want to see something that feels like it's custom to me and not just what the model was wearing. Because if I wanted that, I would've bought it at the time.Fedele:Yes. Also, this was personalized in one case. For example, taking a picture from the showroom, we had the possibility to stay in the showroom where we had all the items of the collection that we are putting online, and matching directly and taking a picture and sending through the email. Then, in the followup, you can also write, manually sometimes is also nice, especially when we complete the order, we were putting something had written. And this is more personalized, I think.Fedele:Well, I think that this part of personalization that is transmitting something that is not just technology is very important for the luxury and especially for the fashion, etc.Stephanie:Yep. We had on a company called called Handwrytten, spelled with a Y instead of an I. It was interesting hearing about the level of increased conversions with handwritten notes coming from the brand. It's, I think, especially important for luxury. But then I also wonder, is everyone going to start getting handwritten notes because now it's easier to get those digitized and look handwritten, and maybe it's not going to be something that people want anymore? I don't know. It feels like if you abuse something too much, people get used to, "Okay, now everyone can get handwritten letters." And it looks like writing, now maybe it's saturated the market in a way that customers don't want that anymore.Stephanie:It feels like a really quickly evolving area, but maybe still an opportunity there.Fedele:Yeah, sure. And think about also the reduction, for example, spamming, which is something that is a part in this case. You increase the conversion rate, but you decrease also the losing time in doing things that probably are not working. We have a KPI, so we know already that there are some people that really don't care about emails anymore. So, it's something that maybe we should understand if there is another channel. Maybe this channel could be also sometimes a postcard.Stephanie:Yep. Are you experimenting with any new channels right now at some of the startups and larger companies that you're advising?Fedele:Not yet. I would like to, for example, in one kind of brands I'm working with, which is wine, it's a winery.Stephanie:Perfect.Fedele:I would like to give the possibility to have an extra assistant, which is, for example, a sommelier [aporte], which is someone that is giving you really a possibility to choose the right wine for you, for the right moment. Maybe connecting the loop, because they offer also the part of wine-tasting in the winery. But maybe at this point, you cannot do. I think that giving the possibility to, for example, give an experience that could be live, the first step, it's important, but also with this kind of ... The video, of talking directly with the person could be helpful.Fedele:And then, in the next touchpoint, maybe also creating a sort of relationship between the two. And that's a part that I'm working with. Well, I think that especially in the items that I'm working now, I work with another company which is a small startup, but is innovating a lot. We are doing spirits, uncommon, totally uncommon, which is made by Selvatiq plants, for example, botanicals. It's very difficult to communicate to the customer the differences between a gin that is industrial and a gin that is more artisanal, for example. Or a soda that is more artisanal.Fedele:Especially when you ... I felt, when I talk with people and I explain sometimes, when I had the opportunity to give the possibility to try them live, I saw that they really experienced more and more, and they buy directly. Also, some friends, that they say, "Okay, they would never buy." No, when they experience, they understand that there is something good behind and the storytelling helps a lot in this case, so it's something that helps.Stephanie:I like that. I had a really good wine experience last night, now that we're on the wine topic. Have you ever heard of this wine called 19 Crimes?Fedele:19 Crimes? No. I will check it.Stephanie:Everyone on the show always talks about, you can't just put technology on something. You don't want to just apply the newest and greatest things. "Why do you need VR and AR right now?" And everyone always says that. But last night, I got these two wine bottles, 19 Crimes. I bought it because it had Snoop Dogg on the label. I didn't know why, I was just like, one had Snoop Dogg on it and one had some very old timey figure on it. I was like, great, apparently these were criminals, that's why they're on this wine called 19 Crimes.Stephanie:And this wine company has an AR app, an augmented reality app, and you hold your phone over top of the wine label and then the figure jumps onto your table and starts making this whole scene about why this guy is a criminal, what he did, and it's just this whole world on your table and he gets pushed into the wine bottle. It was amazing, it was such a cool experience. Such a conversation starter, even people in my house who don't drink wine, like my mother-in-law wanted to come, look at it, see what was happening; she wanted to see Snoop Dogg talking, which I'm like, "Do you even know who he is? I don't know what he's about to say; you might want to cover your ears. But it was a really, really cool experience.Stephanie:It kind of made me think a little bit differently about where technology can be applied to create an experience like that that you're going to talk about. Now I want to go back and buy all the wine bottles that this brand, 19 Crimes, has because I'm like, "I want to see all the stories," what kind of AR experience they've built around this. It was awesome. Everyone should go check it out.Fedele:Well, I think that this is important for the future, especially in the everywhere world, not in terms of ... You were experiencing something that was online at your home. But could be in the store, could be everywhere. Most important part now that we need to understand that people are really everywhere and they don't want to talk about anymore channels, for example. But you need to understand where they would like to have that kind of experience, could be virtual reality or whatever. But it's something that is connecting in the same moment where they really would like to buy something, for example, or maybe know something, which is super important for me.Stephanie:Oh, I like that. Not all about the channels; you have to think about where your customer's enjoying it. Like you said, I don't want to be on social media, I don't want to be posting pictures on social media. It's like if you're having wine with your family or friends or whatever, you kind of want to be present there and only take out your phone if it's for maybe something that you can share together and not just be staring down at your phone and being a hermit. Sometimes I do that too, but ...Fedele:Yeah, also this point of the digital detox, let's say something like that. That could be something that is not just one person that is looking at his phone, because probably we did in this last year, will be important in the future. What you told is nice, because you shared something that you saw. It's not someone that is by himself watching something, but sharing. And this is also a way to network the product, for example, in this case watching on the side of the bottle, sorry if I go back, also on that.Fedele:I think that we are starting to find these kind of new elements, but it will be something that we will approach in the immediate future.Stephanie:Yeah. I completely agree. All right, we have a couple minutes left and I want to make sure we don't miss the lightning round. The lightning round is brought to you by our friends at Salesforce Commerce Cloud. This is where I ask a question and you have a minute or less, one minute or less, to answer. Are you ready?Fedele:I'm not ready.Stephanie:You're not ready? Okay, take a few deep breaths, shake it out of it. All right, we'll do the hardest one first and then it'll be fun ones after. Okay. What one thing will have the biggest impact on ecommerce in the next year?Fedele:I think that in the future there will be more and more personalization. We need to understand where are we and where we could go with our product, and stopping pushing people with just emails or whatever and understanding really what is behind each customer and adapting each content to each customer on the channel that is wherever it is. Everywhere channel, I would like to talk about. I think that data and blockchain also will be also the next big thing, especially in a loyalty process will be something that could be really interesting to be early adopter, probably.Stephanie:Oh, that's good one. I need to bring on a blockchain expert for retail and ecommerce.Fedele:Sure.Stephanie:That'd be a good one. Let me know if you have-Fedele:I'm working with one of the companies on something regarding the blockchain and I'm experiencing something that could be really interesting, especially ... For example, we talked about the wine [online] loyal system that is with a blockchain model adapted to it. It's super interesting. I think that somehow there's still someone that is not pushing, probably that is the economic model that we are touching. We need gloves to touch it, but I think that will be the next big thing as well.Stephanie:Yep. I agree. I'm a big blockchain advocate. So, you advise all these companies, you've worked with a ton of companies over the past decade or more: how do you stay on top of ecommerce? What are you reading? What you newsletters are you subscribed to? How do you stay on top of the industry?Fedele:I like to browse in general. I like a lot when I see content written by people that are experts in the topic. For example, I have many possibilities to look around online. [inaudible], for example, is one of the platforms that I like, because usually I find some genuine content. Also, well-written, for me. In fashion, there are many others. I always liked, for example, Business of Fashion, which is a website, super powerful. They do an annual report with all the information and I like also to understand what is the next trend, for example in this case, on fashion, technology, whatever.Fedele:Well, now I'm focusing more on the sustainability, to be honest. Not just for greenwashing, because it's not at all. I think these are mainly the ways that I find out. I experience also somehow with, in my case, I use a lot Spotify. I like podcasts through Spotify to listening maybe when I'm doing something else. I like to understand. And one way that I use also is students in my courses at university, because they are really somehow asking you something that is the next thing what is, you know? Sometimes I use the dialogue with them. So, also, networking directly with people will be also one good thing.Stephanie:Oh, I like all this. That brings me to my next question, then. You're a professor, like you just mentioned: what is your favorite lesson that you're teaching your students?Fedele:Usually, in my case, they like to understand more about the online experience in general, understanding more, like you asked before, how you sell luxury online, for example. And how you can transmit the artisanal projection of an item online. For me, these are the parts. Now, usually they are really focused on the digital, because I usually teach in a university that is in poly design, which is a design university, and they are really focused on understanding what will be the store of the future, for example. So, giving all the dots to connect, it's a good thing.Stephanie:Awesome. Well, Fedele, it's been awesome having you on. I've loved learning about the world of luxury and omnichannel and everything else. Where can people find out more about you and your work?Fedele:Thank you very much. For me, it was really nice to talk with you, especially crossing the idea between US and Italy, and giving the next big trend the possibility to go up.Stephanie:Yep, yeah. I've loved having you on. It's been a blast.Fedele:Thank you very much.Stephanie:Thanks. And then, Fedele, I would just say, "You can find me here." Wherever you want people to find you and we'll splice it back in to the audio. But if you want to say, "You can find me on LinkedIn or Twitter," just say that real quick and Hillary will put it back into the audio.Fedele:Sure. You can find me in LinkedIn and Instagram, if you like pictures, because I like to take photos. And, well, you can find the brands I'm working with, which is, for example, Selvatiq and there are many others. Well, I'm online, so you find me with my name and surname, usually, Fedele Sforza.
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.
The Beatles told us that All You Need Is Love. Howard Tiersky says the same thing — but he’s talking about brands, not the whole of human existence. Howard is the CEO of FROM, The Digital Transformation Agency, which has helped brands such as Mattel, Barnes & Noble Education, Mall of America, NBC, Avis-Budget, and more transform to compete and win in a new digital world — and they succeed by getting customers to love the brands and everything they offer. Whether you’re a shiny new ecommerce start-up or a legacy brand with decades of history behind you, getting a consumer to actually love you is a multi-step process that is getting harder and harder as the digital landscape evolves. On this episode of Up Next in Commerce, we dig into what the pyramid of brand love looks like and how companies should be working to climb their way to the top. Plus, he reveals the biggest mistake he sees companies making that causes potential customers to shop elsewhere, and he gives some strategies to rectify that situation and improve your bottom line. Enjoy!Main Takeaways:The Switching Cost is Zero: On the internet, it’s easy for a customer to move from one brand to another and it costs them nothing to do so. That means a brand’s first duty is to explain very quickly and clearly that it can and will solve a consumer’s problem. This is the area where most brands fail because they don’t have clear, simple messaging or content that tells their story and delivers their value prop instantly.Keep It Simple: Doing customer research is the best and easiest way to find the kinks in your website and processes. Setting up a simple focus group to watch how customers are using your site to see where their pain points are or where they are getting stuck can reveal the most basic and easy-to-solve problems that could increase your bottom line.Pyramid of Love: Creating a brand that people truly love is a challenge that has to be tackled in stages. There are specific levels of customer affection that you need to build up and that eventually culminates in love. But reaching those levels takes work and requires a brand to take specific actions. What are the levels and how do you reach them? 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. I'm your host, Stephanie Postles, CEO at mission.org. Today on the show, I'm chatting with Howard Tiersky, the CEO of FROM, The Digital Transformation Agency and the author of The Wall Street Journal bestselling book, Winning Digital Customers, The Antidote to Irrelevance. Did I do that justice Howard?Howard:Perfect. Stephanie, thank you so much. And thanks for having me.Stephanie:Thanks for coming on the show. So I wanted to start with something that we were chatting with a little bit before this, that your whole company is about reverse engineering love, which I actually really liked that saying. And I think I'm going to start using it in my personal life now, but I want to kind of start there to describe what is FROM and why do you say that?Howard:Sure. Well, what FROM is, is a kind of a combination between a consulting firm and a digital agency. We work with large brands like Avis, AAA, NBC Universal, Airbus, and our mission is to help them create a better customer experience that ultimately generates more customer love. Because in our experience, the companies that have customers that feel passionately about them, that feel appreciated by them, and appreciate those brands, those are the brands that do the best in the marketplace by all the most common measures of business success, revenue growth, profitability, and share price.Stephanie:Awesome. And a lot of the brands that you're working with they've been around for a long time. I mean, I was looking at, let's see, some of them. You said Airbus, Barnes and Noble, Facebook, Verizon, Spotify, Amazon. And I think I even saw it was like American Girl, which I used to have back in the day. And it seems like you catered towards the brands that have been here for a while and are now kind of seeking help on like how to get to that next level, how to find new customers.Howard:Well, that's exactly right. I mean, we have worked with some, what you might call sort of pure digital brands like Amazon and Spotify and different things. But the majority of what we do is really working with great classic brands that are faced with a real challenge because they need to transform to be relevant in a new age. And particularly when a company is large and has been around for a long time, that's not an easy thing to do. And so this is really our area of expertise, is how do you... Everything from the vision and the design concept of a future customer journey to dealing with the politics and resistance to change that you find in most large organizations.Stephanie:Yep. So when you're initially approaching some of these brands, I mean, how do you even go about finding out what the issues are? Because especially with the company size, it seems hard to go in and be, there's probably a thousand things going wrong, or everything feels like a fire in a larger company. How you start pinpointing, here's some of the things that are maybe not up to par right now, and that we need to start evolving and here's the game plan going forward?Howard:Sure. Well, the good news is most companies ultimately want the same things. They want more customers, they want more revenue, they want increased profitability, they want increased share price. So at the very top level, it's usually not too hard to figure out what the company's after. And one of my fundamental philosophies of everything I've done in business for 25 years is this idea that most business value is derived by influencing human behavior. If you can get people, people like customers, employees, shareholders, if you can get them to do what you want them to do, you're going to have a great business. And if you aren't able to get, for example, your customers to do what you want them to do, then you're probably going to be in big trouble, no matter what ERP system you've implemented or what other kinds of things you may be doing.Howard:So the first question is, all right, you want more customers, you want more revenue and profitability? Great. What behaviors do you need by customers, employees, et cetera, in order to get that business outcome? And in my book, I talk about many of the most common behaviors, but you can imagine what they are getting customers to buy more, to buy more frequently, to upsell to more expensive products, to refer you to their friends. And also there's some behaviors that are sort of value destroying behaviors. For example, customers calling you on the phone every day and spending hours with your support desk getting help, right? And so getting clear on, okay, well, if we can drive these behaviors, then that equates to business success.Howard:And then from there, the question is, all right, well, what drives behavior? I mean, how do you get people to do what you want them to do? And the answer is their thoughts and feelings. People behave in a certain way because of their thoughts and feelings. And then lastly, the question is, all right, well, how do we control people's thoughts and feelings? Where do those come from? And the answer is from their experiences, your thoughts and feelings come from experiences. So our job is to help conceive what would be the next generation set of experiences, a customer journey, that will drive the thoughts and feelings that will drive the behavior that equate to business results. So a very often it's research, doing a lot of ethnography, task analysis, different types of interviews, surveys, looking at existing data, for example, funnels on sites, things like that to understand well, to what degree are these things happening today? Because of course, no doubt, there is some degree of success in almost any business. We don't do often a great deal of success. And what's holding back the increase in that? For every customer that buys, there's a bunch that don't buy. Why not? For every customer that buys at level A and never comes back, why don't they come back, et cetera?Howard:So once we understand those things, well, then it's just a question of figuring out well, okay, how do you start to remove those barriers? Are we confusing them? Are we frustrating them? Are we annoying them? Are we just not offering a compelling enough value proposition, et cetera, et cetera?Stephanie:Yep. Are there any themes when it comes to the barriers within all these brands, were you have seen this come up time and time again, because maybe they have not thought digitally first because there are similar theme around customer barriers to buying?Howard:There are a number of very common themes. That's really a great question, actually. I would say one common theme is being failing to make it really clear, really fast, exactly what you can do for somebody. Anytime a customer is coming to you, they probably don't care much about you, that's just the way it is. Maybe they do if you've already inspired customer love. People really care about Apple. They really care about The 49ers, they really care about, I don't know, Aeropostale, or some fashion brand. Maybe they care about Rolex. But those are a very small percentage of brands that have inspired customer love. But before you get to that point, most of the customers that come to you, they really only care about themselves. What is it that they're trying? They're there to solve some kind of problem, right? Their kid is having a birthday party and they need to find an entertainer. Or their car is broken down and they need to get it fixed or whatever.Howard:And so how quickly do you make it really clear what you offer them? And it's fascinating to me how often brands don't do that clearly. They have different messages, they make it too hard for someone to really answer the question, can you help me solve my problem right now? And because the internet in this environment where it's so easy to just go back to Google, go to another website, it's like when you walk into a store, if you don't get clarity within the first 10 seconds that they're going to have what you need, the switching costs of getting in your car and driving to another store is at least a little bit high. But when you're on the internet, the switching cost is zero or so close to zero might as well be. So that means you've got to make sure someone understands right away they have a high probability of you being a solution to what it is that they need.Howard:So I think that's one thing. And if I were to just mention one more, it's just making it easy for people to transact. Sometimes I like to think of ecommerce as being basically about two things, persuasion and transaction. First, you got to get them to decide yes, on whatever it is you want them to do, and then you've got to get from there to the point that you have their money in your Stripe account or whatever, and that screwed up along the way. And how many times, Stephanie, how many times have you gone on a website and gone, I want to buy this thing and then started the process of checking out, but for one reason or another, you never wind up buying it?Stephanie:Or you go back to your cart, a day late and you're like, why is my stuff's not in there anymore? Why don't you just save that for a little bit. I'm ready to buy but now I give up. I give up easily though, that kind of stuff.Howard:And there's so many things that can confuse somebody about the checkout process, about the sales tax calculation, about the terms and conditions, about, I mean, it's about the promo code, why didn't the promo code work? So just really getting compulsive about asking what is everything that holds people back? How can I make sure that in addition to doing my very best to persuade people that they should say yes to whatever I'm offering, that I lose none of them between their intention and the completion of the transaction. So we do a lot of analysis and research to try to understand how many people are you really losing in that process. And of course, most people do that, right? They study abandoned shopping carts, things like that. So most people have a fairly high percentage of people, but of course not every abandoned shopping cart was somebody who had an intention to buy, some aren't right? There's various reasons people might be putting things in their shopping carts.Howard:But what percentage of those people are you losing? And then again, it goes back to a simple, what's holding them back? What is happening to stop them from completing what was their intention? And, I mean, I'll give you one tiny example. My company is from digital. Our domain is from.digital. My email address is ends in an at from.digital. It's a little bit of an uncommon first level domain, right? Many more dresses and in .com. And I would say a good 25% of ecommerce sites, when I check out, if I have to enter my email address, tell me that my email is invalid. It's not. Now, and I have a solution to that. I don't always abandoned because I have some other Gmail address, I'll give him something else. But these little problems along the way can very often add up.Howard:And the analogy I like to use sometimes is it's like if I had taped an extension cord across a hallway, let's say I was setting up a Christmas tree and I just had to run an extension cord across the hallway and I duct taped it down, so hopefully no one would trip on it, 50 people might just walk by and step over that duct tape, just fine. And 60 people and 70 people, but eventually, maybe it's the hundredth person, they trip on that tape down duct tape cord, and then another 50, 100 people and another person trips. It's a very small percentage of people. The vast majority of people deal with it just fine. But if you're running a billion dollar ecommerce site, and 1% of your customers are getting caught up by something like that and not purchasing, how do you feel about giving up 1% of your revenue? And for some of our clients, the answer is that 1% is a lot of money. And then if you have six, eight, 12, 15 things along these lines that don't affect everybody, but affect a few people and you start to remove those obstacles, all of a sudden you unlock a whole bunch more sales.Howard:And that's the optimization side of, if you will, digital transformation. And then of course, there's more of a envisioning, a dramatically different journey. But I think so often, and I guess this is my long answer to your question about what are the common themes, one of the common themes I see is the lack of what I call hygiene in ecommerce experiences. And by hygiene, I mean, most digital experiences are being constantly adjusted, tweaked changed. And of course, browsers are changing and iOS, operating systems are changing. And unless you're continuously looking through that saying, have I unintentionally planted a confusion bomb somewhere? Have I added a new feature, but it has a label or has a button that distracts from my main button or whatever? I've just added a cool new feature, but it pushed down something on the page, and now my checkout button is below the fold or whatever it might be, unless you're continuously looking for those problems, they'll creep in like weeds and they'll pull down your conversion. And that hygiene process is something that I find as a common theme, many of the largest brands in the world fail to do often enough.Stephanie:Oh, that's good. So, I mean, how do you go about identifying, I guess more like behavioral issues or how people are actually thinking? I mean, it's one thing to solve the tech and the UI aspect of it and make it easy to check out, but what about trying to figure out going deeper with the customer to really understand why didn't you check out, why didn't you follow through if everything else is there tech wise?Howard:Well, one of the things that I go into in some depth in my book is how to do customer research. And actually because at a certain point we had to start taking stuff out of the book because it was so crazy long, we were afraid of someone would drop it on their toe, they would injure themselves and we have a lawsuit on our hands for publishing such a long book. So we started to put stuff on the supplemental website. So I actually published for people to buy the book and additional PDF and a bunch of videos and all kinds of stuff. And the reason I mentioned all that is because research in customers to really understand them is foundational to being able to do all the things I'm talking about. You can't guess, and you probably can't figure it out even by looking at the site. I mean, you can look at a site and sometimes see some things that are probably problematic, and I do that all the time.Howard:But to really know, you use various types of customer research, such as bringing customers into an office or a lab or on Zoom and giving them tasks and saying, okay, great, go on my ecommerce site, here's the story. Your aunt's birthday's coming up. She's 62 years old. You need to find her present or birthday's in two days, you need to make sure you can get it to her in time. And and then you observe how that person uses that website. And as they do, you can ask them questions or we like to ask people to actually speak out loud, kind of verbalize their stream of conscious thoughts. And of course you record it, and you're studying and understanding, okay, well, what's easy, what's problematic, what's confusing, what's frustrating? And you can learn so much.Howard:And you do that for a few dozen customers and you start to see patterns and you start to see themes. And depending on how many different customer segments, a given website targets, you might do even more than that. But even still, it doesn't take that long, a week, two weeks. And in that time alone, you can learn what many of those issues are. You're observing people and then you're having the option to ask questions. If all of a sudden someone's using a page and all of a sudden they get that look on their face, they're fused or whatever you say, "Oh, what are you thinking right now?" They can say, "I'm thinking I can't figure out what the next step is." "Well, what were you expecting to see?" "Well, I figured there'd be like a next button, but I don't see one." Okay, well, and of course there might be a next button right there in front of their nose, but maybe it doesn't say next, maybe it says continue, right? And for whatever reason, that's not what they're looking for.Howard:So, and if a bunch of people are saying that maybe you should relabel the button. And as simple and obvious as something like that is it's shocking how often we find problems that are that simple. Then of course not all problems are that simple to solve, but very often that kind of low-hanging fruit. Can you imagine rewording a button and getting an extra $600,000 a week in sales? I mean, we've seen things like that repeatedly, of course, assuming the site has very, very high volume. So it's really, customer research just is many companies do some forms of customer research, of course, but my experience it's way, way under utilized. And then it's also about how you do the research. And so we've tried to be very detailed in the book and in the supplemental materials, suggesting some of the key things to do to make sure you're getting, you're really getting the insight and you're getting the most accurate. If you take a customer and say, "Hey, take a look at this website and tell me how you think we should improve it," you're not going to get a good information. You have to approach it in the right way.Stephanie:So what things didn't make it into the book that you wish made it in? What's not in the supplemental material is not in the book and you're like, man, knowing what I know now in 2021, I wish we would've had this in there.Howard:One is, I've done since then analysis on this idea of customer love and shown a bunch of examples. We have actually a scale of customer love from love down, sort of like what's the range from? It starts with love then it goes down to resonant, then it goes down to relevant, then it goes down to relevant and ultimately non-existent. And so this idea that companies exist in terms of the mind of any one customer at any time along this continuum. In subsequent to that, we talked about some case studies that show let's look at Apple, let's look at Disney, but let's look at some companies at each level, let's look at companies that are resonant, like Verizon, for example, great brand. A lot of people like them. They love them? No, probably not quite. Exactly.Howard:And then you go down from one from there, maybe now you're at Citibank and then you go down another one and maybe you're at Radio Shack. I don't know. So looking at them and then looking at their financial performance and really being able to show how this correlates. And then the other thing that isn't in the book that probably should have been, is answering the questions, how do you know what level you're at? And we actually have different tools we use, but one of them is a very simple test. We ask one simple question. And based on the answer to that question, we're able to say whether it's a brand that you love, or that's only resonant, or that's relevant, or that's irrelevant or non-existence. And the question is very simple, if this brand disappeared tomorrow, how would you feel? How would you feel Stephanie if Apple disappeared tomorrow?Stephanie:Oh, that's a good question. I'd be super sad because I own Apple everything.Howard:So if you'd be super sad, if you'd be distraught, if you'd be ah, really emotional, then that's a brand you love, that's a brand you love. That's the sign of love. But if you say, well, I be kind of bummed. I'd be like darn.Stephanie:[inaudible].Howard:Exactly. Well then that's a brand that's resonant for you. It's you care about it. I mean, you don't care about it like that much, but like, you'd be like, oh, rats. That's a disappointment. And then the next level down, if you're, well, I need to know that. I've no emotional response, but thank you for telling me that that brand is gone because gosh, I usually get my gas from Chevron. And I guess if they're gone, I'm going to have to go to British Petroleum. So thank you mental note. At least it mattered to you, it affected you, but not in a way that you're emotional about it. That's what we call a relevant brand. It matters, but you don't have an emotional connection. And then below that, if it's like, you're like, who's gone. Who are they? I didn't even know they were still around. Well then now you're down in this sort of irrelevant type range.Howard:And we do surveys like that all the time to try to understand which other brands that really people do love because a key question is, well, what are those brands doing? How are they inspiring love? And one thing that is in the book then is we showed the pyramid of how do you inspire love? What are the three things you need to do to get your customers to have that feeling of love? And that's in the book.Stephanie:And so what are the things to do? Because I'm thinking about a brand like car insurance, whoever's cheapest, don't care Travelers, Geico, whatever it takes, I'll just go with whoever. I don't feel myself ever feeling loving towards those kinds of brands. It doesn't really matter what they do. So how would a brand like that go about inspiring love when you're compared to someone like Apple?Howard:Right, right. So I'll answer your question and it's really not just for car rental, sorry car insurance, but for all brands. And I'll tell you the formula, which is a pretty straight formula. But before that, I want to tell you this, I've worked with a number of auto insurance companies over the years, including Allstate, Farmers, Mercury, a little bit with State Farm, CNA, so a lot. And I've done a lot of research over the years with customers of car insurance. And I will tell you this, there are without doubt people who love their car insurance companies.Stephanie:Oh, this is not me.Howard:I realize it's not you. And I'll be honest. This is not me, it's not me either. But I have been in customer research sessions and I have interviewed people who they are with the same car insurance company that their parents used, and they will never switch no matter what.Stephanie:Why?Howard:They are applying for life.Stephanie:Why are they so committed?Howard:Right, exactly. Why? So let's talk about why, but let me talk about it in the context of the recipe. So how do you get someone, how do you get a customer, how do you inspire a customer to love a brand? Three, just sort of show up in the book, a diagram of the pyramid, three levels. The bottom of the pyramid is to consistently meet their needs. And that is not enough to inspire love, but it is required. Whatever your area of, whether you're delivering pizza or whether you're a place that they buy power tools, or you're hotel or whatever it is, what are their needs, you are consistently meeting those needs. That's your base.Howard:Then the next level up is to periodically delight the customer, to do something above and beyond what you have to do and what you're expected. And then the top level, and that will get you farther up that continuum, but probably not to love. In order to love a brand you have to feel that they stand for something, they have kind of a value system that you reflect, that you see in yourself, a value system that you resonate with. In fact, to that last point, that's why we see some brands now that have taken a strong political stand, and by the way, a value doesn't have to be political. But like when Nike did the thing with Colin Kaepernick and demonstrated their support for Black Lives Matter, that had a massively positive impact on their standing in the market and their share price, and then their sales, because they were taking a stand for something that a lot of people believed in.Howard:And even though that also meant that they were taking a stand that some people believe the opposite and said, I'll never buy another Nike shoe in my life. And that did happen. And there are some people who won't buy Nike shoes because of that, the net impact was enormously positive because the love that they inspired meant so much more business than the people that turned away from them. And you can say the same, see the same thing on the opposite end of the political spectrum. There's a Chick-fil-A not too far from my house. And Chick-fil-A of course has taken strong stands on extremely conservative right wing social values. And I got to tell you there's police at that Chick-fil-A every day to manage the drive through lane, because there are so many people who want to buy Chick-fil-A sandwiches.Howard:And I have been told, I think I might've had one like years and years ago, but I'm not going to Chick-fil-A for the same kind of reasons, but I don't think there's anything that's special about what Chick-fil-A sells. And I think part of the reason of their popularity is because people... Like what they stand for. And you could say the same thing on the right of someone like a Hobby Lobby or other. And by the way, I'll just close this answer with one thought, which is why, why, why do these three things together create such an emotional reaction? And the answer is because they push the three levers, the three emotional levers that really inspire love.Howard:And what are they? When you demonstrate, when you consistently meet someone's needs, you're demonstrating to them that you understand them because you can't meet the needs if you don't understand. So that when someone's always there for me, I'm like, "They get me, they understand what I need, or they understand, I want that coffee hot when I get it, or they understand that I need whatever it is." When you delight someone, when you go above and beyond periodically, but you demonstrate another emotional thing, you demonstrate they care about me. They didn't have to do this extra thing, right. I was going to give them my money anyway. And they went and they did this extra thing. And that demonstrates that they care about me. So many brands they're constantly saying to their customers, "Thank you for your business." And all that kind of stuff.Howard:And man, that just goes right past people, right? How often do you believe when you get a bill from your utility company at the bottom, it says, "We appreciate you as a customer."Stephanie:You are like, "[inaudible 00:25:09]. You're welcome."Howard:Yeah, that's printed on the form, right? Come on, how stupid are we? We might as well not bother. I mean, it doesn't hurt or anything, but come on, people are very cynical. But when you make a genuine gesture that they knew took money, took effort that demonstrates. When someone at Zappos shoes goes out of their way to help you with something, or I was at an Avis Rental Car yesterday, and I observed somebody helping someone on the phone because they had a problem with the car for like 15 or 20 minutes and they were clearly doing everything they could. Way above and beyond what you would expect. When you get that, that demonstrates to someone that not by telling, but by showing that you care about them.Howard:And then the third level, when you express values that they resonate with, that makes someone feel that they are like me. There's a humanity there, not just a business. And that they share something about my belief or my values about the world. And when you combine those things together, and by the way, many companies don't do this. Many people, if we said, what does Ben & Jerry stand for? What does Whole Foods stand for? What does Apple stand for? I think most people would say something that is sort of [inaudible]. But if someone said, what was the auto insurance company that you were talking about?Stephanie:Travelers. Yeah [inaudible].Howard:Travelers. What is Travelers stand for? What does GEICO stand... You could say, well, GEICO stands for saving your 15%. But that's not a value, right? I mean, it might be a value in the sense of a discount, but it's not a human value, right? There's nothing wrong with saving people 15%, but it's not the kind of value that Nike stands for, or the kind of value that Apple stands for. We believe in you, we believe in unlocking your personal creative freedom and capabilities. What is Citibank stand for? There's so many brands. What is United Airlines stand for? And that's a great example. And by the way, I like United Airlines. I fly them all the time. fly the friendly skies, does anyone believe that United Airlines is the friendly skies? It's just words.Stephanie:I believe it. But I mean, I think that just shows that I don't think brands are able to tell their stories very well in a way that connects. I mean, like a political stance, I think that's an easy thing to jump on because it's like newsjacking. Something's going on. I'm going to take a stance on it. I think that's easy. But to actually tell your story without an event going on, to try and get news around it, I mean, that is still think is hard for large brands. I was just reading Warren Buffett's shareholder letter. I don't know if you also read that for fun like me.Howard:No, I don't.Stephanie:Maybe now you're like, "Nah."Howard:I probably should.Stephanie:It's great. I mean, he was going through the companies that they acquired and why he's going to bet big on America and he'll never bet against it again. And he went through the backstory of these companies that he acquired. I think Ikea was one of them. And it was just very interesting to see how he could storytell better for these very, very large companies. And going through why he even was interested in investing in them in the first place. I'm like, "That is what needs to be told." That startup story, yes, a huge brand now, but how did they get there and how you instill that message around your company without just having to newsjack or jump on politics.Howard:Right. Well, and actually it's funny because you asked about things that weren't in the book and one of the other things that's not in the book, but I did a live cast on Subsequent is the answer to that very question. How do you figure out? Well, actually there's sort of two questions. One is how do you figure out what your brand really stands for? Because some brands were birthed standing for something. Toms Shoes or something like that. And so the people that were attracted to that brand, both as customers, but also as employees, they understood what the brand was about. So you wind up with a bunch of people at that brand who believe in that mission, because that's what it was when they came. But when you start with a company that doesn't have that, then the question becomes, okay, so how do you achieve it?Howard:How do you come up with what it is? How do you figure that out? That's a challenge. And then also, and I did a live cast on that, but then also, and to your question, then how do you express that? How do you get the world? Newsjacking is one way or taking a stand on a political issue. But so anyway, so I did another one on what I call the seven Ps, which are just seven different ways. And you don't have to do all seven, but you probably want to do more than one of how you take the value that you're about, whether it's wholesome food, like Whole Foods, or whether it's personal, creative tools that unleash your creative potential. What have you like Apple and how do you actually get that to be something real in the world that people believe in and really see that you are standing for those values.Howard:And one of those Ps is positioning, which means basically telling people, right, which is what a lot of brands do. This is what we stand for. But if you only do that... What I always say is positioning serves only one purpose, which is to create cynicism, to create doubt, which is good. It's good to do that. Because if you tell people what you stand for, they're going to not believe you. And then they're going to look for evidence. And if you have the other Ps or some of the other Ps, and the evidence is there, and then they start to look for the evidence, then they'll start to see that it's true. Brands that are really strong at standing for something don't even need positioning necessarily because people experience it and they know what it is. But if you position, you better make sure that you've got some of the other things, because you're going to create doubt from your positioning.Howard:People are going to, if they're interested, test your positioning, to see whether it's really true in their experience. And if it is, then you're great. Then you've used the positioning as a lens to get them to evaluate whether it's really true, or if it's BS. But of course, if it's not really true, you've accomplished the negative thing, which is you've lied to them and you've allowed them to spend their time and energy proving that you've lied to them. And now, of course, no doubt, unless your positioning is that you're a lying company. It's harmful rather than helpful.Stephanie:Yep. That makes sense. So this kind of takes it way back to earlier in the interview, but a lot of brands right now, I see focusing on here's my mission and the company's starting around the social impact or causes or things like that. And a question that I've talked with quite a few companies about is, how do you balance the mission behind the company, but then also the product value? I mean, you mentioned that, so one of the big themes was that customers would come to a company's website and not know if it could help them right away. And it feels that's a newer thing where every new DTC company right now has some kind of mission, and I do see some of them struggling with, do you put it on your front page, do you sell with your mission, do you sell with your product, how do you think about that? So what are your thoughts on having a good balance there while not making the customer journey get harder?Howard:I think it depends who you're selling to. I think it goes back to what I said about understanding your customer. I know especially with millennials and younger we definitely see something that we generally don't see with older customers, which is a willingness to actually make a choice and spend money for a social reason, because of some sort of charitable connection or something like that. Usually with older consumers, they like it, we'll do tests like this. We'll say, this brand gives 10% of the money to the American Red Cross and this brand doesn't how do you feel about the fact that this brand gives them money? And people say, "Oh, I'm all for it. I think it's wonderful that they do that." And we say, "Okay, great. This brand's product costs $12, and this other brand that doesn't give them money, their product costs $11. Which one are you going to buy?" And very often they're like, "I think the $11 one."Howard:It's like they like it, but they're not really willing to spend more for it. Whereas with younger consumers, we find increasingly they say, "Oh no, I spend another dollar for the company that gives the money to the cause that I believe in." So I think part of it's understanding who you're communicating to, but also I think part of it's understanding that building a relationship is about a number of different thing. And you don't start a relationship usually by focusing on your values. Usually the first thing, I mean, if I said, "Hey, there's this restaurant that gives 50% of all the money to Greenpeace. Do you want to have dinner there?"Stephanie:And that's it?Howard:Do you want to have dinner there? What's that?Stephanie:If it's good food.Howard:Well, right. And you might want to know what kind of food is it? Is it Chinese? It's not enough, right?Stephanie:Yes.Howard:You kind of want to start with, well, what's the value proposition for me? It's like what I said earlier, people care first and foremost about themselves. So I think there may be exceptions to this rule, but I think by and large, you have to do a good job first of being crystal clear about... It's like that pyramid I talked about, right? You can't jump to the top of the pyramid. You got to start by consistently meeting their needs and demonstrate that you understand them, and that at a very basic level, you can deliver what it is that they need. And then you can go to delighting and then you can focus on values. And so I think the answer is it's probably not your first message, and it's probably not the thing that's going to attract them to you, but what's going to happen is they're going to be attracted initially by what's in it for them.Howard:And then you can start to build a relationship and help them understand, most people didn't buy their first car in a Ben and Jerry's because they were protecting grassland in Vermont or whatever environmental stuff. They looked good. They heard all Chunky Monkey, that's good stuff, and let's try and diet. But then they might've fallen in love with the brand over time because they realized that not only is that bottom of the pyramid, not only are they consistently meeting my needs really well, but that they're also doing things that resonate with my values. And then that keeps me coming back again and again, it makes me more loyal and less likely to jump to the next brand of ice cream that has something that sounds appealing.Stephanie:Yep. Yeah. I completely agree. So get them in the door with good products, showcase your value, and then you could probably upsell in a way, once someone knows this is a good product, and now maybe I am willing to spend that extra dollar now that I've already had a good experience with them versus trying to do it the other way around.Howard:Yeah. Or be less likely to switch or be willing to try new products from that same brand, et cetera.Stephanie:Cool. So the last thing I want to of touch on was content strategy. I saw you working with Aéropostale and American Girl around getting these brands to start creating content, making it more organic, getting customers to create their own viral content. How do you think about brand should be approaching their content strategy right now?Howard:Well, in this day and age, everybody's a content creator. And as you look at the ages of your customers, I mean, I'm a content creator and I'm over 50, but as you go down in age, it becomes everybody, my kids are all creating all kinds of content all the time on obviously Tik ToK and Instagram and everywhere. And so I think first of all, it's easier than ever. And I think that one of the best ways to inspire people to create content is to give them a platform. Because what every content creator cares most about is what, likes, whatever it is on the given platform, right? Subscribers, followers, likes all this kind of stuff.Stephanie:There you go, it's wrong.Howard:So I mean, there are many strategies of course, to inspire people to create UGC around your brand. But I think that the number one strategy to say, okay, how can I give someone a sense that if you create something you're going to get my platform, obviously if you're a brand, you want to make sure you have a good sized platform, which means simply how many people you can reach, how many followers, et cetera you have. And then if you can help someone see that by creating content around your brand, that's going to get that content more exposure than if they just create content and post it on their own personal Instagram account or whatnot. Then that's valuable. And then of course...Stephanie:What's in it for me? That's the same thing that we've kind of talked about this whole time, the whole time.Howard:Understanding your customer, 100%. And in this case, the customer is they may be your customer in the traditional sense, they may be buying your product, but they may not even buy your product, but it's, again, it's like what I said about human behavior, you want to influence people to create content about you online. Great. You have to make sure you understand those people and understand what drives them. And there are going to be some different personas, right? To get my daughter to create content is takes one thing, to get someone who's already a YouTuber with 15 million followers, now it's something different. It's called probably going to an influencer platform and writing them a cheque. And that can be a very viable and smart strategy to do as well if you do it correctly and you pick the right influencers and you make sure that it's organically integrated into their content and not feeling like something they just slapped on, like an ad. But that can be a very powerful marketing tool as well.Howard:So that's what they want. My daughter, they don't need your platform because they have an even bigger platform probably depending on, I mean, if your platform is big enough, if you're Coca-Cola, maybe you even have a bigger platform than them. In which case maybe the influencer is willing to do it for less or for free. But anyway, but it all comes down to that. Anytime you want to motivate someone to do anything, you want to make sure you understand, what do they care about, what are they trying to accomplish? That's right.Stephanie:Cool. Well, let's jump 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 30 seconds or less to answer.Howard:Okay.Stephanie:Are you ready?Howard:I'm ready.Stephanie:All right. First one, what one thing will have the biggest impact on ecommerce in the next year?Howard:The elimination of a third party cookies.Stephanie:Okay. Expand a little bit more on, because I've had another guest say it doesn't matter and we have solved that and it's nothing to worry about.Howard:Okay. Well, I'll have to watch that episode because I would love that to be true. But essentially what's happening is between things that Apple is doing and things that Google are doing, Google is doing and frankly, things that may also happen from a legislation perspective, the ability to cookie somebody on one site and display ads to them on a different site is being no longer permitted or they're rolling out changes, which will mean that, if you're familiar with going on overstock and looking at a sofa, and then that's sofa is on every site you see around the whole internet, they're not going to be able to do that anymore. And it has the biggest impact on smaller or medium-sized ecommerce players, because that's a key strategy. So I think that's going to have a huge impact and require everyone to come up with different ways of attracting buyers. I think it's going to have a huge impact.Stephanie:Yep. When does that go into place? [inaudible]Howard:Well, some of it is already in place, certain browsers are already blocking third party cookies and other bots, but I think we're already in the middle of a transition.Stephanie:Okay. Got it. Onto a happier subject then, what's up next on your Netflix queue?Howard:My Netflix queue? Well, I think I want to watch this show about [inaudible], I think just started. Is that? I think it's Netflix or if not, it's one of the other services.Stephanie:On of them.Howard:All about how this [inaudible] thing got started and how so many people were hypnotized into being crazy.Stephanie:Interesting. Tell me how it is. What one thing do you not understand today that you wish you did?Howard:Women, and why they do what they do.Stephanie:Oh my gosh.Howard:I've got two teenage daughters and a wife and man, I don't understand a single thing about why they do what they do.Stephanie:Oh, that's great. I mean, I don't even understand myself sometimes. So that's a valid answer. What's the nicest thing anyone's ever done for you?Howard:Well, I guess I have my children, I've got five children. That could be [inaudible].Stephanie:Five. Wow. That's great. That's a good answer. What's the last ecommerce purchase you made that you maybe would not have made pre-COVID?Howard:Well, that I would not have made pre-COVID? I have been buying more gear for at home, stuff we're doing now because I used to do that all at our offices in Manhattan, where we had more of a studio. So I don't know the very last one, but a lot more lights and microphone stands and all this kind of a side monitor, an extra small minor like I've got over here to show me these slides, if I'm talking about things. So I've been buying a lot more Gadgets & Gizmos, did I say that? Gadgets & Gizmos.Stephanie:Whatever you say works for me.Howard:To make it easier to turn my office into a kind of a studio for all the content that we produce.Stephanie:Very cool. And the last one, if you were to have a podcast, what would it be about and who would your first guest be?Howard:Well, I do have a podcast.Stephanie:Oh, well, what is it about?Howard:It's called Winning Digital Customers. And it is about how you most effectively win as a brand in an age where so many of your customers are living with digital at the center of their lifestyle. And the first guest on my podcast was a great friend and client of mine, Michelle McKenna, who's the SVP and chief information officer of the National Football.Stephanie:Oh, nice. I saw she wrote... Didn't sh write a foreword in your book?Howard:She did. She also wrote that. Well, that's kind of why we kicked off the podcast, which kind of connects to the book, same name. And she also was kind enough to to do that. And she's awesome and has driven a lot of innovation and transformation at the NFL, everything from the new way they do instant replays to stuff that supports player health and safety, to drones at Superbowls and sensors on players shoulder pads and helmets and the ball, so they can track with motion capture everything that happens in the game. So many cool things. And so she's always got great things to talk about and also a lot of stuff she can't talk about.Stephanie:We need to bring her on our IT visionaries podcast, which Hillary also produces. So we get her on there Hillary. Awesome.Howard:He is definitely an IT visionary.Stephanie:Yeah, we'll have to bring her on. Cool. Howard, thanks so much for joining the show. It was a pleasure chatting. Where can people find out more about you and your new book?Howard:Sure. Well, thank you so much for having me. If they want to learn about the book, there's a website for the book, which is winningdigitalcustomers.com, just like all one word. And in fact, if you go there, you can also download the first chapter of the book for free as a PDF if you want to just get started on it. Obviously it's available on Amazon, Barnes and Noble, Kindle, Apple books, all those types of places, and in bookstores, possibly near you if you go to bookstores. And as well, if you want to learn more about me, I'm on social media. I publish a lot on LinkedIn and other places. You can find me by my name, Howard Tiersky and my company is FROM, The Digital Transformation Agency and we are at from.digital.Stephanie:Amazing. Thank you so much, Howard.Howard:Thank you for having me, it's been a blast.
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.
Interacting with customers requires a level of finesse and talent that is beautiful when done well, and a tough sight when done poorly. There is give and take, and you have to flow through various movements and ups and downs to reach a satisfying end result. It’s like a dance. A tango if you will. At least, that’s how the folks over at LivePerson see it. Alex Spinelli is the CTO and EVP of product, technology, and operations at LivePerson, and on this episode of Up Next in Commerce, he broke down what that dance should look like, and how A.I. is taking the lead. As Alex explains, LivePerson is a set of tools, technologies and platforms that enable businesses to have conversations with customers through messaging channels, and to detect where customers may be getting stuck or frustrated. Then, with a small immediate intervention, LivePerson’s A.I. routes that customer to a human who can make the buying process easier. It is a way to get to a better end result more often, and it works. Businesses using LivePerson have seen double-digit-percentage-point improvement in conversions and higher NPS scores than ever. But the power of A.I. doesn’t end there, and Alex dives deep into where we are headed with A.I. as a tool in retail, including the blended in-person and virtual experiences that seem to be overlapping more than ever before. And Alex gets into the nitty-gritty of the ethics behind A.I. and how everyone will have to be more involved going forward when it comes to defining their limits, wants, and needs. Enjoy this episode!Main Takeaways:Joining Forces: The future of A.I. in the ecommerce space is in the way brands can join together an A.I. experience with a human-based one. The way brands should be looking at A.I. is as a conversation-starter and a tool that can solve transactional problems, but when a deeper conversation is needed, it should be able to usher customers through a seamless transition to a real person who can build a relationship, form trust, solve problems, and ensure that the customer experience is a good one the has a positive end result.Let’s Get Ethical!: With any new technology, there are ethical questions that have to be addressed. This is especially true when dealing with A.I. Not only do you have to take into account the repercussions that A.I. will have on the labor force, but you also have to consider how A.I. is being trained, what kind of biases are being programmed into the model, and how and when to start and stop collecting data to build bigger and better A.I. models. Blend It Up: As we move further into the fourth industrial revolution, we are beginning to see more blending of virtual, digital, and physical experiences. Conversational technology will begin to follow us into physical stores and A.I., along with more targeting-types of technology, will be used in and out of stores.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 we have Alex Spinelli joining the show. He's the CTO at LivePerson. Alex, welcome.Alex:Thanks for having me. I'm excited to have this conversation.Stephanie:Yeah, I'm really excited to have you on. So I was looking through your background. And I was hoping we could kind of start with your days at Alexa, because I feel like there's probably a lot of good juicy stories there and I want to hear a bit about what was your role there? What did you do there? And then we can jump into the big topic around AI and your current product?Alex:Sure, sure. I led what we call the Alexa OS. And what that was, or is today, is really the core software platform that powers the Alexa experience, the brain. It included things like personalization, speaker recognition, so Alexa knows who's talking to her. And then all of the APIs and technologies, dialogue management, they really power the whole experience and allowed both internal developers at Amazon and skill builders, so skills are like apps for Alexa, to go and build those experiences. So it was really the cloud operating system for Alexa.Stephanie:So what drew you to that field and industry?Alex:Yeah, so I've always been pretty connected to AI, natural language, even going back to, I have a lot of roots in news, something I was pretty passionate about, in news technology. So at Thomson Reuters, for example, where I lead technology for news, both for real time news, algorithmic trading, and then also all the Reuters news properties and journalists, the tools that journalists use, I spent a lot of time trying to understand how do people consume information, how they read information, and how can digital and computers really help us find the most important things, gain insight from information, gain insight from data.Alex:So then I kind of took a little bit of a hiatus from news, and when I joined Amazon, I was leading search. So the whole experience for browsing and discovering the right product for you, and trying to optimize that, make it easier. And one of the things that was really interesting is, I started to see the limitations of these very flat experiences, search pages, web pages and apps. And people started to try to have a conversation with Amazon search. So they'd ask questions in search, is this product compatible with this one? What's the best gift for my daughter who's graduating high school? And all these interesting questions, and the experience often fell down. So we actually started looking at what we called query understanding and natural search and all these interesting things where we wanted to help people get answers to their questions and have a dialogue with the search experience.Alex:And I thought it was pretty hard. In the sort of traditional, I put in a query, I get a set of results, that interface just didn't work really well. Alexa at the time was just kind of quirky little device that was just launching at Amazon very early days, I actually had one, I was part of the early beta testing. And I said, "God, I want to be part of that. That actually is starting to recreate the way we're going to interact with our digital lives and we're going to use natural language. And I guess the rest is history. I think when I joined there was 20 or 30 people in the team. And again, it was this quirky little device that people were like, "What the hell is this thing? Is this going to be big?" And yeah, in six months, we sold millions of devices, and I was growing a team, and we were adding all kinds of new features and capabilities. And it was pretty much a rocket ship, which was pretty fun.Stephanie:That's awesome. I have Alexas throughout the house. I've always wondered though, how to get past that hurdle of, like when you're talking with someone, you are very free flowing and you'll ask any kind of questions. And I feel like oftentimes, with Alexa or any speaker that you would talk into, you're like, "Ah, ah, what can I ask? I don't know what to say. I don't know how to phrase it." And it feels like there's still a bit of a hurdle with a lot of conversational speakers to get past the getting you help kind of with anything, and being able to query things in a million different ways, so that you're not like me, where you're just like, "And I'm stumped and now I'm just going to open up the app on my phone and resort to the old way of doing things."Alex:Yes. So it's interesting, because that same challenge is what actually led me to LivePerson. So when I met my current boss, he was explaining what LivePerson was doing, which was really a messaging platform for customer service and sales. And he said, "Listen, we're really interested in taking things to the next level with AI." And my first response was, "I'm good. I'm at the hottest product on the planet." And Rob and I had known each other for years from New York and we had conversations earlier. I said, "I'm good."Alex:He said, "Well listen, there's an opportunity to take what you're doing at Amazon, creating these natural experiences, but actually democratize it and do it for companies all around the world, large and small, and really help consumers interact in a new way." And it kind of stuck with me. And I started, we had more and more conversations, and I ended up joining. And I think the key differentiation that you're seeing is, I think the smart speakers in that whole space, they aren very transactional, right?Stephanie:Mm-hmm (affirmative).Alex:They've kind of started to center around entertainment, home entertainment, smart home. And they are still fundamentally very, very, I ask for something, I get the result, I ask for something, I get the result. And what we're trying to do here, because we're working for all different businesses and companies, is allow you to have a full-fledged conversation to build a relationship with the things that are important to you in your life, your bank, your healthcare company, your insurance company — Industries that tech and AI have tended to ignore, like, "Those are big, boring, you can't change them." And I think the problem is we've kind of leaned into these proxies of relationship building, apps, well, you can't build a... You and I are having a conversation. I didn't send you the A.L.E.X. app and say, "Here, you can get any answer to any question, you can click and browse and tap and search, and you'll get..."Alex:You didn't send me your app. We're having a dialogue and a conversation. What's crazy is businesses have put the app, they've actually done that crazy thing. They've said, "Oh, no, don't talk to us. Don't have a conversation with us here, use our app, use our website." And what we want to do is actually do exactly what you described, have that fluid conversation, build a real relationship. And the key for us, and this is where I think the smart speakers fall down, is humans have to be involved as well. So you can't get stuck. The AI is not going to be able to solve every dialogue.Alex:So the way we look at the world is the AI as a kind of concierge in many ways, and begins and initiates the dialogue and conversation for simple things like play music, do this, do that, AI can do it. But then when you really need to have a more meaningful conversation, we want to connect you with the right person. And Alexa can't do that, because just the scale wouldn't work. It's just for Amazon, where I think when you start thinking about democratizing AI, we can actually start to do that and make it a useful tool, not just for the consumer, but also for the employees of the business.Stephanie:Yep. I mean, now it seems like it's the perfect time too, because I think through the past five years or so, and it seems like we've kind of gone through a period where everything had to be optimized, you don't want to have support centers, you've got bots everywhere, you can do drop shipping now, you don't need brands, you don't need... Just white label products, we went through this phase, and now we're kind of coming out on the other side where people are like, "I don't really want to talk just to a bot, I want to talk to a person. If I instantly want to call, I want to be able to have someone there. And it seems like now consumers' expectations have changed where it's like we're a little bit there, we were getting used to just, "Okay, I'll just talk to the chat and see if it fixes it." And now it seems like expectations are so much higher than they even were just a couple years ago.Alex:I think part of that is this digital was growing due to convenience, right?Stephanie:Mm-hmm (affirmative).Alex:We were buying large bulk things. We were buying simple things. We were buying more toothpaste, more batteries, more this, more that. And as we started to need to use digital, and now in the pandemic, obviously, need to, have to, no other way, for all the things in our life. Yeah, we want to actually connect those things to values, our values, right? So the brands matter. The business matters, what does that brand stand for? What are the values that they stand behind? So I do think you're right, I think the need for developing a real relationship is important.Alex:And if you look at, actually it's interesting, banks, telcos, all these kind of big, stodgy, old businesses, or at least we used to think of them that way, or kind of were perceived that way, they kind of lost their differentiation, right? A banking app is a banking app is a banking app, they all look the same, feel the same, act the same. But not all banks are the same, they have different values, they have different missions.Alex:And without being able to talk and have a conversation, you don't get to connect your values to where you're putting your money. So I think that's the shift. I think people now care. They're spending all their dollars in the digital world, by and large. Even the restaurants, who's delivering? Is it Postmates? Is it Uber? Is it Grubhub? It matters. We want to support the right business who has the values that we share. So yeah, I think it's really important. A connection is super important.Stephanie:Yep. I also think a lot about retail. A lot of people probably do miss those experiences of going in stores and having someone there to ask questions to, and now that just needs to be mimicked more in the digital space where people are like, "Well, I can't," or maybe they can start to now, but for a while there, you couldn't go in and have your normal conversations and ask where things were. I mean, I go all the time, and I'll be like, "What kind of wine do you like? Just tell me what you like. I'll buy whatever you tell me because I don't know." And I miss that. And I was looking for that. But oftentimes it was lacking in the digital world. So-Alex:Yeah, so I think developing the tools to allow the... Brands are made of people, and enabling people to actually come through the digital world and connect is exactly what you're saying. Yeah, we thrive that human experience. I mean, we desire that human experience.Stephanie:Yeah. So tell me a little bit deeper about what is LivePerson? Because I'm hearing it is like it's essentially conversational AI for any industry, it's not just focused on commerce, it can be banking, it can be anywhere, is that the right way to think about it? Or maybe I'll let you describe it better.Alex:Yeah, so at our core, at our roots, it's a set of tools, technologies, platforms, that enable you as a business to actually have conversations with your customers through messaging channels. So this is the way we've all started to interact with one another. My daughter and I don't talk on the phone as much, it's all messaging, but I can talk to her all day long, right? Because it's asynchronous, it's on my time, it's on her time, she can be in class, I can be in this meeting, we can start a conversation and continue it. So the core offering is letting businesses do that. So giving those interactions back to the consumer on their schedule. And then we start to layer on a lot of intelligence.Alex:So a lot of those conversations can be led by an AI to gather information, to do the simple things, to actually help you with, what's your name, what's your account number, what's your size, reset my password, pay my bill, lots of things that really become kind of very rote. And then you start to really get more and more advanced in enabling you to shop, enabling you to buy, enabling you to transact. And the whole platform lets you never get stuck. So you can have a conversation, it can be part of an automation, you can be looking at a product, you can be asking questions to a bot about the size, color, compatibility, etc. And then when you get stuck, we can actually detect that and route you immediately to a person, a real human being that can help you. And we call that the tango. So it's this-Stephanie:I like that.Alex:... beautiful dance that allows us to go back and forth. And that's really, I think, where we excel. And then just from a technical perspective, we wrap all of that with a set of analytics and tools that even if you're a small business, you can use to look at the health of those conversations, how's it going? Is it making you money? Is it costing you more? How's your customer satisfaction? And those kinds of things. So it's a pretty full suite of tools to build a new kind of customer experience.Stephanie:That's awesome. So what kind of results do you see? Especially around commerce, when it comes to, like you said, you're doing the tango, you're sending them over to a customer service person. What would you see, otherwise? I'm sure losing that customer and not converting to a sale, are there any metrics that you guys have that you can share?Alex:Yeah, so it definitely is industry dependent and customer dependent. And we tend not to share direct customer numbers. But this is why I joined, the results are crazy. And so when Rob and I were talking about me joining LivePerson, he said that, "We're kind of onto something where we see costs go down, customer satisfaction go up, NPS go up, conversion rates go up, and agent turnover, or sales agent turnover go down." And I said, "There's no way all those metrics can be moving in the positive direction." Usually, there's trade offs. But right now, that's what we're seeing.Alex:So we do see conversion rates for conversations to be often double digit percentages better than experiences that didn't have. So if you were interacting in an app or a website, and we detect that you might be stuck, you might be jumping back and forth between pages, we'll actually offer like, "Hey, it looks like you might be having... Do you have a question? Do you have a problem?" And then we'll have that dialogue and that conversation.Alex:And that might be a tangoed conversation mixed and matched between an AI and a human. And we see conversion rates of those dialogues, again, double digit percent. There's a large big box retailer whose conversion rates typically exceed over 15% when a conversation is initiated. And a typical conversion rate on web shopping is single digits, mid to 5%, 6%. So significant increases when you actually connect and have a dialogue are pretty common for us.Stephanie:Wow, that's cool. So if I'm a brand-Alex:Yeah, it's pretty powerful.Stephanie:Yeah, I mean, it sounds amazing. It sounds like, why wouldn't someone use something like this? If I'm a brand, and I'm thinking about setting this up, would you be tapping into my customer support people who are trained my way and then you're like, you train the AI, you got the questions in there, the answers, you kind of map all that out, you've got your database, and then you're constantly learning, I'm assuming, from what people are saying and what's actually helpful. And then, when you go into the tango mode, it goes over to your customer service people, or how does that work?Alex:So our tooling, mostly, is used directly by the brand. So you're a brand, our technology sits inside, I mean it's SaaS base technology, but it sits inside your contact center. Actually, the way we typically will train AI, it's actually pretty cool, you have human conversations first, and you don't need many. So you actually start to have human to human conversations. And then just in a few weeks, we can actually collect enough data to go and build the best intents. So intent is, as you're having a natural language discussion and an AI is detecting what you need. So an intent is the thing that you want, I want to pay a bill, I want to buy that product. Is this product compatible? Does this come with batteries? Whatever have you. Those are all intents.Alex:So those intents are basically derived from your real customer conversations. So the accuracy ends up being very high. And we've actually built the whole series of proprietary data models that are very industry specific. So in retail, in airlines, in banking, in insurance, we can actually have some really high accurate recognition. And again, those intents can be recognized for human conversations, so that we can tell the agent exactly what's going on and what this person needs. And then they're also used to go and build those AI driven experiences.Alex:And the goal is, can we take all the mundane repeatable stuff away from the agents? So the agents are really closing the sale, they're really helping tough problems. And this is why you see agent satisfaction go up, because they're not doing the rote, same, same, same, same conversations, all that's done by the AI. And then the agents actually having a kind of much more high bandwidth interaction.Stephanie:Like doing the creative work, where they can think and solve- [crosstalk]Alex:Exactly.Stephanie:... problems. And I mean, I think it comes back to, for a while there, everyone's like, "AI is going to take our jobs." It's like, "No, it's augmenting your jobs. And it's doing the things that you probably don't want to do anyways. But now you just get to work on higher level things," I would think.Alex:We do see that. And it's interesting, we see the wait times... So rather than waiting for 30 minutes, you actually wait for very little time. And then that agent can actually spend the time and energy to have a, just like you said, a much more creative high bandwidth conversation. So we don't see this, "Yeah, take..." It's changing jobs, it's augmenting jobs, it does require some new training, for sure. But at least right now, it's not this job killer, it actually opens up the world for new jobs. We actually are converting agents to data annotators.Alex:So agents in real time can actually go and label conversations and data to improve the AI. So it's actually advancing their roles in some ways. Again, I'm not going to be naïve, there will come a time where automation and those kinds of things do impact jobs at scale. I think we as responsible business people need to think about what's the next thing, right? And what's the next set of opportunities. So I'm hopeful in general, we are pretty hopeful and positive on where we can get to, but I think we have to kind of wade in very open eyed and make sure we do the right thing as we go forward.Stephanie:Yeah, so when thinking about doing the right thing, I think it'd be good to get a little lay of the land of the AI field in general, because I feel like it's had a pretty bumpy couple of years, just I mean, so many headlines were made around unintended consequences of using AI models, labeling things incorrectly. There's just been a lot out there. So what does it look like now? And especially in the world of commerce, how do we think about, where is AI even being utilized properly, or misused? And where could it be in a couple years? Or where should it be?Alex:The biggest challenge with AI is bias. And I'll explain what that means. So some of the bias is deliberate, some is not deliberate, or intentional and unintentional. So AI is only as good as the data. So what AI is, at the end of the day, it's a tool that allows you to look at lots and lots of data, examples. And then you build a model, mathematical model, statistical model, that makes certain assumptions based on the examples. And so if you were trying to make an AI service that would recognize oranges, this is when I used to meet people in person at South by Southwest to give a talk, I put this big, gnarly looking orange on the screen. It was not orange, it was mostly white and moldy and green. And I'd asked the audience, "Who knows what this is?" And 95% of people would raise their hand, I'd say, "What is it?"Alex:And everyone knew it was an orange. No one saw an orange [inaudible] anything like that. Unless you went on vacation and left an orange on your counter for like three weeks, then you maybe have seen an orange like that. But everyone instantly recognized it, right? So really what's happening is very similar to AI, you've seen thousands of oranges in your life. So there's a bunch of features of an orange, little dimples, the skin, the [inaudible] possible colors, it's round. And your brain immediately matched that image to this archetype of an orange, even though you've never seen an orange that looks like that. That's really what AI is doing. So if you have a bad data set, if you showed a young kid, many, many different images of things that weren't oranges, but you told them it was an orange, right?Alex:When that image would pop, they might not recognize it, they might not be able to tell what it was, or they might misrecognize something else and call it an orange. So the data under AI can inherently have bias by where we collect it from. So if we're trying to collect data to recognize a certain type of person, or a certain type of behavior, or a certain type of language, if we don't have a representative data set from the right populations, the AI is going to be biased, it's going to be biased based on that data set. Or if humans label that data, and those humans come from a certain one kind of homogenous background, they might label the data with their own biases. Again, that could be unintentional, but everyone brings their own unconscious biases with them.Alex:Or lastly, engineers, when they build AI models have their own biases, too. They think certain things are important and other things are unimportant. Simple kind of innocuous examples, if you're building a trading system, and you thought the weather really had an importance on stock prices, so that engineer would build weather as being a heavily weighted variable, that's a bias. So the key actually is recognizing all the ways that biases can creep in and creating some standards, and then really having the tools and process in your company to actually recognize those, and ask the question, and make sure that you're doing all the things that you need to do to eliminate that. That bias is what we've seen in some of these horror stories around AI.Alex:And it was kind of rushing headlong into it and not really thinking deeply about it. So there's actually some great organizations that... We actually took the EqualAI pledge as a company. So there's a nonprofit called EqualAI, that is working with industries to try to eliminate bias in AI. Or I should probably rephrase, not eliminate, but really try to mitigate. I don't know if we'll ever be able to fully mitigate-Stephanie:Or eliminate.Alex:Eliminate, sorry, yep. It's just super important, and it's actually the right thing. It's good for your business. It's good for your employees, it's just something we have to do, ethical use of any new powerful tool, no matter what it is, you have to actually consider those things. So I think that's the key challenge right now. And I think we're still in the early, early days of really grappling with it.Stephanie:Yeah, I mean, it seems like too, right now, a lot of models will have to be thrown away because they were all trained on a set of consumers that are still there, but now there's all these new consumers who's come on the market that were never shopping online before, never doing their grocery shopping online. And we had a really good guest from Stitch Fix, she was the VP of data science there. And she was like, the way that the older generation, who's now trying out Stitch Fix, wants to talk with us is very different than how we were talking with millennials. And so you have to start rethinking about, do I keep my model and adjust it? Do I just throw it out and start over? And it seems like a tricky point now, because you just had this big inflow of new consumers that you never really were talking with before last year.Alex:Yeah, I have a 14-year old. And it's been an interesting journey as most of his communication has really moved online, and the words and terminology and no cap and sus and all these funny terms. They need to be built in to model. So your VP at Stitch Fix is 100% correct. And we need to go and deal with that. And I don't know if it's about throwing away, I think it's more about augmenting and building on top of. The good news is the influx is a big number of people coming, and those large numbers can actually improve the models pretty quickly, if the number that you're starting with was smaller. But it's something we actually, because we live and breathe natural language, we actually have to stay on top of really, really regularly. And yeah, this is going to be the perennial challenge. This is where actually that, remember I talked about I'm transforming agent roles?Stephanie:Mm-hmm (affirmative).Alex:So one of the things that we've looked at and we've just actually released this, it's pretty cool, is the agents, as they're having conversations, can label the intents and they can actually improve intents, and they can actually retag intents and all this kind of stuff. And so we believe, and this is where I think we are changing roles, not eliminating, the agents know your products, they know your language, they know the markets you're operating in, they talk to your customers every day, and they're the ones that are going to be best positioned to kind of add and augment those models, so it's actually really important to have them as part of that process.Stephanie:Oh, that's really interesting, that they can do that now. And I could see it being really helpful too, because I have heard that oftentimes, models can also, like you said, train themselves and turn into a black box where it's like they keep ingesting the wrong data, wrong data, and then you build up maybe algorithms that, I remember at certain companies I used to work at, you kind of didn't know what was in there, at a certain point, you're like, "I don't know how it's working. I don't know why it's working this way." How much data do you need? Is there ever a point where you're like, "That's enough, let's stop. Only collect it this many times." Because right now, it feels like we're in a world of like, just get as much as you can and ingest as much as you can. Which seems like it could maybe have unintended consequences.Alex:Agreed. But explainability is still a big problem with AI. So there's a startup for folks out there listening, create some technology that offers introspection and explainability to large machine learn models. It's not a solved problem. And I don't have a good answer, actually, when do you have enough, when don't you have enough? I think you need to constantly benchmark, constantly look at your accuracy, and have all the protections in place that you are looking for that bias, you are looking for those negative consequences. And that's hard work. That's not like putting some technology gaps in place and a threshold, that's really having a dialogue internally, asking the questions, turning over rocks, what could be the negative consequences here? It's kind of active management right now, and it really needs to be baked into your kind of culture, that it's something that you focus on.Stephanie:Yeah, definitely agree there. So what kind of opportunities do you see? Where do you think conversational commerce should be in the next one to three years? Or what do you think is going to start happening?Alex:So I think the big opportunity right now is actually the topic of our chat is more commerce, like real shopping, real purchasing, real buying, I think conversational commerce, primarily over the last number of years, has been sort of sat in that care, support, follow up space. And now because digital is a necessity, not a convenience, we're starting to see, like I said before, all the little breakage and the flat experiences. So I think the big opportunities are around how can we really help people discover?Alex:So discovery is really hard. With Alexa, for example, you don't know what Alexa can do and can't do, and those kinds of [inaudible]. Discovery is that still a big challenge. Huge opportunity there. It's how do you stitch conversations together with discovery? And to me, that's all about actually modeling the behaviors that we would have in real life. So we're going to go back to stores, we're going to go back to malls, they're going to be changed up, they're going to be very different. I think we're going to see conversations in the digital world follow us in and try to fill in the gaps and start to really help us in a much more kind of blended way. So there's something called the Fourth Industrial Revolution, if you really want to geek out. It's this-Stephanie:Oh, yeah, we've talked about this before-Alex:Oh, cool. Yeah.Stephanie:... on a lot of our other podcasts.Alex:It's this blending of the virtual and physical. Yeah. So I think the big opportunities are in real commerce, and how do we start to blend the physical and the virtual? So we see, for example, especially during COVID, blending conversations with curbside pickup, I'm ready, I'm here, are you here? I want to add this, can you get me... So really trying to fill in all those gaps in those interactions and exchanges. So I think that's where a lot of the kind of next stage plays, is we're going to see conversations start to power a lot more of our transactions and commercial activities, and starting to blend together that physical and virtual, that's where we're spending a lot of our time.Stephanie:That's cool. I mean, so what kind of tech advancements are needed, because I'm even thinking about that Fourth Industrial Revolution and blending that, and okay, if you're walking to a store, I mean, I know there was a while there where store owners were hesitant to even install the beacons so that you would know who's coming in your store. And there was a lot of hangups when it came to retail that didn't allow the digital world to interact with them, because you had to have hardware infrastructure changes, there was a lot needed there. So what kind of things are needed for that advancement to take place?Alex:Yeah, well, a bunch of things. I mean, these things have basically become supercomputers, right? These are more powerful than even the biggest machines 10, 15 years ago. So they're going to take on more and more of the processing. I think image recognition, big space. And then I think a lot of that starts to wrap together the privacy concerns, so giving control back to the consumer about what data I share and when based on my needs and what I want to do. So that's where I think you're going to see a lot of technology advancement is, yes, beacons. Yes, image recognition. Yes, the kind of blending of conversations and in person and then live and all these kinds of things and trying to, like I said, stitch that experience together.Alex:But if I were, again, entrepreneurs out there and technology companies, I would look at those for sure, but I think we also have this kind of renewed interest in privacy and what targeting is. And we can do a whole soapbox, if you want, on the evils of free social media and the hyper targeting, I think there needs to be legislation to almost eliminate some of that, because what we've allowed companies to do is extreme content and extreme information can find audiences now, because the audience is basically free, they just [inaudible]. So I think trying to really understand who I share my data with, why I share my data with, and I'm sharing it only for the purpose that I want, is another whole area of technology that we need to focus on. These are the things at least we're working on, that we feel pretty passionate about.Alex:And then in terms of very specific technologies, I think the combination of conversations with location and image recognition, are going to start to be really interesting, right? Because I'm going to be looking at something, I want to verify something, I want to validate something with a conversation and a dialogue. And a lot of it's going to be dependent about where I am. So we're trying to figure out how those intersect in the right way.Stephanie:Yeah. How do you approach it in a way that garners trust from the consumer? Because I feel like there's been a lot of times, even me personally, if I know I'm talking to a computer, I'm like, "Nope, I'm good." Because I've had so many bad experiences, or I've mentioned it a couple times, you call in to like Verizon, it's like... Pretending to type, like... And you're like, "This is so fake, and I don't like this." And then they can't even help me either. So how do you go about it in a way that informs the person that you're not really talking to a person right now, but still keeps them incentivized to want to try and work that method, if they've kind of been burned in the past?Alex:I think there's two topics there. One, both of them, we have pretty strong opinions about. First, an AI should always identify itself as AI and not try to pretend it's a human. I actually think we'll see legislation on that. Because I think it's bad. And I think a couple of things, even their practical issues with it too, you speak differently than you do to human than you do to an AI or a bot. And it's better if you know for everybody, it's actually better even for the AI builder to know that you know because the model is going to be different, interestingly. So there's actually a real practical reason. But I think there's a lot of ethical reasons, is I should know who I'm speaking to, and what I'm speaking to. That's one.Alex:Two, I think that the gatekeepers, the Facebooks of the world, that want to kind of screen everyone and operate as these Uber, Uber marketplaces that they control the traffic flow, I think we as consumers are going to start to have very negative... I mean, we've started in terms of perception. But I think there's going to be a continued backlash on that. And I think you want to know that if you're into dealing with Verizon, you want to deal with Verizon, you want to deal with this company, you want to deal directly with that company. So, again, we feel really strongly about that, we don't sell data, we work on behalf of the brand, there's no targeting, there's no selling data, there's no advertising.Alex:So I think we're going to see a return to kind of truer commercial relationships. Now, we've benefited, we've gotten all this free stuff by selling our behaviors, we don't sell our data, by the way, we sell our behaviors, right? We sell behavioral changes to Facebooks and Googles of the world. And I think we're going to stop doing that. And I think we have to stop, we have to pay for the things that would give us value, and then we know what we're paying for and we understand how our data is going to be used. And I think that's really, really important. And I think we're going to see a shift over the next year or two, for sure. For sure, in terms of what people want.Stephanie:Yeah, so a lot of brands are probably hearing this and are nervous because of all the changes that are happening with Facebook and privacy rules. And many of them have been very reliant on search ads and Facebook. So what do you see customer acquisition looking like if you kind of can't rely or maybe shouldn't rely on those channels, and now people are maybe opting out of sharing all their data, even though it's still pretty hard to opt out. It's like, you either accept it or [crosstalk] look at a website. Like, "Okay, I guess I'll just accept." But how do you see it working for brands where it's like, "Well, most of my traffic was coming from Facebook. And now that's not really the world we're going to be living in." Is that kind of targeting and traffic and customer acquisition?Alex:Yeah, I mean, there's still going to be these aggregate places, I think they're not going to be eliminated. So our view is moving from a stream and target the stuff at me to enabling people to express their desires, their intents. And then businesses honestly, basically, applying for, "Hey, here's something that based on what you've asked for, we may have." And so I think the user acquisition, I don't have the answer to, if I did, I'd probably start that company, or we would be doing it here at LivePerson, but I think that there will be kind of a flipping the model on its head a bit, right?Alex:So rather than this idea of, I can have some type of content, because I think the ills that we've seen have come from this model, I can have some kind of content, I want to get 50,000 people for a very, very, very low cost, I can go and target those 50,000 people, who don't know about me and who I think have a proclivity to me, and I can go get them. So that was good for small business in some ways, right?Stephanie:Yeah.Alex:You can actually build businesses online. It's bad for lots of other reasons. It's also as a consumer, that you're being introduced to something that... Like the whole serendipity introduction is neat when you're on Etsy, because you know what it is [inaudible], it's not neat when it could be anything. So I think we're going to start to ask consumers to express their needs, and like, what do you want? What are you looking for? Can you define kind of your ecosystem of things that you like and appreciate? And then we're going to ask your permission to actually bring others too. And you're going to set standards, like, "I really only want to hear from companies that have certain social stances, or I only want to hear from companies that have certain environmental stances."Alex:So I think it's really all about empowering the consumer to kind of define, it's a little more work, and I think that's the thing that's going to be interesting to see. Because I think we as consumers have gotten very lazy, it's just like, "I want to scroll and you're going to send me stuff." I think we're going to have to be asking consumers for a little bit more work to define those things and tell us more, so that we can give them things that are much more open, honest and transparent.n again, I don't know what the format it's going to look like, right now-Stephanie:I'm thinking of a whole new browser right now. Just need a whole new browser that operates in that way, because right now it's like, where do you get all those ads and everything? It's from your own Chrome, you're on Safari. But it seems like you need a whole new world for it to operate in that way.Alex:So we're actually experimenting with, call it a messenger, but I wouldn't kind of categorize it that way, that it is intent driven. So you define, I'm looking for X, Y and Z, almost think of the kind of anti Alexa in some ways where it's not just this transactional thing, I want to play this music and turn this thing on, it's much more, I'm looking for this, I need this. And you understand the ecosystem of services and providers that actually can come together, all permission based, all about transparency. Early days, kind of experimenting and thinking it through, and talking to a lot of partners and companies also, because I don't think we're alone. I think many, many folks think there needs to be a change here, and we need to figure it out together.Stephanie:Yep. So we've had a debate on the show a couple of times about this whole trend of shopping on the edge, which to me seems like kind of where you guys are headed up, like being able to have conversations kind of wherever you are. How are you thinking about where people are shopping now? Do you see it moving to being on Instagram, being within Facebook Messenger, being on Tik Tok and being able to have those conversations there from the brand and selling on those platforms, and less about driving directly to one single website, or just on Amazon?Alex:So I do think this idea of the destination starts to fade. I do think that brands will be able to speak to you wherever you are, right? Again, I think it needs to be permission based. I think it needs to be based on your intent. But I do think brand... It's funny. I mean, the idea that you don't have a website sounds insane, right? If you're a company, but what was a website 20 years ago? Nobody had a website really. The brand found you where you were, you saw the store, you looked in different magazines, you saw them on different television channels advertise. It was a much more organic process.Alex:And these gatekeepers have become very, very dominant. And again, I think if that changes where we're not willing to give away our behaviors anymore, or sell our behaviors anymore, then I do think you'll start to see brands engage in ways across all the places you live and breathe. Again, should be permission based, for sure. So I do think this shopping on the edge is kind of funny because isn't that where we all did years ago?Stephanie:Yeah, but now we're back. In the digital world though.Alex:Exactly. But that's where we're going to... The Fourth Industrial Revolution kind of back again is like, I think all these things start to blend together and we don't want, we don't want these kind of singular locations and gatekeepers, I think we're going to start to see different properties have different purposes based on what we're in the mood for, what we need. It's interesting, I think the biggest thing that I would leave you with, and leave listeners to, is digital was convenient. It is now a necessity. There's not more meaningful things that can shape change in terms of the format of an experience and the business models. And I don't think we're going to go back, I don't think we're going to go back to what was before, there's going to be something new, and that [inaudible] is what's really going to drive a lot of it. So I think you're going to have to as a brand be where people are.Stephanie:Yeah, which sounds chaotic for me.Alex:And this idea that people are... It sounds chaotic, but I actually think it democratizes things, I actually think it means that we can eliminate some of these gatekeepers who make billions and billions of dollars on our behaviors, which I think would be a good thing in the world.Stephanie:Yeah, I agree. All right. Well, let's shift over to the lightning round. The lightning round is brought to you by our friends at Salesforce Commerce Cloud. This is where I ask a question and you have 30 seconds or less to answer. Are you ready, Alex?Alex:Sure.Stephanie:All right. First one, what one thing will have the biggest impact on ecommerce in the next year?Alex:So I'm sorry to repeat, but the fact that digital is now a necessity, I think is going to have one of the biggest impacts, for sure.Stephanie:That's all right. You're allowed to repeat on this show. You can do whatever you want. Let's see, what is something that you believe that many people don't agree with you on?Alex:I'm hopeful. I do a lot of these podcasts, I get a lot of scary questions. I don't go there, you're not going to get me there. I think-Stephanie:[crosstalk]Alex:No. No, you didn't. You didn't. This has been fun and positive, which is great. I really enjoyed it. I'm hopeful about the future, I actually think AI is going to be a powerful tool of change, positive change. I don't think it's going to kill everyone's jobs. I actually think we're going to find new ways to make it augment and enhance us in ways we don't even expect. So I guess in the AI space, in Big Tech space, I spend a lot of time talking, I hear a lot of fear and the sky is falling. And I guess I don't think that way. I think I'm pretty uplifted and positive about what the future is to come.Stephanie:I love that. I'm on the same page. Normally-Alex:Good, yeah, I can get that.Stephanie:... [crosstalk] all that stuff. Yeah, you can get us on a space. What's one thing you don't understand today that you wish you did?Alex:I don't understand, and I think about it all the time and debate it all the time, and I'm not going to go all political on you, I don't understand the device of this right now, that we can't find ways to communicate and talk and debate real issues to find solutions. We like to divide. And I'm kind of confused by it, to be honest.Stephanie:Do you ever just look back at your news and media days and be like, "That's the stem of it, a lot of it." Like the targeting and the way articles are written. Oh, man.Alex:Yeah, I don't know. I think it's easy to go blame the media. I'm not saying you're doing that. I don't know. I don't know. Are we at peak Western civilization and there's always a crest in your fall? Maybe, that could be it. And I'm part of that problem, probably. I don't know. But I'm confused by it. It's something- [crosstalk]Stephanie:I'd like to see that change. That would be nice to see, [inaudible] everyone just come together in love, like the yellow debate, in a friendly manner. That would be nice.Alex:Yeah. And I think we'll get through it. So I am still positive about the future, I think. But I'm confused by the current state of it.Stephanie:Yeah. Yeah. Same. If you were to have a podcast, what would it be about? And who would your first guest be?Alex:If I were to have a podcast, it would probably be a little bit far from tech. It would be about how we bring magic back into our lives.Stephanie:Oh, I like that.Alex:Yes.Stephanie:You need the Alex Spinelli show.Alex:A little journey I'm on. Yeah, the little journey I'm on. I started going to Burning Man a number of years ago, and there's just an infectiousness of [inaudible] in wonder and magic and art, and dancing in the desert, into your life. And I think more people need to dance in the desert at sunrise.Stephanie:I love that. That's great. All right. And then the last thing, what's the nicest thing anyone's ever done for you?Alex:The nicest thing anyone's ever done for me. I have a pretty amazing group of friends and family, so I got a lot of nice things done for me.Stephanie:You're a lucky dude.Alex:I am lucky. I really do appreciate it. I think my wife marrying me is probably the nicest thing anyone's ever done for me. It changed my life and it's been wonderful.Stephanie:Go her.Alex:She's amazing.Stephanie:We've had a couple of guys say that on the show, which is so sweet. I'm always like, "I hope your wife listens to this then."Alex:I'm lucky. She's amazing.Stephanie:That's awesome. Well, Alex, it's been such a pleasure having you on. Yeah, I love the conversation. Where can people find out more about you and LivePerson?Alex:Yeah, I think you start on liveperson.com. And there's plenty on me on LinkedIn and our various social media. So I look forward to it.Stephanie:That sounds great. Thanks so much.Alex:Yeah. You got it. Thank you.
By now we’ve all heard about the thousands of businesses that pivoted to ecommerce in the wake of the pandemic last year. What we haven’t heard as much are the lessons both companies and consumers have learned in the process.On this episode of Up Next in Commerce, I was excited to dive into those lessons and more with Israel “Iz” Moreira, the co-CEO of Doughp, a company that sells edible (and delicious) cookie dough. Prior to 2020, Doughp relied heavily on its brick-and-mortar stores and the foot traffic they delivered. But Iz saw potential in expanding the company through ecommerce channels, and, luckily, laid the groundwork for the infrastructure for that pivot even before COVID-19 forced Doughp to shutter its retail doors. With a now fully-online company, Doughp has started to centralize and increase its shipping capabilities and has seen success, but it wasn’t a cake (or should I say, cookie dough) walk. Iz explains some of the hardships Doughp faced on its journey to ecommerce success, including how little information-sharing there still is in the business world when it comes to cold shipping. Plus he dives into the recent revelations he’s discovered about whether free shipping actually matters as much as you think it does. Enjoy this episode!Main Takeaways:Secrets Are No Fun: Multiple players in the ecommerce space have reported struggles in optimizing the logistics of cold shipping. Some have figured it out on their own, while others have known the answers all along and have been keeping them close to the vest. Competitive advantages are still alive and well in the business world, so the level of information sharing when it comes to cold storage is still quite low in order for places like grocery stores and meal preppers to maintain their edge.Lead With Mission: Depending on your industry, you should be thinking about how to best reach customers in a differentiated way. Testing is required to find the right strategy, so don’t be afraid to experiment with personalization and messaging. And if you are in a more commoditized industry, finding that one thing that separates you from the rest of the pack is going to be the difference between a customer choosing you or not.Does Free Shipping Matter?: While 2020 was a struggle for most, there were some bright sides, including the education of consumers on the world of shipping and logistics. As more consumers became educated on the hardships businesses face when it comes to shipping and handling, the customers have become more willing to pay for shipping.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, your number one spot for all things ecommerce. This is your host Stephanie Postles, CEO at Mission.org. Today, I'm chatting with Israel Moreira AKA Is. Welcome to the show.Israel:Hey, thank you for having me, Stephanie. Nice to be here.Stephanie:I'm really excited to have you on here. I'm excited to have a company on here called Doughp, which I've said now multiple times, "Why was I not innovative enough to create a company called Doughp?"Israel:Yeah, I have to give full credit to Kelsey though. She was the marketing brain behind this brand. So, it's really interesting. Coming from Brazil, Doughp was not part of my English skill. So, when I first heard it, I was like, "Wait, what is this?" And then it makes sense.Stephanie:So, maybe let's start there before we dive into what Doughp is and your role there. Tell me a bit about coming from Brazil. When did you come over to the US? Why? What was that process like?Israel:Yeah, for sure. So, I have a civil engineering background. I went to school for civil engineering, started working in construction in about 2010, 2011, some time ago, and eventually became a project manager for a construction firm in Brazil. I loved working in construction per se, because of all the changes and all the new stuff going on around. Being a project manager is really relevant in any industry. You can just transfer that skill set across multiple industries. So, I love doing that, but living in Brazil was not something that fulfill me per se. I would say, safety in Brazil, public education, public health, everything you hear in the news here about third world countries, most of it is true.Israel:So, being raised there, my parents always told me like, "Oh, if you ever have an opportunity to leave and study abroad, just go do it. All the other countries out there, they're way better for you to have a better career." So, I had that mindset built into me in my upbringing. Israel:So, in 2015, I decided to make the change. I did a backpacking trip to the United States and Canada, because I wanted to be in an English speaking country. English was always my second language. So, I was like, "Well, I've got to go during the winter and find out if I can withstand the winter and the place that I'm going," because the summer is fine, right? I was born and raised under the sun. So, I did this backpacking trip of 30 days going across the US and Canada, which was awesome, but it led me to find out that I wanted to be in Berkeley in California. So, I applied to a course there, an international student course that gave me the ability to stay here studying business management and marketing, which were not my strong suits.Israel:I was always a project manager. So, I wanted to know how to manage a business. The marketing side, because I'm so focused on operations and finances, was never my strong suit. So, I wanted to be a little better in that regard. And then after studying here, I was able to secure a job in San Francisco, which my head was just blown away by that. Yeah, eventually just stay here, working in SF, and then the love story begins between me and Kelsey. But after working for Product School, which was a company I was working for in SF, I joined Kelsey at Doughp.Stephanie:Yup. So, Kelsey founded Doughp, which is a raw cookie dough bar, but it doesn't have raw eggs in there, right? Is that the right way to explain it, or maybe you can do it better justice?Israel:No, that's correct. I like it. It does not have any raw eggs. We use heat-treated flour. So, it's super safe for consumption. So, the whole idea of this is to bring nostalgia by the scoop. So, you just probably grew up here trying to eat the cookie dough that your mom or somebody in your family was baking. Everybody was saying, "No, you can't eat it, because of the eggs and you're going to get salmonella and whatever." So, Kelsey did found Doughp in 2017 to solve that problem. It's an interesting story as well, because in 2015, she became sober. She was struggling with alcohol, working for Intel for 10 years. In becoming sober, she rediscovered her passion for baking.Israel:So, she just launched Doughp in 2017. In 2018, she started the Pier 39 store that she used to have in San Francisco. It was a rocket ship, I got to say. She then launched in Oracle Park in a kiosk. And then in 2019, Doughp opened the store at the Las Vegas Strip. So, in 2019, Doughp have basically three brick-and-mortar operating stores.Stephanie:That's awesome. So, everything was brick-and-mortar at that point. When did you enter into the company? What year was it? What does your role look like as Co-CEO versus what Kelsey works on?Israel:Right. So, let me start with the second question, the Co-CEO role. Kelsey and I have very different skill sets. She is a marketing guru and a business development wizard, I got to say. She's great at that. I'm great in operations and finances. So, we have very defined responsibilities, if that makes sense. So, whenever she comes to the problem, obviously, I'll be the sounding board, but she's the one that's the expert in marketing, for example.Israel:So, if there's anything coming up in a marketing campaign, then she's the one who's going to say, go or no go, the final word. Vice versa, in operations and finances. So, it's a really fortunate situation, I got to say, because it makes it easier, right? Especially having a relationship as well. Right now, I'm speaking from the office. We try to keep all Doughp matters in the office. So, the relationship also happens, but it's a challenge. But anyway, I think we have a very fortunate situation in this skill set.Israel:As far as your first question, when did we transition into the ecommerce? When did I join the company?Stephanie:Yeah. When did you join the company? Because that's where I want to get into the path to Shark Tank and all that. So, what year was it that you joined?Israel:Right. She went to Shark Tank before I joined the company. So, she went to Shark Tank in 2019. So, right after she opened the store here in Las Vegas, she went to Shark Tank. I joined the company late 2019. So, it was about six months after the Shark Tank episode aired.Stephanie:You are in the midst of the growth then, because I was listening to an interview with some stats around... I think it was in November 2019. You guys were maybe shipping 30 boxes a month. And then by April 2020, you were shipping 3,000 boxes per week, which is crazy growth. So, I want to hear. I mean, it sounds like you were right in the midst of that, of entering into... She was on Shark Tank. She didn't get a deal. But then she started opening more retail locations, grew like crazy, and then COVID hit. Tell me a bit about that.Israel:Right, exactly that. So, you just summarized everything. I joined the company in November of 2019, which was exactly when we were doing the small amount of boxes a month. When I joined, one of the first things I did with her was to have a big brainstorming session about all the operations that she was doing, right? So, at the time, she was doing catering events. She was doing a little bit of wholesale, a little bit of ecommerce. She also had the stores. So, it was a very wide breadth of operations and not having a lot of success in any of them per se, right?Israel:So, the stores were still the bread and butter of the company, but none of the stores were growing astronomically. We were already seeing some foot traffic decreases. Happening so much so that as soon as I joined the company, I was like, "We got to make sure that the unit economics of these stores are a little better," right? So, we were paying way more in rent than we should be paying based on foot traffic. So, renegotiations started happening back then. So, out of that brainstorming session, we used a very rudimentary framework, I would say, but it was super helpful to understand what type of work was being done in each distribution channel to serve customers versus what type of return that was giving to the company.Israel:So, the outcome of that situation was, "Okay, brick-and-mortar is still the bread and butter of the company. We are not going to change that, but we need to find one other channel, not five, six, seven, whatever she was doing back then, that will be the 20% revenue, right? We're going to keep the brick-and-mortar 80%. We're going to have one of these as 20%." Ecommerce was the one we decided just because of the "infinite possibilities" of having foot traffic not being limited by foot... It's not actually foot traffic. It's actually eyeballs. So, we decided to go into ecommerce in November of 2019 together. That's when we started shifting all of our resources into growing our website and our paid acquisition channels and our social media strategy.Israel:When the pandemic hit, thankfully, we were ready. So, although it was awful for the brick-and-mortar stores, it was great for the ecommerce because people were at home. They were not very happy being at home. They were trying to find novelties to fill the time, right? They're just not happy at home. Being an impulse buy, a nostalgia buy, we just skyrocketed. That's why 3,000 boxes a week happened.Stephanie:What kind of things did you have to adjust on the back end when it came to logistics? I mean, I'm thinking about shipping perishables. It's one thing to ship it to a retail location. You've got it all set. You're planning for your orders on average every week. How do you prepare for shipping all over the country or world? How did you set things up to prepare for that?Israel:That was a big learning experience, I got to say. There's a lot that co-chain shipping entails. Back in 2019, we knew almost nothing about it. So, there was a lot of talking to people that are already in the space and flying and driving to fulfillment centers and co-packers and seeing how they work, really learning how they work. But at the same time, we didn't have all the resources to go into a co-packer and a national last mile distribution contract. So, we have to be scrappy as well. So, we had to use all the resources that we had.Israel:In March, when the pandemic hit, I had staff of the store and I had the space. I had no customers to serve. So, that helped us in that I started using those resources to fulfill the ecommerce orders, right? So, January, February, we were already having some growth, not astronomical, but still some growth. I was already using that labor to fulfill the orders. And then in March, when the pandemic hit and ecommerce just went through the roof, I was able to use our staff to help there. But as far as the logistical implications, we have a lot of limitations, because of cold shipping, but now I thankfully can say we know what we're doing.Stephanie:That's a plus.Israel:Yeah. When we first started, finding coolants and insulation that will be able to keep our product refrigerated through the time in transit. Also, making sure that you find that sweet spot between the winter and the summer, because in the summer, we'll need more coolant, but you also can't forget about the coolants in the winter. It was a big challenge, but now we got it dialed in.Stephanie:I mean, it seems like this area of cold chain shipping and logistics has a lot of room to grow, because we've had a couple people on the show who... We had Yasso on. It's like frozen yogurt bars. Everyone talks about building their packing materials from scratch, depending on what you need, which seems insane to me. It seems like there should be some shipping materials. If you need something under this temperature for five days, here's the box to go with. Why do you think this industry is lagging behind like that when it seems like this is the way forward? I mean, everyone's going to be doing grocery delivery and online orders much more frequently now. It's the way we're moving, but it seems like that area has definitely lagged behind.Israel:That's a great question. I do think there's a wide or a vast lack of information around there. There's a little amount of players that know a lot, right? So, if you talk to some specialist companies in packaging and box design and coolant design, then yeah, they will know everything, but it's proprietary information, because it's their product. So, they don't want to be sharing this with many people. So, you don't find a lot of that information online consolidated in a how-to book. That's the first problem.Israel:The second problem is we had grocery stores operating before all this happen. Now, obviously that trend of going into ecommerce was already happening. But when the pandemic hit, it just accelerated exponentially. So, the speed with which the information is shared was not equal to the speed with which people needed that information. So, we have this major gap right now in which some players know what they're doing and some players are still trying to figure it out.Stephanie:Also, it seems like as a middle ground if you don't have the resources to invest in your own shipping materials, you could do the middle ground of working with grocery stores and letting them take care of it, ship it to the grocery store. They can do the online orders, the in-store pickups, and all that stuff. You don't have to figure out the logistics from end to end in the beginning.Israel:Right, right. Yeah, that totally makes sense. I think that's why most brands did not adventure into the ecommerce space, I think. Now, we're just seeing so many brands going into ecommerce, because people are at home and they're not buying from grocery stores as often, which is a whole different conversation, right? Are they ever going to go back to whatever normal is, or are they going to continue buying from ecommerce? My take on that is that they will continue to buy from ecommerce not as much as now, but definitely, they're not going back to what that rate was before. So, yeah.Israel:So, having this central player is also another reason why the information was centralized, right? They have this competitive edge, and they don't want to give it away to their competitors. So, if you're talking about Whole Foods, they have their own distribution chain. So, they have their own ways to make their profit at the end of the day. So, they don't want other competitors to find out what they're doing, I bet.Stephanie:Yup, yeah. It makes sense. So, when you were going through these transitions of going from mostly retail to ecommerce, what were some of the areas of the business that needed the most adjustments? When you're focused on retail, you're thinking about foot traffic. What neighbors do you have moving in? What other stores are nearby? You're mentioning unit economics. It seems very different when you're shifting almost completely to online sales. What things that you have to adjust or completely cut out from the business? The whole way of thinking, what do you have to change?Israel:Well, the unit economics of the two channels are very different, right? So, if you're thinking about a brick-and-mortar store, you have to consider labor as one of your biggest costs, along with ingredients and packaging. And then as you go into ecommerce, ingredients and packaging are still there. They're not going to go away. So, the major difference is shipping, handling and shipping. So, these are the major differences. Some people consider shipping within the cost of goods sold universe. Some people say it's out. But then after shipping, it's a contribution margin. Whatever you may say, shipping is a major cost to serve your customers on ecommerce channel. So, that is the biggest change, I think, we've seen.Israel:Ingredients and packaging as we're selling the same product do not change. Operating expenses and SG&A, we'll have a whole different conversation as well. Because as you go into ecommerce, you're acquiring customers in a very different way as you mentioned. You're not dependent on foot traffic. You're not dependent on a shopping mall management, what happens with the world, flights. Especially in the Las Vegas Strip, it's a very tourist-based area. So, going away from that gives us a lot more independence, but at the same time, because everybody got into that space last year, it got very competitive. So, although the cost structure is different, that competition makes it hard.Stephanie:Yeah. Did you have a customer base that you could tap into from your retail locations, where you've got these loyal customers coming back? Maybe they're getting points. Did you already have that baseline to tap into and be like, "We're moving to retail. We'll see you there"? Or did you have to start from scratch?Israel:So, it's a 50/50 response here. Yes, we did. It was great, right? We had a lot of customers through the Pier 39 store and the Las Vegas Strip store. They were indeed activated for the ecommerce. Whenever we were ready to ship, we sent a blast saying, "Hey, guys, here we are. We can ship to your house now." This was January, pre-pandemic. So, that part was great, but at the same time, we just grew so much in March and April, that I would say most of our customers right now did not go through our stores before. So, although we did tap into that, that's not the majority of our customer base.Stephanie:So, then how are you thinking about customer acquisition now? Because once again, it seems like such a different hat you have to wear of how to attract customers in the online world versus I could do a billboard. I could go out and give out samples of the cookie dough. What are your top performing channels right now that you guys are leaning into?Israel:See, our top performing channels are paid advertising and social media organic. I think we have a very different scenario here than most brands that you see in the grocery stores. It's because we lead with our mission and our giving back, right? We have a mission. We talk about mental health and stigmas around mental health. We also give 1% back to the community. That's just not something that other brands out there do. So, if you associate that with a kick ass product, which is what we have, then you have the winning formula. I think this is the way that we lead with our brand messaging. This is what's made us so successful so far.Stephanie:How do you think about balancing that? Because we've had a couple brands on the show who also have missions. We've had Bombas on. We had BLK & Bold Coffee. But they also talked about the unique balance between thinking, "Do you sell with the mission, or do you sell with the product and then showcase the mission afterwards?" Because it depends on who you're getting in front of or who you're trying to reach. How do you guys think about that balance of we have an epic product. and we have a great mission without muddying up the website. Israel:That's a very interesting question. I think you said the answer in the question.Stephanie:I just answered my own questions.Israel:I actually agree with your answer. I think it depends on who you're trying to sell. It depends on what your product is. I think there's many ways for you to do this. In our particular case, we tried to lead with the mission. I think as you go into a commoditized industry, leading with the mission is more important. If you're not in a commoditized industry, then your product has major differences against its competition.Israel:So, it makes sense for you to lead with more of your product and how it is and why is it better than a competition. Although we have differences from our competition, it is a more commoditized product, right? If you go to a grocery store right now, you're going to find Pillsbury, Nestle, and other big brands right there. So, leading with the mission in this case, I think, is more relevant.Stephanie:I like that point. That is a good way to think about it. Depending on the industry, you should think about how to reach your customers. I also think you could maybe segment the customers depending on what they're searching for, what they're interested in, if they're past customers. We've talked a lot about loyalty on the show and how you should be giving different messages depending on who the customer is and how they've engaged with your product. Do you guys think about doing a more personalized approach depending on how your customers are interacting?Israel:Yeah. That also talks very closely to our landing page strategy, right? We have different offerings for different customers. So, it makes sense for you to segment your customer base and say, "Okay, I got to potentially have a loss leader to have this customer in the door. And then I'll make sure that this customer loves the product enough that they will come back because of the mission." So that's one potential strategy, but again, it depends on what customer you're trying to sell to and what your product is. In our case, we have many different customer personas. We try many different approaches to each of them every single day. So, there's a lot that goes into A/B testing and understanding what performs better to each audience. So, that's a lot of our time.Stephanie:Yeah. What are some of your favorite experiments that you've run or results where you're like, "I wasn't expecting that, but now we're leaning into that strategy after deploying that"? Any good stories around that?Israel:Yeah, shipping.Stephanie:Let's hear it.Israel:Shipping is very interesting. We've run many, many tests around shipping. It seems to be a seasonal thing or it has something to do with a pandemic. We're not quite sure about the reasoning behind it, but it seems like in the very beginning of the pandemic, people are more sensitive to the free shipping messaging, right? You were testing free shipping against the $2.95 shipping. Free shipping would convert like crazy versus the 295. Whereas now, it seems like people are more understanding of the world situation and how shipping works and how expensive it is for brands to ship.Israel:So, right now, the latest test that we ran about shipping, we didn't have a very significant variance in conversion between... I think it was a $9.95 shipping versus a $7.95 shipping. So, giving discounts on shipping right now is not as relevant as before, which to me just blows my mind because what you think in shipping, you consider Amazon, right? Customers are getting spoiled with Amazon, "spoiled."Stephanie:I'm spoiled.Israel:Exactly, you just go on Amazon. I literally went on Amazon last week on Friday to get some vitamins and I got the vitamins on Saturday morning.Stephanie:Yeah, I got a leaf blower in one day.Israel:Wow.Stephanie:That's a whole different level of being spoiled, but I mean, I'm all for it.Israel:Exactly. That talks closely to how expansive their distribution network is, how many warehouses they have, and how much inventory they hold in each of the warehouses to be able to do that, because as you centralize, it's easier for you to keep control of what you're doing and keep your processes consistent and whatnot. That's what we do.Israel:But as you want to reduce the time in transit, you have to do that. And then you need more labor, more headcount to make sure that everything happens, and more inventory. There's more cash tied up into that inventory. It just goes crazy. But most people that don't know what goes behind running a business just think, "Oh, well, this brand doesn't know what they're doing, because Amazon is doing it in a day." So, there's a lot of educating consumers about shipping and logistics for them to understand why Amazon is able to do this. Whereas the small brand that you're trying to support cannot do that. It doesn't make sense on their unit economics.Stephanie:Yeah, I mean, I think that's the silver lining of 2020 is that a lot of people did experiment with new DTC companies. They went places they would have probably never shopped before then and were buying things directly from brands. So, I think they probably became more accustomed to paying for shipping to where going forward, that might be a more normalized thing, or going forward, people will just be like, "You need to just include that in the cost." Because oftentimes, I do think if you were just to increase the cost by a couple of dollars and tell me I have free shipping, I probably would be happier and just not care where it went. You can charge me for it, but just don't show me that extra line at checkout.Israel:Right, right. That's exactly how we did that first test. We just did exactly the same total cost for the customer. One had the shipping as a separate line item, and the other one had the shipping baked into it. Again, the free shipping converted way more. But now the last time we ran it, it didn't. So, yeah. Who knows what's going to happen now?Stephanie:Yeah, I mean, that's definitely a good test to run. So, what's next? What are you guys preparing for right now? Are you going to re-enter retail? Are you going to start working with wholesalers? What are you guys planning for over the next one to two years?Israel:That's a great question. It involves a little bit of forecasting in times of uncertainty. To the best of our ability, we forecast that potentially until late this year or probably mid-next year, we're going to be back to whatever normal is. So, there's many other channels that will come back to normal aside from ecommerce, right? Ecommerce is now our bread and butter. We're heavily focused there, but we foresee some opportunities, for example, in grocery stores and wholesale that we might pursue as well. So, that depends a lot on where the market is. I think by now, we know exactly how to pivot and persevere whenever needed. We learned that lesson during the ecommerce and pandemic shift.Stephanie:Would you re-enter retail with... Would you do anything different now, where you've had a year plus to think about it and think through the strategies that you were using before? Would you go about it a different way?Israel:Retail as in to brick-and-mortar stores?Stephanie:Yeah, brick-and-mortar.Israel:No, no, that's definitely not in our intention for the future. I think retail can work in some ways, but that's not something we want to do anymore, just because right now, we have this brand awareness. We have this momentum that the brand generated with the ecommerce shift and everything that's going on around us that we just think limiting your product to one single store that depends on the foot traffic around that store is not where we want to be. So, on the brick-and-mortar side, no, I don't think we would do anything different. On the ecommerce side, perhaps we would have started earlier.Stephanie:You can't have that kind of hindsight, but yes, I'm sure everyone's like, "Why didn't we do this a couple of years ago?"Israel:Yeah, definitely.Stephanie:What about samples? So, that's always my thing with everyone who's come on the show who is in the CPG area and foods and snacks and all this stuff. I mean, I always think about Costco, which I love so much. I miss their samples a lot. I think about a product like yours, especially with buying it online, it's like, "Well, I don't know how it'll taste. It'd be nice to be able to try it out in a small amount first." That's why I think retail is so great. So, how do you guys think about introducing it to customers like me, who would be maybe harder to sell to online without really knowing if I would even like it?Israel:Right. Well, I think you touched a very important point in the wholesale/grocery store channel, which is they do their own experiential marketing. Some of them do. Some of them have fairs and other types of experiential marketing. That's one thing that we'll definitely tap into. Organizing our own events is something we thought about, but not depending on real estate that's under a lease agreement, if that makes sense, right? Because an event, you're going to generate all that buzz and bring potential customers to your event.Israel:Maybe you can even do brand partnerships to generate even more buzz. Those people will come and try your cookie dough or whatever product you're selling, and then potentially buy from you at the grocery store or the ecommerce side. Whereas if you have one space, you're going to have to conduct business as usual. You're going to have to hire staff and keep staff and train staff, keep the lease. There's a lot of difficulties that encompass operating a retail store. I think for what you're saying, acquisition of customers, I think there's other ways to find that.Stephanie:Yeah, I love that. I think there's going to be so much pent up demand around people wanting to, like you said, getting into these experiences and experience brands but in a different unique way, whether it's events where you try something out or meetups or whatever it may be. I do think a lot of people who are changing quickly with the times will see it how you do around, "We don't need just one location. We can tap into the Walmart's and the Whole Foods, and then go to these events and just not be so reliant on one channel or one retail location."Israel:Yeah. I think that brings us to a very important point that's happening because of the pandemic, which is the decentralization of population density, right? If you look at population density of San Francisco, LA, New York, Chicago, all the big cities in the US, there's many people that just left.Stephanie:Got out of there. I'm one of them, peace. Bye, California.Israel:So, do we. Now, we're in Nevada. There's a lot of people that just don't need to be in a physical space. They just work remotely. There's no sense in keeping all the lease or whatever mortgage you have for nothing. So, that creates a very interesting moment for the industry, because there's a lot of other cities that otherwise would not have had so much foot traffic or population that now do, right? Las Vegas now has a big boom. There's a lot of people moving to Las Vegas. So, initially, you would have thought, "Well, I'm only going to launch events in New York, LA, SF, Chicago, Dallas, because these are the biggest cities." But now, it makes sense for you to go a little scrappier and do smaller events in cities that were not that big.Stephanie:Yeah, I was just thinking that too of exploring micro events that seems like it'll be a lot more logistically, because to actually tap into that same maybe amount of people that you would have before 2019 or before 2020, you really have to do a different approach, which seems like a lot of new and different kinds of work that many brands probably weren't and maybe still aren't prepared for.Israel:Totally agree. I believe the brands that are the most prepared in the ecommerce world are the ones that are going to succeed in the experiential events side of things, because they're going to have to ship cold product and make sure that the consistency and quality is kept throughout the time in transit. The companies that are doing the best in ecommerce are the ones that are going to succeed there.Stephanie:So, when thinking about experiences and focusing more on maybe the longer tail, like you said, the big cities, how do you think about leveraging influencers? Because to me, that could have a big impact too if you have events going on and you get an influencer from some city in Alabama, probably will have way better results than pulling in a Kardashian. How do you think about utilizing them over the next couple years?Israel:Well, that's a great question. That's a great question. Definitely, something I did not think about, but now, I think-Stephanie:I got the wheel spinning.Israel:Yeah, no, I think you got the wheel spinning. I think if we're starting the events in these smaller cities, I think the local influencer is going to have a better result as you said, right? Instead of spending millions in a Kardashian, for example, we could spend way less than that but distribute it across 20, 30 influencers in 20 or 30 different cities and bring more people to the event for sure.Israel:I think for the acquisition side of things, that will help because people will try our product, but at the same time, we have to make sure that the people that come to the event don't come only because of the influencer. They have a very good experience there as well provided by us, right? So, leading with the messaging and the 1% giving back. We're not here just for you to see this influencer and just for you to try this cookie dough. We're also here to foster raw conversation about mental health and addiction recovery.Stephanie:Yup. Yeah, that's cool. Also, maybe brings up a point of having volunteer events and smaller micro activities like that to bring people in for the mission. And then you've got the cookie dough, and you're making this well-rounded experience that people walk away with. They're like, "That brand had a really cool thing that I wouldn't have known about unless they hosted it."Israel:Yeah, love it. That's a great idea.Stephanie:You're welcome, man.Israel:I'm taking note of this.Stephanie:But I am thinking now about attribution piece too, which I think is going to be a big thing that brands have to think through over the next couple of years of, "How do you know if your efforts are paying off?" The world's changing so quickly. If you're moving to these more smaller locations to focus on things that are becoming more distributed, it seems like there's going to be a lot of work to do around, "What's actually working and what's not?"Israel:Yes, yes, you just find a situation there, right? Attribution in marketing is the hardest part, because some marketing pieces are going to be for brand awareness. How do you quantify that? It's super hard. So, a good approach for that is to just put everything in the same bucket and say, "Okay, revenue this month versus spend in marketing this month and just have that metric follow you through times for you to see whatever changed this month is doing okay or is not doing okay."Israel:So, obviously, it's a very simplified metric. There's way more refined metrics, I would say, for you to use in each and every channel, but that is a quick indicator of, "Okay, you're messing something up," or "Okay, well, something's going on that's doing well here." So as attribution goes harder and you mentioned it quite well, when you said, "When we start spending in these events and other stuff, how do you know that that person actually purchased from your website because of the event or because they saw an ad on Facebook or because they watched Kelsey on a podcast or me on a podcast?" There's limited ways for you to find that. So, I think that's a good way for you to gauge your results.Stephanie:Yeah, yeah, it's going to be a tricky world going forward. All right. Well, let's shift over to the lightning round. Lightning round is brought to you by our friends at Salesforce Commerce Cloud. This is where I ask a question and you have 30 seconds or less to answer. Are you ready? I just saw your eyebrows though.Israel:I'm ready.Stephanie:That's your game face, I guess. All right. What one thing will have the biggest impact on ecommerce in the next year?Israel:Experience, customer experience. I think when you receive a box from a brand, if you're the brand, you got to make sure that that box is the best you can do for that customer to have a great experience, because the convenience factor is there. Yes. But if you tell them or if you send them an experience that's underwhelming, you're not going to keep that customer. So, I think that's the most important thing in ecommerce.Stephanie:What's your favorite thing you did to your unboxing experience that you're like, "I'm real proud of that"?Israel:Is that still under the 30-second limit, or can I expand that?Stephanie:This is a new one. Yeah, this is your next 30-second question. I just added on.Israel:I think as of now, the coolest thing that we do is to send a note card for each and every one of our customers talking about our mission and what to do with the product. If there's anything that's wrong with the product, please contact us. I think some brands don't take the care of telling their customers how to reach out to them in case anything goes wrong. I mean, let's consider I'm the customer now, right?Israel:I'm paying whatever I'm paying for a cookie dough to receive cookie dough in my house. Something happens and I'm not happy with the product. I'm going to go after it. I'm going to go ask the brand, "Hey, I just paid this amount of money for cookie dough. I could have paid way less in the supermarket. Can you please make it better?" If you're not ready for that, then you're not going to succeed in ecommerce. You've got to be ready to make sure that the customers have the best experience. So, sending that card and making sure that they know what to do and how to reach out to us has been a great victory for us.Stephanie:Yup, yeah. I love that. I think gone are the days of, "There's our chat bot. You can talk to them. Try and solve it through them." Nope, people are over that. That was something that maybe worked in 2019 for a little bit, and everyone was headed in that direction of tech can solve everything. It can take out your whole customer service team. It can solve all your problems, but I think now people are looking for that experience. They're looking for the brand to actually solve their problems and help them.Israel:Totally agree.Stephanie:All right. Next question, if you had a podcast, what would it be about? Who would your first guest be?Israel:Wow, you got to tell me that these things are coming now. The wheels are spinning here.Stephanie:Sorry, I can't. It's the lightning round.Israel:What an interesting question. If I had my podcast, I think it would be about hustling. There's so many people that do so much cool stuff. We never hear about it. there's people that are intrapreneurs. They're entrepreneurs inside their own organizations. They're still in their job, but they're doing very cool stuff within their companies. There's a lot of glamor around just entrepreneurship and whatnot. So, the hustling side would be interesting for me to hear. Who would my first guess be? That's a great question. Does it have to be a person that's alive?Stephanie:Nope, they can be whoever you want.Israel:Okay. I would probably interview Steve Jobs.Stephanie:That sounds good. I would listen to that.Israel:Oh, cool. I think he must have had very cool stories about hustling. There is some controversial information about his managerial skills, but I do believe he was a hustler. Apple is what Apple is very much because of what he's done to it. So, that would be a very interesting conversation.Stephanie:Yeah, I think that'd be really cool. I mean, yeah, there are so many people within companies. You see new product launches. You see new features. I think people just associate it with, "Oh, that's the brand." That's Google. That's Facebook. That's whatever. But there's people inside there who maybe had that idea and actually brought to fruition. I want to hear from this people. That's a good one.Israel:Exactly. Yeah, there's so much PR around the people that are on top of the company, but little is said about the people who actually bring those ideas into life.Stephanie:That's a good one. All right. What's one thing you don't understand today that you wish you did?Israel:Oh, wow. Interesting question. Israel:Well, the wholesale world has a lot of question marks to me right now, just because we're not in it very deep, I would say. So, I would love to learn more about the wholesale and direct grocery store channel. I will probably know a lot more in a year. We can redo this.Stephanie:I know.Israel:My answer will be-Stephanie:We'll do a round two. When you guys start exploring wholesale, you come back with that. And then the last question, what's the nicest thing anyone's ever done for you?Israel:Wow.Stephanie:We go deep here.Israel:Yeah, I love it. I love it. Israel:Okay. So, when I was doing this backpacking trip in 2015, I think it was in Vancouver, Canada. I had just missed my flight going to Toronto. It was the first flight I've ever missed in my life. I was very upset, very upset. So, I just went into this Starbucks shop. I was like, "Okay, I'm going to have this coffee. I'm going to just de stress. I don't want to think about this." I was alone. There was this gentleman sitting on a table right next to me. We ended up striking up a conversation. I was a little stressed because of the flight, but still, whatever. I'm just here to make friends and see what it's like to live here.Israel:And then this guy, I just told him everything about my life, but I lead with what I was doing in Brazil, right? I was like, "Well, I'm a civil engineer from Brazil, yada, yada." And then in the middle of the conversation, he's like, "Oh, so who are you, Israel?" I'm like, "What's going on here? I think this guy is a little odd. He didn't hear what I said." And then I'm like, "Whatever. I'm just going to say it again." And then I started saying, Well, I'm a civil engineer from Brazil, yada, yada." And then he stopped me in the middle. And then he said, "You are not defined by your job. You are defined by your passion. What's your passion?"Israel:And then it made me think like, "Oh, my God. I describe myself by my job today. I'm literally here trying to find a new city for me to live in. I'm trying to lead with my job." So, I think that was really kind of him to do. It was an interesting thing. I don't know that he thought it was going to be so impactful for me. By the way, if you're listening to this, I don't remember your name, but you're really cool, dude.Stephanie:You're the best.Israel:Yeah. So, as I went through my backpacking trip, I just kept that question in my mind over and over again. I was like, "I got to find my passion. What is the passion that I'm trying to solve here or trying to pursue in moving to the United States?" That eventually got me into a very deep reflection. Civil engineering was not my passion, basically. That's the bottom line of that reflection. My passion is education. I want to do something around education. I think education is the key to change the world.Israel:One of the things I want to do whenever I do have some more time... Right now, I don't. But one of the things I want to do is to found a nonprofit in Brazil to help with education in underserved areas. I think that's the key to go. I'm so grateful for the education that I had in Brazil all in all, because that's why I'm here, right? If I had not had that education, then I wouldn't be here. So, that's a long winded response.Stephanie:That's a good one. I think that is awesome of that person to give those thoughts. I've had that same reflection when I was living in the East Coast. People were very much into, "What do you do? What's your degree?" Always starting off with that. And then when I moved to California, it was very much not that. And then moving to Austin now, it's like, "What do you like to do? Do you like to hike? Do you like to paddle board?" That's a different conversation, but it makes you think very differently about, "What do I like to do? Who am I?" So, I love that. That's a turn for the philosophical and I am all about it.Israel:Love it.Stephanie:Thanks so much for joining the show. If people want to try out some Doughp, where can they get it from? I'm going to keep saying it like that, Doughp.Israel:www.doughp.com. It's D-O-U-G-H-P.com. You can also follow us on social media. Most of our handles are @Doughp.Stephanie:Amazing. Thanks so much for coming on. It was a blast.Israel:Thank you for having me. I had a blast.
What happens when you can’t own the direct relationship with your customer? In the ecommerce world, you would think that’s pretty rare, but companies in big and highly-regulated industries deal with this problem daily. Anheuser-Busch is one of those companies and its team has had to be innovative in the ways they gather insights and create relationships with customers. Arabella Watters leads Category Development and Insights for ecommerce at Anheuser-Busch, and she is helping bring creative solutions to understand exactly who AB’s customers are, how they shop, and what they’ll want in the future. On this episode of Up Next in Commerce, Arabella dives into the roundabout ways that AB has had to gather data, and she explains how important it is to have a two-way relationship with retailers in order to share data that is useful to both parties. Plus, she explains why we can all learn a little bit from our international peers and what sorts of innovative approaches ecommerce brands can implement on their own right here in the U.S. Oh, and Arabella teases some exciting influencer content coming up soon that AB put together with Travis Scott that you’ll definitely want to check out. Enjoy this episode!Main Takeaways:It’s a Two-Way Street: With retail partners, sharing data goes both ways. Whether it’s out-of-stock data, landing page placement, or general consumer insights, there’s information that both sides need to have access to. Establishing a reciprocal relationship of data-sharing will not only take the partnership further but transform how you can serve consumers.Digging For Data: Accumulating and then analyzing consumer data is the only way to get a 360 view of who your customers are and how they shop. But in industries that are heavily regulated, such as alcohol, having a traditional ecommerce experience is not quite possible, which means you have to get creative. Put on your creative hat and listen in to hear the many tactics you can use to get intel on your customers in a fun and unique way.Take What You Can: Although China is far ahead of the U.S. when it comes to ecommerce adoption, and how it has permeated through just about every industry — alcohol included — there are still points of inspiration and innovation that can be brought to the American market. Creating full omnichannel experiences and engaging with customers at every touchpoint on the customer journey are just two examples.Premiere Partnerships: Influencers are a dime a dozen these days, and it’s easy for a brand to pay for someone with a big following to promote a product. But the ROI from that is negligible. What works better is a more authentic strategy in which a brand forms a true partnership with an influencer or celebrity who is truly connected to the product and the campaign in a personal way. That authenticity resonates with audiences better than most other marketing activities.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 and CEO at Mission.org. Today, we're chatting with Arabella Watters, the Head of ecommerce for Category and Insights at Anheuser-Busch. Arabella, welcome.Arabella:Thank you. Happy to be here.Stephanie:I'm excited to have you on here. Is it too early for a beverage? Or ...Arabella:Yeah, it's only 10:30, otherwise, I'd definitely would be having a seltzer next to me, for sure.Stephanie:Yeah. So speaking of seltzer, I was think that you're the perfect person to talk about all things D to C alcohol, not just because you're working at Anheuser-Busch, but because of a company that you actually started out of college that I saw you were taking an entrepreneurship class, and you actually took your project and ran with it, and I want to kind of start there because I thought that was really cool, and I was like that's impressive. Probably no one does that that I know of unless maybe you're at Stanford that's a little bit more normal, so tell me a little bit about that.Arabella:Yeah, definitely. I think it's a good segue into how I got to AB for sure. So I founded that company, Mojo, with my partner, exactly like you said, during college. So we were taking an entrepreneurship class, had this idea, and just decided to run with it because it felt like a really kind of rich and impactful idea that could actually go somewhere. I'd say it's super interesting when I think about how it kind of came to be and came to fruition. My partner and I at the time had both been studying abroad during our junior year. We actually were in South Africa, and had just a lot more exposure to kind of the alcohol and drinking culture in a less regulated place, which sounds really interesting and funny, but in South Africa, you can buy wine whenever, the drinking age is a little more relaxed and people are getting a bottle of wine, having a picnic, going for a hike, all of that.Arabella:Kind of more casual, outdoor, daytime drinking behavior. And we found it very, very, one, fun, and two just interesting and kind of something that was missing from the alcohol market in the US. So I've always liked wine. I grew up in California so it was something I was familiar with, but we kind of had the realization that wine in the US was very much so kind of stogy, a lot of different options without a lot of different differentiation, and the majority of the time it's very heavy red wines that make you fall asleep, and hard to drink.Arabella:So the insight that I kind of had was that there really was this growing opportunity for more easy to drink, lighter, social beverages that could be portable, you could take them on an adventure, you could drink during the day or during a more active activity. And I'd say so that was really kind of the thought that led to Mojo, which was basically a wine spritzer based off of this drink in Spain that was wine and Coca Cola. I think it actually was such an amazing experience to have and to dig into those insights and build that brand because now that was five years ago, but we're seeing that same trend of easily more portable, lighter, more sessionable drinks like seltzers or canned cocktails are really growing at such a huge speed. So I do feel validated that one, that was an insight that was definitely something that was a real trend that was growing, and two it really kind of exposed me to the alcohol biz early on.Stephanie:You were just ahead of your time. You're just a futurist.Arabella:I like to think of that too. It's funny though, now looking back when we were pitching it, it was kind of just this counter culture idea of oh you want to put wine and make it sparkling and you think people are going to drink wine outside during the day? And now people are chugging seltzers left and right during the day, so it's pretty much the same thing. So it's nice to feel validated now for sure.Stephanie:I'm sure that was a really good experience. So what ended up happening with that?Arabella:So I think the other less fun and more kind of realistic part of the experience was getting exposure to A, the legal landscape of alcohol in the US, so super challenging, a lot of barriers to entry whether it's getting permits, getting the ability to be registered as a wholesaler and selling to retailers and all of that stuff. So I'd say that in itself was challenging. We got through it, but the bigger challenge was just in order to really have the scale to get a beverage company off the ground, you need to have a lot of capital, and like you said we were pretty close out of college, had done a couple entrepreneurship pitch contests to get some funding and had gotten some funding through crowdfunding sites, but didn't have a huge amount of money at our disposal.Arabella:So I think what kind of is full circle for me is while we had to make the hard decision to not continue pushing on with it since it was so expensive to be getting a proof of concept, now I get to be at AB where it's such a huge scale operation where those things aren't a problem. So I like to think I can take some of those learnings and apply it to my job now.Stephanie:Yeah. I was actually just going to say you were in this kind of D to C world if you would have been fully launching and everything, and I'm sure Anheuser-Busch saw that and they're like that's exactly what we need, someone who was ready to start talking one to one to a consumer, like have the idea to do that. How was it when you transitioned to Anheuser-Busch and you're working on ecommerce for category and insights and all of the sudden you're like oh I actually can't talk to my consumer directly, it's like a roundabout three tiered system that I don't even know who I'm selling to really.Arabella:Yeah. You hit the nail on the head. It's definitely adjustment, it's definitely different. I think when I was thinking of joining the team, what I was really drawn to was exactly what you were saying, that there kind of was this gap in understand of who the ecommerce alcohol shopper was, and I love insights, that's definitely my passion point of my job. I love the whole job, but understanding the shopper really is what kind of gets me up and going in the morning. So yes I was drawn to this new channel that it was a new way people were shopping, that there really wasn't a huge amount of information available.Arabella:I think now being actually faced with it and not having access to direct sales data and to actual onsite metrics because we're working through the three tiered system with retailers definitely has been a challenge. Although I do think it's really kind of forced me to think creatively and think about how we can structure our research and our insights approach, and take directional insights that we have from in-store and take them to online and say what is similar here, what's different? It's pushed me to kind of go above and beyond to think about how to approach the problem of who the shopper is and that in itself has just been incredibly valuable.Stephanie:Yeah. I was thinking that too, you really have to get creative to get data in your industry, and I thought what AB is doing around merchandise and shops and all that is really interesting. I saw a quote where someone at your company said, yeah, we essentially launched these stores and we consolidated them so that we could get shopper data, because we really can't get that easily anywhere else on ecommerce. So tell me a bit about that approach and do you think the people buying merchandise are the same ones probably buying the alcohol in store?Arabella:Yeah. I mean it's super interesting to think of that. I don't know if it's the exact same shopper always, but what I do know is that anyone who's probably buying merchandise from us is definitely a brand loyalist, because you're not going to want to wear a Bud Light sweatshirt if you don't really love Bud Light and feel really strongly about the brand.Stephanie:But I saw a crop top in your store and I'm like that's cute. I don't know if I ever would have worn like a Busch branded T-shirt, but that crop top, it's something. I like it.Arabella:Yeah. You know what, the Bud Light merch is actually really fun. I have a beanie that I wear sometimes and I get endless teasing from my friends but I love it. So yeah, I mean I think it's definitely brand loyalists, or to your point, people who feel, each of the brands that are within AB have such strong brand voices and such legacy and such power pretty much in the market, and so I think the merchandise, while it doesn't directly relate to us selling beer, it does do I think some great work in furthering the brand awareness and people feeling like they're connected to the brand and want it to be something that's part of their day to day, and I think the ability for us to, I think where I'd love to do a little bit more work with the merch business is thinking about how we can kind of create more of a one stop shop experience, so how can we partner with retailers to get that Bud Light crop top paired with a Bud Light six pack and get it bundled together so we can merchandise and sell that in one fell swoop, because I think that sort of would be the ultimate goal that we can get the shopper having the actual product and also that brand loyalty experience.Arabella:But I know that's a huge, huge priority, because to your point, we can't capture the data, but I know with the merch biz, that's a big focus for our next year in 2021.Stephanie:Yeah. So what other creative ways are you all going about to find customer data so then you can personalize that experience in one way or another, like what are the things that you're trying out that you're having success with right now?Arabella:So we pretty simply just work as an insights-driven org to be bringing as much data that's specific to the retailers as we can. Stephanie:Yep. And how do you think about out of stock issues? So we just had a guest on from Intel where they were saying they're trying to work with all these retailers, he was from the internet of things group, and he was saying there's so much opportunity with retailers where they oftentimes don't understand their inventory, things can remain out of stock for an entire day and they'll say that they're on it but they actually had no idea, how do you handle that from a tracking perspective to make sure that your retailers are keeping your stuff in stock and it's being tracked properly?Arabella:Yeah. So that definitely has been one of my big goals for this year is to really get more of a data specific perspective on out of stocks, on how we're doing on the shelf online, everything that you're saying. So we actually just partnered with a digital shelf tracking company, Profitero, I feel like you guys maybe have heard the name before. So our big plan with them in the next year is basically to take on all those things you're saying and give it more of a data lens so we can be reporting out weekly and tracking what products are out of stock and what we should be communicating to the wholesalers to be getting them updated and fixed, because we know that from an ecommerce perspective, out of stocks are a huge, huge issue because in store, you're out of one pack of Bud Light, well the shelf is stocked in a way that Bud Light is a brand that has multiple SKUs, you could easily just grab the other one that's there and go on your way.Arabella:Online, when something is out of stock, a lot of retailers will simply remove it from the site so you don't even see it, so that recognition that we get with our brands is completely gone if the product doesn't even show up on the site, and then you see them moving to a different competitor or substituting in a different way. So I think that really it's a huge, huge piece, and it's especially huge with our pure play partners, so those who are only online retailers, because we're able to have a little bit more of a direct connection to them as well and work through those things.Stephanie:Got it. Cool. So the one thing I'm thinking about too is attribution around marketing campaigns and things like that. How do you think about seeing if something that you're doing out in the world is actually impacting sales, if once again you have to be like let's look at our retail partners and see what's happening, or how do you think about attribution in your industry?Arabella:Yeah. I mean it's definitely a challenge.Stephanie:[inaudible].Arabella:It's a challenge, it's a constant challenge. It's something that I'm always working on to try to, again, thinking creatively and outside of the box, I think one way that we are working on thinking about how our campaigns are performing is we track our placement on the shelf on retailers, so what percentage of the first page we have, what percentage of the first five spots we have, and the way that a lot of algorithms work with the retailers is that they're based on sales and conversions. So what you could do is sort of back into how a campaign or product is doing by looking at the change in where you're placed up on the site, and that's something that's like of course, it's definitely there's room for error there, but I think from a directional standpoint we're able to see, okay we ran a campaign on Michelob Ultra Seltzer all of January and it started at the bottom and now it's at the top. That means that if we were driving to that retailer, it worked. Right?Arabella:So it's a little bit more binary in that we're not able to get so, so granular, but that's one way I think from the category and the retailer perspective we're able to either check or not that something is working. Stephanie:Man, you're in a tough industry.Arabella:Yeah.Stephanie:I haven't had to ask questions like this on any of my episodes, but it makes me wonder, oh actually except for Haus, when I was talking to the Haus founder.Arabella:I listened to that one.Stephanie:Okay yeah, that was where I learned about the three tier-system, but it makes me wonder is a three tier system going to go away? Because it seems like there's companies right now who are kind of just working to get around that system, and once that starts happening it's like maybe that system's just broke, and with the move to D to C, why would it still be there then if everything else can have access to the consumer, it seems like this industry should too, with the proper protections. Stephanie:Yeah, that just feels so odd to me. Especially the world that we're in today, and just thinking that you can make something and then not be able to sell it on your own just feels very archaic in that you have to go through a retail location or whatever it may be.Arabella:Yeah.Stephanie:It just feels not very business friendly, but that's [crosstalk].Arabella:It's super interesting also to think about as marijuana is going to eventually I'd imagine be legal on a federal level, then how are they going to regulate that as well, because it's sort of a mirror industry to us, is that going to be something you also have to go through a wholesalerArabella:But I think that's another probably will give us another opportunity to have the bigger conversation because it's sort of like if THC and marijuana is able to have this direct to consumer business relationship then why can't alcohol as well?Stephanie:Yeah. It sometimes seems like older industries are punished from the older times, where as you're new and up and coming, you move so quickly where it's like you can get much further ahead where it's hard to pull you back in when you're already like well now I'm out delivering everywhere in California.Arabella:No, it's so interesting. I think that's such a great point when you think about the Ubers or AirBnBs or the share economy of the world where they just absolutely turned old industries on their heads and didn't really think about the regulations, and then they're so big now that it's harder to go backwards.Stephanie:Yeah.Arabella:Exactly. And overturn those things.Stephanie:I think it's good sometimes. It's good to push the regulations forward and bring them up to the times.Arabella:Yeah, I agree.Stephanie:So the one space that a lot of guests have talked about is what's happening in China. And what was interesting is I saw that AB was looking at China now as kind of the market that they use to bring a lot of learnings from ecommerce back to the US. So what are you guys seeing there and what kind of learnings have you actually been able to bring back to the US and apply versus what have you been like whoa that's just such a different market, it's very different there and we kind of keep it siloed when it comes to what we're doing there versus in the US or in Brazil or all around the world?Arabella:I'll start off by saying that while I work on the North America business, we do have a global e-retail center of excellence where we meet frequently to talk about best practices and get inspiration, just like you're saying, from markets where while it may not be cookie cutter to our market, we're able to see what they're able to do and how it performs and think about how we could apply it to what we do. So China is definitely an amazing example. I'm always thinking about what they do kind of as the best case scenario for ecom, I think we have to always take it with a grain of salt just because there are legalities, to the convo we were just having, they can sell directly to shoppers at any point I believe in the shopper journey.Arabella:So that's amazing. And we've really been able to I think one of the things that struck me the most, we had the China team present to us last year on double 11, the singles day, and what they have been able to do with our brands there like Budweiser being one of the huge ones, and kind of just creating this huge omnichannel event where we're taking over every single possible touchpoint for the shopper, whether it's a vending machine, or the apps on their phone, or the actual grocery store, doing activations where there is a concert and then you can click the video and get your Budweiser delivered. Things that sort of feel to me like this crazy world of digital, physical connection that I think in the US we just don't have yet in general, and we definitely don't have for alcohol because it's so regulated. But I think that's something that we try to take inspiration from and think about okay, while we can't have a Budweiser delivered in three minutes from someone's cellphone, we can think about how important it is to take over from a branded perspective like multiple touch points from the shopper journey, and communicate with them not just during the shop on the retailer, but with a more interactive experience before.Arabella:I know our D to C team has done some awesome things like international beer fest which was I think in August, and then a New Years Eve concert festival series, those kinds of things, where we're getting shoppers on, they're interacting not only from a transaction point of view, but from just feeling close to the brands, having an experience in a time when we need them even more so, and those have been hugely successful. So I'd say that China is an amazing example. I would love to go over there and work, I think I would learn so much. It's kind of the pinnacle of not having to be regulated versus we're much more in that regulated space.Stephanie:Yeah. I was just chatting with a guest, Andrea, yesterday, where she said they brought an influencer from China to Harvard so the Harvard students could see it in live and action, so they pulled her screen up so they could see what was on her phone or something, and then she was selling Harvard shirts and sold like thousands of them in minutes. She's like that's when I realized that's crazy. And I don't know if that is the same thing that would happen here. You definitely see influencers driving sales, but I don't know if it's to that degree of and I have a pen, and now 10,000 of them just sold because I said I had a pen. I don't know if it's to that degree, but it's very interesting to watch.Arabella:Yeah. That's a great question. I know that influencers, they've been trying to make all the social platforms so much more shopable this year, and I feel like I don't have stats from Instagram, but I feel like it's not quite there yet to the point of what you're saying where an influencer can just be selling things and have this huge, huge power to be creating transactions. But I think another interesting thing about the whole China piece with that is that so much of their tech is just integrated in whether it's the social media, it's with your payment system, it's with the equivalent of Amazon, and so it's just a lot more seamless. But yeah, the power of, we certainly have people in the US who can sell things. Actually an amazing example would be we're doing a seltzer with Travis Scott that's launching in the next month or so, Cacti. I'm super, super excited for it, and I think that's a great example of he partnered with us to create it and he has such star power, so I think it will be incredibly fascinating to see how that does.Stephanie:That'd be cool to bring you back and hear how that campaign went, because I think a lot of people have been debating around do big names, of course they will drive sales, but at what point is it authentic versus not authentic? How do you structure the campaigns to make it, sometimes you'll see certain people being like oh I always use this teeth whitener, or I sure love this whatever it is, and you're like do you though? That's very inauthentic. So it'd be interesting to see how you guys create a campaign in a way that's a partnership instead of just a one off, like okay go put this ad on your Instagram and see what happens.Arabella:Yeah. It's a great point. I think there's so much influencer marketing that can be so disingenuous, exactly. It's like I love this product. Cool, that's great. It doesn't have any emotional resonance with me. I think with Travis Scott, what the team did was really, exactly what you're saying, partner with him. So he was so in lock step with the creative process and the brand building and the actual liquid itself, that when it came time to, we announced it about a month ago, when that was kind of coming to fruition, he was incredibly invested in having it be successful, and it feels really authentic to actually who he is, like the whole Cacti, Cactus Jack thing, and I think that definitely is part of the hopeful success of it, and yeah I'd love to give you guys an update when it launches in March. I think it's just going to be super, I know the initial stats that we've seen like on social media, it's already the top alcohol following of any brand that's out there.Arabella:It's really an amazing testament to how, to your point, how powerful people can be and what is it about Travis Scott that's so resonant with so many people. Is it he's incredibly creative? Is it the whole kind of eclectic side of his brand? Is it because he's Stormi's dad-Stephanie:Probably.Arabella:And Kylie's baby daddy. Arabella:But neither here nor there. He's incredibly powerful, and I think it will just be a good whether it is a smash hit or not, it's a good test to what you're saying about can a person really be the driving force behind a brand?Stephanie:Yeah. I would also like to see the lifetime value of that person, is it a one hit like I'm going to try this out? You obviously have to have a great product behind it, which it sounds like you invested heavily to make sure it was good in partnership with him, but how do you keep those people around after maybe the excitement is kind of dying down, how do you make that an everlasting brand and something that people actually come back to? Arabella:That really is, exactly, that's the special sauce, that's what's going to make people feel connected to it, and also that the liquid is filling some need for them that they actually like and want to continue drinking. Because there's only, I feel like with consumables, what's always kind of driven me to be interested in food and bev and alcohol is that while there is the branding and the specific need that it's filling, it's also there's a piece of it, you're eating it, you're drinking it, it has to be good, versus I think with a lot of the disruption with D to C brands across kind of industries, there's a lot of copycatting going on and things that are not product driven and really brand driven which is not always a bad thing, but there's not really room for us to do that because if it tastes bad nobody's going to re buy it.Stephanie:Yeah. Yep. Love that. So how are you thinking about maybe the next couple years in your industry? You guys had to shift really quickly, I'm especially imagining how big the company is, how maybe certain processes were maybe a little outdated, how did you shift really quickly to focus on ecommerce and where do you want to head over these next couple years?Arabella:Yeah. So I think we're in a really strong position because AB has felt like ecommerce has been something that's important for I believe the team started five or so years ago, so really when building the foundation for this channel for a while, but totally to your point, this year has completely transformed the way that we do business, just because the sheer volume of interest from players wanting to get online, the amount of people who are entering into the category online, so it's double the amount of households in the US of people who are buying alcohol online, and just the sheer simplicity of that and the size of the way the industry has grown, our category in the channel has grown, has definitely been a big change.Arabella:So I think we were set up for success going into it and it kind of was more of an accelerating and scaling everything that we were doing, so making sure we were supporting more regional partners versus just the Walmarts and the Amazons and the Instacarts of the world. Thinking about how to optimize what we were doing in a really fast way, so just like what we were talking about before, trying to track campaigns and get a green light or a red light on whether it is actually doing well. I think one thing that we worked on during COVID that was a big pivot and I'm very proud of is we created a site called buy beer online, and it is designed, basically during COVID huge boom but not everyone knew exactly where to go to find their alcohol online. We found that a lot of people were searching in Google beer delivery, how do I get beer delivered, buying beer online.Arabella:So we created this site that is designed to be bridging that gap and so it has all of our brands on it, and it also links to an ecommerce product locator. So you come on, you can find craft brand that you like, click it, and it will tell you where you can order it for delivery or pick up near you.Stephanie:That's smart, so you're optimizing on a new search trend which I know myself personally has been like how to get wine delivered, and being like where do I even start, and I have to download this app or this one, and this one's going to take four hours, that's too long for me.Arabella:Yeah. Oh totally. Exactly. We actually should have it where it's like 30 minutes or less.Stephanie:Yeah. Important. Sometimes you need it right when you need it.Arabella:It's true. I just actually saw a piece of research where it was like a quarter of people are immediately consuming right after, which makes sense. Sometimes, exactly, you need it. But yeah. So that was I'd say something we created like within a couple months during the beginning of COVID to make sure that we had a tool like that to be helping shoppers, and I'd say it's been really strong for paid search like we're saying, and then also for a lot of our craft brands that really relied on regionality and that on premise bar experience, brewery experience. During COVID it was sort of a big issue where shoppers didn't know where to get the craft brands that they loved, so we were able to in a way make our craft website, so a Goose Island, or a Karbach, we live in Austin, make those sites shoppable by linking out to buy beer online so you could get the shopper to an actual place where they could find the beer.Arabella:So that's been really impactful and very cool for us to be doing during COVID and I think the more we can do things like that where we're owning the full experience because to your point, we also capture all the data that comes through too. So it's like win-win on both sides.Stephanie:Yeah. I just love those stories because it really does highlight the creativity and innovative thinking at AB that maybe you wouldn't have done if you would have had it easier. Like if you would have had that easy one to one consumer relationship you wouldn't have had to think about what are other creative search terms we can go after and content we can create and ways to reach our consumer that a lot of brands don't really have to think like that, so it's really cool.Arabella:Yeah. It is really cool, and I think that's one reason I love AB is it's very creative and innovative place. Which I don't know if everyone knows that, but it really is. And I feel like if it was direct to consumer, there's also you can really kind of get caught up in the tactical pieces of things. So to your point, I would just be obsessed with the open rates on my marketing emails and how I'm converting people, which those things are amazing and important but I think we're forced to, like you said, think outside the box and figure out more about our shopper in a way that's kind of a little bit unorthodox.Stephanie:Yeah. That's cool. So the last piece I wanted to touch on before our lightning round is how does AB think about their tech stack for, because it's B to B to C, how did you guys have to adjust, if at all, to all the sudden be able to let all these retailers maybe order online in a fashion that was not happening before, like pre COVID, did you have to adjust your back end to make it simple for people to come on and order and make that an easy relationship or what did that look like?Arabella:Yeah. So luckily because we have the three-tiered system, we're not actively funneling any sales through our own tech side or back end. Actually what we try to do though is as a lot of retailers have come on in the last year or so is leveraging our knowledge and our partnerships to offer them the best connections. So whether it's connecting a grocery store with the best on demand delivery app, GrubHub or Drizly or whatever it is, and creating those relationships so that they can get on board I think is really what we look to do. I know that that's not a techy answer, but it's definitely what we try to optimize. And then also helping them with the payment platforms too, so helping them onboard with a Stripe, or an Apple Pay, or just at least giving them the tools and the information, it's something that they have to do on their side as the retailers, but we like to try to optimize and help them get to the strongest place to launch as possible.Stephanie:Yeah. Very cool. All right, let's move over to the lightning round. The lightning round is brought to you by our friends at Sales Force 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?Arabella:I'm ready. Scared.Stephanie:Yeah. Dun-dun-dun. What one thing will have the biggest impact on ecommerce in the next year?Arabella:You know what I actually feel very strongly about is the presence basically, the fact that retailers and D to C companies are moving towards creating not just the shopping experience on their sites, but more of a content hub. And what I mean by content hub, not just to say buzzwords, is a place where not only are shoppers coming to buy your products, but maybe they're looking at recipes, maybe they're doing mixology, if it's retail, maybe you're giving them styling options or more information about your products. Really, I've seen more and more companies do this this year as I think it's a two fold thing. It's become the status quo is people know that shoppers love content and social media has been so big in the last few years. And then secondly, as people are more and more at home, more on their phones than ever before, and that's not a COVID answer, it's just true, that if you can capture someone's attention to actually get them engaged and interacting and making everything on your site shopable, I think that's really going to be kind of the bread and butter that can really change your experience or not. And I know that for us, for ecommerce with alcohol, that's especially huge because we're not quite there yet and I really want to get there.Stephanie:Yeah. I love that. All right, next question, what was your favorite virtual event that you did at AB in 2020 and how do you think about success for these virtual events that you're saying performed really well?Arabella:What a good question. Yeah, I think that the international beer fest that we did in August, so I wasn't leading that, but our general direct to consumer team was, and I think that was incredibly successful because it came at a time when people were A, really starved for that interaction and the feeling of connecting with people and doing something and having something to look forward to. And B it worked in a really strong way where it connected with our brands. So international beer fest had, there was music happening, a few artists who were sponsored by our brands, I think Post Malone did a thing, sang, so there was that element where it was a little more passive, it's encouraging you to crack open a beer and watch the concert. Super strong, but then also just other things, like I believe we had a cooking tutorial and a mixology thing, and trying to create something that is for everyone without stretching yourself too thin and also being true to the brand is super key, and what I know was also a great add to it is we were able to leverage buy beer online to also direct you during the event so that people could find places to shop for the products.Stephanie:What did the traffic look like going to the buy beer online during that event or afterwards, what kind of conversions did you see going to that?Arabella:Yeah, so I believe we actually saw a lot more conversion coming up to the event versus actually during it. Which is interesting for sure. I think we're in much more of a place where shoppers are still shopping for a little bit in advance, like planning ahead, like I saw this ad for this thing, I'm going to buy beer for this weekend to watch it, versus looking and saying I'm going to get drinks late in 20 minutes to get delivered. So we saw a lot of traffic leading up to it definitely and then a lot of live interaction during it, but not as much I think quick conversion onto those on demand platforms, which I think just speaks to the fact that click and collect and pickup is just a little bit stronger right now than the delivery aspect, but I think we'll probably see that grow as Uber just bought Drizly literally yesterday, so that's going to be a big game changer for scale.Stephanie:Yeah, everyone's trying to figure out last mile delivery and how to make it work. There's been quite a few interesting articles about why some of those companies like the DoorDashes need to expand. Very cool. What's up next on your Netflix queue?Arabella:Oh. What a good question. I am currently making my way through Grey's Anatomy. I've been watching it for so long, since it started, so it's kind of my comfort watch and after a long day with a little Zoom fatigue and talking on the phone all day it's nice to just relax to something that I know is reliably dramatic and juicy.Stephanie:That's great. If you were to have a podcast what would it be about and who would your first guest be?Arabella:Good question. I think, you know what, I'm kind of a fitness buff a little bit, and I've gotten really into it during COVID just as like a distraction and a thing to keep me sane. I love Pilates a whole lot. I find it very, very, it focuses my brain, it's challenging, I don't have to jump around. I don't love HIIT, it's not my fave. So I would love to do a podcast that kind of explores the relationship between human psychology and exercise and how those things are so entwined because I really believe they are. And I think as my first guest, I'd love to bring on someone, I actually just read a great book about endurance running and ultra marathons where they run like 200 miles-Stephanie:Wild.Arabella:I don't run [crosstalk]-Stephanie:Two miles sounds like, whew.Arabella:Yeah, exactly. I'm like one mile. I find it so, so fascinating how you really can push yourself. So I don't know a specific name but I'd like to bring on someone who's an endurance athlete to kind of pick their brain.Stephanie:Yeah. Very cool. Aright Arabella, it's been awesome having you on the show, such a fun conversation. Where can people find out more about you and Anheuser-Busch?Arabella:Yeah, definitely. So you can check out my LinkedIn I'd say if you want to find more info about me. And if you're curious, please check out buy beer online, we have a lot of info about the biz and all of our brands on there as well. And you can feel free, if you'd like to reach out to me, I don't know we can maybe put my email address somewhere, I'm happy-Stephanie:[inaudible].Arabella:Yeah, that say it's being risky, but I'm always happy to chat with people and connect. I think that's really kind of what is the bones of business and makes the world stronger. So shoot me an email.Stephanie:Amazing. Yeah, thanks so much for coming on the show.Arabella:Of course. Thank you.
What if we told you that you may be approaching Amazon in all the wrong ways? Many brands, especially more established ones who started out in brick and mortar, have been playing a game of catch up while trying to quickly figure out how to sell on Amazon and win. But it may feel like a confusing place to win. Especially if a brand is trying to apply a brick and mortar sales approach, like winning a category, to online platforms like Amazon, Target, or Walmart.But we all love a good underdog story, which is why we invited Andrea Leigh to the show to share her secrets. Andrea is the VP of Strategy & Insights at Ideoclick, a full-service ecommerce optimization platform. Before Ideoclick, she spent nearly a decade working for Amazon, so she is coming to the table with a true insider’s view and strategies in her back pocket that she’s seen work on Amazon and other marketplaces.In this interview, which was one of my favorites I’ve ever done so far this year, Andrea and I discuss why brands need to accept the death of the category and start thinking about how to stand out against an entire competitive set. Doing that means repositioning your brand and winning the share of search, it means optimizing for SEO, and it also means going back to the basics of differentiation so that you’re not just another option in a sea of products that look exactly the same. Plus, we talk about selling across multiple ecommerce platforms, and how to think about Amazon releasing “white label” product lines. I hope you enjoy this discussion as much as we did!Main Takeaways:Category Chaos: Brick-and-mortar shopping lends itself to categorization, but in the world of ecommerce, particularly on Amazon, categories are not something brands should focus on. Customers shopping online are fed suggestions based on their entire history of shopping, so when they search for something like peanut butter, they don’t just see Jif and Skippy, they see that and then anything peanut butter adjacent that might resonate with them even a tiny bit. With this in mind, brands need to figure out how to compete in entire segments, rather than specific categories.One Metric To Rule Them All: Share of search is one of the best metrics an ecommerce brand can look at to measure everything from how customers are finding them, to what the customer experience is when they search for something, to who the competition is in their set. Mining For Gold: One of the places that Amazon has excelled is aggregating consumer complaints, and then coming out with an Amazon Basics product that addresses all of them, which then becomes a top-seller. CPG brands large and small should be employing a similar approach. And, they should be highlighting the bells and whistles of their product that separates them from the white-label product that any marketplace offers because that is what differentiates you from the mass amount of search results a consumer will be combing through.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 Andrea Leigh, the VP of strategy and insights at Ideoclick. Andrea, welcome.Andrea:Thanks for having me. I'm excited to be here.Stephanie:I'm excited to have you on too. I was looking through your bio and I saw that you were at Amazon for almost a decade, and I'm sure you have some good juicy stories from that those 10 years.Andrea:I do. It was a wild, wild ride. I think when I started, I was employee 4,012 or something like that, and then when I left, 99.9% of the company had started working there after me, so I was literally a dinosaur. Yeah.Stephanie:Oh my gosh. That's amazing. So what were, high level, some of the things that you did at Amazon and are any of those things still relevant today?Andrea:Yeah, I think they're super relevant. I spent my entire career there working on their ecommerce business, and everything from the early days of helping launch their price matching software, the software they use to price-match other retailers. I worked on Harry Potter book launches back when print books were the only way to read books. We also had some things that we did with Oprah's Book Club. I worked on the launch of the grocery category on Amazon.com, and the Fulfilled by Amazon program there, helped launch the baby registry and built the baby category after Amazon severed ties with Babies R Us.Andrea:I was general manager for Amazon Fresh for a little while. At my last three years there, probably the most exciting, I moved onto our Canada business and I launched 15 product categories for Amazon Canada. I ran the Prime program up there, and then I also managed our transportation network. And that was probably my most exciting role because it was certainly cross functional. But I think the common thread is, and probably why I liked Canada so much in the later years was just, I really, really enjoy working with the manufacturer community.Andrea:I think that the process that they go through to really understand the customer, to build products, to address customer needs, and then to figure out how to connect consumers to the values that they've built in their products, I think is just really exciting, and figuring out how to do that online is even more exciting. Certainly, in the early years of Amazon, we spent a lot of time working with brand manufacturers and partnering with them because we weren't very big back then and we were really trying to get these categories built and to get customers shopping online for things besides books.Andrea:And I found that to be really enjoyable because every manufacturer has a unique set of challenges. It's like a puzzle to be and to collaborate on. And that's still what I get a chance to do today at Ideoclick and really, really enjoy that process of helping manufacturers solve those puzzles. And we certainly don't have all the answers, but I think it's a similar process to go through with each manufacturer to identify where they are on their ecommerce journey, and then help them figure out how they're going to build a sustainable business.Stephanie:That's awesome. So tell me a bit about Ideoclick. How did you think about creating Ideoclick? And what is it? What does it do? How does it help companies?Andrea:Yeah. We're an ecommerce optimization platform, and we're a hybrid of a software solution and a services organization. And my husband actually started Ideoclick about 13 years ago. We were both working at Amazon together at the time, he left and started Ideoclick and I stayed at Amazon for 10 more years. And I joined up with him about, it was probably like four or five years ago now, to help him run Ideoclick. And really, it came from the same place that I was talking about earlier, really wanting to work more closely with the manufacturers, help them figure out how to navigate Amazon.Andrea:As Amazon became bigger and bigger, not only did it become more important to the manufacturers' business, but it started to become a little unwieldily in terms of how to be successful, how to make sure your products stand out, and how to negotiate and operate. With such a big player, that's so unique and looks so different from brick and mortar, which is what most manufacturers have been really accustomed to for so many years. And so Ideoclick was really born out of that to help manufacturers navigate these waters. And we are a full service, white glove providers.Andrea:So we do everything from setting up the items in the digital catalog, writing content, running all of the automated advertising on Amazon, Walmart, Target and Instacart, and also going back and assisting with operations, managing the chargebacks and fees that the retailers often slap on the manufacturers and recovering some of those fees. So we're a full service agency, we're in a category called managed services.Stephanie:Got it. So what are some of the biggest maybe missteps that manufacturers or sellers are making on the platform where you're like, "I've got all these secrets from an exec at Amazon that I know how to prevent that or why you shouldn't be doing that." What kind of things are you preventing from happening when you're working with them?Andrea:Yeah. I think my answer would have been really different a couple of years ago, especially COVID impact on ecommerce. Amazon's not the only game in town anymore, and these other platforms, more specifically Walmart and Target, but if you look category by category, they're a becoming a really big player in each space, whether it's Wayfair for furniture, or Sephora and ULTA for beauty, or Chewy for pets, there's a player there that's starting to represent a sizeable portion of the business. So a couple of years ago, I would've said getting these Amazon foundational things right is the most important and it's the biggest misstep.Andrea:But I think now we would say not having a strategy across all of these eCom players is a real big misstep, and shooting from the hip, because I think we're in a world where these retailers are in fierce competition with one another, they're price-matching each other, they're very closely watching what one another is doing. And you don't want the customer to suffer as a result of that. And so having a strategy that does things like differentiating assortment or helps you figure out how you're going to allocate your ad budgets, now that all these platforms have ad platforms associated with them as well.Andrea:I think that shooting from the hip is probably the most common misstep that we see. But I think some of the same things still hold true from several years ago, which is just getting those foundational elements right. There's certainly little tricks you can do and little black hat tactics that will get you some more reviews real quick or help you get to the top of search. We don't focus on that stuff, it's not sustainable, most of it's against Amazon's policies. So it's really about making sure your products are in stock, making sure you have the correct information on your product pages, making sure that you've got resources internally within your organization to support ecommerce and to drive it, making sure that you have good SEO and you're making use of the ad platform in appropriate ways.Stephanie:So now that you just mentioned SEO, I do want to talk a bit about categories. I know that you've been on, maybe a brand or whatever it may be for a while around like, categories aren't the way forward anymore, and that you really need to optimize for search, just like you would anywhere else. So tell me a little bit about how ecommerce owners should think about that going forward. Why is Amazon not as focused on categories anymore? Or maybe the buyer's not focused there?Andrea:Yeah, I think it really starts with the customer, and the customer not being as focused on categories. I can tell a little story that might help illustrate it. We had a manufacturer come to us and say, "I'm like the number two or three bottled water brand in the world, and so I should be number two in my category on Amazon." And there are a number of reasons why that thinking is a little bit out of date or flawed. When a customer goes to Amazon and searches for bottled water, they don't just see bottled water, they see tea and electrolyte water and powdered electrolytes for water and ice, flavored water, and all kinds of things that are category adjacent. But they may also see things that are out of category.Andrea:Peanut butter is another great example. If you search peanut butter on Amazon, you're going to get some peanut butter, you're going to get peanut butter crackers, you're going to get peanut butter bars. And it's not because like Amazon is not thoughtful about deciding what to return in those search results, for example, they're returning those products because those are the products customers are buying. Their algorithms are very, very smart. And even from an advertising perspective, you can't win those ad slots unless there's a history of customers making that search and buying your product.Andrea:And so the concept of a brick and mortar category totally makes sense if a customer is going to a store, they're going down an aisle, they're presented with bottled water, they choose from what's available to them, and then they move on to shop at a different category. But eCom customers don't shop that way, the category is dynamic, it's continually evolving, shaped around that customer. And what they've specifically looked at when retailers are using automation and personalization. And so you can't really apply that same mental model to ecommerce. You have to really think about that entire competitive set.Andrea:And so that manufacturer who thought he should be number two or number three bottled water brand his competitors on Amazon, aren't just bottled water, as we stated, they're tea and they're electrolyte water and all kinds of other things. So his competitive set is different, but also because ecommerce platforms and more specifically, Amazon, has frictionless entry, so any manufacturer can sell on Amazon, the competitive set is going to look a lot different than in a brick and mortar store where you have like a buyer making assortment decisions.Andrea:So, whereas there might be five or 10 nationally recognized brands in a brick and mortar store and maybe a couple of local players and private label, on Amazon, there is a huge long tail of brands that are not nationally distributed, maybe only sell on Amazon so that competitive set looks entirely different. And I think that's a big misstep that manufacturers make, is applying that same mental model, trying to look at like market share and category and ranking category, versus moving their thinking to the ecommerce world where there's really no such thing as a category.Stephanie:Yeah. The only time I can see categories being helpful is if you're in the browsing mood where you're like, I'm going to be having a baby, and I just want to see, what do you buy for babies? So like if you're in that browsing mood, which maybe isn't always high intent to buy, more just kind of looking around and maybe you buy, or if it's a curated category, like here's the guest for Father's Day. I have found those helpful where I'm like, I don't know what to get my dad, and on the homepage, it's like, "Here's a whole... " Maybe it's not a category, but the whole curated collection, pick one and go.Andrea:And that's where I think some of these category specific players win over Amazon. They do encourage more browsing because they are curated assortment, because their browse and data are really clean, and it's a more enjoyable experience. But if yo did try to shop by category on Amazon, the data shows that more than 90% of customers just go and start searching, you would maybe not like what you found. It's an overwhelming experience, it's not curated in any way. And then the categorization data is bad because Amazon doesn't use it. They're building a search platform more than they are building a browse platform. And I do think these other eCom players, this is where they can win over Amazon, is they make the shopping experience more enjoyable, they encourage browse, and they curate the assortment.Stephanie:Yeah. We just had on a company called The Fascination. It was about discovering new D2C companies and being able to browse around. But once again, that's highly curated versus just going to a category and being like, "Whoa, let's see what's here today. Oh, there's like 1,000 things. No, thanks." So if we're in a search world now, where you need to optimize for that instead of just worrying about being the number two water bottle, showing up in the category, how should a brand be thinking about that? How do you optimize for search? Are you bidding on keywords? Do you have to use just Amazon platform? Or is it more of like a holistic approach of like, you got to have a good product, you have to have good reviews, and all encompassing?Andrea:Well, certainly it's a whole package deal. There's not like one thing that drives all of the success. But I do think that really understanding that customer and the process we go through at Ideoclick and manufacturers could go through a similar process on their own is we identify these customer search groups. Identify the customer that you're going after and the product that meets their needs. And then from there, what are all of the search terms that customer might search when they're looking for that product? And then bouncing that against if there's any search philosophy. Amazon publishes that data, so it's knowable to know if a search actually has any volume associated with it. And then that's your customer search group. And then we're able to measure progress on achieving placement in search on that customer search group relative to the competition. So the way that we're doing that is, in a brick and mortar world, this would be like market share.Andrea:Like you'd say, "What are my sales over the entire category sales?" And in ecommerce what we do is share of search search. So we say, "What are all of my positions within those first 20, 30 search results relative to the entire set?" And obviously, there's some weighting associated with that, because like if you're up on top, that's more valuable, drives more sales than if you're like down at the bottom or the customer has to scroll a lot on their phones. So measuring that share of search for your customer search group relative to the competition.Andrea:And it does a couple of things that I think are a lot better than a brick and mortar market share model. The first is it very quickly identifies who your competitors are. So if you didn't know which... Most manufacturers don't know who their Amazon competitors are, and that's because manufacturers, when they're checking on their products on Amazon, tend to search for their brand name. So of course you're going to get your products. But if you take a step back and instead of searching for your branded facial moisturizer, you search for face moisturizer, you're going to see an entirely different picture of who's turning up.Andrea:And so this allows you to really measure your percentage of that customer experience, essentially, going back to the customer. And in addition, it gives you more of an upstream look at what's about to happen. So market share is, it already happened, your sales occurred and now you're measuring as a percentage of a total. This allows you to affect what's going to happen in the future, so it's an upstream, maybe an input metric versus an output metric. And then lastly, the share of search is measuring like a finite amount of the first or second page, which is really, as far as the customer is typically going on like a basic search...Andrea:And that looks a lot different in terms of number of brands than what you might see in like a finite category on a brick and mortar shelf. So there may be more brands, more types of categories represented, and measuring that as the percentage of a customer experience really allows you to develop some advanced strategies against those competitors.Stephanie:Is Amazon providing the tools so you can see your share of search, or are you doing this for your customers? Or if I was by myself trying to be like, "Who are my competitors?" Would I be going through the first three pages and being like, "Here they are? How do I figure out that share of search?Andrea:Yeah, it's really tricky. So we have software that does it for us, and share a search is our proprietary offering that we provide to our clients. But it wouldn't be hard to do a very simplistic view of this, which is identify like five terms that you think matter for your product, run a search and count how many of the first page you have. It's not a difficult activity. To get more nuanced about it and track it over time and track all the competitors and all of that, obviously you need some software, but you can do a really simplistic look. And this is often what we do for a manufacturer who is considering working with us, we'll take a look, we'll do a quick share of search audit and do exactly that exercise.Andrea:What are the five terms that we think matter? How much of the page they have, and who else is showing up? And you can really quickly see how you fair relative to those competitors, not just in the position of search, but like how many reviews do you have versus the competition? What's your star rating? What's your price point look like? What is your packaging look like? It's a very fast view of how you compare in this marketplace. And there are some really aggressive brands out there. We have clients that come to us and they say, "I'm private equity backed, I am a new go-to-market brand," no one has ever heard of them, "I have no distribution, and I want to get distribution in Costco next year, in a year. What is your plan for me?"Andrea:And we have a program for that. It involves a really, really large marketing investment. But but that's what these traditional manufacturers are up against, are these really upstart brands that are doing pure play Amazon and really trying to make a presence for themselves. And while they feel like ankle biters when you're just looking at the Amazon search results, next year when they are in Costco, they're no longer ankle biters.Stephanie:Yeah. Which is what's great about it. How do you think about when someone comes to you and says they want to be in Costco... I mean, I've read amazing articles about how Costco will make sure that your product... Like their product always has to be slightly better, but they'll also still work with you to make sure that your yours is selling as well. So one example was like Starbucks. They made sure that their coffee, Costco brand, Kirkland brand was a little bit better than Starbucks based off whatever criteria, but then they also made sure that Starbucks was also being sold, or whatever the brand name was, in a way that it wasn't cannibalizing.Stephanie:But Amazon feels a little bit different when they come out with white label versions of things. You see that, and you're like, "Oh crap. There goes my products."Andrea:Look out.Stephanie:Yeah. That's the one thing that I think sellers are scared of now, is Amazon just copying you? How do you deal with them?Andrea:Well, I think you touched on a couple of things. The first is the beauty of a value-added retailer like Costco for a manufacturer. In that model, in the value-added retailer model, the retailer takes responsibility for the inventory, for the promotion, for making sure it sells, for the profitability, for curation, deciding what the product should be. All of that happens on the retailer side. And that's true across traditional retail, whether you're talking about an ULTA or a Nordstrom or whomever, they own that responsibility. In marketplaces, the responsibility is all shifted back to the manufacturer, so they decide what assortment they're going to carry, they decide how they're going to price it, they have to promote it and market it. And it's a really different model.Andrea:So I think that's one interesting thing about what you were talking about, is that Costco does that. And when retailers complain about Amazon or say how much of their business Amazon's stealing, I think it's important to remember they're there to lean into their strengths, which is providing this value add for these manufacturers and reducing a lot of that burden, and usually, producing a higher profit margin for that manufacturer because they don't have to take on all of that work themselves. On the private label front, it's really interesting what Amazon's doing there. Some of the categories like consumables are getting up to about 10% of the sales being Amazon private label, which is really... And fashion, I think, was maybe even higher than that.Andrea:As a part of Amazon's antitrust hearings, they had to release that data and you have to dig around to find it, but it shares the percentage of each category sales that are driven by Amazon private label. It's really interesting. And manufacturers will often come to us and they'll say, "Oh my gosh, my life is over. Amazon just launched a private label in my category." But I think really, it's an opportunity for the manufacturer to really be more on their toes. And a great example of that is, if you take a look at Amazon Basics, they have a luggage spinner. And if you search luggage spinner, suitcase, or whatever, you see Amazon Basics and you see Samsonite and a bunch of others.Andrea:And the Basics, it's like a third of the price and it looks just the same. And I think what's really interesting here is that Samsonite has an opportunity. If you actually click through to the product pages, you still can't really see a difference. But as a part of an article I was writing, I then went to the Samsonite manufacturer site and actually specked out what's really different about it, and there were enormous differences. It was like a TSA compatible lock, it had all of these extra features that weren't even coming through on the product page, that certainly weren't coming through in the title and the search results and the hero image.Andrea:And so I think Amazon is going to usually come in at this lower price point and this more value driven offering. And for these manufacturers who have better bells and whistles on their products, talk about them. I mean, it's classic differentiation stuff, just the way you differentiate looks a lot different in an ecommerce marketplace. Like you have to do it through the images and you have to make sure that the bullet points really display that, you have to have a title that calls out something about the feature that's really unique. I do think Amazon's seeing a lot of success with their private label because they are able to leverage their own platform and they know it best.Andrea:But through share of search, we've also identified enormous holes in their strategy from a marketing perspective, like entire categories of keywords they aren't bidding on, and then you can get really granular and really go after those holes that Amazon's left wide open. And I think it's because I think the reason Amazon has those holes is they're using an algorithm to drive their private label. It's not people back there saying, "Okay, we got to bid on these five keywords. These are the ones that matter, and here are the features that everyone cares about." And then I think if you don't have a point of differentiation against Amazon's private label, it's time to take a real hard look at your product, because if it's that copyable, it's not just Amazon private label that can copy it.Andrea:But also, if you often look at the differences between the top selling product in the category... Soup's a great example, you can search chicken noodle soup on Amazon, and Amazon has totally innovated the packaging and the format of the product to address all of the customer complaints. Canned soup is terrible online, it dents. No one really likes to eat anything out of a can anyway. So Campbell Soup showing the can traditional format, you look at Amazon's chicken noodle soup, it comes in a reclosable box, which is one of the top complaints in the reviews about the Campbell Soup, which is like, "I can only eat half of it. And then what do I do with it?"Andrea:It ships in its own container, so they're all nicely tightly packaged into a box so it doesn't dent or get damaged in the shipping. It's way more profitable for both the retailer and the manufacturer. So I think there are some areas where Amazon's really innovated on the behalf of the customer and it should be keeping manufacturers on their toes.Stephanie:Yeah. That's such a great point. So many things to unravel there, thinking about, you need to be different and leaning into your differences. And the whole point of having a product is to have a great story and showcase your features and don't get complacent. I love that. I could see even being able to look through the data and find opportunities, just like Amazon is, of like going through reviews and seeing what is someone complaining about? Oh, so many people keep talking about this, creating a whole spin off product, I guess Amazon could do the same, but it seems like there's a lot of opportunity in the data that's already there too.Andrea:There is. And I think this is one area that large established CPGs really struggle, and it's because they have so many brands and they carry so many products. If you're a nutrition bar and you only have 20 items on Amazon and you're growing really fast, it's really easy for you to look through the reviews on your 20 items and come to develop some insights and say, "Okay five people are complaining that they think it's a little bit too sweet, or 10 don't like the sugar content," or whatever. And you can re adjust your product in your next product development cycle. But if you're a large established CPG working across so many brands, so many different categories, I did my air quotes there.Andrea:But if you're a large established consumer brand, maybe you've got 1,500, 2,500, 5,000 items, there's no scalable way to do that right now. And I think that's an excellent business opportunity for someone to get into, which is like really analyzing some of that consumer feedback. I actually just had an MBA student from Northwestern reach out to me through a connection wanting to talk about like that very business idea. She's like, "What about all the customer reviews? Who's got data, that's mining that?" And I'm like, "No one." There are some players out there like Reviewbox and I think Profitero, and maybe even Salsify to some degree that allow you to access them, because Amazon doesn't even provide them, you have to just look at them, and develop some basic insights and maybe some word clouds and things like that.Andrea:But there's so much more to be gained from those reviews that would really help inform product development.Stephanie:We've even heard from so many of our guests talking about the long tail reviews or where the insights are. I think we had someone from HP and then Stitch Fix, of course, talking about like, that's the ones that you need to dive into to see... If someone's providing paragraphs of data to tell you how to make your product better, you better be looking at that and seeing, are enough people saying that? To pivot whatever product you're working on.Andrea:Yeah. You really need some natural language processing technology to really make the most of those reviews. But either Amazon has it or they're just really good at it, because if you look at... I could give so many examples of this, but if you search short-sleeve wrap dress, they have an Amazon Basics, it's a top seller, I even have it. It's a great dress.Stephanie:How did they stick that one up?Andrea:And relative to like the top three other results, I mean, you go through the negatives on the other top three results, and it's like, "It's too short, so it's not work appropriate. It doesn't wrap enough to be able to sit down in it well enough at work. It doesn't come and extended sizes." Those were the top three complaints. And Amazons comes out with an offering that's more conservative, slightly longer, comes in extended size. It immediately just addressed all of the things, all of the negative reviews about the other top three sellers. They've either got something that's helping them do that, or they're just really good at it.Stephanie:Yeah. But I think that also just plays to the point of needing to be diversified and beyond all the platforms. I look at Walmart right now and so many influencers are showing me stuff from Walmart, I'm just even thinking... I've bought rugs in the past month, I bought an egg chair from Walmart, all because these influencers are talking about stuff at Walmart, which also I think has increased quality a lot, and they are becoming a larger player. Maybe their tech and backend still needs a little bit of work and out of stock issues and all that, but I do see them coming up strong. Target also. How do you advise the companies you work with to think about all the platforms and be on all of them and optimize for each one in a unique way?Andrea:Yeah. And I think that's really the million-dollar question, because up until a couple of years ago, those other eCom platforms didn't really matter as much, up until last year, they didn't even have ad platforms. The world is moving and changing so quickly. I actually was just giving an internal speech right before this to our employee base and I was like, "Retail, if you really go back, is meant to be a really simple business. It's, a manufacturer has a product, they sell it to the retailer, and the retailer resells it." And the people who grew up with that model, it's relatively uncomplex or simple process. But if you just look at what's happened over the last five years, even five years ago, you had to be advertising on Amazon and search engines like Google and maybe even Facebook at that time.Andrea:Now, there's social live streaming, there's social media networks, and you have retailer ad platforms. The level of complexity that these manufacturers are faced with right now, and if you think about the ones who lived through all of this, they weren't attracted to this field because it was a technology field, they were attracted to this field because it was really based in sales and product. And so the level of complexity that they are faced with is an enormous. And I was in a share group the other day where a manufacturer called the...Andrea:In our space, we're like the service providers, it's super fragmented, it's a ton of point solutions that help these manufacturers be successful across all these different platforms. He called it a Frankenstein, and this company that was presenting at the share group was working with 35 different service providers from data and analytics to execution, to strategy and execution and strategies, where we set to operations and EDI and inventory management, and how do you allocate inventory across all these platforms. So there's certainly no perfect answer to how do you think across the different eCom platforms, but I do think it's important to really think about, where's your customer?Andrea:Is your customer shopping on Walmart, Target and Amazon? And most of them are because most of them are cross shopping. Where else is your customer shopping? What category specific players should be really important to you? And then where are you most profitable? And where can you get a good ROI? And what platform do you use for what? For Target, it's a little bit more about that curated assortment being on trend with merchandise and being associated with, Target gives your brand a little bit of a boost.Andrea:Walmart stands more for value, Amazon is about assortment, and obviously, price and all of that, but I think really aligning yourself with the marketplaces that are core to your brand's identity feels really important. So the customer, what's consistent with your brand, and then in terms of the investments to make across them. A lot of the fundamentals are pretty similar, so that's good, you have to have those, you have to be retail ready. And the ad platforms are similar, but different in very important ways. And so I think when you think about how to allocate those investments, then it really comes down to profit and what you're trying to accomplish, if it's awareness, if it's maintaining your position in the market, whatever it is.Stephanie:Yeah. I always think about the opportunity that exists for manufacturers of creating a piece of tech that allows them to plug in all the inputs that they have to deal with, even when I'm having companies come on and say, "Oh, we feature D2C companies on our website and they have a backend place to log on." And like, okay, that's one place. Then they're on Amazon and then they're on Walmart, and they're trying to figure out their own inventory stuff. There's so much stuff for them to keep track of that it feels like there's no unifying source right now for them to be able to get a holistic picture of their company as a whole.Andrea:In fact, I got this urgent call yesterday from this guy, this colleague of mine that I've worked with in the past, and he's teaching a course at Harvard right now called The Future Of Work in one of the courses. And he called me yesterday, he's like, "Okay, I'm preparing for this thing, I'm making a deck, I'm showing this crazy environment that we're in with all these providers and all these different things that these manufacturers have to keep track of." He's like, "Who are the service providers who can help them unify it?" And I was like, "There aren't any. It's not because you didn't look hard enough, it doesn't exist."Stephanie:I always think like, "Who is out there?" I even asked an exec, I'm like, "What do you do?" And they're like, "Oh, it's just hard." I'm like, "Someone needs to solve this."Andrea:Someone needs to solve it. It would be a really big job, but even just take like logistics like 3PLs. So you can outsource your warehousing and your purchase order fulfillment either direct to customer or to retailers to a three PL. I just did this as a part of an industry trends report. There are tons of 3PLs 70 some percent of them have fewer than five customers each. So it is a super fragmented industry. It's so fragmented in fact that the new trend is a 4PL. And a 4PL is a broker that helps you manage all your 3PLs.Stephanie:I have not heard about that yet.Andrea:Isn't that crazy? That's like a new cottage industry, is 4PLs, and that's the broker that helps you manage across the other PLs, I guess the other 3PLs. And that's just in logistics. So it's a really challenging space and I think what ends up happening, the ones that end up suffering... Right now, I think the manufacturers are suffering because all of this complexity deteriorates their profit margins. And then they also have to advertise on the reseller platforms now too, which is new, and pay and pay for that. But I think in the future, eventually, if no one figures this out, the customer's going to have to pay for it because the prices are going to go up.Andrea:The manufacturers can't shift from 5% of their business online to 50% of their business online, which is a much lower margin business for them and not raise their product costs. I just don't see how that happens. So hopefully, someone will figure it out.Stephanie:Yeah. Do you see any manufacturers doing it well right now where you're like, "Oh, I just talk with someone and they are doing it this way," that seems like it's streamlining at least a piece of the process. It might not be all of it, but any stories there that highlight someone doing something really good?Andrea:I think there are a few folks who are doing a really nice job designing for online. So that's first and foremost, make the packaging and products such that it's low weight and it ships economically, because that's number one. If you can't do that, if you're trying to still try to sell dry bags of conventional dog food or cat litter online, you have no future in that. And so we've certainly seen like Clorox do some really interesting things in the litter space, Purina36:10 they're doing lightweight litter. There's some great examples of companies designing for online.Andrea:So, how do you build a sustainably ecommerce business? Well, make sure that it can ship well or the retailers aren't going to want it, and you don't have a future in it. So I think there's some good examples of that. Clorox is also doing, they did a green works product a while back that instead of selling three bottles of spray cleaner, there's one bottle with two tiny concentrate refills, so it's less water, it's less waste, it's more sustainable packaging. I'm certainly seeing some really cool stuff from some upstart brands. There's one called Ethique, which does shampoo and conditioner bars.Andrea:That's, again, less weight, ships really well, online store as well, it doesn't leak. And then we're certainly seeing a lot with Liquid I.V. and all of the electrolyte powder drinks. So moving from selling it as a bottle that has water in it that you can't ship to powder. So some interesting stuff on designing for online. I think there are some companies who do a really nice job like aligning their org structures to support ecommerce. I think some good examples of that would probably be, L'Oreal does a really nice job there, P&G has a pretty solid and smart eCom department.Andrea:There are a few CPGs who do a really good job there. And then I think the one that everyone seems to struggle with those logistics, especially the larger CPGs, they're built to scale products and ship truckloads and not necessarily fill direct customer orders or ship like super small quantities to all these little Amazon warehouses. So I think logistics is really been hard on the CPG industry, ecommerce logistics.Stephanie:Yeah. I only see it getting harder and worse. I'm thinking about my interview with Domm from Fast, and him talking about one click checkout where they'll batch the orders on the backend for you buy, buy, buy all in separate transactions, but that's still also encouraging one-off orders that maybe you wouldn't have had otherwise that maybe brands aren't used to, someone just coming in and buying one shampoo or something because normally they have limits. So I only see it getting more difficult as technology gets better and they figure out how to make things easier to buy, it just makes it harder logistically.Andrea:Yeah. And I'm starting to see, I just feel like ecommerce retailers have gone I've really come a long way on this in the last couple of years probably to compete with Amazon, but I can't remember which retailer said, he was Wayfair, I was shopping on the other day. And they suggest that, they're like, "Batch my orders, you can select it. It's like defaults to batch my orders, so they all show up on one day or you can check the other boxes, no ship them each as they become available. And Amazon has been also doing that because in ecommerce, at least on the Amazon, the average order's one.Stephanie:Yeah. And I think that's what Domm said that Amazon's been doing this for a long time, it's that most ecommerce companies aren't doing that. So that's why on Amazon, you can always go and hit, buy now, buy now, buy now, and you don't even think.Andrea:And they'll try and batch it.Stephanie:They'll try and figure it out, but you don't even have to worry about a cart anymore. And that seems to be the way of the future, but I'm just thinking about these smaller brands who are trying to, up and coming, trying to get their foothold and then be like, "Oh my gosh, customers are expecting to be able to just hit, click buy for one thing, and I wasn't prepared for that."Andrea:I think we're going to continue to see... We'll certainly continue to see Amazon grow, they had an amazing quarter, but also I think we'll continue to see customers really being less loyal. And I think that because these other retailers are really upping their game. And if you look at, there was a study that came out that showed the top reseller app downloads in 2020, Walmart was right there under Amazon. And granted Amazon is a huge in-store base, so we need to take it with a grain of salt. Wayfair was on there, Wish, all these other retailers.Andrea:And so I think the pandemic has forced us all to shop more online, but also due to product availability, shop more across retailers. And as a result, we have discovered that the shopping experiences on some of these other retailers sites are more favorable to the types of products we're looking for. Maybe even more fun or more curated or whatever it is that you're looking for, and I think the retailers are starting to figure out how to be more efficient with batching orders or, remember when you used to have to go get your credit card every time you placed an order online?Andrea:They're all saving it now, I mean, stuff that we take for granted because Amazon set a really high bar. Stephanie:Yep. I love that. I know we don't have a ton of time, so I want a quick touch on Bezos. I know he just recently stepped down as CEO from Amazon, so I want to hear your hot take on what does that look like for Amazon of the future? How do you see that changing things?Andrea:Yeah. Well, first I should probably say, I don't know, Jeff personally, and I don't have any inside information. I've been gone from Amazon for five or six years now, but I do think if I were him and knowing what I know about him as the fearless leader, he's an inventor, that's what he's really good at, he's really good at inventing and disrupting industries and inventing on behalf of the customer experience. And when I look at what he has really had to focus his energy on the last couple of years, even pre-COVID, you had the antitrust investigation, they were under intense scrutiny for their treatment of their warehouse workers, counterfeits on the site and fake reviews, labor unionization efforts, here in Seattle, they've been under just a ton of intense pressure for contributing significantly to local elections.Andrea:Our local government put in place a headcount tax just to stick it to Amazon. And it's been really intense here, and also a lot of discussion about their role in increasing housing prices and driving the Seattle's homelessness epidemic. The stuff that he's had to deal with, a super public divorce, all of that stuff. And then you layer in COVID and all of the operational complexity of that that he had to deal with, nothing in there is inventing. And if I were him, I would not only be exhausted because I think the best way to exhaust an inventor is to tax them with a bunch of drama.Andrea:And so if I were him, I would be exhausted, and I'd be really bored, there's no inventing in there anywhere. They've made some really interesting inventions, I guess, disruptions more, I think of them less as inventions, more of disruptions as it relates to transportation. And in the earnings call yesterday, they said half of their packages now are being delivered by their own fleet. Incredible. They are a huge transportation company now, and they'll probably license that out and just walk out, but there's not a lot of inventing happening now, it's all about scaling, managing under scrutiny and really going head to head against some super fierce competition for ad dollars and for customers.Andrea:And so if I were Jeff, I'd be looking at the future and I would just be like, "Not interested, if I were an inventor and I was Jeff. So I think that speaks to why he would step down, I think timing it with going out on the high note with the Q4 earnings being just astoundingly positive probably makes sense. It's interesting, I don't know a lot about Jassy, but I think he was the CEO of AWS for a very long time and he's really good at scaling a business and scaling a business against adversity or fierce competition. If you look at what they are up against with Microsoft, and I think they even like filed a lawsuit against for an RFP that they didn't feel like was handled correctly, he really has gone head to head.Andrea:And I think that that's maybe signaling that Amazon's going to be a bit more about scaling and more about competing and a little bit less about inventing going forward, which maybe that's the stage that they're in.Stephanie:Yeah. Cool. All right. Well, with a couple of minutes left, we have a quick lightning round. Lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask a question, but this time, you only have 30 seconds or less. Usually I get people a minute, but you're so quick, I'm like, you can't have a minute. You get 30 seconds.Andrea:I'll do my best.Stephanie:All right. What one thing will have the biggest impact on ecommerce in the next year?Andrea:I'm going to go logistics. I think the ability for other retailers and D2C to prevail against Amazon or compete effectively with Amazon, is going to be their ability to ship fast and for us to see some consolidation and maturity in that industry.Stephanie:Yeah. I love that. If you were to have a podcast, which you're about to, what would it be about and who would your first guest be?Andrea:Our podcast that we're going to have is Melissa Burdick of Pacvue, who is a competing agency for us in the ecommerce advertising space, and myself. And we're going to be doing a hot take on ecommerce current events. And my job as VP of strategy is all about staying current on ecommerce trends and news. And it's even hard for me to keep up, there's so much happening right now. And so we wanted to really try to provide a value to the manufacturer community of helping keep them current and tell them what they need to know. And then more importantly, tell them what we think it means for them.Stephanie:I love that. I can't wait to listen. What's up next on your reading list?Andrea:On my reading list, oh gosh. Well, I guess on my reading list is a lot of research because I'm trying to write a book about eCom.Stephanie:You're a busy lady.Andrea:I'm a busy lady. I'm trying to write a book about ecommerce and really transitioning our thinking beyond that physical aisle, kind of some of the things that we talked about today. So a lot of my research right now is reading some other pieces of thought leadership around that. And in fact, on my immediate reading list is I need to read a case about Unilever for my class with Harvard on Friday morning, and it's all about Unilever and how they have successfully transitioned to an ecommerce framework and mindset.Stephanie:Oh, I could come to your class too, that sounds good. Awesome. And then the last one, one thing do you not understand today that you wish you did?Andrea:I don't understand, well, I think a couple of areas, one is that as a manufacturer thinking about when is the right time to invest in the most forward-thinking ecommerce technology, which in my mind right now is live streaming. And I don't know a lot about live streaming, I'm learning more about it, I'm certainly watching some of it and trying to participate in it. So nascent here in the United States, but in China, it is incredibly powerful. And in this Harvard class, they had a woman who's a super influencer in China comes to the class and she live-streamed in the class and she was selling Harvard t-shirts, and I think she sold, I don't want to say like hundreds or thousands in a minute.Andrea:It was insane. And then they projected what was on her phone to the screen and we got to see it. And it really blew my mind that we're in such a different place as it relates to ecommerce. So I don't understand it super well, and I want to understand more of it so we can do a better job of helping our brands transition.Stephanie:Yeah. That's a really good one. Definitely one I don't fully understand either, but I know it's very different market there, so maybe people shop differently, but any insights, bring in my way, because I don't get it either. Cool. Well, Andrea, it's been a blast having you on, I hope we can bring you back for round two in the future because I feel like I could probably keep going on for an extra hour if I didn't have a meeting in a couple of minutes, but where can people find out more about you and Ideoclick?Andrea:You can follow me on LinkedIn and Twitter, you can visit my website at Andreakleighconsulting.com. I write and speak and post very frequently about ecommerce. And you can find Ideoclick at Ideoclick.com.Stephanie:Amazing. Thanks so much for joining us. It was a blast.Andrea:Thank you. Thanks for having me.
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.
For more than two decades, Dan McGaw has been engrossed in the world of marketing technology. And through the years, there has rarely been a new MarTech tool that Dan hasn’t given a shot. Why has he placed such an emphasis on knowing the latest tools available to marketers? Because every company, big or small, needs to invest in tools that will elevate their business rather than slow it down. Some tools are better than others, and sifting through the rubbish to find the diamonds is a daunting task. That’s where Dan and his company, McGaw.io, come in.On this episode of Up Next in Commerce, Dan discusses all of the marketing technology he’s bullish on at the moment, and why he believes ecommerce companies will be investing heavily in certain tools and operational activities. From campaign tracking, to multi-touch attribution, to recommendation engines, to personalization, Dan’s toolbelt has a tool for you, and he also has some comforting words for anyone who is worried about the potential of a cookieless future. Main Takeaways:Text Me Back: Companies are misusing SMS messaging as simply a way to send promotional messages. Instead, brands should think about texting as a way to open two-way communication with their customers, especially through the use of direct questions and interactive exchanges.An Easy Way to Personalize: There are opportunities to personalize the shopping experience that are being left on the table. Brands reflexively choose the easy option of sending a cart abandonment email reminding users what they left in their cart. What would be more effective is sending an email that utilizes their entire shopping history, including things they didn’t add to their cart. Just because they didn’t add a particular item, doesn’t mean they weren’t interested. After all, they simply could have been distracted or otherwise disposed of before making the transaction. C is for Cookie: Despite the fact that many people are worried about the death of third-party cookies, they will not completely disappear. And, in fact, there are actually already alternatives to cookies available that work in a similar way. Find out what they are and how to use them by tuning in!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. First things first, I would love it if you could hit subscribe and leave a rating and review, let me know how I'm doing and what you guys are interested in hearing in the future. All right, onto the show. Today, we have Dan McGaw, the CEO and founder of McGaw.io. Dan, welcome.Dan:Hey, how are you today?Stephanie:Good. How are you?Dan:I'm doing amazing. I'm living the dream right now. So having a ton of fun.Stephanie:You are. So tell me a bit about McGaw. So I was reading about your background and what you were known for, and someone called you the godfather of the marketing tech stack and one of the original growth hackers. So if I'm setting you up big here, let me know. But tell me, how did you get those names and what does your current company do?Dan:Yeah, great question. Well, I got those names from other people calling me, which is pretty fascinating to say the least because I remember the first time that I heard that I was like, "What?" But then it kind of caught some legs. So I've been in this space for over 20 years. So I've been doing marketing technology marketing since 1998. So I've been doing mass emails since before mass email was even a thing. So I just have been around for a really long time and I've been in the marketing technology space since before there was even a concept known as marketing technology. So definitely have had a long history of doing this. I've been an entrepreneur for a long time, even have been, another funny, fancy title that I was given is I am a United States ambassador of entrepreneurship.Stephanie:I saw that too. I didn't know what that meant though so I was afraid to put that one out there.Dan:Right? So I was selected by the United States State Department to be an ambassador of entrepreneurship to Mexico and I was flown to Mexico and I had to advise a bunch of companies and corporations and colleges on how to build entrepreneur ecosystem. So it's just been really fascinating. I think that the big thing that I will just say is I have a really big mouth and I'm always out there doing something stupid and I'm not afraid to say how I feel. So it's kind of wound me up with some cool places and I've done some really cool stuff, but yeah, I've had an amazing career. Everything from working at a cemetery, to making pizzas to now of course doing some really bad-ass marketing technology stuff. So I hope that helps.Stephanie:So what'd you do at the cemetery? Now you've piqued my interest there. We'll just have a conversation about that now.Dan:Yeah. Right. And that was the creepiest job I've ever had, but so awesome. I just did, I was a lands crew person and I weed whacked and I blew leaves. I think I was 14 in middle school, but I've always had the hustle so I just wanted to work and make cash. And I mean, I started my first company when I was 13 and was very successful in that business. So I've always just wanted to make money and that's actually how I got into marketing technologies. I saw marketing technology was going to blow up and we chose a vein in there and stuck with it and it worked out really well.Stephanie:That's cool. So how did you see that area was going to blow up? I mean, you're saying that it was before there was even a terminology around it. How did you see this as an industry I want to get into and now I know what to actually do to even be helpful.Dan:Yeah. Fascinating question. So my first company was basically in the music business. We started one of the first online booking agencies for DJs and producers. So everybody here has probably watched the Fyre documentary on Hulu or Netflix. I literally did that same exact business except for I was not a fraud, which is so fascinating. We started an online website and bulletin boards marketing DJs and producers that basically would do raves. Today we now call it EDM and it's all this big billion dollar industry, but back then it was like nothing. And I was just young and didn't know what the hell I was doing. And so I said, "Hey, we're going to figure out how to promote these DJs because I love raves like any ..." What 13 year old goes to raves? But either way-Stephanie:Yeah, really. Where are your parents? We don't know where Dan went. He's been gone for a week.Dan:Supporting me a 100%, crazy enough, but I started that and then really started figuring out the internet and none of our competitors were using the internet. They were still just like relationship based. And as we went through that process, I learned a little bit about development, HTML and nobody was doing anything. So so far in like those days, AOL didn't even have a concept of mass email. You had to get white listed to send mass emails. So I just kind of started doing it to come to find out that there wasn't really any technology back then to do this stuff. So before there was all this tech to be able to make it happen, I was already kind of making it happen manually. So I got really involved, naturally Google analytics which was urchin came out and like ad tech became and there wasn't MarTech. It was just ad tech at the time, Google analytics and traffic tracking.Dan:I got really big into UTM tracking, which is kind of the first bit of it. So fast forward a little bit to like 2000, I think like 11 or something like that, Kissmetrics was a large analytics company. I got hired there as the head of marketing. I was hired to replace Neil Patel, one of the founders. So I wound up becoming like the head of marketing at one of the rocket ship analytics companies. But all the stuff in between the middle there was kind of you just made it up as you went. And then 2011, 2012 was when MarTech kind of like took off and I saw that as a humongous opportunity. So I've just kind of have stayed in that industry.Stephanie:Okay, cool. And what brands do you work with today for context?Dan:Yeah, really, really good question. I mean, our clients weren't ... So our company mission is to help companies of all sizes realize that their customer data is their most valuable asset. So we work with some really, really small companies all the way up to some really, really big ones. So some big ones that people would know like King's Hawaiian Bread. We do a lot of their implementation work. We are managing their ecommerce. Hydro.com, which is like the Peloton of rowing. We do work with them. Some other people might be familiar with like forksoverknives.com. They were a long time client of ours. We no longer work with them, but I mean, we helped blow them up. These are some really popular brands that people would be aware of, but we also work with some of the MarTech companies. So even Kissmetrics has hired us. Segment.com has hired us. Looker which is owned by Google has hired us. So it's really across the board. It's been a lot of fun.Stephanie:Cool. And what kind of challenges do you see the bigger brand struggling with today? And is it kind of similar to maybe with the smaller brands that you work with? Like same kind of thing or are they very different problems you have to focus on?Dan:I think the problems are exactly the same. I think the tactics which are being used are slightly different because the tool set changes, but there's two primary problems that most companies have and that's when they come to us, which is great, is they either lack visibility into their customer journey or they lack the ability to engage in the customer journey. And this is a pretty big problem that every business faces is that they can't see what's happening in that customer journey or they can't act in there. And that's where the marketing stack which is what our specialty really is, is we help companies basically connect all the tools together, integrate them, operate them and be able to gain visibility into that journey so they can provide engagement there.Dan:And this is one of the biggest problems that you're facing in marketing today because everybody's figured out ad tech. Everybody's figured out email automation and everybody is kind of trying to figure out analytics now, but there's still this huge middle and bottom that nobody understands and that's really where our company kind of sits nice and sweetly. So the customer journey is huge right now. I mean, that's what everybody's focused on.Stephanie:Cool. So where do you see companies going wrong right now in the customer journey? Like are there similar things or like you guys all keep doing the same thing and it's messing everything up or is everything very different, all the problems that you maybe discover as you were starting to look into how the brands are operating.Dan:Yeah. The biggest thing that we see that that's fairly consistent, and it's the thing that no marketer really focuses on is it's the taxonomy of the integration. So like what does taxonomy mean? So every time that somebody does an action or we learn an attribute about somebody who's coming through our funnel, that's got to have a name to it. It's got to have a label or as you might call, nomenclature. We've got to all call it the same thing. And that's a big problem that we see across organizations and I'll try to put this ... If you're working with an online education company, the marketing team is calling it a signup, but the development team is calling it an enrollment, but customer success is calling it a registration. And the problem is when this happens and the data all goes into the systems, you now have three attributes for the same exact action, and it makes it really hard to tie all these things together.Dan:So the fundamental problem that we see most companies have is that they just don't have a consistent taxonomy across the stack. So when they finally start looking at the customer journey, they have it all in different namings, and then they have to spend all their time transforming things to get them to line up. So that foundational thing is the last thing everybody focuses on, but when they get that right and it works across the entire stack using a unified taxonomy, which sounds so technical but it really isn't, they really are able to create magic because now everybody is calling the first name of a customer by first underscore name in the analytics, but in the attributes you see in marketing automation is Fname. Right? So that's usually the key problem that we see is that taxonomy is wrong. And then the second problem that we see is that the tools are not connected.Stephanie:Yeah. So it's funny talking about how the taxonomy is wrong. A lot of people listening might be like, that's so easy. And I'd say for a startup like starting out, it's very easy if you know to do that from the start. Like of course, have your variables, make sure they're exactly what you want and train people up, have your data dictionary, whatever you may have so everyone uses the same term. But actually when it's a bigger company which I've seen like back in my Google days, everyone's operating off different things. How do you bring the org together and all the different departments to be able to not only agree like this is the variable, but then make sure everyone's using it that way? Because that's actually a lot trickier than I think some might think.Dan:Yeah, it's extremely, extremely hard to get that cross department alignment. And it's fascinating because like this is one of the things that a growth team would ultimately help with, is kind of cross department alignment in regards to these things. But growth is always focused on action, not necessarily planning. So a new companies or I don't want to say new companies, excuse me. The new role a lot of companies are rolling out is revenue operations, marketing operations, sales operations, revenue operations is the big position that SaaS companies are hiring because it straddles across marketing sales and customer success And that's the big thing that's happening. And I think in a lot of the enterprise companies, you're going to see a lot more of these revenue operations style roles that are coming out that try to align it.Dan:Because everybody's realizing if your data's crap, okay, great, we can't do any of these cool things. This is where a lot of companies are getting their CIOs involved. I think the conversation over the past two years has really shifted away from, hey, we're just talking to marketing technology. So now the CIO calls the shots for all of this because the CIO is the one who makes the decision on business intelligence and all that. So I think a lot of CIOs own the problem. I don't think that they understand the problem because it's outside of their purview, which is sales and marketing. So I think it will be really, really hard, but it's really important for a company to have good data. And without good data, you're kind of, you can't do machine learning, you can't do artificial intelligence, you can't do personalization. But right now it's the CIO, which I think needs to hire the revenue operations person to really get that done.Stephanie:Yep. Yeah. And a side note, if anyone's like, "I really want to hear more from CIOs," we have a whole podcast called IT visionaries where we interview CIOs from fortune 500 companies. So go check it out. So okay. You get your data all set and correct at the company that you're working with. What's the next thing that you encounter that's either an issue or that you see happening a lot right now?Dan:Well, I mean, just to make sure, I mean, the taxonomy, the data dictionary like you said, which I think is possibly a more common term or a schema. I mean, there's just so many ways to call this, which is ridiculous. The integration of the tools I think is really, really important. A lot of companies don't understand the way that tools can now integrate. We have a concept that we call data recycling. You typically see companies that are looking for what's known as we want our source of truth or our single record of truth. And for us, we find that to be a really, really bad model. What you should be trying to do is mirror your data across many, many different tools over and over and over again, and then recycle this data throughout the entire tools. If you have a single record of truth, which is always great, that means that you're helping one team and holding back many other teams.Dan:So we try to make it so that we recycle the data as much as we can and that's through basically data recycling. Leveraging a customer data platform is always really helpful for this, leveraging tools like Zapier, leveraging tools like tray.io, Workado is always really, really good, but you have to string the systems together along in a very, very structured manner to make it so that that data can even flow. Because even if you call everything the same, if nothing's connected in the right way, you're still not going to make any progress. So integration is also a key part of that.Stephanie:Yep. Cool. So now thinking about a little bit farther down the line like maybe when it comes to actually either interacting with the customer or guiding them around on your website or something, what things can be improved there because I've talked to quite a few companies or people on this podcast who say, "Any plugins, get away with all the plugins, they just slow your website down. You just need to focus on website speed. But then you were mentioning earlier how much do you love tools, and so tell me more about that.Dan:Yeah. I mean, I definitely think website speed is extremely, extremely important. I mean, when you're a large ecommerce company, speed is obviously paramount because it affects everything from SEO rankings to people actually converting on the website. But I also think you have to very much focus on personalization and creating a customer journey for the user. I think there's two kinds of use here. I mean, one marketing automation is great because it enables you to do so much, but sometimes we lose the human element and we kind of forget that people are still humans. They want to have a communication channel with us. So you want to make sure that you can personalize the experience and tailor that experience as much as you can. But at the same time, you just don't want to overdo it. So we focus a lot on personalization throughout the website, getting people back to where they want it to be, back to where they left off.Dan:And this would be, so as an example where you don't want to use a plugin because you want to let them use their experience. As things are happening on the website, we can track that in real time. We can save that in marketing automation, we can save that in any tool. So when the person leaves the website, we can very easily send them an email saying, hey, picked up where you left off. Especially if it's ecommerce, right? Last product that they viewed, they don't need to add it to their cart. I think it's the stupidest thing that we do. We send cart abandonment emails to people when they add something to their cart, because we think they have interest. If you send people an email which showed them the last five items that they've viewed, it adds the same value, right?Dan:Just because I added it to my cart, yes, it means I'm interested. Just because I didn't add it to my cart doesn't mean that I'm not interested in it. It means I probably have a five-year-old that's distracting me and I didn't get to add it to my cart. So we see allowing people to pick up where they left off as a really, really easy thing to do. But personalization in helping them accomplish their journey I think is the biggest thing. Marketers job is ... I come from a developer company where the marketer's job was, we were there to manipulate and trick people. And it's like that's not my job.Dan:But a marketer's job in my opinion is to basically help somebody accomplish their goals by serving them what they wanted in the first place. Right. It's to create that magical customer experience, knowing what they already wanted and serving them that on a silver platter, not tricking them to figure out, oh, you should've bought this, right? And I think that's where growth hacking went bad a few years back is it got a little like slimy and really it's about how do we just create the best customer experience for them through personalization?Stephanie:Yeah. So sometimes I think that personalization that I could see it going too far and I've talked to this a bit on the show before of like when you call in on the phone and it's like a robot and they're pretending to type, and they're trying to personalize it to your name and they're jacking with your name or sometimes you get an email and it's so over the top, like Stephanie, I saw this, this and this and it made me thought of you and whatever. I'm like, "Oh, creepy." How do you walk that fine line of giving people something that is helpful, but not being creepy.Dan:Yeah. And just because you're using the word creepy, it brings back some awesome ... I have a webinar and deck that I did before COVID happened. I was traveling the country doing this talk about automation without being creepy. But what does creepy really mean? So what I advise everybody who's listening to this podcast, grab your cell phone and I need you to go to your text messages and I want you to text (415) 915-9011. I'll just say a number again, (415) 915-9011. And I just want you to text the word creepy to that number and then follow along with the text prompt. There's a bot that will follow along with creepy. And then if you're really, really well known on the internet, you're going to get a super creepy email that will surprise you on what the internet already knows about you and that we have access to through your email. So either way, nice experiment for your people to go try, but-Stephanie:I want to do that now. Now that piques my interest. I don't know if I'm well-known enough on the internet though, but we'll see. It'll pull things from like Facebook. I'm like, "Here's what you're doing, Stephanie, back in high school."Dan:Yeah. We'll see. I mean, and usually the minimum that you're going to get is like we get your zip code or it might have your wrong zip code, but there's for myself and had over 300 attributes. I was like, "Holy crap, the internet knows way too much about me." But that being said, you do follow this line of creepiness to straddle, right? And you have to understand like target as an example can predict with nearly 90% accuracy that you're going to be pregnant within three months or you are pregnant within three months and that's crazy data science that you have and that blurs the line of creepiness. What you have to understand is that you don't want to impact life moments like that. Always, you don't want to precede those things, but what you have to figure out is how do you understand what they're looking for and then just serve that element to them?Dan:Because with an email address and with your IP address, we can basically find out anything we want, which is really, really terrifying to think about. So you have to make sure that you're just superseding what somebody is probably already looking for and there's definitely enrichment that you can get. So knowing that it's raining in somebodies area and sending them an email is not necessarily a bad thing, but you don't need to tell them that you know that you know it's raining, right? Like don't say, "Hey, it's raining, you should buy an umbrella." But yes, it's okay to send them umbrellas and rain boots and things like that, which banana republic knows how to send emails based upon that but they don't say it's raining. So there's a lot of ways that you can be helpful to somebody without telling them that what you're doing. But I mean, you can be really creepy if you want.Stephanie:I mean, I think that it sounds simple, but I like that where it's you have all this information, but you don't have to be like, "Hey, here's the zip code you live in? And apparently there's this festival going on right now." Like you can send something where it's like, oh, how did you know? Cool, okay. That's helpful because now I know of an event or whatever nearby without you saying, I know exactly the attributes of why I'm sending you this email because of this or whatever. So that's interesting.Dan:Yeah. There's an API for that too. When you talk about the events, I immediately think of companies that have APIs that allow you to have events and people's areas. So definitely an API for that nowadays.Stephanie:There you go. So what are some of your favorite tools that you're using where you're seeing the biggest success with right now? And it can be marketing tools., it can be stuff around like helping the customer journey. I mean, what comes to mind where you're like, "Oh, 2021, I'm really leaning into these things or we're implementing these things on our customer's websites."Dan:Yeah. So there's probably two primaries that I would go with. One, I'm super big fan of text message marketing, but I think a lot of companies get it wrong in the fact that they use it as a promotional channel and they use it as spray and pray. So I think text is really, really big. We use a software called autopilot, which is our marketing automation tool. They have an integration with Twilio so you can build a Twilio bot. So earlier I said, "Hey, text this number and text this word to it." It adds you to a subscription list and then it will automatically send you information and it can talk back and forth with you. And those types of technologies are where you really get some interesting engagement from consumers in regards to your services. So definitely is a real unique channel, but I wouldn't say that that's something that you would leverage on your website all the time.Dan:However, as somebody's going through your checkout flow and you collect their cell phone information, this is a way that you can reach out to them. Hey, we shipped your order to you and it has arrived today, right? Provide them helpful tips and then say, "Hey, you received your order. On a scale from one to five, how did it arrive?" And things like that. And providing this two way communication channel is really, really good for consumers. It gives them a communication channel. You do have to connect it to a support system and things like that. But customers really find it unique when you're trying to have a two-way conversation with them compared to like buy my 20% off thing.Dan:People hate getting those spam promotions. They hit stop more than you would like to think. So I think that for me, leveraging the SMS bots, whether that be through Autopilot and I think there's a company called Text In, which does really, really good there. There's another company called salesmsg.com. And no, I'm not talking about the Panda Express MSG, but salesmessage.com. They're more integrated with HubSpot or more meant for sales teams, but they work really, really good for customer support too. So text is huge for me. And then the flip side-Stephanie:How do you think about engaging people in texts? Because that's an issue where, I mean, I even think about like World Market right now just sent me a text this morning, like oh, 20% off. They send it to me like every week. I'm like is every week, 20% off week? I start to lose interest and I just haven't had the time to hit stop yet. But how do you think about building a flow that's going to keep your customer actually engaged and excited to see your texts coming in? So I feel like it's a two-way thing instead of just blasting them with promotions.Dan:Yeah. It's got to be really personalized. And this is why when we think about text messages, we think about it from a helper perspective. Right? So we have to think about like the things that are going to optimize their customer experience, not the things that are going to help us, right? Sending somebody a 20% discount is not helping them, that's helping us. So when we think about the change in that fundamentals is of course like when somebody is coming through your website, like hey, you can of course, hey, do you want to be updated with sales and promotions? Right. But I would target it more, hey, do you want to be made aware when we launch new skirts or hey, do you want to be made aware when we do these specific things, and try to only send the messages what's they're requesting which is going to help them in whatever they're trying to accomplish.Dan:And you get unique opportunities like when somebody is going through the checkout experience, right? Like, hey, do you want us to keep you aware of certain things that they're already interested in or hey, do you want to be shipping notifications? Do you want us to keep you aware of your shipping notifications? And those are good ways to get people going, but asking questions is going to get you much more than, hey, here's 20% off. Right. So I think asking questions, that's where the bot part comes into play is asking the question, like do you feel that our customer experience is optimal? Can you reply back with a one to 10 on how your checkout experience was? People respond back with a seven or two or a five. That's the interaction they're looking for, not hey, here's 20% off, right?Stephanie:Yeah. Unless you walk in the door. That's when I always think I'm like, if I walk into the door of a retail location and then I get that text, cool. I'm happy with it. But if you're just sending it to me when I'm at home ... Yeah. It is so possible. I know I'm like, they've got the beacons in the stores, you can do it. There's so many ways to do it now, but I don't see many brands at least retail locations doing that quite yet. But maybe I just don't go into retail stores obviously.Dan:Well, yeah. Yeah. The retail stores is hard. Yeah. I mean, I definitely think if anybody on this podcast wants to do that, let's do that because I know how to do that, leveraging radar, mobile apps and all that stuff. So like totally cool. I think my favorite campaign was by Burger King. They said if you were within 500 meters of a McDonald's, we will send you a free coupon for a free Whopper and you have five minutes to buy it. So if you had the Burger King app, came in within 500 meters or so I think it was even maybe a hundred yards of a McDonald's, you would get an instant push notification, you have five minutes to get your free Whopper. Holy crap. I mean, can we say contextual?Dan:But yeah, that's all possible. I agree with you. If I walked into JC Penney and JC Penny sent me a 10% off discount, I would totally use it. We were working with an ice-cream retailer, which I can unfortunately say the name. They're trying to create a loyalty program, but they couldn't figure out how to do it. And we're like, "Dude, just put a fricking number on the side of your building that says text loyalty now to this number and you're in our loyalty program. And then connect that to beacons and you can do more stuff with it, connect it to your app and do more stuff with it." And-Stephanie:Did they do it?Dan:No, they didn't listen because they were too traditional, who needs technology either way. But [crosstalk] is super powerful.Stephanie:That'd be a really good thing to do now that I'm in Austin area. So hey, anyone listening from Austin, give me a shout out. I'm here now. Yeah. But that's a good area to do that because there's so much like artwork and graffiti that turns into artwork on all the buildings out here, but people pay attention to it. So I think it does depend on the city you're in of like, are people open to that or will they see it and be like, "Man, there's writing on a building."Dan:Yeah. I think text is awesome. I mean, you just, people suck at it and I think people suck at most marketing in general. They just try to spray out there and hope for the best. So the one other technology, there's two technologies that we're testing a lot right now. One is called ConvertFlow, convertflow.com which is really, really good. The other one is right message. And both of the technologies are relatively the same. They're a pop-up technology that happens in your website, except for they're integrated in with your marketing automation solution and they also track a lot of what's going on on the website. So you can provide real time personalization to the website based upon what people clicked or what people did. And for anybody who follows the B2B space, there's like these drift chat bots.Dan:So if somebody comes to the site, a pop-up comes up, what is your goal today? Did you want to see a demo? Do you want to see this? Do you want to see this? People click on it. And then only the chat bot is able to control like what happens next. The difference with these technologies, specifically ConvertFlow is that when those types of things come up, you can click on something, it will drive you different places on the website, but it can also change the headline copy of the page. It can also change like things that are happening. So if somebody comes back, it can be like, "Welcome back, Dan. We hope that we were able to help you in your last visit. Last time you left off, you were looking at socks, let's go look at socks again, right? Or is there something else we can help you find?"Dan:And then of course you could constantly be contextually changing the experience for that user. For us, ConvertFlow has one of the most powerful engines to it and it's super cheap. These two twins created the platform, super, super cool guys, but they're really good at that. And then the flip side would be right message, which right message is more of a kind of a chatbot-esq. It doesn't change your websites, but it does constantly provide you personalization to push people down the funnel based upon what they sent.Stephanie:Cool. Like how many tests should a company be running to see what works and then how much should they pull it back and narrow it down to?Dan:Yeah, man, you should be running tons of tests. I mean, there's a linear line between the number of tests that you run and as well as the growth that you can create at a company. So I would just say you should run as many as you possibly can, that you can hit statistical significance with, speaking of which we have a tool for that. If you Google AB testing calculator Chrome extension, go check it out. It'll help you know if you have statistical significance. But yeah, I mean really, you should be running tests all the time. You shouldn't be launching anything that's not a test in our opinion. That's a big part of our business.Dan:So companies like Hydro, we run all of their AB Testing experiments and we're always running tests, right? So like for me, you should not be doing anything unless you're testing it. The thing that I would just add as a caveat of that is you have to have enough traffic to run the test. You have to hit statistical significance and you have to know what you're doing from a data perspective because false positives, I lost a company $125,000 in 24 hours because I had a false positive. I made a mistake. Luckily, this was a long time ago, but-Stephanie:What was the false positive? Tell me the story, or backstory of that.Dan:Yeah. I mean, a great problem that you have is that people only focus on one metric. So when you create an AB test, the test, I worked at a company called codeschool.com. Going back to that developer centric company, we were an online education company for developers. We created an experiment called the summer school campaign or summer camp campaign. And I had optimized the AB test for sign-ups and then purchases. The problem was we didn't optimize the test for lifetime value. Lifetime value was 75% less on the winner of the test. So we saw an immediate increase in conversions. We got super, super excited, come to find out that those users were 75% less valuable based upon that test.Dan:So there's a thing known as you have to basically reverse look at tests. So when they've been running for two months, go back and look at that to see if it hurt lifetime value, it hurt retention, anything like that. But we basically had just wrote a headline, which wasn't 100% percent true to the developer. Like it wasn't 100% in line, so they wound up churning after their first I think it was two months. The other users who didn't see that headline stuck around for like six months. So it was just-Stephanie:Okay. So was the headline, it made them think it was something that it wasn't where they came in-Dan:Yeah.Stephanie:Okay, got it. Yeah.Dan:That's what the developer said that we manipulate people and it was like, no, we just had a misalignment in regards to what we wrote. I wasn't trying to manipulate somebody, but either way, that's marketing.Stephanie:Yeah. I mean, to me, that's just always a good reminder that all of this is a long game and anything that's focused on like a quick hit and trying to pique someone's interesting and get them in, it's probably not going to work out long-term.Dan:And if anybody knows of Kissmetrics, that was the whole reason why the company went out of business and got sold to a private equity firm is there was too many people at the leadership level that were focused on quick hits and it's what put us out of business. You got to focus on, you've got to have a good mix of short-term and long-term focus and why we've been so successful and are still successful even at our company and our clients, we focus on the longterm as much as we do on the short term.Stephanie:Yep. Yeah. Very cool. So when thinking about marketing and all these data attributes that you can have on your customer, how do you think about a, sorry, a potential cookieless world?Dan:Oh, it doesn't bother me at all. Cookies, whether you like it or not, the cookie is not going to die. It's third-party cookies they're talking about which are going to die. It's not first party cookies. The problem that people don't understand is we've already come up with millions of solutions to create better first-party cookies, if I could talk, better first-party cookies, which we hide third-party cookies behind. So I mean, we just had a whole debate about this last week.Dan:Cname cloaking and proxies and all this stuff. There's already a ton of ways to kind of hide it and change it. The cookie's not dying. It's just the way that the cookie gets used is what they're saying is going to die. But cookieless world is going to happen. Is it necessarily going to be ... I almost want to say it's a false or that the cookie is going to die because you can't completely kill a cache in a user's browser about what we know about the user or you'll break the internet.Dan:And the internet is not prepared to completely get rid of all those technologies, so there's always going to be a hack around it. So we have a technology called utm.ao that we use for campaign tracking. So if anybody out there uses UTMs, they have a stupid UTM spreadsheet. We solve that problem. But the real problem is that the technology is now making it so that before you even before you even get to the website, we know who you are. So that's all going to be passed to the website through URL parameters, and there's all kinds of hokey stuff there. So I guess like I'm not that stressed, if that makes any sense.Stephanie:So why are other people so stressed? Because I listened to different ad tech podcasts and other marketing shows. And I mean, there's been so many conversations where people are stressing about it. So why are you so chill about it then and they are so worried?Dan:Yeah. Well one, if you're an ad tech company, Apple's out to cut your throat, right? Like there's just no way around it. Facebook is in a complete battle with Apple, which I think one, Apple is totally doing this for a promotional stunt because their job is to own your data, right? Like don't let them fool you, they know every single thing you do and they hold it on. It's the reason why they're one of the most valuable companies in the world is they know every single action you do. So for a Facebook, it's definitely really, really concerning because they have to be able to get companies like, and I'll just use one of our clients, King's Wine to figure out how to do Cname cloaking and proxy changes and stuff like that, which is really, really hard.Dan:But if you're using myself as like your consulting firm, like that's our job is to figure that stuff out and to solve those problems for you and to deal with it. So I guess like for me, I'm not stressed because that's what we do. But for the ad companies, like how the hell did they get everybody else to know how to do that, right? They've got to teach mission.org how to load a advertising pixel in this certain way and there's no way that mission.org is going to figure that out unless they hire me. So that would be the reason why there's the big difference is I actually know how it works. Most people have no idea how any of this stuff works.Stephanie:Yeah. Okay. Well that's good then. So then no one has to be worried and just hire someone who can help you, sounds like the gist of it.Dan:The general thesis of it. And it's expensive. It's a lot of service that stuff. So I mean, the problem is that 95% to 98% of the internet is not going to be able to understand it or fix it and that's where a lot of people are really panicking on how do we get this done? But there's always a hack.Stephanie:Yeah. And a certain point though, I wonder if Apple is going to have to change the way they do things. I mean, I know that they have been like ruling the market for a long time, but I see now that they're trying to get into something like podcasting and they have big competitors out there who already know how to do podcasts advertising, and they know how to show the dynamic ads and actually showcase metrics to the advertisers. There's so much competition when it comes to that. I can see Apple having to change the way they do things and provide more data and show the ROI instead of being like the black box of like yeah, just put it on here and it's in your best interest because we're a big platform.Dan:Yeah. Well, we have to remember that they did invent the pod cast and that came from the iPod. But they're allowed to, I mean, I think when you have that dominance, you're allowed to be slow to things. I mean, when we think back, I used to run a bunch of mobile app companies and like they sucked at giving us data about the mobile app. So we had to figure out all these other things. But when you're the gateway to the rest of it, right, when you're the heroine of the drugs, you can be a little late to solving your problems and that's unfortunately how Apple is. So they're going to be late to the party, but when they step on the throat of anybody else, they make changes. And I think the easiest way to think about it, does anybody remember the QR code? And it hasn't gone anywhere, but all the QR code apps, there's none of them, they're gone because it's part of your camera now. So when-Stephanie:It's funny how you forget about that. Like I remember being like, "Oh, which QR code app is the best one that I need?" And it's like, they're all the same, just pick one.Dan:And now none of them are around, just like the calculator apps. And like when Apple wants to ... And in our business, one of the things that we try to help our customers figure out and this is something I hope all of your podcast people listen, if you've never read the book, Crossing The Chasm, it's a really, really good read. But you have what's known as basically these innovators, which are out front. Most innovators die, right? They just don't live forever. And what we've recommended to our clients is be the early majority, right? Don't be the person always out trying to be a hipster because then you wind up finding out that like, hey, this stupid business idea blows up. I mean, I was put out of business one time by Facebook changing a feature like, oh my God, I can't believe Facebook changed a feature I went out of business.Dan:There's definitely things that other big companies, when you build on their platform, you have to be aware of that if they just decide to get into that space, you could go out of business or you could not have a feature which your business is around. So we always recommend people don't always try to be the innovator, wait for there to like be something solid, wait for something to be proven, wait for something to be figured out. Because if you're always going from the next hot flip to the next hot flip, and you're always a hipster, you're going to spend 10X more money than I am, and I'm going to still make the same amount of money if not more than you and that's always fascinating.Stephanie:Yeah. I also recommend that book and it's come up a few times on here. It's a really good one. I mean, how do you think about companies relying on a platform? Because I see so many brands right now just launching on Amazon, for example, and not even worrying about building out their own website presence or even developing their own community. Like how do you think about that?Dan:Well, I think my opinion would be different if they would have been doing that 15 years ago. Right. But if you've ever read the book, The Everything Store About Jeff Bezos, just understand he is coming for your throat too. I mean, they're just like Apple. If you read what they did to the book publishing industry, I'm like, "Holy crap. Wow, they completely gutted that industry." So for now I mean, there's not much you can do about it. You have to play with it. But I think it's definitely imperative that you create your own online presence. And I think this is where Shopify is trying to come fill a void is there is definitely, you have to do both at the same time because at any time Amazon is just going to come out with Amazon basic of your product and you're done. They've done it hundreds of times, if not thousands of times.Dan:So you do have to build your own kind of side sliver as a brand. And I think the best book that I think I've ever read, which made me understand not only my childhood and why I am the way I am as an adult is the book Antifragile.Stephanie:Yeah. You seem to love them.Dan:Yeah. It's such a great book. But you have to have optionality and if you put all of your cards on Amazon, well, you don't have any optionality. And I think creating those options is a huge business. I mean, I read 42 books last year. So we want to get into like talking about all the cool things I learned just last year on that stuff. But optionality is huge. I think it's really, really important.Stephanie:Yeah, we've had a great guest on from, let's see, it was Taylor Holiday from, I think something collective. I can't remember what his company was, but he said, "You need to figure out how you can basically win even when you're wrong." So like when your models are wrong, which to me I'm like, "Yeah, you're talking about being anti fragile and making sure that you won't fail, even if your models set you in the wrong direction, how can you still benefit and have upside?" Which I thought was really interesting to frame it that way.Dan:Yeah. And I think in regards to the platforms and I'll try to bring this back to like the marketing technology platforms, there's a lot of optionality that you can look at and you need to have a backup plan to your backup plan in regards to marketing technology tools. I mean, Marketo got bought by Adobe and that's going to revolutionize the way their product works. And I mean, there's a lot of things in Marketo that suck already and Adobe buying it just means that it's going to slow down, right?Dan:So you have to be prepared to be able to say, "What's my backup plan to Marketo? And if I was to switch, what is that going to take?" And that's one reason why we recommend a lot of companies to leverage customer data platforms because it makes switching easy, but then you run into the same problem. Well, if you have a customer data platform and all of my data goes to the CDP, well, what happens when that CDP gets acquired? Right. What happens when Twilio buys Segment for 3.2 billion? How does that change my ... what's going to happen to the CDP? So you just have to ask those questions, like what are my other options with these platforms when I choose it and how much am I baked into this tool? And if I lost this tool tomorrow, what would it take to replace it?Stephanie:Yeah, that's really good to have a mindset like that and be thinking about all angles. So really good. So from a general ecommerce standpoint, what kind of trends are you guys preparing for in 2021?Dan:Well, first one, just going back, the death of the cookie.Stephanie:Or apparently you're not preparing at all and you're like, "I'm good."Dan:No, I mean, we started ... I mean, if Google the death of cookies McGaw.io and we wrote a blog post about this a year ago. So we've been tracking this for a long time. I think that the biggest thing that we are focused on, the biggest thing that we see in ecommerce right now, everybody wants to do multi-touch attribution. Everybody's trying to figure out how do they do multi-touch attribution to better align their return on ad spend. Because the key problem that you have is all these retailers are spending millions of dollars a year on advertising spend. And then if they look in Facebook, they see a conversion in Google, they see a conversion in LinkedIn or whatever the platform they see a conversion and they're attributing one sale to five different conversions. So they're really trying to say, "We understand that those five conversions we see in these different platforms or from one purchase, and we need to be able to pull that data together." So touch attribution is huge.Dan:We're extremely well-known in that space so a lot of companies are working with us on that, but every company is a unique snowflake for multi-touch attribution. Recommendation engines are probably the other thing that we see a lot of companies really trying to figure out. There's a cool technology called blue shift. Really, really good for ecommerce especially if you have thousands of products. They use machine, excuse me, machine learning to consume your catalog. And then also use machine learning to distribute that catalog as a recommendation to people based upon the best channel that suits them at the best time for them. Blue shift is crushes it. Great technology, Josh, the CMO or CGO, chief growth officer is a good buddy of mine.Dan:So we see a lot of the trend in regards, how do we make proper recommendations on the right channel at the right time with the right message. And then the last thing would just be customer data platforms. So those are the big three trends. I mean, one of the reasons why we're crushing it right now is like we know CDPs better than almost anybody else, customer data platforms. And customer data platforms, it's not a fad, it's not a trend. It really is the future on how you need to manage your data and your customer data specifically. So those would be the three big things that I would lean on for 2021 and going, especially into 2022.Stephanie:Cool. So you were just mentioning channels. What kind of channels are you guys most bullish on right now? Maybe are there any new ones out there? We've had a lot of people mention TikTok. You and I were talking about Clubhouse earlier. Is there anything that you guys are kind of shifting your focus towards and trying out?Dan:Oh, I love TikTok. Man, they tried to hire me as a brand ambassador and I so wanted to do it, but we had to turn it down and I love TikTok. I spent so much time on there. It's ridiculous.Stephanie:I do too. It's great.Dan:I think TikTok is great, a really, really cheap channel, but you got to learn how to do it, but it's a harder curve so I think that's good. I think that there's a lot of ... YouTube, oh my God, YouTube, YouTube, YouTube, YouTube, YouTube. We haven't even hit how valuable YouTube is. I mean, they're going to be ridiculous. So I think between those two channels, figuring out video is going to be really, really important for companies across the channels with TikTok and YouTube. I think if you can't figure that out in the next five years, you're really going to struggle. There's a cool tool called Fleeq, F-L-E-E-Q.com, which will help you do that for video. So I think YouTube and TikTok are huge if you want to be successful. I think there are some other really surprising ones. Like I always try to tell people you should invest more in Bing. Bing's really cheap. I always think that's always really, really good.Stephanie:I haven't heard Bing yet. That's a new one. Okay.Dan:Yeah. It's just so cheap. Not as much volume, but just the per dollar comparison is good. And the last one that I'll just say is direct mail. Like, oh my gosh, it's so cheap.Stephanie:What are you guys doing in direct mail right now? Because that was also something I've brought up a couple of times of like so many people are now at home and I am delighted when I get mail that's not something spammy where I can actually look through a great catalog and like, oh, this is actually cool stuff. And I always mention the Trader Joe's pamphlet where I'm like, "They have really fun content that also sells their products as well." But it's, I mean, I look forward to that one. So how are you guys approaching the direct mail piece?Dan:Yeah, so depending upon what the integration ... I mean, there's a company called lob.com, which makes direct mail really, really easy. And we leverage autopilot as our automation tool and we've been able to, I mean, personalize tons of stuff. In regards to giving people recommendations, we are able to literally write text on the postcards saying the technologies they use through data enrichment. So there's a lot of stuff that you're able to do there, but we have to remember is like sending somebody a thank you card or a birthday card in the mail as direct mail like happy birthday. It's your birthday coming up soon. Right? Like that's not hard, but people love it. And with COVID, I think the best quote that I had somebody say to me into COVID, the most exciting part of my day is walking to the end of my driveway and collecting my mail. And I was like, "What?"Dan:So I think it's just a great medium to use. And if you build it as part of your automated personalization journey, I mean, once again, you don't have to know it's raining in somebody's area to send them direct mail. Right. But you can know that it's going to snow two weeks ahead of time or there's a good possibility, you could send them a coupon for snow boots. Right. Like I just, the options are endless. So yeah, I mean, I think it's great. Hey, you abandoned your cart and you left these three things on and you print like three things on there. I mean, the personalization is really, really crazy and awesome.Stephanie:Yeah. Yeah. Very cool. All right. So we have a quick lightning round 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?Dan:Can I admit I'm scared? Yeah.Stephanie:You can admit it. Yes. All right. I'll start with the easier ones first. So you sound like a little bookworm. What are the next three books on your list?Dan:Oh, next three books. I don't know. I'm not prepared for that one. I think Atomic Habits-Stephanie:I usually ask one, but I'm like, "That's too easy for you." You have to tell me three.Dan:Yeah. I'm slacking on my book thing because I had a goal at the end of the year to hit 20 books and I demolished it. So I could probably say my last three books, but Atomic Habits, Billionaire Plan and Maverick. Those are the three books that I want to finish right now.Stephanie:Cool. Where are you traveling to next when we can travel again more easily?Dan:Oh, well that's an easy one. I fly to Snowshoe West Virginia and less than four weeks to go snowboarding again and I'm super excited for that trip. I traveled multiple times during COVID so-Stephanie:Yeah. I mean, I have too, but some people haven't. So if you were to have a podcast, what would it be about and who would your first guest be?Dan:We are in the process of creating a podcast of what we call The Stack and we'll be talking to VPs of marketing and CEOs about their marketing technology, sales technology and customer success technology. My first interview is hopefully going to be with mission.org and figuring out how you guys manage your marketing tech stack.Stephanie:All right. Yeah. Bring us on. And we also have a whole marketing trends podcast where we interview CMOs. So then we'll have to bring you on that one as well.Dan:I think that'd be great. I think it would be a lot of fun. This has been awesome. You are amazing at this. Good, good work. I thought this was fun.Stephanie:Thanks. Yeah. I mean, we talked about in the beginning, what was our line was just don't be generic. So I think that was a good motto of our interview. All right. Two more questions. What's the nicest thing anyone's ever done for you?Dan:Nicest thing that anybody's ... My godfather took me for my first snowboarding lesson when I was like eight years old. It's the best memory I think of my entire life because it's something I've used forever.Stephanie:Oh, I like that. Alright. And then what one thing will have the biggest impact on ecommerce in the next few year? And it can't be the three things that you mentioned earlier.Dan:Oh, come on. The next biggest thing in ecommerce that's going to happen. Amazon will start to die. They're going to get ... I think Amazon is going to get split up because Jeff Bezos will want to do it. I think that's going to be one of the biggest things that happens in ecommerce in the next five to 10 years though. I don't know how long it's going to take, but I think that and Congress realizing that Amazon, they're too big.Stephanie:All right. Well, that's a good answer. I'm glad that I punted the other three so you had to think of a new one. All right, Dan. Well, this has been an awesome interview. Thank you for not being generic. Where can people find out more about you and McGaw.io?Dan:Yeah, so definitely you can go to McGaw.io, but I'm most active on LinkedIn, so go to LinkedIn and search up Dan McGaw. There's three of us, but you'll be able to find my pretty face. Go there and send me a connection request and play along. I've got over 25,000 followers there and I try to stay active.Stephanie:Amazing. All right. Thanks for joining us.Dan:Yeah, thanks so much. And the one thing I forgot, look up Build Cool Shit, my book which is all about how to build a marketing tech stack. If you go to McGaw.io, I'll send you a free copy. It's on the headline, but I forgot all about it. I have a book called Build Cool Shit. So I forgot that's-Stephanie:We will link it up. Don't you worry. Cool.Dan:Thank you very much.
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.
Imagine this: You’ve developed a new product. One that you know works… and that you know people need. There’s just one minor problem: Selling that product requires you to not only enter a battlefield filled with regulatory land mines, but face competition with billions of dollars at its disposal. We’re seeing this situation play out in the multi-trillion-dollar industry that is supplement and pharmaceutical sales. It’s an industry that entrepreneurs everywhere are trying to make waves in, and just like any other industry, finding success means coupling the right product with the right strategy.Zak Williams was able to kick the door open with his company, PYM, which sells all-natural amino acid-infused chews that have proven mental health benefits. Zak is the son of the late actor, Robin Williams, and he is using his own experiences navigating the ups and downs of mental health to help him build PYM into a company that advocates for mental health support in whatever way works best for the individual. Practically, that means working out a business strategy that allows PYM to not compete against big pharma, but sit alongside it. And it includes developing new kinds of convergent experiences that allow consumers to operate in a physical and digital world simultaneously. Zak explains all of that and more on this episode of Up Next in Commerce. Main Takeaways:Play Where You Can Win: For companies that are selling natural products, trying to sell in the same channels as big pharma would be a mistake. Not only will you not be able to make the same claims about proven solutions, but you will not be able to afford to acquire enough customers to make it worth it. Instead, find other channels or methods of marketing where you can stand out, either organically, or in a more affordable way.Do Your Research: Making wild, unproven claims has always been a bad strategy for brands, but it is especially reckless when it comes to how something can affect a person’s physical or mental health. Invest in real research to back up the claims you are making, and be authentic with your message. Rather than trying to convince customers your product can cure something, help them open their minds to new experiences and products that might be part of a daily ritual or personal blend of what works on an individual basis.Convergent Experiences: As a new normal emerges post-pandemic, brands will need to focus on creating convergent experiences that allow people to engage in the physical world while still using a digital experience to achieve goals and objectives.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 your host, Stephanie Postles, co-founder at Mission. Today I'm chatting with Zak Williams, the co-founder and CEO at Pym. Zak, welcome to the show.Zak:Thank you so much, Stephanie. It's a pleasure to be here.Stephanie:Yeah. I'm very, very excited to have you on. I was going through my amazing prep dock, and I first thought that Hillary was playing a joke on me when she wrote down Zak's the son of actor Robin Williams. She likes to put in silly things to see if I'm going to go with it. Then I'm like, oh wait, this is actually real. I started reading a bit about your story and your company, and I would love for you to actually start with that. Tell me a bit about what led you to Pym, and yeah, expand on that, because I was really excited to hear about the full story.Zak:Yeah, certainly. What led me to starting Pym, the mental health support company, started very early on in life. I had anxiety throughout my teens that manifested into something more extreme after my dad, the entertainer, Robin Williams, died by suicide. I found myself experiencing bouts of depression, also extreme anxiety and stress episodes. I was feeling like my life was becoming unmanageable. I was trying to use alcohol to self medicate and was trying to find any other solution that would work. I tried cannabis products, had prescription pharmaceuticals, which work for many people. For me, I didn't find the solution that necessarily helped me in a way that would work in perpetuity. Then I found some help in things like talk therapy and alike.Zak:Through that experience, a couple things happened. One was I was diagnosed with post-traumatic stress disorder and was dealing with a lot of issues associated with that. The other thing is I started to find help and support through committing to service, specifically working with mental health organizations, not for profits; supporting them around things like governance, organizational development, fundraising initiatives, strategy, business development. Whatever it is they needed help with, I wanted to jump in and support because I found actually that commitment to mental health organizations really helped me. Through that experience, another thing started to happen, which I found that me sharing my story and what I went through really helped others while helping myself. I found that being vulnerable and taking a lens of vulnerability and opening up really ultimately ended up starting that process of healing for me. I found that mental health advocacy is one component.Zak:The second component is when I took self medication out of the equation, using alcohol, and by the end I was drinking alcoholically and it was just not good for my mental health. I was feeling very emotionally dysregulated and not having a great time. When I cut out alcohol, I was still really stressed and really anxious, and realized that I needed something to support me throughout the day. I found a solution that my wife introduced me to. My wife, Olivia June, who's also co-founder of Pym. She turned me on to amino acid formulations, which when I tried them were a game changer. They helped me feel clear and erased the anxiety that I was feeling and that was ultimately crippling me. She was introduced to this sublingual tincture by one of her doctors. When I tried it, I was just like wow, this is transformative.Zak:Armed with the insights of mental health advocacy is very healing for me, and amino acid formulations really helped support me throughout the day, I realized there was an opportunity to develop something that was very near and dear to my heart, but also helpful for people while focused on the core mission of mental health support. I started Pym with the lens of creating a brand that stands for mental health support, like Red Bull stands for energy. In starting the company, we kicked off the food science and product development element of that in 2019 and created something that was both safe and effective, while also being delicious. We worked with a food scientist named Lena Kwak, who was the director and research and development for The French Laundry, which is a restaurant in northern California; a very well-known internationally regarded restaurant in California. We wanted to create something that had a great taste and smell and a texture that felt unique but also toothsome.Zak:We came upon something that we ended up testing with our early beta testers that they liked and they found effective. We kicked off the commercialization phase when we decided that everything was in line with not only how we wanted it, but how our beta testers felt it should be. Through that process, we hired the chief operating officer of Sugarfina; a wonderful man named Scott Cuillard who came on as our chief operating officer, and he accelerated the process of commercialization by 200%. Now we're at market. We're just getting this feedback from our customers and early advocates that our product is a lifeline and it's helping people in a very significant way and we're doing these giveback campaigns where we're supporting mental health organizations, starting with Bring Change to Mind, which is an organization I'm on the board of that focuses on developing communities and high schools for mental health support, while launching campaigns to break down the stigma associated with mental health.Zak:Moving into 2021, we will be deepening our relationship with Bring Change to Mind and have a portion of our proceeds of every sale going to supporting building mental health communities and high schools. That's what we've been up to in a nutshell. The why behind it relates very much to mental health advocacy. We see ourselves as a brand that stands for advocacy and we want to really triple down on supporting the movement associated with mental health. That's what we're all about.Stephanie:That's great. It seems like this kind of product would have a lot of barriers to entry, because when I think about the market right now around mental health products and CBD and cannabis and all this stuff, there's already a market there. There's already been a lot of messaging, a lot of advertising before a product based on amino acids, which honestly, I haven't even really heard of that. Tell me a bit about how you overcame those barriers and educated new audiences or are starting to. I know you just recently launched, but tell me a little bit about that process to really get your product on the front of people's mind.Zak:Sure. Amino acid formulations for mental health support is not a new thing. We didn't miraculously come upon something that was new to the world. They were gaining momentum and popularity as a way to provide mental health support by balancing out the endocrine system in the 80s and 90s. Something happened in the 90s that set off an era of a pill to solve all your problems in life. Kind of that era of taking a curative approach to symptoms. Do you know what that event might be?Stephanie:I'm guessing you're talking about prescription pills, but I don't know what the event is.Zak:Yeah. Actually, it's a very specific prescription pill. It was the creation of Prozac. The profound thing about Prozac is it was a product that would function as an antidepressant that would not kill you if you took it in excess or stopped taking it, because at the time, the available toolkit of prescription pharmaceuticals had toxicity associated with them. In certain situations, you could take a product and if you stopped taking it, you would be at risk of severely debilitating affects in the like. Prozac created kind of a safe mechanism to provide mental health support. By the way, I'm a big believer in prescription medication being helpful for many, many millions of people. I don't want to make it seem like I'm not supportive, but the momentum that amino acid formulations were getting kind of fell by the wayside and didn't favor of this era that lasted a couple decades of a pill to solve all your problems.Zak:It's only been in the last five plus, just over five years, from my perspective, that the whole idea of seeing the individual as a system, as a collection of interacting organs and functions working together to help support and sustain the body, that idea and premise has really been embraced in a major way by the medical community. Going hand in hand with that is the idea and premise that you can take certain products, to kind of balance yourself out, because they provide support for a number of different systems and create kind of a balanced ecosystem to better help you. That's kind of where amino acid formulations kind of come into play.Zak:From our perspective, we just concentrated these existing amino acids in a way in which they actually provided a more comprehensive form of support for stress and anxiety with our first product. That's the story in brief, but the challenge is very specifically we need to popularize amino acid support as a way of providing mental health support, because there's science and research behind. Science, research and studies behind amino acids being helpful for people, but people aren't too aware of it.Zak:As part of forming the company and making the effort to formulate something that's helpful for people, we established the science advisory board from Harvard Medical School, UCSF, USC, and MIT, and with specific focus on neuroscience and neuroendocrinology, with some mental health epidemiology being an element of that as well. As part of that, we are in the process of establishing a pre-trial study, which we'll then use as a foundation to go into an actual clinical study that we'll be using to really get a deeper understanding of how we can provide decisive support for the mind and the body. We're kind of in the brave new world of natural compounds providing support both for the brain and the mind and also the body, but I'm an advocate and believer in compounds that are safe and effective.Stephanie:Yeah. It does feel like the timing's right. 2020 is a year where I've at least seen a very big shift in not only healthy living, but people actually looking into the source of what they're ingesting and thinking about healthy alternatives to not only their diet but also things they're taking, whether it's prescriptions or whatever it may be. Stephanie:It feels like the market's ready for it, but then figuring out ways, like you're doing, to pull it together and put it in an easily, I guess, consumable format where people kind of know, oh, here's the five things that are coming together, here's what they're going to do. Someone's already done the science behind me, instead of trying to piecemeal these extracts and things off of Amazon together to try and fix a need based on all the YouTubers and influencers and people who are telling you oh, this is good for this, and this is good for this. It's so much information now.Zak:Right. That's what I was doing. I was cobbling together an experience that helped me, but it was a bunch of different products. I agree. I think that there is a major opportunity on the research side too. There's some great companies that are focused on establishing more research through studies. Some registered, some focused more so on doing the research to really understand how things work prior to actually doing registered studies. There's organizations and companies that are focused on actually creating frameworks to do the testing. I will give a specific shout-out to my buddy, Jeff Chen, who was one of the founders of the Cannabis Research Initiative at UCLA, and he recently started a company focused on doing research around natural compounds. His new company, Radical Science, is hyper-focused on establishing frameworks, specifically clinical frameworks, around testing for natural products. It's so essential that people actually really start understanding what it is they're putting in their body to support themselves.Stephanie:How do you approach that regulatory field? Like you said, to me, it sounds so scary entering a market like this one where you're doing things for the first time, it's new, people aren't used to it. How did you approach this field and did you find any quick paths to get past some of the crazy rules and regulations to be able to actually start creating a product and testing it and seeing how it would work?Zak:Yeah. Great question. It wasn't a cold start for me. I have several years of experience working with complex compliance and regulatory environments due to investing, advising, working within the cannabis industry.Stephanie:Got it. Okay. That's good background. You weren't a newbie to this. I've done this before.Zak:No. The lens we take. I say we in terms of our team and our advisory board is prioritizing compliance and safety. In starting the company, we sought the most sophisticated advising we could get. We need to continue prioritizing safety as front and center with what we do. We're a dietary supplement as a product class, and it's important to consider how we make claims. We are very cautious with how we do so because from our perspective, we are given the privilege and opportunity to provide support for people given a specific framework, and we want to be considerate of that framework. The key thing for us is as we go about doing studies and the like is we want to develop a deeper understanding of how we're actually providing support for people.Stephanie:Is your goal to not just be a dietary supplement eventually?Zak:The big goal for us would be to become a doctor recommended product, or there's a class of products called a medical food. What a medical food is is a product that is meant to support specific disease states in the like. It's a product class. It means there's a lot of research behind how it's been effective to support different states. You can make specific sets of claims.Zak:From our lens, the reason why medical food establishing that type of status is important for us is because that way we can actually say we've done X amount of research, it's shown to be statistically significant, and we can really make these specific claims around supporting people. That's a process. That takes a long time to do. It's not inexpensive. There's stages that we're required to kind of get through to get to that point.Stephanie:How much money are you estimating it could cost to have your product become medically food stamped? That's a weird term.Zak:There's a range. Depends on what type of condition we're seeking to support and how long the study is meant to be conducted. Generally, these studies are months long. In some cases, over a year. It's not inexpensive. Let me frame it like that.Stephanie:Yeah. I guess that it what makes me worry about maybe new entrepreneurs who see opportunities or if they're like you, but they don't have connections and they don't have the story that you have and maybe the status. You'll probably be like, don't say that, but you have a lot of things that maybe a lot of others don't. It seems like innovation's going to kind of stall if it takes so much money to get something natural into the world, or a blend of something natural, and then to be recommended over top of prescription drugs where these pharmaceutical companies have huge amounts of money and marketing.Stephanie:I read this whole book about... what was it called? Let me think. It was called like the cure to cancer or cure of cancer. Something that was abour apricot oil and the apricot seed. I don't know if you've ever read this before, but it was about how this guy was showing that apricot oil, I think that's the kind of oil it was, was having a big impact on cancer and cells and all this. All a sudden, these big pharmaceutical companies start putting out hits on him. He had to go to a whole different country to prescribe it. It seems like an insane world to even try to do something new just to start, and then also not having a huge budget or connections. It doesn't feel like anyone can enter this market, really.Zak:There's ways to do it. The barrier to entry in terms of launching a natural product is not as high as, say, launching a pharmaceutical product. You have to make certain assertions to say hey, this product will be effective. It seems to help people, and you have to generate demand. We've very much in the business of demand-gen. From a Pharma perspective, I would say that pharmaceutical companies are actually taking a lens of openness towards utilizing natural compounds to better support people.Stephanie:They're not taking out hits on you.Zak:No. Where it gets challenging is if you're going out and saying, we have a mental health support solution, and you go in certain channels where you're trying to advertise, you just get squished. You just can't afford to acquire a customer when you're talking about going in a channel which people are seeking certain mental health support solutions through search, for example.Stephanie:You have to find ways to maybe be innovative to not have to rely on the same channels as maybe the big Pharma companies and find ways to get to the users who are probably looking for that, but they just don't know exactly what to look for or the terms to search for.Zak:The big advantage that entrepreneurs should look for when it comes to creating an edge, an unfair advantage in this space is distribution advantages.Stephanie:Tell me more about that.Zak:Direct to consumer, there are some advantages, but there's also some disadvantages. We have had limited success with paid search. It's just hard for us because when people are searching for specific needs, that can be very expensive from an SEM perspective.Stephanie:What do you do instead if paid search is expensive for us? What kind of channels are you maybe looking at instead or experimenting with where maybe you're finding better results?Zak:We've had enormous success with earned media and organic SEO in the like, but that's a strategy we set out from the get go in applying. I come by our company and the products very honestly. Part of what I do in mental health advocacy is just share on a story consistently and when it's combined with Pym, people are curious. Sometimes they end up being drawn and attracted to our product. The thing too, which we found has been helpful for folks is that we're not advocating for a product to be a cure-all. It's actually kind of I don't want to say the opposite, because that's not quite what it is, but it's kind of adjacent to that. Really what we're saying for is our product's a catalyst. We want to get people into the mindset of prioritizing mental health hygiene as part of their daily rituals. Hopefully our product's a catalyst. If they're taking our product as the solution for their mental health support over the course of their day, that's great, but ideally, they should be doing other things to best support themselves.Stephanie:I think that's the messaging that will win going forward. All the companies I've had on the show so far, so many people talk about authentic messaging and not just having the same kind of corporate speak like maybe they used to years prior or something. I think thinking about how to craft that going forward, it's actually more trustworthy if you say something like, this isn't a fix. This is meant to be a part of your daily routine along with exercise and eat healthy and whatever else you need to do to stay healthy.Zak:Yeah. The thing for us we really want to push for and advocate for, something I call enrichment loops. Meaning if you come to our product and take it on a consistent basis, hopefully it adds value every time. Meaning you're clear headed, you can learn something, you can engage in an activity that's helpful. If that's not the solution for you, then we're not going to push it on you. Do something else that helps you. Again, this is where prescription pharmaceuticals, if you're finding a solution with prescriptions, by all means, take that solution. If it's meditation, if it's mindfulness activity, if it's a fitness regimen, If it's nutrition. For most people, it's most likely a mix. For me, it's a mix of meditation, eating well, some fitness, but I could definitely be better on it. I take Pym because it helps me. I'm a big believer in talk therapy and community support groups. That's my mix.Zak:To close on the unfair advantages in distribution. If you have a digital channel like an app or something, we're exploring creating a companion experience. That gives you an ownership of being able to really provide unique insight, pushed out notifications, establish a foundation of data that better helps you understand what it is a customer needs and there's an advantage there. I think blending DTC with Omnichannel is a huge opportunity, but Omnichannel can often work as just establishing brand presence that ultimately pushes people into DTC, or vice versa. It could be DTC that ultimately pushes people into a daily loop, ideally an enrichment loop, around purchasing products at their natural grocer. Okay. I'll close at that, but I think focusing on unfair advantages in distribution is how entrepreneurs will get ahead in a very challenging space.Stephanie:The one thing I've heard a lot is a lot of entrepreneurs that I've talked to on the show, a lot of them have really good stories, but not everyone tells it. Some people are hesitant to tell their story. Did you experience this with everything that happened? Did you ever feel a need to pull back and you weren't sure if you wanted to share or you weren't sure what you wanted to talk about? Tell me a bit about how you thought about sharing your story and resonating with people. Were you scared at an point to do that, because I've heard a lot of people have been? I don't know to tell.Zak:Regarding story, look, the lens I take is that there's great strength in vulnerability. I've been guarded a large part of my life, and not sharing my experience and alike, I've realized that I was losing out on opportunities to help people. I was given many advantages in life, and there are elements that have been disadvantageous. Instead of seeing it as that and seeing it as kind of a foundation for resentment or being annoyed around certain things, I say, this is just part of my experience. There might be shared experiences or there might be something that would be unique to your experience or not very many people, and I think that needs to be embraced.Zak:My whole thing is share my perspective and story. As it relates to Pym, try to be considerate of really the advocacy that underlines what we're doing as well because that's what really matters at the end of the day. I think people just need to find what it is that they want to tell, and really understand that they're crafting their story in the present, in the now. You don't want someone else's story. Own your own. It's a muscle. I had a lot of fear and anxiety around sharing stuff for a large part of my life.Stephanie:Now you're talking about even before your dad's passing you were not very vulnerable. What pushed you to want to start sharing, and why do you think you were holding back before?Zak:I think I was doing certain things that I was ashamed of. Drinking has always been a problem for me. I'll be perfectly honest, and it was something that only came to a head where I was like whoa, this is getting out of control after my dad died by suicide, but prior to that, it was something that was a challenge and I wasn't liking doing it. I think there were elements of my story that I was ashamed of, perfectly frankly. To be perfectly frank about it. In that, I realized there's certain elements of my story that are private and I relate to being considerate of the sphere of individuals or communities that are titled to that. Then there's elements that I love to share and talk about. The thing for me is when it comes to mental health, talking about mental health and alike, I like talking about it because it's very healing for me.Stephanie:Mm-hmm (affirmative).Zak:Yeah.Stephanie:Very cool. Before the show started, we were talking a little bit about converging experiences, and I want to hear how you're thinking about this, especially with probably giving certain talks that now, this past year, had to all be virtual and not as much in person. Tell me a little bit about how you're thinking about online and offline blending and what you guys are betting on for next year.Zak:Well, the big bet we're making is that people will continue needing mental health support products.Stephanie:After 2020, yes.Zak:Yeah. Here's the thing is that relative to the pandemic, there's been a shift into the COVID pandemic. We can talk about the parallel mental health pandemic, which is a thing too. There's been a shift to kind of embracing and engaging, or customers, communities, populations embracing and engaging in digital experiences, whether it's telehealth, things like that or for meetings, remote work, Zoom, things like that. We're hitting the stage where we're starting to see what a post-pandemic world will look like. Just little glimpses of it. There will likely be people wanting to connect with other people in person, people wanting to go out and shop and dance and eat out in the open. There will be certain habits and there will be people who have become acclimated to digital experiences, but people will also want to go out into the world. I think it'll be interesting to see the blend of online and offline that's going to be this new paradigm. I think as we're thinking about it Pym, we're very much thinking about establishing a companion experience to support people throughout their daily activity. Zak:For us, there is a need to really establish a better understanding of how people are requiring mental health support products and experiences. In the neuroscience community, there's something called an adjuvant experience, which has shown to be very helpful. What adjuvant means is... it's very simple. It's just something in something else.Stephanie:Something in something else. Wait. What? Sounds simple, but I don't get it.Zak:No, it's just an adjuvant experience is talk therapy and some sort of prescription protocol.Stephanie:Oh. Okay. Blending two things together. Got it.Zak:Yeah. That's adjuvant experience. From our lens, we wanted to create an adjuvant experience that is fun, accessible and accretive in terms of delivering value and support for people. The two things that are most helpful, at least based upon my experience talking with researchers and doctors and scientists about how consumer oriented mental health support experiences can help people is insight and community. The insight component involves behavioral recommendations, maybe data, specific things that help people live a life that they want to live. The community component involves supporting authentic connection with people. Those are the hints in terms of how we're thinking about developing an adjuvant experience, which ideally we hope to be convergent.Zak:I see there's an enormous opportunity, and it's very hard to get right. I'll say that. It's in the cake walk, because you need to really factor in blending the online and offline experience into something that feels natural and seamless and ideally, fun. I think a lot of companies are going to be taking that tack, because events are going to be really big, people are going to start eating out again, people are going to start shopping beyond just kind of going out and doing a foray out into the wild and then coming back.Stephanie:Oh, it just went to Costco. What a blast.Zak:For instance, where Target has really done an excellent job is on their pick-up experience. It's been a game changer for Target this year in 2020. Where you shop, you order online, and then you go to Target and you pick things up. You pick stuff up. That's technically a convergent experience, blending online and offline because it involves you having to engage in the physical world and using a digital experience to achieve your goals and objectives. I think most companies are going to have to think about that in a very meaningful way in order to maintain an edge. I think telehealth platforms have achieved a huge boost this year, but there's going to be some reversion, and it's not going to be a reversion to the previous me. They need to think about okay, what is it that we can do to establish an edge to further support people when they go out into the world again?Stephanie:Mm-hmm (affirmative).Zak:That's essentially what I mean by convergent experience. From a mental health support perspective, it's really about developing an adjuvant experience. X and Y together at last to create better support for people than the individual parts.Stephanie:Got it. I love that. That's a very good example and description, and I feel like I learned a new word. This is a win all around.Zak:Hey, it's my pleasure.Stephanie:All right. We have about 10 minutes left. I want to shift over to the lightening round. The lightening round is brought to you by our friends at Salesforce commerce cloud. This is where I'm going to ask you a question, and you have one minute or less to answer. Do you think you're ready, Zak?Zak:Yes.Stephanie:All right. What's up next on your Netflix view or Hulu or whatever you use?Zak:I'm excited about watching The Crown. It's been on my list for ages, and we're starting to get through our queue. Stephanie:A lot of people have said that, so I'm guessing you're going to enjoy it. All right. What one thing do you not understand today that you wish you did?Zak:I wish I spoke Japanese.Stephanie:That's a good one. I love Japan. It's my favorite.Zak:I love Japan too. For me, the process of learning a new language is already daunting for me. I'm not a polyglot. I don't learn other languages easily. At some point, I should just take the plunge and just start. That's my goal, learning Japanese.Stephanie:That's awesome. Sounds like a good goal. If you were to have a podcast, what would it be about and who would your first guest be?Zak:My podcast would be about getting to the very core of people's experiences, like what's their truth. Whether they know it or not, hopefully we can uncover that truth. What is it that they're all about? My first guest would likely be one of my favorite people on the planet, Dr. Adam Gazzaley, who is an advisor for Pym and a scientist and a profoundly interesting person that I'd love to get to the bottom of finding his truth.Stephanie:This sounds like a good show. I think this needs to happen. What's the nicest thing someone's ever done for you?Zak:Well, I'm a big fan of my son, Mickey.Stephanie:That's good.Zak:Having my wife, Olivia, her having carried Mickey for nearly a year.Stephanie:That's sweet.Zak:That was extremely thoughtful and considerate of her.Stephanie:That was very sweet. I like that. All right. Well, I have two more. What's up next on your reading list?Zak:There's a bunch of things, but the main one is Jim Simons' biography.Stephanie:Cool. All right. Then the last one, what one thing will have the biggest impact on ecommerce in the next year?Zak:The one thing that will have the biggest impact on ecommerce in the next year would be, I think, oh man. That's a really good question. I think it very much relates to more seamless experiences, frictionless experiences. Even though it is quick and can be considered convenient, it could be so much more convenient. I think the disrupters that are establishing quick checkouts, embedded checkouts, connecting wallets to checkout experiences, things like that, that's going to be a game changer, because people who have an edge there are going to really be able to see the difference in their bottom line. I know that's a very tactical consideration.Stephanie:That's a good answer.Zak:I think that's really one of the game changers.Stephanie:Yeah. You'll have to check out our interview with the CEO of Fast. It was very fast, and a good interview and definitely opened up my eyes to what a frictionless ecommerce world could look like.Zak:I think Fast is great.Stephanie:Yeah. All right, Zak. Thanks so much for coming on here and sharing your story and being vulnerable. Where can people find out more about you and Pym?Zak:Well, you can find out more about me through tuning into this podcast and other advocacy work I do specifically. I'll push people to advocacy. I work with organizations called Bring Change to Mind, United for Global Mental Health, Inseparable, and then Project Healthy Minds. Those are the four mental health organizations I work with. You can find out more about me through the work that I do with those organizations, and then you can find out more about Pym at youcanpym.com. Y-O-U-C-A-N-P-Y-M dot com.Stephanie:Amazing. I will be checking it out after this. Thanks so much. It was really a pleasure to have you on and love to have you back in the future when your app is out.Zak:Awesome, Stephanie. Such a pleasure.
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.
Access to goods is still an issue for millions of people around the world, but recently, ecommerce has been leveling the playing field. With so many direct-to-consumer operations in business today, the average consumer has more choice and therefore more access than ever before. But there’s one industry that stands out as lagging behind this trend: Coffee. That’s one of the reasons that Pernell Cezar co-founded BLK & Bold Specialty Beverages. Pernell is a long-time coffee lover and saw an opportunity to turn that passion into a business that could also make a big social impact. Historically, coffee has been hyperlocal, but he envisioned a business model that democratized access and brought specialty coffee to everyone. The only problem was that neither Pernell nor his co-founder had any experience in the coffee business other than as consumers. On this episode of Up Next in Commerce, Pernell reveals how they were able to turn BLK & Bold into a nationally-distributed product, including how they turned a mission-driven ecommerce business into a retail one by securing partnerships with places like Whole Foods and Target. Plus, he explains the importance of giving potential customers multiple ways to find your product, and the value of finding mentors to help you fill in your blindspots.Main Takeaways:The Way In: Having multiple ways and messaging for potential customers to find and want to engage with you is a great way to build a base. But when one of those ways is through a social impact mission, you have to also be sure the product quality and experience delivers. Tune in to hear how Pernell thought about striking this balance.Stick To The Plan: Entering retail can be an exciting milestone for your business, but it’s important not to rush the process. You should have a checklist of things you want/need to accomplish in order to set yourself up for success. Whether it’s with your packaging, other partnership, or logistics, be patient and get them done because a failed retail launch is hard to come back from. Share With The Class: When you’re just starting out, be open about what you are doing and on the lookout for anyone who might be able to help or mentor you. Small conversations can lead to critical connections that can propel you further than you’d be able to get on your own. You will have blindspots, and addressing them sooner means saving more time and money in the long run.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. This is Stephanie Postles, and you're listening to Up Next in Commerce. Today on the show we have Pernell Cezar. He's the co-founder and the CEO of BLK & Bold Specialty Beverages. Pernell, welcome.Pernell:Thank you for having me.Stephanie:I'm excited to have you on the show. I actually just saw some of your coffees in a Whole Foods around here. I was like, "Hey, he's joining us." It was perfect timing.Pernell:[crosstalk 00:00:30]. I love it.Stephanie:I'd love to hear a little bit about BLK & Bold, what is it? And let's dive right into your founding story because I know you have a good one.Pernell:Sure thing. BLK & Bold, we are a coffee roastery out of Des Moines, Iowa, founded about two and a half years ago really from the length of conversations that my childhood best friend, who's actually my co-founder, his name is Rod. I'll likely reference him a few times here. Him and I had just in teenagers, talking about whatever to being professionals and being time strapped and wanting to make sure that we were spending our dollars more consciously to support initiatives that we really felt we didn't have a lot of time to put into like we wanted to.Pernell:After so much ideation around our ritualistic beverages and coffee and tea, we really decided to focus on connecting everyday consumers back to their community by way of turning those beverages into vehicles for impact, and in which we launched BLK & Bold with the initiative to tangibly give back to disadvantage youth by way of giving 5% of our profits back to initiatives across the US that service specifically that demographic, but then also making specialty coffee and the delicacy of coffee and tea more accessible in conventional spaces where people shop already and not have it be confined to the independent shops that exist in neighborhoods across the US.Stephanie:Very cool. How did you decide to start with coffee? Because I read you didn't really have a background in that, and I was watching your video where you guys were starting it, I think, in your garage and you were trying to figure out what buttons to press and it was really fun just seeing how you really didn't know what you were doing. How did you land on that idea and decide like, this is the one.Pernell:Professionally, I didn't come from the coffee industry per se. However, as a consumer, I have user experience as a consumer. And going-Stephanie:You're a pro.Pernell:Yeah, exactly. Going across that journey, I always call it the coffee spectrum in the sense of what you like and what you don't like. And that's really where the curiosity book hit us where just traveling so much professionally in one state of my career and I just became immersed with the coffee shop culture. Visiting city A, city B, city C and falling in love with these different shops but they all have different menus. And so you learn to appreciate the different tiers of coffee, especially the specialty coffee, the more premium side of things, and really enjoyed that.Pernell:But again, the accessibility of these different experiences or product experience that we learned was hard to consistently access. And it then became a matter of like, "Okay, well, what is this? And why is this?" And from there, it was a matter of, "Okay, well, let me see if I can make this." And that hints the sample roaster journey back in our garage with me really just wanting to see how is this made, and the complexity of it went down the rabbit hole from there. So I always equate it to people that have heard someone's craft brewing story and starting that journey in their basement with a few tools here and there. It's pretty much the same approach from just a coffee junkie and wanting to learn more about it, but also have access to the different things that I was learning. So just kind of taking in our own hands.Stephanie:I love that. What were some of the biggest surprises when you were trying to find the beans and the equipment and all that? What were some of the biggest surprises you encountered when starting out?Pernell:I would say, the initial shock was just how massive, complex, the coffee manufacturing side is, whether you're talking about the sourcing of beans, which was part of your question, but also literally the manufacturing piece of it. The diversity of equipment needed, the diversity of capabilities, there's just a ton of science that goes into the process of turning a crop, which is coffee coming from the pit of a coffee cherry plant, or a fruit from a coffee cherry plant and turning that into this fine, ground product that you are brewing and drinking. And the nuances in between that to uphold integrity of that is really the really enjoyable part of the science that just, you don't know until you peek behind the curtain, fall down the rabbit hole and the learning process begins from there. So it's not as difficult to fall in love with if you're curious, because of just the many nuances in ways it becomes an art after you get going.Stephanie:That's very cool. And did you guys launch ecommerce first or were you also exploring retail as well? How did you think about that launch?Pernell:Sure thing. Obviously our go-to-market strategies much more cemented in our ideation of building the brand upfront. And so to make more sense out of that, for us, looking at building a brand in coffee in the modern day coffee climate, mind you pre-COVID, for modern day coffee climate where you have independent shops and then you have of course the conventional grocery isles and the lack of accessibility, but you also have ecom continuing to be ingrained in people's lifestyle in purchasing habits every single day. But when you look at part of the reason why coffee hadn't been accessible so much in more conventional spaces, ecoms, is because of how hyper-local the product is, and the hold coffee shop culture has on people's behaviors and what their preference is.Pernell:For us, it was a matter of, well, we are looking to shift the economics of how currency impacts domestic youth. And in order to do that in the commodity category, you have to be able to scale it. And if we go into shops, the margin is much tighter where we it's harder to make a sustainable contribution. But if we manufacture and we wholesale, it gives us more room to make the contribution more sustainable. And by way of that, we need to make more access and scalable environments such as retailer distribution and/or ecom. And so in thinking of that and understanding that, but knowing that, all right, we're going after this with little to no resources self-funded and with our own validation and learning curves to go from that. And so we for sure launched with ecom as our fastest point of entry, but also a place where has to validate the concept.Pernell:And so our ecommerce platform as well as social media, the idea of ... well, there's tons of micro roasters that pop up every day, but to pop up, but also with a very different rhetoric on being this domestic impact model, we needed to find validation that consumers were interested in that as well. And so very long-winded answer to, yes, ecom was the way we started, very much part of our DNA in the sense of being ready to own our message and also provide accessibility for people given that we don't have our own storefront.Stephanie:I love you started with the social impact model to derive results you wanted. How much did that really push you to think bigger and be like, "I'm not just going to go to one of the coffee shops and sell to them. We need big results with our model and to do that, we need the wholesale model. We need retailers, we need ecommerce we need like everything."Pernell:Yeah, for sure. We have to believe upfront, and building a hypothesis for a business that the sediments that resonated with us on there being a void of values and tangible values that were relevant for us, that other people, if that opportunity existed, we'd align to that as well. And I guess because of that, that allowed us to really focus upfront on what channels make the most sense, I guess. And so the shift in consumer behavior and the validation from consumers shifting their behavior, I want to back up and say, not behavior more so than mindset. We want consumers to still consume coffee, consume especially coffee, but we want them to know that brand B versus their brand A actually has a different value proposition that allows you to extend your impact without really changing your behavior. And that allows us to actually become considered a lot earlier than going at it in a more conventional way.Pernell:And so that was very much key for us in the sense of how do we make it easy for people to extend an impact without having to change their behavior, which allows us to then get them on board, allows us to get retailers on board, allows us to get businesses on board, all around shifting the commerce to be able to scale the impact domestically. So it's a little much of a lift for everyday people, but to have a much more relevant tangible sustained impact.Stephanie:Got it. And it seems like that story in that messaging definitely helped put you guys on the radar of a lot of new customers. Was that one of the key ways that you acquire new customers and they found out about you was getting that messaging out there and getting that PR out there for like what you guys stood for to then bring in new clients, or were there other tactics you used to bring in your first customer?Pernell:Yeah, no doubt. There's a fine balance because for us, we look at multiple entry points or propositions for where we can be in someone's consideration set. And then as they enter into understanding our brand and they learn more about what we stand for and ideally one if not all of them, resonate as well. And that strengthens the loyalty of if they have loyalty to the product, if they entered us through the product proposition, and/or from a brand values, and then they also love the product. And so the storyline no doubt allows for accessibility when we are introduced to someone in a non-tangible space. And so we can scale our story to impact this is normal that we're looking to bring in the sense of domestic social impact versus someone is shopping in the coffee aisle and so forth. So it definitely gives us a much more scalable share of voice that people can discover us a lot faster given the sensorial experience that most people usually choose coffee for.Stephanie:Got it. And at what point did you launch on Amazon? Because I saw you guys are listed there. When did you decide it was the right time to sit on Amazon?Pernell:Amazon was always part of our model as well. It was a matter of the prioritization of the learning curve. We launched June 1st of 2018. We had our core coffee items that Q4 of 2018 set up. And it was really a matter of just having them active so we can learn, and kick the wheels and make sure that we're not doing more harm being on Amazon and not for Amazon's sake but for, again, the learning curve. And then again, transitioning into, let's see, throughout 2019, the trial and error of learning that. But then with 2020 and prior ... let's call it, this 2019 was a matter of being digitally native, but ramping up and preparing to launch in brick and mortar.Pernell:And so once we got past that milestone at the beginning of 2020, of course, fast forward COVID, being on Amazon allowed us to pivot more fully into maturing, what that experience, that digital experience on Amazon looked like. And so while we were on Amazon, let's call it about 15 months prior to launching our formal storefront. When we launched our foremost storefront in early April this year, that's where we really were able to drive people to who we were, what we represented in a way that it was much more convertible given that people were ... this shift of coffee and consumerism and accessibility changed completely of course because of COVID.Stephanie:Yep. So essentially you were shifting over to retail and then COVID hit, and then you were like, okay, now back to Amazon, back to our platform and you had to quickly change once the world started changing.Pernell:For sure. I think the benefit was that we were already digitally native and our site being the hero experience, having an extension by way of Amazon and the size of traffic and consumers they have. But no doubt when it became time to diversify our revenue streams, fortunately, we were much further ahead of the Amazon experience look like then more of the, it's called the indie boutique micro roasters that relied on shops and didn't have a digital experience. They had to then began the learning process as well.Stephanie:You were already ahead of the game.Pernell:Fortunately. The case study for us was a matter of, can we accelerate our awareness curve of what we stand for in order to convert enough people at a healthy enough rate that without having a shop, we can convince those consumers to purchase more coffee for home or those that were buying coffee at conventional grocery areas that the quality and the value proposition of a slightly higher price point is still worth it for them at least to get them bought in? And so the shift of COVID and the states closing and all the shops being closed, it's completely changed the necessity of everyday people to have to purchase more for home and we were fortunate on the front end of that just from a digital standpoint. Brick and mortar as well, because of the timing of us launching was just ahead of the pandemic really showing his face, but the digital pieces was definitely huge.Stephanie:Yeah. Before we get into brick and mortar, I want to dive a bit more into how you sell on Amazon. How does it differ when you sell an Amazon or what are you seeing right now versus your customers that maybe buy from your website or customers that even buy from target.com or something? Do you have different messaging or what kind of things are you seeing behind the scenes?Pernell:We offer a singles as well as a bundles, two packs. And just from a sheer economic standpoint one of the old challenges from being a omni-channel brand that also lives on is retail price and the disruption of an everyday price with the retailer versus what he shows up on Amazon. For us, we worked through Amazon's fulfillment centers and allows us to control the price, but from a bundle standpoint, it allows us to ensure that we have the same product proposition, but in no way shape or form any pricing activity would disrupt because they are from a item count standpoint, different experiences. And so that was a core piece of how we stood up our business initially, and some of our bundle items do better than our singles. The ones that don't do better do about just as strong.Pernell:And so seeing people go on Amazon really as a basket builder, it has been huge. And even from an awareness play on the amount of users that Amazon has, we focus specifically our consumer acquisition on Amazon platform. So we don't really focus on driving people to Amazon because there's so much space to play and win within Amazon as we're still early on as well. To the other pieces, as our site continue to build, we have seen pure incrementality from the Amazon platform where we don't see the shift of trading one consumer from one to the other. It's very key to being an awareness play for us, but then just, we have to also come back to the reality of consumer dynamics. And what does the social landscape look like? What does the economical landscape look like that's impacting those consumers? And the focus on supporting small businesses, supporting black-owned businesses, and then the accessibility of specialty coffee.Pernell:People are much more intentional about whether they want to save a dollar for Amazon or shave two days off Amazon versus support individuals that are trying to build their businesses and support them where margin is much more supportive and favorable. And we've seen the incrementality on both sides from consumers that are more mature on Amazon and those that are really looking to put their dollar further into the business to support the businesses during these times.Stephanie:Yep. That's great. Your users on Amazon, do they seem stickier? Because I often think about like, when I'm checking out whether it's through using Whole foods or whatever on Amazon, they always give me the recommendations or they're like, "You'll just buy this again." And I'm very quick to be like, "Okay, sure." And it seems like I'm a very sticky user when it comes to reorders. How does that customer profile from your Amazon customers seem to differ from people who are maybe just going direct to your website because they want to make sure to support the business and the message and they understand that by going there directly, it's probably going to help margins and the story behind it.Pernell:To a certain degree, our engagement is really high on our platform and with our community and our email list as well as on social. And so we get a lot of stickiness from our existing community and bringing them in. And so from an anecdotal read, there's just a significant amount of loyalty, not just to what we're doing, but what we're offering. And our subscription business is really strong on our site. When we do drop new launches, we also see a quick adoption on those as well, and so we have much more flexibility on those. Just launched a limited edition collection just ahead of the holiday season. We're able to fluidly do that where in Amazon, while it's not a brick and mortar, you still have to have much more lead time built into that versus being nimble as a small business.Pernell:And so even in putting something else that adds a little bit more complexity, it's incremental from a experience, from a product standpoint. Our consumers also still highly converted on that even though we have a strong subscription business. The Amazon piece is, what we see is also very sticky, but we still have much more conventional tactics on whether it's a prize promotion here or there or the affiliate programs that come from press that are driving the Amazon. We see those strong conversion pickups as well. But I would say again from an incrementality, we are pleased with the learnings that we have right now from the stickiness of it, but at the end of the day, we still from the recording of today, we are still, in this pandemic and trying to navigate life through it and the loyalty from coffee isn't going away anytime soon. And so I think people, wherever they're most comfortable with shopping are still highly susceptible to converting because they know that they need that fuel.Stephanie:Yeah. I think that's smart as you were mentioning to develop a different kind of experience on your website, not only with subscriptions, but also limited edition drops. So you get early access to and developing that community seems key. How do you go about, not only curating and developing a community, but also keeping them engaged for that longterm?Pernell:Yep. No doubt. I think the most important piece of this is no doubt customer service and experience. What we don't want to be is a one trick pony in the sense of, hey, we can do these two things really well because coffee is very vast. And as I mentioned earlier, the spectrum of coffee is really wide. And so we don't want to be too linear to offering only certain flavor profiles whereas as people either discover new brands or their options of how they safely access their daily fix of coffee or caffeine, that we then follow it lower in the consideration, or we just have to lean on whatever consumer habits that they had in the current, but we'll then be in the past.Pernell:And so for us, it's a matter of continuing to diversify, evolve what the experience and options are on our platform in particular and try to drive our email list and drive as many people to our site, so we can capture and engage with them so we can continue to evolve with them on their coffee journey and make sure that our offering is healthy enough, that we can do that without gridlocking our operations and our other distribution priorities.Stephanie:Let's talk a bit about retail. You're in some good stores. I saw you're in Whole Foods, Target, and I was reading a bit about how you got in front of these retailers. I think you were going to sourcing call events where they had like pop-up events. And I was wondering, how did you get in front of these retailers? How did you peak their interest and what was that process like?Pernell:For sure. A big piece of BLK & Bold and my co-founder and I bringing this to life was our formal background prior to. We launched this in our 30s, our early 30s and Rod's background being in philanthropy and fundraising with higher education healthcare, and mine being in corporate merchandising, brand business development around packaged goods. And so the lens that we took to the white space of coffee was a by-product of what lanes exists within coffee. And the understanding that the accessibility gap was huge when you stepped out of a premium specialty coffee shop that's in neighborhood A somewhere, and trying to carry that across the country. And so, understanding that we know where the opportunity is, which again, ecom retailer shelves, now we have to build something viable enough that allows for them to consider us from whatever the right starting point is and from the way those retailers test or minimally launch.Pernell:And so our journey throughout 2018 and 2019 was operations, learning curve and validation of consumer marketing. We did a ton of road shows, just consumer shows engaging them on the product. And the aha moments for most of them were the 5% for our youth model that we have. It wasn't where they were introduced to us. It was supplementary validation for them. And so continuing to drive that part. But then also just from formal background within retail, understanding that there's different engagement points. We are a certified minority business enterprise, which is a national certification organizations out like that, where they have shows and tons of industries that attend these to meet diverse or minority owned businesses. And fortunately for us, we have visibility to select retailers that attended these as well.Pernell:In addition to digital platforms, there's one called a RangeMe for those that are not familiar, that is a virtual marketplace for all packaged goods brands and merchants, which is hyper dependent in today's climate, where corporate is not allowing people to travel. And so knowing where to start and having something viable was number one. Number two is being a student of those retailers isles. Understanding who was in the competitive space, how long they were there, what a swarm in they were there for so you can understand what their core consumer was, but then what value proposition do we incrementally bring for that merchant? What problem are we solving for that merchant? And so that was a big piece of when we had our opportunity to engage with these different retailers. Target, for an example, we understood what value proposition we were looking to bring to them. The conversation from there became a matter of readiness operationally, organizationally, to be able to launch and sustainably start with intention, of course, sustainably growing.Stephanie:And was there a bit of back and forth with the retailers when they were like, "We're interested, we love your model, the coffee is great." Were they giving you any guidance on, here's what we think will do well on the shelves or here's how to set yourself apart, or was that really all on you guys to do the research, figure it out and present, here's some maybe new packaging that we think will do well at Whole Foods?Pernell:Yup. For sure. It definitely, it can be either way. We had our first, let's call it national launch or a major launch was with Target Corporation, at the beginning of this year on about 300 ... it was 350 stores across the major markets within the US. The conversation and the process of having that launch was about a nine month process from introduction to essentially the product arriving on the shelf. And this was from our social media engagement and fortunately word of mouth being passed on to Target for a show that they were having, we received an invite and we were fortunate to have an introduction with the coffee buyer and allowed us to further the conversation, this is not only our business model, but our case, the consumer that we're looking to capture and the incrementality of that consumer to retail.Pernell:But then, thereby also helped us understand where our strategic priorities were in a sense of how this space is set up and where there may be room to identify the incrementality if it's really there. And so the feedback on just the core consumer that we're going after and aligning on that was very real. And quite honestly, for us, while we had that opportunity to have the connection and the conversation, we knew we weren't ready because where our packaging was, we had a checklist of key things that we wanted to accomplish before we entered onto a shelf, so we can have our best foot forward, and we were halfway through that checklist. And so the merchant said, "Hey, well, when do you think you're ready? Well, here's the key things that we need to accomplish."Pernell:B Corp certification was one, which was, we hadn't got through the finish line on it yet, and the rebrand on packaging and also some of our operational scalability. And so that nine month journey was really with, understand the strategic vision values and knowing that with accomplishing that, we can have a solid start together to go push it through. In January with that launch then gave us the opportunity to credibly approach other merchants with some understanding that we were already vetted and well equipped to enter into their shelves as well if we had the same alignment on the value proposition. So the Whole Foods conversation was a lot more in the sense of, "Hey, we see what you're doing here. Here's some of the assortment that you have that we think will work really well is some feedback on what may not be yet, but let's get started and let's find out together."Pernell:And so it was much more collaborative in the starting point and from my experience, that's exactly what you want. If you're pitching to retailers with the hope that they will take whatever you're pitching, I made the perfect vision, they didn't ask me a question, they're going to take it. Where the risk is that they don't understand enough of where your blind spots may be, and you're all going to find out-Stephanie:Yeah, you want to partner.Pernell:Yeah. You all are going to find out together and that's the last thing, because it's really expensive to back out of distribution. So any who.Stephanie:That's so smart. I love the idea that you had the checklist going into it and you were open with Target, like, here's the things that we need to knock out. Tell me a bit more about what else was on that checklist and why were they important? Like why were you looking to have that B Corp certification and what else was on the checklist on top of that?Pernell:Sure thing. The B Corp I would say is a major one. I have to remember some of the smaller ones, but the B Corp was a major one mainly from being in retail. And once you learn about B Corp, it's hard to unsee it. But it being a ... it's essentially a independent organization that certifies businesses, those that value stakeholders equivalent with shareholders. And so being for-purpose being equally as important as for-profit and you have organizations like Ben & Jerry's, Tom Shoes, Warby Parker, Patagonia, these major organizations that are all at B Corp, they continue to move into improving society while again, building sustainable businesses.Pernell:And for us with, having this domestic social impact focus, the model doesn't exist. It's unfortunate it doesn't, but that's also a core reason of why we decided to go into this space. And knowing that, given that it doesn't exist and at the scale that we have to start at, we want it to be taken serious to our consumers and our stakeholders on the intention of where we're going while we work on getting there. And so with the launch into retail and being on the national stage, we took it various cities to make sure that we have third party validation vetted out already for us, for people that can engage with the brand.Stephanie:I don't know much about court structures. Are there also benefits that come with being a B Corp?Pernell:Yep. There's different tiers of ... you can incorporate it as a B Corp if your state has that as a legal option. And that I think there's definitely a different tax implications for being a legal B Corporation. And then there for states that don't, and this is the way that it was initially set up is that there's a certification and you're certified by, it's called B Labs, which is the umbrella organization. So you're certified by B Labs. And then as they continue to build momentum and further penetrate their models where the states began to allow it to be a legal entity structure.Stephanie:Got it. And then tell me a bit about, so you're getting into these new retail locations and you're working on your packaging and getting certifications. Tell me about how you guys are preparing for the orders. What were you doing behind the scenes with distribution and logistics and setting up partnerships? What did that look like?Pernell:Chaos.Stephanie:Craziness to say the least.Pernell:Yep. Chaos. Again, self-funded bootstrap and never want to put the cart before the horse was really a matter of trusting our forecast and building enough bandwidth to at least get through the initial hump of a national launch. And so then instead of today, we do everything in-house. We source and we work with our importers. They move the goods right with export departments, but we are identifying what origins we want to source through. We're doing all of the testing cupping and validating the integrity of what we're putting into our product. We micro roast in-house, we package in-house and we work we shipping partners to get goods out the door.Pernell:And so at the time, we had graduated from the garage and in to a shared production space with a local brewery. That's where we had our commercial roaster and we essentially had to tighten up our ship, bring onboard a few individuals that had coffee background in roasting and packaging to help us get the Target launch out of the door. And so that was a mad hustle because again, it was, here's what we are, here's the bandwidth we have, we're going a 100% capacity, sometimes a little bit more than that to get the launch out of the door with the intention of sourcing a new location that we can grow into. And so, fast forwarding that story, we had identified a location and we're closing the deal in March. And of course pandemic changed all of that. And so we found ourselves still running idol in that location for a while, but it wasn't with a bevy of orders and things until we started getting further into the summer. And that's when we got flooded in that space with orders go on and so forth.Stephanie:If you were to look back and change anything, what things would you have done different if you were to start again? And it can't be everything. You just got to pick me like, there's this one thing when I was setting up my partners or distribution or with the retailers I would've maybe done this differently.Pernell:It's tough because there's been too many reasons because there's so many learnings and it sounds so cliche, and that's why I was trying to prevent it sounds so cliche, but there are so many learnings that if I didn't learn them then I'm going to have to learn them later and I just don't know it yet. Because we are continuously learning and it's not just about coffee, but it's about, you're in a space where we are looking to win over over the longterm consumers into not only what product was selling, but the impact that we're selling and there's so many curves along the way. And so I am happy to have the learnings that we do have in the bank checked off. I think more so it's a matter of how do we continue to broaden our view to mitigate blind spots?Pernell:What I would say is one of the things that was hugely helpful early on as we were initially launching with literally our hearts on our shoulder was sharing what we were looking to build with some other professionals, just more mentor related people in the network. And as our informal mentors, that fortunately connected in to a formal mentor that was previously executive within the industry and just gave me a history download on how coffee and the industry came to be. And that in itself, just broadened context more so than why you have to, you're crossing Ts and dotting Is and every single step of the process. But to have that broader context of how the industry around you got to its point just fast forwarded that blind spot for sure. I would just try to color it all in.Stephanie:Do you have other mentors right now that you rely on or that help when it comes to guidance or showcasing what else is happening in the industry or ecommerce as a whole that you lean on?Pernell:Yes and no. Informal, for sure. Students of work, without a doubt. I think it's important to have a broad lens on what's working across different industries in digital in particular. And so if you rely on someone that's hyper-focused on a particular industry, then it may mitigate you from having your antennas up to learn about other things that are working elsewhere. But I'd say informal, yes. But tapping into what's working for them and learning from there, it's really hard. This may be a me statement, but I'm sure it may resonate with someone else out there. It's really hard to move at the speed of entrepreneurship and startup, and to have someone that isn't as intimate with your business to give you specific guidance on building the business more so than giving you more visibility to things that work and that exist. So it allows you to be able to align closer and jumping into rabbit holes further that you know may be in the path where you're going. So much work is done offline that having visibility of things allow you to dive into it without having to bottleneck someone else's time and do it.Stephanie:I think that's really good advice. And a mentor might fail to give you a higher ideas or industry level things or maybe connections but I think it's the same thing when it comes to investors, the second someone starts giving you like really nitty-gritty advice on what you should do, you might want to be a little wary of that because you know your business best and you know where you're headed. What's next for BLK & Bold. Where are you guys headed? What are you betting on right now?Pernell:Sure. We're still young and awareness is still important, accessibility is still important. The more traction we get, the more we can further cement our contribution model. Now that we've kept the door open, even minimally in the product assortment that we do exist in, the more immediate is to continue to round out our accessibility, but with our key partners that have strategic alignment with us. And so we have retailers that we're on board with today, Target, Whole Foods, Hy-Vee in the Midwest and we're rounding out a few more that have shown very important strategic alignment with us. But then we're also looking to diversify outside of just retail shelves and moving into food service that allows us to have more B2B contracts that are now consumer adoption, but also businesses to help further the impact which ultimately helps drive consumer awareness as well.Pernell:And so from a ecom standpoint, home base is home base. And so we're going to continue to pour into our website to be more proactive in how we drive engagement, but also acquisition. And also, we're selling a tangible good. And so while that's key and that's great, we also have to look at supply chain, all the efficiencies, but innovation that's out there to allow for us to continue to connect and win with convenience and accessibility from what that means from a D2C space as well. We got some ideas under our belt on some strategic partnerships that can allow us to further that. But without a doubt, continuing to further develop our D2C. And the more important pieces that help our community better be more transparent with how we are building and continue to support from an impact model, but also to build more loyalty for that come in to see it in action.Stephanie:That's awesome. I'm excited to see, especially that B2B piece too. I think that could be such a strong partnership. I used to work at Google and I think about the road shows they would do and having companies come and all the employees would test out the coffees and the chocolate and all that. And that could be huge and very smart partnership to have that B2B angle in there.Pernell:No doubt.Stephanie:All right. We have a couple minutes left. Let's move over to the lightning round, brought to you by Salesforce Commerce Cloud. This is where I'm going to send a question your way and you have a minute or less to answer. Are you ready for now?Pernell:We'll find out. Let's do it.Stephanie:All right. What's up next on your Netflix queue.Pernell:Gosh, I just googled this yesterday. The Undoing. I think that's what it's called. We just ran through all the Schitt's Creek. So TBD on Netflix.Stephanie:All right, there you go. And I've got Hilary in this document say, "It's amazing, and it's on HBO." So that works.Pernell:Love it.Stephanie:All right. What's next on your reading list?Pernell:Oh my gosh. Besides emails?Stephanie:Yes. Besides emails. It doesn't count.Pernell:Oh man. It's a great question. I digest so much content through just online, but if I'm looking at something tangible, it might literally be a roasters magazine.Stephanie:That's great. We have not had anyone say a roasters magazine.Pernell:Yeah. In the anecdotal know of what's going on.Stephanie:That was perfect. If you were to have a podcast, what would it be about, and who would your first guest be?Pernell:Oh, goodness. First guest would be Rod, my partner. What it would be about? I don't know, the random things we come up with throughout a day, which is a plenty, and most people don't get to see or experience. You're building something with a best friend you have for over 20 years. You can only imagine the randomness that comes about within a day.Stephanie:Oh my gosh. I love that. I could see that being really fun. Pernell and Rod's musings.Pernell:Love it. Love it.Stephanie:That's great. What topic or trend or theme do you not understand today that you wish you did?Pernell:That I don't, that I wish. Oh my gosh. This sounds terrible, but Twitter. I tried to figure out my Twitter game early on when everyone else was, and I was just too loyal to Facebook. And now here I am still trying to figure out how to not tweet on the wrong thing or something.Stephanie:Me too. Well, what's your Twitter handle? We'll get you some followers there.Pernell:It's Pernell Cezar. [crosstalk] name.Stephanie:Oh my gosh, you don't even know.Pernell:Yeah, I don't.Stephanie:Well, that's the problem Pernell, you don't even know your handle. I actually don't know if I know mine either. We'll link it up in the show notes. There you go.Pernell:Okay. Appreciate it.Stephanie:All right. Then the last one, what one thing will have the biggest impact on ecommerce in the next year? And it can't be COVID.Pernell:I know that's right. That's a good point. From a good standpoint, I do think supply chain, speed of delivery on native sites and not having to be relying on third party commerce platforms. We know the behemoths, they in-house a lot of that and they have major contracts that do that. But the comeback of boutique independence and owning their future I think really be a by-product of independent supply chain companies doing the same thing. So again, from a packaged goods or a tangible product lens, but I think BLK & Bold can deliver something in a matter of hours and not having to rely on Amazon, that just drives that much more engagement and loyalty for the longterm.Stephanie:That's great. Cool, great answer. All right. Pernell, well, I've had a blast talking to you on here. Where can people try out some BLK & Bold and learn more about you other than Twitter? They shouldn't go there right now.Pernell:Yeah, don't go there. But on social media platforms, BLK & Bold, spelled B-L-K and Bold, and then our website, blkandbold.com.Stephanie:Awesome. Thanks so much Pernell. It was a blast.Pernell:Yeah, same here. Thank you.
The fact of that matter is that the healthcare system was not built with the consumer in mind. That is, until hims & hers came along. This three-year-old company has been making waves in the industry, and for good reason. Its platform has facilitated more than two million medical visits and is valued at more than $1.6 billion. And all of this in an industry that has been immune to disruption for decades. hims & hers is the first true consumer healthcare brand that, through its platform, creates an easy, transparent, and high-quality experience for all those frustrated with their current healthcare option. Its mission is to help people finally feel empowered to talk about and get treated for certain conditions, and Hilary Coles, the co-founder and VP of Merchandising for the company, is responsible for making that happen.On this episode of Up Next in Commerce, Hilary explains why humor really is the best medicine when it comes to marketing, and she talks about how brands should approach experimentation. Plus, she provides tips to anyone who is thinking about trying to disrupt a big industry, and why she thinks it’s a risk worth taking.Main Takeaways:Everything the Light Touches: Talking about certain things is uncomfortable — especially when it comes to your healthcare. But for a brand to make an impact, it has to have a message, reach into those uncomfortable places, and make it okay for those you’re trying to reach to talk about them too. By embracing humor and truth in marketing, you create an authenticity that is often missing and you open the door for your target consumers to feel empowered to take action.Social Experiments: Making experimentation and ideation a social process is one of the best ways to bring the most creative ideas to the table. When you invite everyone to contribute, and when you are honest with everyone about what ideas worked and which failed, you create an atmosphere that encourages risk-taking and you are more likely to experiment in channels or with opportunities your competitors are overlooking.But Why?: Having an endless curiosity and need to ask “why” is the best way to disrupt an industry, and also to keep improving your processes. Too often companies or entire industries fall back on doing things the way they have always been done. The company that comes in and consistently questions how and why things are done a certain way and then changes them is the one that consumers will begin to take notice of.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. Today, I'm really excited to be chatting Hilary Coles, the co-founder at hims and hers. Hilary, welcome.Hilary:Thank you so much for having me.Stephanie:Yeah, I'm really excited. I think we're going to have such a good conversation and there's so many areas where we can take it. I was doing a bit of research, and there are so many case studies built around you guys. Did you know that?Hilary:I didn't actually know that. Is that true?Stephanie:Yeah, I found at least three and so many articles diving into your business model. So, there's a lot of content I want to cover, and maybe first we need to start with what is hims and hers?Hilary:hims and hers is really the first consumer health care brand, and what that means is that we prioritize the consumer and really thought through every aspect of the business in order to suit the consumer, in order to give them choice, in order to give them control, in order to give them transparency into how they take care of themselves because we thought it was way too hard to take care of yourself today and navigating the health care system is incredibly difficult. And that's really because it's never been built with the consumer in mind, and so everything we've done from the beginning has been really just to champion the consumer. And so, today hims and hers is a platform that allows you to treat everything from dermatological conditions like acne to sexual health and wellness, to metal health, to hair care, all conveniently from home, which after this year has never been more important.Stephanie:So, as a new customer, I can essentially get on there, have a virtual doctor's visit, maybe even get a prescription for something I need, and then even order it on your platform, like it's everything from start to finish? Am I thinking about that correctly?Hilary:Exactly. Everything happens on our platform, and the reason why we did that is so that we could ensure that from start to finish we were in control of the level of quality that you would experience as a consumer. So, from the moment you come on to our platform, you select what you're interested in, what your health care goals are, you are given education, you are given a direct relationship with a provider, you are given product options, and you are able to make that decision that's right for you. And then, you're able to skip going to the pharmacy, skip taking off work, finding child care, taking off time in your day to go see a doctor, and able to talk to a doctor from wherever you feel comfortable. And then, having that product shipped directly to you and managed by you, which is again, just totally revolutionary from the way we've thought about health care to date, which has never prioritized the customer's needs but has focused really on everyone else in the healthcare industry except for the patient.Stephanie:Yeah. When I was looking through it I'm like, "Oh my gosh, this is what I've needed all my life." I've always thought everything with health care feels backwards and old school, and I'm like, "How have I not heard of this?" I mean, I'd heard of you guys before but I didn't know it was also for women.Hilary:Yeah, it's such a good point, and the reason why we developed hims and hers is because when we looked at our lives and the level of control and choice we have with with, you can choose a hundred different things to be delivered to your house in the next 20 minutes for lunch. You can choose your mode of transportation, you can choose what kind of couch to get delivered to your house. You can choose what kind of workout you're going to do today at whatever price you want, but when it came to your health care it was like this weird thing that you put off doing because it was so inconvenient. You never knew what it was going to cost. You were made to kind of go on a maze to figure out who's the right provider, are they covered by your insurance, how do you pick an insurance plan? And it's so unlike the rest of our world works today, and I think consumers are too smart for that and they expect better. And so, we really just developed something that fit into the rest of our lives.Stephanie:I love that. So, just so everyone knows the scale of where you guys are at, because I saw a lot of numbers from all my research, everything from evaluations, your revenue numbers, but I'd rather hear it from you and know it's accurate. Where are you guys today? What's your evaluation or what revenue numbers can you share just so everyone knows how big you are? Like, you're legit.Hilary:We're legit. So, in the past three years we've done well over two million medical visits, and when you think of a big company like Teladoc in this space, it took them 13 years to get to one million visits, so we've accomplished double that in three years. We are valued at 1.6 billion dollars.Stephanie:Billion, everyone.Hilary:Which we think there's so much more to do, because if you think about it, the health care industry is really the last trillion dollar industry that hasn't been disrupted. So, we really think this is just... It sounds like a big number, but it's just the really top top tip of the iceberg. The majority of our business is subscriptions, ongoing reoccurring revenue, and yeah. There's lots of excitement coming. We have more than a dozen conditions that we treat with almost 100 skus, so we've really... I think that's been a key differentiator for us in this industry as more and more people enter the D to C healthcare industry. When you look around at the landscape, so much of it is pretty niche and one condition focused, and what we've strived to do from our early days is be this umbrella company where you really can treat multiple conditions, you really can take care of yourself very practically on one simple to use platform. We're not expecting you to jump around.Stephanie:And that's great, it really is. It's like the future, it's what I've always wanted. So, I love talking about the early days of starting these companies, and especially with yours it feels like it's so intricate, especially on the back end. Probably not for the consumers who are like, "Oh, everything just works," but behind the scenes I'm just thinking about the partnerships that you're getting with the doctors, and then you got the products that you're selling and how to make everything work. I want to hear a little bit about how did you start it, what did you focus on first, and maybe what did you experience where you're like, "We would've done that differently if we knew what we knew now?"Hilary:Right. Hindsight is 20/20, of course, but we... Our first iteration into Hims was an MVP I think that we called club room at the time, and that was to learn how men were shopping for haircare products, and specifically hair loss products at the time. We explored funneling and promotions, we explored brand personas, and really how to talk to men. And we learned a lot about price points, we learned a lot about what men were looking for, and that was a really really valuable... We got enough signal really from that to have confidence that we were doing something differently with what is not hims and hers. And we knew a couple of things, we knew we would have to provide access to providers in every single state. So, by the way, that means setting up an entity in every single state, which is just a tremendous amount of work. There's nothing out of the box we could do so we had to build everything from scratch on the back end.Hilary:We needed to have proprietary products. Part of our goal and what we've continued to do is really blending both wellness products and prescription products and education, and so we had to create our own wellness products. So, I remember in the early days showing up to manufacturers in the middle of the country who looked at me like I was crazy and I was begging them to put our brand on the line and produce Minoxidil, which is generic Rogaine. And they basically said they felt bad for taking our money because this is an industry that hadn't shifted in decades, and what were we thinking, and there's no way this is going to work. And we were able to blow through what we had ordered from them in days, not months, and from there it was just kind of beyond. I think everything we processed from the beginning, or we prioritized from the beginning, was our brand. I think we knew that unlike 10, 15 years ago when you had all of these "disrupting" startups coming out your brand wasn't as important, but because the barrier to enter direct to consumer brands is so low these days with all the onslaughts of digital channels that you have, having a differentiating brand, having a point of view becomes so important and earning trust becomes so important.Hilary:And you need to do that, you need to have a deeply differentiated and personified brand today in a way that I think was not as urgently important 10 years ago. And so, that was the bet we took early on that really really paid off, as well. And [crosstalk 00:10:19]-Stephanie:You can definitely see that with all your marketing and branding, and people are eager to buy your products and you focused on a market, especially around men in the beginning, that I think wasn't being served well. I mean, you mentioned Rogaine and I'm thinking about the commercials back then of like just not very pleasant ones. I wouldn't want to buy that product based on the TV commercials I used to see around that, and it seems like you leaned into that and not only served the market but did it in a way that people were eager to even talk about it and have word of mouth.Hilary:Totally. I think the most interesting thing about our brand today, and especially in the early days, was that majority of the people coming to us for hair loss, for sexual wellness, for mental health, it's the first time they're ever treating these conditions, the first time they've trusted anyone with these conditions, and that's a big deal because it's not like you wake up one morning and you decide you're going to take action. It's usually on the heels of days and weeks and months and years of feeling unsure and feeling like it was something you had to hide in the back of your cabinet or didn't want to engage with, like the Rogaine example you just had. And so, that's really been the key unlock is that relationship we've been able to foster. And to this day, that remains my favorite compliment that we get as a business is, "Your brand empowered me. It made me believe in myself." That's really what we're getting at here, because the products exist, and for us it's about kind of slaying all the dragons of access and cost and barriers to make it easy for the customer but we can't walk you to the front door. We have to be on the journey with you and you have to believe that we're on that journey with you, and so that's really our mission at the end of the day.Stephanie:I love that. So, you just mentioned about the brand empowering your customers. How do you create that messaging, especially around topics that a lot of people don't want to talk about? How do you go about doing that in a way that has grown and seen the success that you all have?Hilary:I think one of my favorite quotes ever is that sunlight is the best disinfectant, because I think if you can't see it you can't talk about it. And so, that, from the very early days of fundraising, was a big eye opener for us because when we came into the room and we were talking about erectile dysfunction and hair loss, no one wanted to be the first to ask any questions about it. No one wanted to seem overly interested in it even, you don't want to be associated in it. And it wasn't until we changed tack and started using humor and started using numbers and saying, "Hey, every third person in this room will probably suffer from erectile dysfunction or hair loss." You need that provocation, that shock, that humor to remind ourselves that in a weird way, you're not special, like baldness doesn't... hair loss doesn't choose you, anxiety doesn't choose you. It happens and it's common, and if we're all in it together we can talk about it. We can find the education, the products, and the services to tackle it and get you feeling good.Stephanie:Yeah, that's great. All the campaigns I was looking at were funny and I could definitely see it sparking engagement, like people like... I mean, I saw there was a urinal campaign that you guys did and there was a quote I think that you said-Hilary:Our urinal takeover.Stephanie:Yeah, you're like, "No one in the history of ballparks ever wanted to advertise in a urinal, but we saw it as a creative channel." Tell me, how do you even think of things that are funny like that? Maybe I'm just not a funny person because I'm like I would never think to do that, but that's great, or like your cactus, your erect cactus. You know, people look at that, they know what this is for, it's super funny.Hilary:Right. You can't deny... I think that was part of the beauty certainly the early campaigns where we did city takeovers with city takeovers urinals dominations we called them with the phallic cacti, because you can't deny that you know what it is. You instantly know what it is, and so it save you the rigmarole and dance of are we talking about this, what is this, I think it's this. And fundamentally, I think some of the bets we've taken with marketing channels that have been more on the creative side like the urinal dominations, like we've sponsored corn hole tournaments, and all sorts of things that people haven't necessarily tried before. It's because I think we have a really deep empathy for our consumers and we're thoughtful about where are they spending time, where are their eyeballs? I always joke with our team, like, if you try hard and believe in yourself, anything can be a billboard or a messaging opportunity for the company because we're...Hilary:You want to meet your customer where they are, and I think unlike a typical DNVB and D to D playbooks out there where you're on the same channels as everyone competing for the same eyeballs, we really are striving to be health care for the people, for all people, for anyone with a body, and to do that we have to get eyeballs everywhere. We can't just be on the traditional digital channels. We have to think outside the box. We have to be provocative. We have to shift the traditional ways of thinking.Stephanie:How do you go about encouraging your team to think creatively like that and to come up with new ideas? Is there a process that you guys have in place or something to have fun ideas rise to the top like that?Hilary:Our team is amazing, so they need very little encouragement, but I think what we've preserved since the early days of Andrew and I joking around on text message late at night or around a table is just what do you think is interesting? What do you think is funny? what are we not seeing? And so, from whether it's a customer service agent, whether it's someone on our creative team, whether it's someone on our analytics team, just what are you interested and what are you seeing? And I think as the team's gotten bigger it's gotten... it's been so interesting to learn all of these different perspectives and what people are into. Like what is happening is with gamers? What is happening with cooking trends, and how is that relevant and what does that mean about people today? I think we try not to be too precious with our own ideas, and I think Andrew and I are the first ones to say, "Oh, that didn't work. That's fine," and we very much internally socialize the things that didn't work as much as the things that did. And that ladders back up to the priority we place on testing and learning, and so I think because we remain flexible with that and have fun with that all in service of learning, it makes every single big campaign less do or die.Stephanie:Yeah, I like the idea of not being too precious with your ideas and being open to just testing and seeing what works. In the spirit of testing, what campaign did you launch, or your team launch, where you're like, "That's not going to work," and it actually did?Hilary:Oh my goodness, we have... There is a commercial we can find later, and it's still shown, and it is essentially just our full portfolio of the Hims products and the signature peach and pastel colors that we've become known for. And all of sudden, when we launched our company three years ago we launched with candles, which a lot of people made fun of us for but we wanted to really be extremely explicit about the fact that we were a wellness company as well as a health care company and we were doing something different. And so, we played on this idea of candles being something we were known for, loved for, and mocked for, and that whole campaign is somebody just lighting that candle in front of the portfolio of products.Stephanie:Oh my gosh.Hilary:And we're like, "It's so simple. There's no way it's going to work," and it's been going for like a year and a half. It is far and away one of our most successful creatives.Stephanie:That's so funny. I've heard that same theme though around the things that you don't think will work actually end up working. I mean, especially we've been experimenting with different YouTube ads and just seeing what people connect with sometimes is a little out there our you're like, "Wait, why do people like this?" But that's why it's important to test and actually figure out what connects with people. Who knows, maybe in that candle commercial people are like, "Well, let me..." like, they're obviously going to look and see what's being the candle and analyzing it more than they probably would in any other commercial.Hilary:Right. You're competing with so much nowadays and I think there is a tendency sometimes to over complicate, to simply copy what other people are doing, and I think we've been pretty brave with what we're willing to test and keeping smart about that rather than having, you know, pouring millions of dollars into one solitary campaign, we're able to come up with several different iterations that are more appealing to more different groups of people. Which again, comes back to our mission of being for everyone and meeting you where you are.Stephanie:Yeah, I love that. I think going forward brands can learn a lot from your guys' campaigns because I think, especially the past couple of years, there's been a lot of censorship on how the brands can and should interact and what campaigns are okay or not, but I think really for that authenticity is going to be really important for the brands to actually come above the other ones and stand out by actually leaning into their goals and doing it in a way that they feel is best for their products and their customers and connecting with the people they need to.Hilary:That's totally right, and I think is one of the more exciting trends that I'm hoping we see more of in the coming years. I think, as I mentioned earlier, especially in the past five years, it became so easy to launch a company and as a result I think you saw a real copycat culture, a real everyone using the same kinds of design, a real same kind of brands and missions even, for a lack of a better word. And it became really hard to tell the difference between anybody, and I think where everyone's feet started being held to the fire is this year where there's been so much in the world happening and it's now becoming clear if you don't stand for something, or if you stand for the exact same thing as everybody else, you get lost in the shuffle. And I think that's really going to separate the brands that are here to stay from the brands that probably won't cut it, and it comes down to having that clear point of view. Because again, consumers are so smart and they know.Stephanie:Yeah, I think authenticity will always win and I would rather maybe be offended by a brand who's trying to do something where I remember them than just be like, "Oh, this is another brand saying that they're standing for the same thing as everyone else because they're probably being told that that's what they have to stand for." Those are the ones that I forget about versus the ones that are experimenting and trying and testing out messaging. That's the ones I'm excited to watch where they head.Hilary:Totally. I think that's where sometimes not saying anything is as powerful as saying something, and thinking about what do your customers really want from you? What are they coming to you for versus what you personally are excited about and what makes you sleep better at night? It's not about making you feel good, it's about serving your customer, and I think some brands get that twisted this year.Stephanie:Yeah, I completely agree. So, when it comes to... since we're diving pretty deep on marketing and brand voices and stuff, how do you think about measuring your campaigns and which ones are doing best? Like, I saw you partner with Snoop Dogg, which is awesome, like how do you measure a partnership like that versus your TV commercials and what's successful in that area?Hilary:I think the thing that has been the most interesting about our marketing approach is that on any given day we are in at least two dozen different channels, and we are testing within each of those channels. Again, it ladders up to this mission of being there for our consumer wherever they are, and so it's about not just having radio and podcasts and various audio, but it's what are you saying within each of those channels and does it make sense? Because you don't want to jar the customer out of what it is, and so, yes, the Snoop Dogg campaign was awesome for being well known and the J-Lo and A-Rod campaigns I think all make sense in certain contexts, but I think we keep a pretty broad playbook which allows us to really start the relationship off on the best possible foot with our consumer. Because I think at the end of the day the KPI that matters the most is NPS, and I think what's been really remarkable about hims and hers is that our NPS is 65, and for healthcare services the NPS of the whole rest of the industry is nine.Stephanie:That's what I was going to say, is it like five?Hilary:Yeah. So, we're talking about single digits, deeply unsatisfied people, deeply negative experiences, and we're talking about a huge exponential growth on that. And that's what we're really protective of and why I think a real reflection of what happens when you give consumers choice and control and transparency and kind of treat them like adults and know that giving them more information is not going to, if anything, going to increase their trust in their lifetime with you.Stephanie:Yeah, that's great. How do you think about personalization, because healthcare just seems like such a tricky thing, and especially when you're talking about the NPS and developing that trust. What do you do, if you do at all, personalize when communicating with people so they're like, "Oh, yeah, this is just about our conversation. This isn't a generic message?"Hilary:Absolutely. I think personalization remains so important particularly in healthcare where you're used to being treated like a number, where you're used to being left behind and expected to sprint to keep up with just a basic level of treatment. And that's where we've been able to differentiate so much by having that end to end control and being totally vertically integrated as our consumer healthcare platform. And so, we spend a lot of time thinking about, within each of our respective categories, within each of our respective brands, what that consumer journey looks like and what the consumer segment within that consumer journey looks like. So, that end to end we know you're going to get checked in on at the right time to make sure that your skin is adapting well to your new prescription skin routine that you're on, so that you're being exposed to the most amount of information and the ability to chat to your personal provider whenever suits you and being there kind of one step ahead. I think that's the best lessons in hospitality that we've tried to bring into our business of anticipating the need before it happens, before you even think about it, and that's where our service has been super seamless.Stephanie:So, how are you anticipating that need? Because that is a really good example where I'm thinking about factors... It'd be so nice if they checked in on me a bit more because I'm also just lazy.Hilary:Right?Stephanie:And a lot of times I might need something but I just need a reminder, but I haven't seen any of the traditional models having a good method for doing that, that checks in in a way that's not annoying.Hilary:Absolutely. So, each category, each journey is heavily directed by an advisory group of the top medical professionals from all the best institutions across the country, and really getting that brain trust together within that specific category, so say using the skincare example, the top dermatologists in the country and walking through if you had a magic wand, what would the best possible treatment look like for a patient? What would that best possible experience look like? And then, we map out, if you could clone yourself 600 times as a doctor, what would you be doing, and then we go and we build that.Stephanie:Man, that's a really good lesson I think for any business model. It's kind of coming in... I mean, it is coming in with a beginner mindset and just saying, "Start from scratch. How should this work?" Doesn't matter if it can work or if we know how to make it work, what should it be doing right now? What is success, and then building towards that?Hilary:Yeah. I think that's really fundamentally why we've been so successful in a short period of time, is we've just asked why, because in so many, especially in established industries like health care, so much of it is just continuing on because that's the way things have always been done. And a lot of it was just us asking naively, "Why? Why do you do it that way? Why is it done that way? Could it be done this way?" And just having that endless capacity I think for curiosity, and I think the more we... When we first started working on the company, we had assumed there were, to be frank, adults in the room who had already figured this out and had already really tried to do their best possible job for the consumer. And the more we asked questions, the more it became clear nobody was doing this and wasn't an impossible task nearly, it was it just needed a different lens and some elbow grease I think.Stephanie:I can imagine you guys getting a lot of pushback and people kind of betting against you, especially in the early days around what you wanted to do.Hilary:Oh, definitely. I think, one, sure, disrupted [inaudible] industry and then do it using millennial beige color and a bunch of cacti. We were nobody's best friend's. I remember even my fiance saying in the early days, like, "Are you sure about the name Hims?" I wasn't 100%.Stephanie:And now it's like, "Well, yeah, obviously."Hilary:Yeah, exactly.Stephanie:Very very cool. I could see there being a lot of room of having a great community, and maybe you guys already have that, because I'm thinking you're getting people to talk about topics that they maybe never would have otherwise, but you know everyone is on there googling their problems and you end up finding bad Reddit threads or, who the heck knows, whatever you stumble on, and you're trying to see, like, do other people have this issue? How are y'all approaching community and having people speak up and talk about and talk about their results and everything?Hilary:That's such a great question. That was a key motivation for us, is how you get people to stop doom spiraling and looking in the middle of the night for things... to ask about their health, because spoiler alert, anything you ask about your symptoms is going to lead to you're dying.Stephanie:Yeah, you're dead.Hilary:And it's scary and you're not empowered and you don't feel in control. And so, it was really like how do we make it so easy that even you would be willing to, just as easy as googling something, it's just that easy to go to our platform and that level of simplicity and directness of that relationship. And that was really, again, I think a key piece of having our brand be aspirational and safe and celebratory. And why we knew that that worked and why that resonated is in the first two weeks of sales of being open as a company, we had men submitting videos of themselves unboxing their hair loss kits, we had men submitting before and afters probably, and these are all on public channels like Instagram, tagging us in them. And these are things that historically were so private and had never been spoken about, and here they were sharing, tagging, telling us, "Please post. Please share my story. I feel so good and I had no idea it was possible, and everyone should know about this." And so, community from day one has been such a core piece of everything that we do in helping you feel like we're your hype person.Hilary:We're here for you, and I think people really responded to that idea of positivity. And I think that's kind of wild to think that there are brands with 100,000... a healthcare brand with 100,000 fans on Instagram who are-Stephanie:Yeah. No, that's wild.Hilary:... submitting and talking and sharing their, prior to us, deepest secrets. [crosstalk 00:33:34].Stephanie:Yeah, that's crazy to think about someone sharing before and after pictures without getting paid. I mean, that whole industry when you see those pictures you're like, "Is this real? Is this a real person that seems like they're kind of like me?" I mean, how did you encourage that word of mouth and encourage people to want to share that kind of stuff, other than just having a good product? Because that's obviously key, you have to have a good product that actually works, that people get excited about, but how do you encourage them to take that next step and actually put it on a platform that's public?Hilary:Yeah. I mean, truly we were surprised. We didn't think it would be a lever for us, especially in the beginning. We thought there was no way you were going to see the before and afters you were seeing on some of the other D to C companies or what you would normally see on a woman's brand, for example. When we started seeing it, we were like, "Oh, this opens up a whole new world," and so we built a community team that focuses on relationships with our existing consumer, and that can be everything from seeding them new products and seeing what they think of those products. It can be sharing their story for people who tell us that they want to be that inspiration for somebody else. And yeah, we've gotten to a point where we have 1,000 people in our community network who are just true fans of the brand that happened completely organic. And then-Stephanie:Very cool. So, what does the next maybe two or three years look like for hims and hers, and what kind of big best are you guys taking?Hilary:I think where we are really excited in the next couple of years is to continue to expand into more conditions in order to be of more service to the consumers on our platform, to provide entry points for new consumers, and to be able to manage with that high level of quality that consumers expect, more conditions. And so, for us what that means is entry into chronic conditions like fertility, like sleep, like cholesterol. That means expanding into broader portfolios into the main categories that we serve today, and that means continuing to expand into our wholesale partnerships like we have with Target which allow us to be more accessible, same day, more accessible in any single market to people who are in need of effective affordable products.Stephanie:That's very cool. What kind of advice do you have anyone who's looking to disrupt a big market? I think you're the perfect person to answer this, like it's doable, but what advice do you have?Hilary:It's doable. I think, again, just keeping asking why. I wouldn't assume that there's a reason why things are the way that it is. If you see something that isn't right, that doesn't reflect the world or reality that you want to live in, ask why. There's a good chance that it's a pinpoint for other people and it hasn't really been tacked effectively.Stephanie:Yeah. I love that, ask why. Is there any tech that you're betting on, tech trends, things that you're thinking you might be able to implement over the next couple of years that you're excited about?Hilary:I think we are super excited to continue to centralize information for our customers and help them make smarter decisions about their healthcare. When you look at, again, this digitally native generation who thinks of healthcare in a very different way from the way our parents think about healthcare... When you ask a gen-z or a millennial about how they think of taking care of themselves, it includes nutrition, it includes sleep, it includes mental health, it includes physical health. It includes a wholistic picture of flourishing, and I think using data to help coral all those decisions and provide them all at your fingertips so it's not just this discreet siloed experience, I think is very revolutionary and where we're excited to think about. And it's so different from how we all thought about healthcare before, which was you only really engage with it when something physical is broken and something wrong with you, otherwise you stay far far away. And so, I think we're motivated and excited about a future where you feel good because all of your decisions that affect how you feel are... You have options, you have information, and you have opportunity to help meet your goals.Stephanie:Yeah, that wholistic view of things is something I'm very excited about and can see you guys crushing, because right now, like I said, it does feel like so much of healthcare is siloed, and if I have an issue why isn't my diet taken into consideration? Why isn't how all my supplements interacting with each other, interacting with vitamins that might interact with whatever you're going to prescribe to me, like why isn't everything taken into account? So, to have like a dashboard where not only can your doctors talk easily and see what's going on wholistically, it seems like where the future needs to go and what everyone wants right now, and you guys are the first to tackle it.Hilary:Yeah, I think we firmly believe that the future needs to go the way our lifestyle and behavior preferences are going, and it's very cool, especially as we talk to the gen-z consumers who are like, "Yeah. No, of course, I never wanted it to be siloed and I fully reject a future where it is." And they're just... It's very cool to see that that's an expectation for the future, not a nice to have.Stephanie:Yeah, very inspiring. All right. So, let's move over to a quick lightning round, which is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Hilary?Hilary:All right. We'll see.Stephanie:All right, we'll the tougher question first. What one thing do you think is going to have the biggest impact on ecommerce in the next year?Hilary:I think big etailers entering the market and consolidating is going to have the biggest impact.Stephanie:Tell me a little bit more about that, that's interesting.Hilary:I think as we start to see, especially with the pandemic, we start to see Targets and Amazons and Walmarts start to be even more of a one stop shop than normal. As we're all trying to stay home and take care of our families and limit the amount of trips that we're making, I'm interested to see how those big companies start including different services, different products that where they wouldn't normally have been interested in in a year or two ago in order to serve more of the needs of the every day consumers, and where consumers will trust and not trust them, but for sure we're going to see some aggressive moves.Stephanie:That's a really good take about consolidation. I like that. What do you not understand today that you wish you did?Hilary:I don't really understand TikTok but I really wish I did.Stephanie:Someone just said that, I just did an interview about an hour ago and they said the exact same thing. Even they do really well on TikTok, their company does, she was like, "I don't understand it and it takes a long time to makes videos."Hilary:Exactly. I mean, I love it. I love the generation of content creators and I think it's really interesting that the shift is moving from influencing to actually creating, and I think it's certainly more democratic which is more in line with certainly the world that we believe in at hims and hers, but I would be lying if I said I came close to understanding it.Stephanie:We'll have to learn it together.Hilary:Yeah, deal.Stephanie:Because, yeah, I agree. What is your favorite book? It can be a business book or something where you're look, "I quote stuff from here. It's something that always come to mind when I'm making decisions." What's your favorite book?Hilary:My favorite book... Let me think, it changes all the time.Stephanie:Or you can have a couple.Hilary:I think the things I come back to frequently are The Five Dysfunctions of a Team, Innovator's Dilemma, and I think one that is earning a place on my shelf is the New Rules of Culture that Netflix just came out with.Stephanie:Oh, I haven't heard of that one. I'll have to check that one. Those first two are good ones. Very cool. All right, and the last one, if you were to have a podcast, what would it be about and who would your first guest be?Hilary:If I were to have a podcast it would be focused on people who use their energy to uplift and amplify other people, and to me there's nobody who does that better than Michelle Obama.Stephanie:That's great. I would enjoy listening to that. We need to make that happen, Hilary.Hilary:[inaudible 00:47:34]. I'll reach out to her. I'll send her a DM right now and see where we end up.Stephanie:Yeah, just DM her. We'll have this in the works in like a week, no big deal.Hilary:Yeah. That's the Hims pipeline, for sure.Stephanie:All right, Hilary, well this has been such a pleasure having you on the show. I knew it was going to be a good interview and you exceeded all my expectations. So, thank you very much, and where can people find out more about you and hims and hers?Hilary:Definitely, there's always so much going on, and thank you for all the thoughtful questions. Forhers.com and forhims.com and on our Instagram @Hims @Hers are always the best ways to keep in touch with the latest and the greatest.Stephanie:Awesome. Thanks so much for joining us.Hilary:Thanks, Stephanie.
Some brands are lucky enough to have a built-in audience of millions, while others need to develop an audience from scratch. Chris Mainenti has been on both sides of the coin and he knows that in either situation, once you have a base of potential customers paying attention to you, the next challenge is converting those browsers to buyers. Chris is the Director of Commerce Strategy at Discovery, Inc. where he is helping turn the millions of viewers who tune into Discovery’s channels such as HGTV, TLC, Food Network and more, into customers who buy across various platforms. On this episode of Up Next in Commerce, Chris explains how he put his history of building audiences at previous companies to work at Discovery — including some tips for young companies on how to utilize newsletters. And he discusses how to use the data you collect as a starting point for creating a more personalized, one-to-one relationship with your audience on various platforms. Plus, he looks into the future to predict how shoppable experiences will be made possible with universal add-to-cart and buy-now options. Main Takeaways:Developing Your Audience: Audience development goes beyond marketing. When you are building your audience, you have to know who you are as a brand and understand the audience you have and want to bring in, and what they want and need. In the early days of a brand, certain audience development strategies work better than others, including tapping into the power of newsletters.Lights, Camera, Take Action: Every company is collecting immeasurable amounts of data, which then needs to be sorted, analyzed and acted on. But the actions you take should be nuanced and applicable to the specific needs of specific audiences. For example, it would be wrong to lump together all of the women in your audience because a woman who is exploring your dot-com presence is likely looking for something different than a woman that is scanning a QR code on their TV. Those segments of women shop differently, and therefore should be approached in unique ways after the data tells you what they each want.Dreams of a Universal Cart Experience: Many believe the future of ecommerce revolves around the development of a universal cart experience. Every business wants to create shoppable moments and engage with customers across many different platforms. But getting to this nirvana means you also have to remove all the friction points.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. Our guest today is Chris Mainenti, the director of commerce strategy at Discovery Inc. Chris, welcome to the show.Chris:Thank you, Stephanie. I appreciate you having me on and talking all things commerce here in the current climate that we're in.Stephanie:Yeah. I am very excited to have you guys on. I was just thinking about how long Discovery channel, and all the other channels, HGTV, and Food Network and Travel Channel have been in my life and with that, I want to hear a little bit about your role at Discovery. I mean, it seems like there's so much going on, so many digital portfolios that you guys have over there, and I think just a lot behind the scenes that an average consumer wouldn't even know. So, I'd love to hear what you're up to at Discovery. What is your day-to-day look like?Chris:Sure. So, I would say, first and foremost, for commerce specifically in the digital media space, we're probably slightly different than a lot of others. We're really multifaceted in terms of how we work, and who we work with across the org. Obviously, like you said, Discovery is huge, has a ton of major, major worldwide brands. So, we actually sit on the portfolio wide level with our lifestyle brands, and we're really in the weeds with them on the day-to-day basis. And, that really starts with, obviously, our editorial teams. That's our bread and butter, that's our voice and our authority in this space. So again, that's really where we begin, and that's obviously where we're doing our content output, and producing all of this great shopping content for our different audiences, and again pulling our experts from all of these different brands to come together.Chris:So again, folks are really getting the full spectrum of expertise in all of these different categories. And from there, it just really starts branching out into other groups. So, we work heavily with our ad sales and branded content teams, where we work on much larger partnerships and deeper integrations which we can talk about today as well. We have a licensing team, where we work on licensed products, and we take our learnings that we're seeing on our shopping content on a day-to-day basis, and analyze that, and then speak with licensing to see where there may be some room to actually create a new line with one of our partners.Chris:We also, believe it or not, and I know you don't know this, we have a video games team at Discovery, and we work closely with them as well on trying to find those shoppable moments, and again bringing our brand and our voice into those games when they're being built. So again, we're always serving the reader no matter who or where they are, and again pivoting as necessary. So, those are just a few groups, and obviously our marketing and ops, and audience development teams were heavily embedded with as well when it comes to promotion.Chris:So again, there are just, I would say, a lot of areas that we focus on. I know in the beginning it was always all about, commerce is part of diversifying your revenue streams at a digital club. But, we see it more as now, we're trying to diversify our commerce stream into all of these other areas. So again, a lot of exciting stuff has already happened, and we're working on some cool stuff too as we head into next year. So, a lot of exciting stuff in an area that's obviously blowing up for a variety of reasons.Stephanie:That's a lot going on there. It's actually really interesting because you just mentioned video games, and I just did a recap episode with one of my coworkers for the first 50 episodes of this show, and the one thing I was bringing up was like, "I think there's a big opportunity in having shoppable moments in these worlds or video games." And, we were mentioning Unreal and Epic Games specifically, that I hadn't really seen that yet. So, it's interesting that you guys are starting to explore that arena, because it feels like that's something of the future, but it's needed, and that's where everything's headed.Chris:Yeah. And again, I can't stress enough. I mean, our portfolio is just so suited for so many of these different, avenues that we could always find something where, again, we're not being gimmicky just to say we're there. This is our bread and butter, and we're making sure that we stick to our tried and blue, into who we are, and not shy off too much, and again just try to say, "We did something here or there." Really making sure we're always serving our audiences and giving them what they want on the platforms they want.Stephanie:Yeah. Which I think that's a really good jumping off point, then because that was actually my one biggest question I had of how do you strategically think about what an audience wants without disrupting the content? I mean, it seems so tricky, because you see a lot of shows, and whatever it may be where you might have product placement in a show or a movie, but it might not actually uplift sales, because it wasn't done correctly. Where I was also just talking about the Netflix original, the organizing show where they partnered with the container store, and how they had an instant, I think was a 17% uplift in sales after that show aired. That worked, and many others don't. So, how do you guys think about making those shoppable moments, and actually having it work?Chris:Sure. First and foremost, I think, you have to be honest and say, "Look, not everything is going to hit." And honestly, it's not always meant to always hit. So, I think we go into that, first being real with the current situation, and understanding not everyone is going to want every single thing. We're always talking about integrating, promoting, so on and so forth. So, I would say that's first. Secondly, again, we start with, what's our expertise? What do we believe in? And, what do we want to showcase to our various audiences across all of these different platforms? And then, from there is when we start to really start getting down to the nuances.Chris:And look, we have created what we dub internally as the commerce hub, where we're bringing in data feeds from all different platforms, our affiliate networks, our in-house reporting platforms, social, so on and so forth, bringing that all together. And again, understanding, what are people consuming? And, what is their mindset when they're on social, versus linear, versus a DTC, or our dot-coms. And, really starting to look and pull out trends from that. I always like to say I prefer the term data influenced versus data driven, because you can't just take a dashboard of data, and sort in descending or ascending order, and say, "Okay. Whatever is at the top or bottom, do or don't do." And, call it a day.Chris:We focus much more heavily on insights, and use that data as a jumping off point, but then do very, very deep analysis, and pull actionable insights out of that for all of our different brands and teams for when they're creating new content, or when we're optimizing old content. Again, wherever that is. And then, I think lastly with that comes, how do we visualize that to the audience. On digital.com, is it more about, again, really simple to read, simple call to actions to buy items. Again, on linear, what is that? A QR code experience? Is it some type of more deeper integration with a smart TV company on our TV E experiences? Is it more deeply integrated where you can actually tap to purchase within the app? So on and so forth.Chris:So again, there's just a lot of things that we're looking at. We never make it cut and dry, that's probably because personally I don't think anything is ever cut and dry, especially this space and shopping behaviors across, not only brands but the platforms those brands are on, and that's how we look at it. I know that's a lot, and that sounds a bit crazy, but we do really pride ourselves on, again, using these things as a jumping off point and then really diving in deep and making sure that we're serving our audiences, again, where they like to consume this content.Stephanie:Got it. Yeah. It sounds like everything is very custom, and every channel and project you start from scratch where you start figuring out what your audience might like. But, do you have any internal formulas where you're like, "Well, we always follow this in the beginning." and then, it goes crazy after that, because we find other things out. Is there anything that's similar among all the campaigns or projects that you're working on, at least from a starting point?Chris:Yeah. I think, honestly, it's probably not surprising whenever you're talking about items on sale, or whenever we're talking about certain merchants, or price points, or categories, like organizing and cleaning is always up there for us. We know very specific furniture categories that do very well for us. So, we do have our basic what we call playbooks that we start off with, but like you said, we still are always constantly learning and pivoting as necessary. I think a perfect example is in the beginning of the year, I don't think anyone in this world saw what was coming, so we were doing our thing, and then when everything started to unfold, we got together and we had to pivot. And again, the good thing about Discovery's brands is, again, we are so widespread in terms of the categories that we're experts in, that we were able to easily pivot and, again, make sure we're giving our audiences what they need at that moment.Stephanie:Do you see more companies starting to shift? Like media companies turning into ecommerce companies, and ecommerce companies turning into media companies. I've heard that saying quite a bit, especially over the past six months, but it feels like you guys have been there for a while. Do you see other companies looking to you for maybe best practices of like, "How do I make this shift?" Or, "Should I make this shift?"Chris:100%. I think, the beauty in that is that we can coexist and really do things that benefit each of us. I don't think this is an either, we succeed or they succeeded. This is, I think a space where we can coexist. The way I always like to frame this when I'm talking to our merchant partners, and talking internally, is we're really here to humanize the star review. When you come to us, you're not just going to see, again, this is a four out of five, or this is a five star, item, and that's it from the random ecosystem of the internet. We are heavily focused on saying, "Look, here are the things we recommend, and why." And, I think that's where our partners can really leverage us, and where you're really seeing us shine. Again, we don't have to just throw a bunch of random stuff out there and hope for the best.Chris:Again, given our brands and our standing in this space, we can really leverage our expertise and authority there when growing this portfolio with all of our partners. To be honest with you the thing that drove me to Discovery the most was, "Wow, these are huge brands, with huge audiences, and huge respect. Now, we just got to tie all of that together, and go from the moment of inspiration to action." And then again, that's what we've been working on.Stephanie:That's really cool. With all the data that you were mentioning earlier, since you joined have you seen any changes in consumer shopping behavior?Chris:So, yes. Obviously, the biggest one occurring this year, and that was with online grocery. I think it's no surprise that it's been building up now for a year or two in terms of mainstream, but it never really caught on. It's only a five to 10% of folks are really engaging and entertaining the online grocery space. But then again, obviously, earlier in the year when things started to shut down, and people were uneasy about going out, we did see huge spikes in that space, obviously, on our FoodNetwork.com site. And, I would say that continued for a bit, and did peter out a bit recent months which, again, is obviously expected. So, I think that's probably one of the big ones.Chris:The other thing that we have seen, not so much in terms of major shifts in shopping behaviors, just more increased sales in categories that we already know are performing. So, organizing and cleaning is always been a winner for us, and then as the months went on, we've just seen it doing better for us. I think we do a lot of buying guides where we talk about the best cast iron skillets on Food Network, or the best humidifiers on HGTV. We started to see those things gain more and more traction as we went, and we're attributing some of that to us really getting our audience to trust us, and now know that they can come to us as a trusted resource to really be a personal shopper for them.Chris:And again, we've seen that across the board in all of our main categories. The only other thing I'll say in terms of, not only, I wouldn't say shifts in behaviors, but just something else we've pulled out from the data is that, everyone loves a good deal and good price points, but our audience is willing to spend more, especially when those items are either offered at a discounted rate for a holiday or something, or if we've worked with the merchant to get an exclusive discount for our audience, so we have also seen uptakes in that as well. But again, holistically, we haven't seen any huge shifts outside of, like I said, the online grocery, which again is expected given the situation we've been in.Stephanie:Yeah. That makes sense. Yeah. I saw for the Food Network, I think you had a subscription platform and you partnered with Amazon. Was that something that was already in the works, or did that get sped up once everything was happening with COVID?Chris:Yeah. So, that was already in the works with our DTC group, and for folks who don't know that's our subscription platform on the Food Network side that we call internally FNK, because it's just easier. And yes, that was in the works, and again we're working more and more in getting that to more and more folks who are really looking to get more classes, get more recipes, just be more intimate with our brand. Stephanie:Yeah. It looked very cool. I was on there looking around at, "Oh, you can follow these chefs and have cooking classes with them, and then you can tell your Amazon Echo to order it for you the exact things you need." And, it looked like it would be really fun to engage with that.Chris:Exactly. It goes back to that 360 approach that we have really been focused on, when it comes to our shopping portfolio.Stephanie:Yeah, that's very fun. So, you've talked a lot about partnerships where you've touched on a bit. But, tell me a little about what does a partnership look like from beginning to end? What does that process look like when you're finding a partner, figuring out how to actually strategically partner with them in a way that benefits both parties? What does it look like behind the scenes?Chris:Sure. So, I think there's really two paths there, there's the partnership stuff that we handle directly with merchants through affiliate networks, and so on and so forth. And, for that we do a lot of research on our end, again we already know what type of product hits, what type of merchants hit. So, one thing we do is take that and then say, "Okay. What are similar merchants in this space?" And then, we'll reach out and discuss the opportunity of working together on that front. And then I would say, on the other side, bigger picture stuff is, again, we're heavily embedded with our ad sales team on much larger partnerships.Chris:And, I think a great example of that is our shop the look campaign with Wayfair, which is a deep integration that spans across linear and digital that, again, was really spearheaded by our sales team that we then came in and assisted with. But, for folks who don't know, basically what this is, when you go to any of our photo inspo on hgtv.com, you'll see a little flyout of all the products within the image that are shoppable on Wayfair.com. And obviously, that's not just a basic integration that you just wake up one day and do. So for that, we came together and we've said, again, "What can we do that is going to benefit both of us, that's going to serve our audiences for the long run, and really make a successful integration here?" So again, that's what turned into shop the look.Chris:It's one of our best partnerships that we have across our dot-coms right now, and it's super successful, our audience loves it. And again, I think It's always starting with, "Well, what is the goal? And, what do we want to achieve from this?" I think sometimes people get too focused on, "What looks cool?" And like, "Let's just do that." We wanted to really focus on, "Well, what's the goal here?" And, what do we think we can create that's actually going, again, to help our audiences that come to hgtv.com be inspired and feel comfortable, making purchases based off of what they're seeing.Chris:So, that's really how we approach these, we're super particular about who we work with, and what that looks like. You mentioned the Amazon partnership, we have a really strong relationship with them as well. And for us, again, it's always looking at the brand and our audiences first and saying, "What makes the most sense for them?" And then, that's when we start peeling the layers here, and figuring out what are those experiences that we could bring to them on different platforms.Stephanie:Yeah. I think that's really smart. Like you said, not to just do something because it looks cool or seems cool, but actually do something that you know the audience will like, and will convert into sales to also help the partner. What are some of the success metrics for the shop the look campaign for example? What did you go into hoping to achieve when you set up that partnership? Is it affiliate based, or what do you guys look for and be like, "Oh, this is a successful campaign versus the previous ones that were maybe okay, or good."?Chris:Yep. So, I think just simply put it, consumption and sales are the big ones. Consumption being, are we seeing more and more folks coming to these different integrations across our platform, and then again how are they translating into sales? Looking at things like, "Okay, so we are getting them to Wayfair.com, but once they're on Wayfair.com what are they doing?" So obviously again, looking at conversions, average order value, so on and so forth. Again, just to really gauge what these audiences are looking like, as the days, weeks, and months go by. I would say, one of the things that we were looking for, especially as COVID first hit was, "Are we seeing an increase, a decrease? What are we seeing in terms of shopping behaviors across our platform?" And again, the metrics we looked at for that was, obviously, click through rates, conversion rates, average order value. Because we even saw in some instances where experiences weren't driving as many views or clicks, but the average order value was much higher.Chris:And again, just goes to show that our audience is a very qualified audience that trusts us, and is willing to spend with us. So, we try to pull out all of these different metrics. I think one of the things with commerce that is either for better or worse, is that you can't just look at one metric and just live and die by that number. So again, that's why we have a handful. And look, we also pivot based on what that platform is, what the experience is, who the partner is, so on and so forth. So, we don't have a one size fits all solution, again, that was done by design. And, that's how we approach these things. And again, just making sure that we stay true to who we are, and we're benefiting everyone involved.Stephanie:Got it. How do you keep track of, if there's a TV viewer who's watching HGTV, and then you're trying to send them to maybe Wayfair to shop that look like, what are the best practices with converting those people, but also keeping track of them in a way that's not maybe creates friction? Are you telling them, "Go visit this URL."? Or how do you go about that?Chris:Yeah. So, totally right. I think, obviously, the most common ways of driving from linear to digital is the QR code experience. And, we're actually working on some of those solutions as we speak and trying to understand, again, what will it take to bring more linear folks from TV down to digital, and like you said, make this a frictionless seamless experience? So again, is that as simple as a QR code, or again is this more about a stronger deeper integration that's a bit more sophisticated and partnering up with folks who can actually understand what is on screen at any moment, and then surface that product on screen.Chris:Again, if you have a smart TV and allowing folks to enjoy that experience, or again, when it comes to TV E we have our go apps that you could log into with your cable subscription. And again, obviously, it could be more sophisticated on your mobile device. So, what does that look like? Is it again, while you're watching it at minute three or whatever, five minutes in, do you surface what is currently being seen in the screen and saying, "Look, shop this room?" And, what do you do from that point down to the device. Can it be as simple as just a tap to buy, or do you have to tap and then open up a new browser window? What do those integrations look like? Again, ultimately trying to find the most frictionless experience. So, I think we're still experimenting with that. I don't think anyone in this space has really nailed that down in terms of what is shoppable TV, or just shoppable video in general? And again, how do we go beyond what just looks cool and turn that into actionable?Stephanie:Yep. Yeah, I think creating a frictionless experience is key, and there's a lot of room for innovation in that area. I'm even thinking about just Instagram, where I'll find a blogger I like and I really like her outfit, and then it's like, "Okay. Well, now go to the link in my bio." And then, that's going to open a LIKEtoKNOW.it app, and then maybe you'll be able to find the outfit. But at that point, it's probably just on the home screen if that new app. And, it just feels like there's so many places for a customer to drop. I guess I was just really eager to look at that outfit, so I stuck with it. But any other time, I probably would been like, "Oh, that's too much work." It seems like there's just a lot of room for innovation around this shoppable moments, whether it's TV, social, video, audio, anything.Chris:Yeah. I mean, I think you nailed it right there. I think Instagram is a perfect example, and that's a platform we're looking at as we speak, and we have some ideas around that as well. Because like you said, our goal here is to, how do we cut out all of these extra steps that are unnatural? Normally, when you see a product you like, you want to be able to say, "Okay. Great. Let me buy that." Not let me go to a bio, let me click this link, let me wait for this page to load, let me do that checkout experience is completely different from the platform I was just on. And then obviously, you're playing around with browser settings and everything else.Chris:So, I think you're spot on, and again that's something we're heavily focused on, again, literally as we speak. And, what does a more integrated Instagram shopping experience look like for Discovery and our partners? So, there's going to be more to come on that soon. But, we are thinking about that, and trying to find, again, these ways to make it as frictionless and seamless as possible. Again, no matter where our audience is consuming our content.Stephanie:Yeah. Well, it seems like if anyone can figure it out, it would be all because it's not like you're trying to put your products on someone else's show, or having to utilize someone else's platform. You have your own platform, you have your own shows, you can build new shows, and try out different ways to influence. There's shopping behaviors. That seems like there's just a ton of opportunity for you to experiment with everything that you all have.Chris:Yeah. No. A 100%, and those are these ad conversations we're having with a lot of our partners as well, and understanding from their world how they see it, and then bringing our world into that, and marrying that together, again, so we can coexist here, and at the end of the day just create a better experience for our viewers.Stephanie:Yep. Love that. So, what are some of your favorite platforms that you guys are experimenting with right now? You said, you were looking into Instagram, but what's really performing for you, and what are some of the more moonshot platforms that you're trying out, and you think it will be good, but you're not so sure?Chris:Sure. Yeah. I mean, obviously, the bread and butter is our shopping content on our dot-coms, those are our top performers. But, I will say some of the more areas of interest, again we already spoke about Instagram. But, another one where we are seeing some really good traction, believe or not, is in the Apple News space, most notably on Food Network. We're getting a lot of traction on that platform, and seeing what our audiences are resonating with the most on Apple News, which I again I know it maybe a shock to some folks, but I think-Stephanie:Yeah. So, tell you more about that. I mean, I have an Apple phone, but I have not opened up Apple News probably since I got the phone, so tell me more about, what are you guys doing there?Chris:Sure. Yep.Stephanie:Because you're the first person who said this.Chris:Okay. All right. Again, understood I know that's not always the first thing that jumps into someone's mind when you're talking about commerce, and lifestyle brands, especially because they name Apple News. But again, I know you don't really use it, but again this is just the basic free version that's included with your device when you get it. And again, we're syndicating our day-to-day content onto that platform. And, we've built really strong audiences across Apple News. And again, it's a similar experience to our dot-coms, just slightly different because it has to fit obviously the specs of the Apple News platform. But again, we just have seen some really strong successes in different areas, again most notably in the buying guide space, or sales events that are happening, and dabbling with pushing notifications for that.Chris:Obviously, with some of the recent shopping events that occurred, we built a push notification strategy around that as well, and it did really well for us. So again, I think that's one of those ones that is also intriguing to us. But I think, again, the high level, we really are trying to be everywhere it makes sense, but also really tailoring our content and strategy based on what that platform is. So, for some of the stuff that's working on Apple News may not make sense for Instagram or vice versa, so on and so forth. So I think, again, those are two areas. And I would say, the last thing that we're really, or me personally is really intrigued by, is this universal cart experience/straight to cart experience that more and more folks are dabbling with. There's a handful of platforms out there that can help publishers do this.Chris:And for folks who aren't familiar with this, it's basically saying, if someone comes to HGTV, or FoodNetwork.com, or tlc.com, and they see an item they like on there, instead of saying, "Buy now on X merchant site." And getting thrown off to that merchant, you could hit buy now, or add to cart, and you could actually check out within our platform, which I think is definitely going to be a big piece of the puzzle for the future of commerce on digital publishers. I think the big question will just be adoption, and then what does that look like. I think, again, Discovery is in a perfect position for this, because folks are already coming to us for this expertise, and know and love our brands already. So, there won't be a lot of convincing in terms of like, "It's okay to check out with us as well."Chris:But again, we're anticipating some shopping behavior adoptions that are going to occur during that process. But again, I think that's an area where you really start to open up a lot of new doors here when it comes to shopping for digital media sites. And, I think that's when it gets even more exciting for deeper integrations with Instagram shopping for example.Stephanie:Yep. Yeah, I love that. I mean, I'm excited to look into the Apple News more. And, I was just intrigued by that, because I like hearing things that others have not said yet. Because I'm like, "Oh, that means there could be opportunity there if you know how to work with the platform." Especially, if you can set up a push notifications. That's huge to make it in front of Apple users. And then yeah, I completely agree about the being able to shop instantly from a page. We just had the CEO of Fast on, Domm. And, I thought it was really interesting how he was talking about how every website should have buy now buttons under every single individual products, and he went into the whole thing of, "You actually will have higher conversions." Because of course, I was like, "Well, then you have to get past the minimum shipping amounts, and maybe higher order values, if you let me add stuff to a cart." And he said, "Based on everything they've seen, people will buy more if they can buy it instantly." And, it'll batch it in the background and ship it out after the fact, all together. So-Chris:Yeah.Stephanie:... I think you said it.Chris:Yeah. Convenience is key. I mean, everyone likes convenience, and again that's our hypothesis as well here, that we do plan to see increased conversions by building a more intimate shopping experience across our dot-coms with a lot of our partners.Stephanie:Yeah, that's great. So, the one big topic I also want to touch on was about audience development. So, when you guys, you have these huge audiences that you can tap into, but for especially a smaller brand, I want to hear how you all think about building that audience to then eventually being able to sell some products to them as well. What does that process look like? And, how can a new brand do that?Chris:Sure. So, I think first and foremost, I think it's important to understand what is audience development as it relates to your brand and organization. I think the biggest misconception with the term audience development is, "Oh, yeah, it's just another word for marketing." But it's not, and this has been written about it as well. And, I think the easiest way to think about this just in a very basic form is, marketing is more about how you want to look to the world as you bring those audiences in initially. More on the branding side of things, whereas dev is now like, "Okay. So, who are we to the world?" And, really drilling down on understanding those audiences that were brought in and who they are, and then building those audiences through different engagement tactics and community tactics.Chris:So, I think that's always a good place to start, to understand how those two worlds kind of then meet. And then once that happens, to answer your specific question, again start with understanding who your audiences are, and where they are. I think sometimes and probably not so much now, but in the past when I was first getting into this space, I think a lot of people just thought that, "Well, content is content. It could be put anywhere, and it's going to work the same way everywhere. Obviously not the case, even more so for shopping content, and behaviors. So, it's really, again, drilling down and pulling out insights based on, "Okay. Who is my Facebook audience? Who is my newsletter audience? Who is my Apple News audience?Chris:And, really starting there, and once you understand high level who they are, what they like, what they're consuming. More specifically when you talk about newsletters, what type of keywords are working to increase open rates, and so on and so forth, then you could start drilling down on the specifics. Saying like, "Okay. High level, here are the different topics and content archetypes that are working, now how do we build out an editorial calendar with that in mind." Again, with the understanding that we're not just going to set this and forget this across the board. What this looks like in newsletters is going to be slightly different than how we're positioning it on Facebook for example, and so on and so forth. So, I really think that's the key right there, and using data to your advantage and saying, "Okay. Well, here's all the different metrics that we're currently compiling, which ones can we look at, and pull from to better understand what these audiences are coming to us for." And again, working with your editorial teams, and the branding teams to bring that all together and say, "Okay. Now here's the plan for output."Stephanie:Yep. Got it. So, if you don't have an audience, and you're starting really from scratch, where would you start? Because I read quite a few articles, maybe from your past life at other companies about you increasing conversion rates by 60%, through maybe newsletters or increasing newsletter subscriptions? Is that maybe a place that you would start? Or where would you recommend someone brand new, who's like, "I don't really have an audience. I have five followers on Instagram."? What's the best way to acquire an audience and then keep them around to build it?Chris:Yeah. So I would say, if we're talking about limited resources and funding, I do think newsletters are a great place to start. And that's really because, it gives you an opportunity to have this one-on-one intimate relationship with the folks on the other side that for the most part you're not having to be held against what the algorithm is going to decide to show at any given day. Obviously, you have to worry about, spam and junk mail and things like that. But for the most part, if you're running a really clean newsletter list or lists, you don't have to worry about that so much. So, I do think, starting in the newsletter space is a really low budget, friendly way to start growing audiences, and it's really great to use as a gut check to see what is resonating. You could look at your open rates, you could look at your click to open rates.Chris:Again, you can monitor what the churn is and stop to see if what you're producing is causing people to drop off for good, so on and so forth. So I do think, for publishers where it makes sense that is a great place to start. You can obviously acquire new users through a bunch of different audience development tactics, whether it's on site widgets or modals, or do some small paid spend to try to bring folks in, and do the sweepstake partnerships as well. Again, obviously I'm a little biased, just because that is part of my background. But again, over the years, newsletters, again, I know they're not the sexiest platform to talk about, but they have been the most consistent in terms of performance and really bringing your most loyal and engaged users from that platform.Stephanie:Yeah, I completely agree. And, you also get access to quite a bit of data that you don't on other platforms, and if you can figure out how to properly engage with them, you could have newsletter subscribers for years to come, which is everyone's goal.Chris:100%. Yeah. And, I think even to take that one step further, you could even start to get more and more personalized where you get to a point where you're launching a newsletter to half a million people, and no two newsletters are alike because it's all based on past user behaviors that you were seeing within email and the dot-com, and again adjusting that based on different predictive intelligence tools. So again, I think 100% there's a lot there, and if done correctly, and go a long way. I mean look, this has been tried and true in the space. We see a lot of folks who start there, we're even seeing in the news media space a lot of journalists, and editors, and things like that backing off from the larger brands, and going this newsletter route to get their word and opinion out. So yeah, I think email is here to stay, and it's going to be a huge piece of the puzzle moving forward.Stephanie:Yep. I agree. So, you've been in the media world for a while, I think I saw at least back to 2012, maybe even before then.Chris:Yeah.Stephanie:I went as far as I could on your LinkedIn, I think it cut off.Chris:No, you got it. Yeah. I have been in media basically since the day I got out of college. So-Stephanie:Okay. Well, this is the perfect question for you then. What do you think the future of online commerce in media look like? Maybe in 2025 or 2030, what does that world look like?Chris:Yeah. So, I think it's going to be an extension of what we talked about a little earlier about this universal cart experience, and turning digital publishers into this space where audiences can come and also feel comfortable making those purchases. And again, not being bounced off to third party sites, and really being able to start building an even stronger shopping relationship with your audiences, because again with a universal cart experience, also comes a lot more first party data where you could, again, focus on more one-to-one relationships with your audiences, again, specifically in the shopping space, which I think is key.Chris:And, I don't foresee a place where merchants are going to have a huge problem with this, because, again, you're just helping to legitimize their product. Like your previous guest said about increased conversions. I think that's another huge piece of this puzzle. So again, it's really just now, again, bringing this all together, this whole 360 approach and saying, "Look, you're not just coming to us for flat inspirational content, you're now coming to us for the inspiration, and the ability to take action immediately." Again, versus being bounced off to one, two, three other platforms depending on which platform you're on, like your experience with Instagram.Stephanie:Yep. Yeah, I love that answer. Really good. So, now that we're talking a little bit about the future, what do you not understand today that you wish you did?Chris:What do I not understand today that I wish I did? That's a that's a good question. So, as it relates to commerce?Stephanie:Yep. Or the world, where you're like, "I really just wish I knew more about this." But yeah, it could be a commerce one, that would be cool too.Chris:Sure. I would say, I think not so much about not understanding this, but more not understanding why it's not better. And, that goes back to, I would probably say, affiliate data, and what that data looks like, and what partners have access to, or don't have access to. Obviously, being a part of many different networks, and merchants being on all different networks and so on and so forth, it becomes, quite difficult to manage all of that data coming in, and really having a platform that can easily bring this all together in a unified way. We do have a really strong partner that we work with to aggregate a lot of this data. Again obviously, it's never going to be perfect, because you're pulling it from all different places, and you have to understand, "Well, how does this platform leverage conversion rates and click through rates, versus this platform?" And again, just like, "What do those measurements look like?" And, the methodology behind them.Chris:So, that becomes challenging. But, I do think that's probably one of the biggest things that I just wish. And, I know it's not easy, hence the reason why it hasn't really been done yet. But, finding a more universal way to bring all this data into one data warehouse. Again, we were working on some stuff along those lines, but just high level, just generally speaking in this space, I do think that's one of the more challenging situations that a lot of digital media folks are in when it comes to with the shopping space.Stephanie:Yeah. That's a great answer. It does feel like a lot of technologies in general started out in that way. Very chaotic, things are everywhere, data is everywhere, and then things eventually end up in a dashboard, or it starts coming together in a more useful way. So, I hope that world comes to be in the future as well.Chris:Yeah. I mean, look, at the end of the day, that's only going to help all parties. It's going to help the audience, it's going to help the media company, it's going to help the merchant, so there's definitely reason to really get this right. But again, then, to do a bit of a 180, I think that's why you're going to start seeing these universal cart experiences take off more and more, because it does make that a bit cleaner in terms of what you're going to have access to and when.Stephanie:Yep. Very cool. All right. So, we have a couple minutes left, and I want to jump into the lightning round, brought to you by our friends at Salesforce Commerce Cloud. They're the best. This is where I'm going to throw a question in your way and you have a minute or less to answer. Are you ready?Chris:Let's do it.Stephanie:All right. What's Up next on your... Well, do you have Netflix? I would say Netflix, and I'm like, "He's going to be like, "No.""Chris:I do.Stephanie:Okay. What's up on your queue? And then, you can also tell me what's up on your Discovery queue?Chris:Fair. So, I'll start with us first.Stephanie:All right. Go ahead.Chris:And, I think this is so obvious, but huge 90 Day Fiancé fans. And, I will say my wife actually started that. I wasn't always, but she was like, "Come on, we got to watch it." And, this was a couple years ago. And, once I started, we have been heavily invested ever since. So, from a brand standpoint, we're 90 Day through and through. So, I think again-Stephanie:I like it.Chris:Yeah. Probably obvious to a lot of folks just because of the success of it, but that is our thing there. And then, she's also actually a huge fan of Discovery ID, it's her favorite channel by far. So, we got both ends of the spectrum there, right?Stephanie:Yep.Chris:Discovery ID, the DLC. But again, that just goes to show the strength of our portfolio. And then, on a personal front, I would say, what we're actually currently watching is the Borgias on Showtime. If you haven't watched it, I highly recommend it. But, it's three seasons, so that's good for me. I'm not a huge binger, but I can get through a three season watch, so we're currently in the middle of that.Stephanie:Cool. I have to check that out. Yeah. 90 Day Fiancé, so I have a twin sister, and she's obsessed with that show, and she's been telling me I need to watch it. And, I've been like, "No, I'm not watching that." So, now that you say you also enjoy it, maybe I'll have to want to check that out.Chris:Yeah. Come on. It's only fitting now. You got to at least give it a shot.Stephanie:Yeah. I think I will after this. That'll be the rest of my day.Chris:Perfect. So, I've succeeded tonight.Stephanie:You did-Chris:I converted someone.Stephanie:You can tell everyone, "I got a conversion."Chris:Exactly.Stephanie:What's Up next on your reading list?Chris:On my reading list. So, this is also probably slightly depressing, but I'm actually currently reading the Plague.Stephanie:That's [inaudible 00:49:47]. I mean, I don't even know what that is, but I'm like, "No." I mean, is it good?Chris:Yeah. I mean, so far, I'm only maybe a quarter of the way in. it's just eerily similar to the situation we're currently in, and obviously this was not written recently. This is old Camus. But yes, so that that's what I'm currently reading. So, not exactly an uplifting read, but I do think interesting to say the least in seeing some of these parallels that, again, just six, seven months ago we thought were just crazy things you would read or watch on Netflix.Stephanie:Yeah. Well, if you enjoy the full read, let me know, maybe I'll check that out.Chris:Will do.Stephanie:Next up, if you were to have a podcast, what would it be about, and who would your first guest be?Chris:That is interesting. If I had a podcast. For me, I think I probably wouldn't fall into the current podcasting world that pulls a lot of talent from different areas, and makes that the centerpiece of their podcast. I would much rather try to get in the weeds with folks who are making a difference on a local level. I think especially in this political climate, I think that sometimes gets lost that we think it's only the top that matters, and nothing lower does, which I think is completely false. I think everything starts at the local level. So, I would love to give more exposure and light to those folks who are doing the dirty work on the ground which, again, sometimes gets lost in the standard media cycles, or across social media for example.Stephanie:Yes, I love that. It's also something we're exploring here at Mission is local level podcasts, because I think that's what people are leaning into now. They have lost that also a sense of community with everything that's been going on, and you might want to know what your neighbors or community is up to, and also what they're doing, like you said, on the ground level. The next one-Chris:100%. I think it's super important. Go ahead.Stephanie:Yeah. What does the best day in the office look like for you?Chris:The best day. So, when that was a thing-Stephanie:When you went to the office, and you weren't just in your house in New York.Chris:Exactly. Honestly, the best part about that is, being able to... And, now I feel it even more, is having that change of scenery, and being able to have those face-to-face interactions with folks. I recently read a study where, I think it came out that people were actually working longer hours, and having more meetings, while working from home, because they don't have those passerby conversations in the hall, or going in and out of the restroom, and so on and so forth. Which, again, I don't think people appreciate until it's gone. And for me, that's been a huge piece of the puzzle that's been missing during these times is that, human interaction. I think everyone wants to think that working from home is the future, I'm just not sold on that yet.Stephanie:Yeah. I think the flexibility, maybe, but I think a lot of people are eager to get back and see their coworkers, and have coffee together and whatnot. So, there'll be pent up demand, as economists would say.Chris:Exactly.Stephanie:All right, Chris. Well, this has been such a great interview, where can people find out more about you and all the fun work you're doing at Discovery?Chris:Sure. So personally, you can find me, Chris Mainenti on LinkedIn, and we can connect there if you'd like to chat further. But more importantly, if you love our brands, you know where to catch us on TV. And then, similar to dot-com, HGTV, Food Network, TLC, Travel Channel. We're everywhere and we look forward to continuing to serve our audiences wherever they are, and really helping them through these trying times that we're all in.Stephanie:Yep. And most of all, go watch 90 Day Fiancé, everyone. I mean, I feel like you need that fun.Chris:Exactly. For the handful who haven't yet, including you, obviously.Stephanie:Yeah. I know. Such a veil. All right. Thanks so much, Chris. It's been fun.Chris:Likewise. Thanks so much again. Bye-bye.
Stephanie Montgomery is a two-time author, works as a successful TV personality, and is mama to an 18 month old. She believes if we as mamas share our stores and are there for each other EVERYTHING EVERYWHERE gets better. We get into doing what's right for you and your family, no matter what. We also chat about how to trust your gut and live life on your terms. This was a truly wonderful conversation. More about Stephanie:You can find her book here: Max and Ollie's Guide to Baseball More About The Savvy Working Mom:The $7 Reboot, an easy way to revive yourself: https://www.10minutereboot.com/rebootFollow Me Here https://www.instagram.com/thesavvyworkingmom/Get the Free Video Course: https://thesavvyworkingmom.com/more-time/
They say that laughter is the best medicine. For Colin McIntosh, it’s also been a pretty good business strategy. After a couple of fits and starts in business, Colin found himself with no job but quite a few domain names in his possession, all of which were pun-based. So he cycled through what he owned and formed a plan to build a company in a disruptable industry where he could make a splash and earn some market share. What he landed on was Sheets & Giggles, a direct to consumer bedsheets company with a social good component that became the most successful bedsheets company to launch on the crowd-funding site, Indiegogo. Since then, Sheets & Giggles has grown to millions of dollars in sales. On this episode of Up Next in Commerce, Colin gives the behind-the-scenes story of building Sheets & Giggles, including how he worked backward to build an email list that led to an unprecedented 45% conversion rate. Plus, Colin dives into the pros and cons of selling on Amazon, and gives an exclusive preview of some of the ad copy he’s working on to bring more humor to the Sheets & Giggles campaigns across channels. Main Takeaways:Going Backward: In order to meet your goals, it’s sometimes useful to work backward. Define what it is that you want to achieve and then reverse engineer the steps you need to take to get there. Navigating the Amazon Waters: DTC founders agree that Amazon is simultaneously the best and worst partner you can have. There are pros and cons to working on the platform, including massive discoverability but also deep cuts into profit margin. It’s important to weigh all the pros and cons of selling on the platform and find the strategy that works best for your brand and that leaves you with more of the pros than the cons. Laughing With You, Not At You: Selling with humor is an effective strategy if you can actually get potential customers to engage. Consumers are reading less and less, so if you are going to use humorous copy, it needs to really resonate, grab the attention of the customer, and get them to keep going along the customer journey. It’s easy to be funny just for the sake of being funny, but you have to remember that the ultimate goal is to sell the product, so there needs to be a call to action.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. Welcome back. Our guest today is Colin McIntosh, the Founder and CEO of Sheets & Giggles. Colin, how's it going?Colin:Pretty good. Thanks so much for having me today.Stephanie:Yeah, thanks for coming on. I was very nervous about messing that name up. I'm sure you get that a lot.Colin:MacIntosh, McIntosh. Yeah, [crosstalk 00:00:28]-Stephanie:Oh, I meant your company name.Colin:Oh, Sheets & Giggles. Yeah. No, of course. Yeah, sorry. I feel like I've gotten so used to it now, I don't even register it anymore. But yeah, you can call it S&G for short, so that way you're not laughing every time.Stephanie:There you go. I like it. So, before the show started, we were going a little bit through your background, which I think people would like to hear before we get into Sheets & Giggles. So, I'd love for you to kind of start there. How did you come to founding Sheets & Giggles, and what came before that?Colin:Well, a lot came before. It depends on how far back you want to go. I graduated from Emory University's business school back in 2012, and I started my career at the world's largest hedge fund in Connecticut, a place called Bridgewater Associates. And, the founder there, a guy named Ray Dalio, is pretty famous nowadays. And, I got fired in about five months, which was great being 22 and losing your first job in a strange state that you don't know anybody in. And then-Stephanie:What happened?Colin:Well, I was terrible at my job. So, [crosstalk 00:01:33]-Stephanie:Five months is not enough time. How did they even know?Colin:No, Bridgewater is usually... They're famous for two months or two years.Stephanie:Okay.Colin:And so, I kind of had a weird little in between stay, where after two months we were all pretty sure it wasn't going to work out, but they were like, "Ah, this should work out," and they didn't want to really pull the plug. And then, eventually I remember, they were arguing in front of me one day about... I'll never forget this. They were re-interviewing me for a different role inside of the company, and... That's how they do it. You lose your "box," and then they try to find you a new box before they totally get rid of you, because they think you're a culture fit.Stephanie:Yep.Colin:And so, they were arguing in front of me. I'll never forget, these two guys, the two managers. One said, "You know, I think Colin is a six for this role," and the other manager says, "Well, I think he's more like a seven, and I think we should hire him into it." And, they're arguing six, seven, six, seven out of 10. And then, the arbiter goes, "Look, guys. He can't get hired into the role if he's not a seven. If he's a six, we can't give him the offer." And then they agree, "Okay, he's a six-and-a-half, and we'll need to have another meeting on it." And, I just remember I raised my hand and I go, "Guys, let me do this. Today's going to be my last day at Bridgewater." I just couldn't deal with that type of [crosstalk 00:02:50]-Stephanie:Yeah, rating you.Colin:It was crazy. Yeah. And so, that was my first job experience. And, from there I became a recruiter, a third-party agency, recruiting for banks, and hedge funds, and startups. That's where I got into technology, and startups, and software. Taught myself a lot about software development and software engineering, and ended up hiring a bunch of different engineers at a bunch of different companies. And, I ended up hiring myself at one of my clients in Seattle, in a really interesting B2B software space called Application Virtualization, which was really hot in 2014; it's still pretty hot.Colin:And I ended up moving up to Seattle. And then, about a year and a half later, I got an opportunity at a company that I helped co-found with some friends called Revel R, which was a wearable tech product that got into Techstars, which is for those listening, a really famous worldwide accelerator for startups. They give you a $100,000 for 6% of your company, and put you in a room with nine other companies for three months, and give you all the training, resources, connections, and mentorship that you could possibly need.Colin:And so I dropped everything I was doing in Seattle, drove 19 hours down to Denver on a week's notice, and became a Coloradan about five years ago. And, that company... I ended up working there for about two-and-a-half years. We all got laid off at 1:00 PM on a Sunday, as startups unfortunately go. And, it was really sad. We had raised millions of dollars, and we're in Target, and Brookstone, and HSN, QVC Deals, T-Mobile stores. But, that product, unfortunately, didn't have all the legs that we thought it did. And, three weeks after I got laid off xI incorporated Sheets & Giggles, and now it's been three years since that date. And, it is now the longest I'd ever worked anywhere in my career.Stephanie:That's great. So, what is Sheets & Giggles, and how did you have the idea to start it?Colin:Well, for anyone who hasn't heard of us, it's okay; although, I will hold it against you.Stephanie:Very rude.Colin:Very rude. We sell bedsheets that are sustainable, and they're made out of a material called Lyocell, which is made from eucalyptus trees. And so, if you Google or Amazon eucalyptus sheets, we're generally the first results. Lyocell sheets is another query we rank high for. And what our sheets do is, they actually save up to 96% of the water that cotton sheets use, which is about 96%... sorry, 1,000 gallon reduction. And then, they also save in energy, they use no pesticides, no insecticides; whereas, cotton can use 16-24% of the world's insecticides just by itself, as a crop.Colin:They also biodegrade faster than cotton, they're hypoallergenic, they're zero-static, and they're naturally softer and more cooling. So, if you're a hot sleeper, they're the best possible material. The eucalyptus Lyocell is for hot sleepers. And so, it's a really wonderful product. We began manufacturing at about two a half years ago, and we now have shipped tens of thousands of orders. We raised a couple of million dollars in capital, although we are mostly revenue funded, and we grow according to our revenue. And, we are just loving life right now. We're a very socially conscious company, and it's really wonderful to be able to have fun, do good, and make money at the same time.Stephanie:That's great. So, with your company, did you see an opportunity in the market from doing research, or did you just wake up one night sweaty like "Oh, I need to build better sheets. This is [crosstalk 00:06:32]." How did that happen?Colin:So, whenever I hear founder interviews from Brooklinen, or other bedsheets companies... And, I hate to throw Brooklinen under the bus. They're a great company, and I really respect... No, I really respect what they've built. They get $100 million dollars in trailing 12 months revenue. They're a wonderful company. But, their co-founders go on these-Stephanie:However.Colin:... podcasts, then they're like, "Oh, we were staying in these hotel sheets, and we were like, 'Oh, they're so lovely. And, let me find out how expensive they were,' and we were like, 'There had to be a better way.'"Nobody starts a company because they stayed at a hotel. They saw a really good business model. They found a manufacturer who would make really good products for them at an affordable price so they could resell it a higher price, and they went from there. And that's great, and they should be proud of that.Colin:And so, that's sort of, more or less, what happened with S&G, where it was actually a business model play first. And, I'm a big... a big, big advocate of sustainability, and climate change is one of my hot buttons. I've always had a bleeding heart. I've worked at startups trying to end animal euthanasia. My last startup, the wearable tech startup I talked about, we were trying to fight sexual assault and violence. We actually sent out 60,000 emergency alerts, saved a bunch of lives, which was really a wonderful... wonderful thing that the company did. But you know, this company, I really wanted to have a sustainability mission. And so, I kind of sat down and I wrote out my perfect business model with a sustainability mission.Colin:This is a true story. I looked at all the domains that I owned, and I owned SheetsGiggles.com because I thought it'd be a funny name for bedsheets company. I have a lot of pun-based domains that I own.Stephanie:What's some other ones? I want to hear them. Any others come to mind?Colin:I've got a few really good ones, Bodcasts.com...Stephanie:Oh my god.Colin:... B-O D-C-A-S-T-S.com. I love that. I would love to do podcasts for exercise, where you don't have to watch YouTube videos, and you can just have a platform for exercise physiologists and personal trainers to do listening-only routines. I also own SunglassesHalfFull.com for a sunglass company, GiraffeCarafe.com for carafes in the shape of giraffes. I own WorkFromRome.com. Why work from home when you can work from Rome? That's a travel company for remote work. I buy a lot of domains [crosstalk 00:09:13]-Stephanie:So many companies to start, so little time.Colin:Yeah. Romanhemperor is probably my favorite one that I'll probably start one day, a CBD company.Stephanie:That's good.Colin:My nephew's name is Roman, so he'll be my little CBD mascot.Stephanie:Perfect. I like it.Colin:Yeah, I'm sure my sister will love that.Stephanie:Yeah, I think she will.Colin:Yeah. But yeah. To answer your question, a lot of them. I owned SheetsGiggles.com. I thought, "Does bedding fit my criteria?" and it fit perfectly, $12 billion U.S. market growing 10% year over year, highly fragmented, the top five players only own about 27% of the market, and it wasn't fully online at that point. It was still mostly physical retail. I kind of just put my head down, and I fell in love with this brand. That was the other thing, is I just fell involved with the idea of a funny brand in a very boring space, especially if it's a sustainable, premium product and you can still do a funny brand. That's a really hard tight rope to walk, and I really fell in love with the branding challenge.Colin:That was kind of when I put my head down in October 2017. I created a brand, Identity Map, for this pun-based bedding empire, is what I would call it to people. Me and a couple of contractors just designed a logo, and I built my own website, wrote every single word of copy myself, would stay up until four in the morning, writing, wake up at 8:00 AM, start writing again, and just totally fell in love with this weird, little company that I was creating in my bed, in my underwear. In May 2018, we did our crowdfunding campaign on Indiegogo, raised $284,000 crowdfunded, love those crowdfunders and have a very special relationship with thousands of people who brought the company to life, and it's all been history of since there.Stephanie:That's really fun. What was your experience on Indiegogo? How did you get found? Because a lot of times on those crowdfunding platforms, it seems like there's so much noise nowadays. In the early days, it was [crosstalk] to get found.Colin:Yeah.Stephanie:Now it's like, "Oh my gosh, if I put something up there, there's thousands of other people trying to raise money for something." How did you make sure that people found your potential product?Colin:Yeah, absolutely. Even in 2018, it was still a pretty difficult task. There were still thousands of projects being launched every single day. 2013, 2014 would have done prime time to do a crowdfunding campaign. That was actually when, fun fact, I'm going to brag a little bit, Brooklyn did their Kickstarter in 2013 or 2014, and they did $236,000. We did ours in 2018, $284,000.Stephanie:Hey.Colin:Yes.Stephanie:Hello.Colin:Basically, there's a few hacks for crowdfunding campaigns. If anyone out there is thinking about doing a crowdfunding campaign, generally speaking, you want to do a few things. First and foremost, you want to set a goal that you can hit on day one because their algorithms reward percentage of goals hit in a period of time. They don't reward dollars raised. You don't want to go too low because then you've set expectations for people that, "Wow, you've blown away your goal, and now I expect the world from this company," but you don't want to go too high either and have a goal that takes you the full 30 days to hit because then you won't trend. For us, for example, internally, we wanted to do $100,000. Externally, we set our goal as $50,000. We thought that we could hit that in a couple of days based on our preparation.Colin:The second thing you want to do in order to come out of the noise is prepare. A lot of people... It's kind of sad. I see them launch a crowdfunding idea for something that maybe is a really cool idea or a cool project, but they don't do any preparation whatsoever, and they don't stop the think that even if they have 1,000 Facebook friends and 30 friends and family and 500 connections on LinkedIn and whatever it is, you just got to always assume a 3% conversion rate with anything, even your friends and family. If you have 1,000 people that you think you can count on, you're talking about 30 people that are actually going to pull the trigger and give you their credit card information when you end up buying. You don't want to rely on the friends-and-family model for crowdfunding. It's just not a good way to do it.Colin:What you want to rely on is an email list. I get asked all the time, "Where do you find your email list? Do you buy it? Do you build it?" The answer is, "You build it." You want to build it and get people to give you their emails who are interested, qualified leads, who are interested in buying into the brand that you're building. What we did was we worked backwards from our goal of $100,000 and said, "Okay, $100,000 in 30 days, generally speaking with the crowdfunding math, you want to make 30% of that on day one." That's just the way the crowdfunding works, big boost in the beginning, plateau in the middle, boost at the end. You want $30,000 on day one. We knew our sheets were going to cost $70 on average, which was a really low price. I really under-priced them. We knew our average order was probably going to be 1.5 units, so $100 average order value. If $30,000 on day one at $100 average order value is the goal, that means we need 300 customers on day one.Colin:If an email list converts at 3%, then that means that we need 10,000 emails in order to get 300 customers on day one. That became our singular focus, singular goal from February through April of 2018 was gathering those 10,000 emails, doing it at an affordable price that would end up translating into a low cost of acquisition, and we ended up spending about $9,000 to gather about 11,000 emails, converted at about a 45% rate, which was really unheard of. That was the first time I was ever very, very-Stephanie:That's really high.Colin:Yeah, I was very, very excited and confident that the crowdfunding campaign was going to go well when we saw the 45% email capture rate. We ended up converting at 4.5% on our email list on day one, and we had a $45,000 day one just like clockwork. Then we [crosstalk 00:15:05].Stephanie:That's awesome.Colin:Yeah.Stephanie:I like the idea of working backwards. I think enough people don't think of, "What do I want my end result to be, and how do I make sure to get there?" Like you said, they rely on, "I have enough friends who will buy," which I've also experienced does not work. Friends and family [crosstalk] can only go so far. Yeah.Colin:People forget. People get busy. They have busy mornings. They forget. You need a big boost all at once to come out of the noise on crowdfunding. We ended up being the number two trending topic on Indiegogo.Stephanie:That's awesome. How did you go about building your email list? Because acquiring emails for the price that you did is very good. Conversions are very good. You can get a ton of emails these days, but a lot of them probably wouldn't be qualified if you don't do it the right way. What kind of tactics did you use to get good emails who are qualified buyers to make sure that they actually ended up converting when you launched?Colin:That's a great question. First and foremost, if you're going to do a crowdfunding campaign, I would recommend hiring a digital agency that specializes in crowdfunding, but I would be very careful about whom because there's a ton of sharks and predators in this industry who will take your $2,000 set up fee, and they'll promise you the moon, right? Colin:There is one agency I'd recommend, my buddy, Will Russell, he's the man, Russell Marketing in New York. And I trust him with my life, so I hired Will. I had known him tangentially through the last place I worked at. And he basically flew out the boulder. We sat down and we white boarded things out February, 2018 about our plan for the crowdfunding campaign. And basically the method was he had these emails from past campaigns that were early adopters, right? There are people who had backed Kickstarter campaigns before, and you can get lists like that in other places. Then you begin to build one, two and 3% lookalike audiences on Facebook. From those lists, you're able to advertise to other people who are likely early adopters. You build a landing page. We use kickoff labs as the software for our landing pages that hooked into our Google analytics. We did a photo shoot all in for $500 with me and all my best friends in Denver, Colorado. We were smoking cigars, drinking whiskey, having fun in bed, playing with dogs, eating pizza.Colin:Basically, whatever makes us laugh is what put on camera. And so, that was what we did in February 2018. We built those landing pages and that content with our first photo shoots, and all the copy that we wrote was just coming from my two fingers or 10. And then we just basically ask people, Hey, do you want to walk into the best price you're ever going to get on the best bedsheets you're ever going to feel? And we had three core value propositions for any crowdfunding campaign. You generally need three core differentiation propositions. One was that it's literally softer and cooler than cotton. And I led with that because I think that people are selfish and won't buy a sustainable product, if it's not better than the unsustainable version.Stephanie:Yep.Colin:Value prop number two was that it was sustainable, and value prop number three was that because I knew how all these retailers worked, and I know the margin share that Bed, Bath and Beyond takes from this category, which was about 40%, the price that you're paying is going to be traumatically lower than the price you pay for comparable luxury, sustainable options in the store. And those were our three value props and it really resonated.Stephanie:That's great. So what is your customer acquisition strategy look like now that's different than maybe what you did with Indiegogo?Colin:Now? I mean, now I have an in-house marketing team, a four person team. They're absolutely wonderful. And Sarah, our VP of marketing, is total genius, and she is someone who on the performance marketing side I think is unmatched. And I basically give her, to be completely honest. I give her free rein at this stage because a founder's skillset is fundamentally different than a CEO skillset. And I'm doing my best to transition from founder to CEO. And part of that is not micro-managing. And frankly, being okay with a much more boring job of facilitating, supporting, financing and managing versus being the creative, being the brand voice, being the copywriter, being the photographer and the videographer, and the Facebook data analyzer, and the Amazon ads creator. I can't do that anymore because it just doesn't scale. And it's also a good way to get talented people to leave when they feel like they're being micromanaged.Colin:So in terms of our actual strategies, basically, it's all direct to consumer on our website, sheetsgiggles.com and Amazon. And we've got a core channels of Facebook, Instagram, Google, and Amazon as our digital spend. We do some podcasts advertising, so definitely get in touch about that. And we also do radio advertising on Colorado Public Radio and a few other stations. And then we've tried direct mail, we tried a few other funky things. Nothing has the [inaudible] that digital tends to have.Colin:And in terms of email strategy nowadays, we actually don't email people nearly as often as we used to. In the very beginning, when we launched them Indiegogo, we'd email people maybe once a week. Now we're probably emailing people once a quarter, which is really crazy for a direct to consumer brand. Like every direct consumer brand in my inbox blows up my inbox four times a week like, buy more of our shit.Stephanie:Yeah.Colin:And so, the amount of sandal emails that I get from my sandal company is ridiculous. And so we email people only when we want them to take a very specific action. And that leads to open rates of high forties on emails, which is really, really stellar for open rates on emails. And we make sure that we use that wisely and we don't over innovate people.Stephanie:Great. So what are your favorite channels right now? Of everything that you just mentioned, is there any channel that you're maybe putting more budget into, or that you're seeing higher success with?Colin:I can find a row ad that beats Facebook, I will pull all my Facebook tomorrow, but they're definitely the highest row ads. Branded search is obviously the thing that's going to be best in the long run. So we spend a lot of time building up our brand recognition with people and our brand affinity, and then just earned media is really good too. We have a PR agency that we employ and we got covered yesterday by the Daily Beast, and we've been covered by Real Simple and Forbes and Apartment Therapy. We are Apartment Therapy's Best at 2020 picks, and a lot of other publications. We've been on today.com and Amazon gives us a lot of shout outs because of the philanthropy that we do.Colin:And so that's been really helpful to have Amazon as a big partner in our PR and in our discovery and exposure. So overall I would say Facebook and earned media are probably our two biggest ones. And then I do love radio and podcasts advertising, and I'm trying to figure out how to make that funnier for the listener. And so I'm currently recording a few new podcast ads that I think are going to be really funny and not in a really bad Geico, not funny at all way, but actual bits on the radio.Stephanie:Oh, give me a bit. What are you working with it? [crosstalk] You can practice in here. There's no judgment.Colin:Okay, great. Great. Great. So, I've got one that I think is pretty funny in a meta sort of way where I want to go on a podcast and be like, hi. Have you ever the CEO of Harry's do his thing?Stephanie:Yeah.Colin:I'm not famous, but I'm the CEO of Harry's.Stephanie:Yeah.Colin:So, I'm like, hi, I'm Collin, the CEO of Sheets & Giggles. That's probably means nothing to you, which is depressing, a little sad. We're a young company, we're based in Denver. We do some good stuff. Oh, we sell bedsheets. I should probably lead with that. God, how does the Harry CEO do this? And basically go with that. And then, somebody in the background goes 10 seconds. 10 seconds? And I'm like we sell eucalyptus bedsheets. They're sustainable, they're softer than cotton. Go buy them at sheetsgiggles.com. And that's the end of that. And then-Stephanie:That's actually catchy. I like that because a few people were like, "What is this dude going to say?" And then [crosstalk 00:24:12].Colin:And then I want to record four or five versions of that, that run on different roles. And basically, it moves from okay, they gave me a second take, I got it this time, I'm calling, CEO Sheets and Giggles, again, we sell bed sheets. I feel like that's obvious, maybe not that obvious. I don't know. If it was just called sheets without the giggles, it'd be a little more obvious. And then somebody's like, "10 seconds. And I'm like, "Oh, my God," and then get back into it again. And so, I think that those little bits and the nonsequiturs and stuff is very much our comedy and the trailing off and the tangents. And so, I really want to write a few different bits like that, that really flow with one another.Stephanie:Yeah. That's pretty great. I can't wait to hear this on radio or other podcasts as I think those will all do well. How do you-Colin:Well, you heard it here first.Stephanie:Yeah. You heard it here first everyone. This is special. Do you ever feel like selling through humor, like that could hold you back in a way because sometimes I see some brands where that's so much their angle that it gets away from the product because they get so funny where you're like, "Wait, what are you actually selling again?" So, how do you guys balance that to make sure you're still selling, but in an innovative, new way, that's setting you apart from others.Colin:It's actually a stellar question. I see that all the time when I see an Instagram brand that's just pure, pure, pure, funny without ever talking about their products in any way or ever talking about their reviews or their sustainability. It's just, "Buy our shorts because we're funny." It's like, "Dude, they're polyester shorts. I'm not going to buy your polyester shorts because you're funny."Colin:But the thing that we do, I think, that is not unique, but I think is smart is we basically let our reviews do the talking for us. So, we always say we're not serious, but the sheets are. And that's our mantra is, "We don't need to sell the sheets. Our reviews sell the sheets. Our stats sell the sheets." The amount of water we save, the pesticides and insecticides we save, we plant a tree for every order. We've got 3000 reviews on our website, 4.8 stars and we don't hide our one star and two star reviews like a lot of other consumer brands do. We have 845 reviews on Amazon as of this morning, I check every single day. I personally, as a CEO, read every single review that comes in, we have a Slack plugin that pulls every single review and puts it in front of my face. Every time we get one in live time on Amazon, we're four and a half stars on Facebook. We're 4.7 with 116 reviews, I think.Colin:And so, that type of cross channel confidence in terms of review score is really important for the consumer. And then the sustainability, the planting of a tree for every order, we give you 10% off if you donate your own old sheets to a homeless shelter, we pledge 1% of our profits, time products and equity, to local Colorado charities, we've donated $40,000 this year to Colorado COVID-19 emergency relief. The stuff that we do, I think, really speaks for itself and we don't have to really broadcast it and advertise it, even though I just obviously did. Instead, we just lead with the humor and then let people read more if they want. And truth be told, I think the most limiting thing, and you kind of touched on this, is that not everybody's a reader, especially when you're talking about Americans, no offense to... I'm a red blooded American, but we don't read.Colin:My old mentor at a toy company told me with the packaging that they made, their mantra is, "If you're asking people to read, you'll lose." And so, that's probably the biggest limiter is that a lot of our comedy is very copy heavy. A lot of other people are more visual or meme based or slapstick and video and we're much more copy heavy. And so, I like to think about us as sort of like the Seinfeld of bedding brands, which is probably the first time that's been uttered in the sense.Stephanie:Was that your Techstars YC type of thing of I'm [crosstalk 00:28:24]?Colin:We went to Techstars. They were like, "Why should we have a bedding company in Techstars?" And I think I was just like, "Why not?" And they were like, "We never thought about it like that." I was like, "You're in." But yeah, the Seinfeld of bedding companies was the way that I always thought about it. It's a brand about nothing. And by being a brand about nothing, it really is a wonderful way for us to be a brand about everything. And that was the beauty of Seinfeld, which has been my favorite TV show obviously, is that every episode was about its own little subtopic and it didn't have to have this overarching theme or story arc and that's great with us.Colin:As one day, we can donate $12,000 to the world wildlife fund to save koalas, another day we can donate 40,000 to COVID-19 relief, another day we can donate thousands of dollars to Black Lives Matter organizations, another day we can plant 20,000 trees for last year's orders. And we don't have this kind of overarching thing that we push on people. Instead, they can just discover it if they want to keep reading. And then we just try to make the copy entertaining for them to find their way through our website.Stephanie:Cool. Yeah. That a good way to explain it and yeah, it makes sense how you guys do it. So-Colin:It is limiting though. Yeah. When you're building a brand, you want 20% of people to really viscerally resonate with it and 80% of people to either be mad or react poorly to it and then that way you just don't want indifference. That's the biggest thing is I see so many direct to consumer brands that are the next shiny thing like, oh, the best apparel you'll ever buy or the best makeup or the best food or... They're all the same exact brand and it bores me to tears. The white stuff on the white walls with the white curtains and the white room. It's like, "Oh, just kill me."Stephanie:Yeah, completely agree. So, how do you encourage reviews? You were mentioning that you have a ton of reviews. How do you get people to follow through and actually take the time to give you your reviews?Colin:We, again, brand about nothing. We give to people who leave reviews free pizzas every week for no reason. It's just like, why pizza? I don't know. Pizza's good. You like pizza.Stephanie:Okay.Colin:Does it have anything to do with bedding pizza? People eat pizza in bed, I guess.Stephanie:I guess. Yeah. Not on my nice eucalyptus sheets though I'm not going to.Colin:But they wash real easy. So, it's okay if you spill on it. No, but that's how we incentivize it is we just say, "Hey, if you leave a review there's a chance that you'll get two free pizzas this week," and who doesn't like free pizza? Communists that's who. And so-Stephanie:That's good.Colin:Actually, we say capitalists that's who. And so, we do bits like that and it's stuff like that, that I think really drives people into the brand and we get people who are like, "This is insulting. I'm a capitalist." And I'm like, "It's a bit. It's just a joke about free pizza." And so that's how we incentivize it mostly. And then again, really engaging copy. The subject line is good, we have high open rates on our review request emails, we make it so you can leave the review directly in the email-Stephanie:Oh, that's a good one.Colin:We don't overpay for review software. I can't stand the stuff that's thousands of dollars a month. There's really good, affordable review software out thereStephanie:Okay. Cool. How did you think about moving on to Amazon? Because we've had a couple of [DVC] companies on here. Quite a few. It's been kind of mixed where, some were very excited about Amazon. Some were like, "Oh, I pulled it off because it kind of walked down the brand and they could end up just copying us and making a white label," and so there's been a lot of mixed thoughts around working with Amazon. So what led you to wanting to utilize their platform? Obviously they're featuring you and helping you guys. What are your thoughts around having a DVC company on Amazon?Colin:Amazon is Amazon. It's the best partner you'll ever have and the worst partner you'll ever have, and exists simultaneously in the same platform. That's why you hear this sort of debate or dichotomy amongst founders where it's like, "Do you want to go on Amazon?" And the pros, right, are that 54% of Americans. I think it got up to 60% of Americans now start a product search on Amazon. They've trained the American populace to, when they're looking for a thing, go to amazon.com. Google has lost that battle. So it's a massive channel that you really... It's hard to avoid. You have discoverability. You could have channel dominance. If you rise to the top of search returns for a high volume query, you can just rack in cash with no marketing spend whatsoever for years, until somebody tries to come beat you.Colin:It's a really solid platform. The negatives are, of course, that Amazon is extremely impersonal as a company. It's hard to get people on the phone there, although we do have account managers now. It is expensive. They take 25 to 30% margin share all in when you end up calculating all the fees from most companies, which is a really, really difficult thing for a lot of small businesses to swallow. And then you wind up paying them more to advertise on their platform to give them money when you make a sale. And so they're really a good partner in a number of ways. They do a lot of really great things for their companies, especially the small business partners, but, overall it's a love, hate relationship for sure. And you can do one thing wrong and get your whole listing pulled. And that can be really devastating too. So overall for me, it's a no brainer because if more than half of your audience is starting a product search on a specific channel, you have to be on that channel, period. End of story. Even if you're only doing it for branded searches.Stephanie:Completely agree. So earlier you were talking about working with PR firms and different efforts to bring new people, new customers, your way. How do you guys have your backend set up to be able to handle fulfillments? What does your tech stack look like to be able to handle any surges in demand?Colin:Surges in demand are actually difficult because we... forecasting demand is extremely difficult. Forecasting inventory becomes extremely difficult and then you put those two things together and you have to forecast the amount of people that you have working on your warehouse team at any point in time, which is extremely difficult. And so when it comes to surges and spikes, we use a 3PL, third party logistics provider, to ship out all of our orders, both on our website and on Amazon. We do FBM on Amazon, instead of FDA. And so we are basically able to get probably 99% of orders shipped out within a 24 hour period. But when we do have big surges and big backlogs it can slip to 72 hours.Colin:Because we are paying for that 3PL service, they have a finite amount of people that they've forecasted to work on their thousand brand partners that use that share of the warehouse space. And it's a really good way to lower the cost overall and then, from a small warehouse operation, if you're running it yourself, because you're sharing that square footage with so many other brands and you're sharing a labor with so many other brands And it's a pretty straightforward process nowadays in terms of hooking up a 3PL. In the beginning for the first six months of the company, October 2018, through March 2019, I was shipping out almost every box myself, along with a three person team in Denver, Colorado. We had our own warehouse space. We had 1,000 square feet. We were packaging. We could do maybe 250 orders a day maximum. And we were just trying to burn getting through holiday 2018 on our own.Colin:It was crazy. It was so [crosstalk] hectic. I think I shipped 3,000 boxes in a three week period at one point in time with the rest of my team, working eight hours, 10 hours a day in the warehouse and buy everybody lunch every day. And it was great. I had my customer service team and they're working with me. But yeah, it was definitely a lot easier when you can scale up and use the 3PL. I do have some companies that run their own warehouse space that actually wind up with all the headaches that it comes with and migraines that it comes with. They do wind up having a lower cost per unit in terms of fulfillment than we do, so there's certainly something to be said for that. But I think that right now we're at the 3PL stage for sure.Stephanie:Yep. That makes sense. All right. So we have not too long left, so I want to jump into the lightning round because I think you're going to have some good or funny answers. Lightning round is brought to you by Salesforce Commerce Cloud, our sponsors. They're amazing. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready?Colin:Okay, I am ready.Stephanie:The first one, what is the biggest fail that comes to mind when starting a DTC company that you experienced?Colin:Our packaging was white in the beginning.Stephanie:Were they white walls, white sheets, white, everything?Colin:Well, the inside of the packaging was purple and the outside was white and our packaging was lovely. We've got knapsacks to wrap the sheets. We've got free eye masks in every box. It's lovely, but a white exterior box sent through any postal service is going to get absolutely destroyed. And so that was our biggest fail was we had boxes just showing up, just beat the hell from FedEx and UPS. And so we moved in, I believe, mid 2019 to purple exteriors and that's allowed us to be much more efficient with our shipping and have much better customer experience.Stephanie:That's good. I can imagine getting a white box knowing that my bedding is inside it going, "Ooh."Colin:So dominant. And so to protect them, we had to put them in polymailers and in brown cardboard boxes, which was a huge waste for the first six months of the company. Then we had people call us out on it. And I was like, "You're absolutely right. This is so dumb. Why are we doing this?" And so now we just slap a label on the outside the purple box, and it's so much better. Additionally, minor thing, a major thing, minor thing. We had plastic in the packaging for the first six months. We had a little plastic sheet around the sheets, inside the knapsack to keep them safe from any water damage during transit. And we got a couple of complaints from people, really peaceful, nice messages saying, "Hey, I expect better from a sustainability company to put plastic in the packaging, even if it's recyclable." And we said, "Okay." And so we removed the plastic and we put in tissue wrap now for a final piece of protection.Colin:So there's no markings on the sheets and I'm thrilled to have eliminated that plastic. And now we've shipped out tens of thousands of orders since then with zero plastic packaging. In fact, we're the only bedding company in the world that does not vacuum seal our comforters. And they ship in the box, ready to go directly on the bed straight from the box, no [crosstalk]Stephanie:That's a good one. I hadn't even thought about that and I was wondering, are you having issues so far? But if not, more people should be doing that.Colin:Oh, we had issues. We just replace them. I mean, it costs us money. Like, FedEx will rip a box and then they'll get damaged and they'll leave it outside in the rain and it'll get waterlogged, so we definitely have that. But I think it's worth it to eliminate the amount of plastic that we're saving.Stephanie:Yeah, I like it. What's up next on your Netflix queue?Colin:Oh. I just started Ratched last night.Stephanie:How is it? It looked too scary for me. I'm a baby.Colin:It's really good. You know, I like stuff like that that's a little trippy, and I'm also a huge Marvel nerd, so I'm still waiting for the next Marvel series, but that's a Disney Plus queue, so I cannot wait for WandaVision and Falcon and the Winter Soldier and the Mandalorian is in two weeks as well, so I'm really excited for that.Stephanie:You've got your whole queue set up. I like it.Colin:Yeah, I love that stuff.Stephanie:Well, I know you said people aren't readers, but do you have anything coming up on your reading list?Colin:Yes, I just started The Everything Store.Stephanie:Oh yeah, that's a good one.Colin:And I'm surprised I haven't read it yet, actually. And then I'm trying to read things from a different cultural perspective because I'm a 30-year-old white male who mostly hangs out with other 30-year-old white males, and so I've got a book called Well Behaved Indian Women that I just started, and I'm really enjoying it. It's a totally different cultural perspective. It's so foreign to me and it's really, really great to immerse myself in that. I'm trying to think if there's anything else up next, but those are the two big ones.Stephanie:I'll have to try that out. What new E-Commerce tool are you trying out right now or having success with?Colin:Oh, it's something called Gives, and I should get a referral fee for this. So basically, it is this really cool thing we're doing to allow people after check-out to, when they buy something, donate a percentage of their order to the charity of their choosing. So we just tested it this week for Prime Day because we had our Prime Day deal on Amazon and we had a lower percentage off on our website, but you could donate another percentage of your order as well, so it actually ended up being a lower price but part of that was donated versus just going into your pocket and it's really cool.Colin:So now, our customers moving forward, and we're trying to decide if we want to do this on only special occasions or on every day type of thing. We already plant a tree for every order, now we're going to be able to let our customers donate 10% or so of their order to a cause of their choosing, which I think is a really, really, really cool thing. I just don't know if the dollars and cents work, so we're testing it out to see what that looks like.Stephanie:Awesome. Yeah, that sounds like a good implementation. All right, the last one. What one thing will have the biggest impact on E-Commerce in the next year?Colin:I mean, COVID. COVID.Stephanie:Yeah.Colin:No doubt. It's blown up E-Commerce on a five to six year type of acceleration. The amount of people that are shopping online versus in-store has just grown dramatically, and I think that we're probably in this environment for another six to nine months, until a vaccine rolls out. So I think that this trend will only continue, and I think that that's been a huge, huge driver of E-Commerce, and I think it's both good and bad, obviously. It can be good for some industries and horrific for others, so it's also a logistics issue and everybody listening out there, when you order stuff online right now, it's not the brand's fault if it takes 14 days to get to you. FedEx is trying to hire 70,000 people by Christmas and they're not going to hit that, they're going to hit like 50,000, which is still a dramatic undertaking. But the amount of packages going out right now is just overwhelming the system that we built.Stephanie:Completely agree. All right, Colin, this has been a fun interview. Where can people find out more about Sheets and Giggles and yourself?Colin:I'm a pretty private person. I do have a public Twitter, Colin D. McIntosh. Sheets and Giggles, you can google us. SheetsGiggles.com is the website, no "and" in the URL, just SheetsGiggles.com, and then we're also on Amazon if you want to search for our sheets there, Sheets and Giggles. [inaudible] the sheets. And yeah, pretty easy to find. And then our social media, SheetsGiggles, so it's just at SheetsGiggles everywhere. On Instagram, Twitter, Facebook. We're a good follow, we promise. We don't just post pictures of our products all the time and people buy them. And we just hit 10,000 followers on Instagram, which I'm really excited about. We've never paid for a single follower, so it's fun to build this organic following over time.Stephanie:Oh, that's great. Yeah. Nice work there.Colin:Thanks.Stephanie:All right, Colin. Thanks so much for coming on. This has been a blast and we'll have to have you on again in the future.Colin:Thanks so much for having me. Hopefully when I come back on next time, we're a much bigger company and everybody's like, "Oh yeah, I've heard of that brand."Stephanie:They will have heard of it. Don't you worry.Colin:I hope so.
Rachel Drori has come a long way from the days of filling a shopping cart at Trader Joe's and packing up healthy, frozen meals for delivery to customers all around New York — all while being nine-months pregnant. As the Founder and CEO of Daily Harvest, Rachel bootstrapped her company from the very beginning, and eventually had a few big names reach out to invest, including folks like Serena Williams and Gwyneth Paltrow. In 2019, Daily Harvest generated more than $125M in revenue and the company is growing. So what makes her meal-delivery service different from the others? The heavy focus on customer-centricity.When Rachel founded Daily Harvest, her goal was to build a customer-driven company that connected people with food that was designed specifically for them. But what did that look like from a practical standpoint and what can others learn from Rachel’s journey? On this episode of Up Next in Commerce, we’ll give you the answers to just that, so stay tuned!Main Takeaways:Nimble and Agile: In marketing and customer acquisition, it’s a mistake to be reliant on any one channel. Having the ability to understand and follow the trends, and then meet potential customers where they are at the moment they are online will allow you to actually bring in new customers reliably.Call and Response: Customers are less interested in having a place to share their thoughts than they are in having their feedback responded to by the brand they are interacting with. In every channel, there should be a way to engage in two-way conversations with your customers and then a method to follow through on those customers’ needs in a way that everyone can see.High On Your Own Supply: Having control of your supply chain is one of the best ways to create agility within your organization. But sometimes it takes some technology investment to bring all your suppliers on board.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, your host and co-founder of mission.org. Today on the show, we have Rachel Drori, the founder and CEO of Daily Harvest. Rachel, welcome, welcome.Rachel:Hi, thanks for having me.Stephanie:Thanks for coming on. So yesterday in the mail, I got an amazing box of Daily Harvest. And it was the perfect way for me to understand exactly what it was and enjoyed this morning. But to kick it off, maybe I'll let you explain what Daily Harvest is.Rachel:First of all, I need to know what you tried first, and then....Stephanie:I tried a smoothie, and today I'm going to be trying one of the soups in there. I think there was a lentil soup that you just add water to. I'm like, "This is what I need in my life, something that you just add water to or just add coconut water to make a smoothie and it's done."Rachel:I love it. Yes. So I started Daily Harvest about five years ago. And the mission is simple. It's really to take care of food so that food can take care of all of us. And we do this by starting at the root with our farmers. And we grow the best fruits and vegetables in the best way possible. And then we make incredible food, which I'm glad you got to try. [inaudible] smoothies and flatbreads, ice cream, alongside with people who eat it, our customers. And the idea is that you can then stock your home with convenient, but also clean and delicious food that's built on real fruits and vegetables. And part of our magic is really connecting people with food that was designed specifically for them so that you're really always stocked with a whole food kitchen of clean food when you want it and it's ready in minutes.Stephanie:I love that. I think on my Twitter, I posted a picture of my freezer and what it looks like. And it was kind of sad because there was like waffles next to one of them. I'm like, "What?" This is my life. I have waffles and then now a new experience that I don't think I'll be able to step away from after this.Rachel:Well, that's what I like to hear. But it's interesting, people buying additional freezers in the last few months. And I'm like, "I support this message. I support this very much."Stephanie:That is awesome. So tell me a little bit about the early days of when you were starting it. I mean, I'm thinking about all the different logistics and the supply chain and working with farmers. And I want to kind of hear how it all got started.Rachel:So as I started pulling on the strings really trying to figure out why the food that I wanted didn't exist, what I realized is that it was because food is not customer driven. The way food is created is actually really far from that. And the reason food is not customer driven is actually a true systemic problem. So as I set out to start Daily Harvest, part of what I wanted to do was really solve some of the systemic challenges with food. Not only the convenience and the health factor, but also why do we have to choose between preserving ourselves and preserving the planet all of the time with packaging and sustainability and regenerative farming practices and all the stuff that makes our food systems so broken? So back in those early days, I had these really grand ambitions, still have the grand ambitions, but less power to actually make them happen in those days. And what I did was I faked it all until I was actually able to do them.Rachel:So I was buying our ingredients at Trader Joe's. I wasn't telling stories of things that were going to happen in future but buying ingredients at Trader Joe's, got a commercial kitchen in Long Island City. And my right hand and my left hand were my first team members, bagging all those ingredients up into food that I knew solved all of the customer problems that I had surfaced to myself but also in friends and family, and started delivering across New York City and really trying to see if I was solving problems for people other than myself. And it turned out I was. And I'd quit my job and dove in head first.Stephanie:That is amazing. So were you personally delivering a lot of this items in the beginning?Rachel:I was delivering everything.Stephanie:Oh gosh. Any crazy stories of the delivery days?Rachel:Yeah. So I was nine months pregnant towards the end of the bootstrap MVP period. And I could no longer get behind the wheel of my car. But I had a 16-year-old nephew who could drive with an adult.Stephanie:Oh my gosh, getting his permit hours with you?Rachel:Yes, yes. It was ridiculous. So I would pick him up. I would pay him like $15 an hour to drive around and hop in and out. And I would sit in the car like a beached whale. And he would run these boxes up to people's apartments. And I would be like, "Nope, can't give us a ticket. I'm in here."Stephanie:And I'm pregnant. So even more of a reason. Don't try. That's awesome. So then around that time, it looks like you were also... Was that when you were also raising money?Rachel:So I did raise money... well, so I'd raised a few rounds at this point. I actually tried to raise money for a Series C at that phase and it didn't go very well to be honest. People didn't really understand how I had this grandiose vision and I was delivering smoothies. They just couldn't connect the dots. And I guess it was too much of a leap for people. So I decided to bootstrap for as long as I possibly could. And when I say bootstrap, I think people assume you have money to burn. When I say scrappy, literally doing things like having my nephew deliver the food, and I created the website entirely by myself and the packaging and printed everything. There was no money spent to be clear.Rachel:And raised money officially right after I had my first child and decided I needed... I was kind of choking off growth and needed to take it from the MVP stage to something much bigger. And we launched nationally in 2016, which was almost like a year after that period, and then raised our Series A actually when I was pregnant with my second child, which was super fun.Stephanie:What kind of experience did you have being pregnant and raising money or trying to raise money? What happened during that? Because I know I have some personal experiences that maybe weren't always the most positive of people just being like, "How do you plan on running a business and you're pregnant?" Even now, knowing I have three kids, people saying, "How do you plan on running a business with three kids?" And what kind of stories do you have around that? Hopefully, I'll get one. So I'm interested to hear.Rachel:Yeah. I mean, the positive and the negative. The positive was that I had no time to worry about being pregnant. I was just like, "Oh, yeah, this is just happening and I'm going to keep moving." And I think a lot of people in that moment of life and in that phase kind of stew in the moment. And it was great. Nine months later or 10 months later, a baby popped out and I was like, "Moving on." And the negative is it's funny exactly as you just phrased it. The question that came up not actually as frequently as I thought it might, but once or twice, I definitely got the question, how do you plan to be a good mother and run a business? And I'm like, "Interesting question that I'm not going to justify with an answer. But if what you're trying to ask is if I'm 100% committed to making Daily Harvest successful, the answer is yes."Stephanie:Yep. That's great. That's a good way to do it like, "I'm not even going to answer that."Rachel:What a ridiculous question?Stephanie:Yeah. I always say like I could never imagine someone asking like, "Oh, man, how do you plan on still working if your kids are on the way?" I can do that.Rachel:Totally.Stephanie:So I saw you have some really impressive names as investors like Serena Williams, Gwyneth Paltrow. Tell me a little bit about how you got these investors on board.Rachel:Yes. So each one is kind of its own story, but Serena is my favorite because I got a random email from Alexis Ohanian who's now her husband, at the time was Serena's boyfriend. And he was like, "My girlfriend and I eat Daily Harvest every day. We would love to talk to you." I had no idea who his girlfriend was. And the next thing I knew, I was on the phone with Serena Williams like, "Wait, what?"Stephanie:Oh my gosh. That is actually insane. I mean, I wouldn't have known that either because I don't really know names and stuff like that. So how did the conversation go?Rachel:I had no idea. I mean, it was amazing. She's so cool and was incredibly down to earth. And she was just saying how Daily Harvest really helped her eat the way that she wanted to eat, the way that she needed to eat in a pinch. And she loved the idea. And this was super early on. And I was like, "First of all, how do you even know about us? But amazing." And she asked if she could invest. And I was like, "Let me think about this for a second. Yes, absolutely."Stephanie:Oh, that's great. Stephanie:So after you landed Serena, did other investors come along when you could kind of point to like, "I've got Serena Williams. You win her out." How did the other ones go?Rachel:I mean, it's funny. We weren't really public with it until much later. So we had other investors reach out to us with interest, but it had nothing to do with Serena. It really was people finding us in pretty organic ways. And people just getting excited about the idea and the concept and seeing the problem that I stated earlier in their own life and seeing that we don't have to compromise, we can have it all, at least with our food. So each story, as I said, is pretty unique. But they really all were people who found us, which was pretty remarkable.Stephanie:Yeah, that's great. I mean, that's a testament to the product. Very, very cool. So when thinking about new customers finding you in organic or non-organic ways, how are you getting in front of people right now? And I'm asking this question because I went on your guys's Pinterest, and I saw you have like 4 million views a month. And I was like, "What? How are they getting 4 million views on Pinterest?" So I want to hear a little bit about your customer acquisition and how you're getting in front of people.Rachel:Yes. So we have a really robust marketing mix. My background is marketing. So we always started with the goal of, how are we not beholden to any one channel? Right? Because I think that that's just asking for trouble. And we built it in a really nimble and agile way so that as trends and algorithms and all sorts of things change, that we can then be nimble as a result. And we're lucky that we have a really high amount of our customers come in through word of mouth. But we've also done a lot of things to make that easier, to remove the friction of people sharing when they have a positive Daily Harvest experience.Rachel:But there are other things that I think have made us stand out on... I mean, literally, you name a marketing channel, we are on it. There's nothing that's like secret saucy there. But I really think it comes down to our differentiated messaging and our differentiated photography and really focusing on connecting with universal human truths where people are just like, "Oh, you get me. Yep, I understand. I'm going to learn more."Stephanie:Oh, that's great. So tell me a little bit about that differentiated messaging that you're talking about? How do you go about figuring out what you want to message and how do you know what will connect and what won't? Because what you might think is going to be a universal truth, I might be like, "Oh, that's not my truth." How do you guys go about making sure you're speaking to your customer?Rachel:Absolutely. It definitely is trial and error to understand what works, but we obviously have a mission. So we're looking for customers with whom our mission resonates. And there's just a lot of different ways where when you remove your marketing hat and you're like, "How would a normal human say this?" Or, "What is the way of saying something that gets somebody to stop their scroll or perk their ears while listening to something that they might otherwise fast forward past?" And then it's the same thing on the visual side, really focusing on photography and imagery that's visually arresting and beautiful. And also stuff that looks delicious. You can't underestimate the salivation factor of... I don't know if that's a real thing.Stephanie:I like that. Now it needs to be.Rachel:It totally does. How much of a photograph actually makes you salivate? Because that's tied to how hungry it makes you and how much it makes you want something.Stephanie:Yeah. I mean, pictures are everything. Even on your packaging and things like that, I mean, that's what makes me want to buy something, even when I'm on DoorDash or something, if an item doesn't have a picture on it, I'm like, "No, I'm not so sure if I want it," even if it sounds amazing. I want to see what it actually looks like. So it seems like you have very, very smart to have pictures on everything, especially Pinterest.Rachel:Yep. And because people have such short attention spans these days, and because there's so much media being thrown at you constantly, we also really focus on simplicity with it. So not only is it beautiful and drool-worthy, but it's also simplistic.Stephanie:That's great. So earlier, you mentioned also removing friction of having customers share their stories. How did you go about ensuring that a new customer or existing customer would share their stories and keep doing them?Rachel:Yeah. So what we have found is it's not so much about giving the customers places to share their thoughts and feelings. It's more about showing that you respond to them. So one of the things that we did really early on is we built a quite agile supply chain. And the goal of that was really to be able to respond to customer needs. We wanted to create a customer driven company. We had to be able to respond to customer needs. And it's one thing to have these amazing insights and to be innovative. And a lot of companies have the ability to do that. But if you can't respond in a timely manner, does it really matter? I'm not so sure.Rachel:So by showing customers, not just telling them, that we are actually listening to them and creating the food that they want to eat with them, and then connecting people with the food that was created for them, it sounds pretty simplistic. But there are really few companies that actually do it. So we're able to bring something to market in six to eight weeks from the time our customers tell us what they want. And I think that that is why customers love to share with us. And that is why we continue to be able to build these connections with our customers, those relationships.Stephanie:That's such a good point actually to show someone like you're not just submitting something into a black box and nothing's ever happening. What does the process look like? Where are they submitting their feedback? And then how do you interact with them in a way that is one on one, but then also shows your entire customer or new customer base, "Here's what we did for this one customer?" What does that process look like from start to finish?Rachel:Yeah. I mean, literally any channel that you can think of, we've built a way to interact. So whether it is through our app, whether it is through text message, whether it is through social media, you name it, we've made the conversation two ways. And what's interesting about it is if you think back to the story I told you earlier where kind of faking it till you make it, I'm air quoting, which you obviously can't see, but you're faking it but kind of faking it.Rachel:In the early days, our way of talking to our customers was every single team member at Daily Harvest would follow the Daily Harvest hashtag and every single day, it was the expectation that they would scroll through. And when somebody wrote something about Daily Harvest, the team engaged. Every single person on the team was asked to engage. So everyone from an engineer who might not under normal circumstances have any interaction with a customer directly to somebody on our culinary team. And it depends on what the customer put out there. But if it was something like your app is X, Y, Z, then an engineer would jump in and say, "Hey, can you tell me more about that?" And really just empowering the team to forge those relationships and to have those conversations I think is really what started it from a team culture perspective.Rachel:And then as we've grown, we've built tools in this way that allow it to happen. [inaudible 00:20:08], obviously, not everybody is scrolling through every single Daily Harvest hashtag these days, but we've empowered everybody to really think about how we maintain our vision of being truly customer driven.Stephanie:I love that. I mean, that's such a good experience. It's so different than, of course, corporate culture where you're probably told you are not allowed to engage with someone who tweets at us, and it has to be approved by PR. And there's so many rules and stuff. A lot of us had been taught in the past like, "Just don't say anything." And I can imagine how great of a culture you build by saying, "Everyone get on there. Respond to these people. It's on you to actually keep our customers happy." That seems like a transformative environment.Rachel:Absolutely. And then you have it scaled too. People really are thinking customer first at all times.Stephanie:Yeah, that's really cool. So when it comes to product request, I mean, it seems like there'd be an area that could be like a leaderboard where people can vote on the next products they want and actually determine that. Is there anything like that that you have going on to kind of create more social engagement and also people having an input in the product that maybe they wouldn't have just tweeted at you and said like, I want to have more figs?" They might not have that idea on their own, but they would like to maybe vote on it?Rachel:Totally. Yeah. I mean, we have all sorts of engagement opportunities for customers. But the important thing to know is that none of our skews or collections at Daily Harvest are created to be generally accepted. So we really focus on what people want from the perspective of their taste affinities, which is really differentiated.Rachel:So if you think about traditional product cycles and product development tools, people will look at things like demographics, psychographics, household income, credit card swipe data, and all of these things that when you kind of zoom out really never made sense to me because I can tell you, my husband and I live in the same house. We have the same household income. We share credit cards. We have the same credit card swipe data, same education, we met in school. But when it comes down to it, he orders from a very different restaurant than where I order from at night when we order in. So we really try to focus on what taste preferences are. And we try to create food for specific groups of people that have similar taste preferences, so nothing that we create is meant for general consumption. And that's where it gets really nuanced and really differentiated.Rachel:So yes, we will say to people, "We're thinking about creating X, Y, Z, and we would love your input." We take that into consideration, but we also take into consideration that, "Who is actually answering that question and where they're coming from and what their taste preferences are." Because I might like something that is, let's say, filled with greens, and you might like something that has no garlic in it or whatever it is because you might be allergic to garlic. And we're not going to like the same thing. So why should we try to make food for both of us?Stephanie:I love that idea of making sure that you actually focus on your customers because I think it's very easy, especially with all these new B2C companies that are launching right now to get distracted and not remember like, "Who did you actually build this for? What is your customer base? And what are you trying to do in this world?" Instead of being like, "Oh, and this person wants more sugar added to the matcha. Okay, I didn't really want to add a bunch of sugar to it, but this person wants it." It's a good reminder to not get distracted.Rachel:Right. But if we do have a group of customers that tell us that they want that same matcha that's a bit sweeter, we can accommodate that. It's just we would never target the same food to... We would know who we're targeting what to.Stephanie:Yep, very cool. So I'm very interested in the partnerships that you have with farmers and what your supply chain looks like behind the scenes that you can make these really quick product pivots or new products coming out in like six-day weeks. So can you speak a little about, what did that look like forming those partnerships? And any hiccups that you experienced in the early days of trying to get that worked out?Rachel:Yeah. I mean, as I said, it started with Trader Joe's because every time we reached out to a farm, they were like, "Who are you? Can you guarantee this entire crop?" And I was like, "I don't know."Stephanie:They were asking you to guarantee whole crops for them?Rachel:I mean, sometimes you have to if you want to be in control of how sweet it is, what the nutrition level is, you really have to be. And that was the vision because the way that I always envisioned taking care of food was really at the systemic level. So really to make change, you have to go to that level of scale in your purchasing. And we're incredibly meticulous about the ingredients that we use and how we source them. We actually have an entire team that's dedicated to finding the best farms. And we have over 400 farms that we work with directly. So we set incredibly rigorous standards that ensure not only are our partners using regenerative practices in their farming, things like increasing biodiversity, improving the water cycle, using organic farming practices, strengthening the health and vitality of our farm soil, using fair labor practices.Rachel:But we also are really particular about when we harvest our food. We want to make sure that the fig or the blueberry that you're eating is unparalleled not only from a nutrition perspective, but also from a taste perspective. So that means that we have to let every single ingredient reach its full nutritional and flavor potential on the vine or on the tree. And then we freeze everything within 24 hours of it being picked, which is really differentiated. And because of that rigor, our food is actually more nutritious than the stuff that you buy in the grocery store, which is something that a lot of people are surprised to hear. I think a lot of people see frozen as not as nutritious or inferior, when in fact, unless you are picking something straight from the farm and consuming it within three days, that's just not the case.Rachel:And we work with these farmers to also create entirely new supply chains, which is amazing. Our customers told us that they really wanted something with celery root last fall. And we worked with the farmer to create an entire supply chain of frozen celery root that had never existed before. And what's cool about a frozen supply chain is there's actually 50% less food waste and there's just so many benefits to the system overall. But we really think a lot about how we create the most nourishing, best tasting food and it really all comes back to those farm relationships.Stephanie:Wow, that's really cool. Yeah. I mean, I think a lot of people like you said don't understand the frozen aspect of why it's better because I know a while back, I heard that about fish too. But it's better to have frozen fish that's frozen right away when it's caught than getting something fresh. Fresh feels like it's healthier but actually it's more nutritional if you get the frozen one that was frozen right on the ship or boat or whatever it is.Rachel:When you think about the frozen aisle in the grocery store, most people associate it with like dinosaur shaped chicken nuggets.Stephanie:Yes, which may or may not be in my freezer right now.Rachel:I don't judge. When you ask most people what's in their freezer, it's like ice cream and vodka and ice cubes. I'm like, "These are not bad things, but it just shows you how the food system has evolved." And the microwave dinner was created not because it was healthy. It was because it was convenient and it was because it was created during this Industrial Revolution when food and science melded together in ways that is just so unnatural and we kind of just stayed there. So I think there's been a lot of... not I think. There's been a lot of education for customers to help them understand the benefits of frozen not only for themselves, not only for their taste buds, but also for the food system as a whole.Stephanie:Got it, that's great. So the one thing I'm thinking about too is working with farms, I can see them being on older tech stacks I'll call them or no tech stacks.Rachel:What tech stacks?Stephanie:Yeah. I'll just say non-existent tech stacks maybe unless they're like the very advanced farm with the drones going on.Rachel:No, [crosstalk 00:29:55].Stephanie:You're working with 400 farms. How are you placing these orders and getting things to happen quickly and making sure that it's up to your standards and that nothing's going to get backed up? How do you do that with farms that don't have a tech stack?Rachel:I mean, we built the technology for it.Stephanie:Tell me a bit about that. What did that process look like?Rachel:Yeah. So in the beginning, we only had a few farms, and it was easier to manage. But obviously, once you hit a certain scale, it becomes a little unwieldy and it's not just 400 farms. There's four crops a year and different ingredients. One farm might have six ingredients that they're growing for us. So it can get really complicated. But as I said, we have a large team that really focuses on this, and they're incredibly passionate. So what we did is we thought about how technology could make their job easier, how we can leverage technology to remove some of the friction in managing the quality of our food and the supply chain in general. And we really built a verification system that... I would say a trust but verify system where we set certain quality standards. Because we can't [inaudible] people who are on site at every farm with every harvest, and then there's like a verification system where they're sending us samples constantly to make sure that that everything is as we say it needs to be. And we're verifying nutrition after something is frozen to make sure that it's as it's supposed to be. And through every step, we are trusting and verifying. And all of that is rigorously notated in our technology stack.Stephanie:That's really cool. So it seems like you're bringing a lot of farmers online. Have they asked to reuse the technology with other partners too? They could be a whole separate business like, "Here's technology that you can now have with anyone else ordering from you."Rachel:Totally. I mean, we work with a lot of small farmers. So a lot of farmers don't have a lot of other business. We've really grown to a scale where most of our farmers are Daily Harvest farmers.Stephanie:Mm-hmm (affirmative). Oh, cool.Rachel:Really cool when you think about it. But yeah. I mean, we've definitely had people ask, but we've got to focus on our core competencies and what we're trying to achieve.Stephanie:Yep. That's great. So everyone's obviously looking into subscription businesses right now. It's always top of mind like, "Should this business be a subscription or not?" Everyone wants one. How do you think about retaining your customers and enticing them to stay with you for the long haul?Rachel:Yeah. So one thing that's interesting about Daily Harvest is on the outside, we kind of look like a subscription, but we're actually not a subscription. We're really what we call a replenishment business because once you sign up for Daily Harvest, our goal is to make sure that your freezer is always stocked. And it's not because that's good for us, it's because that's how we make sure that you have the food that you want when you want it. At that moment when you're hangry, when you're reaching for that bar, you need to have the right food in your freezer. Otherwise, you're going to make a different choice, right?Rachel:So we think a lot about what that replenishment looks like. And we also never want you to get an order of Daily Harvest that you don't want. Right? So we actually communicate with our customers ad nauseum to make sure that we're never sending them anything that they don't want, and they're only getting food when they do want it. And that's what makes us different from a subscription business where you have to consume your food or use your razor or whatever it is within a specific period of time and it's only good for that period of time. Because we're frozen, we're really not perishable, which is a huge benefit and allows us to be even more customer centric, but really thinking about maintaining our customer base.Rachel:Removing friction for our customers and making things as easy as possible for them, making their account as easy as possible to manage making sure that they're getting the food that they want when they want it. And we found that there's a direct correlation between removing that friction, being customer driven. We don't even think about about retention. We think about how can we be more customer driven? How can we get our customers exactly what they want? And what we found is that those things correlate really nicely.Stephanie:Yeah, I completely agree. So what does that back end account management look like for your customers? And one thing that's coming to mind is like the past couple interviews I've done, we've touched on one click ordering and how that's a big thing that a lot of people are expecting now. And I could see that maybe coming into play for you guys too where you're more about replenishing items. If I'm out of my matcha, or smoothie, or whatever it was that I really just enjoyed, going on to my account and just ordering that, and not having to have minimums or anything. Just being like, "That's what I want," and just doing it one off. How do you guys have the back end working?Rachel:Yeah. So we don't do that. And the reason why is because we really think of ourselves, as I said, as replenishment. So our customer behavior is much more going to shop at Costco, let's say. You don't go to Costco to buy one thing. It's never worth a shot.Stephanie:I need 10 pounds of butter when I go there.Rachel:Totally. But you have certain things that you go and you buy a lot of. So our customer really thinks about, how can Daily Harvest fill my entire freezer? When your inventory at home starts to dwindle, that's when you make your next purchase. So for us, one click ordering is not a thing. And we find that actually there's tension between how much cognitive load you reduce and how much customer friction you reduce, and people really getting the food that they want. So there's definitely a balance there. But what we do instead is we have an app and our app is incredibly customer driven. And it's about communication with our customers and making sure that, as I said, they're getting the food that they want when they want it. But it's definitely as easy as humanly possible, but not so easy that you're going to get something that you don't want.Stephanie:Mm-hmm (affirmative). That's great. Yeah. And I think that's a really good reminder, too, that everyone might be obsessed with a subscription model because that is good for businesses to lock people in. But that might actually leave a bad taste in a customer's mouth. And your model is completely different, which is like focus on what they want and what they need and make it easy for them to order and refill quickly without having to come back a thousand times.Rachel:Yep. And make it as easy as possible honestly for them to pause and cancel and do all the things they want to do because when you do that, they come back.Stephanie:Yep. I love that. Low friction, it's worth it. So to go to little more general commerce questions, what kind of disruptions do you see coming to commerce right now maybe in the next couple years?Rachel:I mean, look, I think COVID has been... it's been an interesting few months. But what it has done is it's really accelerated a bunch of trends that we've seen. And we've seen this huge adoption of ecommerce and people's willingness to stick around once they've tried it. So as you had early adopters previously who were signing up for food delivery or whatever it may be delivered to their home, what we're seeing now is people who are not early adopters, so more of the mainstream signing up. And there are different needs, and there's a different level of education, and there's all sorts of nuance to take into account with that trend. So we're thinking a lot about that, how we continue to remove friction for this different type of customer.Stephanie:Mm-hmm (affirmative). That's really great. So we have a couple minutes left and I want to jump over to the lightning round 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, Rachel?Rachel:No.Stephanie:Prepare yourself to get some deep breaths. Get in the game. All right. We'll start with the easier ones first. What's Up next on your Netflix queue?Rachel:Oh, wait. I can't remember what it was called. It's The Man and the Company Castle. Hold on.Stephanie:Oh, that Amazon? The Man in the High Castle?Rachel:Yes. Not Netflix.Stephanie:That's okay. Yeah. Have you started it yet or?Rachel:I haven't but I am such a history nerd. And I don't know how I missed that this show existed, but I cannot tell you how excited I am to watch it.Stephanie:Yeah, it's very good.Rachel:Yeah. And I also feel like there's something about current state of affairs and dystopian society is that it really resonates. So let's see what it's got for us.Stephanie:Yeah. I mean, I like that one a lot. I think it's a good reminder I'm always very biased and ask about Netflix but Amazon, they've got some good stuff. I mean, I've binge-watched I think it was like Marvelous Mrs. Maisel if you knew to balance yourself out of it from dystopian to fun and cute. Also a very good series that I loved.Rachel:That show is amazing.Stephanie:Oh, you like it too? Yeah. It always leaves me with the happy feeling like, "Oh, this is cute. I love this."Rachel:All the time that I remind them of Rachel Brosnahan, and I'm like, "That is a huge compliment. Thank you."Stephanie:That is. She's awesome. Good. What's up next on your reading list? And it can be business or personal.Rachel:So it's Never Split the Difference which I've actually read before, but I like to read it every few years because I think it's the best negotiator out there and I'm not a natural negotiator. But it's obviously a huge part of my job. So it's coming up on time to read it once more.Stephanie:That's great. What is one thing that comes to mind when you think about that book? One lesson or principle where you're like, "Yeah, I'm not going to split the difference?" Anything high level other than what I just said which is just jacking the title.Rachel:So my favorite takeaway from the book, and it's just a reminder, it's really about listening. It's funny. I think a lot about toddler psychology these days because I have a three-year-old and a five-year-old. And there's a lot in common with the tactics in this book and toddler psychology, but it's really about validating people's emotions and feelings and creating trust and safety to be able to negotiate better.Stephanie:Oh, that's good. I like that. It shows that so many things are similar in life. Dealing with toddlers is the same thing as negotiating for your salary or investment money. Same thing.Rachel:It really is. It's crazy.Stephanie:I have to check that one out. What app or a piece of tech are you using right now that's making you more efficient in your life?Rachel:Okay. So this is such a weird one, but my husband just introduced me to the app for my cable provider. And I had no idea that this existed. I never watched TV ever. But given that we're in day three of the sit and wait for the results of our election, I've been able to just pop it up and have the news on live stream behind me. And it's been incredible because previously, I was refreshing my Twitter feed every 20 minutes or whatever it was. But just kind of having it in live feed behind me has been a huge unlock for my efficiency in this crazy time.Stephanie:That's great. I haven't even thought about apps from cable providers. So it's a good reminder for everyone. I like that.Rachel:It never occurred to me that one would even exist, and I'm very happy with it.Stephanie:That's great. What's one thing that you wish you knew more about? It could be a topic, a trend, a theme, anything.Rachel:Let's see. I really wish I knew more about human psychology. I feel like every time I read something or learn more, I get really excited and I want to dive in more but I really never have time to. And it's something that I feel would make me better at what I do every day if I really understood the psychology behind it.Stephanie:That's a good one. Yeah, I completely agree about that. Something I always want to dive into more and haven't had the time yet. So Rachel, this has been such a fun interview. Where can people find out more about you and Daily Harvest?Rachel:At dailyharvest.com.Stephanie:Awesome. Thanks so much for coming on the show.Rachel:Thanks for having me.
In this episode, Holy Cross professor Stephanie Yuhl reconnects with friend and former student Meg Griffiths '04. They reminisce about Meg's days on campus, and reflect upon the many ways that the Holy Cross Mission and its pursuit of social justice is evident throughout Meg's life and career. Interview originally recorded on July 31, 2020. Due to the ongoing effects of the pandemic, all interviews in season 2 are recorded remotely. --- Meg: I think people who come to the dialogue table… they come because they’re in touch with something that means a lot to them, and they care enough to show up and listen and try to muddle through with people who they know occupy different positions. And to me, that’s a sign of hope in and of itself: that people are willing to come to the table. And that they have a shared commitment to making some kind of change, making their community better, making space for more voices and rehumanizing the “other.” Maura: Welcome to Mission-Driven, where we speak with alumni who are leveraging their Holy Cross education to make a meaningful difference in the world around them. I’m your host, Maura Sweeney ‘07, Director of Alumni Career Development at Holy Cross. I’m delighted to welcome you to today’s show. Maura: In this episode we hear from Meg Griffiths from the class of 2004. Meg can be described as an educator, space maker, practitioner of dialogue, crafter of questions, and human can opener. Ever since graduating from Holy Cross, Meg has pursued mission-focused work. After starting her career with the Jesuit Volunteers Corps in New Orleans, her journey has evolved to include work in the nonprofit sector and higher education. Today, she works for Essential Partners, an organization who partners with communities and organizations around the globe, equipping them to navigate the values, beliefs and identities that are essential to them. Her work showcases the importance of dialogue and connection in order to build trust and support mutual understanding among diverse groups of people. Stephanie Yuhl, Professor of History, Gender, Sexuality, & Women's Studies, and Peace and Conflict Studies, reconnects with Meg to speak about her life and career. Their conversation is filled with mutual admiration and respect, stemming from Meg’s time as a student at Holy Cross. The importance of living the Holy Cross Mission is interwoven throughout the conversation. Despite coming to Holy Cross not knowing what a Jesuit was, Meg has lived a life devoted to the Jesuit values of social justice ever since. Stephanie: Hi, Megan, it's Stephanie. Meg: Hi, Stephanie. It's Meg. Stephanie: How are you doing Meg? I'm so excited that we get this chance to spend some time together and to talk about interesting things related to you and Holy Cross. I have to say, whenever I think of students that to me, have really lived out the mission, you see the T-shirts at Holy Cross that say Live the Mission, and I think that certain people actually really do that and you're always at the top of the list of that, so thanks for sharing your time with us today. Meg: Thank you, Stephanie. When I think about my Holy Cross experience, you are one of the people that regularly comes to mind. So, this is a pure joy to have some Zoom time with you these days in this weird, strange time we're in. Stephanie: It is and hopefully the listeners won't be bored with our mutual admiration society that we're having. Let's get started and let's talk about Holy Cross and you and then, we'll move into your life and career. Tell me why did you choose Holy Cross? What was it about the school that attracted you and how did you move through Holy Cross during your time there? Meg: Yeah. So, I was looking at colleges in the late '90s but before I actually stumbled into Holy Cross, this glossy, beautiful materials that came my way in the old school snail mail, my sister was looking at colleges and she's a couple years older than me. We are very different people in all kinds of ways. My parents had taken my sister to do a New England college tour and Julie came home, very uninterested in Holy Cross and my mom said to me, "Megan, I found the perfect college for you, because your sister is not interested." So, it was sort of planted in the back of my head, before I actively started looking at colleges and I just loved it when I stepped on campus. Meg: I think a lot of Holy Cross students say this, they have this experience of sort of feeling something when they come to campus. My mom said she could read it all over my face, but it really sort of met a lot of what I was looking for in a school at the time, which is a small liberal arts Catholic school. I didn't know what a Jesuit was yet but I was Catholic educated my whole life and that felt familiar in a good way and in a challenging way. Yeah, I landed here in 2000 as a wee freshman, and took me a little while to find my sort of academic home and you, Stephanie, were a big part of that. I meandered through all of my distribution requirements and learned that I wasn't a disciplinary thinker but a multi-disciplinary thinker. Meg: Got a chance to design my own American Studies major before that was a thing on campus, and you Stephanie, were wise enough really, to say yes to being my advisor for that- Stephanie: It was wise because then we got to be friends, and you did your senior thesis on Child's Play, which I think is really interesting and I think it reveals a lot about you and the way that your brain works. Can you talk about that a little bit, explain what that thesis was about, if you can recall? Meg: Yes, I can recall. I can recall sitting in the library at a giant table every Friday writing it, my senior year. I was really interested in gender. I was also a women's studies concentrator before it was women and gender studies and then, material culture, and so, I studied how doll play and child rearing manuals sort of told a story about gender and the role of women in early America and how girls were socialized to grow up to be mothers and caretakers, through the use of dolls and doll play. So, it's really interesting, kind of nerdy but lovely research. It was sort of the bringing together of all of the disciplines of my American Studies major and my interest in sort of gender, and culture. Stephanie: Yeah, and also, I think creativity, right? The idea of looking at something and you see something extensible in that, a doll but then, being able to read and interpret more deeply into it and try to think about what are the influences and impacts that this artifact could have? I think that that is in a lot of ways really connected to some of the work that you do about seeing things one way and then trying to shift one's angle of vision to see it another way to unpack its power. So, it might look like doll play, but I think it was really indicative of future trajectories, perhaps. Meg: I love that. Stephanie: So you mentioned that you didn't even know what a Jesuit was and then, your biography really kind of spent a lot of time in that Jesuit social justice space. So, can you talk a little bit about ... and that's what we would stay around mission, right, around how you're formation at Holy Cross, what are the sort of the things that you think are part of your Jesuit education at Holy Cross, and then we can talk about how you then put those into action after graduation? Meg: Yeah, I love that you brought up the Live the Mission T-shirts, because I was an orientation leader who wore that T-shirt many summer and I'm a little bit of a mission statement nerd, because I just love the way that institutions and communities and even people can take an opportunity to name explicitly what they're about and what they aspire to be. So, I think they're both aspirational and descriptive. The Holy Cross mission, I stepped into it in a variety of ways. I mean, my experience as a student is that you can't go to Holy Cross and not be steeped in mission, but I understand other people have different experiences of that. Meg: For me, I saw it everywhere I looked, and I sought it out also. So, I got involved in the chaplains office, pretty early on in retreats, and in singing in liturgical choir, and sort of embracing the social justice mission of Jesuit education and formation through Pax Christi, and going to the School of the Americas protest and participating in the Mexico Immersion Program and SPUD. Really, seeing the ways that a faith doing justice was a huge part of the college's larger mission and I also just ... I think, part of what I loved about specifically, the Holy Cross mission statement was that it was full of questions and when we talk about what I do now, this might become even more clear to people but I'm sort of all about questions. Meg: I love the ways in which a question can invite us into, again, aspiration and also possibility, and deep personal reflection at an institutional level, sort of organizational reflection on again, who we want to be and how we want to be in the world. The Holy Cross mission statement asks these super powerful questions like what is the moral character of teaching and learning and what are our obligations to one another? What's our special responsibility to the world's poor and powerless? How do we find meaning in life and history? Meg: These are what I have always called the big important questions and I love the way that my academic experience sort of mirrored that more spiritual formation in wading into those big questions and finding the nuance and complexity that comes through sustained engagement with those kinds of questions. There's no simple answers to be found here and I love that. Even though I'm someone who really likes clarity and planning and a clear path, there's a big part of me that also knows, we need to wrestle with the complexity and the gray areas of what it means to be human. So, those are the parts of the mission statement and the way that the mission was lived in my experience that really captivated my imagination. Stephanie: That's awesome and that notion of patience and ambiguity, which is also in the mission is a wonderful thing and it's hard for type A organizers, like yourself and myself, sometimes to sit in that space but I think that that's really probably where we're most human, right? Particularly today in our really Balkanized political discourse, it's important to try to find these spaces of more nuanced. So, let's talk about that a little bit, so you come to the college, you find your way, you figure, you learn what a Jesuit might be, you live the mission, wear a T-shirt and then you graduate, right? With this thesis in Child's Play where everyone is banging on your door to hire you to do something with Child's Play because they don't know that Child's Play is not a play, it's very serious. Meg: I think that was the subtitle of my thesis. Stephanie: It was. This is no joke. I think it's serious- Meg: Something about seriousness of ... Yeah, anyways, yes. Stephanie: Exactly. So, tell me a little bit about ... I know right after college, you joined the Jesuit Volunteer Corps, right? Meg: Mm-hmm (affirmative). Stephanie: And went to New Orleans. Meg: Yeah. Stephanie: Tell me a little bit about that decision and how this question driven impulse that you have, played out in that space. The kind of work you did there, and how maybe your sense of your own personal mission started to shift a little bit in that time. Meg: Yeah, so I served in New Orleans in 2004 to 2005. I served at a domestic violence shelter. We had a transitional shelter and an emergency shelter. My work there involved being a part of the life of the shelter, of the residential life of our clients and guests. I dropped into a culture that could not have been more different than my suburban New Jersey Catholic upbringing, although New Orleans is very Catholic, but sort of my sheltered, very white suburban, middle class upbringing. For me, that was a transformative year in terms of coming to see the lived realities of some of the things that I had studied at Holy Cross. So, I took great courses, like social ethics with Professor Mary Hobgood, and liberation theology with Jim Nickoloff. Meg: I had studied ... and also in my local volunteering over the four years that I was in Worcester, obviously, coming face to face with the realities of injustice and poverty and violence, and sort of had this sort of charity orientation. Definitely, Holy Cross moved me into a conceptualization of justice as a really important aim, more so than charity. They go together but really, that more of my activism sort of bloomed as a Holy Cross student. It was entirely different to move to a city I've never lived in before, worked in a shelter, live in intentional community with six other humans, doing all kinds of work in the city, and tried to live in some shape of solidarity, which is not really possible in some ways, because I was bringing all my privilege and my social network of support with me. Meg: I remember feeling like I saw a different side of the world for the first time, that I really was face to face with three dimensional humans, who were experiencing these things that were really sort of more theoretical in my head at the time, oppression and discrimination, and violence, and classism, and sexism, and heterosexism and all the isms. Yet, New Orleans is this amazing, cultural, rich, historic place that is so much an example of finding joy and having resilience in the face of so many difficulties. Of course, I left New Orleans, three weeks before Hurricane Katrina hit the Gulf Coast, and never was that clear, that sense of resilience and hope and richness of community than when I returned to New Orleans, about 10 months after Katrina hit to move back. Stephanie: Let's talk a little bit about that, because that was a really interesting ... an interesting move for you, I think. They joke that JVC graduates are ruined for life, right? That sort of tagline and I think a lot of our students would find it interesting and helpful, frankly, who also choose this path of service as a postgraduate moment. After that, sometimes they feel a little stuck about what next, right? Because you've just had this really intense experience, an experience in which hopefully, you've made some kind of impact but really, mostly it has an impact on the server, as we know, around that quest around justice and charity models, right? Stephanie: You opted to come back to New Orleans, right, to go back to New Orleans and the listeners might not know this, but Megan, Meg Griffiths was a member of the CIA and I think you should explain that, because I think it will surprise people that you are a CIA member. Do you want to explain that Megan and what called you back to New Orleans? Meg: Yeah. Yeah. So, I had moved up to Milwaukee. I was serving at Marquette University, an internship in their university ministry office, so that's where I went when I left and that's where I was when Katrina hit. I didn't have a television in my apartment. I was living in a residence hall. I just come off of a year of simple living. I do not bring a lot with me to Milwaukee. As the news of Katrina was sort of coming up to Milwaukee, I was really not as in tune with what was happening as I would have been if I had a television and sort of made a point to be following the news. Simpler times back then. I quickly started checking in with some people who I knew who were in New Orleans, and it became clear that it was being taken increasingly seriously, as Katrina was approaching. Meg: So, I think that the fact that I had been a resident of that city three weeks before Katrina hit, I mean, I just ... it felt like home still, as much as a place you've lived for 11 months, can feel like home but- Stephanie: Very intense 11 months, so that makes it more home, right? Meg: Yes, and I just ... the only way I could explain it is I felt like I was having the experience that my heart was still in New Orleans and was breaking for this beloved city and its beautiful humans. So, I made my way down several times that year when I was serving at Marquette. I brought students, I went down and met up with other JVs and at the end of my internship, I didn't really have a plan as to what was next. My supervisor at the time, at Marquette who is Jocelyn, she was the liturgist there, she decided she was taking a leave of absence and going to move to post Katrina New Orleans because she felt so called to do so. Meg: I remember so clearly that she asked me straight out, "If I do this, will you come with me?" Without even thinking, I said yes. That is a moment where I felt so deeply certain about the word yes, that I didn't even have time to think before it came out of my mouth. Then, I was like, "Oh, no, I just said, Yes. I think I have to do this." Stephanie: Wait a minute the overthinker didn't overthink this. She just responded. That's great. Meg: Yeah. Stephanie: That's a pure yes. Meg: Yeah. Yeah. I mean, it felt like a call. I mean, it was a direct invitation- Stephanie: It was an invitation, literally. Yeah. Meg: So I said yes, not knowing what it meant or how we would pay for anything or what we would do. Another person joined us, a recent alum of Marquette, my dear friend, Stacy now. So, the three of us moved to New Orleans, rented a house started calling ourselves contemplatives in action, i.e. CIA. Stephanie: I love it. Meg: So, we built this fledgling nonprofit to help people ... to help receive short term volunteers into the city. So, our Jesuit high schools and colleges and parishes, and so many others but in particular, we had a connection to this larger Jesuit family, and people wanted to come to New Orleans and help rebuild and stand with the people of New Orleans and accompany people in their moment of pain, and hear their stories and bear witness. So, we created an opportunity that made it easier for people to find their way to do that work by helping place volunteers and connect them with local nonprofits and local community leaders and with the spiritual and religious and cultural history of the city of New Orleans. Meg: It was really hard work. I mean, physically hard labor but also emotionally hard work. I remember, Stacy, my colleague and co-conspirator in the CIA, say, "I came to New Orleans, to lighten other people's burdens and what I didn't realize was that I would wind up carrying them, with them." That's how we help lighten other people's burdens. Stephanie: Right, accompany them. Meg: Yeah, and that weight of living in what was, for many years after I was there, still a city in distress and in disarray, is emotionally difficult to show up every day and be present to that and to be able to leave was a huge privilege. That wasn't my life. It wasn't my community. It wasn't my home. It wasn't my school, that was destroyed and yet it felt like a part of me. I also knew that there was a limit to how much capacity I had to continue to show up. So, I made a commitment of a year of doing that work in community and then, stepped out of that work and into the next thing. Stephanie: Right, and that's, I think, really ... I just want to thank you for sharing that. I think it's really important for people to know that, you can step up and step in and accompany and do your very best and sometimes it feels like failure to step away, but stepping away is also stepping towards something else. It's not always stepping away from. This notion of sharing the suffering and sharing the stress, and sharing the work is something that very few single people can do, right? It's something that many people need to step in and come in and go. So, I think that idea that you were there, you went away and you came back, I mean, that's that kind of push, pull relationship. Stephanie: I think it's important for people, particularly younger folks who might be listening, to recognize that one, you make a commitment to something and you follow through on your commitment and then, it's okay to also make a different commitment. That's also part of the development and you're not abandoning people, you're not quitting. Meg: I mean, for me, it was about how can I find a different way to support this work. So, I think, also like, especially right now, in our world, when there's so much work needed, and so many people joining in the long struggle for racial justice, for the first time, finding your place in the work can be really hard and I think we sometimes ... I'll speak for myself, I think I sometimes think that there's only one way to show up, to be part of the work and the truth is, there are many ways and we are as different, in terms of our gifts and our assets, and our limitations, as you can get in humans. So, noticing what you can do, what serves the work, what sustains you and the work. Meg: Then, being okay with pivoting, when you realize that that's no longer the role that you can play or want to play or is helpful to play. So for me, I moved to Providence, which is where I live now after New Orleans and I took a job in higher ed setting and one of the first things I did was asked if I could start a program to bring students to New Orleans. So, I continued my relationship and my work and in some ways, built a much more sustainable way. My advocacy continues like super- Stephanie: Particularly you singularly doing the work. Meg: Yeah. Stephanie: Something that amplifies and continues. Yeah, the sustainability question. Meg: Yeah. So, I mean, not right now because nobody's going anywhere but up until last January, students were still going on the NOLA immersion trip from my previous institution. I built that program in 2009. It ran for 10 years, and it will come back I hope, when travel is a thing again, because the work in New Orleans also continues. The immediate response and rebuilding was ongoing for many, many years and yet, there's still ongoing work that we can do. Stephanie: Yeah, and I think that's really interesting, Meg to hear you talk about how you can best serve because sometimes we do have these default notions that it needs to look a certain way. I would connect this with the spiritual exercises, right? That idea of you have to find your way, right? Discern your way, not the way that the culture might tell you is the way or what does service look like, what does a simple life have to look like? We bring a lot of baggage to that and the hard work of reflecting on what is my path and being okay with that even if it looks a little counter-cultural, if it looks like someone's leading something or pivoting. Stephanie: I think that has a lot to do with letting go of ego. Did you think that had to do at all with ego, the idea of who you thought you were in that moment and then, recognizing there's another way of using your skills and gifts toward a larger end? Meg: Yeah, I don't know that I would put that language around it at the time but certainly looking back ... I mean, I did have a lot of moments of asking myself, like what am I here for? Am I here for the right reasons? Am I the right person to be doing this work? I mean, the answer wound up always being yes or enough of a not no, to stay. I think there are moments where in my own development and sort of self-actualization we might say in the fancy words, where I would look at people that I admired and try to be more like them. I think it was actually another of my Holy Cross mentors, Kristine Goodwin, who at one point, used this frame of sort of holy envy. Meg: That when we see people who live out values that we share in a particular way, we can have some jealousy around it almost, that like, we want to be as good, quote, unquote, as they are. I think there have been a lot of people in my life that have served as beacons or sort of examples. The challenge is to always stay rooted and figuring out how I can live out my own values in my own way. One of the things that I care really deeply about and how I show up in the world, is with a sense of integrity. For me, that means living in alignment with my values and who I am and who I've been called to be. So that there's an integrated self in that way of the word integrity, that what I say I'm about, I'm about or at least I'm trying real hard to be about it. Meg: The same with the mission statements being both descriptive and aspirational. I think my values are things that I hold dear, and I want to live out and I also have to aspire to because I won't do it perfectly, and I won't always get it right. Stephanie: Well, of course and I love that phrase holy envy, I have to say the reason I went to graduate school was because of holy envy. One of my professors at Georgetown, I wanted his life. I thought it was just remarkable what he was able to do and the impact he had on me as a young person. We're very, very different. Went to really different fields and different personalities. We're still friends and that's right, you find your ... you might have the catalyst, the inspiration. Then, as you emerge and you grow, you find your way, hopefully in it. That back and forth between achieved ... hitting the mark on values and aspiring to living that, I think that's really interesting. Stephanie: Tell me then about how in your life, if you can ... and you have a really rich professional biography, educational biography, activist biography, and we don't have time to go into all of them. So, I want to give you the opportunity to highlight if you can, either a moment or a choice or a career path, that for you, really puts this values in action, where that integrated self has found firm ground, and what kind of ... and how you manifest that in your work. Meg: I'll leave it to you, Stephanie, to ask the big old questions. Stephanie: Sorry, but you got to give me a good one example. I'm just wondering, is it your current work now? Is it navigating higher ed? Is it your work, which I'd love to talk about at one point with the LGBTQ alumni network at Holy Cross, which to me has been so important, so we can get to that unless you want to talk about it now. So, it's really up to you. I mean, I think ... like I said, the beginning of our conversation, you are a person, remarkably. I mean, I admire you so much, Meg. When you talk about being catalyzed by people, and you put me in that list, I need to share with you that one of the great things about teaching at Holy Cross is being catalyzed by your students. I mean, I put you in my list. It's true, though. It is true though and you know that and I would throw your wife Heather in there as well. Stephanie: I mean, you the two of you really live what ... from the outside and someone on the inside feels very real. A real life where you don't run away from the hard stuff and you try to stay true to your moral compass. We need more of that in the world, frankly and so I'm glad you're in it. So, having said that, what's a way that you think that that's succeeded for you? Obviously, never 100% but what do you think what's been a moment where you've been able to make those choices and live the way you seek to live? Meg: Well, thank you for that kind offering. When I think about how I've had to navigate and negotiate what it means to live out my values, I mean, I think what has been the ... one of the pivotal sort of negotiations has been around identity. So, you mentioned my beloved wife, Heather. She's a Holy Cross alum as well. Stephanie: And a former student. Meg: Yes. Although Stephanie can take no credit for the matchmaking directly but- Stephanie: Much to my chagrin. I had each of you in class and yet you didn't even know each other as undergrads, which just breaks my heart. See, fate happens, right? Meg: That's right. Yeah, so I mean, I ... So when I was an undergrad, I didn't believe myself to be anything other than straight. When I started to come to know myself, as at first, not straight, and then later claiming various identities over time, but then, partial to queer, because of its sort of umbrellaness of many things. When I was an undergrad, I imagined myself working in Catholic higher ed for the rest of my life, ideally, Jesuit higher ed. I wanted to ... I'm obsessed with mission and mission statements. I wanted to be the person on a Jesuit campus who helped the community live out their mission, of course. Stephanie: You pointed at it, you'd be fantastic. Meg: I was born and raised Catholic. In many ways, my Catholic faith was nourished in college, which is often, I think, not the case for what happens in terms of spiritual development of many young people but Holy Cross was a place that nourished my spirituality, and gave me an intellectual and theological frame for holding complexity, as I was sort of mentioning earlier. So, I took classes like sexual justice and feminist theology and liberation theology, that helped me make sense of a world in which multiple things can be true at the same time, both in the world and inside of a human. So, when I came to know myself as a queer Catholic, that was a lot to take in. Meg: Also, I felt really prepared in some ways to hold those identities at the same time. There is internal tension there, that is never going to be resolved and it's taught me a lot about embracing paradox or seeming paradox. I think that that process of negotiating my identity and trying to live out my values as a faithful person, and my identity as someone who falls outside of the church's teachings about what is right, quote, unquote, I think is what was part of the path of getting me into the work that I do now, which is the work of helping people hold tensions and manage internal conflict, and sit across from someone else who holds a drastically different opinion, idea, ideology, set of identities, and see them as human still, not in spite of but because of what they bring in terms of their humanity. Stephanie: We're listening to them and taking seriously in. Meg: Yeah, absolutely. Stephanie: This seems to me a good segue to talk about the kind of ... what it is that you do? Sometimes people talk about the language of bringing people to the table and having people, and it is sounds wonderful, but it's hard to understand what that actually looks like and I think about my own struggle right now, given our current climate and as an American historian, and the ways in which history is being bandied about and weaponized, frankly, and I feel like I know certain things. I know certain things to be true and you're telling me correctly, that multiple things can be true at the same time. Talking about how does a community respond to what's going on right now and to me, let's just use the example of Black Lives Matter, to me, this seems like it's not an ambiguous at all, right? Stephanie: You're either stand with Martin Luther King Jr. or you stand with Bull Connor and his dogs and hoses. To me, it feels like that kind of choice. How in the work you do, which I think is so important, because I feel myself getting more and more entrenched and frustrated, how would you bring someone like that to the table with someone who had a different feeling? What are some of the things ... this is very much mission. I mean, how do you do that and I want to ask you another question, what do you call yourself? I mean, I know your title is associate, but are you a teacher? Are you a mentor? Are you a space maker? What do you go? So, those would be ... I want to know more about how this actually works, largely, because I feel like this is a free consultation. Stephanie: I don't need to pay you for your expertise because I feel like I need this. I need this in family conversations, Twitter ... my goodness, the text threads, I need Meg Griffiths and your skillset. So, how do you do that work and what do you call yourself? Meg: Well, first of all, we all need a little Meg Griffiths. I mean- Stephanie: True and we need Meg Griffin's baked goods. The whole other story of your community making baking space but we do need a lot of Meg Griffiths, not just a little. So, how do you do that when we're in this moment, it's hard enough anyways, particularly, this reactive moment we're in right now. Meg: Well, let me start with, who I work with and for and what we do, and then, I'd love to talk about what I call myself and how we're responding to this moment. So, I work with an organization called Essential Partners. We were founded over 30 years ago by family therapists in Cambridge, Massachusetts. These were a group of mostly women who looked at the public debates around, say, abortion that were happening in the 90s and could clearly see patterns of dysfunction in these quote, unquote, conversations on public television between the pro life and pro choice sides of the issue. They said to themselves, "You know, these are patterns we see in family therapy sessions. We are familiar with this dysfunction and what these systems produce. These communication systems. These power dynamics, et cetera." Meg: So, they went to work and started playing around with an approach to dialogue that would begin to bring their tools to the public conversation. So we were founded as Public Conversations Project, about 30 years ago. We had a name change about five years ago to Essential Partners. So, what we've done over the last 30 years is fine tune, adapt, iterate, and evolve an approach to conversation around polarizing issues. So, what we do is we come into communities, organizations, schools, faith communities, nonprofits, anyone who wants us, and they usually call because they're stuck. They're stuck or they've gotten bad news because they got a climate study back that said, things aren't looking so hot or because they've had some sort of acute conflict come up in their community. Meg: They say, we need help. We don't know what to do. We don't know how to get out of these stuck patterns that were in. Stephanie: Even where to start, right? That kind of news is just so shattering if it's not your experience of the institution, but you know that some of your colleagues it is their experience. Meg: Right, right. Stephanie: Even that moment of recognition is huge. Meg: Yeah, that cognitive dissonance of, well, I love this place and this place feels like home and community and family to me, what are you telling the other people don't feel that way? Yeah, and other people are like, "Thank you for putting the data in front of people, because we've been telling you this for a really long time or we haven't been able to say it out loud because of fear of consequences, of naming our experience. So, I mean, we do a lot of different things but we usually start by listening and trying to get a sense of what the real ... what hasn't worked in the past. What people's hopes and concerns are. If they can imagine a preferred future, what would it look like for them and their community? Meg: Then, we do all kinds of things. So, yes, my title is associate. I talk about my work as being a practitioner of dialogue and of facilitation. I am a trainer, I am an educator, I am in accompanier. This work feels like the Venn diagram of everything I've done. It feels like the middle of ministry, which I have a history in working in ministry, education, I've done teaching of various kinds, and still work for justice because I think this is about helping everyone in the community feel heard, valued, understood and understand that they have dignity, and that their community sees them as having the same dignity as everyone else. Meg: So, we work with people to build skills, to try on new ways of speaking and listening and structuring conversation. We build people's capacity to lead and participate in dialogue and we also work with faculty to help them bring dialogue in their classrooms. We bring coaching and consulting support to organizations and leaders. We just try to ... I mean, when it comes down to it, what I think this work is about is helping people see what's possible, because when we're stuck and all we have are bad examples of destructive communication about hard topics, we have lost our sense that anything else is possible. We can't even imagine that I could sit across the table from someone who disagrees with me, and feel heard and understood by that person. Meg: Be able to hear and understand what their experience and how they've come to their beliefs has been. That's what we do. Stephanie: It's such important work. I mean, it is a real crisis, I have to tell you and I feel like in a differently trained way than you, I tried to do that in my classroom and yet, in personal life, things get more complicated and it's really easy to fight or flight, that you either fight the fight and sometimes it doesn't always have to be a fight. It can be a combination but everything feels like a fight these days or flight, which is just shut down. I'm just not going to deal with you. I'm not going to engage and there's a certain amount of ... there's a lot of disservice and violence in that, of negating someone entirely and yet, engaging when another person doesn't have the same skill set, and where my skill set might be really out of training, because of the world we're living in, can be a really, really hard thing. Stephanie: It also seems like it's a hard thing for someone like me, I would say, who's very outcome oriented, right? When I directed Montserrat, one of my colleagues said, "Okay, we need to process these program goals and outcomes all around assessment," right? I said, "Well, we did that, didn't we." She said, "No, we need to have more meetings and more conversation." I'm like, " Ugh, process." So, I discovered, I'm kind of a closet autocrat, that I ... the illusion of democracy but I really just, let's get it done, right? So, I've learned as an adult to slow down and listen and embrace process more. My teenage children might not agree with that but at least in the professionals space, I tried to do that. Stephanie: It's been a challenge for me, and I know that you also are a person who's outcome oriented, action oriented, but you're also a process person. So, what advice would you give us today, who are all having these conversations in our lives, professionally or personally, around this idea of process itself being worthwhile and not just thinking about the win or the outcome? Meg: Yeah. That is- Stephanie: Consultation, free consultation, but it's true and this is mission, right? This is exactly ... when you talk about your Venn diagram, again, I think you're very lucky and I think you've also been really intentional about creating that diagram. Some of it might be luck, but a lot of it is choices and most of us don't necessarily have as integrated of a Venn diagrams as I think you've been able to construct. So, what do you think? How can we do this better? What would you say to folks that want the outcome that weight with the process. Meg: So I mean, my thing is ... I often say this to clients who are like, we got to get to the business. We got, blah, blah, blah. I'm like, "Y'all, this is the work. The process is the work because if we're stuck in destructive patterns, we got to rebuild a different kind of pattern. We have to examine the processes that are getting us stuck and every process is designed to get exactly what it gets." So, if you're going to try and like, be different together, you have to have a different process. For me, I think about naming that with people up front, because we are so outcomes focused, right? People call us because there's a problem, an acute problems. Sometimes a very public problem, sometimes a lawsuit kind of problem. Stephanie: Right. Meg: They want to fix things and I think- Stephanie: Make it go away. Make it go away. Fix it and move on. Meg: Yes and hopefully, people when they call us, they're not trying to just check a box, they're actually trying to change the culture of their organization or their campus and build some new skills so that they don't need to keep bringing us in all the time if they can start to build their capacity to change and shift things themselves. Stephanie: I was thinking that it sounds like the kind of work people and organizations should do before the acute crisis. In other words, you should build your skill set before the crisis, because what I talked to you about was this idea of how do you bring people who are so outcome oriented, think of the process is the work because ... And also how do you do it when it's asymmetrical? Let's say you have the skills of process, but the person on the other end doesn't have the skills? How do you leapfrog them? Meg: Yeah, and so, one of the things that we do organizationally is we have a couple of certain organizational norms and principles. One is, we say, connect before content. So every time we're doing anything, a client call, a workshop, a dialogue, we build the time in to connect as humans before we get down to business. We do that really simply, we might ask a question like, what are you bringing with you into this conversation that it would be helpful for other people to know about as we prepare to like land in this conversation, or tell me about how your morning has been, right? It doesn't have to be so fancy and what we do in every engagement is we try to model a different kind of process. Meg: Bring people into that so that they can see what shifts. So, I'll say, I actually have done some work at Holy Cross, I worked with the chaplains' office with Marybeth Kearns-Barrett, who was trained by us when we were still Public Conversations Project back in the late '90s, as an early adopter of dialogue and we were able to work together to re-imagine the freshmen retreat and I trained a bunch of Holy Cross faculty and students and staff in our facilitation model to prepare to lead that retreat last fall. Marybeth, she took this idea of a connecting question into other work that she was doing on campus, and that she heard from someone who participated in that conversation, that it was the most seen and understood, that community member has ever felt on this campus. Meg: Because they were able to show up and tell a different side of who they are in that space. Because in our work lives, we're often put in boxes of ... and we introduce ourselves, name, rank and serial number, how long we've been here where, all these things that can actually serve to disconnect us rather than connect us because it can highlight our differences or different levels of power and status. When we ask a connecting question that actually invites story or experience, a little bit more of our humanity into the room, and we suddenly see each other in a new way, in a more three dimensional way. The same is true in a deeply divisive polarizing dialogue. Meg: That what we do is we invite people to share a story about something that would help other people understand how they came to their position on an issue. We don't ask people to state their positions. That's a destructive pattern of communication. We know what that looks like when it plays out when all you do is bring a position to the conversation. When you can bring a story, a piece of who you are and then when you can share the values that are underneath that story, you start to get a more complex picture and then, you ask people actually, where have you experienced internal tension on this issue? That is a completely different conversation. Meg: There are infinite, more possibilities for how that conversation can unfold and if we stick to our typical pro and con, or and against position conversations, Stephanie: That's really, really helpful to think about, and it makes me ... I don't think I did this in the class I taught with you but I do this political autobiography assignment that actually, Margaret Post back when she was directing the CBL and Donelan Center really helped me shape and she also does a lot of this kind of service work and scholarship. It's the same thing, I asked my first years to write a political autobiography without any guidance, just like who are you? What do you believe? It's very much a position statement, pro, con and then, through a series of interviews with peers and different reflective exercises and the readings and of course, over the course of the semester or year, if I'm teaching at Montserrat, they rewrite various points of it. Stephanie: It's so interesting, because slowly as trust is built and confidence, and a sense of community, they feel able to share, exactly what we're saying, when you said a piece of themselves. It makes that position so much more legible, and it makes it legible to the peer and the various peers that are reading those autobiographies or having the interviews. I always try to put people that I've ... have a sense of might be oppositional in the conversation, because it's easy to be oppositional on paper but when you're sitting at Cool Beans with a cup of coffee, and I say go to breakfast, have coffee, sit on the hovel, suddenly, I understand Meg, even if I might disagree with her. Stephanie: Suddenly she's going to understand me differently and 201, the students that comment, they love the assignment and again, it's built on the shoulders of other people and their help to me. They comment that, that experience of being with a peer talking about serious value driven questions, and needing to listen because they have to reproduce the conversation, each of them and then reflect on it, as part of the assignment, was the high point, right? That's just like a teeny little bit of what sounds like what you're doing though, that adults need to do that, right? So, these are these young people information and it's underneath this academic umbrella. Stephanie: Then, it's like, okay, your credential, if you've got your BS or your BA go out into the world, you're fully formed now and clearly, we still need that. I need that reminder, in my own life. It's funny, I feel like I can facilitate that a little bit with my students because of my position as professor and they have to do what I say, but am I doing it in my own life in the spaces that that needs doing? Meg: Well, I love that and that is so beautiful, Stephanie because I mean, when we talk about how to bring this work into the classroom, we have a particular approach. It's highly structured and it's structured because we know that that helps people feel safe enough to contribute. There's a sense of certainty about what to expect. They know that there's a container for the conversation to happen inside of and it can hold a lot. The container can hold a lot of emotion, a lot of disagreement, all of those things but you don't have to bring a 90-minute structured dialogue into your classroom, to create the kind of dialogic spirit that you have clearly demonstrated, right? Meg: It can be as simple as helping students, and then also to your point, bringing this out into the world, in our families, in whatever, right? Helping them to ask questions that will invite that deeper experience, that is behind their belief. It's about following our curiosity instead of listening to debate or persuade, right? The intentionality that we bring to our listening and to our asking of questions, we know has a powerful impact on what we hear and how a person responds. So, we come with a genuine curious question. We're going to get a really different response from our interlocutor or conversation partner than if we come with a question that's actually just a suggestion with an inflection point at the end of the sentence, don't you think it would be better if you just did this? Stephanie: Do you mean my mom voice? Yes, I know that, I've heard that once or twice. I always say I'm a better professor than I am a parent. I'm so much more generous and open ended with my students than with my own children. Meg: My God, please. Heather is like, that doesn't sound like a curious question. Stephanie: There's no fun in it. Yeah, I'm not talking ... That is great, I love that she says that. Look, bring your work to home. Usually, it's like your work at the work place and you're like, "Okay, bring it into this conversation." That is too funny. Well, I would like to write my congressional representative, Jim McGovern and suggest that he bring essential partners to Congress, because I think exactly what you're talking about is what we need and we need it frankly on local and state government levels, as well as institutionally what you're talking about, because I really think we are in a crisis and unfortunately, I don't believe that playing to just ... I mean, leadership matters and the tone is set from above in many ways, I believe in a ground up model too. Stephanie: I don't think that necessarily just notions of who's in charge is going to magically change how we have trained ourselves over decades frankly, really, it's not over a few years as a country but over decades to not listen and to not understand because people are angry and frustrated and then shut down. So, it sounds like if you were to describe yourself beyond, you need a new title. The associate does not encapsulate it. It's teacher, it's curiosity generator, it's ... you're a human can opener. You're a maker of space for these things to happen. We need a more- Meg: Crafter of questions and- Stephanie: Crafter of questions, that sounds like Hogwarts. The Crafter of questions and potions. Well, this is such a pleasure and I have to say I'm so glad you do this work, Meg, because we really so desperately need it. It must feel wonderful to do work that you really believe and see, as needed and effective. That's really awesome, so thank you for that. I'm going to shift gears and do you want to say one more thing? Go ahead. Meg: I just want to add, I think sometimes dialogue gets a bad rep because there are so many urgent issues that need action and attention. So, I just want to say that dialogue is a tool, and our approach has, at its heart, a purpose of building and supporting mutual understanding, and it is not going to solve all the world's problems but what it is really good at is building trust, building understanding and building social cohesion in communities that have been sort of torn or harmed in terms of their sense of community, and it can lay a really strong foundation for action, for a community coming to know and understand where its shared values and shared hopes are and then, moving toward that. Stephanie: Again, this is a ... it's a really helpful precondition. A really necessary precondition but I appreciate you saying that because I think, again, as historian of the ... and I think about Martin Luther King Jr. in Alabama, Birmingham and the City Council saying, "Just wait, don't do this now, wait. This isn't the time," and he wrote his piece why we can't wait and the letter from the Birmingham Jail. So, there does come a time when dialogue shuts down, because it's not really dialogue. It's not dialogue of ... sort of you're talking about, which is people on various positions and I'm saying sides because we don't want to be binary, occupying various spaces in the conversation, who are equally equipped to have a true dialogue, as opposed to not equipped. Stephanie: If people refuse to be equipped, and they insist on being equipped or failed to be equipped, then, of course, I understand why it breaks down and people have to act, because you're right, action toward justice is what the process is hopefully leading toward. Meg: Yeah and people have to ... I think people who come to the dialogue table, they come because they're in touch with something that means a lot to them, and they care enough to show up and listen and try to muddle through with people who they know, occupy different positions and to me, that's a sign of hope in and of itself, if people are willing to come to the table and that they have a shared commitment to making some kind of change, making their community better, making space for more voices and re-humanizing the quote, unquote, other and that ... again, process is an outcome. Stephanie: It were, you say, yeah. Meg: The outcome of that is increased trust, increase connection, increased resilience of listening and social cohesion that, as you said, can be a precondition for greater change in terms of structural change or organizational change, or societal- Stephanie: Yeah, absolutely and even an opportunity for decreasing certain kinds of behaviors, right, is also ... plus its increasing capacity, but not just dismissing a person because you think you know their whole bio or of course, that's how they're going to react and I'm sure that in your work, you come up against certain parties in various institutions, when they hear your plan, say, "Well, I'm not going to do that, right. That's not for me." That must be really frustrating because the idea is to build that trust so that, people who need it, who's all of us, that's the other piece, it's not just certain parties need to hear all, all the parties need to hear. Stephanie: I think that that's a really inclusive model. Awesome. That's great work. It's so needed, I want you to come to my house in my next Thanksgiving dinner, Meg and we'll have a consultation. All right, so let's shift gears, because we don't have too much time left, although I could do this all day long. I wish I could. I'm going to do something called speed round for fun. Meg: Okay. Stephanie: My gosh, what is it? Okay, and I'm going to ask you a series of questions and I just want you to answer in whatever way you want. Okay? They're really, really heavy questions. These are heavy questions that are going to shape the future of the world, ready? Favorite vacation spot? Meg: Wellfleet. The Cape. Stephanie: Beautiful. Favorite baked good that you make yourself? Meg: Homemade no knead bread. Stephanie: Favorite dessert that's a dessert, baked good. Of course. It's so funny that I say baked good, I'm immediately thinking chocolate and you say bread. So, favorite dessert, dessert not just bread. Meg: It's the Italian in me. Stephanie: I know. Right. Meg: I don't actually make a lot of desserts but I buy the most delicious brownie from The Vegan. I know, it sounds unbelievable. The Vegan bakery down the street has amazing fudgy chocolatey brownies. Stephanie: Delicious. All right, then that sounds perfect. I like that. My mother was a baker like that. She was like, I don't really bake, but I go to Paris Pastry Bakery and I buy the best stuff in pink boxes. What is one of your favorite places in Worcester, because you also lived here for a while after graduation, what's one of your favorite places in Worcester? Meg: Can I say your house? Stephanie: Yes, you're so sweet. Thank you. More importantly, what's your favorite restaurant in Providence, your current home? Meg: We have a weekly standing Friday night dinner at the Vegetarian Place down the street. It's Garden Grill and we miss them terribly while they were shut down and now, we get takeout usually on Friday night. Stephanie: Nice. Garden Grill in Providence. Excellent. Do you make New Year's resolutions or is it every day resolutions? Meg: I don't usually make a New Year's resolution. I try to reflect on the previous year, around that time of year. I don't really make resolutions. Stephanie: That's good. I think you live resolutions every day. Resolutions are outcome oriented. They're not process oriented anyway, right? Meg: Yeah. Yeah. Stephanie: Maybe what we should make are New Year's process commitments. We need to change that to ... change your title and change that tradition. All right, what about ... real quick back to Holy Cross, what was your favorite dorm that you lived in? Meg: I was the first class to move into what was simply called the apartments, my senior year, now Williams Hall. I was the senior resident director. The first ever in the senior apartments. Stephanie: Did you get a room with a good view of downtown? Meg: I was in the basement, so not the perfect view, but close to the nice balcony- Stephanie: They do. Meg: Yeah. Stephanie: That overlooked Worcester. What about if it's possible back in the early 2000s, your favorite food at Kimball? Meg: Gosh. Stephanie: It's gotten so good. Meg: Probably, froyo with cereal on top. Stephanie: Yeah, I think that's probably still, because that constant open machine of the froyo, yeah. What kind of cereal? Meg: Cinnamon toast crunch or something with sugar- Stephanie: There you go. Excellent and then, what's the best part about being a Holy Cross graduate? What's the best part about being part of this community and I'm going to add, what is something you would like to see more in this community of people? Meg: Well, one of the best things about being an alum is that I got to build the LGBTQ alumni network and meet a bunch of really fabulous and I mean fabulous in all the ways, LGBTQ alums and be part of creating a space where some of our alums who had never stepped foot on campus since they graduated, and had felt really disconnected from the college could reconnect. So, we have a network of hundreds of alums from across many decades and more than a handful of people have made it known to us that they have not had a relationship with the college until this group was founded and recognized and the college was so supportive when we approached them a number of years ago. Meg: Really, the request and encouragement of students at the time from the Abigail Allies now Pride group who wanted to see alums be recognized and organized so that they could see themselves in the alumni community, and that they could have support from alums. So that work has been really meaningful and my colleague, Phil Dardeno, from the class of 2002, has really held that work and steered the ship for the last few years. Stephanie: Wonderfully so and I can attest how important that group is for students. This model of, of being able to move through this place and be true to oneself and have a community that matters, that's wonderful. What would you like to see more from your alum group or from ... what do you what do you hope Holy Cross graduates can bring to the world right now? Meg: Gosh. Stephanie: It's a diverse group of people, so it's so hard. Meg: I know. Stephanie: A hard ask. Meg: Holy Cross alums are doing amazing things in the world and I love how we have Dr. Anthony Fauci out there representing some of what it means to be a Holy Cross alum right now and I'd love to see more storytelling and more ways to bring alums back together. I think the affinity spaces is the future of alumni development and alumni community because I imagine I'm not alone in this. My relationships and connection as a student spanned all four ... well, more than four, graduating classes because I was involved in so much. The idea of coming back for reunion is like, lovely and also, those are not all my people. I missed the people that I saw and had relationships with, that were years ahead and below me. Meg: I would love more opportunities for alumni to gather and now, that must be virtual. Also, for the college to tell the story of more alumni who might be not as famous as Dr. Fauci is and doing really amazing and important work in the world and that's why I love this podcast, but also, I think to amplify and elevate voices of alums who are doing ... who are living their mission and the colleges and then, have opportunities to like hang out together and learn from each other and like rub off on one another a little bit. Stephanie: Exactly, and then, that's that sustainability thing, right, that it fires in sustainable and relationships. That's awesome, Meg. I am so grateful for you, taking the time today to share your story with us and also to share your wisdom around process and relational exchange and hope. Whenever I speak with you, I always leave with a great sense of admiration, love but also such a sense of hope. You're a person who makes things possible and I thank you for that because sometimes this world feels like that ... possibilities feel, they're shutting down. They're literally shut down with isolation, right? It's just really revivifying to spend time with you and I appreciate how well you live the mission. Do you still have your T-shirt, we should have had you wear it. Stephanie: Maybe you have to find an old picture of you in the T-shirt to send ... to post with the podcast, of moving people into the apartments, right? Meg: I'll have to ask Brenda Hounsell-Sullivan, if she has an old orientation photo of me with the Live the Mission. Stephanie: I'm sure she does. I'm so grateful. Thank you so much. I will hopefully come down to Providence and grab some Garden Grill with you and Heather, and my husband Tony soon and keep up all the wonderful work you do. Thank you for being part of the Holy Cross story, Meg. Meg: Thank you for being one of my beacons along the way, Stephanie. Maura: That’s our show! I hope you enjoyed hearing about just one of the many ways that Holy Cross alumni have been inspired by the mission to be people for and with others. A special thanks to today’s guests, and everyone at Holy Cross who has contributed to making this podcast a reality. If you, or someone you know, would like to be featured on this podcast, please send us an email at alumnicareers@holycross.edu. If you like what you hear, then please leave us a review. This podcast is brought to you by the Office of Alumni Relations at The College of the Holy Cross. You can subscribe for future episodes wherever you find your podcasts. I’m you’re host, Maura Sweeney, and this is Mission-Driven. In the words of St. Ignatius of Loyola, now go forth, and set the world on fire. --- Theme music composed by Scott Holmes, courtesy of freemusicarchive.org.
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.
What comes to mind when you think about the relationship with your manufacturers? Chances are you have the same picture in your head as so many other brands. You see a series of events that starts with opening a purchase order, and goes down the line of tasks including paying for your items, getting them shipped and then starting the process all over again. It’s a transactional relationship that has seen very little disruption through the years. But the times are changing, and a company called Italic is leading the charge when it comes to developing a new framework around partnering with manufacturers. Italic is a membership-based brand that gives customers access to products produced by the same manufacturers of the top brands in the world. Jeremy Cai is the CEO of Italic, and he likes to say that Italic is a marketplace-inspired supply chain. On this episode of Up Next in Commerce, he explains exactly what that means. Jeremy describes new and different kinds of partnerships with manufacturers that, for the first time, makes them true partners in business. Plus, he explains why that partnership is leading to a better end product and happier customers. He also dives into new ways you can leverage manufacturers that many aren’t aware of, and details the metrics and strategies that subscription companies need to be focused on to rise above the competition.Main Takeaways:Getting in on the Action – Traditionally, manufacturers have not had to put much at stake financially when working with brands. But, with a company like Italic, the manufacturers take on a financial risk. In doing so, they also become more involved partners which leads to a better end product.It’s Deeper Than You Think – There is now a partnership opportunity between manufacturers and brands when it comes to designs and in-house pattern design capabilities t In the past, much of the design and pattern work was done solely by brands. But today, many manufacturers have high-quality design and R&D talent inhouse and create showrooms of products that brands can tap into.Meaty Membership Metrics – For membership-based companies, there needs to be less value placed on the traditional metrics that have so often defined ecommerce companies. Tune in to hear which ones are crucial to pay attention to.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, cofounder of mission.org. Today, we have Jeremy Cai on the show, the CEO of Italic. Jeremy, welcome.Jeremy:Thanks so much for having me.Stephanie:I'm excited to have you on the show. I was mentioning earlier, but I've read quite a bit about you guys. I see you in a lot of the eCommerce newsletters that I follow, so it seems like you're growing in popularity at least when it comes to people writing about you right now.Jeremy:I don't know if that's a good success metric, but we're doing I think a good job on media coverage right now.Stephanie:There you go. I think it's a pretty good one. Tell me a bit about Italic for anyone who hasn't heard about it, doesn't know what it is. I would love you to give a brief overview of what it is.Jeremy:Sure, so Italic is an annual membership that costs $100 a year and our members get access to hundreds of products that we design and develop inhouse, ranging from cookware to bedding to towels to apparel and accessory, footwear and many more coming soon, but the difference is we sell them at prices where Italic it doesn't actually make a profit. This actually results in pricing that is dramatically lower than both direct-to-consumer companies as well as traditional incumbents, oftentimes in the 40% to 50% to sometimes 70% to 80% range. We've been around for about two and a half years, but we've only launched the membership about a month and a half ago, and so far, it's been a pretty good start.Stephanie:Very cool. You have membership and you're not making money on the actual products. Tell me more about what would be an example of something you're selling and how are you encouraging people to sign up for a membership to get access to everything that you just mentioned.Jeremy:Sure. One example of the product that we sell, and this applies to all their products, is let's just take our slumber cotton sheet set, for example. The sheet set sells anywhere from I think ... Actually, I might have to actually look at this for cross reference, but I think it's like anywhere from $80 to $120. Those are prices where we're not actually making money. Those prices do include things like freight and warehousing and fulfillment fees, but generally it still comes out substantially lower than the prices that our competitors would set. Then in terms of how we're actually attracting new members, really I'd say it's from two general ways.Jeremy:One is I think the goal is for our members to be saving money on their first purchase. This oftentimes comes through the lens of product marketing. If we would do a great job of really letting the products tell their own story of saying how great quality they are, the same manufacturers of so and so brands are, which certifications these manufacturers have, what specific details of the products really sell the product itself, I think that actually helps sell the membership for us because we don't really have to say like, "Hey, with this membership, you're saving all this money." instead it's like, "Hey, this product is obviously really great and it's really high quality."Jeremy:Then once you look at the price point, the perceived value is like, "Oh, I'm going to save pretty much the entirety of my membership fee in one or two purchases," which we see in the vast majority of cases. Typically, 93% of our new members will break even on their $100 fee in one order, but on the flipside on the membership, this is different than the standard transactional model in which you have to be a paying member in order to purchase anything. I think we do have do a fair amount of education in terms of showing to our members or showing to our audience who might become members, "Hey, this product, you can only buy it if it's a membership. This is how the platform works. This is why it's different than a brand. I think we have to put out a lot of content in terms of actually sharing like, this is how we were able to put together this offering that doesn't really exist elsewhere."Jeremy:We do a little bit of both, but I would say right now we lean a little bit heavier towards product marketing since we have a lot of new exciting launches coming up.Stephanie:That's awesome. Talk to me through a bit about what was your thinking behind creating a membership program for because I think I saw you started out with it and then maybe you stopped doing it and they started again and feel free to correct me if that's not right, but tell me about what was that journey like.Jeremy:It was not easy. I would say the way I like to view it is the first two and a half years of our business, we've really been focused on the supply side of operations, building out that product assortment, and exactly like you said, we did launch in 2018 with a membership product. Within basically a month or two, we decided very, very early on like, "Hey, we had three manufacturers in three categories at the time, handbags, scarves and eyewear. As you can imagine, those are not necessarily high frequency purchases to substantiate a membership value proposition.Jeremy:We actually never actually charged anyone for the membership. It was always a test to see how the response would be. Overwhelmingly, we saw that the product response was great, the quality was great, but I think the offering was too limited at the time. Instead for the following two years, we ran a transactional model in which we made money through marking up our products, albeit not as much as a brand would. Our products might be marked up two to two and a half times, whereas our competitors will mark them up five, 10, 15 times sometimes. That's how we made our money.Jeremy:Really the incentive was, "How do we build a product assortment that's large enough, so I guess wide enough and deep enough to attract the member to actually convert?" Around, I would say, Q4 of 2019, to be totally honest, I think we saw two things happen. One was the structural, I guess, implosion of the venture direct-to-consumer model in which a lot of brands, I think, who had been raising money and then going out with this one playbook that hadn't been set maybe back in 2013 to 2017, I think suddenly realized, like, "Hey, we are not technology companies. We are a brand and we make money through transactional volume." Basically, I'm just trying to say we saw the writing on the wall if we were to continue that model.Jeremy:Then in Q1, we also took a hard look in terms of our user behavior. We saw frequencies of purchases, our lifetime values get to a place, our product reviews, our NPS scores all get to a place where we felt confident in our product assortment to date. When we first started, we might have had maybe 30 or so skews. Now, we have over 1,000 skews. It finally got to a point where the product assortment felt mature enough to launch a membership product. We tested that, and then basically right when we started testing it, that's also when COVID hit.Jeremy:We figured there's either two options. One was we just pull that and just focus on building the transactional model again and getting it into a sustainable place which is still the goal, right? We don't want to build an unsustainable growth model or alternatively stress test the model in the peak of, I think, consumer uncertainty in which we would see like, "Hey, does this value proposition of saving money resonate in the time when it would matter the most. Thankfully, it did and I think from April to May, June and July, we monitored our cohorts and user behavior really closely and wanted to make sure that the membership was something that we had conviction in.Jeremy:Eventually, we got to a point where we realized like, "Hey, this is ..." I guess the way I like to put it is our customers always liked us, but our members absolutely loved us. We decided to go all in and then finally released the public version of the product in July.Stephanie:That's great. That's good seeing quick pivots and seeing like, "What is the market telling us? Where are things headed?" and trying out different models. How are you going about building out maybe a financial model because I'm thinking if you have only a membership subscription-type model, there's probably only a limited market? You can't scale indefinitely. There's only a certain people who will be on that versus making profits off of each product. I'm sure those are two very different models. How to do think about it financially when trying the two different ones out?Jeremy:That's a very valid point and I think we knew going into it that there is a lot of subscriptions out there and a lot of subscription fatigue and at least the states in the US in which everyone has a Prime membership or a Spotify subscription or Netflix and to add one more to that is always asking a lot. I think we knew going into it like, "Hey, this is all or nothing in which you can't launch a half-baked type of membership product." I think to the financial level, I think two things are worth noting before we decided to do this. One was the fact that we are capping our upside to $100 very literally for pretty much the extent of the year and the incentive in that case is, one, can we launch products and provide a service that our members love so much that they'll stay for years to come in which our LTV or lifetime value in that case would become quite substantial and hopefully our churn would be low and retention would be high and so on and so forth?Jeremy:I guess that's one area is we really were aware of the fact that if we cap our financial upside that the immediate short term would be that we're limited to $100 for the year, but the amount of utility and value that we could provide to a member would be so great that they hopefully stay for years to come in which our LTV would grow to a point where we would actually outperform our transactional type of behavior. Then the second point, exactly like you said, memberships aren't for everyone. We're very well aware of that, but I think something that has been exciting for us to see is if we're able to build this type of product, I think it is genuinely massively different than anything close to us.Jeremy:Whereas most of these direct-to-consumer brands, they're basically providing products and a story to a customer which is an incredibly, incredibly competitive market. We have a product where it's like, "Hey, for $100, you get access to all the products we sell at a price where we don't make money. I think that's a genuinely differentiated product in which we know it's not for everyone, but we think value-driven commerce, it's not sexy per se, but it is something that is very attractive to a very large segment of the American consumer base. I think we were willing to take that bet.Jeremy:Of course, we wanted to monitor really closely so that we weren't losing money on transactions at least and at least that we were breakeven and we were able to accomplish that within the months of the pilot, so we felt confident in rolling it out more broadly, but I think to answer that more directly, if we didn't see user traction, if we didn't see members using the platform or membership or if we saw our NPS or product reviews drop or if we saw an increase complaint rate, increase return rate, etcetera, then I think we would have actually probably returned back to the transactional model, but it was something that we felt confident enough in just off of a couple months of data that we've decided to go all in.Stephanie:That's awesome. I think that's so great, because it really shows a longer term vision and commitment to be around where I think actually a lot of B2C companies right now are missing that. I don't know if it's because of the VC stage where it was like grow really quickly, but it seems like a lot of people are more ready to just quickly make as much money as possible, maybe sell the company off, see what happens afterwards, but I really like the idea of actually telling your customers, "Hey, we're only going to make $100 profit for the year off you that essentially cover some of our costs." I could see that really helping a customer want to also support you guys along with just wanting it because maybe it's a very good service and some platform they use.Jeremy:Thanks. That was pretty much the bat. The reality of the business right now is if you're a direct-to-consumer brand and you're starting out nowadays, you might raise one round of financing, let's say anywhere from $500,000 all the way to like $3.5 million or something of the sort if you want to pursue that route. That's pretty much all you're going to be able to raise or at least assume that's the last capital you're going to raise, and then subsequently, you're going to try to sell. Nowadays, what I've seen whether it's a PE firm or a conglomerate or a larger direct-to-consumer brand that might be interested in acquiring one of these assets, it's now valued off of EBITDA, as opposed to revenues or run rates which is what we saw in between 2014, let's say in 2019.Jeremy:I think the reality is nowadays if you're trying to build a venture scale business in this model, it's really, really tough. I think the actual advantage of doing so is doing so sustainably with growing off the business off of cash flow as opposed to equity raises and going that route. Then, I think for the companies that have already raised that are in this tricky spot where we were for sure, we had to look ourselves in the mirror and just say like, "Hey, what is something that would be significantly differentiated in the market that has technology scale outcomes that would be potentially accessible if we were to do everything perfectly right.Jeremy:I think that's the only reality where we can actually like continue as a venture scale business. I think that's what we had to really just operate with the mentality of. I think in terms of like the customer empathy too, we always knew that our prices were good, that we always came maybe 15% to 20% lower than the next direct-to-consumer brand, but truth be told, if you were to compare our products which were objectively great products next to a brand's products that built all of their community messaging, advertising, copy, etcetera off of that single category, 15% to 20% off might not be enough to sway one of their customers to decide to purchase the value option, whereas nowadays to go much, much lower into the 60% to 70% range, that's a lot more powerful sway.Jeremy:I think for us we knew that it was a risky bet, but I think the customer would ultimately like it a lot more and so would the investors and I guess, business community at large. I know the brands don't like us, but that's another story.Stephanie:Well, that's actually a good segue. I wanted to hear some of the behind the scenes of partnering with these manufacturers and thinking about the psychology behind, "This is also bought," or let's see, "It's manufactured at a factory that also produces Prada." I saw that on your website mentioning like, "It also manufacturers this, this and this," and I was curious to figure out like, "What was the process to partner with these manufacturers and then also be allowed to say, 'These brands are also built or manufactured at this factory as well'?" It seems like that'd be a tricky area to play in.Jeremy:I can't deny that. I think we have a unique value proposition in that case. That's really what drove I think, a lot of our early interest in the brand over the first two years. In full transparency early on, I was personally quite nervous about it since it is a pretty radical statement, especially since like we position ourselves not so much as an individual brand, so much as, say, a platform or a marketplace or a retailer. I think in the early days we were very careful. All these things, it's not to say that we've loosened up on this. We're still very, very careful about auditing all of our partners, making sure that we're working with the best of the best in each category, regardless of where they are in the world.Jeremy:Oftentimes, that comes along with saying, "Hey, this product is made in the same manufacturer as X, Y and Z brands." That's part of the selling points of the product. I think in terms of the tricky part was obviously on the manufacturer side. We have an interesting relationship with our manufacturers in which it's not like a normal brand in which they're a vendor and we're a client, where we just place a PO and then we'll mark up their products and then that's how we profit. The best we can do in that case is like get letters of credit or Net30, Net90, etcetera.Jeremy:Instead we actually have a financial relationship with our manufacturers in which they actually are taking on inventory risk and we're taking on the marketing risk of this inventory in which their incentive is to take inventory risk for a higher yield or higher rate of return on the inventory that they're producing and owning. Then our risk, of course, is making sure that we can sell that to our members at a price point that is still radically lower than the competition, but at a place where they'd be happy with the profits. I think that was actually the tricky part because manufacturing, and this is actually my personal like family background is a really hard business and margins are already razor thin.Jeremy:On a final sale, a DTC brand might take like 80% of the margin and cost might be like 20% and the manufacturer might actually take like 5% of that cost. That's honestly how it works. It doesn't matter if you're like a legacy brand or a direct-to-consumer brand. Manufacturers treat them all the same because it is the same for them. I think on the flip side for the manufacturer, they are not oriented to take capital risk. They have predictable revenue. If you place a PO, we expect payment certain date, whereas on Italic, there is no legitimate end date for a certain PO to be paid.Jeremy:It's a little bit nuanced and that was actually the hardest part I would say of convincing these manufacturers to join. It really wasn't the brand piece. The brand piece we're always very careful of ... We always do very careful audits to make sure that they're factual claims. We always do audits with our general counsel as well to make sure that we're making claims that are factual. On the trademark side and then on the copyright side, we have a development system when we're merchandising that there's at least a number of differentiating points on the product, but we've actually never really run into major issues on this.Jeremy:Perhaps that's because we're a smaller brand right now. As we grow, the issues might pile up, but at least for now, it hasn't really been, that the legal side hasn't been a big issue. I would say it's actually more so convincing the manufacturers to take on this new type of model, but I think now that we've been around, we have over 50 manufacturers we work with. I think we've had a really good relationship with all them thus far. Yeah, I think other brands always come into question, but it's never actually been like a point of contention.Stephanie:I could see that being really beneficial for you having the background in manufacturing for those manufacturers to also feel like, "Hey, this guy gets me he understands. He knows that we don't have big margins." I want to talk a little bit more about that piece. I could see a lot of the manufacturers really liking that you have a background in manufacturing because you understand that tight margins and you're not trying to maybe push them too far. I was wondering, one, had they ever done this model before where they're taking on inventory risk? Then two, were any of them scared to work with you because they didn't want to make the brands that they work with upset?Jeremy:I can answer the second one first, which I think it's actually pretty straightforward. That has never been a reason why a manufacturer wouldn't work with us. I thought it would be, I guess in actual practice, I think it hasn't been. The reality is most of these manufacturers have a number of clients and I think they will readily offer new clients the current client list and say like, "Hey, this is who we work with. You should trust us," as part of the vetting process. What we're doing is bringing that information that all the brands already know and offering that to a customer as well, so one more layer of information that a normal brand would never offer.Jeremy:The bigger issue with the manufacturer is actually more so just capital. It's like, "Hey, you got to fund hundreds of thousands of dollars for this first run and you're not going to see a payback until we start selling it, and depending on when we decide to launch it or decide to really invest in growing that category or product offering, the return might not be immediate." I think that was actually the biggest problem. Every so often what we'll hear that'd come up is like, "Hey, we prefer that not to happen," but with regards to the brand names being mentioned, it's never been a reason as to why a manufacturer wouldn't work with us. It's always been capital related.Jeremy:Then I think to the point of the model itself, I think people have tried different approaches to this over the years. In the States, at least, there is really no one doing anything like us right now because it is an extremely ... I would say like you really have to be aware of how manufacturing works, how to communicate with them, how to work with them, also how to partner with them. That's not something that like the vast majority of American brands will ever understand and for good reason. They really have no reason to because the entire business model of commerce is built on markups, as opposed to us where you can basically just treat them as a vendor. If it's not working out, if you need better pricing, you can always counter source and so on and so forth.Jeremy:The relationship there was always rather fragile, whereas for us it's very strong from day one because we have to be in which we become basically financial partners immediately. I think they haven't necessarily ... We work with manufacturers in Asia predominantly, in Europe, in the US and for the majority of them, these are not small mom and pop merchants or artisanal shops. They are pretty professional large scale production houses for very large runs. We work with like five different public listed manufacturers. I think for them, this model is, I like to call it like a private label as a service in which they can experiment very rapidly if it works.Jeremy:We do all the design and development in house, so we take care of pretty much all the heavy lifting on the stuff that they don't have, but if it works, great. If it doesn't, the downside is basically the capital that they put into it. We haven't had that happen yet. I think it's a new ... We like to think of it as like a marketplace inspired supply chain which none of these manufacturers have encountered before, but it is something that I think has promise.Stephanie:It's so interesting thinking about everything that's going on behind the scenes and I honestly have not even gone deep into the world of manufacturing, so I have so many questions, but one that comes to mind which is probably maybe a more basic one, but how did you even go about finding out who manufactured what products? If I owned Prada, which I do not, I definitely don't, but if I did, and I was like, "Hey, who makes this? This is really nice," I want to find out what factory it's coming from or who's actually behind the scenes making it, how did you even start that process of finding that out and then finding the next one, the next one and maybe getting referrals?Jeremy:Well, you just named it. Sourcing is a weird business in which it's still and this ... Not just sourcing, but a lot of the supply chain is still heavily relationships based in which it's like, "Who do you know? Who do you know? Who do you know?" and that's who you're able to work with. In the early days, I personally met and lived between China and Italy for the first year of the business and I met with hundreds of manufacturers, many of whom are now our partners, but in the beginning, were very skeptical, "Who is this guy? Who is this company?" I think the best way to put it, it's like in terms of sourcing, the best way to do it is through referrals.Jeremy:We've tried everything from digital platforms to sourcing companies to even trading companies just to see what type of quality and price point we can achieve, but ultimately, we've always found the best option would be to do direct sourcing ourselves. We actually have an internal team coming from the likes of Patagonia, Arc'teryx, Zulily and Amazon, really focused on sourcing the world's best manufacturers in each given category. Each time we want to enter a new category, we will always ask for referrals from our existing manufacturers. There's digital products that help you find manufacturers through other sources but generally we found the best have always come through referral.Stephanie:I think I've looked online before looking into, maybe this is a 3PL that I was looking at. Either way, that whole world seems pretty behind the times when it comes to trying to find things online and get details about it. It does seem like referrals would be the best bet in that industry.Stephanie:I was going to ask when it comes to inventory risk, you were mentioning that the manufacturers take on the inventory risk, do they also have a say when it comes to the pricing of the product?Jeremy:Yup, they definitely do. We are hand in hand with their manufacturers at every single point in the development journey, from material selection, color dyes and sample reviews and so on and so forth in which if we are talking about cost structures and cost payments, or sorry, sample reviews, we're always thinking about price and we're always very transparent with our manufacturers in terms of what our research tells us. If we believe a certain price threshold is too high, we'll tell them, and vice versa, they'll tell us like, "Hey, this is getting expensive. Do you think your customers or members will still want that?"Jeremy:Ultimately, the incentive for manufacturers to earn a higher than normal profit margin on Italic sales because they're taking on the inventory risk, so there, we're able to pay them out substantially more than they would ordinarily make. I think they're very in tune with our orders, sometimes even more than we are in terms of the performance. We've also built a lot of internal dashboards that we'll share with all of our manufacturing partners for them to log into, review the performance. Sometimes, we'll need to set price points that are lower, so that will encourage a product to move faster and they're able to cut down on their margin, but still again, it's at price points that are pretty much close to cost.Jeremy:It doesn't really moving the needle too much nowadays that we're past the transactional model. It's easier to do that on the development side when we're actually developing these products, or on the flip side, if a product is actually performing way too well, they might actually ask for us to develop a more premium version or a version that uses a high quality or a more expensive material, not necessarily higher quality, just a different material. For example, we started with cotton sheets. It was sateen. Now we offer percale and we're looking into linen. Then we also offer eucalyptus lyocell sheet set as well. Those were examples of where we saw their consumer demand really expand what our manufacturers want to develop and as a result their price points were able to change quite a bit depending on the product.Stephanie:I was thinking about that these manufacturers probably have a ton of insights into what's selling with their other brands, what consumers are interested in. I'm wondering, are they even allowed to share that and help influence your guys product designs and say like, "Hey, we see this plain shirt with like a lion on it and selling really well with Anine Bing," which we just had on the show?Jeremy:I guess there's two ways to look at it. One way really is from the lens of like, "Hey, the manufacturer has what I call like extraordinarily delayed insights into performance," in which the only time the manufacturer actually knows about how well a certain skew or style is doing. We're primarily talking about fashion and apparel and other soft goods and home for example. It's a little less seasonal or trend driven, but in apparel for example, a manufacturer will only know the performance of the line after the season or after the client comes back and places the reorder in which their insight is already delayed by a whole, let's say six to nine months.Jeremy:By then, it could already be out of stock or out of favor with the client. The second point is actually much more interesting in which this is the dirty secret of a lot of these brands is the manufacturers nowadays have significantly improved and really, really sophisticated design and development inhouse capabilities. Historically, let's say 30-40 years ago, a lot of the design and development and pattern making and so on and so forth was always done on the brand side. Nowadays, I really call it more of a partnership in which the design and R&D talent inhouse at a manufacturer is so great that sometimes, and this is like extraordinarily ...Jeremy:This is not just like startups. This is like huge multinational brands, all the way to brands just starting out in which their buyers and merchandisers or product developers or designers will walk into a showroom that a manufacturer has made for a season. They'll pick like four or five styles from the manufacturer's design books or pattern books and then say like, "Okay, let's make some small tweaks, but pretty much, it's the manufacturer's design that we're iterating on."Stephanie:Oh, wow. I definitely would never have thought that.Jeremy:It saves a lot of time if you think about it because developing patterns from scratch is really time intensive. You have to ship samples back and forth all the time, whereas if a manufacturer already had a lot of these samples ready to go for you and you just had to tweak, let's say, the material or stitching or whatever it is on apparel specifically that it cuts down development time significantly. It happens pretty much everywhere and really the designers at that point in time are not really designers, but they're just iterating on the final versions of products. I think-Stephanie:That's a good secret that I never knew about.Jeremy:[crosstalk 00:33:15].Stephanie:When you're thinking about getting maybe inspiration though and you're looking around at some of the more luxury brands, how much of that can you actually take and use? Because when I'm thinking about, there's certain things that without a logo on it, you probably be like, "Is that from Walmart?" Sometimes the logo makes it where if it didn't have that, I don't know, personally, why anyone would ever buy it. I sometimes don't know why they would buy it either way have you ever had an experiment like that where you've been trying to maybe let a brand or popular brand influence products where then you're like, "Oh, actually, the logo kind of made that one."Jeremy:I think the way I would respond, one thing we really care about a lot at Italic is having a data-driven sense of merchandising in which we're using our customer insights to really drive the product decisions that we're making, both on the technology front as well as the product development front for our physical products. I think what we realized is, to your point of, "Does a logo make a product or does the product make the logo?" which is actually maybe a good way to think about it, is the fact that logos matter to some people and it doesn't matter to other people, but everyone has a specific category in their lives in which they care about having a logo and then vice versa like that same person might not care about having logos on other products that other people might.Jeremy:I guess a better way to put it is let's say you really care about having a logo on your handbag, but you actually, and I don't know if this is true or not, but let's say you don't actually care about having like the top of the line logo on your bedding or all-clad cookware or Le Creuset Dutch ovens or what have you, right? Let's say that's actually the mentality. On the flipside, I think there's a lot of people out there who would actually have the alternative approach which is like, "I don't care if I have a big fancy handbag, but I am really into cooking and I want the fanciest cookware and I need to have like X, Y, Z brands cookware in order to feel good about my purchase.Jeremy:What we found through a lot of our, I guess, our surveying is, one, the main reason why people buy from us is quality in terms of the product and the second is design and overarching, I guess, the main reason why you sign up is because you're getting quality at cost. The price point and the value you're getting out of your products is really, really high relative to pretty much any other option out there because we're not making money on the products that we sell. I think what we found is the people who sign up, if you're a fashionista for example, you're probably not going to buy our fashion products, but you might actually sign up for your home goods and then vice versa, someone who really cares about that specific type of bedding or having really great towels or candles or what have you, but doesn't really care about having a logo or the next trendy thing.Jeremy:The way we look at merchandising is really anti-seasonal in which we're trying to find products that are always evergreen. They might not be always in style or in vogue, but we know that they're consistent things that people will always want to buy. That's why we try not to fall too hard into having a specific branded look on our products. The product should be able to stand for their own.Stephanie:I like that. I'm just going to say quality always matters, I would think and I'm definitely your person because I'm a logo-less person. I don't care about the brand or where they come from. If the quality is good, it doesn't matter to me who makes it as long as the quality is good and something lasts. I like that. When we're thinking about metrics for subscription business, yours is very unique, of course, because right now, you're like, "We're not going to need more than $100 per person," but how are you guys tracking things? What metrics are you looking at right now to see if things are going well?Jeremy:We've changed our metrics a lot as we transition from a transactional model into a subscription basis as you can imagine, but what was interesting for me is because we run this type of membership in which it's not a ... I guess before I get there, in my mind, there's three types of consumer subscription products. One is you get something in a box every month and it's on a set frequency that you can customize. Secondly is you're paying a subscription for a discount. Then thirdly, as you're paying subscription for access to a certain product, whether it's digital or offline or whatever it is. I think we fall into the latter two in which you're paying for Italic because you want a discount on your products, but you're also paying for access to even shop those products in the first place.Jeremy:I think when we actually transitioned into this model, we realized like, "Hey, all this transactional revenue, metrics that we're tracking are actually great indicators of engagement. Now, those are our leading indicators of, "Are these members happy? Are they getting the most out of their membership? Are they unhappy because they're not using it? Are they logging back in? Is the conversion rate high for members? Is our average order value growing as we add new products or is that actually shrinking in which the products we're adding are actually lower price points?" so and so forth. It's a pretty sophisticated, I think, model that we've had to build in order to actually price these products at a price where we're not losing money on each sale but also not making money.Jeremy:It's on the engagement side all the things that historically eComm companies would track, your conversion rate, your LTV, your frequency of purchase, your contribution margins. These are all things that have now become like performance indicators on a membership basis as a cohort of how we track a certain cohort doing overtime, but now what matters on the company side is actually, "Are we adding new annual subscribers happily? Are they staying? What's our opt out rate? We offer like a 30-day period in which if you sign up and you decide not to place an order and you want to get a refund, we'll provide that, no questions asked. Right now, it's 5%.Jeremy:I think like those questions or metrics that we've done a pretty deep dive in terms of like what we actually want to see. Now really that the core metrics are like, "What's our new annual recurring revenue because it's an annual plan?" and then secondly what is ... We don't have retention yet since our first cohort is still seven months out from renewing. The second indicator of that is like, "What are all the engagement metrics telling us? Does that suggest that they're likely to churn or stay?" I think those are like the metrics that we've transitioned towards. There's a lot more that I could dig in there, but that's at a high level how we think about it.Stephanie:That's great. Are there any methods right now that you're experimenting with and seeing success around when it comes to keeping your users engaged or staying top of mind to them or even like different things that you're changing for the website that's connecting more with the customer when they're coming there? Any tests overall?Jeremy:I think we aren't great about testing and I'll be really forthright about that. We don't have much testing infrastructure built in. We don't have the ability to test their pricing. AB test for us are really just like, I think, very, very incremental changes. I think the biggest [inaudible] which is the transition from the transactional model and I guess the best way to really put this is like for example, during our pilot, we saw behaviors and frequency and lifetime value that we would expect on a transactional customer at month 12. We saw that on a membership level between weeks four to six. It was a literal 10x increase in utility activity for that member versus a customer who would otherwise purchase the product as a standalone.Jeremy:I think that's what I meant going back to the point of customers liked us, members really love us. That was something that we really saw. Then I think in terms of metrics that we're looking to test or at least improve with our customer that can improve the experience for them or at least hopefully it will increase our retention rates, I think that really comes in the form of, "What are the products that ..." The main four reasons why people opt out just for full transparency, one is it's international and we only serve the US, so they actually sign up through eagerly and they're like, "Hey, I didn't know that it's US only." That's actually the number one reason.Jeremy:Number two is financial. It's like, "Hey, I got furloughed or I was laid off," which happened a lot in the early days in April and May. Nowadays, it's less common, but the last two are ones that we can directly address. One is, "The product offering is currently not broad enough. You don't have a product that I want to see or a category that I wants to see." Lastly, "The products that I want are out of stock." This are directly in our control. For example, we'll show now in the coming soon page like what products are coming next for our members and that keeps them excited.Jeremy:Secondly is what products are being restocked. We're placing much, much larger orders, so that hopefully we don't have these out of stock issues. Really the reason was like our members just purchase at a substantially higher frequency than the nonmembers did. We actually underordered prior to the membership, because we didn't know what to expect. I think those are things that ... There are certain features like that that we developed for that use case, but really the only thing that we can solve for in a long-term basis is just develop more products, order more deeply, and hopefully as a result, acquire more members.Stephanie:I love that. I think that's a really good point too about how to keep people engaged and coming back to see like, "Okay, what's coming next? What's the new t-shirt that's coming out that I can get really excited about?" because I could see a lot of members maybe, at least in my head, I would think like if I am in a subscription or a membership, I would probably frontload a lot of purchases right away to get that value and then I might forget. I think that's really smart to find ways to keep someone like me engaged coming back maybe a couple months later if I forget, so that I will renew after the year.Jeremy:Exactly. I think for us really, the goal isn't necessarily to make you buy more stuff if you don't need it. The goal is to hopefully show that, "Hey, you're going to get enough value out of this membership, so that you're going to stay another year, or two or three or four or five in which there's a constant drop of new or a constant allure of new products that will be down the line such as products in travel. For example, we just launched our jewelry line last month and that sold out in a week's time. Now we know, "Hey, there's a lot of demand for that. We should order much deeper in it" I think constantly testing on the product side is something that we do a lot, but now that we're not making money on the transactions, we're not trying to force you to use it unless you want to.Stephanie:Very cool. I saw that you guys had a signup list. I think originally it was over 100,000 or something along those lines. I was wondering, how are you going about acquiring new customers? What kind of channels are working well for you right now? What are you finding success in?Jeremy:The hardest question for anyone in eCommerce nowadays. In 2018, we had a strong waitlist going into the membership, and then once we launched, we were like, "Hey, the membership is not going to work. We dropped it in, and instead all those people on the waitlist became our email subscribers and we were ... Fortunately, they eventually became customers as well. That was where a lot of that 100,000 original list went to. Then more recently, we actually had another waitlist. This time, it wasn't for marketing purposes, but it was actually like a legitimate operational waitlist in which we simply didn't have enough inventory to serve all of our members to a great experience in which if you've logged on in the third of all the products were sold out, that's not something you want to see as a first time experience.Jeremy:We have the waitlist up for a while, up until we can restock more deeply to address those issues which we've recently done. In terms of the new customer acquisition, I'll be like totally honest. It's a mix of performance marketing and brand marketing. We internally separate our marketing team into two. One is brand which is everything nonpixel-based or nonattributable to a pixel. Everything growth is pixel-based in which it's pixel through Google and the intention of growth is to grow the membership base. The intention of brand is to keep our cost per acquisition on the growth side low, so that hopefully it's not the first time that you're seeing, let's say, an ad from us, but instead it's actually a recall.Jeremy:Examples of that would be like influencer would be in brand. TV would be in brand even though I know there's pretty good models for tracking nowadays and attributing podcasts we still put in brand. All these things ... I guess I'm being hypocritical because those do have pixels nowadays, but really the intention of those is to get in front of you first, so that by the time that you see a Facebook ad or a Google ad, that you're already aware of where we are, so your interest is already piqued.Stephanie:Cool. All right. We have a lightning round coming up. Before I move on, is there anything that you were excited to cover that I forgot to ask?Jeremy:Well, our basics are dropping tomorrow-Stephanie:All right. Well, tell me more about the basics.Jeremy:We've had a line of recycled t-shirts for a while and those were really, really popular through a lot of quarantine. The number one requested kind of products for us for years has been a line of just great Ts, plain really high-quality t-shirts. It's finally coming out. I've been waiting literally a year for this. I'm super excited, but that's all. That's it.Stephanie:That's great. I love a good t-shirt. Actually, maybe it's always been a trend and I just haven't paid attention, but now it feels like it's really coming back to just wear a normal plain t-shirt or just something like simple on it. It feels like it's coming back strong, but maybe it's always been here.Jeremy:That's not surprising. I feel like a lot of people nowadays ... I'm sure there's a lot more people out there who could speak much more eloquently on why basics are great, but basics are always in vogue and our members have been requesting it very actively, so I'm excited to finally get that out.Stephanie:I will definitely have to check into that when it drops. All right, let's 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 and you have a minute or less to answer. Are you ready, Jeremy?Jeremy:Yes.Stephanie:All right. What's up next on your reading list?Jeremy:Well, I actually just got a copy ... This is going to put me in a bad light, but I don't always read business books, but I just got a copy of Reed Hastings new book. I'm excited to begin. I literally just got it right before this interview. That will be next.Stephanie:Cool. What's the title of it? I don't know if I know which one that is.Jeremy:No Rules Rules.Stephanie:I'll go check that out. You have to let me know if you like it.Jeremy:Yeah, will do.Stephanie:All right, what's up next on your Netflix queue?Jeremy:I've been actually watching The Legend of Avatar which is-Stephanie:I don't know if I've actually seen that one.Jeremy:It's an anime, cartoon that used to run on Nickelodeon as a kid and I forgot how good it was, so I just watched that again.Stephanie:That's great. Netflix probably knows not to advertise that to me. They're like, "You just probably won't like that one." All right, if you were to have a podcast, what would the podcast be about and who would your first guest be?Jeremy:I've actually been thinking about doing one.Stephanie:You should.Jeremy:It's been on the list. That's actually why I have this fancy bike here.Stephanie:You do sound great, though.Jeremy:I think I wanted to do like a podcast show where ... I live in Park City, Utah. There's a lot of great ... I took up fishing during quarantine. I haven't really caught anything, but it's really relaxing. I thought it'd be fun to go out and go fishing and then do an interview at the same time. I think guests-wise, there's so many people out there. One brand I've admired for a long time is the, and I like loosely know them, but I've really liked the Buffy team for a long time. I feel like they're pretty unique. They have a lot of success, but they've still been humble about it and low to the ground. I think it'd be really cool to have them. My background isn't just like eCommerce and retail. I think it'd be a mixture, but yeah, that'd be a cool one.Stephanie:I like it. I can only imagine you catching a fish while trying to interview and how that was found. Interesting. All right, what is the favorite piece of tech that is making you more efficient right now or that you're enjoying?Jeremy:Oh, man, that is a tough one. I use a lot and the whole Italic team makes fun of me for it because I always add something new every week. I think the one that stuck with me for years is this company called Missive. It's a collaborative email inbox that allows the entire team to work in conjunction on emails. Let's say it's an email with a vendor or an email with a YouTuber who we want to advertise with, we can collaborate in line without having to go to Slack or take it to another email thread in the same place. Missive and Front in the same vein does the same thing. I think those two products are ones that I really couldn't live without.Stephanie:That actually sounds really good. Can you send it out? If I was one of your employees, could I say, "Send this out under Jeremy's email because he gets better responses as the CEO than I will"? Personal question. This is something I actually want to know for myself.Jeremy:There's actually a setting to do that in which you can share an address and other people, like let's say an assistant can send it for you, so yes.Stephanie:I like that. I'll check that out. Awesome. The last, slightly more difficult question, what one thing will have the biggest impact on eCommerce in the next year?Jeremy:I'm not going to give you the cliche answer and say COVID changed everything, which it did, but-Stephanie:We all know that now.Jeremy:I actually think it happened last year and then I already alluded to this earlier, but I think the biggest change will be the transition from ... People have been talking about these like DTC waves. The first wave was like the Bonobos, Warby, Everland 2008 to 2012 era, and then, the second wave was like everything thereafter. A lot of the direct-to-consumer brands you see nowadays, it's the category leaders per se, but I think now people ... Let's say from, I don't know, 2014 to 2018-2019. I think there's been a big change in the operating mentality of these newer brands in which if you're a new brand starting out, you can't go out and raise these massive rounds that these companies used to off of revenue growth because people have realized now, this is not technology revenue growth. This isn't like an 80%, 90%, north of gross margin product.Jeremy:There is a saturation level to performance marketing. I know I'm sounding like quite cynical here, but I mean that actually in an interesting opportunity in which you can actually raise that money, but I think if you're creative about cashflow and you're creative about how you grow the business, you can build a huge business. I guess Gymshark would be a great example of this in which you can bootstrap to a really large volume without having to raise equity financing. I think you can do it through focusing on cash conversion cycle which is what Gymshark has with its founders or you can have in any case of owned supply chain like House or Buffy does.Jeremy:I think there's different ways that you can frame the direct-to-consumer model that allows you to still grow, but I think the era of venture-backed DTC, getting into the series, A, B, C and onwards is probably over. I think that's already happened and I think that will probably be the biggest impact on the ecosystem.Stephanie:I completely agree with that. If you sound cynical, then I think cynical too, because I completely agree with that. That's a really good point. All right, Jeremy, this has been such a fun interview. Where can people find out more about you and Italic?Jeremy:Italic is on italic.com and I am @jjeremycai, J-J-E-R-E-M-Y, C-A-I on Twitter. I think that's the easiest way, but we'd love to have anyone as a member.Stephanie:Awesome. Yeah. Thanks so much for coming on the show.Jeremy:Thank you.
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.
The COVID-19 pandemic has turned the world upside down, and there is a lot of talk about when things will go “back to normal,” or whether this is the “new normal.” Christoph Schell, the Chief Commercial Officer at HP, is spending a lot of time thinking about what this new world will look like. He’s responsible for setting the company’s path and making sure HP is ready to go-to-market in the best ways possible. How he does that is by looking at emerging consumer behaviors and combining that information with hard data, which leads him to design strategies and solutions that, recently, have needed to be deployed faster than anticipated. The pace of change is quicker than ever before, and the five-year roadmap that companies had previously planned for are now taking place in a matter of months. On this episode of Up Next in Commerce, Christoph explains how this acceleration has forced a change in HP’s roadmap and sales model, and discusses why the new plan is so focused on subscription-based services, supply chain resiliency, and data. Main Takeaways: The Rise of the Prosumer: A new customer segment has emerged in recent months — the prosumer, who is a professional who is now working from home but requires enterprise-level capabilities and technology. Companies like HP have had to pivot to meet the needs of this new group, who are being guided by CIOs investing heavily in workflows and increased security for new work environments. Everybody is an Inside Sales Rep: With much of the world forced to work from home, how business gets done needed to change. This was especially true for sales, which now had to be done fully remote through digital interactions. But working with many retail partners and revamping an entire sales model is no easy task. All About Supply Chains: Creating a resilient supply chain is one of the biggest challenges companies face today. For global companies, that challenge is made trickier by things like tariffs and other cultural and legal issues that may arise. To become antifragile in the supply chain means to have the ability to assess all your partners from every angle in order to see where roadblocks may occur and if they are surmountable. 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, co-founder of mission.org. Today on the show, we have Christoph Schell, the Chief Commercial Officer at HP Inc. Stephanie: Cristoph, welcome. Christoph: Thanks for having me. Stephanie: If it was any other time, I would have you in studio, I'd have you walk down the street to come here but here we are, on Zoom, even though we're basically neighbors. Christoph: That's true. Stephanie: So I want to hear a little bit about your journey. I saw that you have been at HP for more than 21 years which I was like, "Whoa." That's a long time. So I want to hear a little bit about how you came to HP and what that journey looked like to becoming a Chief Commercial Officer, which is where you are now. Christoph: Yeah. So look, you probably can hear this. I'm German. I started with HP in Germany, in '95, as an intern. I did a six month internship in the business school that I went to and I worked with HP as a business analyst and then back for another year to school. And yeah, then actually graduated and I wanted a job at HP but HP had a hiring freeze back then and so I went to P&G in Germany as well. And then one a half years into it, went back to HP. Moved with HP to the middle east. I was eight years in Dubai and then Australia, Singapore, San Diego, back to Singapore. Then I left HP again. I went to a company called [Phillips] and I stayed there for close to two years. And then in 2014, came back to HP. This time, in Palo Alto. And yeah, since then I've been with HP here in Palo Alto. Stephanie: That's amazing. So what does your current role look like now? Christoph: Look, it's a new role. I mean for all these years that I was in HP, there was a lot of change. But actually, one thing that never changed, we always had the globe organized into three regions. These regions were the Americas, Europe, Middle East, and Africa, and Asia, Pacific, and Japan. And we decided last year that we will change that and we did away with the three regions and moved to ten markets. These ten markets are reporting now into a central structure that we call The Commercial Organization and I'm heading the team of The Commercial Organization. Christoph: And we're basically responsible for all go-to-market, and from category management, we do the product management. We're responsible for basically the revenue and the margin and positioning the products correctly to get with our marketing teams and global business units. So in a classic marketing term, you would say we manage the four P's, the four P's of marketing. And we do that globally. Stephanie: Got it. So tell me a little bit about behind the scenes of why you moved the org structure to the ten markets instead of the three regional one. Like what was the driving force behind that? Christoph: The driving force to me, and I was leading that project from the get-go when we designed this new structure, was a change that we saw in how our customers wanted to consume our technology and how they went shopping. And actually it's interesting to see that COVID-19 has accelerated a lot of this. Christoph: So a lot of our go-to-market has moved online. Either to marketplaces or to online businesses, these can be partners or even our own store. And customers go back and forth between these. They get some of their information during the journey, on the marketplace, on HP, with the partners. Some of them go obviously to publications, they listen to podcasts. And they form an opinion. And when you want to be there with them all the way, you need to be very consistent. Very consistent in how you show up, very consistent in how you manage additional assets. And very consistent in how you get your value proposition across, globally, internationally. And we thought that the structure that we had of three independent regions resulted in too much decentralized decision taking when it came to four P management but also basically, basic definitions of value proposition. Christoph: And so, we centralized this a lot more. We took a lot more control in how we manage it. And that was the big, driving force behind the structural change. There is, hand-in-hand with this, a move to go more and more into subscription-based engagement with customers. And we can talk about this a little bit later. And that's also a lot easier to do in a digital go-to-market, and digitally engage with customers. Stephanie: Got it. Yeah, that makes sense. So you mentioned COVID earlier and I've heard from quite a few guests that their tech or product roadmaps that were maybe for three years to come, that sped up into three months. So what kind of changes has HP seen when it comes to COVID? Christoph: Yeah, look, I will echo that. I really believe that what we've seen now happening in five months is what our plan, our roadmap had to schedule to happen in five years. So there was a huge acceleration. Basically, the way I would summarize it is this move to digital has been accelerated, the move from transactional engagements to subscription-based engagements has accelerated. The request of customers to have more personalized experiences has increased. And that has a profound impact on how we design products. It has a major impact on our roadmap that has clearly changed if I compare from February to now. Christoph: But it also has a significant impact in how we think about talent, how we think about culture that we want to build within HP. It's actually very exciting. The core of our business is around personal systems and printing. And there are categories within personal systems and printing that have become essential during COVID-19. You know, the good-old PC is very hip right now. A lot of people need it to work from home or to learn from home and even home printing which a lot of people stopped even looking at as a desirable purchase, has been coming back in attractiveness. And it's essential, again, for people that work from home and that learn from home. Christoph: And so that helps us a lot to offset some of the headwinds that we see clearly in an office environment with people working from home. Obviously the office business is a little bit neutered right now. So those are the big changes. Stephanie: So how are you guys handling these big changes? Like what were some of the biggest pivots that you had to make over these past couple months and how are you aligning team members and everyone around a big cause like that that is probably shifting a lot of the plans, like you had mentioned, and condensing them into a very short time. Christoph: I'm going to answer this across a couple of headlines. So the first one is really, roadmap. So if you stay with these essential categories of working from home and learning from home, what is really interesting to see is that COVID-19, to me, has created a new customer segment. I call this the consumer segment. And what I mean by that is that you have employees that work from home and expect enterprise type of deliverables in their home. Their CIO's want to make sure that they can work securely and in a compliant way from home. And that required us to think about how can we bring assets that we have usually in an enterprise go-to-market, how can you bring that into individual employee's home? So that's the first change in roadmap that you see. A lot of investment into workflow. A lot of investment into security. Christoph: The second notion under this headline is, when you run an employee's home, you are also participating in how the family entertains itself. And that gives you a boost in how you think about your consumer value proposition and your consumer roadmap. And so, we saw these two things merging. We had to, in the past for example, a product called Instant Ink. It's a replenishment service where your printer sits in the cloud and you pay $2.99 or $4.99 or $9.99 a month and you get a certain page amount based on the subscription that you pay. When your ink levels in your cartridges are at a certain level, we will replenish those and send them automatically to your home. So you don't have to leave the home to go shopping for ink. Christoph: And that has, during COVID-19, really hit a nerve and we saw subscriptions going up. Now the cool thing about this is that you build a very loyal engagement with your customers. And the loyalty that we have on this product is really very impressive. We like the numbers and we have really thought about how can we take this and engage on it from an enterprise point of view and satisfying some of the CIO needs of having employees print from home? That's number one. It requires a bit of infrastructure investments that we're thinking about how can we take this program and scale it further globally from the countries that we're in today to get a more complete coverage. So I think that's one point. Christoph: The second point is, around the headline of supply chain. I think, my generation, we have learned how to optimize supply chain for cost. But we had to now learn that you need to also optimize supply chains for resiliency. And that is a very complex topic to do that when you manage a global business and when you produce some of the products that we have, some of the portfolio that we have, we own the manufacturing. Some others, we do that with equipment manufacturers. And so coordinating that, working on strategies and how to, on the one-hand side, still be cost-effective but on the other-hand side, be more resilient, is actually very interesting. And so that's an ongoing project but clearly something that COVID-19 has required us to do. Christoph: And then the third element is how we manage customers and how we allow customers to really enjoy our technology and consume our technology and I said this before, COVID-19 has been for families, but also for businesses, a concern. A concern to their bottom line, a concern to their cashflow. And so moving from Capex investments to apex investments around subscription engagements and contractual engagements is something that is super important right now and we're bringing those business models to the forefront of our offering. So those are the three headlines I would like to touch on. Stephanie: Cool. Yeah, maybe let's start with the prosumer shift as you call it. I want to hear a bit about how ... So you were focused B2B and on enterprises and maybe not as much on consumer prior to this. How did you shift your mindset and really understand what the consumers are looking for and what they need? How did you change that sales model to be more consumer-focused and at home and working at home and learning at home? Christoph: We very quickly saw an increasing need of customers to become productive working from home. And it started really with a lot of global accounts, enterprise accounts. Think about the financial service industry. Think about call centers that all of a sudden had to move thousands of people that they had in call centers to working from home. And to do that in a compliant way to the enterprise, in a secure way, with cyber attacks going through the roof during COVID-19 because home networks are not as well protected as our usually office networks. That created an immediate request from our customers to come back with solutions, how can we do that? How can you enable us doing that? And can you please do this in a way that we don't have to transact with you but we in through a service [inaudible] engagement? That was the very first thing that happened. Christoph: The second thing that came right on the heel of that was, hey, we need the kids to go back to school and they need to do this online. How can we do that? What's the best ecosystem? It's not just a question of what device you buy but you have to actually think about with school districts, how is it best to move a curriculum online? What's the best way to partner from a technology point of view, what solutions do we have in the ecosystem? If I think about Microsoft, if I think about Google, if I think about other service providers we have? And then again, how do you package that? In the beginning there was a lot of demand for mobility products. And right now, I actually start seeing a shift to a more desktop products because I think kids and their parents are learning the hard way that if you sit six, seven, eight hours a day in front of a small screen, it's not very easy to stay focused and concentrate. So getting them the best possible setup to learn, to read from a large display, to maybe have the speaker set, to have a good microphone for voice. All of this becomes very important. Christoph: And how did they learn this to life from a business modeling point of view, again, was very interesting. In the US, a lot of the education business is still transaction for us but we have other countries where we are letting kids and school districts consume on a subscription model. And so this is something I think that COVID will further. Christoph: So I think those are the two clear items I think that I have seen evolved here in COVID-19. If you then look at our go-to-market, we are a company that does close to 88% of our revenue through partners. And what our partners needed to do, they need to shift their engagement, very often from a physical engagement with a store or a demo room or a sales force, basically there was [inaudible] on feet on the street, to a more digital engagement, to a more call center driven engagement. In the past we talked about we have feet on the street sales people and we have inside sales people. Today, everybody's an inside sales rep, okay? And sometimes they go out and meet a customer but everything has cocooned back into our employee's home as well and the way they engage had to change. So we had to learn how to virtually sell. Which is not easy. I mean right now, I'm talking to you with our video off so I can't read your facial expressions, I can't read your body language, your [crosstalk] either. Stephanie: I'm happy, don't worry. Christoph: It's one thing to do that in a podcast but imagine you have to sell and you have to engage. So you need complete new skills on how to do that. And we've also, I think, had to learn how to become better. Each of our sales consultants become better in social media interactions prior to a call with a customer just to learn a little bit more and to get a little bit more in touch with decision makers of companies. Christoph: So just a couple of ideas but that is really playing out right now. Stephanie: Well that sounds like a ton. So when it comes to prioritizing things, I could see there being so many things. Like everyone's popping up now. Like I need security, I need to be able to work from home but my kids also need to be able to be on. How do you think about what to invest in? Because it seems like some of this could go back to maybe a little bit of how it was before. Like kids might start going back to school eventually, people might start going back into the retail. How do you make sure you're making an investment that's for the long-haul? Like what are you guys betting on to make sure these are good investments? Christoph: That's a great question. I actually think this is just the risk and the bet that we are taking here. We think that while things will correct in the future, a lot of things will stick, okay? And that is informing the priority that we have from a product, a roadmap point of view, and also from a sales force point of view. Christoph: The team and I, when we discussed about this, we think that travel will come back, but it will never come back to the same levels as prior to COVID-19. So that has an impact. It has an impact in how people communicate. It has an impact of how people meet. It has an impact how people design. And overall, how we engage. And so the skillset to invest into virtual selling, into social selling is probably a good investment. Not just during COVID, but it will stick, okay? That's one. Christoph: Then a second one is, commercial real estate. Absolutely fascinating topic, and yes, people will go back to offices but I don't think that all people will go back to offices. And I think that the people that will go back to offices maybe have learned that they don't have to go back to offices five days a week. There are certain things that we will do in offices in the future, but there are also things that we will do from home because we've learned that, you know what? It's easy to do. I don't need to be in a traffic jam, I don't need to rush to get the kids back from school. I'm at home, okay? I also think that some kids will continue to stay home. I could imagine that college students and more of them will move to online classes because it's more convenient. In particular, for this generation. Christoph: So again, these are certain things that will stick and I think your talent, your skillset, the processes that you adapt to and the roadmaps of products that you sell, they have to cope. And so I think the bet that we're talking about here is an informed bet and basically we're just looking for, hey, what is going to stick. I also think that not all of it will happen globally. I think there's going to be different degrees by markets of how travel will evolve, of how real estate will evolve, how working and learning from home will evolve. But overall, I think COVID-19 will have a cosmic, a really big impact, on some of these things and I think that's opportunity for tech companies. Stephanie: Yeah, completely agree. So you just mentioned globally, and I'm pretty sure that you're able to see a lot of consumer behaviors across the globe and I wanted to hear a little bit about what kind of trends that you're seeing. Like what do you see in different areas that's maybe different than the US? Christoph: Yeah. So for me, the most interesting actually when you heard from my intro in the beginning that I've spent a lot of time in the Middle East and Africa, in Asia, amazing to see how quickly customers have moved to online business engagement and to services like business engagements. That has happened a lot faster than it has happened in Western Europe or the US. And so that again is something that will stick and it will have an impact on retail structures. It will have an impact on financing of services like business models. Super exciting, but it's also obviously requiring for certain infrastructure to be in place. I talked about the investment in infrastructure that we are making to bring some of our subscription models to life in those markets. So that is overall a very exciting thing that I see. Christoph: I also see that in our partner landscape, there's consolidation going on. And the consolidation is going on for two reasons, I guess. One is, the overall health of business. And also, the second reason being, that different partners need to get access to different capabilities. Partners that in the past, prior to COVID-19, were focused on value-add reselling for example in the enterprise segment. They have an opportunity to learn how to be involved in consumer business. And the opposite is true as well. Retailers have an opportunity now to be involved in working from home and learning from home and to thinking about a consumerization of IT in the professional world. And both is happening. And it's super exciting to see. Super exciting to see how different partners are taking different strategies and running with it. We see significant impact on our business lead by global system integrators. These are companies that help the large companies, enterprise companies, with outsourcing projects and outsourcing in certain [inaudible] and certain geographies has become very ... Has been increasing quite a lot from a customer demand point of view. And so we see more and more of our funnel and more and more of our business going through global system integrators. Christoph: So there's a lot of movement in the overall go-to-market structure of HP and of the IT industry in general. Stephanie: Got it, that makes sense. So move over to your second point about subscription-based services. Everyone wants to create a subscription service because obviously that's very good for revenue prediction and just good for a business. But not everyone can do it. So what kind of lessons do you have or have you learned around this is how you create a good one, like people actually want this versus we tried this and this is not good. Any lessons there or advice? Christoph: I think it's like any product, you know? If you just do it because you think you should or you can, that's not a good enough reason, okay? So at the end of the day, it all starts with the customer. So you need to hit a nerve. You need to solve for an outcome that a customer wants. Christoph: Let's think what subscription's all about. You are now in an outcome-based engagement with a customer. And I think that is probably a very traditional definition. I think what you need to add now to it is, okay, it's an outcome but the outcome needs to be personalized. And if you can do that, then the likelihood of getting and loyal customer engagement, I think is quite high, regardless of what you invest into. That's number one. Christoph: In order to do that, you need to ... We needed to think differently about how we approach our categories. So what I mean by that is, it's less about the hardware engagement, the hardware sale that we traditionally have in printing and personal systems, but it's more about, okay, here's the outcome. It requires this workflow. It requires this software engagement, if you want, and sometimes the capability of the hardware, they take a bit of a backseat because you're really trying to get involved into a workflow. You're trying to get involved into some productivity element or an entertainment element that your customer is seeking. So I think that shift in mindset as you design the value proposition is very important. Christoph: And then thirdly, I guess you need to adapt the value proposition culturally and by market. So what I described earlier on around Instant Ink. I gave you the US example because we're both here in California in Palo Alto. If I would talk to you and you were in Germany or you were in France or in Singapore, the value proposition would actually look different. And I think that's important that you have the understanding but also the technical means to adjust to a cultural environment and to a specific market environment. Christoph: Yeah, I'll stop there. But I think this is very general answer but I think this is kind of the A-B-C of ... Yeah. Stephanie: Yeah, I completely - Christoph: Having a successful shift to a subscription-based business. Stephanie: Yeah, I agree. I think COVID-19 definitely helped with that because before all this, even myself thinking about entering into a subscription I'm like, I'm going to forget. Is it going to be worthwhile? But I think now, because a lot of people are at home and they're trying to make things easier, there's a lot more things on your plate when you're at home with your kids and you're working and all that, it seems like people are more willing and as long as you deliver on that value proposition, golden. Christoph: I agree. Stephanie: How are you staying on top of, like you were talking about the cultural trends whereas places in Europe, it's very different there versus in the US, maybe people are more eager to get into a subscription. How do you stay on top of what different cultures want and what's valuable to them and what maybe is a little bit too far? Maybe like you mentioned in Germany, they might not maybe their [inaudible] information in there or something. I know privacy there is a very big thing whereas here it's like, okay, charge my credit card and if something happens, credit card company will take care of it. How do you stay on top of that? Christoph: That's actually a very important topic. In particular, when you talk about personalized experiences where we look into customer's data in order to project what the outcomes are, do they want in the future, and to offer, we call it a second of one value proposition. And we are taking a ... When it comes to data, we're taking a very informed decision, understanding local contacts and local laws. We want for our customers to opt in. If they don't opt in, of course, we will not be able to give a personalized experience but we will respect the data privacy concern that they have. Christoph: It does help to have local teams and local setups in key markets so you have your finger on the pulse. We obviously have as well very capable teams that think about trends, design our global business units. And it also helps if you have the ability to not always go and launch a program globally at the first instance but if you start in one market and have a pilot, pause, fine tune a little bit, and then go for a rollout, that can actually be quite beneficial. So I have quite good experiences with that. Christoph: But you are absolutely right. Understanding the local context, understanding the local laws, understanding what is culturally acceptable, beyond laws even, is very important. Stephanie: Yeah. I think having people on the ground who can kind of guide you on that, definitely the only way to go about that. So how are you approaching holiday season? Like what kind of things are you changing that maybe you had a plan six months ago but now is completely different? What are you guys doing around that? Or what trends do you see happening around the holidays this year? Christoph: The holiday season is super interesting because I think it is flavored by how COVID is actually being managed by certain countries and by certain markets. We have a very different playbook by markets because we see in some markets COVID coming back in the second wave and some maybe even a third wave, you could argue. And by the time Black Friday and holiday approaches, that will definitely be the case. And so how do you manage holiday in that context where supply chains can be disrupted. Where you might have another lockdown. Where also then, whenever that happens, all of a sudden the essential categories I've talked to you about earlier, they will come again, even more top of mind from an essential point of view because kids understand, okay, this is going to last longer. We're going to be at home. Parents understand, okay, the office is not going to open up in my city, in my country, I have to have better equipment. Christoph: And so you see this constant, very fluid situation, on demand. And so for us, the biggest topic is actually how to manage forecasts, how to manage supply chains, how to make sure that we have the right product at the right time in the right place and of course, I could have said that before COVID but all the historic data that we had on this, is kind of obsolete. All of that is up in the air because of COVID. We've learned a lot and the challenge that we have sometimes is that you cannot just turn on a dime here. We work in ecosystems, in proponent ecosystems and manufacturing ecosystems. And so reacting to that is not easy. You need to pull a big shift of an ecosystem with you. Christoph: And so we're trying to be agile, trying to be as flexible as we can. We're trying to communicate more with our customers, communicate more with our go-to-market partners. And basically, are planning a lot more to be able to cope. But ask me that question again in January, after this over because clearly, I don't have a crystal ball either on how all of this is going to play out. So it's all about being agile. Stephanie: Yeah, completely agree. Well how are you guys going about forecasting? Because we did have an earlier episode where the guest kind of mentioned don't even try to forecast certain scenarios because you don't know what's going to happen. You can either just ... I don't know. It's different ways of thinking around forecasting where he just said don't try and place it on those scenarios. Like if this happens with the election, this will happen. He said all of that doesn't really matter. What are your guys' viewpoints on creating a forecast that can at least guide you in the right direction, even if it's not right? Christoph: Yeah. Very good point. So maybe that's exactly the point. Maybe your endeavor for the forecast should not be to be accurate but to have a forecast that supports your game plan. And then you execute the game plan. And I actually think that's at least how I think about it. That's number one. Christoph: Number two, we are ... We did do scenarios for Black Friday and for holiday. We have to. Just to come to an agreement of what products we will sell and what go-to-market in what country, what does this mean from a component point of view. What does it mean from a factory point of view. What does it mean from an ocean shipment and airplane capacity point of view? So we need to have scenarios. We cannot just leave that open. But interestingly enough, we tried not to boil the ocean. And when it came to how many different criteria do we use in coming up with this forecast? We centered very much around COVID and how COVID might play out in different markets from a timing point of view and from a consequence management point of view. We are going to be more lock downs or not. The kids go to school or go to school from home. Scenarios like that. Christoph: We also learned that from a component point of view, different countries have been impacted in different ways during COVID. Manufacturing capacity went up and down in different manufacturing countries of ours based on how COVID rolled out. So trying to anticipate that is very important too. I hope that answers it but unfortunately, we did have scenarios. There's only three but we had three scenarios. Stephanie: Yeah. I think that the way you guys are going about it is really smart. Not getting too much in the lead and having higher level themes around the scenarios because I can just think about the number of models that I built back in my finance and product phase and it's like one person could question one little variable like oh that shouldn't be 10%, that should be 15. And it got too much in the weeds and the conversation would always go astray and sort of like you said, kind of keeping it at higher level things that you can influence, would actually give you some kind of scenarios that could be semi-correct. So seems really smart. Christoph: You said this much better than I did, yes, thank you. Stephanie: The third thing I want to touch on, because I can tell, you are so excited about supply chains. So I wanted to touch on that a bit about making your supply chain anti-fragile. Like how are you guys ... Like how were you before COVID-19 and what does your supply chain look like now? Where are some of the big changes you made that are making you more resilient? Christoph: It's actually interesting because already prior to COVID, we had to think about our supply chain strategies because of tariffs. And so that was actually quite a good preparation for COVID because we kind of learned about different options from a supply chain point of view and moving to different cities, moving to different countries, using different logistic strategies, not just ocean and trucking and airplanes but also looking at railway. It's really interesting, interesting scenarios. Christoph: And what COVID then did is kind of play a filter over this possibilities that you have from a resiliency point of view, okay? Which countries and which geographical setups have been coping with the pandemic better than others? And that actually had a material impact on supply chains. It still has material impact on supply chains. Christoph: And so now we're looking at all of this, we've made some moves already, but I think if this project is just started really, it's something that we have to continue to work. It's also not easy just to move from one factory to another. It takes deliberate planning. But I really believe that in a weird way, the whole tariff discussion gave us a bit of a headstart in thinking about how to disrupt our own supply chain for print. Stephanie: Yeah. It seems like it would be pretty tricky figuring out, is this partner going to be resilient and agile, especially if you're starting from scratch with someone new, like building out some new partners. How would you think about finding a partner that you can trust if you haven't worked with them before? Christoph: That's a very good point, maybe even at a higher aggregated level countries. You can have a very good partner, somebody that is super resilient, but if the government in the country where they operate doesn't allow them to manufacture, then that's that. Okay? So it becomes very complex very quickly. You can have a country that wants to manufacture and a partner that is very capable but if the components can't be shipped to the factory for whatever reason, you are head in the water again. Christoph: And so looking at this holistically, assessing country risk, secondary component supply risk and then forming a strategy is super important. Of course, when we do this, we have a very elaborate process to qualify suppliers and to qualify component suppliers as well. I think that COVID-19 has sharpened our senses a little more again. Stephanie: Mm-hmm (affirmative). Yeah it's probably good to have a little bit of that. We'll shake up every once in a while to make sure all the internal practices are good, right? Christoph: [inaudible 00:35:10], yes. Stephanie: Yeah. So what kind of ... What do you think the future of online commerce looks like in the next year or in the next five years? What other things are you guys preparing for right now? Christoph: I'm super impressed by what I see marketplaces doing for our businesses. So it's not just in a business to consumer environment but also be in the business to business environment. In the US, we all daily in touch with these marketplaces be it Walmart or [inaudible 00:35:44], anything with a [inaudible 00:35:45]. Or Amazon. But that's a very US-centric viewpoint. When you look a little bit more globally, there are also other marketplaces. In Southeast Asia, there's a marketplace called [inaudible] that I think is very interesting. In China, you have Alibaba or JD.com for us that are very interesting. Christoph: And at the end of the day, it's super amazing to see how the idea of having tailor-made value propositions to your customers, how marketplaces are dealing with this, how they're dealing with being very customer-centric, moving to a subscription-based business models, moving to outcome-based business models. Anticipating what the customer wants to experience next and what they want their outcome to be next. So I think that is setting the bar, I think, in our go-to-market and it is setting the bar on how close you can be to a customer. So what we require to do is, we obviously participate in these marketplace opportunities but we're also keen to learn and think about how we can get to the sharp partners involved. And also get our own direct go-to-market [inaudible] involved. And basically think about how we think about the relationships that we have with customers but also with partners. And so, we recently launched a new channel partner program and said early on that we do close to 88% of our business through channel partners. Christoph: And in the past, we defined the relationship that we have with partners basically based on two pillars. One was your overall performance your overall size of the relationship that we have from a business point of view. And the second pillar was really around capability, think about certification for example. And we left those. They continue to be important. But we added a third one. And that third one is really collaboration. Collaboration on going to market together, going to market in services-lead models. Going to market by sharing important information, obviously with customers opted in. In order to be able to move to subscription and outcome-based services. And so that is a Herculean task to do that across the tens of thousands of partners that we have. Across the whole global coverage that we have. But it's also super energizing to have discussions with partners and to see what their capabilities are. And as I said to you, I think prior to COVID, launching that third pillar would have been a very tough sell-in into my partner landscape. But with COVID-19, everybody gets it. So everybody understands why this is something that we need to evolve on together and why our customers are expecting from us. Stephanie: Yeah, yeah that makes sense. So with all these changes that you guys are experiencing, what kind of new metrics have you started to have to review that maybe you weren't reviewing before? Christoph: Oh my God. Stephanie: Your favorite ones that you want. Doesn't have to be every one. Christoph: It's a great question. The biggest challenge is that yes, you have data from these digital footprints that your customers leave behind but which of these data are really important? How do you use the data? And let me maybe say this, the data is interesting, but what is fascinating is how you get to the data and how you treat the data. What I mean by that is, a lot of companies, they do A-B-C testing but then it's some executives that can overrule the results of A-B-C testing. Stephanie: [crosstalk 00:39:41]. Christoph: Exactly, based on the gut or user experience or whatever. But that's actually a problem. So I think you cannot be a data-centric company and then have a process that allows for data-centricity to be overwritten. So that's number one and that requires actually a huge cultural shift. Christoph: The second cultural shift is on and around data analytics. And I think we had to really double down on data analytics and capabilities within the company both from an employee skillset point of view, but also from a digital transformation point of view on the tools that we use and the infrastructure that we use. And I think nowhere is this more visible to me, the progress but also still what we've left to do than it is on pricing, one of the four P's. We've come a long way, but more to be done here. So I think that has a significant impact and I think COVID-19 has explained this even more, informed us even more. Christoph: And then the third piece is really this personalization and I think we're starting to offer more personalized experiences. This is clear in the future of where we want to go. And doing that in a partner-based go-to-market where the partner owns the value proposition together with HP to a customer, doing that consistently requires a lot of collaboration. So this is why this third pillar in our HP amplified program is so very important. Stephanie: That seems really tricky - Christoph: Yes. Stephanie: ... trying to make sure the partners are able to personalize the experience based on their platform and how they know their customers. Like how do you ensure there's a level of quality and that they're actually getting an experience that you guys want while also letting the partner influence it based on what they know about their customers? Christoph: Exactly. I think that last piece is very important and it's a joint responsibility if you have an indirect go-to-market. And so we have some part of the information, they have some part of the information. We have a clear understanding about what our brand stands for on what value proposition we want to drive, but they need to ... It needs to match their philosophy as well. So being in close contact, having good communications around that is super important. Stephanie: Very cool. All right. So let's shift over to the lightning round, brought to you by Sales Force Commerce Club. This is where I'm going to ask a question and you have a minute or less to answer. Christoph, are you ready? Christoph: Wow, okay, yes. Stephanie: Yeah. I know it's 5 o'clock but bring that energy, all right? I'll start with the hard one first. What one thing will have the biggest impact on ecommerce in the next year? Christoph: What one thing would have the biggest impact on ecommerce in the next year? Stephanie: Yep, only one. Christoph: COVID-19. Stephanie: Yeah, I would think COVID-19. Everyone says COVID-19. So is there anything else that you want to say? Christoph: I guess probably the stickiness of what we've learned during COVID-19. So even when it's over, how much of work from home, how much of learn from home will stay? And how much more blending will we see between consumer and professional lives into this prosumer segment. I think that will have a huge impact. And as I said truly before, I think this is here to stay. Stephanie: Okay. I like that. What's up next on your Netflix queue? Christoph: My Netflix queue? That's a very good question. I moved out of Netflix. I'm currently watching Succession on HBO. Quite entertaining. Stephanie: Okay, that works. I will have to ... Is it good? Christoph: Yeah, it's good in a weird way. Stephanie: Okay, I'll have to check it out. What's up next on your reading list? Christoph: On my reading list ... So there's a book that I really want to read. It's in German. It's about the Weimar Republic. So that's a period in Germany between the two World Wars. And my wife just did a college course on that and it's intriguing. So I'm going to read that book about the Weimar Republic. I'm not yet sure exactly what to expect but it's something that I really focused on when I was in high school so I would like to go back to that. Stephanie: Very cool. If you were to have a podcast, what would it be about and who would your first guest be? Christoph: It would be about drumming, because I play the drums. And it would be a famous drummer. I mean maybe Ian Paice from Deep Purple or Jess Drummer, the [inaudible] maybe. I don't know. One of those guys. Stephanie: Is it just maybe drumming the whole time? Like I can do that. I'll do that for you. I got you. Christoph: Well then you can be on the show, that's great. You can be my first guest. Stephanie: I don't think many people would listen after that. They're like this is what it is? Okay. Christoph: You never know. Maybe. Stephanie: Everyone likes something different I guess. What new ecommerce tool are you trying out right now that you are loving? Anything come to mind? Christoph: Well I'm trying to shed all that weight that I gained during COVID so I have this. Ecommerce tool is maybe too much to say but it's a diet app and I take pictures of all the stuff I ear. So it's actually quite entertaining to relate the calories to the pictures and doing so slows me down on my eating habits which is great. It's all good. Stephanie: Oh my gosh. I mean, yeah that might not be an ecommerce tool but I like it. So it tells you you just lost ... Or you're eating this many calories and it looks like this and it shows you a piece of food like a bag of chips or [crosstalk] - Christoph: Exactly. You take a picture and then it suggests how many calories that might be in there and that in itself is such a negative experience that you stop eating. Stephanie: You're like, ugh, maybe not. I like that. Christoph: I'm not hungry anymore. Stephanie: All right, now last one. When you can travel again, what's up next in your travel destinations? Christoph: Oh my God. I would really need to show up at my parent's place. That wouldn't be too bad. And then Germany. So I would love to see family in Germany. I also wouldn't mind going skiing in Canada, if possible. Stephanie: That sounds great. I need to get back to Germany too. I have a lot of family there, so ... Christoph: Good. Stephanie: Very pretty place. All right Christoph. Well this has been such a great interview. Thank you for coming on the show. Where can people find out more about you and HP Ink? Christoph: All right so look, if you want to be in touch with me, please try and find me on LinkedIn. I spend a lot of time on that platform. And obviously, if you want to learn more about HP, please go to HP.com.
Why wouldn’t someone like free swag? That’s not a rhetorical question. In fact, Jeremy Parker has been trying to answer that question since he co-founded Swag.com in 2016. Jeremy knew that swag and other promotional items were becoming key marketing tools, and he saw an opportunity to build a business that brought those items straight to the people who needed them. On this episode of Up Next in Commerce, Jeremy takes us behind the scenes of what it was like building Swag.com, including how he went from 3,000 organic site visitors in a month to more than 40,000 organic visitors. The journey to that success was paved with many hiccups, including the difficulty that comes with building an ecommerce platform from scratch, and trying to land their first big-name customer by walking around that company’s campus until they found a buyer. But today, Swag.com can handle unlimited orders, and that first customer was a little company called Facebook. How did it happen? Learn that and more on this episode. Main Takeaways: The Snowball Effect — Attracting customers is always easier when you have a proven track record that you can point to. Therefore, it is critical to land key accounts in the early days that can be referenced in future sales conversations. Because when you can point to one successful company that works with you, other companies will follow suit. What To Know About SEO — Good SEO doesn’t happen by accident. Even though you might have great products and a thriving customer base, organic growth doesn’t happen unless you’re paying attention to your content strategy and making the necessary little tweaks that will bump you up in the search results. If You Build It, They Will Come — When deciding on your product offerings, you have to get inside your customers’ heads and build up an inventory of things that people actually want. Sometimes that means you have to get your hands dirty, do some testing and try things that don’t scale before finally settling on the right blend of offerings. 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 Jeremy Parker, the co-founder and CEO at Swag.com. Jeremy, how's it going? Jeremy: Hey, thanks so much for having me. Stephanie: I'm excited to talk all things swag. You saw my shirt hoodie. I was ready for you this morning. I have everything branded mission. Jeremy: Every everyone needs a little schtickle of swag in their life. Stephanie: I agree. What is the first piece of swag that you remember? Jeremy: Oh, wow. For myself, I've been going to a ridiculous number of trade shows and events over the years. Honestly the earliest swagger member was stuff that I ended up throwing away and that's one that gave me one of the ideas for Swag.com and we wanted to make sure we only offer products that people actually want to keep. That was my main mission from the very beginning. Stephanie: Yeah, same here. I remember getting a bunch of stuff and throwing it away, but I remember being so excited it was back I think in 2010, it was like my first finance conference and I got like a Koozie. I was so excited because it was like the first thing that I'd ever gotten for free maybe and finances a little bit. Sticklers is about giving stuff away for free. And I look back and laugh now because I would go and collect all this stuff and it would ultimately end up being nothing that I really used. Jeremy: 100%. From the very beginning of our business, we were thinking of swag as an amazing marketing tool if it's used right, so obviously that's a big caveat. And when you think of just marketing in general and you have TV commercials and everyone's trained to now fast forward through commercials and you get a magazine, you flip through the ads, or you put your ad blocker on your computer. If you give somebody really high quality swag, they say, “Thank you.” It's really a powerful tool if it's done really right. And it has to be something that people are actually going to want to use. We don't really like to push the flashiest thing or the new hottest thing. It's all about what are people that actually use every day and get those impressions of. Stephanie: Yeah. I love that. Before we dive way too deep into Swag.com, I want to hear a little bit about your background because I see you've done a lot of things in your previous life. And I wanted to kind of hear what your journey was like before founding Swag.com. Jeremy: Sure. I was a documentary filmmaker actually in college, that's why I went to school for. I actually never wanted to be a filmmaker when I went to Boston University. And I looked at the curriculum and I really wanted it to be in high school my whole … Before college life I always wanted to be a marketing guy. I was always into branding and commercials and how to tell stories through marketing. When I went to school and I looked at the syllabus of film and marketing, they really were the exact same thing, except for film taught me how to make videos. And this is right at the onset of like YouTube. I thought that would become valuable. I became like probably the first filmmaker at BU history that never actually wanted to be a filmmaker. Jeremy: But as I was in school for those four years, I ended up making a feature length documentary that ended up winning the audience award at the Vail Film Festival. And I was [inaudible] and I walked down and the brunch the next day after the award ceremony and half the room are these major celebrities and half the room are these struggling filmmakers. And I did kind of an internal gut check of, am I good enough? Is this what I want to do with my life? And it wasn't, so right after I won this award, when people primarily feel like on a high, they're like, “Oh, I'm going to become the biggest filmmaker,” my thought was, “What else am I going to do? What's my plan? What's really my plan? What am I good at?” Jeremy: And when I graduated college, I didn't know what I was good at. I had no real experience in business or anything, but I thought maybe I should start something and just learn what I'm good at, what I enjoyed. I started a t-shirt company right out of college when I was 21, 22. And really I thought t-shirt sounds so simple, but really you're learning manufacturing, PR, marketing, building an Ecommerce experience, all the different aspects of business, fulfillment, all these different things. And I tried to figure out what I was really good at. Jeremy: And over the last 10 years, I've done a lot of different things. I started the company with my brother and Jesse Itzler. Jesse is the co-founder of Marquis Jet, private jet company. He sold ZICO Coconut Water to Coca-Cola. He's one of the owners of Atlanta Hawks. I started a company with him where we partnered up with different celebrity influencers and we owned their celebrity rights to Twitter and Facebook feeds before people knew how valuable it was. This was nine years ago or so. Jeremy: So [inaudible] a lot of celebrities, buying their rights. That company ultimately got bought by a publicly traded company. I then went on to start a social networking app that ultimately failed. Never start a social networking app, I'll tell you that. Extremely difficult. Stephanie: Semi-hard. Jeremy: Yeah, it's semi-hard to do. And we built an app called Vouch. That basically was about like Oprah's favorite things democratize for everybody. You could vouch for your favorite movie and book and charity and anything you'd want to vouch for and people who follow you really get to know what you like. Really kind of making the like button with its own platform. We ended up having 100,000 plus users. We had tons of influences. It just never materialized. And after doing that for three years, I realized that the next business I want to start, it needs to be something where we made money from day one, I could give a service and a product and I started Swag.com. Jeremy: So, it's been almost five years at this point with Swag. We were just named the 218 fastest growing company on the Inc. 5000. We have 5,000 companies from Facebook, Google, Amazon, Netflix, TikTok, Spotify buying on our site and we spent a really big portion of that building is automated experience for purchasing swag. And now it's about, now how do you handle the distribution of swag? It's more than just making it easy to buy. How do you get into the hands of people? And especially now with this pandemic, that's really the most important thing. Stephanie: Yeah, I was just going to touch on that. I know everyone's probably wondering with everything going on, where conferences are being obviously canceled and not coming back for a while. How are you guys handling that? Because I'm that the swag industry right now is down overall. What are you guys doing right now to not be part of that downward spiral? Jeremy: Yeah, that's a 100% true. They just came up with numbers. ASI, which is like the big organization for promotional products, just came out to number that over 92% of companies in our industry are down approximately 50% in Q2 this year versus last year. So, it's really bad. And then obviously it makes sense on the surface where you have our core buyer was like the HR manager buying for onboarding of new hires. That was one of our big purchases and no one's hiring right now. That business goes away. And then you have the marketing teams buying for trade shows and there's no trade shows happening, so that business goes away. Jeremy: Then you have the office manager buying for internal office and company culture, and no one's in the office right now. You have all these different buyers that really are not buying swag for the normal, the typical reasons to buy swag. So like everyone in our industry, we were very nervous like what's going to happen. And what we've been able to do is take this platform, our swag distribution platform, which is what we're really pushing and what we're really excited about. We'd been building this really amazing platform over the last two years, specifically for marketing managers. That was the initial idea of it. Allowing marketing managers to easily be able to buy swag and then send swag to the remote customers or to best leads to close sales. Jeremy: That was their initial intention. But obviously with this pandemic and everyone's working remotely, it's transitioned to office managers and HR managers really buying swag in bulk and sending it to the remote employees addresses to keep the company culture thriving, even when no one's in the office, so much so that not only are we not one of the 92%, that's downloading over 50% our Q2 this year was more than our Q2 of last year and July was almost double our last year July. And it was our best month ever and August is even better than that. We're really growing frankly in a crazy time for everyone. Stephanie: That's amazing. Now, I'm thinking about it. I ordered swag for our team maybe two years ago and the process, it was crazy. It was so much back and forth of like, “Here's your quote. Oh, you want to more of this? Okay. Here's your new quote? Here's what the design might look like.” It was just a lot. And then of course the big box came to me and then I had to maybe ship things out individually or wait until I saw people in-person if I was being a little cheap. What does it look like now I'm thinking about reordering hoodies and shirts for our team members? But of course I would have to individually maybe shift them out again or are you guys different? What is your process look like that's so different than others? Jeremy: Really simple. On our site, we have very curated selection of products. You're not going to be overwhelmed with too many options. Say the top 25 mugs, you find a mug you could use our filtering tools, really easy to search by color or price point or your type of brands. You find the product you upload your logo. Our system will detect how many colors are in your logo, in the nearest Pantone match. We're making sure we're printing, Coca-Cola red and not Staples red. Once the logo is uploaded, you can maneuver the rounds, you can mark everything up. You select on your quantity price adjuster in real time and checkout. It literally takes less than three minutes to buy swag. There's no back and forth. You can also use our instant quote tool, if you wanted to quote things out before you want to go through the design process on our site, you can upload your different variables, the quantity that you're looking for, how many print locations, the number of colors in the print. It takes two seconds and you're coordinating things out. Jeremy: So, there's no back and forth emails, there's no phone calls, there's no presentation decks. It's none of it. It's really completely automated streamlined. And then when you're going through the checkout flow, obviously you can input your own address, so we'll ship everything to your office. Or if you want us to handle all the distribution for you, there's a pink button on that shipping page that says, one is to hold your swag and inventory easily distributed, [inaudible 00:09:29]. You click on the button, you follow the onboarding and then we hold all of your swag in this online Swag closet if you will, where you can manage all of your inventory in real time. If you're ever running low in stock, we'll send you smart notifications to restock. If you want to send 1,000 different locations, you upload a CSV file we'll calculate the shipping costs in real time, based on the product you selected, where they're going. Jeremy: Once you pay for that, we grab those products off the shelf and we're shipping it all over the world for you. We really streamlined the entire experience. We take it a step further if you wanted it, some companies want this, some companies don't, but we have a whole ability to create different inventory closets for location or for a department. You can have a marketing closet versus a sales closet, versus your London office or New York office. Different people should get access to it. There's different permission settings, approval flows, et cetera. You could really break it down by department, by location and we're doing this with a lot of global main companies all over the world. Also, a lot of small startups who just want to use our service as a way to distribute swag. Stephanie: I was looking through your site and I saw products there that I haven't seen in other swag companies. And I wanted to talk a little bit about how you guys go about picking your products because all of them seemed high quality where oftentimes, I'll go through it and I'll find 50 different shirts on a custom t-shirt company website. And I'm like, “Oh my gosh, actually let me look through all the reviews. Let me see if they're good. Okay. 95% of them are all bad. They all have bad reviews, bad fits, whatever.” How do you go about making sure that you only have high quality stuff there that people will actually want? Jeremy: That's a great question. And that was the challenge. And it's an ongoing challenge, always. From the very beginning, me and my co-founder, each invested $25,000 of our own money. That was our first startup budget. What be used primarily for that was buying samples. We went out and we went to different trade, shows all over the country and we bought samples from tons of different suppliers. And we saw exactly what customers typically see when they buy from sites. A lot of this stuff was really poor quality, would end up in the trash and we would never feel comfortable selling it. We were really kind of laser focused on only offering a curated selection of products that we would actually want to keep ourselves. It's a lot of testing, it's constant testing. Jeremy: How we kind of look at the whole process is we want to have the best of what's out there. It could be the relatively inexpensive, or it could be premium. It doesn't really matter we have to have stuff in all price points. We don't want it to be known as the premium quality supplier. We want to be known as the quality supplier. We have a lot of products there high-end brands, Public Rec, Rowan, Top Wood Designs, Patagonia, different products like that. We also have no name products that you had never heard of, but they're really, really quality. We have a product sourcing team that's constantly contacting a lot of direct to consumer type of products and brands that are not traditionally found in the promotional product space and going after them as well, because we want to be known as the company that has products that no other company in our space offers. Jeremy: What we've been seeing is that a lot of companies that are okay featuring their stuff on our site or are happy to feature their stuff on our site like Bellroy Backpacks, they've never done it in other promotional product sites because the other sites, feel schlocky or throw away or cheap in some way. And we are really, really not that. We're really trying to focus on quality products, stuff that people would be proud to show off, stuff that when you get it, you're going to want to wear it every single day because that's really the only real reason why Swag is a true benefit is that people actually want to use it. Stephanie: Yeah. So, now that you can't go to trade shows and try things out, and are you still going through that process when it comes to finding new products, like just ordering things that you think are great and trying them out, or is it different than what it used to be? Jeremy: No, it's exactly that. It's less expensive in some ways and more expensive in other ways. We want to make sure we have the right products that we're constantly spending a ton on samples. And now at this point in the business also, we're almost five years in and we're somewhat known in our industry. We're the fastest growing company in the promotional product space. A lot of different, great suppliers and direct to consumer brands have heard of us, so they're willing to send us free samples. We don't necessarily have to pay for it anymore. But we're just constantly sourcing more products and taking some products that maybe were cool last year, but we don't think they're going to be good this year and replacing it with new stuff. Jeremy: We don't want to keep just adding and adding and adding because it then makes it very complicated for customers to make a decision. So, we're constantly, always looking at our site and saying, “Is this the right blend and mix of products?” And we're always never happy. We're always constantly trying to improve it. Stephanie: Very cool. I'm guessing there's also a bit of like a data element where you can probably look into the data and see what people are either enjoying. Do you do reviews? Do you use customer feedback to also influence the products that you choose? Jeremy: Yeah. 100%, yeah. After everyone places an order, we always have a survey that automatically goes on the time of delivery, very basic. It's like one question like, “How satisfied were you?” So we can get our ranking and see how people like the products and how they turned out. If we ever get any sort of bad or not 100% amazing feedback about a product, we'll look into it and maybe there's something wrong, maybe the print quality wasn't great for that order or maybe the product itself wasn't as great as what we thought and we'll just remove from our site. We're constantly listening to our customers, understanding do we have the right products at all times? Because that's very important for us. We need to have that. Jeremy: We're constantly testing more and more products. And obviously we're learning what people are adding to their cart. How many products are being … What products together go? We sometimes find that if somebody buys a tote bag, they're going to buy other products that could fit into that tote, like smaller products. Or if they buy a backpack, other types of products are usually bought with backpacks. We're constantly looking at data and trying to make sure we have the right mix of products that go with each other, so we can start positioning certain products. When you buy a backpack, the products that are featured as you might also like actually make sense. So, not just what we think, but what the data is telling us. Stephanie: I love that. Along with maybe getting personalized recommendations, depending on the product they chose, are you also personalizing the experience based on maybe what company is looking around? If a LinkedIn's looking versus Google, maybe you know that Google always buys hoodies where LinkedIn buys coffee mugs. I don't know. Are you personalizing it based on who's actually browsing? Jeremy: At this point, we're not. And we've been constantly thinking about that. The challenge is that there's so many different buyers within companies. Even if we worked, let's say with LinkedIn, which we do or Google, which we do, there's so many different divisions within Google that are completely different. We're selling to the HR team or the marketing team or the sales team or office manager, or just somebody who's buying it for their local team. Everyone's looking for different things. We've done for Google complete stuff, obviously the normal stuff of notebooks and t-shirts and sweatshirts, backpacks and water bottles. But we've also done custom Allbirds Sneakers. It's hard to kind of match up always and all the buyers are necessarily not always the same. Jeremy: So, it's constantly changing, but as we're growing as our processes and we're able to handle a lot more orders and we're analyzing more data, I think that will be a shift in the future of really making the experience as personal as possible and that might be not making it personal at all based on companies or that might be going the opposite way and making it super, super personal. We're kind of learning what's the right mix at this point. Stephanie: So, to talk a little bit about maybe the backend, the tech stack, it seems like there's a lot going on behind the scenes. I first wanted to start with, I saw that you were quoted saying the platform's able to handle unlimited orders in a day. And I was wondering, is that because you guys are leveraging cloud infrastructure or have you built some kind of scaling methodology? What does that look like behind the scenes to allow you to have unlimited orders? Jeremy: Yes. We do work with AWS, which for the cloud obviously makes things a little bit easier, but our entire platform is fully custom. Every single aspect of our site is custom. We're not using any other services. Obviously we're using like Intercom live chat. We're not going to be building our own chat, but the entire platform itself and all of our pricing is very complicated. That's why there's not a lot of companies in the space that could do what we do because it's fully dynamic. Every price tasting consideration, the quantity that you're looking to buy, how many print locations, the number of colors in the print, all these different variables that have to be in play. And now if we have 3,000 products on our site and 200 core products, they all have different pricing structures, they all have different under base charges, they all have different kinds of printing methods from screen printing, embroidery, laser engraving, all of these come with different complications. Jeremy: So, we really had to build our site from this place from the very beginning we couldn't just take an out of the box solution. And frankly I would have loved to take an Ad Box solution for this because it's been taking me five years to build [inaudible] building. We have a 15-person tech team and we're growing, we keep developing more and more and more because it's important. And we want to always stay one step ahead. At this point, like yesterday we did north of a 100,000 in sales all through our Ecommerce site. Things we could really scale and that same day. The day before we did 50,000 in sales and then hopefully today we do more than a 100,000 sales. Every day could literally be completely different and it's completely the same automation. Somebody could buy 5,000 notebooks or they could buy 50 notebooks or 15 notebooks or 20,000 notebooks. And it takes the same processing ability, same exact time for checkout. Stephanie: Very cool. Yeah, that's great. When you're thinking about back in the day, starting out with a custom website versus maybe pulling something like using a platform that is already out there, how did you go about deciding that you wanted something custom and then what did that process look like? What were some of maybe the mishaps or failures along the way where you're like, “Oh, if you guys are trying to build something custom make sure you don't do this or that you avoid this.” What kind of learnings did you get from doing a custom? Jeremy: Actually the truth of the matter was in the very beginning of the business, we went all in on Shopify. And we went all in say, “You know what? Why are we building our own Ecommerce experience when somebody else could do it significantly better than us or is worked through all the kinks?” The challenges, when we start to really build a Shopify, we realize how complicated our specific industry is in terms of pricing. And there's no really easy way. There's no Ad Box solution that could really do it. We spent literally two and a half months building the Shopify store only to then realize, which was a big mistake on our part, that the pricing was not able to be done. Jeremy: We had to really scrap it and start from scratch. And we realized it's going to take us a lot longer to get where we want to be, but we're still not where we want to be, but it makes the most sense. It's really the only way to streamline it as much as we want to streamline it. Now, the typical process of promotional products, as you mentioned before, it's a lot about phone calls. It's back and forth, this quote versus that quote. You change one little element, the whole quote changes. We didn't want to deal with that. We wanted customers to be able to do it themselves, no talking to anybody. If you don't want it, obviously if you want to call us, we love to hear from you, but you don't have to. You could do every single thing yourself and we want it to make that effortless. Jeremy: You want to hold things in inventory, click on the button and now it's all in inventory. You want to distribute swag, upload this and it ships out. Every single thing on our site, we wanted to make it as easy as possible and historically, and traditionally it's not been easy at all. And it makes sense because of how custom the product offering is. Stephanie: If you would have, maybe on day one started out with like, here's the kind of things that we're most interested in. Did you know that you wanted this custom pricing option and did you go and kind of look at different platforms to see if they could do that? Or did you just jump right in? Jeremy: Yeah. From the very beginning, honestly, we spent a year before we built any platform. Our initial idea was we don't really know the platform to build, we knew that the industry needed to be shaken up a little bit. We knew how old and fragmented the industry was, but frankly, I think most entrepreneurs could agree. You honestly know what the right answer is. Most people don't, they think they do, they don't. From the very beginning, our idea was let's just learn as much as possible. Let's reach out to as many office managers, HR managers, people that we know within industries by swag. And let's ask them what they like and hate about the current buying experience that they're having. And we would show up at meetings and we would literally say, “What sites you buy from?” And they would give us some site names and we would look over their shoulder really. Jeremy: This is what we did for the first year. We spoke to over 200 different office managers, HR-related buyers. And some ended up buying became customers of ours for many years and some moved on to other things, but just to see how they purchase swag was a big tell for us, really what the process was. Looking at their email back and forth 40, 50 emails with a rep just didn't make any sense to us. We kept kind of thinking. That was kind of the first six months of our business. The second six months of our business, the remainder of the year was about, “Well, let's do it the old school way. Let's just launch a landing page. Let's go out there. Let's be a traveling salesman and try to sell some stuff.” And we really learned how painful it is. It's like it takes forever to quote, there's a lot of manual labor. Jeremy: Every single thing that was painful for us, we then figured out a solution to automate it. And we kept just chipping away at it. Stephanie: That's so important. I think it's Paul Graham who said do things that don't scale. And that's how you actually learn, like what's working, what's not working and what to build going forward. That's really smart. Jeremy: Exactly right. And that's the same thing with even getting our customers. Now, I haven't made a sales call in four years, but in the beginning I was doing everything. Me and that co-founder, Josh, we would show up at offices and try to sell. And we sold to Facebook as one of our first customers. First customer, really actually. We had a friend who worked at Facebook, got us in the door. We ended up walking around Facebook's office in New York just speaking to whoever we could to see somebody who would buy swag. Ultimately ended up selling them a couple of t-shirts, like 100 or 200 t-shirts. We barely broke even on it. I think we made like 5% margin, like barely anything, but didn't matter to us. It was just about getting that Facebook logo. I remember two days later we showed up at WeWork in New York and WeWork asked us who else we work with? And we said Facebook. Jeremy: They assumed we probably had thousands of others because we had Swag.com brand and Facebook, but really it was just Facebook. And we got, WeWork and we continued that cycle to get that really five core blue chip companies. It was doing the really unscalable things like showing up, showing the products in-person, making the sale, really learning the process as much as possible, and then automating the experience and making that whole buying experience effortless. Now, people don't need to speak to anyone if you don't want to, that's really what our main goal was. Stephanie: That's great. Yeah. I think we've had a couple people on the show. Who've talked about just finding that first customer that you can kind of leverage as the brand name and then just pointing to them and be like, “Yeah, they work with us. Like you should too.” So I think that's a good lesson for a lot of companies starting up. If you find that one brand name and you can reference them, it'll probably help with all future sales. Jeremy: 100%. It's all about social proof, at least what we have learned, it's everything. People are not going to work with you if they don't feel confident. To build up the confidence, obviously you have to have a great platform, but that doesn't happen overnight. That takes time. You have to have a great brand and a great design, make people feel confident, but other ways are who else you've worked with? A lot of our shirts and what's big reason why we've been able to scale with very little money is a lot of our t-shirts and apparel has a Swag.com in your label. We do our own products. Jeremy: When people [inaudible] t-shirts that's 5,000 people knowing about Swag.com. They see the t-shirts, they see the quality, they feel how great it is, they see the print, they have the instant social proof that Facebook uses them or Google uses them, whoever is getting the product and they see Swag.com and it drives a ton of traffic to us. That only really works if the products are great as well. Obviously people are getting really poor quality and everything's says, “Swag.com,” no one will use us. It'd be opposite [inaudible 00:25:52]. Every single thing really has to work hand-to-hand Stephanie: Yeah, that's a really. Jeremy: Yeah. We were thinking about it initially because I wear jeans a lot. I was thinking like I buy one pair of jeans for like three years. It's kind of looks cooler, the more you wear jeans, it gets more faded. But with Swag.com or swag in general, people buy stuff for a specific reason. You're buying it to give it away and then you need more stuff. If they're buying it to give it away, we have to make the experience of giving away products that other people actually want and see. And then that new person, that person who just bought that 5,000 t-shirts now they need more stuff for the next event. It's a completely different kind of business. And we just try to figure out, we have to make sure that our logo is everywhere that it can be, obviously within reason. Stephanie: I love that. Let's talk a little bit about the backend when it comes to warehousing your inventory. How does it work behind the scenes? If you're able to allow someone to essentially have their cart saved and then say, “Okay, ship this to one person in California and then ship this to one person in Florida.” What does the backend look like to make those logistics work? Jeremy: Yeah. Upfront in terms of the actual buying swag and bulk, we have integrations with different kind of the best vendors in each industry. So, like the best one for drink wear, best one water bottles and obviously we have a big selection of product. When somebody buys 1,000 mugs or something on our site, it's automatically connects to our supplier network that produces the highest quality mug with their logo and then drop ships it directly to the customer's office or wherever. But if they're holding stuff in inventory, it ships into our 3PL. We have four strategic locations all throughout the US and we're adding more locations in Canada and Europe right now to make it cheaper for global distribution. Once the products are in our fulfillment center, then they log into the, my inventory portal and they see all of their inventory in real time. Jeremy: So, if you're ever running low in stock, we'll send you smart notifications to restock. They can easily upload their CSV file. We'll calculate the shipping costs in real time. They pay for it. We grab it off the shelves and we're shipping it to 1,000 different locations. We also have this feature called the Swag Giveaway. Oftentimes, especially now, people don't necessarily know where their remote employees are living. Say you went to a trade show. God willing the world opens up, we have trade shows again, and people go to your booth and they give you their email address. You'll know what t-shirt size they are. You'll know where they live, but you still might want to engage with them. We built the Swag Giveaway feature, where you can create a fully recipient branded landing page. Let's imagine Google just uploads their logo and their colors. Jeremy: And they could easily blast out to a CSV file of just having the person's first name and email, that recipient will click on the link. It will be branded with Google, they'll select their t-shirt size or they'll select their mug, or water bottle, they'll be able to choose which product they want. Input their address, submit. It all speaks to our system. And now we have the address that we can distribute. We're building all of these tools to allow people to distribute if they're shipping to one address, thousands of addresses, or even if they don't have the recipients addresses, but easy way to capture that and also distribute. Stephanie: Wow, that's a lot going on behind the scenes. Jeremy: Yeah. Stephanie: How are you thinking about the front end part of the website because to me when you're ordering swag or something where you really want to see the details of like, is that embroidery right, are the colors right and also just like making sure that you have people who are converting and not just sitting on maybe their design or their shopping cart? How are you moving people along through the website and what kind of best practices have you seen when setting up the front end user interface? Jeremy: Good question. It's probably the most challenging thing for our business because it is custom and everyone is somewhat concerned about, is this going to come out perfect, is it could be the right logo color, is it going to be the right positioning. What we've learned is obviously we built our patent technologies is one of the first things we built to detect the number of colors and the nearest panto match in your logo when you're uploading it. So, to make people feel really safe, they're going to get their exact color. Now, obviously it can never be 100% because web colors are not the same as Pantone colors that are used for printing and t-shirts, but it really gets to the closest match. And if you want, and if you know your Pantone, which a lot of companies do, it allows them to easily input their exact Pantone, so it overrides everything and it makes it really easy. Jeremy: Obviously they can maneuver their logo, they can mock it up. And what we say is, after you place your order, we're always going to create for them a virtual production mock-up to approve before we ever start to print. We'll never go into production until they give us the green light. Really customers should feel super safe that even if they upload their logo and they're not sure is this straight or is this exactly the right position. It doesn't really matter. We're always going to create that mock-up and they can make as many revisions as they want before we start with the print. That makes it really easy. And in terms of our distribution, obviously they can always just add this stuff to inventory and just easily distribute. The process on the front end, we try to make it really effortless and streamlined. Jeremy: It's taken us four years. We're constantly adding more and more features to make that experience better. We're launching a feature very soon called the Company Art Folder. Imagine you bought something and 20 other people in your company buys different things. It should lump all of your artwork together as a company art folder, so you never have to really hunt down the designer to make sure you have the right file or is this the right logo, is this the approved logo for swag? You can always, when you're uploading your logos, select the pre-approved designs that have been used and purchased by other people in your company, so you feel more safe. Or unlike my orders page, let's say Jennifer on your team is out sick one day, you can log into your account, you'll see all of your orders and then there's another tab that says company orders. You see everyone else in your company what they purchased, so you could easily reorder what somebody else ordered and easily subtract and make sure you're using the exact same artwork. Jeremy: We're trying to build this platform as effortless on the front end to make it really, really streamlined. And in terms of getting people through the funnel, what we've seen is our platform really does work well. I think that the more simple features that really solve a problem. And as you mentioned before, Paul said, “Do things unscalable before you scale it.” Every single thing we do, it has to be super painful for us, for us to spend time developing a solution for it. Once it's overwhelmingly painful, then we build the solution to make it easy. Jeremy: Then obviously we see their abandoned carts. We can track everyone's abandoned carts. And then we have our SDRs calling all these abandoned carts within like 10 minutes of the time that they'd been in to make sure that there's no experience that's wrong. Sometimes people say, “The shipping is too high.” Or, “It doesn't seem I can get in my in hand date.” There's certain things that we could actually help out and maneuver possible. And if it's not possible, we'll let the customer know it's not possible. But getting in front of them right when they're thinking about, are they going to purchase or not and they might have issues, that's really, I think we found the most important thing for us. Stephanie: Yeah. That's really smart. Have you seen people pick up their phone right away or have you experimented with texting instead? Jeremy: We haven't done texting and I've been researching some companies and I think it's actually a really good idea. We've seen a lot of people if they're actively looking on our site or they've just left in 10 minutes, they're likely to pick up their phone. Even when people fill out a form on our site and we have a lot of … Obviously our core business up until this point was Ecommerce experience adding it to distribution, but we have a whole ‘nother business where people could buy swag boxes in bulk, giving a really great unboxing experience for new hires or engaging with your best clients. That's fully custom branded boxes inside the boxes, as custom notebook and water bottle and pen and custom note card, crinkle paper. We've allowed people to custom build those boxes effortlessly through our site. Jeremy: All you have to do is upload your logo, the same process as buying and adding to your cart, you click on the button that says, “Build a box,” and it lumps, all those products together as a box listing. It makes the entire experience super simple. And we've seen with those bigger box orders. A lot of times it might be like a two to three week sales cycle. When Ecommerce could be like they land on a site and they check out that same day, boxes, they're fairly larger sizes. Typically, they're usually using our distribution platform for distributing because no one has room in their office for boxes or wants to boxing up themselves. So, they actively use our distribution platform for that. And that cycle takes a little longer. Getting on the phone with them, really talking through the challenges or what their issues are and what their questions are, we find is really, really important. Stephanie: Yeah. That's really great. Oftentimes when you're talking or this can happen, when you're talking to a customer, they don't always tell you exactly what they need. One example you gave there was, you want to be able to go into a library where your logos are there, which is huge. I remember ordering swag back in the day at other companies and it was always kind of a review and escalation process of like, “Is this the most recent logo? Are these the right colors? Is this our team logo?” Okay. How would you find out something like that that maybe a customer wouldn't know to tell you, but it would just make it easier if they did have that there? How do you go about getting in your customer's head? Jeremy: Yeah. I think it's just like just being their teammate. We like to think of in all of our customer success likes to think of it, is that we're an extension of your brand. Obviously if you're buying swag on our site, it has to really be the quality, but it's only going to be quality and only what you like, if the logo is right, the positioning is right, it's exactly what you want. Especially dealing with bigger orders, we like to jump on a call with customers, have a conversation, try to understand what the use case for their swag is, what their budget is, what their timeline is who the audience is. And we like to suggest ideas and obviously customers can go on the site and not talk to us if they want to talk to us and use our filtering tools and our search tools and just our browsable experience and find what they want. Jeremy: But if they want our help, we want to be there to help them. I think it's just constantly trying to understand, the reason for them buying swag and with the use cases. And then we constantly offer different suggested items that we know that we work with that other companies in the similar space have worked with. And we give other solutions for them to kind of play with. And I think it just gives a great experience where they could do their own kind of sourcing and they can also use us as a guiding tool to find them exactly what they're looking for. Stephanie: When you're thinking about getting new customers, what kind of acquisition channels are you using or finding success in right now to get these large companies using you guys? Jeremy: Yeah. I like to think about marketing and it's not always going to be the same traction channel is always going to work. Now, from the very beginning, we were doing a lot more Google ads because we wanted to get paid back fairly quickly and we've realized early on, at least for our business prospecting on Facebook is a little more challenging when you're dealing with B2B buyers. But for Google, when is looking specifically for swag it's quite challenging [inaudible] Google, obviously it's very expensive. In the beginning it maybe makes sense to do Google just to get those early wins and get the credibility. But then maybe you kind of shift away from Google and you do some more SEO. SEO for us has been tremendously successful. We started really diving deep into SEO about 18 months ago, just to put things in perspective. Jeremy: Last January, we had about 3,000 organic visitors to our site, in 2019 January. January of 2020, we had North of 20,000 organic visitors. And last month we had nearly 40,000 organic visitors. Really growing the base in terms of organic, putting out tons of content, always it's content that maybe has stuff to do with swag buyer like buying swag or maybe just has to do with the audience, HR managers, the best HR solution tools. Doesn't necessarily have to be about swag, but it's a valid topic related to the buyer. And then ultimately when the buyer comes on our site, reads about it and then is going to Facebook or Google or any of their other properties, we can re-target them. That's been a really great driving force for us, but also partnerships. Jeremy: There's a lot of different companies in our space that don't necessarily sell swag. They sell other products to the office manager or other products to the HR manager, that we could really parlay and work on. We could promote them to our audience. They could promote us to their audience. We've been trying a lot of different things, affiliate marketing, a lot of different stuff, but usually it's always the one or two kind of traction channels that are the most beneficial at that time. And right now it's SEO [inaudible] hands down has been the best driver of customers for us. Stephanie: Okay. I want to dive into that a bit then, because I hear people are always talking about SEO. There's so many SEO agency, they'll do all this SEO stuff for you. I think there's like tons of bar jokes, maybe not bar jokes. Maybe just be regular jokes about SEO agencies and consultants and stuff. I want to dive into, what are you guys actually doing when it comes to your SEO strategy because it sounds like it's been successful? How are you finding out what topics to write about? What are you seeing work? Give me all the nitty-gritty on what you all are doing behind the scenes. Jeremy: Yeah. I think from the very beginning with SEO, it was about making our site compatible and making it work for Google traffic. Our site, at the very beginning … I'm a branding person. My background is in branding and user experience design for the customer. There's a lot of things that are behind the scenes that Google looks at, that the customers don't even realize. And frankly, it doesn't even mean anything to the customers. I had to learn that. I didn't know anything about that. Frankly, I'm fairly new to SEO. We started really 18 months ago and I realized our organic rankings should be a lot higher based on our brand, based on these experience. We're getting a quality product out there and it should be getting a lot more traffic. The first step was just analyzing our site and realizing, “Well, how do I make the site faster?” Jeremy: Or, “How do I make the site make more sense in terms of Google?” So for example, on every single product page, 18 months ago, we had no other associated products below the fold. Now, most people don't necessarily look at those below the product the fold because they're trying to upload their logo, mock-up things. There's a lot of stuff for them to do on the product builder page to add to cart. But you need to add those other products below the fold, so that in terms of Google, they see that that product listing is connected to four other products or so, right. There's all these small kind of tweaks or theoretically, you want to keep adding and making your site feel refreshed. You're not going to be refreshing your homepage every single two weeks. It doesn't happen. Jeremy: You're not going to be redesigning your product builder page every two weeks or your browsable experience every two weeks. What you can do, is you can maybe put like a blog post in your footer, make it like the latest blog posts. Every time you update your blog, every day or every two days, your site is getting refresh constantly. There's all these kinds of small kind of tweak things that you could do in terms of overall site. And then it's about kind of pinpointing the content that you really want to go after and saying, “Well, who is our buyer?” So, really understanding who your customer is and trying to write really good content, not just like throw away stuff, really good content with great subject lines that get people to read something and learn something, get real value out of it that might not be about swag related, but has to do with swag adjacent, if you will. Jeremy: If someone's looking for office holiday party ideas. They might not be looking for swag, but maybe we could get swag in there somehow. Or best ways to engage your remote employees or something like that. Or what healthy snack food to have in the office, literally has nothing to do with swag, but the person who is looking for that is ultimately going to be looking for swag. And we don't necessarily need to convert them today, at this point, we could convert them a month from now. When they are looking for swag, just be on the top of mind, re-target them and ultimately convert them. Just putting out consistency. I think in general, whether it's SEO or whether it's being a startup founder or whether it's anything you do in life, I think it's just really all about consistency and just trying to have more good days than bad days. Jeremy: Constantly just trying to keep pushing as hard as you can because at the end of the day, you're going to get to a much better place if you're consistent with it, you keep pushing forward and no small setbacks really affect you. Stephanie: Yeah. I completely agree. Are you all doing the content creation and things like that in-house still? Or have you hired that out? At what point would you say like, “Oh, it's about time to hire this out,” to have someone else work on it instead of maybe an entrepreneur doing it all themselves? Jeremy: So, initially it was all me writing the content, then it became use some freelancers and now it's becoming, now we have the resources we're hiring actually this week, a full-time writer for our own team to be writing content and doing all of the stuff that we want to do. I think in everything, it always starts with the founders. Me and my co-founder, I think we've done really ridiculous, crazy things over the last four years to get to where we are. We've driven u-hauls 11 hours making deliveries at 11 o'clock at night. Having my family and my grandma, my aunts and uncles rolling t-shirts for three days straight trying to win these big deals and having no resources to do it. You're always kind of founder, CEO and head intern all at the same time. Now, at this point we're able to hire some of those roles that doesn't really make sense for us to be doing at this point or frankly, people who are just a lot better at it than we are. And that's where we're really excited to get to. Stephanie: I love that. I'm sure your grandma thanks you. Poor grandma, she's a real VIP over there, rolling t-shirts. Jeremy: Yeah. She was making fun that she hurt her back and that's why her back is messed up because of the [inaudible 00:43:33]. Stephanie: All because of you, Jeremy. Jeez. That's great. Before we move into a lightning round, is there anything that you wanted to cover today that I missed? Jeremy: No, no, this has been great. Stephanie: Okay, cool. Yeah, it has been a blast. All right. So, let's move onto 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, Jeremy? Jeremy: I'm ready for it. Stephanie: All right. What's up next on your Netflix queue? Jeremy: Oh, cool. I started watching … I was in the Hamptons this weekend. Stephanie: Fancy. Jeremy: I know, very fancy. My mother-in-law's in town and she wanted to go out. [inaudible] and there's all these ads all over the place for million dollar beach house or something. I think I started watching some real estate show. Stephanie: There you go. I saw that also on Netflix. I was watching Selling Sunset, though I need to finish that one first. Jeremy: That's fine. Stephanie: All right. What is the best promotional item you've ever received? And what's the worst one? Jeremy: Well, okay. The worst one is obviously easy. It's all about the schlocky pens that don't write. Stephanie: Oh my gosh, yes. Jeremy: Pop socket, lighter. There's some of these things, stuff when they do the hybrid stuff, it's just kind of ridiculous. Like the highlighter that also acts as a compass. It's like, “No, that's not the right thing.” So, a lot of those. And a lot of people trying to sell me on selling their stuff and it's not good. Stephanie: You're like, “No, this is no.” Jeremy: Yeah. I don't want to be mean to anybody. I just say, “I don't think it's the right fit,” or something like that, but it's not good. And the best stuff I think is honestly anything really you're going to keep it. A really high quality water bottle, something you're going to see every single day it's could be on your desk and you're going to get those impressions. I'm really proud of that, but obviously we've done bicycles for companies. We made fully custom bicycles. A company came to us and they had their whole executive team. They're very into health. They want to do something a little bit different, unique. They have a campus. We create a really cool custom, fully custom logo, colors, everything bicycles. That was a really cool project to work on. And obviously we've done really cool backpacks. We did a backpack for Facebook, which I thought was really cool where the logo was nowhere on the outside. Jeremy: [inaudible] was we wanted to make the product so kind of premium. These are like very nice backpacks, that it didn't like scream Facebook. No one even know about it, except for the people who are wearing it. So, it was black-on-black logo on the inside of the backpack, so like when you open, only the people who are wearing it, see it. That's, I think is very important. I knew this was going to happen because frankly I started getting a sense that socks were going to become very popular. We sell [inaudible] socks and clearly socks is very … No one really sees it, but it's all about the person who's putting on the socks, is wearing it, who were seeing your logo. It starts to feel that kind of connection to your brand and eventually becomes that brand evangelist. It's all about that internal. Stephanie: Yeah, that's awesome. What is a new Ecommerce tool that you're trying out that you're loving right now? Jeremy: New Ecommerce tool? We're using a company called [Tend 00:46:36]. It's very early in it, but you're able to kind of track all the different people who are coming to your site without them inputting real information, which I think is kind of spooky, but kind of cool, just to see who's checking what. Stephanie: Cool. Jeremy: For me, it's kind of the core stuff. It's the Intercom, it's the HubSpot, it's just the marketing automation, streamlining things. And there's two different things, obviously with Intercom, which is our real life customer success. People are always here to help and jumping on the phone call. Then you have the HubSpot, which is really automating the experience. Having both sides for our type of businesses is very important. Stephanie: Great. All right. The last one, a little bit harder. What one thing will have the biggest impact on Ecommerce in the next year? Jeremy: Wow. Stephanie: Yeah. Jeremy: That's a good question. I'm still laser focused on swag. I don't necessarily always think about the broader industry as a whole. I think for swag, I think it's easy. I think it is swag distribution. Everyone's working remotely. I don't see people getting back into the office anytime soon. Even if they do, it's going to be somewhat of a new normal, maybe not every day. People are still going to be able to need to engage with the remote employees or the best customers. And who's going to want to fly across the country, maybe to that trade show. They might want to do things a little more remote and automated. For Swag, that's where we're going and we're going to be automating the distribution of Swag. I think that's our next phase. Jeremy: Or somebody's one year anniversary, send them automatically Swag in the mail. Or somebody's had a baby, send them Happy Mother's Day or Happy Father's Day type of swag in the mail. So, really automating different life activities where you want swag. Stephanie: Awesome. Love it. All right, Jeremy. This has been a blast. Where can people find out more about you and Swag.com? Jeremy: Yeah. You can obviously reach out to me on LinkedIn Jeremy Parker, and obviously come visit us at Swag.com. That's S-W-A-G.com and we would love to work with you on your next order. Stephanie: Awesome. Thanks so much for joining. Jeremy: Thank you so much for having me, guys.
Recently, Jill Devine received a direct message in her Instagram account (@jilldevine) from Julie: Hey Jill! I’m new to your podcast and binge listening to them. Love them!! I wanted to put a bug in your ear about a local mom that is the new rage on Instagram. Her handle is @the_car_mom. She and her family are in car sales. She does reviews on vehicles for moms to let you know what car seats fit good in vehicles, the luggage room and tells you her personal opinion about the bells & whistles of the vehicles. She is in the St. Louis area. I thought you both could be very useful for each other. I know she is about ready to have a baby, but I bet she would love to be a guest! Kelly Suntrup Stumpe, A.K.A., The Car Mom, joined Jill on this week’s episode. Before Kelly and Jill talked about how The Car Mom was created, they talked briefly about the dynamics between siblings and what it’s like to have multiple children. Kelly is 38 weeks pregnant with her second child, a baby girl, and her first born is a boy and he’s 16-months old. The Suntrup Automotive Group family have been servicing and selling cars since 1957 for the St Louis area. Kelly is third generation of the Suntrup family. She started selling cars right out of college and when she became a mom, being in the car business was extremely difficult because of the hours. She cut back her hours to work part-time and she started thinking about how difficult it is for moms to buy a vehicle, taking into consideration moms need to bring their car seats and strollers to the dealership to make sure they would fit in the vehicle she was considering purchasing. Kelly wanted to streamline the process for busy moms. She enjoys breaking down the car buying process, how to get a good deal, and how to not get taken advantage of as a mom, but more importantly a woman. All of this led to the creation of The Car Mom. Here are some other details discussed in the episode: *Options for a roomier vehicle based on one rear facing car seat and one front facing car seat *Is there a perfect mom car *Accessing a third row in a vehicle *Telluride or Palisade *SUV or Minivan *Ceiling vents *Designing vehicles for women by women *Safety features In addition to her Instagram account @the_car_mom, she created a private Facebook page, The Car Mom Crew, that you can join. New to Season 4, the Supermom Shoutout! Jill would like to acknowledge and recognize the hard work moms put in on the daily. It can be a thankless job at times, and Jill wants these moms to know their worth. This week’s Supermom Shoutout goes to Stephanie of Lake St. Louis, MO! Her BFF, Amy, nominated her and said: To Stephanie, of course! Because she is giving her all and more to being a full time preschool teacher and a mom of two littles, and doing a kick ass job at both...although she would never say that herself because she doesn’t realize just how amazingly awesome she is! Stephanie – YOU are seen and YOU are supported! To nominate a Supermom (or you can nominate yourself) email hello@jilldevine.com. Submit the name of the Supermom, where they're from, and a brief description as to why Jill should shout out this particular Supermom. Two Kids and A Career Website: https://www.jilldevine.com/ Two Kids and A Career Instagram: https://www.instagram.com/jilldevine/?hl=en Two Kids and A Career Facebook: https://www.facebook.com/JillDevineMedia/ Thank you to our sponsor: Evoke Creative
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.
In the music industry, having talent is often not enough to succeed. You need to find a way to stand out and be unique. That’s true when it comes to marketing and ecommerce in the music industry as well. Eamon Mulligan is the VP of Product & eCommerce at EMPIRE, and it’s his job to help lead a team toward ecommerce success. The way he does that is through creativity and partnerships that have proven to drive traffic in big ways. What kind of unique ideas have they tried, how do they manage to achieve a high ROI on SMS marketing, and what do memes have to do with all of this? Find out on this episode of Up Next in Commerce. Main Takeaways: Think Outside the Box: In a sector as saturated as the music industry, you need to do everything you can to stand out and get your messaging and products in front of fans. Everyone is still using the traditional channels, but if you think outside the box and test ad content on different platforms — like meme websites — your impact might be larger than you expect. Employ Creative Partnerships and Campaigns: When you partner with artists and get them to buy-in to a creative marketing idea, they can put it out to their fans and followers who will be more likely to see credibility in the product because it’s coming from an artist they already trust. Stay Unintrusive: When utilizing something like SMS marketing, it’s important to be as unobtrusive as possible. It’s also critical to make transacting through text easy by providing direct links and easy access to the store or the cart they left behind. 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. This is Stephanie Postles, your host, and today on the show, we have Eamon Mulligan, the VP of Product and eCommerce at EMPIRE. Eamon, welcome. Eamon: Thank you for having me. Stephanie: How's it going? Eamon: Good. Just hanging out at my home office and plugging away. Stephanie: Yeah? Eamon: Yeah. Stephanie: That is good. I've never had anyone on the show in this industry before, in the music industry, so I'm really excited to hear all about it. But first I want to start with you and your background. I saw you have a long history in the music industry, so I wanted to hear how you got involved in that. Eamon: Sure. I guess not to go back too far, but as a kid I always loved music and wanted to be in it somehow. I grew up originally in Napa, California, which is not necessarily a hotbed of the music industry. [crosstalk 00:01:04]. Stephanie: Unless you get too much wine. I guess. Eamon: Yeah. I spent a lot of time traveling down to the Bay Area and watching local groups perform and eventually really attached and followed a local group called Living Legends and befriended them at the time webmaster, this is probably 1999, 2000 ish. And I didn't really know anything, what I was doing at the time, I was talking to the webmaster and asking, I read all these magazines and I see that mentioned in there, but there's never been a full on article, how does that happen? And then he went on to say, "That requires a publicist and BIOS and press kits." So then I started interviewing the guys and putting together BIOS and press kits, which I wish I still had today because I'm sure I would laugh at them. Eamon: And eventually, the Living Legends in 2005 asked me to go on tour with them to assist the tour manager. Previously I had been helping them with online stuff. I had started their MySpace page, their YouTube channel, was helping with an email newsletter. So that was where I cut my teeth a lot in the digital space. And then they had me go on tour. I was the assistant to the tour manager who was also doing merchandise. So I was helping set up the Merch booth, and she was teaching me how to sell stuff and keep tracking everything and all that stuff. Eamon: And then, with two shows left, she had left the tour ... the tour was ending right before Thanksgiving. And she left early, and they were like, "Okay, you're the tour manager now." And then I was like, "What?" Stephanie: Push you right into it. Eamon: Yeah, and they were like, "It's not that hard, it's not rocket science." And they just forced me into it Eamon: I had never gone to college, and so I eventually went back to school. And then so when I finally graduated from school, I initially was thinking, the music industry was fine, maybe I should try my hand at something else. And so I started taking interviews with a couple of ad agencies, advertising was interesting to me. I had taken a couple of the classes while I was in school. Eamon: Nothing really panned out. But at the same time, there was all these music opportunities that kept presenting themselves to me. I looked at that as like, "Okay, I think the universe is trying to tell me something here." And so we had put a release out with EMPIRE in 2011. And Ghazi, the CEO and founder, and I just built rapport, he's a Bay Area guy, grew up, born and raised in the Bay. So we just always kept in touch. And when I got out I shot him an email and said, "Hey, I'm looking for something to supplement my income, I'm still managing, but do you have anything going on?" So we went back and forth for a little bit and then he eventually brought me on to help with the physical distribution side of things and merchandise, which has been a long tale in building [crosstalk 00:07:09]. Stephanie: Tell me a little bit about what EMPIRE is at a high level and what your role looks like there. Eamon: Yeah. So, EMPIRE is really like an all encompassing company. So it originally started as a digital distribution company. Ghazi the founder just completely bootstrapped, was never taken a dime of investments, refuses to sell anything, retain 100%, that kind of autonomy. And eventually the company grew into adding label services with a lot of the distribution that we did. And one of the things that set EMPIRE apart originally was for the distribution deals. He was doing non-exclusive distribution deals. And that was unheard of at the time. People would often catch when he was giving out non-exclusive distribution deals and be like pretty crazy, what are you doing? Stephanie: Yeah. Jump at that. Eamon: Yeah. His thought process was, I'm not in the business of holding people hostage. If anything, hold us accountable, because then we have to earn the business, and it keeps us honest. And so that's been one of the guiding principles of the company to this day. And so, eventually, we started adding more services and more departments. And it's grown into a full fledged record label at this point. And then we also have a publishing arm. So right now we have a distribution, record label, publishing and merchandise. Stephanie: That's awesome. Any artists that I would know? Eamon: Yeah, we work with Snoop Dogg. We just released Adam Lambert album earlier this year. We were instrumental in XXXTentacion career, unfortunately who's passed, Anderson Paak, we were a part of early. We've helped grow a lot of early artists and we're still doing that and also working with a lot of legendary artists as well. Stephanie: Very cool. Yeah, I do know a lot of those names. So that's very impressive. So tell me a little bit about your role at the company as the VP of product and eCommerce when it comes to thinking of record labels. I don't always think eCommerce and of course, when I started looking at you and I was like, oh, yeah, obviously they are. But tell me what your day to day looks like there? Eamon: Sure, I manage our physical distribution and our merchandise team. So on the physical side that looks like setting up and gathering assets for a physical release and setting it up with our physical distribution partners, and getting stuff the product made, so CD, vinyl, cassette, and then making sure that it is getting into all the right stores. We'll also do a lot of exclusive things with Urban Outfitters and Vinyl Me, Please and other retailers, Turntable Lab, et cetera. Eamon: And then on the merchant side that looks like managing ... we have a team of people that's, our account management and web admin and marketing and production. So we're talking with the artists that are signed to our label that we have merchandise rights with and building out merchandise items and coming up with creative ideas. Sometimes it comes all from us, sometimes it's collaborative effort, sometimes the artist has things ready to go. And then we're just helping manufacture a market. But that's ... it ranges from building out the creative, building out web stores, building out marketing assets, as well as back end automation marketing as well. And then ultimately reporting and paying out the artists. Stephanie: All right, cool. So when it comes to thinking about being a label, because I would think some artists might be like, "Oh I'll start up my own eCommerce platform and sell my own merchandise." What makes them want to work with you guys and have you do that for them? Eamon: Sure. A lot of ... we're living in a very independent-minded world in music, especially right now. And that's very different than what it used to be. So, we also have that spirit, but a big part of it is the production and the fulfillment process. A lot of people can build the website and put up a product image just that they made in Photoshop, but when it comes to fulfilling stuff and getting stuff out to customers on time, and then getting things made and knowing how to prep your files and all fun stuff. Those are the areas where they definitely lean on us. Stephanie: Got it. How does the creativity process when it comes to creating merchandise, and making sure that you're creating good merchandise, because I'm sure artists have a lot of ideas around like, here's the thousand things you can do. But I'm guessing that you guys have a lot of insights into like, we've been doing this for a lot of other artists, and we know what sells and doesn't sell. How do you guide them in that creative process? Eamon: Delicately. Stephanie: You have to be creative. You've got to be careful. Eamon: Yeah. It's definitely ... a lot of artists I feel ... I'll say this, that I think a lot of artists are very savvy. And they are watching what's going on, seeing what their peers are doing, and also other artists that they look up to. And they have a lot of great ideas and then some of those ideas maybe a little ahead of where they are in their career. For instance a lot of artists might want to do a cut and sew piece, which means cut and sew, and so it's like you know you're actually fabricating a garment from scratch. You're not buying a blank garment and then just silkscreen something on it. Eamon: Which is possible, but there's high minimums for it to make sense financially. So, sometimes an artist will come to us and say, "Hey, I want to do X, Y, and Z." And then we'll come back and say, "Okay, we can do it, but we have to make like 300 of them." Eamon: And they're like, "We can just make 50?" And I wish we could. There are places that can do it, but the unit cost is going to be really high. So unless you feel like you have a diehard fan base that will pay a premium price on something, it's hard to do. So a lot of times explaining the mechanics of things, helps artists understand it. One of the principles that the company deals transparency and education. We want to educate the artists, we don't want to hoard the knowledge. We want to let them know, "Hey, this is a really cool idea, but it's going to cost this much and we would have to sell it for even more for it to make sense financially." Eamon: And then, a lot of times when you have that conversation they'll say, "Oh, okay, I get it now, let's try to figure something else out." So yeah, that's like ... I think education is probably the biggest tool. Stephanie: Yeah, that makes sense. And how do you guys go about selling With the actual merchandise, is that all under EMPIRE's website or are you putting in other outlets as well? Eamon: So yeah, we have a couple of different ways but we have a general EMPIRE store and so anything that we feel might just be a one off project or might be something that is not going to require a full own store themselves, we'll build out on the EMPIRE store and then things that are larger, it's going to be a longer relationship, we'll build out their own store for them. Those are our two primary sales channels. And then we also have a partnership with another company called Merchbar where they aggregate the products from our back end to artists, Spotify and YouTube channels. Eamon: So when a consumer goes to listen to Spotify and they're on the page and they're scrolling through their profile, they'll see a couple of Merch offerings on the profile. And then similarly on YouTube, if you may have seen it, if you're watching a video, just below the video, there's a merchandise shelf and so there'll be products there. So those are our bigger things. And then we have doubled a little bit in the live event stuff, but obviously right now that's not taking place. Stephanie: So when it comes to the EMPIRE brand, as a fan, maybe I'm not always aware of the label that's behind the artist, so how do you guys think about getting the fans attention from a label perspective, if at all? Eamon: That's a good question. Early in the company's history, we were all about not forcing that, and playing the background as we've grown, and we've become more of a label and less of a distributor. We've definitely made that play a little bit more. So it's like little things from ... we're making a CD or a vinyl including our logo on it, and billboards or advertising, we'll have our logo on it, and sending our artists, EMPIRE sweatsuits so that they wear them and they'll take pictures on them. There's pictures of Diddy in our sweat suits. Stephanie: That's great. Eamon: Cool. Yeah. Stephanie: I need a sweatsuit. Eamon: Yeah, send me your address. I'll get you on. And then we also do a lot of events around larger industry events or around the Grammys, around BET weekend. We throw parties that are widely attended and hard to get into. But that definitely helps spread the name. I would say that, a lot of ... probably right now more of the industry knows about us than the actual consumer. But I think that that's shifting the more we grow and have higher caliber artists. A lot of consumers that are knowledgeable or super fans, excuse me are going to Spotify and looking at the label line and realizing like, "Oh, this is another EMPIRE artist." So, I'll talk to a lot of people who will say, "I didn't know you guys had this artist and that artist and this artist. I saw on Spotify that you guys were the label name." Eamon: So I think that also helps too. I know as a kid, as an avid music listener, I would read all the liner notes, which unfortunately don't exist as much anymore in the digital space. But they're working on correcting that a lot of the DSPs and Spotify and Apples of the world are starting to include a lot of that metadata now. But I think having that information available and then the fans that are in the know will find it. Stephanie: What is your most successful marketing channels or advertising channels for your artists? Because I heard a little bit about EMPIRE you guys do events and billboards and things like that but is it a completely different strategy for marketing your artists? Eamon: General marketing it's a whole suite of things from ... that all connect and play with each other. So it's like putting out content. Isn't like the first part, whether that's audio or a music video. And then making sure that that audio and music video get seen through ads, serving as the fans, letting them know that the album is out, letting Know that new video is out and then direct email marketing. Retargeting, on the merchandise side we use a lot of retargeting apps and services. Especially one that works really well for us is SMS retargeting, and then outdoor advertising billboards. We paste guerilla marketing and then we also have our radio team. Eamon: We have our own radio team and so they're working records at radio. Radio is still a very large discovery platform for people. So that definitely helps bring artists into the general knowledge and then in the digital space, doing things on with a bunch of the meme pages and running that kind of content on there. Stephanie: That's cool. So I want to dive into three of these. Maybe first I want to start with meme advertising. I haven't heard of anyone doing that yet on the show, and I want to hear about how you guys think about doing that and how are you converting people over to either the merchandise or the music or whatnot? Eamon: Yeah. It's really just more of an awareness, like top of the funnel. So it's making sure the content is out there on all these pages that a lot of people are following. So it's like that. And then TikTok has been also a big part of that. So if something catches on TikTok, that's a huge driver for streaming because then people will go and find the song. Who knows what will eventually end up happening with TikTok. But that's been something that's really been cool as well and seeing if something goes viral on TikTok. That's always not something ... we can't control if something goes viral, we can help with the kindling of it, you know what I mean? But ultimately, if it catches it catches, if it doesn't, it doesn't. But the TikTok thing if something goes viral, we've seen huge spikes in the streaming numbers. Stephanie: Do you see any similarities between your videos that are going viral versus the ones that are duds? Eamon: That's a good question. A lot of them are ... on TikTok it's something that a lot of ... if it's anything that people can recreate and take a part of, or take part in sorry in the trend, then that's something that we'll catch. So if it's either doing some dance or doing some little skit or something like that, then those really take off, usually. Those are the ones that we've seen go. And then ... but sometimes it doesn't happen either. And sometimes it happens on songs that we weren't even thinking about. And all of a sudden we'll see that some song is going viral that we didn't even know about. Stephanie: Yeah. I think that's a good reminder of why testing and doing more rather than less is so important, because we see that with some of our ads that we surface too. Some of the most random ads that we use would be the best performing ones, but the ones that we really thought hard about they don't even work a lot. Stephanie: So the other two areas that I'm interested in, you said SMS is working well for you. What kind of messages are you sending to fans in a way that's not annoying and actually helpful? Not intrusive. Eamon: Yeah, it's basically, we're not being intrusive. Well, hopefully we're not, but a part of it on the commerce side it's basically like an abandoned cart email. So it only works also if the customer inputs their number. So if they get all the way to the point where they're filling out the payment information and put their phone number in and maybe their dog ran off the leash or whatever happened, or they don't complete the purchase. There will be a text that gets sent to them automatically and remind them like, "Hey, you left this in your cart." And there'll be a direct link to their cart. And we've seen astronomical return on investment on that, where we'll spend very little money and get thousands of dollars back. Stephanie: That's great. I haven't ... because I do get those texts sometimes. But I don't always have the link that just brings me right to my cart. That seems like a very great way to make sure it's easy, because oftentimes, it'll maybe link back to what I was looking at. But then maybe I'm on a different ... I was on desktop before or maybe now I'm on mobile, and it's a very different experience and actually hard to even purchase or [crosstalk] again. Eamon: Navigating back to where ... yeah. Stephanie: Yeah, that's awesome. Eamon: And then also just like digital marketing, we have a digital street team per se. So we have a general EMPIRE phone number that people can text and they'll get added to the list and then we'll blast out things that we feel are relevant or big announcements. And then we have artists setup as well with that. So a lot of artists have a phone number, and they can actually send text themselves and actually respond to people themselves, if they want to, it depends on the level of engagement they want to be committed to. But it's a good way to ... and you can also geo target that. Eamon: So if we were in a world where touring was going on, you can still, "Okay, I'm going to be in, where Seattle next week so let me send a text message to everyone with the Seattle area code." And say, "Hey, my show is next week, the show box, here's the ticket link." So, like helps in that way and then any new releases, album, merchandise, videos, can also be communicated through those channels. Stephanie: That seems really smart from a lot of companies and brands going more at the local level right now. And engaging with your local community, but how are you encouraging people to actually text you and so that you can even have them on the list to begin with? Because that seems like the initial hiccups to even get people to want to text you in the first place. Eamon: The acquisition. Stephanie: Yeah. Eamon: A lot of it is hinged on the artist and then posting something that says, "Hey, give me a text, shoot me a text and I'll text you back or." There's always some call to action or [inaudible] that's like, I'll text you back or you'll get a sneak peek of new music or a certain percent off my merchandise store, something like that. So there's always some incentive to sign up for the fan. Stephanie: That's great. So with everything's happening with the pandemic, and events and concerts being canceled, what are you guys doing instead? Because it seems like eCommerce is probably something that you're leaning even more heavily into, so what have you changed or plan on changing going forward? Eamon: We've definitely seen an uptakd of inbound requests with people wanting to set up eCommerce with us. So just, one being able to provide that option to people where they might not have the infrastructure on their own to do it has been helpful. And then we're also looking at different ways to partner up with delivery services. So for one of the releases I'm working on doing something with DoorDash. And so it'll be a custom facing restaurants. And then there'll be a couple of Merch items that are available through that. And so if you order the food you can also order a piece of merchandise and it will come with your food order. Stephanie: Oh, interesting. Tell me a bit more about that partnership. How did that idea come about and how are you convincing restaurants to also show Merch which maybe could distract someone if they're like, "I'm just trying to order sushi." And then they're like, "Oh, now I'm going down a [inaudible] of [crosstalk] as well" What does that feel like? Eamon: Yeah. So the project I'm doing on is the whole theme of albums are restaurant themed. So it made sense. The idea initially ... we were talking about it right as the quarantine happened, and at that time, it was like, "Oh, maybe it'll be done in a month." And so we were thinking of doing an actual pop up restaurant, like a physical pop up and like a restaurant in LA. And then as time went by, and we realized this is not going to end in a month We started thinking of other ways we could effectively do the same thing but not do it in a physical space where we would be having people come and gather. So we have a partnership team and I believe we have a connection to DoorDash and a couple of other delivery services, Postmates and maybe Uber Eats. Eamon: And we just reached out to DoorDash and presented the idea and they were into it. So it's still in the final phases right now of being launched. But the DoorDash team is handling the restaurant end of things. So they're basically going to be partnering with restaurants and going to specific restaurants and asking if they can provide a specific menu or menu items. And then within the app, it'll be basically a virtual pop up. So it'll be in its own restaurant and people will be able to order from there. But it's really on the back end, like an actual restaurant. Eamon: And it was also a cool way for us to try to support some of that, because the restaurant sector just took such a hard hit with the pandemic. We were like, how can we do this and not and also help that sector of the economy? Stephanie: Yeah, I love the creativity behind that. Eamon: Yeah. Stephanie: Yeah that's really great. What are other creative campaigns or projects that you've done like that before that either they worked really and you're like, "Oh, that's surprising." There's just a funny or random idea that worked well, or maybe one that you set up and you're really betting on and then it just didn't do anything? Because a lot of the things you're mentioning now when it comes to your marketing and channels you're trying out, you're probably one of the more creative companies we've had on the show that's literally trying a bunch of different things and new things that I've never heard of. So I want to hear a little bit more about this. Eamon: Yeah, we're definitely not afraid to take a leap and try things. One of the cool things that we did last year, we put out Snoop Dogg's album, "I Wanna Thank Me" and this was one of those things where we did it. We thought it was awesome, and we didn't feel like it fully connected. But we basically ... our digital team had someone build an augmented reality filter on Snapchat of the album cover. And so If you scanned ... on the marking sticker for the album, we put the little Snapchat like QR code and said, "Scan this code in Snapchat to hear a special message from Snoop Dogg." So you open Snapchat, you scan it, and then you put the album cover in your viewfinder on the phone and then the album cover comes to life and it was Snoop Dogg. He had, I forget what award show was that he had given a speech saying ... when people accept the words [inaudible 00:39:33], I want to thank God, I want to thank my family, blah, blah. Eamon: And he got to, I want to thank me because without me, without my hard work ... it's like a very endearing speech. And that was fully animated and you could move it in different angles, and it was like 360. And that was really cool, but I don't feel like that really virally took off at least. But that was one of the things that was different and unique that we did. Right now we're actually doing a giveaway for one of our artists Young Dolph, he is giving away his Lamborghini and to enter you basically buy Merch product that's bundled with the album on pre order. So yeah, that's a- Stephanie: I want a Lambo. Eamon: Yeah. Store.youngdolph.com. Stephanie: Go do that. Eamon: Yeah. So that's something that we're doing right now that we've never done. That's we're testing out. The first couple of days were really big and now we're trying to figure out how to keep it going. Stephanie: Have you seen any hesitancy with consumers with ... you've got all the stuff that like, I'll give you Bitcoin if you do this, and you'll win a free car if you do this. And it seems like it's a good mix between spammers and scamming people and fraud and then actual real competitions going on or giveaways. How are you balancing that in a way that people trust like, "Oh, yeah this person is real, or they're actually going to give away their Lamborghini or whatnot." Eamon: Yeah, I think that probably there's probably still some skepticism on the fans end at some level at all times, but the artist has posted on his social media so that always helps. That's helped one drive traffic to the store to ... it shows that it's coming directly from the artist and not just this unknown entity. So that definitely helps. There's a bunch of legal language on the site that explains everything if you feel so inclined to read legalese, but it's all there [inaudible] Stephanie: I do not. Eamon: Yeah. Stephanie: Okay, got it. So I guess one last bigger question before we jump into a lightning round is what is your guidance on larger brands being creative, having creative partnerships, marketing campaigns, how would you tell another brand to come up with these creative ideas or to really get into a mode of experimentation? Eamon: I think there's a couple elements. One it's having ... I think a part of it comes top down. Our founder and CEO, Ghazi he's always been like, try it if it doesn't work, then move on, but try something. So he's always been encouraging of that. So I think if you have that culture in your DNA, as a company, then I think that helps. The other thing is, I think obviously hiring the right talent, and having the right minds and skill sets they can think of and structure and eventually execute these things. [inaudible] we have a lot of young creative minds on the team and then some people that are a little bit older, they can help execute things that maybe have a little bit more experience of seeing things through or just executing. Eamon: I think the end of the last one, I think would probably just be ... what do I want to use here? The right infrastructure. If the company is really big, there's probably a lot of bureaucracy and red tape. We are lucky because we are independently owned, we're a small company so we can be nimble. So we are able to move and react quickly. But I think having the courage, I guess to jump out and try something is probably one of the bigger things. Stephanie: Yeah, I completely agree. And execution, like you mentioned is so key. Earlier, you were like, "Oh, we just reached out to DoorDash and just ask them if they want to partner." I think a lot of people might have an idea like that and then not just think, let me just email them and see if they'll want to partner on this which is Just [inaudible 00:45:21]. Eamon: Yeah, We are experts at not taking no for an answer. We are just like, keep trying and try to find different ways to get it done. Stephanie: Yeah, I will get to DoorDash. Just [inaudible] keep sending emails. That's good. Cool. I was thinking now we can move into the lightning round, if you're ready. It's a quick lightning round where I ask you a question and you have a minute or less to answer. Eamon: Sure. Stephanie: All right. What new up and coming artists are you all most excited about right now? Eamon: We're growing a lot in the African space. We recently opened an outlet in Nigeria. So there's a lot of good music coming out of there. Patoranking is one, Fireboy DML is another and then I also work with an artist to plug a little bit but with EMPIRE but Tobi Lou is another artist that I'm working with, that I'm really excited about. Stephanie: Cool. I'll have to check out all those artists. What app or piece of tech are you most enjoying right now? Eamon: I would say the standby Instagram, I guess. I probably spend the most time on that app just scrolling through and seeing what's going on. Stephanie: Yeah, I agree. I love Instagram. And then the last one if you were to create a Netflix or Hulu original or documentary, what would it be about? Eamon: Maybe about us, maybe about EMPIRE. I think that'll be interesting. Stephanie: There you go. If you don't celebrate yourself, no one else will you. I like that. Cool. Well, Eamon this has been such a fun interview. Where can people find out more about EMPIRE and you? Eamon: You can find out more about EMPIRE at our websites empi.re. No dot com, no dot net, just empi.re/empire. I think all social channels. So Instagram, Twitter, et cetera. And then for myself, Instagram/eamon E-A-M-O-N. Stephanie: Awesome. And thanks so much for coming on the show. It's been a blast. Eamon: Thank you for having me.
When you’re entering a new company or a new market, there are lessons to be learned from the past and opportunities to grab hold of to propel yourself and your company forward. Paul Lanham entered a new company and industry all at once when he became the Chief Information and E-Commerce Officer at Charlotte's Web, a CBD company. On this episode of Up Next in Commerce, Paul details how he used his experience at companies such as Crocs, HCL and Brookstone to help guide him as he helped grow the Ecommerce business at Charlotte’s Web to the point where it now represents 65% of the business. Paul explains the methods he has used to generate qualified traffic, conversions and a high retention rate, and he discusses the technology he thinks is going to make a huge impact on Ecommerce in the future. Main Takeaways: Respect The Work That Came Before You: As a leader coming into a new company, there can be a tendency to try to change too much too fast. Instead, acknowledge and respect the work that was happening prior to your arrival, and then try to evolve that work into something more. Let the Tools Handle the Work: Humans are excellent at many things, but we all have inherent biases and miss certain correlations or connections. Rather than trying to analyze all the data you have on your own, employ technology like A.I. that will ignore most (unprogrammed) bias and can do the deep work a human brain is incapable of. Tech is Catching Up To Personalization: For so long, there has been a promise of technology that could interact in a human way with customers in real-time. That technology is finally starting to become a reality and those that can implement it properly can take personalization of their Ecommerce experiences to the next level. 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 have Paul Lanham on the show, the Chief Information and Ecommerce Officer at Charlotte's Web. Paul, welcome. Paul: Hi, nice to be here. Stephanie: I'm glad to have you. Yeah, I'm really excited. I've used Charlotte's Web products before. So, when I saw that you were in our queue for interviews, I was like, "Oh, this is going to be a good interview." Paul: That's good to hear you have some perspective then. Stephanie: To start, I was looking through your background and was really impressed by some of the companies that you've worked at. I'd love for you to first before talking about Charlotte's Web, kind of go through a little bit about your history and then what brought you to Charlotte's Web. Paul: Sure. As you just noted, I have a pretty diverse background mostly in the retial and CBG and technology industries. What's really colored my career is that I've been given a lot of opportunities, some of which I hadn't had a lot of experience in including Ecommerce when I started in its infancy in the mid '90s when you had to build everything. You couldn't really go to the corner shop and buy an Ecommerce server. Paul: But I basically have touched on virtually every aspect of Ecommerce over the past 20 somewhat years. I've been a C level executive for about 25 years and worked for a diverse group of companies, a variety of sizes. Some startups. Paul: I started my own tech company and now it's Charlotte's Web, which I have to say is very much different in terms of its make up versus the companies I've worked for in the past. Stephanie: Yes. And just for people to know the difference, it would be great if you could name drop a bit. I know people hate name dropping, but I'd love to hear what were some of the companies, the largest ones you've worked at? I think you can compare it to Charlotte's Web. Paul: Sure. I worked for what was a startup, Crocs. I think people will recognize the infamous shoe company that is just located down the street from where I work. Paul: I've worked for Jones Apparel Group, which is a mega apparel conglomerate that own companies like Barneys New York, Jones New York, Apollo Jeans, et cetera, in the apparel industry. Paul: I started a tech company that eventually became a subsidiary of HCL Technologies, which is a global tech firm based in India. Paul: And Brookstone, which is the gadget shop, competing with Sharper Image. Again, near its infancy as well. So, a diverse group of experiences. Stephanie: Yeah, that's amazing. With some of these companies you've worked at previously, are there a lot of lessons that you were able to bring to Charlotte's Web or is it just such a different beast that you kind of had to just start over and had a completely new hat on? Paul: Well, basically if you've been a C level executive for a number of years you have some successes and you have some failures and hopefully you learn from the failures, and I've had them too. Paul: Implemented virtually every kind of system you can imagine. Been on the business side from an Ecommerce perspective and learned a lot of different things that I've been able to bring to Charlotte's Web. Paul: Back to the diversity of my career, one thing I can note, I probably have been in just about every function that you can imagine from finance, to marketing, to sales, to Ecommerce, et cetera, et cetera. Paul: So, I think that brings somewhat of a unique perspective to a company like Charlotte's Web, where I frankly I have a lot of empathy for my peers in other departments because I've done a lot of their jobs. Stephanie: Yeah, that is so important. I've worked at previous companies where someone doesn't understand I worked in finance back in the day and people do not understand the complexity or why there are certain procedures set up and you can definitely see tension between certain groups if they've never worked in that team before. So, that's key I think. Paul: Absolutely, and financial people can be fun. Most people don't know that. Stephanie: They can be. Just like me, I'm fun. You're fun Paul. I'd love to hear or I'd love for you to explain what is Charlotte's Web and maybe even starting with the story behind it, behind the name. Paul: Sure. Charlotte's Web is CBD company that was founded by the seven Stanley Brothers and that's a wonderful story in it of itself in that they grew up in the Cannabis industry. Paul: But the company's namesake, Charlotte Figi, who many people may remember from the Sanjay Gupta CNN Specials from years back and most recently illustrating how there was this trajectory of various peoples and things to help a little child basically survive. Paul: So, our namesake Charlotte really is like our guiding star or north star in the context of our mission, which is to help people through natural products that Charlotte's Web produces. Paul: So, it's a young industry, it's a young company where we are a market leader. Obviously we are commercial, but we're always grounded by our original mission and we still do help quite a few people to where our product is very essential like the Charlottes olive oil. Stephanie: Yeah. I was looking at the I am Charlotte video on your website and it definitely gave me goosebumps. When did you guys create that campaign? Paul: Well, it's basically been the past year. The point is with her passing it really shook us all to our core because frankly it was probably one of the core reasons that most of us joined the company. I was fortunate to be able to meet Charlotte and her mother Paige a couple of times. Paul: But many people in my company, and obviously the Stanley Brothers basically grew up in this company attached to Charlotte's story. The I am Charlotte campaign is currently just obviously a testimony and our take on how beloved she is and still is. Stephanie: Yeah, I love that. The CBD industry as you mentioned, it is kind of a new-ish industry. When you're in California it seems like it's been around forever, but when you go to other states or back to my hometown, people still kind of have they either don't know what it is or yeah, are just very unclear about what it is. You have different preconceived notions, you can say. Stephanie: So, how do you all think about kind of educating the public or new buyers who come to your site for the first time? Paul: Certainly. Two points, actually about 15% of households have had some experience with CBD in the United States. And still because it's such an emerging industry, word of mouth is still very important. Typically, people first get exposed to CBD by a relative or a friend or somebody mentioning it that it helped them. Paul: When they go to search for it, we basically are actually a leader at Charlotte's Web because we rank very high on the first page, in the first third with what is CBD. To that point, we spend a good deal of time on our site through blog entries and various educational videos that we put out to educate our customer on the difference, for example, between hemp and cannabis or what is the efficacy of CBD and various in-depth, I guess, videos to illustrate the depth of what they could know about CBD. Paul: So, it very much is still an educational process as you've mentioned to evangelize the use of CBD. Stephanie: Yeah. Yeah, I completely agree. How did you all become a market leader? I know you were not first, but you definitely were some of the early leaders or even starting up in this industry. But how did you go about making sure people had your name as the household name when it came to CBD? Paul: Sure. They were among the first and the brand story between the Stanley Brothers and Charlotte really resonated. It was made for this industry and the mission that the Stanley Brothers inoculated into the company and we still have in terms of evangelizing the product and natural products to the world to help people, I think resonate with people. Paul: When you talk about, for example, our end-to-end integration from seed to shelf, our quality, et cetera, all those things kind of are confluence in terms of being perceived as a quality brand and a premium brand to a consumer. Paul: There are a lot of smart business decisions along the way, frankly, in terms of becoming that market leader. Stephanie: What kind of smart business decisions? Now you've piqued my interest. Paul: Okay. For example, going really strong in Ecommerce initially in that the nature of the industry is that there's been a slower adoption in the major retailers because hemp frankly, from a federal perspective, wasn't quite legal until a couple of years ago based on the format. Paul: There are some reticence in terms of conservative retailers to carry the product. So, they were very smart in not necessarily going the mom-and-pop route even though we have a big natural store population on the retail side. Paul: But going very strong with Ecommerce and hiring the right people right off the bat a couple few years ago to basically push the commercial side of this. Ecommerce right now represents about 65% of our business as was in the first quarter. That's somewhat of a higher percentage than many of our competitors. Stephanie: What do you think is attributed to that higher percentage? Paul: Being first out of the gate. Being very professional about it. But the primary drivers, they're a couple, back to the brand story that really resonated, was beautifully presented on the site and for media. Paul: Secondarily, the quality that we bring to the table that we try to communicate to other consumers. From that seed to shelf continuum, we test the product 20 times, we track each individual bottle or tincture or the like back to a specific lot and seeds. We could document virtually anything anyone needs to know about that particular product. Paul: So, particularly in this industry where you have an influx of competitors, some of which frankly are not quite as sophisticated in the context of testing and the branding. You can really stand out by basically taking care of those issues. Stephanie: Yeah. Yeah, I completely agree. That is how I found you guys in the early days was because quality to me is the biggest factor when it comes to CBD. Paul: Absolutely. Stephanie: And it's also something that a lot of people worried about early on because you do hear horror stories and it felt good going to a company knowing yeah, they've already got everything figured out. They've got the dosing down to its seed. They've got it's non-GMO and yeah, I think that's so important with an industry like this. Paul: Absolutely. Stephanie: The one thing I was thinking about was consumer journeys. Everyone is coming to your website maybe at a different place like we were mentioning before. Some people are brand new or they've maybe never even heard of it, where education is key. Stephanie: Some people have heard about it. You've got the people who maybe are hiding their browsers when they're looking for it or the people like me it's like, "Yeah, this is an obvious thing that can help you." Paul: Sure, sure. Stephanie: How do you personalize either your Ecommerce experience or your marketing efforts to kind of go after all those people and meet them where they are? Paul: Well that's a good question because when I mentioned sophisticated we invested in tools that enable us to personalize that journey. So, for example, back to my comment on what is CBD. Paul: If somebody enters that as a search term and they have to click on our link, we will take them initially to the education materials and will kind of guide them through the process from the Ecommerce perspective of walking them through that journey and hopefully they purchase. Paul: We do that in the context of segmenting our email channel. We have a variety of channels and we handle each one differently. Our affiliate channel, for example, is very strong in terms of the partners we deal with like a Healthline.com, which yet again is another educational component in that we're very strong with them. Paul: So, depending on the channel, depending on the entry point of our consumer, we will treat them differently in the context of where we land them on the website, what we offer to them in the context of their journey through the website, and what promotional activity we engage with them. Stephanie: Got it. Yeah that make sense. When it comes to affiliate programs, how did you all think about setting that up and is that still a big part of your strategy or did you kind of pull back on that once you started becoming more of a household name? Paul: It's still and will be a very big part of our strategy in that penetration of CBD from a search to perspective is still relatively low compared to what I've experienced in the past so that we're still in an emerging phase where we need to use and leverage every channel we can. Paul: So, as strong as our Ecommerce business is, which happens to be frankly Ecommerce alone at Charlotte's Web is a market leader in revenue compared to every other CBD company, just alone. It kind of tells you the scale of our business. Paul: But what I'm getting at, the Healthline.com affiliate is very important to us in that it is the number one rated medical advice site, I believe, if I look at the statistics recently. Paul: Every entry point is different for every consumer and we need to leverage all those different entry points. We can't, for example, rely solely on organic search as an example, not that we would. But we basically go through every venue. Stephanie: Got it. What does it look like setting up a partnership like that? Because, I think that is really important kind of finding someone who has a good reputation that a lot of people trust. But what did that look like setting that partnership up and making it so both sides feel like it's a win-win? Paul: Well to your point, it's important to vet the partner because obviously you don't want to be presented on a site that doesn't quite meet your value set or your brand image. So, we're fairly choosy in terms of the affiliate partners that we work with. Paul: Obviously, in some cases it's a longer negotiation in that obviously we want to do it on advantageous terms in terms of the share basically. So, we don't cast a wide swath in the context of the affiliate partners we deal with. We're very selective. Stephanie: Got it. So, the one thing that I was wondering earlier when you were mentioning failures and you of course have a huge backlog of experience at other companies, what did your first 90 days look like coming in to Charlotte's Web and what big things did you change from the start based on maybe past failures or successes that you've had at prior companies? Paul: Well, like entries in the most companies it's a rush. My story, this is pre-COVID times obviously, I talked on the phone with a board member and my boss, the CEO, on a Friday. I flew over the weekend, got there on Monday. I took the job sight unseen after a phone call. Stephanie: Wow. Paul: I was so enamored of it. I've never done that before. And Danny has never hired anybody like that before, it just went so well. I showed up on Monday and I didn't leave for 90 days, much to the consonation of my significant other in Boston. So, we worked it out. Paul: But it was just a rush of understanding the industry in-depth, doing triage in the context it was still a start mentality, triage in the context of building a business intelligence stack, revamping the Ecommerce organization, planning the next iterations and improvements, setting up for the holiday season for example. Paul: When I joined, literally the week after I joined we kicked off a new platform upgrade that we only had a couple of months to do prior to holidays. So, it was a lot of long days. Stephanie: Was that something that you feel like you could step into because I'm sure you've done many re-platforming experiences before? Paul: Yeah. There is some muscle memory and back to my point, you always want to learn from your failures and not do them again or at least understand the context and admit them. Basically one of those issues is that one has to listen very carefully. Paul: I parachuted into a company that was going 1,000 miles an hour and one of the lessons I've learned in the past is honor the past because there was a great deal of work and a lot of great work done that I took the attitude of evolving and adding to as opposed to turning the part which many C level executives take that as their mandate. Paul: I've never really done that. It's one of the failures I've learned from in my past that basically sometimes evolution is better than tearing things apart. Stephanie: Yeah. Yeah, I love that and I think the quote too. Paul: Yes. Stephanie: So, I'm sure another thing that you kind of the change of thinking on would be how you track the success of a business or the Ecommerce site. What kind of metrics, did you maybe look at prior companies where you were like this is our set of metrics that always made sense versus what do you look at now at Charlotte's Web? Paul: Well, there are quite a few. You know the Ecommerce business, there are probably 20 things that you look on a daily basis. That's my routine in the morning, I get up and I look at basically all the metrics. Paul: But what's important here, more so than perhaps, it's always in the top three conversion for example, on unbalanced traffic. It's significant here because you're engagement with a new customer and maybe fleeting because of the nature of the industry, the curiosity about CBD, people not knowing about it. Paul: I actually had to look at that statistic or those statistics several times because they didn't believe them, they were so high. That's a testament to the people and the staff that were here in that whether it's educating the consumer, or the customer experience on the site, or customer care on the backend, we have a high percentage of sales that convert. Paul: So, that probably is a much more important stat that I've paid attention to in the past. It's always been in the top three or four. Paul: Retention of consumers. Again, in this sort of industry because of the fleeting interaction with your customers, we have a very strong subscription program that is very important to us, which are typically customers who deem the product to be essential to their wellbeing. Paul: So, we've put a good deal of emphasis on that as well as retaining customers, and again, without divulging the statistics, it's much higher than I've experienced in my past 20 plus years of experience in Ecommerce. Stephanie: What do you think is making it so high? How are you all retaining customers so well or encouraging people to subscribe? Paul: Well, it's high because I guess in a way our traffic is more qualified, then again I've experience in the past. When they come through the site and they've been educated, there's a slightly high degree of propensity to buy. So, that's a factor. Paul: Plus some of our tools really facilitate the conversion in that. Not that we're pushy but we don't let go in the context of okay, this isn't right for you, maybe this or how about this promotion or have you rethought this through the customer journey in the site? Stephanie: Yeah. Paul: Basically, there's a pre-decisive to buy basically once they get to our site. Stephanie: Is there any initiatives that you've implemented when it comes to, like you said, it's nice you don't let go and you make sure to make to keep reminding them or showing them new products or new ideas. Stephanie: Is there anything that you've implemented recently around those kind of initiatives that have increased conversions or increased subscription rates or anything, or anything that you've done where you're like that was a big flop, don't try that? Paul: Well yeah. Again, getting much more sophisticated, I don't think anybody else has implemented the suite of what I call campaign tools and analytical tools. Typically, people use the standard GA or Google tools and we've gone past that and utilizing tools that I've used in much bigger companies without naming the company. Paul: So, we can have a high degree of personalization in terms of how we treat our customers as they kind of navigate through our site. A much higher capability in terms of test and react and basically inoculating those scenarios and situations into our campaigns eventually down to the individual level. Paul: So, we're still learning some of those. We've implemented those over the past three or four months. The company is still, my staff is still learning some of the aspects of those tools. Paul: On top of that from an analytic standpoint, which is a little unusual in the industry, we dived in with both feet from an artificial intelligence perspective because I joke with my staff and they read too rapidly that my experience doesn't always mean anything. I think I know everything about my customer and I'm confounded constantly in terms of why I was wrong on that. Paul: It comes down to the data and what artificial intelligence does for example, is that it makes those deep correlations that none of us would have thought of, I would have never thought of with my 20 plus years of experience of how our customers actually interact with our site or what are they thinking in the context of their purchase strength. Paul: So, when you put all those things together from a capability perspective, I love it in terms of being data driven, in terms of understanding our consumer at a deeper and deeper level and being able to provide the best experience and the best service that we can on an ongoing basis. Stephanie: Got it. That makes sense. When you're implementing AI, first can I ask what platform are you using for that and what kind of surprises have you found when you implemented AI? What were the consumers doing that you would never have guessed before? Paul: Well it's a third party app. It's a bunch of data scientists who basically provide the service for us. They're conduit for the massive amount of data that we have. To your question of surprises or those correlations or what people have affinities for in terms of say, an add-on purchase that we would never think of, what prompts them to basically make that leap to make the purchase in the context of their journey through the site. Some of which are counterintuitive to some of our experience particularly for certain segment of our consumer base. Paul: It's just some of those interesting nuggets of information. The hard part of it is, there's so many correlations that we have to rank them and we basically test each correlation over a period of time to vet out the action. Paul: Our challenge at this point is basically getting into a much more test and react cycle on these correlations. Stephanie: That's really interesting. Paul: Yes. Stephanie: So, if you were to implement AI all over again or you had someone who does not have that on their site right now, what would you do maybe differently or if you were like we could go back and maybe I would change the way we did this or think about it differently when implementing it, what are some advice around that? Paul: Well what slowed us down was the notion of producing what I call hypothesis based on our prior knowledge. That tends to put you into silos of information and doesn't quite give you the breadth of correlations that AI can do for you. Paul: So again, it was all of my advice that hey, I think I really know this aspect of consumer behavior. I'm really interested in terms of their conversion activity when they do X, when they do Y. Paul: I wouldn't be so structured in those hypothesis going into it and probably a little more open minded in the context of looking at the correlations in a much different broader way. Stephanie: I love that. That's such a good reminder about the kind of biases you bring when looking at data or your consumers and why all that should be scraped from the beginning and just let the technology work for you? Paul: Absolutely, absolutely. Stephanie: In your industry I'm sure you probably get a lot of questions around this. But I'm thinking about all the regulations you have to deal with especially on a state level and when it comes to having Ecommerce be such a large part of your business, what does that look like behind the scenes when it comes to shipping or selling in certain states? Paul: Well, it's mostly an impediment from a retailer, particularly a major retailer perspective because to your point, there's a hodgepodge of regulation in the state. Even though hemp was 0.3%, THC less than 3% as federally allowed, depending on the nuisances of what is in California or Florida, et cetera, retailers may be averse to getting into ingestibles as opposed to topicals. Paul: So, back to our point, one of the reasons why we're industry leaders we've invested heavily in internal, external lobbyists that can guide different parties and factions, whether it be congress at the federal level or legislations at the state level or associations to evangelize the notion of CBD. Paul: One thing that people miss the point on, we welcome more defined regulation from the FDA because we feel that we're heads and shoulders above most of our competitors in the context of how we test, how safe our product is, how we document it and the like. Paul: So, it's an ongoing journey that hopefully more clarity will emerge at both the state and federal level whether it's with the FDA or with various state legislatures to make the retail sales of CBD more palatable. We do ship to all states in the Ecommerce perspective. Stephanie: Okay. Yeah, I like that idea around encouraging the FDA to look into it and implement regulations because you're like my product is so good, we should have the other products regulated and be held to a high standard as well because that is what can maybe hurt the industry as a whole, is having people making subpar products that aren't as high quality as Charlotte's Web. Paul: Yes. It's kind of adding to that, major business publications have basically stated and make the articles that CBD is here to stay. It's a multi-billion dollar business growing at a rapid rate and it's frankly grown so fast and it's a new industry that regulations haven't quite caught up with it. Stephanie: Yeah. I was reading a bit about demand surges especially during the pandemic right now. I think maybe it was your CEO who was mentioning like, oh we had a surge in demand for two weeks and then people kind of pulled back for a little bit. Stephanie: I was wondering how you guys are keeping up your inventory levels, how you manage that and then if you're changing anything going forward after seeing these surges of hopefully consumers that are going to stick around going forward? Paul: We've been really gratified and continuing to serve our customer because the majority of the customers consider our product to be essential for their wellbeing whether it's the type of tincture they use or the ointment or the like. So, it's been relatively stable for us. Stephanie: Okay. Paul: Now from an notary perspective, as a growing company our processes have become more sophisticated and over the past year we've implemented an NSLOP process or production planning process that I'm more familiar with in my CBG background to really dial into marrying strategic plans to budgets, to demand forecast and skew level and doing a relatively sophisticated job of planning product demand. Paul: Now the flip side of that, this industry is volatile in the context of demand in general because retailers, some are still adverse to taking the product, so it's hard to predict demand in that context. Paul: So, we place a little more emphasis on safety stock and agility in the context of the co-manufacturers we deal with and the like. Stephanie: Got it. What are some of the best practices you set up when it comes to setting up that forecasting process because I know you've had a lot, like you mentioned, a lot experience with that. What did you bring to Charlotte's Web that maybe they weren't doing before? Paul: Well, they had started it but I amplified from an Ecommerce perspective, a rigorous skew demand process that is three dimensional and that it adds up from top to bottom and extremely rigorous analytical process of continually revising those forecasts taking into account promotional cadence, taking into account day-to-day iterations of different campaigns. Paul: So, it's a fairly in-depth forecasting process in Ecommerce so that our accuracy is much higher. It's in the 90 percentile by skew in terms of our monthly demand, for example. Paul: One of the things I've learned in my past is that sometimes you have to take a leap of faith on a particular product because you don't know how high you can go. On the other hand, that's what safety stock is for. Stephanie: Got it. What does that look like when it comes to thinking of new products? How do you influence your decision behind that, like you were mentioning, behind the sales channels and the marketing channels that help you influence your ideas or thoughts behind it. What does that look like when it comes to new products? Paul: We do have outside data and with a caveat that it's such a rapidly growing industry that tends to change overtime. But I feel is obviously one of the standard firms we use in the context of a longer term view, in terms of product categories and growth and certain segments and the like and we use that as a baseline. Paul: Obviously we use our trend and my counterpart on the retail side and myself where basically experience marketers and sales people and that we have our own opinions in terms of how we correlate our thoughts on category growth versus what we're seeing in external data, for example, like Brightview. Paul: So, we listen very closely to our consumer in terms of what categories we're pushing. Stephanie: I was just going to say I'm sure you guys get a lot of customer feedback of what people want or what they're looking for. Paul: Yes we do. Stephanie: How do you grab all that and put it in a meaningful way because you probably know best. So, a lot of times consumers might ask for something and then not actually buy it or not really want it. Paul: This is true. They certainly vote with their dollars. But on the other hand, we have a pretty good customer care department that is in my peer bid where I've managed those sorts of departments in the past but this is in an interesting one, the group of individuals that the empathy, because of the nature of the product and the stories they hear and the people they try to help, the empathy they exhibit in terms of comments from customer is just outstanding. Paul: So, it's not only commercial, but to the extent that it's practical based on the information they have, they are advisors to the customers that call in and we have a high volume of calls that come in not necessarily about order standard things, but really what should I do? What about this product? Paul: The other aspect is we have a fairly rich library of customer reviews and the technology we use enables us to slice and dice some of the categories of the customer reviews and try to get to a gist of what's working versus not, whether it's from a product efficacy perspective or perhaps a defect of some sort. Paul: The dropper may not work exactly the way we wanted to and the like. So, we have multiple sources of information of customer contact. Stephanie: I think that's so key to be able to call in and actually talk to someone. That's the perfect way to develop trust is by having someone that you can actually get on a phone with and be like, "Okay, I don't know what to do now. Tell me exactly what I should be doing." Or same with reviews, being able to see someone who sounds like me reviewing the product just seems like a great way to develop trust all around. Paul: Absolutely. From a hiring perspective, I have lunch, a virtual lunch nowadays with every associate in my group at some point. Today I just, prior to this meeting, I had lunch with three of our associates just to kind of get a feeling of that. Paul: When it comes to our customer care associates, I've never met such a group of people that are truly empathetic to where they hear a story and they're crying on the phone with the consumer. They're doing everything. They have a wide latitude of actions they can take to help our customers more so than I'd had in the past in much larger companies. Paul: But they really have the right mindset, I think, as opposed to working in a call center. Stephanie: Yeah. That's so key and so important. Paul: Absolutely. Absolutely. Stephanie: So to shift a little bit into more of a marketing mindset, I wanted to hear a bit about how you guys are investing in different digital channels. What's working and what's not? Paul: Sure. Just the overview is that you may have seen our Trust The Earth campaign, which I loved, we started last fall that kind of instills what our brand messaging is. Basically, a lot of our marketing efforts go to that because again we're an emerging industry, we're maintaining our market lead, we want to convey a certain image, just a random stat based on our efforts here today. Paul: We have over 400 billion impressions from the various things we've done versus, I think our closest competitor from the stats that I've seen were about two billion and it dropped rapidly. So, marketing our digital efforts from a broad perspective are very effective and that shows in the context of where we are in organic search or educating the consumer, long ways to go. Paul: From a digital perspective obviously we're active in every social media component and we're very assertive in terms of educating our consumer through that channel, conveying our brand message. Paul: The industry is in a place right now, there are some restrictions in terms of how aggressive that you can market CBD on social media like on Facebook, for example, or Twitter. But that's not a real problem for me right now because for me we want to activate understanding and education and our brand story at this stage of our growth in the social media channels. Paul: So, a lot of our digital, aside from our paid media, which we're very good at I believe, a lot of our digital is focused on building our brand. Stephanie: How are you thinking about expanding into other markets? I think I saw that you were looking at going into a few other countries. How are you guys exploring that right now? Paul: Well, we're basically putting our markers out there. We have a staff of people who are very experienced internationally. I have a good deal of international experience as well from an Ecommerce perspective in retial. Paul: But one of the constraints still is the regulatory environment in that we won't sell in any country that obviously it's not allowed. There aren't too many countries that actually allow it. So, we're basically putting the building blocks in place if in case that would be our strategy to understand what the international market would mean to us. Paul: But it's still evolving because it's basically not allowed from a regulatory standpoint in quite a few countries. Stephanie: Got it. So now that we're kind of predicting our future a little bit, I'm wondering what kind of Ecommerce trends are you excited about or preparing for right now? Paul: Well, in general, like I have for a number of years it's the technology keeping up with my visions of personalization. In the perfect world I'm interacting real time with the individual consumer in the context of whether we're educating them or guiding their journey and the like and the technology is starting to catch up with that capability even at a company of our scale. Paul: So, that's the trend that has been there for a little while but the promise has been there, but the reality is starting to catch up. The other one I mentioned is using deep technology to a point within certain boundaries to understand our customers behavior and needs and wants and applying, point number one, the personalization with that. Stephanie: Yeah. That makes sense. Is there any new tech that you're experimenting with right now that you guys are loving? Paul: Well, I've experimented with in the past in terms of client side speed of devices. Every Ecommerce and you know all the tropes about how conversion is impacted by site speed and page loading and all those different things. Paul: But what I've been enamored of in the past couple of years is utilizing technology to tailor the experience on whatever the device our consumer has. You know there's somebody out there who's still on dial-up, if that still exists. Stephanie: You caught me Paul. Paul: With a new browser, right. It doesn't matter how efficient your site is or your servers are like, you have to tailor the experience, strip down the page load, the content, rejigger the Java script on the fly depending on that individual's device because as far as they're concerned, they may have a iPhone 5 that hasn't been updated in five years but they still like that experience. Stephanie: Yeah. I completely agree. That's really important because I think a lot of people assume that users are always on a newest and the latest and greatest. The one thing, yeah, I had, let's see, we're doing a study on I think Google maps users in India and the majority of them were on such outdated versions that they were never seeing updated streets or an update at all in maybe a year or two. Stephanie: I think it's just a good reminder that a lot of people are on older versions of things, not just in other countries but here too. Like you said, some people still use dial-up. Sowe have a quick lightning round coming up. But before that, I wanted to ask you one last question because I love your excitement towards the company and your energy behind it and I wanted to hear what is the best day in the office look like for you? Paul: The best day in the office, let me think about that for a moment. Stephanie: Yeah. Paul: As I mentioned before I'm usually willing to go every day. It's when I'm in the thick of it, I'm a great delegator I believe, and I think the people who work with and for me would say so. Paul: But I'm most happy when I'm in the thick of it, not being Mr. Executive and my people interacting with, like a peer to some degree, in terms of coming up with ideas, debating certain concepts, making things happens. Paul: It's still small enough company where many people I'll be a jack of all trades and that's where I've shined in my past of, okay, rolling the sleeves up and figuring it out and having to learn things. Paul: Many of my jobs have reflected that. So, that's when I'm happiest, when I'm learning something new. I think I've been told I'm really, really curious to a fault. I ask too many questions sometimes. Stephanie: I think that's a good thing. Paul: Yeah, I guess so. But that's what jazzes me, being in the thick of things, making things happen. Now having said that, as a C level executive you have certain programs and responsibilities to create a conducive environment for your people to work in to make them feel trusted, to stretch them to the extent of their capabilities giving them a vision. Paul: On the other hand, I've always been a believer of an executive being able to walk the talk having done something. Being able to do it, without actually doing it. That lends a certain amount of credibility in your interaction with your staff. So, I think that's very important. Back to your point, that's what makes me happy is just being in the thick of it. Stephanie: Yeah. Yeah, I completely agree. I like that idea and I heard a ratio or it was a metric that an executive used called the say do ratio, and it was how much do you do what you're going to say you do, and that's how he gained the trust with a new company he was joining, was he actually tracked it. Paul: Well in a small company I think my first interaction with an associate at CW is riding up the elevator that Monday, they had heard of me, and they asked my name and they heard that I was a tech guy. I was really the Ecommerce business guy and tech guy and they asked me about an email problem they were having. Stephanie: A personal or a company one? Paul: A company one, yeah. Stephanie: Okay. Paul: "I can't quite get this to do this." It was a sales executive or a sales manager that we had. She asked me a question not knowing exactly what I did so I spent a half hour tracking it down and getting back to her. Paul: Later when she learned, you're in charge of Ecommerce and tech and all that stuff. To me, in a small company like ours, you have to be personal, you have to be willing to help anybody with anything and follow up on it and get it done as opposed to always delegating and there's a balance obviously in terms of the work balance. Paul: But you have to show that direct interest in everybody's issue in what they're doing. Stephanie: Yeah, I love that. That is such a good mindset to be in, like you said. Especially coming from a larger company where employees might be like, "Oh this guy is going to just delegate everything," like showing them you're willing to get your hands dirty and help them with their needs and stuff. It's also crucial. Paul: Yes. Stephanie: All right. Next we have 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. Paul: Okay, lightning round it is. Stephanie: Are you ready? Paul: I'm ready. Stephanie: Roll up your sleeves, get ready. All right. Paul: They're already rolled up. Stephanie: First, I'll start with an easy one. Paul: Yes. Stephanie: What's up next on your Netflix or Hulu queue? What are you watching these days? Paul: On my Netflix queue let's see, geez I don't watch a lot of TV so you're going to stop me. I have 30 seconds left. Mostly about historical dramas. I've always wanted to watch The Crown, which everybody has watched. So, that's probably next on my queue. Stephanie: Cool. I haven't watched that yet. You'll have to let me know how it is. Paul: There you go. Stephanie: All right. What's up next on your travel destinations when you can travel again? Paul: Wow. When I can travel again? I'd like to go back to Tokyo. I've traveled so much in my career personally. One point I spent about 50% of my time overseas. Stephanie: Oh my gosh. Paul: But Tokyo because I was born in Tokyo. Stephanie: Cool. Paul: And an American descent. But when I traveled I was always able to get there and see my cousins three or four times a year. But it's been a while. That would be my first place to basically get back to my roots. Stephanie: That is a good one. I love Japan. Paul: Yeah. Stephanie: What app or piece of tech are you most enjoying right now? Paul: I'm most enjoying, this is an odd app, is a password saver. I won't say the name of it, but I've been searching for the perfect one because I'm all about convenience and security and all those things at the same time. So, it's an odd choice but I found the perfect passwords saver. Stephanie: Yeah. That is actually a very good piece of tech. We recently implemented that at the company not too long ago and I was like, "Wow, this saves a lot of time. Who knew?" Paul: Absolutely. Get rid of the sticky notes. Stephanie: Yeah. All right. If you were to create a podcast, what would it be about and who would your first guest be? Paul: My first guest I'm thinking big. Stephanie: Go for it. Paul: Because I'm thinking really, really big because I'm enamored of her career. I was actually at her first rally, Elizabeth Warren. It tells you a little bit about politics and no offense. Stephanie: That's okay. Paul: But I was still in Boston, I went to her first rally and I was just enamored, I've always been enamored of her and not withstanding what happens in the near future. I would just be fascinated to talk to her about her career and how she made that mid career shift and the [inaudible] plan. Stephanie: That's cool. So, it would be politics focused or more human centric on what's important when it comes to you? Paul: More human centric with a tinge of politics because I am interested in politics. Elizabeth Warren would be it. Stephanie: We could get her on the show. I would make that happen for you. Paul: You could make that happen? Stephanie: Yeah. Paul: That would be so cool. Stephanie: I could do it. Elizabeth call us. We're ready for you. Paul: Absolutely. I remember I've actually seen her a few times, in the crowd obviously. The last time was at a protest at the Boston Common and she was quite compelling in her speech. Stephanie: Well that's great. I will have to see if I can find that online. Paul: Yeah. Stephanie: The last hard one which you've kind of already answered this, but I'll throw it anyways at your way. What one thing will have the biggest impact on Ecommerce in the next year? Paul: I think the biggest impact is the turmoil going around the big guys whether it's Facebook, Google, to some degree Amazon. What is the regulatory landscape, what is the antitrust landscape, how will they evolve, how monolithic will it be? Paul: I think I actually think about that quite often in terms of how do we enact with them, do businesses, make the leap into Amazon as a third party do, how do the algorithms evolve from a group perspective. How does privacy work? Paul: That really weighs on me in the context of thinking through how do those outside forces that are so monolithic in the tech industry impact Ecommerce. Stephanie: Well that's a big juicy one. We'll have to have a whole nother episode just to talk about your thoughts on that. Paul: Right, right. Stephanie: Well Paul it's been such a pleasure having you on this show. Like I said, I use Charlotte's Web. I've been around it for a while and I really appreciate you coming on and taking the time. Where can people find out more about you and Charlotte's Web? Paul: Well obviously our website, Charlotte'sWeb.com and I have a pretty fulsome linked in profile that shows you how haphazard my career has been but it's been a fun ride. Stephanie: Yeah. That's where I found out all about you. Well thanks so much for coming on. We'll have to have you back for round two in the future. It's been great. Paul: Absolutely enjoyed it. Thank you very much.
How does a guy who used to sell fighter jets move on to build an Ecommerce company that sells single-blade razors? It’s an interesting question with an even more interesting answer, and on this episode of Up Next in Commerce, Patrick Coddou tells the tale, and gives some insights into the world of Ecommerce along the way. Patrick is the founder and CEO of Supply, and even though the company has been in business since 2015, has seen 80% of its total profits have come in over just the last several months. So what’s Patrick’s secret? In today’s interview, Patrick dives into the nitty-gritty of what changed, including how he finally discovered exactly what profit margins he — and most companies — need to hit in order to achieve sustained success. Learn what that number is and more, on this episode. Main Takeaways: Always Be Testing: To achieve the best user experience and optimize sales, you need to constantly test new ideas. Whether it’s pop-ups to showcase new items, implementing a legacy program, or experimenting with video, you learn something new every time you test. Plus, sometimes the failed tests are even more valuable than the successful ones. It’s All About the Margins: Businesses live and die based on their gross margins. If you are not charging enough and/or pay too much to have your products made, you’re putting an unnecessary financial strain on your business that could break it. Riding the Ecommerce Waves: There is a ton of volatility in the Ecommerce industry. In order to achieve sustained success, companies need to be nimble and able to adapt to the changing tides. Keep overhead low, focus on your P&L and build processes that allow you to make quick shifts when needed. 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 and today on the show, we have the founder of Supply, Patrick Coddou. Patrick, welcome. Patrick: Thank you for having me. Stephanie: Yeah, we're excited to have you on. I was doing a little bit of LinkedIn stalking and your background... At first, when I stumbled on your LinkedIn, I'm like, "Is this the right guy?" I saw a background in selling fighter jets and I wanted to start there with you of kind of like a little bit of your background before you founded Supply. Patrick: Sure. So I spent my education as a mechanical engineering and before starting this company, I spent eight and a half years in the corporate world. I worked in the aerospace industry and in particular I worked on military aircraft. We make some fighter aircraft here in Fort Worth, Texas where I'm from. Stephanie: Very cool. And what does that look like behind the scenes of working on aircraft? I saw that you did, I think an $8 billion deal. So I want to hear a little bit more details around that. Patrick: Yes. I worked on it. It would be very, very arrogant of me to claim that I was responsible for that deal. Yeah. So in general, and I'm happy to go deeper if you want to, but in general, the US government works with foreign militaries to arm and equip them with certain pieces of equipment that we think that are necessary for them to have and to support interoperability between allies. So one of those aircraft was called the F-35. And I think the deal you're talking about was maybe the deal with South Korea we did probably five or six years ago where the US government sold, I don't remember how many, 60, 70 aircraft to South Korea. Patrick: So that was a really phenomenal experience getting to fly there and negotiate with our partners over in South Korea and spent a lot of time kind of immersing myself in their culture. Just a cool, cool thing to be a part of. So I learned a lot there, but at the same time was ready to get out when I left. Stephanie: Yeah. So let's hear a little bit about you're almost a decade at, I think Lockheed Martin and you're starting to get the entrepreneurial itch. So what was happening while you were there and what had you make the jump. Patrick: Yeah. So as outrageously cool as the subject matter was of what I worked on in my previous life, it was... As awesome as the subject was, it was as equally terrible to work in a corporate environment like that one for me personally. Not for everybody, but for me. And especially working with the US government. Just procedures and processes and just layers of bureaucracy. It just led to boredom and frankly anxiety and depression personally. Just wanting to be fulfilled in my work and not finding the ability to be so in what I was doing. Patrick: I tend to plan and think ahead a lot. When I visualize the future of my life there, it was like I could literally see myself sitting at the same desk like doing the same things that I had been doing for like the next 30 years of my life. For years, I wasn't raised as an entrepreneur. I don't really have that in my family. I didn't know the first thing about starting a business, but for years I was always thinking about kind of what is kind of my path out of this life and kind of into the next one. Patrick: I always had ideas and never really kind of jumped on them because I wasn't a risk taker, I was an engineer. Taking risk was the furthest thing from what I was used to. And I finally have this idea for a razor that I wanted to invent, and we can kind of get into that if we want to, but in general I've always kind of struggled with irritation and ingrown hairs with shaving since the first day I started shaving. I came across this old style of shaving, shaving with a single blade safety razor and just fell in love with it and decided I wanted to try to kind of make a modern version of this old razor that I found. Patrick: Then in addition to that just decided like this is kind of... It's kind of now or never to make the leap from this job to doing something on my own. So it was kind of a perfect storm of the idea came and the necessity came and the opportunity came at the same time and just decided to go for it. Stephanie: Yeah, that's awesome. I think a lot of people probably have those same feelings of getting stuck somewhere. I know I have in the past. There was a point in my previous life when I was working at Fannie Mae and I had the same kind of thing. I'm like, "Oh my gosh. Do I want to end up in a semi-government job or corporate job?" And even at Google, it's like, "Oh, things feel so great right now. Should I leave? I feel like I'll stay here for a long time because it's so comfy." So I think a lot of people have the same kind of feeling of now or never. I better jump before I get stuck here for the rest of my life. Patrick: And the further you go in those career paths like the harder it is to leave. What can an aerospace engineer that has worked as an aerospace engineer for 20 years do other than that after they've been there so long? Stephanie: Yeah. I had the same feeling. What year did you start Supply or did you start something before then or was Supply your first company? Patrick: Yes, Supply is my first kind of real company. Prior to starting Supply which we started in... The company started in January of 2015, but we launched publicly in August of 2015 with our first Kickstarter campaign. And prior to that, I started a website with one of my best buddies called razorpedia.com and that was like, I think, we started in 2012 or 2013. Long story short, it was a kind of razor review website that really was kind of a... Just kind of a stupid fun thing to do with a buddy on weekends where we wanted to kind of test razors and try to find the best razor on the market. Actually, the website ended up getting pretty popular and we ended up selling it later. But that's really where the razor kind of story began with shaving. Stephanie: Yeah. I mean, I read that the Razorpedia was like the number one google search result and it had like 1 million organic page views over 30 months. So it sounds like it was actually a pretty big deal. Patrick: Yeah, it was pretty successful. We were fortunate enough to like... We literally launched I think the same week that Harry's launched. Stephanie: Good timing. Patrick: Yeah. It was good timing and we wrote a blog like the same week about Harry's. We ended up like kind of being... If you searched razor reviews online or Harry's razor review, we were right at the top of the search results. So it was kind of dumb luck. So we started to kind of monetize it with ads. We didn't know what we were doing. We were making it up as we went. The best thing that came out of that was the realization that all these multi-blade razors that we tested were all... In my opinion, were all trash and just not good razors. It was that website that actually led me down the path to find this old style of shaving, which is this single blade style shave. Stephanie: It's really interesting how marketing can really train us like "Oh, the more blades the better, and this one has two. Oh, this one has three." You wouldn't even think like getting back to the roots of like you're talking about a single blade is maybe actually the best way of doing things. Patrick: Yeah. There's an old Onion article from like 2002 and I think the most blades in a razor was maybe three or four at that time, and the title of the article was Screw It, We're Doing Five Blades. So they actually foresaw the five blade razor. I think you can actually buy a seven blade razor today. Stephanie: Oh my gosh. So you have this idea of Supply. What did the early days look like? I mean you have this old-time razor where you're like, "Oh, this actually works really well." What was it like to actually start the company and find a way to create and manufacture this razor? Patrick: It was very challenging to say the least. So I had the good fortune of one of my friends. I wanted to just make the leap and just go cold turkey and go all in on the company and the idea from day one. I had the good fortune of having some friends in my life that I listened to that said, "Why don't you try to figure out how to make this product work before you just leave your paycheck behind?" That turned out to be really good advice because it took me about a year and a half if not two years to go from Kickstarter campaign, which was kind of the initial rough prototype to no kidding supply chain or product that I could actually sell at scale. Patrick: I have no background in consumer products at all, whatsoever. So a lot of that kind of two-ish years was just me making it up. I had no investors. I had no real network or people to rely on to help me figure out how to kind of make this product. So a lot of it was just kind of figuring it out as I went and making a lot of mistakes and fixing those mistakes when they happened. Stephanie: So how were you finding ways to... I mean, you get a really well-funded Kickstarter. What was the next steps after that? Did you go and start meeting with people who manufacture razors already and you're like, "Here's my new design idea?" Or since you're an engineer, were you actually like trying to make your own? Patrick: Yeah. No, I did not make my own. We've always done outsourced supply chain and production since day one. We're currently actually not working with any of our early manufacturing partners. We've got a really phenomenal network of manufacturers that we work with today. But in the early days, it was a lot of googling although that doesn't really get you too far when it comes to manufacturing. Patrick: And then just a lot of calling and cold outreach to anybody that I could get to pick up the phone. So I think I probably called somewhere around 50 or 60 different suppliers that I just found through Google or recommendation from somebody who would talk to me, but didn't want to do the work for me or something like that. I eventually settled on... And this is a very common practice in the consumer products space. I eventually settled on... I never really know what to call them, but kind of an outsourcing kind of middleman sort of company where they're a... This is what they do is they go find factories to make you your product. Stephanie: Oh, interesting. Patrick: Yeah, I found a guy local to me. I don't remember how I found him. I think he was on Upwork maybe and he managed the manufacturing of our first batch for me. Stephanie: Very cool. So what led you to change manufacturers? You said in the early days, you had one manufacturer two and then you don't use them now. What happened and what kind of lessons did you learn through switching manufacturers? Patrick: So we launched our campaign August of 2015. I promised delivery by March of 2015, and that was in my mind plenty... That was more than enough time. That was like I was being generous with that timeline. And the manufacturer knew that. They were on track with that. March came and went. No products. April came and went no products. May. And then June I finally... I'll never forget, he literally shows up on my doorstep with a big old dolly of... I think we had ordered maybe 2,000 razors or something like that and he drops him off inside my house. Then as he's walking out the door, he says, "Oh, by the way, there's a problem within." Patrick: I'm like, "Oh, now, you're going to tell me there's a problem." Anyways, it turned out there was an issue with the razor to where if it wasn't used properly, it actually wouldn't even really shave at all and you couldn't load a blade. Stephanie: Oh my gosh. Patrick: Yeah, just a little problem, which was just devastating because I had already spent all my money that I had raised, I think about $8,000 on that production batch. Essentially what we did over the next kind of two to three months is I set up a little shop in my garage to try to kind of adjust the razors to make them work and we did the best we could with that. We were very open with our backers and that's always like number one thing. I always tell young founders or operators is like when things go wrong trying to cover it up or not being honest about it with your customers is just going to make it worse. Patrick: You need to kind of be honest. We were telling our customers what's up like here's what happened, here's what we're trying to make right about it. Oh by the way, if you want to wait, we're going to start up a second batch with a new manufacturer, but it's just going to take some time. Patrick: Anyways, we ended up kind of salvaging some of that initial bash. We ended up having to scrap a lot of it, lost a lot of money on that first batch and then we started up a second production line and eventually made it right with our backers and delivered everything we promised, but it took... I think it was the following March before we finished delivering what we had promised. So it took a year longer than what we had told people it would take. The lesson for me is and has always been at the end of the day, all I have personally that's keeping my business alive is the relationships with the people that I work with. Patrick: Those relationships and that trust is everything. It's extremely difficult to, on the front end, determine if you can trust somebody. But I always highly leverage towards trust when I'm evaluating a new partner rather than capability, right? Because capability is just kind of table stakes for us to even have a conversation. Something is going to go wrong and what happens when it goes wrong is what makes all the difference. Patrick: So that first vendor, his true colors were showed when something went wrong. The vendors, I'm with now, things go wrong all the time, but what happens is they make it right. So that's kind of the biggest learning lesson for me and the biggest advice I can give people is going into business with people that you not only enjoy working with, but can trust to make things right when things go wrong because that's literally all you have. What's written on the contract doesn't even really matter when you're as small as me, right? Because I can't sue somebody. It's just... Anyway. Stephanie: Too much time, too much money to even try and do that to begin with. Patrick: Yeah, exactly. So it's all about relationships. Stephanie: Yeah, that's a really good point. So on your Twitter I think I saw that... I mean, you guys have been in business for a few years, but 80% of your lifetime profit has come in the last six months and I was wondering what's the catalyst behind that? Why are all the profits coming in now? Is it better marketing? What's behind the scenes to drive that profit now? Patrick: Two things, supply and demand. So on the supply side, I worked all last year. This is another kind of big learning point. I've gathered over the years. I worked all last year to significantly improve our gross margins or essentially how much our products cost to make versus what we sell them. The first four basically years of my company, I wasn't charging enough for my products and they were costing me too much to make. So 2019 was a big kind of cost cutting year for us. Patrick: Then in addition to that... So those cost cutting initiatives went into effect on November 1st. So that's the supply side and then the demand side is November 3rd we aired on Shark Tank. So that was the beginning of a big tidal wave of orders. So those two things coincided very nicely to bring us to a place to where we're significantly profitable in the way that we've never been before and that really changes a lot of things for us. Stephanie: That's awesome. So how did you go about figuring out what areas needed to have cost cut down? What does that process look like? Patrick: Yeah, for us, I mean it's less about... We've always had very low overhead. Started the business with my wife. We've barely ever paid ourselves much... We've had a very small team always. We worked out of our house for the first three years. So overhead has always been very low for us. I always, always, always urge young businesses and founders to keep overhead as low as possible. I think a lot of the reason you're seeing a lot of companies go out of business or have issues this year since COVID hit is they don't have the flexibility in their overhead to withstand volatility in the marketplace which is what's going on right now. Patrick: So that's always been low for us. It's always been a thing that I've held important. What it costs us to make our products versus what we charge for them, I had what I'd consider a friend/mentor get on a phone with me. He runs a very successful men's clothing business that's probably 10 times larger than mine. He shared with me, "If you're not charging at least 4X for your products what you make them for, you're never going to be able to scale in a meaningful way because customer acquisition costs are just too high to let you be able to scale with any less margin than that." And he's right. Stephanie: Did you take his advice exactly and do 4X of how much it costed you? Patrick: Yes, I did. Stephanie: Cool. And what was the price before for a razor and what did that jump to? Patrick: Without getting into the engineering side which is maybe a little boring, but we didn't really necessarily change the price of the razor. We have two versions. We have what we call an alloy version and a steel version. The steel version we increased the price probably about 20 to 30% and we introduced an alloy version which is a lot less expensive to manufacture and we actually kept and almost kind of lowered the price on that one because we were able to bring our production costs down so much. Stephanie: Got it. When you're lowering your production costs, I know you mentioned overhead is a big thing, but was there anything with your production costs or the materials that you also looked at decreasing the prices for? Patrick: No. I mean, we kind of kept the packaging the same. Another thing that you'll probably hear a lot of people, supply chain guys talk about is we're always trying to get like ahead of the curve when it comes to ordering because historically we've always had to rush shipments via air. Not all of our stuff, but a lot of our stuff is made overseas and air shipments cost anywhere from five to 10X more than ocean shipments. So that's always really painful when you got to spend 20 to 30 grand just to ship something versus two to three grand. Patrick: So getting better forecasting so that we can order far enough ahead of time to put something on the ocean instead of the air is another big thing we're doing. Otherwise, it's just like constant... I live in my profit and loss statement where I'm just counting every single penny that goes into my cost of goods sold whether it's the cost to ship to me, whether it's cost to ship to my customer, the fees I'm getting charged by my credit card companies, cost of my boxes. Patrick: I mean, it just requires relentless dedication to constantly being in the numbers to make sure that... It's just like... It's like entropy. All things tend towards chaos. Well, everything in your P&L tends towards higher costs if you don't stay on top of it because you're just going to spend more and more money. Stephanie: Yeah, I completely agree. I think a lot of founders oftentimes avoid looking at it because, one, it's kind of hard to read a P&L or a balance sheet or something like that if you haven't taken the time to figure out what all the line items mean. But then also like you said like a lot of things start adding up behind the scenes whether it's subscriptions or just stuff where you're like, "Whoa, I didn't realize my credit card fee is this." Maybe it's actually cheaper just to you know get a loan or do this and start thinking differently about how you're spending your money. Because a lot of those costs do add up especially in the early days. Patrick: They do, and software too. Stephanie: Oh, yeah. Software is a big one. And forecasting. I thought that's a really good point about forecasting in a way that you don't have to airship things. We actually haven't had someone on the show talk about air versus ocean, so I found that very interesting. Patrick: Yep. Stephanie: So the other thing I was wondering I would love to hear more about is your Shark Tank experience. We've had quite a few Shark Tankers on here and everyone's had a slightly different experience. I want to hear a little bit about what that looked like. Patrick: Awesome. I mean, it was a once-in-a-lifetime sort of deal. Never will forget it. We had a blast. I went on with my wife. We both pitched. We filmed in June of last year, so June of 2019 and then we aired in November of 2019. Just all the way through from the very... I applied three years in a row. It took me three years to get on the show and from the first day I applied the first time all the way through the last interaction I had with them after filming, it's just a really class act. Up and down, just phenomenal people. Patrick: I'm not talking necessarily about the sharks, although they're all great. You work with them for literally 30 minutes to an hour. You never see them again, but all the people behind the scenes are just a class act. Just the experience of standing in front of these people that you've watched for close to a decade, if not more than a decade on TV and actually talking to them and them talking back to you and saying your name. It's just like this very kind of out of body experience to where you kind of like in a sense like black out a little bit. Like don't even really remember what happened, at least personally. But we had an absolute blast. We ended up getting an offer from Robert and accepted his offer. We actually didn't end up closing that deal, but just had an absolute blast. Stephanie: Oh, and you said you didn't end up closing it? Patrick: No, we did not. Stephanie: I think that's also interesting to know that not all the deals close and there's things that maybe happen afterwards that could impact that on both sides. Patrick: Yeah. About half of them don't close. Stephanie: Yeah. So what was it like after you went on the show? I'm sure you had a large increase in demand? Did you guys have any website issues or inventory issues or what did that look like? Patrick: Yeah, a huge increase in demand. I think in November, we did you know 4X our previous monthly record. So big increase in demand. It really strained our customer service. It strained our supply... Not our supply chain, our warehouse a bit although we had just onboarded with Shopify Fulfillment Network. They were doing a phenomenal job of keeping up with things. It was more of what was straining was getting stuff in stock from our vendors on time. Patrick: So we had some orders that took us like three to four weeks to ship and that made some customers pretty upset since they were Christmas presents. We did get everybody everything they needed before Christmas which was like my one thing that I wasn't going to sacrifice on. We ended up getting it done. But between November 3rd and Christmas, it was pretty painful, in a good way. But the response was pretty phenomenal. Stephanie: Yeah, that's great. And are you seeing continued demand from that or did you start leveraging other maybe customer acquisition strategies or marketing tactics to kind of build on that demand? Patrick: Yeah, so it really put a ton of wind in our sales. It's really helped us kind of upgrade a lot of our business kind of to the next level. But in terms of like sustained demand, no, you're not getting a ton of like post Shark tank people streaming it and coming to your website. Although, I'm sure that happens. What it has done for us is it's given us kind of a social proof of being on this national platform. Patrick: So we've used a lot of footage and assets from the airing in our advertising. So if you go to our website, you'll probably get retargeted with some Shark Tank style ads. And just in general, it's given us the ability to taking us from this quiet kind of nobody brand to... I won't call us a household name, because we're certainly not, but a lot more people recognize us like, "Oh yeah, I've seen that before." Patrick: So it helps with everything. I mean, it helps with not only the company but your partners and your vendors are now even more excited to work with you. Press finds you that hasn't found you in the past. We'll be in The Wall Street Journal this weekend. Stephanie: Oh, cool. Patrick: We are in GQ's best single blade razor of 2020. These things just kind of slowly snowball. It's been a really phenomenal experience. We're very grateful for it. Stephanie: Yeah, that's great. It's such a good reminder of how PR can work if it's done the right way because there's all these PR companies who always say that they can help you, but it depends and that's just a good reminder that it can work well if you get the right outlet and getting featured in like Wall Street Journal or places like that. Very beneficial. Stephanie: So what kind of digital channels are you finding the most success in right now when you're going about... You're talking about retargeting and different marketing tactics. What kind of channels are you finding success in? Patrick: Sure. I mean, no surprise Facebook, Instagram and Google in that order for volume. We've always wanted to test these other channels like Snapchat and Tik-Tok and whatever and we probably will sooner or later. But there are some other things we want to spend some more time on building before then. We do a little bit of affiliate. We do a tiny bit of influencer, and that's really kind of I think what we're going to start turning our eye to for maybe the next phase of our growth. But yeah, those are really the big channels for us. Stephanie: Yeah, cool. So when you were building up supply and you mentioned Harry's earlier. The razor market feels like it's been pretty popular for people to start companies in. You've got Dollar Shave Club, you've got Harry's. How did you think about that competition and making sure that you stood out among the other brands that were launching? Patrick: Yeah. So our value proposition is very much kind of anti-Harry's and anti-Dollar Shave Club. Then our positioning and our pricing is similarly the complete opposite. So they're clearly competitors of ours, but I don't really consider them necessarily direct competitors. What I do consider them is people that I can steal my customers from. So it's a single blade. I haven't really talked much about the product. It's a single blade. Stephanie: Yeah, let's hear about that. Patrick: Yeah. It's a premium single blade razor and the value propositions are there's a few. Number one, it's not a cheap product. It's a $75 handle, but the value prop is you invest a lot up front, but then you save tons of money over time. So our blades are 75 cents a piece and they last somewhere between eight to 10 shaves. So after you buy the handle, you're spending... If you're shaving every day, you're spending maybe 24 bucks on blades a year. Then you've got this handle that lasts forever. We actually guarantee it for life. Patrick: So you never have to buy the handle again. But then aside from that, the value prop is a single blade gives you just as close of a shave as a multi-blade razor. But for roughly 30% of guys, they experience like myself a really severe razor burn and or bumps typically on the neck or in the sensitive parts of the face. And a lot of that is caused by multi-blade razors. We don't have to go that deep into it, but the way they're designed is works for some guys in terms of giving you a close shave, but for guys like me who have sensitive skin, it actually does the opposite. It makes things worse for you. Patrick: Anyways, so going back to Harry's and Dollar Shave Club. So a lot of guys, they just use these razors and they just think like this is the way everybody shaves and they just have to deal with this issue and just deal with the razor burn or just not shave. So what we're telling them is no, it's not the case. You can actually shave and enjoy it and not have your face be a train wreck after you shave. Patrick: So we're slowly helping guys kind of wake up from this myth that multi-blades are better and that's like the only way to shave. If it doesn't work for you, then too bad. Just keep shaving and tearing up your face. Stephanie: Yeah. How are you going about that education process because I was going to say that it does seem like there's quite a bit of education required for that and just for like... I mean, you mentioned shaving eight to 10 times. I'm like, "Oh, I think a lot of people probably shave with the same blade for long time." I'm thinking about myself, I'm like, "Oh, man. I'm pretty bad at that." So how do you go about getting people to change their behavior? Patrick: Yeah. Honestly, it's tough. I mean, I'll give you an example. We present in our ads like why multi-blade razors are bad for your skin and we literally present it the same... We present the same data that Gillette presents. It's on their website. Multi-blade razors are literally designed to lift... The first blade tugs the hair out of the skin and like the second and third blade kind of cuts it below the surface of the skin. That's literally how Gillette has designed them to work. Patrick: People accuse of us of lying and making that up. And it's like, "No, just google it." You'll see it straight out of the horse's mouth. So the point is like it takes a lot of education. When they don't even believe that you're just saying what your competitor says, clearly they they need a lot of education. Patrick: So we do it through video. For example, if you buy the razor, you get four emails from me, the first four days after you buy it and each one is a short 60-second training video. It's not like this outrageously complex course of learning how to shave with our razor. It's 60-second videos. But guys, we've learned are very prone to throw instructions out so they don't read anything that we include with the product. Stephanie: You think they fancy videos like you call them, "Hey, come look at this." Patrick: Exactly. It continues to be a challenge, but in general video seems to work the best in terms of teaching guys how to do. And actually, we're starting up our YouTube channel next week to kind of help that process as well. Stephanie: That's really interesting. Another thing I read. I don't even know why I know anything about razors because I did read an article about the marketing behind them, how a lot of the traditional companies show the razor getting like water all over it and sitting in the shower and that actually degrades the blades and then you have to change it more frequently and that was like their whole plan. Do you think that's true or am I just reading conspiracy theories behind razor blades? Patrick: Yeah, I don't know exactly what you've read, but I mean it is true that water, what it does, I mean, if it sits on a blade it causes it to rust which degrades the edge. I mean, we tell our customers don't leave your razor in the shower in a damp environment. We tell our customers not to do that because that's very... That's true. Stephanie: Yeah. I mean, all these things I think most people probably are doing right now, I'm thinking of myself and our producers typing in there that how long she goes from changing her blades. So I think there's a lot of education to do in the market in general. How are you guys also thinking about new products because these are designed for men, but I'm like women definitely have a lot of the same issues. Are you thinking about launching new products geared towards women as well or are you just strictly focused on men's products? Patrick: The short term, we're focused on men's products. We do have women as customers. My wife and my co-founder is a user of our product. So we're more than happy to have the ladies buy from us. But what's really, really difficult or at least I've found is to position our product as both a men's and women's product at the same time. I don't know the best. I'm sure there's a good way to do it, but I don't know what it is because shaving your face and shaving your legs are too... They seem similar, but they're very, very different things. Patrick: I'd love to do like maybe different landing pages or product pages because the value props are basically different, right? So I don't know, man. Maybe I could use some advice for how to sell... Maybe the problem is I just don't know yet how to sell razors to women. Stephanie: It sounds like my team. We've got ideas and we'll team up with your wife and we can all figure it out together. Patrick: Yeah, yeah exactly. It is on the to-do list. It's just something we haven't been able to get to yet. Stephanie: Very cool. So tell me a little bit about how you developed your website like the experience... I mean, when you're selling something that kind of needs to be tried out or you need to hold like the handle to see like wow, this is a good quality like piece of steel here, how do you convey that to the customers who are coming on and how did you develop your website experience. Patrick: Yeah. It's tough, it's really tough. I don't think we've arrived by any stretch, but certainly, certainly made a lot of progress. We have a very, very talented development company. We work with agency called Fuel Made. Good friends, just good people and they do amazing work. So they handle just from the front end and the back end design. They're handling most of that for me. Patrick: Prior to that when we were smaller, I think it's a complete, complete waste of money to spend any money on complex web design. There are so many free or very cheap templates out there that work so well. I would encourage people to not spend any money on development and take any money you have and invest it all in creative and start with just phenomenal photography. Patrick: Find a very, very talented photographer and spend your money there if you're going to spend your money anywhere. So I have a very good friend of mine who is that person and he takes all of our photographs. And so we over index on beautiful photography. We're now at a point to where we can afford kind of an expensive agency to develop our site and otherwise, we do just tons of AB testing. Every month, we're testing something new or we're launching a new feature. Sometimes it works, sometimes it fails miserably. Each month is just an opportunity to get better. Stephanie: What kind of tests have you seen work versus fail because I think a lot of people may be thinking about trying out some of the same kind of features or tests that you're thinking about. So is there anything that comes to mind where you're like this really worked well with conversions or increase cart value versus this one did not work at all and it seems like it would have. Patrick: Yeah. I probably have more this didn't work than this does work. Stephanie: Let's hear it. I like those stories just as much. Patrick: Well, man, I'm really sad about this one. We just did one where once you add the razor to the cart, there's a pop-up that immediately shows up that says, "Hey, do you want to upgrade this to our starter set which is our second best seller aside from our razor?" We tested different variations of that pop-up. We tested it against no pop-up and there was like no clear winner after, I think it was two weeks and a very significant amount of traffic. No clear winner. Patrick: So we decided not to go with that pop-up. I launched a membership/loyalty program in April. The way I designed it was outrageously complex and I put a lot of development work and dollars into it, let it run for eight weeks and then I canned it. That was painful to do because it was just too complex. Stephanie: What made it complex? Because I've actually heard similar themes from a few other people who've been on the show who said that they thought that a loyalty program would work for them, but it ended up not working like they thought. So what do you think made it too complex or would you have done it differently or are you just like, "We're not trying that again?" Patrick: Yeah. Two things on the front end and on the back end. So on the back end, the code, it was completely custom designed from a code using scripts on Shopify and it just got really complicated. But on the front end, it was kind of confusing to the customer. So the program was essentially like it was kind of like buy a razor and get a free lifetime of blades offer which sounds like a really compelling offer, but there's always kind of... There's got to be a caveat to that statement. Patrick: So it was like you could get a shipment every quarter of blades, just pay for shipping or you could buy our premium membership, which was like 20 bucks a year and then get the blade shipped to you once a quarter, which is a great deal, but offering them those two options was really confusing and then just the way we made them sign up for it was confusing. Patrick: In general, we're going to try to launch another program in the future, but it will be far less complicated. If you can't explain it in a sentence or less and have people get it immediately, then you've set yourself up for failure. And that's what we did. I've explained the program to people and they'd be like, "Okay, wait. But if I buy this, what happens?" Stephanie: I need my Google spreadsheet out like which way will I save an extra dollar? Patrick: Yeah. So anyways, things that have worked. We actually launched international currency on our website because we do a pretty big chunk of business overseas and that actually increases conversion rates quite a bit for us. I'm blanking right now. We've had other wins, but I'm blanking on it right now. Stephanie: That's all right. If you think of any more, we can circle back because I actually think it's very interesting diving into some of these tests like this because I'm sure other founders are thinking about similar tests. Patrick: For sure. Stephanie: Very cool. So a couple general Ecommerce questions. Now, that you've been in the world for a while and kind of doing a bunch of tests and you launched your company, what kind of trends or patterns do you see coming down the pipe right now especially with everything with the pandemic. Are there any changes that you see coming in the future around Ecommerce? Patrick: I guess this is probably cliché, but the only thing I know is that I have no idea what's coming next. I think there's a ton of opportunity in the future and a ton of volatility in the future for Ecommerce. I'm very, very grateful, number one to be in the industry I'm in to continue to operate and be healthy and growing. I have friends in the restaurant business that cannot say that. Patrick: So I'm very bullish and grateful for the industry I'm in. I'm not planning on changing anytime soon, but at the same time, I think consumer behavior is going to continue to be like challenging to kind of forecast. People say this all the time on Twitter, but I just don't get the fact that our stock market is so high and our GDP is so low and so many people are out of business. Patrick: To me, it's like, okay, when is this... Part of me is waiting for the other shoe to drop and when is this all going to come crashing down and the other part of me is like eCommerce is 30% of retail now and like that's not showing any sign of stopping anytime soon. So I don't know if that's a direct answer, but in general what I'm doing is I'm doubling down. I'm building processes and teams for growth. Patrick: So we actually just left our long time marketing agency that I had a great relationship and love and really enjoyed working with and it was really difficult to leave them. But the main reason I left is like I'm convinced the brands that are super nimble and able to react and adapt really quickly are going to be the ones that survive and thrive in this environment, in this volatile environment. Patrick: So whether Facebook CPMs are up or down or what's going on, I think we're just going to be really flexible and part of what I'm doing to be flexible is building more internal teams to move quickly rather than just being a bit slower. Stephanie: Yeah. That's such a great point and I think a lot of other companies are probably starting to think about that too especially around like being able to move quickly and not having costs that are recurring for like the next three years that you can't get out of or long-term contracts and even around like not relying on just a single manufacturer and being able to kind of like move around if needed. So definitely being more nimble will probably be how a lot of companies are thinking about this going forward. Patrick: Yeah, and it's tough because at the same time you also, I think... We started the call off kind of like this, it's like you have to keep overhead low at the same time. So you've got these competing priorities to be able to move fast and have an internal team, but then also not have a bloated internal team that you just can't respond. Your overhead can't respond quick enough to any kind of unforeseen events. Stephanie: Yep. Completely agree. So is there anything that you wish I would have asked you that I did not bring up? Patrick: Let me see. I don't think so. No, nothing I can think of. Stephanie: Man, I'm just the best. All right. Cool. Then we can move on to a quick lightning round, if that sounds good. Patrick: That works for me. Stephanie: All right. So 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. Are you ready, Patrick? Patrick: I am ready. Stephanie: Cool. So if you were to start a podcast, what would it be about and who would your first guest be? Patrick: Okay. I know the answer to this one. Stephanie: You're prepared. Patrick: This is no offense to you at all. Stephanie: All right. I'll try not to be offended. Patrick: I would start not like a one-on-one podcast, but like a round table debate style podcast with roughly three to five people. I want vigorous like vitriolic... I don't know if that's a word, but debate. I want people that are so ingrained in their opinion that they're willing to fight other people to the death about what they have to say. The topics would be all Ecommerce or retail related. Stephanie: Okay. Patrick: So anyways. Stephanie: I feel like I see that happening on Twitter right now though. Patrick: Yes, it's Twitter and podcast form. That's exactly what it is. Stephanie: Yeah. I see all these people getting very angry about stuff with certain Ecommerce or someone calls something like D2C and they're like, "That's not data saved." I'm like oh my gosh. Patrick: That's exactly what I'm talking about. Stephanie: That's funny. We at Mission have done roundtables before, but they're usually with like three CMOs and then one of us hosting it. So it does not get that heated. So I'd be very interested to see how your podcast goes. Patrick: Yeah, it would be a requirement for yelling to happen. Stephanie: That sounds great. What's up next on your reading list? Patrick: Let's see. I just downloaded been a book by Ben Horowitz. I don't remember the name of it but it's about building culture. Stephanie: Oh, yeah. What is that new one? Patrick: I don't remember. But it's all related to this kind of transition I'm going through right now is what I call a transition from founder to CEO and focusing less on doing things myself and focusing more about delegating and building a team that can accomplish things without me involved. So a huge, huge, huge part of that is culture and I have no clue how to build good culture. So I want to learn from the best. Stephanie: What You Do Is Who You Are? Patrick: Yes, that's it. Is that new or is that old? Stephanie: Yeah. That one is his newer book. I was listening to it on Audible and I like it because it ties in history along with building a culture, but it's like here's what happened a long time ago and why these themes are still relevant. So I'd recommend that one as well. Patrick: So you liked it? That's good. Stephanie: Yeah. I thought it was great. Patrick: Okay, good. Stephanie: What's up next on your Netflix queue? Patrick: I don't really watch a whole lot of Netflix. Stephanie: No? Nothing? Everyone always starts by saying that and they're like, "Oh, wait. I just did this. I just watched this whole series." Patrick: It's funny. Me and Jennifer will turn on Netflix to watch something new and we always default to just watching The Office. Stephanie: That's a good one. That's a good go to, to Keep you smiling. Patrick: I will say we did just start. We dug up an old DVD set of Seinfeld and now we're watching Seinfeld right now. Stephanie: Oh, nice. Pulling out the DVDs. That's awesome. Patrick: Yeah, the DVD. Blu-Ray though, yeah. Stephanie: Yeah, got to be. What app do you enjoy most on your phone? Patrick: What app? I use twitter probably too much. It's a good thing and a bad thing. A lot of the good things that have happened to me over the past year have been through connections on Twitter, but it can also be a time suck. Stephanie: Yes, I agree. All right. And then the last one, what is a favorite piece of tech that you use or a trying out that's making you or your team more efficient right now? Patrick: More efficient. Well, we're trying out a productivity app called ClickUp? Have you ever heard of it? Stephanie: I think I have. Tell me a little bit more about it. Patrick: It's kind of like a monday.com or an Asana. So like project management, task management. I've never found one I like or that works. We've tried doing it in Notion before, although I love Notion. So we're trying that in ClickUp. I don't know. We'll see. I like it so far. Stephanie: Cool. Yeah, we'll have to check that out. We use Basecamp for almost everything, but I'm open to other things. Patrick: Go ahead. Stephanie: Oh, go ahead. Patrick: I was just going to say, I don't know that I'm a huge fan of Basecamp. I could never get it to work for some reason. Stephanie: Yeah. It is a little high when it comes to like starting up and teaching the team and everyone learning from it, but it gets better. Patrick: Yeah. Stephanie: All right. Well, this has been such a fun interview, Patrick. Thank you for coming on the show. Where can people find out more about you and Supply? Patrick: You can find me on Twitter where I spend most of my time. My handle sounds like canoe. Because my last name sounds like canoe, it's Patrick Coddou. So you can find me there and that's really where I spend all my time. And then our website is supply.co. You can see our company and all of our products there. Stephanie: Awesome. Thanks so much and have a great day. Patrick: Thank you.
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.
How would you like to take your business to the next level by getting the media attention your business deserves?As an entrepreneur you have a unique story to tell and when you can get that story published and featured in the media, your audience will grow and your sales will accelerate.What if I told you it was much easier than you think to get published in major media? We’re talking big names like Forbes, Entrepreneur, GQ, and more...If you’re thinking; “Yes please!” Then this week’s podcast episode is for you.This week’s guest on the Untapped Podcast is Stephanie Lee; she is a writer, storyteller, and media strategist dedicated to helping you share your stories and ideas with the world.Stephanie lived the digital nomad life for 3 years, writing her way around the globe. She quickly started getting published in places like Lifehacker, New York Magazine, and GQ. That’s when she discovered the online business world of creators and coaches with big ideas but without the tools to get published.Now, she helps entrepreneurs make an impact through their own unique stories. Stephanie knows that the world needs to hear your story, and by getting published you can reach the wide corners of the internet. She’s helped her clients get media coverage in 20+ major publications by tapping into their authentic self and sharing them with the world.Ready to get the media attention and visibility your business deserves?In this episode you’ll uncover: Steph's journey from being a digital nomad for 3 years, writing articles and teaching others to get published outside of their blogHow she uses press to grow her clients' businesses.Why most entrepreneurs don't understand the power of media to help grow their profits (while still being authentically you)How to come up with ideas that editors love (so that you can get published beyond your blog and be authentically you)Podcast Resources and Links:Want to learn how to get published? Get Stephanie’s word-for-word pitch to GQ at stephanielee.me/bonusWant to connect with Stephanie? You can find her here: stephanielee.meTune in to learn How to perfect your media pitch strategy with Christina NicholsonListen to my interview with Christina on how to grow from a blogger to a brand.Ready to earn $10K a month and earn more income and a bigger impact? Check out my $10K Club. See acast.com/privacy for privacy and opt-out information.
If you really stop to think about your clothing and the prices you pay for it, you might find that you’re left with a few questions. For example, how can a t-shirt cost less than your morning cup of coffee? Surely the materials and labor involved in designing, making, and shipping a t-shirt are more costly than a few coffee beans and some milk. That low-cost t-shirt is the result of the fast-fashion business model which has swept through the fashion industry. The result is that we may have more access to cheap clothes, but the quality is poor and the environmental and humanitarian cost could potentially be catastrophic. Zana Nanic is the Founder and CEO of Reclaim, a slow-fashion Ecommerce brand, and she is on a mission to change the way people buy clothes. On this episode of Up Next in Commerce, Zana explains how she started Reclaim after becoming fed up with the business casual, fast-fashion norms of Silicon Valley. Plus, she dives into what you have to learn from your customers during the initial launch of your business, and why she believes that an omnichannel approach is the best way to find success in the future. 3 Takeaways: First impressions matter. You have very little time to make a lasting impression when someone visits your page. Relaying the information that will get them to convert must be delivered in the first few seconds a potential customer visits your page. Returning customers is the holy grail metric for a small or start-up company, especially as it relates to the slow-fashion industry. When customers return to buy more, it tells you that they value you and your products and you can build a stronger relationship with them. Invest in pop-up shops and omnichannel strategies to help convey the quality of the clothing. These tactics yield a more valuable and loyal customer. 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 have... Let me get the name right. Today, we have Zana Nanic on the show, the CEO and founder of Reclaim. Zana, welcome to the show. Zana: Thank you so much for having me. Stephanie: Yeah, I'm really excited. I'd love to hear a little bit about Reclaim. Zana: My story is not the typical story of she liked fashion and therefore she's super creative and wanted to do fashion. I am originally Croatian and I moved to Italy because Croatia was in the middle of a civil war. I grew up in Italy as a refugee and my parents, I remember, they were trying to get a job and they couldn't get any job because they didn't speak fluent Italian. Somehow, it was the early '90s them and fashion was the thing to do in Italy. Somehow, they started working in the fashion industry, very, very small and they were lucky enough to have a pretty successful run with it. Zana: But to me growing up, fashion was this amazing tool for empowerment. It was something that you could wear and forget a little bit of your identity. I had this very heavy label I was carrying with me, I'm a refugee, a foreigner, an immigrant, and as a child, sometime, it was pretty heavy. But when you had the right outfit and you look really nice, people just assume different things and admired you and were inspired by you. Zana: Fashion became a little bit my armor and then going into my adult life, it really became a tool I would leverage and use to present myself in a certain way. Giving you an example, when I was at Uber, I was one of the youngest people there and I was already managing. Having the appropriate dress code that made me look a little bit older than my age was essential for my confidence. Very much today as well. Zana: Reclaim really is this testament to how do I help women connect to themselves more and just open up opportunities so they don't have to worry about their outfit, but worry about much bigger and much more important things in their life. Zana: Reclaim is a fashion brand we started eight months ago and we focus on a very limited collection, all the wardrobe staples that every woman needs. But what we try to do is combine Italian craftsmanship and artisans. I'm Italian and my family is in Italian manufacturing. I literally grew up and made in Italy fashion. We tried to combine that aspect of fashion where beautiful aesthetic and a beautiful detail with love for practicality and function. Zana: I currently live in San Francisco, very Silicon Valley. Everybody's superefficient, super go getter. We try to incorporate those to [inaudible] and the clothes, and we have a very limited collection of things that are practical, functional but also extremely beautiful. Stephanie: Very cool. I was reading a little bit about your story of how you were in pencil skirts and heels and then you came to Silicon Valley and everyone was wearing hoodies and jeans and you're like, "I want something a little better." Zana: Yeah, that was a bit of a shocker because I grew up in Italy, where fashion is part of your identity, such a country that has a sensibility for beauty and art and culture, and fashion is a form of art. I was coming from a very corporate world. I wear pencil skirt, high heels, very formal wear was the day today. Zana: And then my first job at Silicon Valley was working for Google. I remember showing up there and everybody was wearing jeans and sneakers and T-shirts. I adapted to that lifestyle in the work outfit. But I also felt super underdressed. I'm like, "Ah, last time I wore this outfit, I was 15 and in high school." Is there anything a little bit more elevated? I feel like an adult and a woman with a career but still appropriate for business casual, and this is a little bit where Reclaim came from was how can we define a business casual aesthetic that is elevated but still very approachable and affordable Stephanie: Yeah, I love that. It's funny. I also worked at Google and if you would even get what would be considered maybe dressed up, they'd be like, "Oh, where are you going today? Do you have a date afterwards?" You're like, "No, I just want to wear a dress today. I just want to wear something cute." Zana: 100%. It will be, "Are you interviewing for a different job?" Stephanie: Yes, I would get that too. You're working at Google, what did your career look like before Reclaim at Google or some of the other corporations? Were you in eCommerce or was that a big shift for you? Zana: It was a little bit of a shift. I mentioned before my family's in fashion so they have boutiques on the Italian coast stuff but very old school. They barely have a website and they do a lot of manufacturing and older clientele hasn't been the same for 30 years. I grew up in commerce but not eCommerce, a different generation. Zana: When I graduated college, I didn't think about fashion as a career option to be honest. I was like, "I want to do something that is different." Everybody I knew was in fashion. I was like, "I want to do something completely different and break the path with what my family is doing." I ended up in consulting. I ended up in management consulting and I didn't work for some fashion clients, but mostly I did a lot of projects and hardcore heavy industry, and after that I worked at Uber. Zana: I was managing Uber Eats in Italy which is different than fashion but is related to commerce and how to get conversion and how to get people to purchase your products. Some of the themes were similar and then the Google role was a mix of the two. It's a little bit of strategy and a little bit of execution and was focused on growing this smart home business. Zana: I would say that the career path I took was not a fashion career path and then this shift happened in business school. When I went to business school, I realized actually I do want to embrace my roots and there is a lot I know and I can offer and I spotted this niche in the market and this gap that was really needed. Honestly, it was my pain point. I was like, "I really don't know where to shop and I want to wear beautiful clothes but I also don't ever want to go dry clean them." That was the perfect solution. Stephanie: Yeah, that's super important. I remember one time I had dresses to dry clean only I'm like, "I'm going to throw that dress away. I'm not going to do that. I don't do dry clean." Zana: I also have a lot of beautiful cashmere sweaters and I wear them once per season because they end up in my pile of stuff I need to bring to dry cleaning and it takes me months to go. Stephanie: When you're shifting into creating Reclaim, did you tap into your family say, "Hey, here's what I'm doing," and start brainstorming with them since they are the experts but not in eCommerce but maybe in the industry when it comes to high end retail? Zana: 100%. They were my first consultants, advisors, investors. They heard it all. My family business was a little bit like the sounding board for Reclaim and I spend a lot of time with the people in my family business and my family contacts. Like our pattern maker, for example, that we use in Reclaim she's a person that I met through my family. She's based in Florence. She's super, super talented and I designed with her most of the clothes that you see in the Reclaim collection because I would bring in the creative perspective and the vision, but then the nitty gritty manufacturing specs, somebody who's an expert has to do them. A lot of the concepts come from my family background. Stephanie: That network that seems a great way to start a company when you have different connections that you can tap into like that and different lessons that you can bring with you. That's awesome. What did the early days of Reclaim look like? Tell me a little bit about starting it up and building the website presence and how you were thinking about attracting your first few customers. Zana: The early days... We launched last summer. That was our first collection launch. I'd say the early day was a little bit like still discovery. I want to say that that lasted for the first few months. From launch to beginning of January was a discovery moment. You come in and you've done a lot... At least, when I launched the website, I talked with more than 2000 women at that point. I thought I know it all. I've talked to them. I understood what they want. Zana: I have a crystal clear picture what is needed, but then, when you have a website is when you start learning for real because one thing is the people that you have face to face what are they telling you and another thing is, "Oh, how are people interacting on my website? What products are they looking at? What are they purchasing? Which ones are asking questions? Which product are getting returned?" Zana: I would say the real learning starts when you are putting something in front of people's faces and you're asking them, "Put your credit card information and buy." That's when you're learning. Do you have product market fit? Or is there something you need to change? Zana: The early days were very, very busy. A lot of documentation and a lot of learning. We really cared about nailing it. Our first 300 to 400 customers, I would personally give them a call and just ask them, "How come you purchased? What convinced you? What did you like?" And just spend a lot of time learning and writing all that knowledge down and taking that feedback in. At the end of the day, we'd be like, "What did we learn today?" And just the bad thing and improving what you're doing. Zana: I wouldn't say that commerce is you have an idea, you put it out there and build it and they'll come. It doesn't really work like that. It's literally like take a lot of pride into changing things every day and iterating as fast as possible. Stephanie: I love that. You had a good point of a lot of people sometimes think build it and they'll come. But oftentimes, that's not the case even if you have an epic product or website or whatever it may be. How did you find your first couple of customers? How did they find your website? How did you get in front of people? Did you do some marketing? Zana: Marketing is a great way to attract people. Our first customers came from the Stanford network. I went to Stanford Business School. The first purchaser were people within my network. People that graduated from Stanford, Stanford alumni, or people that were affiliated with the university because we market it in the university network. And then following that, we had a lot of word of mouth. People who were wearing our products will tell their friends. We had a lot of referral. Our first batch of people that started using the product were referral, learned about us through referral, and then paid marketing. Zana: We did paid marketing on Instagram and Facebook. That is a channel that you use to raise awareness about your brand and your product. Our second wave was through paid marketing. Stephanie: Very cool. How often are you all launching products or new lines? Zana: We are a slow fashion company. Let's say, Zara. Zara would launch 20 collections a year, something that is not like fast fashion but still a high fashion. They would launch 14 collections a year which is a huge number. We're a slow fashion company so what we do we launch very, very few products, but we spent an enormous amount of time making sure that those products are amazing and they're done with the best material and the construction and fit are very well done. Zana: In total so far, we have launched one collection last summer and then we're coming up with our second one this coming August and it's a fall and winter collection and we're having just four products, four basic products, but they're done so much better than what's out in the market. Stephanie: Very cool. When you say four basic products, am I thinking like a T-shirt, a black dress like that kind of product? Zana: Yeah, I can tell you more. We're going to have white button down and the special thing about this white button down is that the front layer is actually made out of two different layers of fabric. You can 100% be sure that your white button down is not going to be see through which is a common problem every woman faces. And then material is the tencel material which is only produced in Germany, is highly sustainable, and it's one of the most ethically conscious materials. Zana: Another thing we're launching is two-piece jumpsuit and it's also made in tencel, so super nice fabric. We made it two-piece because, I don't know if that happens to you but it always happens to me, when you're wearing a jumpsuit and you're feeling amazing and then you go to the bathroom and you have this humbling moment where you're completely naked in your office bathroom. We're like, "No, it has to be practical." We made it look like it's only one piece but it's actually two pieces. Stephanie: That's awesome. I think every woman who's either tried on a jumpsuit or worn one you're like, "Oh, this is kind of awkward." Zana: Yeah, you look great and then the first moment where you actually have to live your life, you're like, "Oh, this is going to be difficult." Zana: And then the third product we're launching are... Those were our bestsellers in our first collection so we made some tweaks to them, but it's a pair of pants. They're made out of a super stretchy fabric but basically you're wearing a pair of black pants that look very nice and professional, but they're absurdly comfortable because the fabric is a 4-way stretch. You're feeling like you're wearing yoga pants but you look like you're wearing a really nice pair of black jeans. Stephanie: That's good. I need that. Zana: Our customers love them. We've got the most responses on those because they're such a good cheat. You're super comfortable but not inappropriate. Zana: And then the fourth product we're producing is going to be a camel coat. This one, the fabric is amazing. It's 30% cashmere and the rest is merino wool. It's super nice and soft. You literally want to sleep with the fabric, just the fabric price is $250 worth of fabric. It's super expensive but going direct to consumer, we will be able to price this product at a 350. It's one of the most affordable best quality materials that you'll be able to find. Stephanie: That's great. How are you conveying this quality and value to consumers or new customers when they're coming on your website? It's hard if you can't feel the fabric or try something on or know the backstory behind it that it's coming from Germany or Italy. How are you conveying that message on your website? Zana: That's a great question. Honestly, that is one of the hardest things to do because in a store, it's very easy. Somebody walks in, you touch it, you try it on, you talk with a store associate and you understand the message. In e commerce, you have roughly 10 seconds to make an impression. That's how much time people spend on one page before they decide. "Will I shop here?" Or they'll just bounce and go somewhere else. Zana: I think here is one of the areas where we did the most learning. Initially, we would have a lot of marketing language to be honest. The highlight or have some bullet points. Now, our learning is actually, no, like the women are coming on our website they really want to learn. We do exactly how I described them to you. We have lengthy copy, we go into the details, we give people the story. You don't have to read it. Zana: But if you're interested, there are pages into story of the material, what is the German fabric that is making this material. We provide all of that information out there and then we do big visual. Visuals and images is what converse the best and what people are resonating the most. We combine the text and the rich information with images, beautiful lifestyle images that people can see a zoomed in image of the fabric and reviews. Zana: We have also a lot of product reviews where every single customer that purchased with us we've reached back and asked them if they want to review the product if they loved it and oftentimes they do, which is great. Stephanie: That's awesome. How are you encouraging those reviews when a customer buys? Zana: We have an entire review post purchase encouragement system. The first attempt is always just to ask and usually... We have an email where I just introduce myself and tell them the story of our brand and how valuable their reviews are and that's where most of the people do their reviews. And then our second or third interaction is we provide them with a discount to a future purchase in exchange for a review. Stephanie: That's cool. Is there any split testing you do there that you've seen that worked better? I know we were speaking, I think, a couple weeks ago to the founder of Hous and she was talking about how she puts an image of her and her husband on a pamphlet every time they send a box or a thank you or something like that and that helps convert. Have you seen any best practices around that? Zana: The reason why we use my personal email for the reviews and I introduced myself is because people do like the personal touch. I'm sure that the founder of Hous was putting an image of her and her husband... People form a connection. My customers have the feeling that they know me and they're purchasing from an actual person. That is a real bond. Zana: I had one customer who bought a pair of pants from us and then she wore those pants on her family photo shoot with her newborn baby. She emailed me afterwards and she was like, "Oh, I want you to have the photos of our family photo shoot because I wore your pants and I look so great and the photos are beautiful." And I was just shocked. I was like, "This is so nice. This is amazing." Zana: I don't think I've ever emailed a brand to share like, "Oh, I wore this for an important moment of my life." I felt so attached. I remembered that made my day. The fact that something that I came up with and I designed and produced and spent time thinking up on, it's something that made her photo shoot more special and she felt prettier and more confident was very meaningful to me. Stephanie: That's really cool. That is a good customer to have. Hopefully, you can keep her long term. Zana: We have the craziest customer. We had one customer who purchased our perfect pants, the pants that are super comfy but they look professional. She purchased one pair. She loved them so much that she purchased 12 of the same size, the same... I remember seeing this order and I was like, "There must be a mistake." Zana: We email her because we thought there was a mistake or a glitch in the system and she was like, "No, I really love your pants. I want to have one for everyday of the week and I always want to have one ready because those are the pants I wore the most, so I just purchased 12." And I was just like, "I love you. You're amazing. Where do I find more customers like you?" Stephanie: Yeah, really. If you know, you know. That's great. Are you trying to also cross sell to a customer? I'm guessing when someone comes on your website and there's not a huge product catalog, it's probably beneficial to be able to say, "You're looking at this sweater. You should try this pair of pants with it too." How are you thinking about showing other products and are you personalizing at all? Zana: Yeah. The collection that we're launching is only four pieces and you're meant to have them all and they work as a capsule. All the colors are in the same color palette and they're all made to be mixed and matched. The idea is that you do purchase the entire catalog, and we're very mindful. Zana: The collection that we're coming up now is very much in line with the one we had before just a different cuts and different styles, but all the ones we are going to do in the future we're going to keep the same color palette and consistent materials so that people that decide to be Reclaim customers will have a trusted brand where they can have the entire wardrobe being a Reclaim wardrobe and it will always work for them because we're not going to have crazy fashion forward pieces that you buy once and they don't go with anything that you own. All the colors that we pick are very much neutral, creams, beige, black, and white. But it's a palette made to be mixed and matched and to do cross selling. Stephanie: Got it. Do you see people normally do buy multiple products at once? Or is there a little bit of convincing afterwards? If someone's like, "Oh, I'm just going to buy the button up and pants," are you then saying, "You forgot the sweater. You forgot the jumpsuit." Zana: Both. On average, people buy two products. That's our website average. But oftentimes people who bought and liked the products come back to the website and either buy more or just like fill their carts to try new products. Both things are true. Average first order is at least two items and then we have a lot of returning customers. Stephanie: Cool. Is there analytics that you're checking out to either see did they add something to their cart and removed it or were they hovering over something for a long time? Or is there any metrics that you look at behind the scenes to target those customers? Zana: 100%. We have an abandoned cart flow. We call them flow. When we see somebody put something in their cart and then they ended up not checking out, basically an email follows them and ad follows them for a few days just to remind them that they still have this product in their cart and if they want to purchase it, then people who do purchase get an introduction to every product of the collection. They will receive emails to learn about the different products. If somebody, for example, bought the camel coat and then the following weekend then email about the pants. They can go back and purchase the pants. Zana: But there are some Holy Grail metrics that we look at as a startup. For us, returning customer is super important, even more than customer acquisition, even more than value of the basket size. Returning customer is what we really care about because that's the metric that shows how do people like you and how do people trust you and how well do they like your product. Stephanie: How do you reengage a customer if you have your... I think you mentioned slow fashion is the industry that you're in. How do you reengage someone when you might not have another product launch for six months or a year? Zana: You don't. That is a little bit the tradeoff. You can either have customers who are going to buy lots of pieces with you and you're going to have a high lifetime value of that customer, but they might not like you that much. They might consider you as us. "I bought it because it was cheap and it was on sale and I keep it in my wardrobe." But then the first Marie Kondo moment you have and you go through your wardrobe that is the first item that doesn't give you joy. Zana: Our model is very different. Our model is we're going to do fewer much better pieces and a customer will wait for our collection to come because they know it's going to be superior quality and it's going to be a piece that they will buy and keep for years. Stephanie: That's a good idea. Is there any education that you give your customers around why they should move away from the idea of the fast fashion industry or how to think about that? Any education behind the scenes that you're also doing? Zana: We are vocal about it in our Instagram but we're also considering starting a blog just to educate about what is this little fashion movement. But I would say that in 2020, a lot of the people that we interact with are extremely conscious consumers especially the younger generation. They know if a product is sustainable. They care if a product has an impact on the environment. Zana: I would say that it's the age of information. If somebody wants to know how ethical a company is and how much they honored your commitment, it's very easy to learn that. I don't know. I remember 15 years ago when fashion companies were like, "Oh, everybody's telling us we're not green." And they all started doing marketing campaigns in the middle of the forest. Get away with that. Literally, it's a practice called greenwashing. Stephanie: I had never heard about that but I do remember seeing images of people in new outfits and whatnot marketing them while they were sitting on a tree branch or standing in a field. Zana: Yeah, literally. That is called greenwashing where you basically show some images that could make your customers think that you're greener or more ethical than you actually are. I despise that. I don't want to be that kind of company ever. Zana: For us, it's very important just the customer that we have care and we do too. I'm okay if somebody who is not our ideal customer doesn't want to shop with us. I'm okay with that. If our price point is too high or if being sustainable is too expensive, I'm happy to have a smaller market but be company that is worth having in this world, than compromising on my morals and having great profitability. Stephanie: Yeah, that makes sense. It seems like your consumers would be interested in the community aspect of... You have a great personal story. You have a good story behind your company, a fun process, probably if they wanted to see behind the scenes of who's making what and how you're thinking about your designs and coming up with ideas and balancing all that out. How do you think about building a community around your brand? Zana: Our social media is our most powerful channel to share. We always post stories of behind the scenes and what's happening and what are we going through. That is the channel where the community is starting to mobilize. But in general, we do a lot of in person events. Not now because COVID changed that. But before COVID we would do brunch and browse, shop and sit. We would do events like this or and we target professional women in San Francisco because this is where we're based. We were very active on Facebook groups for professional women. Zana: We would have events where women can just come together and talk about their challenges and how they're advancing their career and simultaneously try on new great clothes. That is something that we help foster a lot. Stephanie: That's fun. I want to do one of the brunch and browses. That sounds awesome. Were you doing popup shops? Or how were people were they browsing? Online while in person or how do you think about the in person experience and retail locations? Zana: We have a partnership with a company like... We have multiple partnerships with companies that only have stores. We were in a Re:store in downtown San Francisco. They had our products on for six months. Now, they're close but they're reopening soon. And then we're opening our location in L.A. and one in New York with [inaudible 00:28:27]. We have partnerships with companies that basically bring URL brands and products in real life events. Stephanie: That's cool. How do you think about creating those partnerships and finding the right person, the right store? How would if someone was brand new go about finding a partnership like that? Zana: You have to make sure that is the right path you want to go on. I say that because retail distribution at this moment is not something that we could afford because we are a direct to consumer brand. We use premium materials and we make sure that our materials are done in an ethical and sustainable way. Our product cost is pretty high. We still keep prices as affordable as we can. Therefore, we don't have enough margin to pay a store or retailer and have a big distribution. Therefore, the partnership that we use we see them more as an opportunity to have a marketing presence in L.A. or New York. Zana: If somebody wants to touch our products and learn more about them, they can actually go and have a physical retail presence but it's more an exercise and a way to discover products rather than a sales channel for us. Our direct to consumer website is our number one channel for sure. It's the place that we use because that is the only way we can pass on as much price saving to the customer as we can. Stephanie: Yep. That makes sense. How have you seen conversions when it comes to people seeing something in person and then buying it online? Were you tracking that? Have you seen success in that model? Zana: What we noticed is that people who discover us in person are very loyal. The people who have had the chance to try on pieces and have had the chance to touch all the materials, they are the ones who end up buying. Most of the products have the highest basket size and they're the ones coming back just because they had the opportunity to discover everything and literally touch it with their own hands rather than seeing it on a website. There was definitely a benefit to that. Zana: But as I said, we are thinking about a model where in the future you can have a store where you discovered a product and touch and feel it but the growth will still come from eCommerce rather than opening stores across America. That's not something that we're thinking about at all. Stephanie: Got it. Maybe having like guide shops style where people can go in and look at it and then still go online and order to keep your margins down where you guys have now or close to it, I guess, not where they're at. Exactly. Very cool. To shift into more general eCommerce questions, what kind of trends are you most excited about over the next year or two around e commerce? Because a lot of things are shaking up right now, so I'm sure there's a lot on your mind. Zana: Yeah. Oh my God. eCommerce has been exploding. COVID definitely helped the eCommerce grow, but we're seeing multiple trends. One trend was definitely... Apparel did suffer a little bit. Zana: When COVID started in March, we saw an impact on our sales because everybody was scared. Most people are working from home. Our pieces are investment pieces to make you look great when you go to work or when you're out and about. It's not at leisure. And suddenly, the world is shopping for pajamas. We saw there was an impact to our sales. But the trend is quickly changing. Already in April, we saw a bump in sales and we think it's stimulus check giving an impetus to, "Let's buy nice beautiful clothes." We're seeing different trends. Zana: In terms of things I'm excited about, I'm very excited about sustainability. I'm very excited about slow fashion, the fact that consumers really care and want to purchase companies that our ethical. Zana: I'm most excited that customers are seeing that fast fashion and buying on sale and buying seasonal pieces is not something that they want to keep on doing. It's something that it's okay for your early 20s when you're broke and you want to be on trend, but the moment you're in your 30s or 40s, you want to have a more of a... They call it like a French lady aesthetic. Few pieces, very well done, super high quality, but not always make you look very chic rather than a bunch of things that do not make sense together. Stephanie: There's this one company that always targets me on Instagram and they drop new products, I think, it's every week and it got to a point where it's like, "Is this even quality? How can you drop new product lines every single week?" I started looking into it and you're like, "The reviews are pretty bad." "Oh, it's not..." Like you said there's no good ethical practices that are happening behind the scenes, but they're just very good at marketing. Zana: Ask yourself. If you see a T-shirt that is being priced six, $7, think about it. If the cost of Starbucks coffee is four or $5 and making your coffee is much easier than making a T-shirt that requires fabric, people sewing it, machines, transportation, it just makes you think. Somewhere in the supply chain, they must be taking some shortcuts. Stephanie: Yeah, I completely agree. It definitely is a good time too around apparel for a lot of people to rethink, like you said, what they're wearing, what's important because right now everyone's been in workout clothes and now even myself, it's like, "What do I really want to invest in going forward?" Because up until now, I've only had to worry about my top half and just have a nice looking shirt on maybe. Stephanie: But once it starts going back to work and going out into the world, I do think there will be a big shift in the consumers mind around, "What do I actually want to wear going forward and not just, like you said, for a season or a few weeks and then be done with it and clog up your closet space?" Zana: Exactly. That's definitely a trend that we want to participate in where if you already have a limited disposable income because the world is an uncertain place right now rather than spending it on things that are not going to last or that are questionable, spend a little bit more on fewer things which ends up being the same amount of money at the end of the day. But you're 100% happier with the premium pieces. Stephanie: All right. Let's move on to the lightning round brought to you by Salesforce Commerce Cloud. It's where I send a question your way and you have one minute or less to answer. Are you ready? Zana: Yeah. Stephanie: What's up next on your reading list? Zana: The Wheel of Time. It's a fantasy book. Stephanie: I haven't heard of it. I have to check it out. What's up next on your Netflix or Hulu queue? Zana: Oh my God, don't judge me for this but I think it's going to be The Bold Type or Selling Sunset. Don't hate me for this. I watch everything that was watchable on Netflix. Now I'm starting to trash watching. Stephanie: I actually can't judge you. It's funny because I was just watching Selling Sunset last night. I'm like, "This is so embarrassing but I'm going to keep watching it because it's really funny and I ran out of things to watch." No judgment coming from my side. Stephanie: Next on your travel destinations when you're able to travel again? Zana: I want to go to Italy. I know it's cheating but because I'm international in America, the recent visa immigration policies have been really difficult. I haven't seen my family in a year now and the moment this is all over, I'm going to Italy. I'm going to vacation for a month and I'm going to make all my friends jealous on Instagram. I don't care but I deserve it. Stephanie: I think I'm just going to come with you. You don't even have to worry about me. I'll just get behind the scenes. I'll be like, "Hey, mom and dad, where's my pasta?" Zana: We can go to Italy and watch Selling Sunset. I think we have a plan. Stephanie: Yeah, there we go. It'll be a perfect girls' trip. Stephanie: What's up next on your shopping list? Zana: I actually want to buy a nice desk. I'm eyeing this beautiful wood desk on AllModern. I think that's going to be my next purchase. Stephanie: Oh, that sounds great. If you were able to pick anyone to go to brunch with, other than me because that'd be a blast, who would you pick? It can be a celebrity or whoever you want. Zana: Oprah. I'll definitely go to brunch with Oprah or AOC, one of the two. I have a big girl crush on both of them so I should decide which one. Stephanie: You can bring them both. That sounds fun. And the last harder one, what one thing do you think will have the biggest impact on eCommerce in the next year? Zana: Next year? Stephanie: In the next year, yep. Zana: This one is a hard one. I don't know if under one minute it's answerable, but I think different forms of creative so Tik Tok is exploding. How to leverage different platforms like Tik Tok or just different forms of creating than the usual that we've been accustomed to see. Stephanie: Cool, great answer. It's been super fun having you on here. Where can people find out more about you and Reclaim? Zana: They can always shop and this is reclaim.com and follow us on our Instagram @thisisreclaim. Stephanie: Awesome. Thanks so much for coming on the show. It was really fun and we'll have to have you back in the future. Zana: Awesome. 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.
As Randy Goldberg says, ‘no one dreams of going into the sock business.’ But if there is one sock company you can name off the top of your head, it’s probably the one Randy built with co-founder Dave Heath. Bombas Socks has grown from a small Ecommerce company with a mission into a $100-million dollar enterprise, and the success they’ve had all boils down to remembering the fundamentals. On this episode of Up Next in Commerce, Randy takes us through his journey to Bombas. He details why founders need to avoid ‘shiny object syndrome’ and focus their sights on the basics if they want to succeed. Plus, he talks about Bombas’ culture of transparency and how to decide between leading with the company mission or the merits of the product when trying to attract customers. Key Takeaways: Bring in the Right People. Scaling requires people — employees, execs, investors, and mentors. Lean on your network, ask questions, hire carefully, and create a dialog with other D2C companies to learn from them. Pro tip: It’s time to bring someone else in when you start to ask questions that neither you nor anyone on your team can answer Ask Yourself, “What Matters More?” When it comes to getting better conversions, don’t let shiny objects distract you. For example, changing the copy or placement of a video matters a lot less than the speed of the site. The faster your site speed, the more conversions you will have. Stay focused on what investments really convert Transparency Impacts the Bottom Line. When employees feel invested in the company and comfortable in the environment you create, they begin to ask more questions, buy-in to the company mission, and work harder to achieve success for themselves and the company 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 of mission.org. Today, I'm really excited to have Randy Goldberg on the show, the co-founder and Chief Brand Officer at Bombas. Randy, welcome. Randy: Thank you for having me. Happy to be here. Stephanie: Really excited to have you. Thanks for taking the time. I'd love to dive into your background a little bit before we get into Bombas, a little bit about what brought you into the world of Ecommerce and starting Bombas. Randy: Yeah, I guess, we have a sock company, an Ecommerce sock company. I say this a lot, but I don't think anybody ever really grows up dreaming of being in the sock business. It was kind of a winding path for me to arrive at Bombas and to think about this company. My background is in branding, so I was a copywriter and a strategist, and I worked for digital agencies and I worked for a lot of brands through the years. Writing brand books, trying to find out where they had gone astray, brands that were sort of struggling a little bit. I think through that work, I gained a perspective on what I thought a good company looked like, talked like, acted like. At some point, I moved from the agency side to the media side and I was working at a digital media company, and that's where I met Dave Heath, my co-founder in Bombas, and we sort of cooked up the idea when we were working together way back then in 2011. Stephanie: Cool. Why did you guys think, I want to start a sock company? Did you both want to start this or did one have to pitch to the other? Randy: Yeah. Well, I don't think we thought of it as a pitch. We were friends and we were both very entrepreneurial in our outlook. Our families were entrepreneurs. We just, I think, had that same point of view on the world, and we liked the idea of maybe starting a business one day. We weren't actively writing things on a whiteboard and crossing off a list, but we would just talk about things and the business landscape at the time. It wasn't, we need to get this done this year, we were just having a regular day, and Dave was on Facebook, and he saw a campaign that the Salvation Army had been doing with Hanes. Randy: The Salvation Army, they had a quote in there that said socks are the most requested clothing item in homeless shelters. We were having lunch, and Dave said, "I saw this quote, did you have any idea about socks and homeless shelters?" And I said, "No, and I don't even understand why." We started to call around to some shelters in New York, and we were talking to people and we just realized that there was a real problem here. If you're living on the streets, a fresh pair of socks, foot hygiene means a lot. You might be walking more and have less frequent opportunities to wash your clothing. And then, shelters don't accept used socks for donations. So they were always having a shortage and it was always a big need and people would have to buy new socks and then donate them. Randy: People just tended to donate the things that they had worn or gently used. We really just wanted to help solve the problem. So, we started thinking about that, we started buying socks and donating them. Then, I guess just the way our minds work, we started to think there's probably an opportunity here. We looked at the success that Toms had been having and saw their one-for-one business model, and Warby Parker had just launched at the time and they had a charitably inclined business. We thought, maybe this business model really works for this product. It really maps well to it. Just because this is a product that people really aren't allowed to donate on their own. Randy: Then we started to think about socks and we just got obsessed with socks. We were like, socks just haven't changed in 50 years. Athletic socks look the same. They're cardboard, they're white or they're black. Even if you're somebody who cares tremendously about the things that you wear, where they come from, what you're putting on your body, the last thing you get to generally is socks. We thought there was an opportunity to make something really great, to really improve on a product that people take for granted, and that are afterthought in the consumer market, to help solve a problem that's an afterthought sort of for shelters and organization. Randy: Just like, if we can make something really great, we'll sell a lot, and if we sell a lot, we can donate a lot, and if we donate a lot, we can help solve a problem in the community where we work and live. It's easy to look back and say that, but at the time, it just took a while for us to wrap our head around this and think about it as a business idea. Stephanie: Very cool. I will say that I'm definitely someone who had socks as an afterthought, but I will say when I tried on Bombas, I was like, this is a whole different level of socks. I didn't realize I cared about them at all. I would normally just get black ones and just be like, whatever, as long as they're short, I don't care. Then I tried them on, I'm like, oh, these are game changing. They're amazing. Randy: Thank you. I think that's what we're going for. We want to change the way people think about socks, and make it hard for you to go back once you put on a pair of Bombas. Stephanie: Oh yeah. You can't. In the early days, when you were starting out, how did you think through the economics of developing the one to one program? Randy: The early days for us, that meant making sure that we could, from the start, bake into the unit economics, the donation pair, so that no matter what anyone said along the path, if we were raising money, if we were building the business, that there's nothing anybody could do because we were ironclad around the donation model. We built it into the covenant of the business. We've codified it. It's just something no one could ever really take away, but just focusing on it from the beginning and making sure that we could afford to do it, as a for profit enterprise, was a big early step. We've grown and we've gotten smarter about it and we've built a big network of giving inside of the company. It's all gotten bigger and better, but it really started with that idea. Randy: I think that's the right question. Did you think about it from the beginning? Yes, or else we wouldn't have been able to do it and maybe somewhere along the road, we would have compromised, but it's been a big part of how we've talked about the business and the brand and a big part of the success of the company, and having a great product on the side for the consumer allows us to afford the development costs of the donation product, which is an important thing to make sure we're making a product for people who are experiencing homelessness or living on the street. All of these things have been really thought out from the start. Stephanie: It's amazing. I think I saw that you reached profitability by year three. What does your revenue look like now, annually? Randy: Well, we don't typically share exact revenues like numbers, but it's a multiple hundred million dollar a year company at this point and profitable. Stephanie: Very cool. Yeah, I think that's what I saw, but I wanted it to come from you instead of me saying what I think that I read. Randy: Yeah. You read correctly. Yeah, so profitability, I think you're seeing a lot of direct to consumer companies and Ecommerce companies now really starting to think about profitability in this moment. The way that people are raising money and what companies who are handing out money have been looking for, it's forcing a lot of companies who've raised a lot of money and had profitability as a down the road kind of goal, shift how they're operating and shift how they're thinking. I see that, and I've talked to founders who were dealing with this and it seems really painful. I think for us, it was a goal from the beginning. We wanted to have a really solid conservative financial outlook, get to profitability quickly, build a business for the long-term, for the long haul. Randy: We want our grandkids to be wearing Bombas. That's one of our core values. I think that plays into the way that we built the business from the unit economics and financial side of things as well, and the way that we approach marketing, which obviously as you know, as a direct to consumer company, is the hot topic, of course. Stephanie: Yep. Were there any issues that you ran into along the way? Because scaling to over a hundred million revenue is probably pretty tough. Is there any lessons you learned along the way or things that you're like, ooh, we did this great, or we maybe should have done this a bit different? Randy: I think the number one lesson is about focus. Know what you do really well, know why your company exists, why your product deserves to exist in the world, and then focus on doing that well, focus on telling the same story over and over and over again. Whenever we've been able to really focus on that product on the donation, on the sort of foundational elements of the business, that's when we've done the best, and that's when the company has grown really well. When we've gotten distracted by, hey, let's try this pop-up retail idea, or let's advertise in this new place that is unproven, but seems good for this one specific reason, and it's taken our focus away from the things that we do best, that's where we've had the most trouble. I think that's been the big theme for us in the early years, is just focus has really led to growth, and it's where we've had the most success as a company. Stephanie: Very cool. When thinking about the first conversion or a brand new customer, do you think the social good aspect of the business sells the product initially? Because it's pretty hard to convey how good the socks are on the website. Randy: Yeah, it is. It's hard until you, I guess, you try them on, and we just want to get as many socks on feet as possible. But yeah, there has been a constant debate at Bombas since day one about what comes first and the way we talk about the company. The quality of the product comfort or the mission, our commitment to give back to the community. Some people come for the product and stay for the mission, and some people will come for the mission and stay for the product. I don't think we've solved that debate. We poll our customers and we're surveying people and we're thinking about this a lot, but I think the thing that works the most in marketing for prospects, people who haven't heard about our company, is talking about comfort, is talking about the quality of the product. Randy: The mission definitely helps complete a sale, helps with the follow on sales, and our customers, people who've already made purchases, expect us to close the loop, report back on how we're doing with the donations that we promise we would do on their behalf. That storytelling element helps us with both sides of it. It's just about where we show up with the mission and where we show up with the product marketing, at what time in the life cycle. It's an ongoing debate and we stay nimble around it, but those are still the two elements, and they have been since the beginning that show up the most in our communication. Stephanie: Cool. The other thing I saw that you all had was the happiness guarantee, which I was like, how do they remain profitable? Because one of the things I think I saw in there was, if your kid outgrows a sock in a year, which I have three kids, so I'm like, that could happen quick, or if your dog chews up a sock, which our dog, [Tossy 00:11:14], does that every day, how do you make sure that people aren't abusing those rules? How did you come up with that happiness guarantee? Randy: I think for us, we think about the great companies that we all like to work with, or shop at, or interact with. A common theme is that they have great customer service and they stand by their products. We wanted to make that a hallmark of Bombas. In the early days, Dave would take all of the calls that would come in to our phone number on his cell phone. So we would be out talking about the business or in a bar, back when there were bars. He would get a phone call and go outside, and an hour later, he'd come back and he'd just talk to a customer. I think that idea of just making sure that we're taking care of the people who are spending money with us, that led to the idea of the happiness guarantee. Randy: We have our internal customer service team, they're called the customer happiness team, and we've also, just sort of connecting it back to the business, to get back to your question, people who interact with our customer service team have two times the lifetime value of customers who don't. We're trying to turn issues that people have into positive experiences, and that turns people into bigger longterm customers, because then they trust us, they trust that we take care of them. Sure, there are people who try and abuse the policy, but that's far outweighed by the number of people who are just trying to solve a problem, or get to the bottom of something and want things to be right and don't want to have to jump through a lot of hoops to get there. Randy: For us, the good of having that really strong internal team to deal with our customers and to respond to problems, and yes, to make sure that if your kid outgrows the sock that's expensive or that ... We'll be there to grow along with you. All those things are ... we just want peace of mind as people go through the process and think about, should I be making this purchase right now? Stephanie: That's great. How do you train your customer happiness team? Because I feel like it takes a certain kind of person to be peppy and to, like you said, have a higher lifetime value with the people who interact with that team. What kind of training process do they go through? Randy: It's pretty rigorous. I think Dave passed on the mentality of our customer happiness team to the person who originally ran the program, and he's still running that team. I think, like almost everything at Bombas, when we have something that we want to do and we feel like we've reached the limit of how we can handle it ourselves, we try and bring in people who are way smarter than we are and have the right skillset, and really focused on hiring great people. It also helps that, people who come to work at Bombas, tend to want to give back to the community and are inclined to support and work for a company that cares about that as well. Then, we in turn, care tremendously about our company and the company culture, and all of those things lead us to find, I think, the people who are right for the roles and write for the company and speak to those core values, and that's how it works with the happiness team. Randy: They're trained, not only on what to say in the situations that come up most often, but how to deal with Bombas customers, how to put the extra spin on it. It's about, I guess, just that level of care. Our whole team really appreciates that customer service team, and we make sure that they know how appreciated and important they are as the first line of defense for our customers internally as a team. I think giving them the support and love that they need as the team that has to deal with a lot, and has to clean up mistakes when they happen and make sure that everybody's happy, and then understanding how we want them to communicate with the world as a brand. The way that we talk in an ad versus a video, versus on the phone with the customer, versus internally, none of that should really be different, right? We're trying to be really consistent as a brand. Stephanie: How do you create that consistency? Because I can see as a company grows, and I've seen this happen before, where you start developing silos and the teams are kind of off doing their own thing, maybe trying their own marketing campaigns, and it starts getting a little bit chaotic. How have you kept a consistent culture and feel at Bombas? Randy: Yeah. We're not immune to some of the issues that you just brought up. But just recognizing it, being honest about it, trying to get ahead of those things, and focusing on that core messaging and communicating well internally. We're also at the stage where we're really thinking about planning and processes as a company as we've grown to 150 employees and being remote, how we interact and how we work cross departmentally. Those types of things are at the front of mind right now. We're hearing it from our team, we listen to ideas, we bring in people to help us. I think we're laser focused on making sure that some of those breakdowns and that siloed work doesn't get the best of us. We have seen that and we're working on it. Randy: I think any company that starts off operating like that, when you have five or 10 people, that would be overbearing, and I don't think the type of people who end up coming to a company that small would appreciate that, but as you grow, you have to adjust and you have to get ahead of it so that people keep that same feeling of freedom in terms of thought, in terms of how they can innovate in their work and get things done, and expectations around their jobs, all that stuff becomes really important to be more documented, to have tighter processes so that people feel freer to do the things that they love to do. That's what we're trying to work on, but it's not an easy thing. Stephanie: Yeah. It's definitely a tough juggle. If someone were to join and they're employee number five, and then all of a sudden, there's 150 employees, it's like, okay, well, I used to be able to do everything at the company, and now you want me to shrink my role. A tough thing to work through with employees. Randy: Yeah. It's a challenge. You want to retain the people who made Bombas, Bombas, but you also want to make sure that people are growing in the right way, and there are opportunities, and the new people who come in at certain levels understand what they're supposed to do and what everybody else is supposed to do. You just start to get into these things that maybe you thought you would never have to deal with if you started a company, but as it grows, this is what it looks like. Stephanie: Yup. Were there any resources that you leveraged along the way when you were growing quickly, when you were like, I need to learn this or I need to figure this out, or companies that you were watching to learn from? Randy: Yeah. I think that's been our mindset since the beginning. Just from our early advisory board, just to fill in the gaps, to hires that we've made, the things that we tend to lean on are people. Dave and I are like, we don't know the first thing about performance marketing, when we started this business. We need to bring in somebody who's an expert in that, or at least, have somebody on our advisory board who can help answer questions for us as we grow that until we have that right person, or to help us find the right person. That's been a big part of how we've grown this business, is leaning on our network to reach out to people, to ask questions, to make good hires, and then watching other D2C companies and having a good dialogue with the other D2C companies who have grown to our size and larger. That's been really helpful as well. Randy: Then you also think about companies like Toms. They've been really helpful to us, in terms of watching out for certain mistakes that they've made along the way with their donation aspects of their business. They've been really open with us about those things and helping us avoid them. We try and do the same with other companies who reach out and want advice from us as well. Stephanie: Very cool. How did you think about building out the website? What kind of things did you want to have on there to make sure that you kept with the brand story, but also, sold enough to be able to be profitable to keep the model working? Randy: It's a great question. The idea of what a website looks like when it's your only store is so important. You want to have that right blend of storytelling, but you want people to be able to breeze through the checkout process the right way. That's been a journey for us. I don't think it's anywhere near where we want it to be, but I would think that you would ask any direct to consumer company and they have a lot they want to do, and their technology roadmap is pretty long, and that's part of it. You're always building, you're always tweaking, you're always improving. You're looking at the data and you're making changes to just make it better. Randy: In the beginning, at some point we have to replatform. But just the processes along the way to get us from where we started to where we are now, to where we're heading, it takes a lot of care and attention. Like I said, when it's your only store, I think it's your job and your duty to make sure that it works and operates really well. Stephanie: Yeah, I completely agree. How did you know it was time to replatform and what was that experience like? Randy: I knew it was time when we just had so many issues with managing traffic or the backend or uploading content. It was wrong. We launched the business and the website in 2013. Since 2013, there've been a lot of changes in technology and the way that Ecommerce works and looks. If you went back to a site from 2013, as a 2020 consumer, you wouldn't last a minute. You'd be out. Stephanie: You'd bounce right away. Randy: You'd bounce. There was a lot more tolerance then, but less people using Ecommerce because the experience just wasn't great. I think, if you go back even further, and I think about this a lot, if you were starting a direct to consumer company in 2009 and you didn't have a lot of money that you would raise, building the website itself would have been prohibitively expensive for most brands, for most companies. But if you managed to get it up, the marketing was basically free. There was no algorithm that was holding your content back. If you had a Facebook page, whatever you posted, everyone who followed you with anyone who shared it, and anyone who got added to your page, not some of these early companies, resources to build a site were able to build huge businesses. Randy: But then, as it shifted, now, if you want to launch a direct to consumer company, the technology is basically free, getting that website up, but the marketing is prohibitively expensive. It's totally flipped. We just happened to launch, I think, in a sweet spot where the technology had gotten more affordable and the marketing was still affordable, but it was not free like it had been in 2009, and it wasn't very hard or challenging environment like it is now. We sort of had time to figure out both pieces, and we had runway to figure out the marketing and we could afford the technology. Then that got a lot better, and just have to stay on top of and ahead of all those things. Stephanie: That makes sense. To focus on the website piece first, and then we can jump into the marketing aspect, so the website, was there any like big fundamental changes that you made where you're like, this made the biggest difference when it came to sales and conversions and even getting traffic in the first place? Anything that you remember that you change where you're like this had the biggest improvement for us or a couple of things? Randy: Site speed, I think is the number one thing. As a person who comes from the creative side of the business, a copywriter or strategist, there's nothing that I could do from my previous job or as a brand person that would make the improvement of one second of site speed in terms of how something loads or how it acts. Just sort of getting over some of the sort of shiny objects into saying, oh, if we change the copy here, or what if we put this video here, or had this type of look on our site? If you make your site faster, it will convert better. Things like that, just understanding the fundamental way things move and what people want from you, layering the other stuff on top then becomes just sauce and becomes fun. Then you can start to have incremental changes and things that work. But I think, just looking at site speed, if you want one good thing, that's where I would start, as dry as that might be. Stephanie: Yeah. No, that's a great one. Was there anything affecting the site speed that you were surprised by? Randy: I think the way that you manage and load images, obviously has a big effect on that. Your product architecture and understanding Randy: I think some of these things you don't realize when you're starting out, but the way things are organized, hosted, served, there's sort of best in class ways of doing that now. But if you want to have your variants of your products perform a certain way, or if you want to create bundles in a different way than most companies do it, then all of a sudden, you're creating ... you could be creating extra things that are weighing your site down, even though you think ... it helps you organize the things that you want to sell the way that you see them in your mind. It doesn't always benefit you because maybe you're slowing things down. If people are bouncing before they're even seeing it, then what's the point? Again, this isn't my area of expertise, but these are the things that you learn along the road when you're doing everything in a business when there's five people. Stephanie: Yeah, I think that backend infrastructure piece is hard to focus on in the beginning because you're so excited about the product and the marketing, and like you said, getting good copywriting and telling your friends that you don't really think about how to set up, maybe the data and the backend piece to actually create a good performing website. Randy: Totally. Listen, like I said, my background was in branding. I was a copywriter. I think we built this business around the brand because it's, in many ways, a commodity that you turn into a brand. You do that by being really consistent and having good storytelling and build a moat through brand. But none of that exists if you don't get the infrastructure piece right, and you can't get to that. I talked to founders who were starting companies, and they're so focused on hiring the right creative agency or branding agency, they'll put together the right logo, and it's just not the right place to start in my mind, even though I love that work and I love thinking about that for companies and thinking about how you communicate to the world and understanding why your product exists, but without that fundamental infrastructure piece, no one's going to care about that other piece. It's just maybe a little bit of a sad truth for creative side of business people. Stephanie: That's okay. Got to hear it sometimes. Randy: That's right. Stephanie: One thing I saw that you guys were doing was that you were investing in a data science team and embedding more data elements into the customer journey. Can you tell me a little bit more about that and how you knew it was the right time to bring on a team like that? Randy: How will you know it's the right time is that when you start to ask questions that you can't answer, and nobody internally can answer it. That's the truth, and when one person ... Randy: You also know when you're having a debate about something in the business and somebody is able to pull out data or a statistic related to what you're talking about, and the conversation ends because it's hard to argue with the data. When you see that and you've thought about it the other way, and you're not trying ... You can't convince data, right? I know [crosstalk] manipulated. Stephanie: There's no argument there. Randy: That's right. Then you sort of think, this is really valuable, and rather than trying to think about something from the perspective of, I think it should work this way, you want something to show you how it should work, and you want to be able to interpret data the right way and be able to use it to your advantage to build out a strategy, rather than just making assumptions and going off of somebody who has the most experience or who has the most seniority. I think companies get in trouble when they just rely on the loudest voice in the room or somebody who's the most persuasive at arguing rather than bring data as a voice into the room for decision making. Randy: I think it started to creep in when we would understand a little bit what we don't know, and then have debates that were a little bit out of our depth and we didn't have the right people. We didn't really have that skill in the beginning. We knew that it would be a big part of this business, even back in 2013. We just knew that it wasn't the first thing we were going to invest in. It just sort of came naturally to the time. We were always excited about the idea of what a data science team could bring to the table for a sock company. There was a point where you almost can't operate without it anymore. Stephanie: Yeah. That's awesome. What does it look like now having that team, and what kind of metrics are you guys paying most attention to? Randy: A lot of the metrics are the same. You'll see a lot of Ecommerce companies paying attention to, but what the team looks like, and what's interesting is, now that we have the team in place, getting other teams to work with that team the right way is the key, and getting our directors and decision makers accustom to partnering with the data team, to help surface solutions to problems and present them and work, it goes back to some of the work that we're doing, trying to figure out the processes and cross departmental work and to avoid some of the siloed behavior that you brought up earlier. A big part of that is the data team and how they can help support. There's support teams within an organization, there's execution teams, and that's very much a support team, and they love answering questions for teams, and some teams use the data and analytics team more than others. Randy: We just try and be really loud about it at our all hands meetings and present back case studies so that people understand how they could better use that team. It's a process and something that was getting better all the time, but you just sort of have to make it central to how you operate as a company. That doesn't happen overnight. It's a big change. We've been working on that for the last six months to a year in a major way. I think it's really paying off for us. Stephanie: Very cool. Yeah, I definitely have seen business intelligence teams in the past struggle with being able to create a partnership with the product team or the engineers. I like the idea of showing a case study. So instead of pushing it on a team member, it's like, well, here's what another team did. Look how great this turned out, and encourage them to want to partner with that team even more. Randy: Yeah. You're making decisions, how many times a year should we ... We're not a promotional company. But if you wanted to ask a question, like how often should we do a sale? There's logical times of the year when you think that should happen, and the merchandising team might have a different perspective than the marketing team, and using the data team to think about the effect on customers or prospects. There's so much information that could help steer a decision like that, that is major to the business. Those are the types of things where you start to see a lot of power in the team like that. Stephanie: Yeah. We're talking about data. I want to also shift into the aspect of transparency. I read that you and your co-founder both had subpar experiences with transparency at previous companies you were at. I wanted to hear, how do you think about being ... Well, first tell me the story. I want to know all the nitty gritty details, and also how did that influence your culture now? Randy: Sure. I don't know, the cliff notes is that was a major influence on our culture now, but we had the experience together. Like I mentioned, we worked together at a previous company, and at that company, the person who ran the company brought amazing people together, and there was a great team, and the work was fulfilling and we learned a lot, but it was really hard to have conversations around career growth or compensation, or how well is the company doing? Or data. One person tended to hold on to decisions for so long that it was counterproductive and it was demotivating for people. You felt nervous to even ask a question, and nobody understood their stock options. You would ask questions about it and you'd get them response months later. Randy: That sort of fogginess around the things that people really care about when they're going to work at a smaller company, it was really hard for us. We knew no matter what company we started together, building a culture of transparency, where people really understood the why behind the business, the core values, the financial performance, what their ownership meant, and a culture of being able to ask questions, that was hallmark from the beginning. We just wanted to create the company that we would have loved to have worked at and centering our employees in the business, and thinking about them just as much as we do our bottom line. Our theory was that it would make the bottom line better. People would be more inclined to give something beyond their capacity or to continue to learn or to grow if they felt safe and supported at the company. Stephanie: Cool. Yeah, that definitely is a good way to build a company from the ground up, and maybe not fun to have that experience, but hey, you learn from the best people you work for and the worst people you work for. Randy: Absolutely. I wouldn't trade that experience because that's what led to the culture that we've built at Bombas. I think, if you talk to our employees and the way they think about it, we're maybe more proud of that than anything else that we built in this company. Did I give you enough nitty gritty details? Is that good enough? Stephanie: Yeah, I was hoping for a little more drama, but I'll take it. That was good. Randy: There was plenty of drama. We can talk about that offline. Yeah. Stephanie: That sounds good. Earlier, I mentioned, I also wanted to hit on your marketing a little bit. What kind of channels do you focus on? What are you seeing success in right now in any new channels that you're excited about? Randy: Yeah, for us, listen, we're a direct to consumer company that started in 2013. Can you guess what our number one marketing channel is? Stephanie: Facebook? Randy: Bingo. Right. Okay. I think we still see a lot of success there, and while it might've been a way larger percentage of our marketing mix in the early days, and we've diversified away from that a fair amount, it's still an important driver for us. In the beginning, in the early days, we would create a video that we didn't even intend to be an ad, just a thank you to our customers, and then eventually it gets turned into an ad on Facebook that's seen a hundred million times. Leaning into the trends and trying to see around the corner at Facebook. now working closely with that team. has really helped grow our business. Randy: One of the things that we have had since the beginning is ROI positive or breakeven on first purchase. We're not over our skis on Facebook spend, while lot of companies are to just to try and build up their customer base. For us, it was important to really be disciplined. We knew that if we were going to grow our budget and grow our company, and we were a really marketing led company, we'd have to diversify away. So, Hello Podcasts, radio, direct mail, TV. Those are all big parts of the business now, and they're all growing probably at a faster rate as a percentage at least of the business than our online ads on Facebook. But search has grown for us tremendously in the last year and a half as our brand has grown and recognition has grown. Randy: Some of that comes from broader marketing, like on TV, and then people are searching Bombas by name, and we can lean into search advertising and that works better. Some of these things are just about timing. Yeah, we still have a tremendous success sort of trialing things out online. We've never used a creative agency. Everything is internal at Bombas, so all of our creative direction and the marketing team and the partnership between the creative team and the brand teams and the marketing team operates as an internal agency. We like places where we can test things, test creative, test lines, test different cuts of videos, see what works, preview it, and then build it out into bigger campaigns that could work across all those different places that we talked about earlier that I mentioned. Randy: I don't know, that's sort of more of an overview than what's working now. But if I think about the last few months, when everyone's at home with COVID, people who were still able to afford to be buying things right now online are looking for comfort, and socks have done well in this moment. On the other side of things, we talk a lot about our efforts in the community and how we've adopted and been able to help out in this moment above and beyond how we normally do. That's also something that people want to hear about. For us, it's the combination of the product and the storytelling and the marketing mix, and making sure that we're nimble enough in all three of those places to make adjustments as we build and grow. Stephanie: That's awesome. Do you find that you have a community also, because it seems like with your story and your brand, you would have this community of people who want to lift you up and talk about you and spread the word organically without you really having to push too hard? Randy: Yeah, absolutely. Community is a big word at Bombas. Something that has been since the beginning. I think about the community of giving partners that we have. In the beginning, when we wanted to donate the socks, you buy a pair and we donate a pair on your behalf. We didn't know how to do that. We started with one giving partner that would accept socks from us, and we learned a lot from them. Then we built a specific sock that we donate, that's more tailored to the needs of the homeless community. Since then, now we have 3,500 giving partners across all 50 States. These are the people who are working really hard on the front lines helping out that community and doing what they can to serve their communities, and our job is to support them. Randy: That is a big community. We get a lot of feedback from them. Then you have our customers who really care tremendously about the product and the donation aspect of it, and they're telling our story on their behalf. You mentioned earlier about one of the keys, I think for us is consistency. The more you're telling the same story in different nuanced ways, the easier you make it for other people to tell your story on your behalf, and that word of mouth marketing, or letting people explain to somebody else when they're having dinner that, hey, they just got these socks and they're really excited about them. Randy: They donate for every pair they sell, and they also just happen to change the way they feel about putting on a pair of socks in the morning, and they feel more supported and comfortable in their daily life. That's a pretty amazing thing that you can get somebody talking about socks at dinner. I think all of this stuff is related, making sure the messaging is tight, keeping that internal, having a marketing team that's nimble and always trying new to new and different areas, and then having that product that's really high quality to support all of that, to give you the confidence to go out and sell something. Stephanie: That's great. How do you keep things organized? Because I'm thinking about, you have all these community organizations that you're mentioning to do the one to one program, then you've got your own product that you need to focus on. How do you make sure that you're spending the right amount of time with each area? Randy: You don't want to be playing whack-a-mole, I guess. You want to be seeing ahead of things a little bit. There's a certain element of making sure ... You start to see when some friction comes into a certain side of the business and you need to spend a little bit more effort getting your go-to-market process ironed out, or on the technology side, if we don't install an ERP process in the next X amount of time, we could see a lot of trouble. I think that starts with a leadership team that communicates really effectively, often open, and is really humble, and then syncing up on our company roadmap, and making sure that when something does seem like it needs a little bit more attention, that people spend their time on it. Randy: That's the idea. I guess some of that is also thinking about, and talking to companies that are a year or two ahead of us, and have been through some of these sort of growing pains at the same times, and looking for the pitfalls that they went through and trying to get ahead of it rather than to have to be reactionary. Stephanie: The D2C community, it seems like they're very helpful with each other, and you just mentioned, looking to someone who's maybe two to three years ahead of you, how have you utilized that community and leaned into it to get advice or build friendships or mentorship? Randy: Yeah, it's a great community. For us, we're a pretty open group. We talked about transparency and communication as pillars of Bombas from the beginning. We want to help out other companies who are coming up behind us, and then we've looked to other direct to consumer companies, and other, generally, just good companies to try and help us out. You ask the question and you find that people are generally willing to say like, yeah, this is how we did this, or connect with this person on our team. They know that at some point they'll have a question for you. We've always been just asking questions outside of the organization. It's the same approach with hiring. We want to bring in people who are smarter than we are. Randy: We want to ask the questions to the companies who are ahead of us. You don't get the answer if you don't ask the question. It's just an important thing, and I'm not sure why this group of companies especially is more open or collaborative, seeming than other groups that you've been in, but maybe it's this generation of founders and the way that we grew up and the interest in community, and the expectation from customers that our company just can't look the way it used to look or act the way it used to act, and it has to have more of a purpose. Maybe that just drives us all to be a little bit more open and a little bit more flexible and a little bit less guarded about some of the things that we're doing. Stephanie: Yeah, I agree. It also just seems like there's so many opportunities. It's not like you're going to be talking to someone who's doing exactly what you're doing. There's just so many opportunities and so many things to start and try that I'm sure that also helps with people wanting to share and show how they did things. Randy: Yeah. I don't really feel competitive with anyone in that space. In some ways, those companies, you could see them as more of our competition than another sock company, because we're competing for the attention of people online. It doesn't matter what you're selling. If somebody else is taking away time that somebody might spend thinking about Bombas, then I guess that's competition, but approaching it, from a lens of collaboration and like, if they can help us know we can help somebody else, it's just the way we've done it. I'm not sure it's right, or it does feel like it's helped us. It is nice to feel like there is a community around this. I like to think about these companies, I like the community of the businesses. Randy: I'd rather be lumped in with these companies, as a community of people that can help each other with the business side of things, than on the brand side of things. I'm wary of being one of the direct to consumer brands out there, because I don't feel like that set of companies always looks the best or the type of press that is out there is always positive. For me, it's just about the people running it and the people at these companies, and making sure that people in our teams are connecting to people who've done something that they maybe don't know how to do perfectly. Stephanie: All right. Before we jump into a few higher level Ecommerce themes, I wanted to hear what is the best day in the office look like for you? Randy: Oh, the office. Stephanie: How do you walk home when you're like snapped in and you're like, that was a good day. Randy: Remind me of what an office is. Stephanie: Okay. What's the best day from your bedroom look like? Randy: Well, okay. It is interesting to think about at home versus at the office. The office is a big part of who we were as a company and getting everybody together and that spirit of community that comes into it, and being able to sit down with someone face to face. We do miss that. Although the teams are really productive and risen to the challenge of working remotely. The best day feels like when something goes well beyond what you expected and teams are celebrating each other and recognizing each other. Also, when we have a speaker from one of our giving partners to give us perspective on what's happening in our work life and why maybe it's not the most important thing in our life and in our world. Randy: When all of those things are kind of clicking together, I think people remember why they work at this company, what's truly important, how they can impact it, and then the collaboration and the spirit that comes along with it. Those are the best days for me, when you're reminded of what's important and how that impacts the company. Stephanie: I think it's good to document those days too. I really like, there's a coffee shop, Philz, right up the street, and they have all these pictures of their employees and just having fun and team meetings they have. It's on the way when you're headed to the bathroom, but it's really fun. I would think as an employee, but also as a customer to see and remember like what it felt like that day and how excited this person looks when they're receiving this award. Because it seems like it could be easy to forget when something's moving so quick. Randy: Totally. I love that idea. I also think about the times when we all got to volunteer together. Now we tend to volunteer in smaller groups which is obviously still great. We have sign up sheets for all of our volunteer opportunities and you have to pounce on them to get the spots that you want. I think that speaks a lot about the culture of the company, but some of the photos you look back on from those moments, or those days when the team feels really connected, those are really exciting days. Stephanie: Yep. All right. A higher level Ecommerce question. What do you think the future of online shopping looks like, like in 2025? Randy: Ah, like when we're all driving around in flying cars, what does Ecommerce look like? Stephanie: Yup. I'm on Mars. Where are you? Randy: I might be on Mars too. Do you want to have a rival colony? I'm down or maybe we have a collaborative colony. Stephanie: Okay. Oh, I'm down. Maybe, we'll see. Randy: We'll see. Okay. All right. We'll see. We'll figure it out then. Stephanie: It depends if you accept my LinkedIn request, I guess, then I'll know. I'll be like, is it any cooler now? Randy: Wait, that's how we judge if you're cool, is if you accept our LinkedIn request? Stephanie: I just made it up, but we'll see. I might have higher criteria afterwards. Randy: Okay. All right. We'll put a pin in that. I don't know what the future of Ecommerce looks like, I got to tell you, I know the percentage of people who get comfortable shopping online, that's only going to go up. I know that companies are going to invent new ways to make it easier for people to buy their product, to review their product, to look at it. I think ease is the name of the game. In a world that's going to be more and more competitive, the way to stand out is going to change. All I know is it's not going to look like it looks right now, and having the attitude that, even if you're doing something right, that the way to succeed in a few years, it's going to be a different version of right, then you'll be okay. Stephanie: Yep. I love that. All right. Before I move into the lightning round, anything that you wanted to share that we missed, where you're like, I really wish you asked this, Stephanie, and you just didn't? Randy: No, like I said, I'm here for you guys. You want to talk about Mars and infrastructure, then great. Whatever you want to talk about. Stephanie: Mars and the moon, that'll be the next podcast. Anyone who wants to sponsor it, hit us up. I don't know what we're going to talk about, but we're going to need help to figure it out. All right. Lightning round brought to you by Salesforce Commerce Cloud. This is where I ask you a question and you have a minute or less to answer, Randy. Are you ready? Randy: I'm ready. Stephanie: All right. What's up next on your reading list? Randy: Can we just start that over? Sorry. Stephanie: Yep. What's next on your reading list? Randy: Up next on my reading list is the Mike Nichols book. I'm not sure what it's called, but I'm excited to read it. Stephanie: What's it about? Randy: Its about the director, Mike Nichols, and his life. Stephanie: Cool. We'll have our producer, Hillary, will find the link to that and everyone can go explore it there. Randy: I don't tend to read business books. I know that they could be helpful, but I'm more interested in people, humanity, fiction, novels. Stephanie: Yep. Cool. Any podcasts you listen to? Randy: Yeah. There's a great podcast I listened to about words called The Allusionist, Allusionist with an A. Love that podcast. I have a whole list, but let's just do one. Stephanie: Yeah. We'll check that out. Any hobbies that you're really getting into these days? Randy: Hobbies that I'm really getting into. I really like this sport called paddle tennis. It's not pickleball, it's not ping pong. It's called paddle tennis. If you look it up, it's like a fast version of tennis. You play with a paddle and a tennis ball, but you poke a hole in it. There's like a really small, but passionate community around the sport. It's really fun. Stephanie: Do you play on a tennis court? Randy: You play on a small tennis court. It's basically the service boxes and two-ish foot baseline, and a net. You serve under hand, and you can't serve [inaudible 00:52:55], and you poke a hole on the tennis ball so it doesn't fly everywhere, but it still bounces. It acts and feels like tennis, but like a faster version. It's really cool. You can play in New York. There's courts in New York in StuyTown and Peter Cooper Village, and there's courts in Venice Beach in California. Those are kind of the two centers in the US. It's not a very big popular sport. Stephanie: We will have to bring it up to Palo Alto. I will be the one do that. That would be my initiative over the next year. Randy: Do it. Stephanie: All right. If you were to have a podcast, what would it be about, and who would your first guest be? Randy: Oh man. If I was going to have a podcast, wow, I don't know. Do we need another podcast? Do we need a podcast from me? Stephanie: Yes, we do. Randy: Maybe it would just be rants. Just do like a short rant every week. I don't know. Stephanie: I like that. Hey, that seem to do well sometimes. Stephanie: That's okay. All right, this one's slightly harder so you might have to think. What one thing will have the biggest impact on Ecommerce in the next year? Randy: I think the thing that will have the biggest impact on Ecommerce in the next year is the timing on reopening the economy and stores and retail. If people can't go to stores or don't feel comfortable going to stores, they're going to, inevitably, accelerate their comfort level with shopping online. We already see that happening. I think it's just going to push that trend line even further forward. I'm for one, excited about it. I think the biggest, biggest test for this will be this Q4 and the holiday season, and to see what percentage of shoppers are shopping on Ecommerce and what they're demanding of Ecommerce retailers that they weren't a year ago when the percentages were smaller. Stephanie: Yeah, I completely agree. Great answer. Randy, it's been a blast having you on the show. Where can people find out about you and Bombas? Randy: You can find out about Bombas at bombas.com, and everywhere else you would expect, B-O-M-B-A-S. That's it. Thank you for listening and thanks for having me. Stephanie: Yeah. Thanks so much. It's been fun. See you next time. Randy: All right. See you next time.
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.
In this week's episode, Stephanie receives an email from a woman looking for a mediumship reading to connect her fiancé to his late father as a surprise birthday gift. Stephanie tries to suggest she try a more experienced Medium, but they decide to give it a shot. Tune in to hear the beautiful message that was delivered and the connection made with the father. Interested in booking a Distance Reiki or Akashic Record Reading Session with Stephanie? You can book an appointment here: https://www.themediuminthemiddle.com/ Follow along the journey with Medium in the Middle, on Facebook https://www.facebook.com/mediuminthemiddle/ and on Instagram! https://www.instagram.com/mediuminthemiddle/ *** Stay tuned for more information on Distance Reiki Training Level 1 being offered online! ***
You never know when inspiration will strike. For Jordan Nathan, the idea for his company came after an unfortunate incident. Jordan got Teflon poisoning after burning one of his pans while cooking. After researching the dangers of Teflon, which is one of the most prevalent materials in all of cookware, Jordan knew there was a chance to carve a niche for himself in the market with a non-toxic and eco-friendly product. Thus, Caraway Home was born and it launched with a waiting list of more than 150,000 customers. Jordan has been building on that initial buzz by focusing on his Ecommerce platform and selling a vision of a company that can go far beyond just non-toxic pots and pans. On this episode of Up Next in Commerce, Jordan explains how he builds a pipeline to drive customer reviews, which he uses to organically grow the business. Plus, he reveals the growth strategy for Caraway Home and why he believes that if you want to truly take on the big brands in an industry, you need to use an omnichannel approach to take market share and shelf space away from them in all areas. 3 Takeaways: Reviews are key to showing the value of a product when you are selling online. Building and maintaining a review pipeline is critical and means following up and offering products to everyone from influencers, to editors to ordinary people Taking a data-driven approach to product development allows you to lean into introducing products that have a strong chance of flourishing online In order to achieve true saturation of the market, you need to have an omnichannel approach. It’s smart to build up your Ecommerce platform and product offerings at the start, but to compete with the bigger brands, you need to eventually replace them on the shelves of brick and mortar stores 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 everyone to Up Next in Commerce. This is your host, Stephanie Postles from Mission.org, and today, we have Jordan Nathan on the show, the founder and CEO at Caraway Home. Jordan, thanks for coming on. Jordan: Yeah, thanks for having me. Stephanie: I feel like we have to start with the story of you poisoning yourself which brought you to your company. Can you please tell me about that because I read that in the notes and I'm like, I didn't know you could poison yourself from pans, like pots and pans, so I wanted to start the episode that way if that's okay. A great way to start, on a high note. Jordan: Definitely. Yeah, back in, I think it was late 2017, I was cooking just like any other night and unfortunately left a fry pan on my burner for about 45 minutes. I think I ended up getting a call right when I was starting to cook and forgot the pan was there. Call ended, ended up feeling kind of nauseous and light headed and the apartment was feeling super fumy and soon realized that I had forgot the fry pan on the burner. Yeah, ended up getting sick. I was nervous based on having inhaled a bunch of fumes, live in a really small couple hundred square feet apartment in New York City and ended up calling poison control. They basically had told me that I was likely exposed to Teflon poisoning which occurs either from overheating a fry pan with Teflon in it or scratching it and it getting into your food, and really just was really surprised that something that I was cooking off of and touching my food could potentially get you sick. Also, further research showed that there were definitely some longer-term consequences that have been proven through a number of studies related to Teflon and felt there was a big opportunity to build a brand in the kitchen space around launching non-toxic products and eco-friendly products in the category. Stephanie: That is a very good reason to launch non-toxic products. Before deciding that you wanted to start Caraway Home and build non-toxic pots and pans and things like that, let's hear a little bit about your background and what brought you to moving to the world of Ecommerce. Jordan: Sure. Well, grew up in New Jersey, went to school at Colby College, up in Maine. Studied consumer psychology there. I tried launching my first startup out of school, which was a Ecommerce marketplace built for direct to consumer brands. This was back in 2015. Really got it as far as I could, but unfortunately, really struggled with that fundraising process and coming right out of school, didn't have much experience, but it was really a great kind of launchpad to testing and learning and trying to do my own thing. Jordan: I then joined a company in New York in early 2016 called Mohawk Group. They're a consumer product holding company owning about four brands and I joined them to lead Vremi, which was their kitchen brand and ended up basically working there for about two and a half years. Launched close to 200 different kitchen products. The brand itself was really focused on a post-college consumer. Average price point was $10 to $20, so definitely someone looking for something that was lower cost, colorful, and was my kind of first really great experience at obviously working in the kitchen category launching a number of products and really fortunate to have done more or less the exact same thing prior to Caraway. Stephanie: That's awesome. What were some of the lessons you learned, especially at Vremi when you were launching all of these products that you brought into Caraway? Jordan: Yeah, I think biggest lesson was don't launch 200 products in 18 months. Stephanie: Sounds intense, but why? Why not? Jordan: Yeah. Well, it's definitely a lot of fun and learned about a lot of different materials and categories, but definitely caused a lot of issues with inventory forecasting and quality. I think through that experience really got to see the power of selling through digital mediums. At Vremi, we really did focus on Amazon, which is quite different than what we're doing at Caraway, but a lot of the same kind of growth principles that carry over that we now implement at Caraway. It's really a good opportunity to leverage data, use that to inform product decisions and the beauty of online, obviously, is the ability to test. Really taking a lot of those same principles into what we're building at Caraway. Stephanie: That's great. Were you any bit nervous when you were moving from a large company that had resources and infrastructure and more funding and all that, to then start your own company where you had to do everything on your own? Jordan: Definitely. I think when you take that first leap, it's super scary and you leave a comfortable job. You end up initially pitching investors and getting rejected a lot, you're not getting paid anything, and really, you are the only person in the world who actually believes in what you're building. It's definitely scary, but I had enough conviction in Caraway and having sold all these products before and had experience, felt really there was no better person to go do this. The supply chain and the manufacturing were really easy for me just because I had done a lot of this. It was more of the fundraising that was kind of a challenging and new process for me. Stephanie: You had some recent success around fundraising. Right? Jordan: Yes, that's correct. Stephanie: It was a seed round? Jordan: Yes. We just closed and announced a $5.3 million seed round. Stephanie: That is awesome. How did that feel closing that when I think earlier on you said it was a bit of struggle trying to attract the investors. How did you find the right investors and get them to believe in your vision? Jordan: Yeah. Well, we're really excited. It's a big step in our journey and I think validation for what we're building. We took a little bit of a different route than most brands and I think something that's maybe becoming a little bit more common in consumer, but we raised from over a hundred investors in the round, a lot of founders and execs a number of funds and a lot of consumer-focused investors and really took the approach to building a large network, which we felt would be much more valuable in the long-term. As you can imagine, getting a hundred investors means I probably pitched a thousand investors and it took a long time, but I think in the long run it will net out much better because we're more or less one introduction away from any company, given the large pool of investors we have. Stephanie: Were some of the key differentiators that either excited the investors or that they saw about your company? Jordan: I think there have been a lot of news and some companies out there over the past number of years who've really focused on growth at all costs and really prioritizing top-line growth and thinking about things like profitability at a much later stage. Coming out of my prior experience, I had a really great grasp on economics and how to manage cashflow. I think since day one, our pitch has always been really growing a sustainable business in a category that's super-exciting and stale and hasn't seen much innovation. As a brand, we call ourselves Caraway Home for a reason in that cookware is our hero product, it's where we've launched and felt there was the biggest opportunity, but we really see taking those same product principles and applying it across the whole home. I think what's really exciting, that investors have really been attracted to is basically the breadth of how big the home is and how many products there are within the general category. Really, an opportunity to build a lot of products and a pretty large brand across a variety of categories. Stephanie: Got it. Yeah, that's great. When it comes to organic and non-toxic cookware and things like that, how do you convey those type of unique differences on your website because when I was looking at it, it's like, I wouldn't automatically maybe know that Teflon can poison you. I mean, I kind of have heard it before, but it's not something I think about every day, maybe when I grab out my pans. Especially if I'm on a Ecommerce site where I'm looking and shopping, how do you show people this is why we're better than all the other brands out there? Jordan: Yeah. I think for us, storytelling's a really big piece of DNA. Most places where people are coming to from the site, whether it's press or a Facebook ad or Google, we do our best to tell that non-toxic story through those mediums, so they're coming into the site with an idea. We're not here to use any scare tactics; we're here to educate consumers. We try not to push it too hard on our site. We've got sections on materials that you can go deeper, we have a lot of blog posts, so we really provide those educational resources in case you're interested to read more and educate yourself on the subject, but the site's really meant to emphasize all the points of differentiation, whether it's design or color or the storage components that come with our sets. We really want people to get the full picture there, but in those kind of advertising mediums and press, the nontoxic is really who we are and what we stand for. Hopefully, before coming to the site, you get some type of idea of that product feature. Stephanie: Got it. The one thing that I liked when I was browsing through your site was it had this very risk-free feeling to it because it has that free returns and 30-day trial and it had a ton of reviews. I mean, all over the page and it had a whole tab, like a tab for just reviews. Was this something you did from the start or is this a more recent implementation? Jordan: Reviews have been a really big piece of the brand since we first launched and this was a big learning from my prior experience, especially on Amazon, which is so driven by reviews. It's one thing to just show a product on a website, but you can't touch and feel it and reviews are really the only way to create validation for the quality. Really, since day one, we've been focused on our review funnels, we also want to get feedback to improve our products. Yeah, we continue to improve that pipeline, but we're excited to really continue building that out. As a brand, again, with no brick and mortar presence at the moment, it's really the best place customers can go, especially for a brand that's six, seven months old and they've never heard it before. Stephanie: Mm-hmm (affirmative). How did you go about getting those reviews because that, to me, seems like one of the hardest things to do, especially with a new product or podcast? For anyone that hasn't reviewed this podcast yet, please help us and share the word and review it. How did you go about getting those reviews because some of the places that you were getting them from where pretty big media brands? What was the strategy there to bring people in to actually review the product? Jordan: Yeah. I mean, on the site, we've run post-purchase email funnels, SMS funnels, we hit each customer with it a number of times to get their feedback and then, when it comes to press, we did a lot of gifting at the early stages and really tried to create a culture amongst editors of getting the products into their homes and actually using them at home. Not really pushing them to write stories on us, but getting them to experience the product and if they love it, have them come back and write their honest opinion. Stephanie: Mm-hmm (affirmative). That's great, yeah. I think if you get something in someone's house, even if they didn't originally maybe even ask for it, you kind of feel obligated to give a review. I know on Amazon, I left a two-star review on something for a baby product, and they sent me a new and different product just saying like, "Hey, we're sorry that the first product didn't work out, but if you could please reconsider your review because here's three new things we're sending you to try out." Even though I didn't ask for it, and I didn't expect it, I kind of felt obligated to get on there and test out the product and re-review it if I did end up liking it. I think that's good to get it in their house to get people to start thinking about it. Jordan: Definitely. We see the same things with influencers as well. We want to be working with people who organically love the brand and product. We're very confident in the product that we've created and the quality. We've seen just a lot of success of once we can get it into people's hands and they cook with it a few times, it's really a great bridge to starting a bigger partnership conversation. Stephanie: Yeah, that's great. The one thing that I saw that was interesting was, it was on a blog post where you mentioned that when you were launching, you had a wait list of I think it said 150,000 people who joined pre-launch to get the product when it was ready to go. Is that the right number and, if so, how did you garner that excitement for people to get on a wait list? Jordan: Yeah. That is the right number and that wait list was a really incredible kind of launch platform for us. I think early days, it really started with me pitching just a lot of investors and talking to as many people as possible. Created a lot of word of mouth, which drove to our landing page and then, prelaunch, one of the things we did was partner with other brands on things like sweepstakes and giveaways and start building our brand rep through a lot of those partnership campaigns. Then, towards the end of the funnel, we started building, not dissimilar from what Harry's did to build their prelaunch, I think hundred-thousand wait list, ended up doing a referral campaign within that existing list we built and that referral was super-successful. We got a lot of word-of-mouth and people sharing out of it. By the time we launched, we had a nice grouping of customers who were really excited to test and be our early adopters. Stephanie: That's really fun. How do you keep them coming back and engaged because I think of cookware, I mean, I got mine, I think, at my wedding and I haven't really thought about it unless it breaks, which has happened a few times when we've dropped it and it's gotten all bent up. It's not something that comes top of mind or would bring me back maybe to a site easily. How do you keep those customers, especially the really engaged and excited ones, coming back to the site and checking out your new products? Jordan: Yeah, it's really through content. We're pretty active and it becoming building a much stronger content platform, both on the site and social. For us, we obviously want people to buy the product, but we also want to provide education outside the physical pots and pans, so we see a lot of activity from consumers coming to us. Actually, less about food and cooking and recipes, but more about design and colors and seeing Caraway kind of inspired them to redo their whole kitchen or rethink the products that they have in their homes, so whether it's our blog or social or writing in through chat or email, we work to really provide these pieces of education to the consumers. Jordan: As we grow, we have aspirations to build a pretty large portfolio of products, so what's fantastic about cookware is it's a larger purchase item, we're not waiting for revenue to come in through a subscription. We get that first purchase and then, really have opportunities as we launch more products to focus on those for upselling and reengaging customers. Stephanie: That's great. How are you thinking about retail locations or like your omnichannel strategy? Jordan: Yeah. Right now, we are solely focused on our website, we are on a few marketplaces like Zola and Goop and Huckberry and a few others. Omnichannel is super exciting to us. I think going back to our mission, if our goal is to really get non-toxic cookware into as many people's houses as possible instead of Teflon, really the only way to truly embrace that and do that is to replace the products that are on shelves and currently saturate the market. Online right now is really our main focus, but we see big opportunities with partnerships in retail, with our own brick and mortar. Still, today, we're a young brand, so we're focused online, but have some exciting new plans coming up in the next 18 to 24 months. Stephanie: Fun. What's the experience been like selling on marketplaces versus just if you just CBA your website? Jordan: Yeah. I think for us, we see it as opportunities to reach different demographics than what we've... are currently seeing on our site. We've gone into it with a really open approach and have seen a lot of success. Obviously, being in the kitchen and home category, a lot of these items are purchased through a registry process, so that's always been really important to us at the beginning, but also someone like Huckberry, who we're working with, it's an all men's marketplace, they do a really amazing job with curating and they really know how to talk to their customers. It's one of those marketplaces where we've just seen great success. It's a totally different demographic from what we see on the site. It's really a good opportunity to just test and reach new markets that otherwise we'd have no access to. Stephanie: That's great about the registry idea. I mean, it seems obvious when you say it now, but making sure that you're in on all the websites, I don't even know how they link up because I think when I built my registry, they were already linked to different marketplaces already set up. Do you have to go to the marketplace to get that relationship or is it a brand who controls the marketplaces all in one place? How does that work? Jordan: Well, most of them are marketplace controlled, but they're all standard kind of retail relationships and a lot of the major registry players are all digitally driven. Some of them allow you to add any product from any site onto their platforms. They're all a little bit different, but we want to be at the top of every registry platform and also, encourage users who come to our site, who are getting married, to go to those platforms as well to add us. Stephanie: Yeah. I think just your colors and I saw some of your videos, that should be enticing enough for people to want to add it to a cart because it does look very different than the typical black or light gray items and I haven't really seen many videos of cooking where I'm like, "That's a nice pot or pan or whatever it is," and I'm not even looking at the food. I'm looking at how they're cooking in this nice, colorful, bright product. Jordan: Yeah. Color's a big part of our brand and this was actually a big learning from my prior experience, but there's just a big lack of color in the category and the colors that do exist are typically like bright reds or really de-saturated baby blues and I think there's definitely a place for those. Also, we just saw a big, kind of wide-open space of colors like navies and sages and creams that exist in the rest of your home, but for some reason don't exist in the kitchen. I wanted the brand to have a little bit of playfulness, yet sophistication through colors and also give people the opportunity where you can really create a kitchen that I think represents your personality in the rest of your home. Stephanie: Yeah, that's really fun. Why weren't there colors before? Is there something about creating that that makes it harder to incorporate colors? Jordan: The creation of colors certainly is challenging. It's a lot of back and forth, a lot of sampling. For larger brands, who I think are cranking out products and not really investing the time into innovation, it's much easier to just choose something like black or stainless steel. Quite frankly, that's been what's popular on the market for decades, so Le Creuset is really one of the first players to come in and introduce colors. KitchenAid has done and awesome job, but I think a lot of the legacy brands who dominate the category, they've been selling neutrals for such a long time that for them to even test colors, could actually potentially cannibalize their existing business. It kind of opens that door for us to try something new. Stephanie: Yeah. That is good. How do you go about creating new products? Is there a data element that you use to maybe get like customer input to know what they're looking for or what new products you're going to be exploring? Jordan: A lot of our product process is super data driven. There's definitely an element of asking consumers what they want and what's bothering them across certain product categories and what they like. We do that qualitative research, but a lot of how we think about products is looking at things like Google Trends, Google AdWords, what's trending on social. We have a number of internal tools that we used to model out what we find to be interesting. Obviously, there are things like market size and competitor mix, so we really like to take a data-driven approach and we were the same way at my prior company as well and where I learned this. Yeah, I think we would really like to lean into products where we've got a strong conviction that will sell well online. We typically like to avoid things that purely exist for potentially a brand marketing reason, which I think a lot of companies get caught up into in many cases. Stephanie: Yep. What metrics do you think are most important when it comes to, like you said, you take a very data-driven approach, which ones have been the most important and how should a company think about implementing that type of data and research into their product development? Jordan: I think it really comes from the channels that you're in and kind of working backwards from the core metrics that you track as a business. If you're on Facebook and Google, really understanding if there might be an opportunity at the micro level across the category, but you really want to make sure that where you're going to be spending your marketing dollars and efforts, there's an opportunity as well. I think that's even the more important piece is we found niches in certain places where we feel even at the macro level, it's very competitive and saturated, but we feel there's a big opportunity within the digital landscape. I think it's really focusing on where your marketing dollars are. Stephanie: Got it. Are there any website metrics that you pay most attention to like how many tests are you doing every single day to see what helps with conversions or what helps with your customer acquisition strategies? Anything that you look at there on a weekly basis or a day to day? Jordan: I think for us a lot of the focus right now is definitely on top line growth, but working back from that conversion rate, return on ad spend is incredibly important. We place a big emphasis as a brand on being first purchase profitable and making sure that we're growing sustainably and not burning cash on each purchase. A lot of the emphasis is really on that. As we grow, things like LTV and repeat purchase rate will become much more important. Within each specific ad platform, we've certainly got different goals and metrics we try to hit, but as a brand, the focus at the moment is really on metrics that lead to top line growth. Stephanie: Yep. Are there any platforms that you're finding your most success in or new platforms you're exploring right now? Jordan: Sure. We, similar to most D2C brands, focus a lot on Facebook and Google, but I think one thing we've really put a big focus on since the beginning is growing our influence or ambassador network. We currently work with a group of a hundred to 200 influencers and this is a group that's growing really fast, too. Similar to what we were chatting with before, we've gifted, they've experienced the product, there's really an organic relationship there built and really working with fantastic creators who I think are the best voices for the brand and they've got trusted communities who watch them every day and listen to them. Having those groups really tell the story for us has been tremendously success. As a brand, we've actually avoided the food and recipe market, which I think a lot of this category goes after, and focused a lot more on things like wellness and design and tried some new categories that I don't think kitchenware has really entered into until point. Stephanie: Well, that's smart. I'm thinking of utilizing Pinterest and places like that where people are, like you said, designing their kitchens or their homes- Jordan: Definitely. Stephanie: ... and just thinking about things differently. That definitely seems like your kind of ideal customer. Jordan: Definitely, and we see Caraway as almost... and we hear this from a lot of consumers, that almost being that first kind of inspiration or purchase that they make, that then kind of put them on a path to redoing their full kitchen or wanting to create a safer and healthier home. We love being in platforms and working with creators who kind of align with that strategy. Stephanie: I think it's really important that you're moving in that other aspect of the home because that reminds me, when I got a... it was like a pastel green tea kettle, it was super cute and I liked it a lot and I put it in my kitchen. Then, I'm looking around and I'm like, "Oh, man. I don't have anything else that matches this tea kettle." I started trying to go around and search for that color and I couldn't find a match. Yeah, it did start making me rethink about how to redesign my kitchen and then, incorporate into my living room because they're so close. I think having multiple products, kind of help create that experience all throughout the house and that nice design principles could be very beneficial. Jordan: Definitely. Pulling that back to new products as well and color, it creates a really exciting opportunity where you make that first navy or sage or cream and having a bigger portfolio of products to really seed that throughout the rest of the home is really where we want to get to. Stephanie: Mm-hmm (affirmative). Do you pick colors that can't really be matched with other brands? Jordan: That's certainly part of it. All of our colors are custom made. A lot of brands typically lean towards choosing a Pantone color. Colors are very difficult to replicate. Just going through the experience, they do take a lot of time to get right. There's definitely some data that we look at when it comes to what people are looking for and searching. It's asking customers, but at the end of the day, we wanted to create something that was uniquely different in this category. I think in the initial research stages was really surprised that something as simple as navy, which you're wearing in your clothes every day and is such a prominent color in people's homes just didn't exist in the category. As a young brand, it's fun to have a website and be able to test into colors that just don't exist today. Stephanie: Yeah. Have you tested anything that you didn't actually have on-hand yet? Jordan: Nothing publicly, but we certainly do some stuff privately or in small tests across Facebook or Google. Stephanie: Mm-hmm (affirmative). Got it. Is there any time data's led you down the wrong path where I'm over here googling fluorescent pink pan and, then you make a product? You're like, "Eww, a lot of people were googling that or searching for that keyword and it was because of this and we probably shouldn't have made maybe a product around that or no one's actually buying that color." Any time when data's led you down the wrong path? Jordan: Yeah. Nothing specifically with Caraway, but my prior role with Mohawk Group and Vremi, we launched a lot of products, there were many that we had strong conviction on based off data. Sometimes, it doesn't work for whatever reason. It could be the product design, it could be the colors, it could be the price point. There are so many variables to it, but I think understanding all the variables that can impact the success of a product is super important and as long as you're really trying to make something different and really try to make it a compelling offer, I think, across all the categories you have a pretty good chance of success. Jordan: Really, I think this is a universal truth, but the product quality needs to be there. It can look pretty and the price could be great, but as long as that product's a really great product and people love it, that in and of itself should generate its own word of mouth. Stephanie: Mm-hmm (affirmative). Is there any way that you encourage that word of mouth with your customers? Jordan: Definitely. I mean, we encourage consumers to continually post on social showing us what the pans look like in their home, showing us how they organize their kitchens with the pan racks that we sent over, showing us what they cooked. As we roll out new products and expand the brands, I think there's definitely some areas we can improve in, in word of mouth, but so far, it does make up a large percentage of our sales and having reviews built into the brands I believe also encourages that. Stephanie: How are you measuring the organic growth right now? Like you said, referrals make up a large part of the sales. If you don't have a referral program yet, how are you tracking that to see where the customers are coming from. Jordan: It's definitely tough. We run a post-purchase survey after people purchase. Obviously, not everyone fills it out, but we get a lot of data through there in terms of asking consumers where they came from. That's really the best indication, but we're also very... in a position where we really understand how many sales are coming from Facebook and Google and a lot of other channels, so we're able to kind of parse out between those two methods what we think the word of mouth effect is. Stephanie: Got it, got it. It seems like it would be kind of hard to keep people, not only just customers, but also even like the influencers engaged because I think about when someone sends you something or you buy something new, you're really excited for maybe a week and then you're kind of, like a lot of people, at least myself, maybe not everyone else, it's on to the next thing and excited about the new thing. How do you keep, not only your customers, but also those influencers that you were sending products to, engaged for the long haul? Jordan: I think a big, important piece of our influencer program is that most of these relationships are tremendously organic and we work with people who truly love the product. Just like anything, there's always more excitement at the beginning when something's new, but we like to work with people who are sharing content around cooking and sharing content around storage and design and our products are always in those content pieces. It's really been a pretty organic relationship and we haven't seen a massive drop-off in sharing amongst that group. In terms of customers, we put a lot of emphasis into email and SMS and new blog posts and social and really try to get people into those funnels and onto the social page, so they're staying up to date with everything that's going on with the brand. Stephanie: Mm-hmm (affirmative). Do you have any events or things like that where you bring together your influencers or maybe even customers to build that camaraderie feeling? Something that I think back to, when I was at Google, we had this local guides' program and they would do big events where all the local guides could come and meet and get some swag and really feel like a community. Is there anything like that that you guys are planning for in the future? Jordan: Definitely. I think community is tremendously important. We, obviously, really focus on that with our consumers, but for our ambassador base, it's still really early days and early stages. Looking at companies like Glossier and I think they've done such a great job at creating that community amongst ambassadors and the people they work with are tremendously proud to represent Glossier. Events and dinners and opportunities to gather are certainly among top interests for us. With COVID going on, it creates some more challenges, but- Stephanie: Yeah. A Zoom happy hour. Jordan: Yep. Yeah, we're looking to roll out a community base whether it's on Slack or Facebook groups in the coming months for all of our influencers to connect. It's also a good opportunity for them to share best tips on what's working for them and what's not on their social posts or maximizing engagement. Stephanie: Mm-hmm (affirmative). Yeah, that definitely seems like it could be really beneficial because you have this group of people working for you behind the scenes, teaching each other best practices, that you're not having to employ- Jordan: Exactly. Stephanie: ... which is great. Circling back a little bit to your background, I saw or I think you mentioned that you studied consumer psychology. Is that right? Jordan: Correct. Stephanie: Okay, cool. How did that background help you with building your company, if it did, or what kind of principles did you take away or remember from your studies? Jordan: Yeah. Back in school, I was really interested in understanding why people chose the products that they did, why they align with certain brands, and I think at Caraway, we take a pretty granular focus when it comes to that. A lot of that's reflected through the messaging that we put out. We're, at any given point, running dozens and dozens of tests across our ads and our website and there's obviously demographic information on people, which we try to segment based on, in terms of our consumer, but there's also personality traits and more of a psychology of further breakdowns of certain demographic categories. We do our best to collect this information from consumers to really understand who the customer is, what they're thinking about, who they are as people and that, in turn, really informs the macro messaging, what's on the website, and branching out to the brand principles. Stephanie: Mm-hmm (affirmative). Yeah, very cool. Is there any element of personalization right now when you come to Caraway based on the data that you just mentioned, whether it's demographics or anything else? Jordan: At the moment, not onsite. We're really focused, and this was highly intentional at the beginning of launching the brand that is we really want to create a product and brand that are really accessible to the most people possible and also, kind of narrow down the decision making that they have to do. Stephanie: Yeah, super important. Jordan: Right now, we've got one set, it's really simple, really the core decision is the color that you have to choose. As we grow and we start launching more products, I think that's where we'll start to see a lot more personalization and trying to help people, once you buy the cookware set or you buy another product, like what's that next piece that you should add into your kitchen and why do you need that product. I think that really comes with expanding the brand into those new categories and then creating sub-segments based on what their initial purchases were, where they come from, who they are as people, and how we can help them better merchandise and support them in their home. Stephanie: Mm-hmm (affirmative). Very cool. You've been in the world of Ecommerce for a while. What's one thing that you wish online sellers would either start doing or stop doing? Jordan: Great question. I think for me there's become this really big mentality of consumer products of growth at all costs. I think a lot of venture-backed companies have really, really pushed into achieving most of their sales through buying ads and buying customers. That's certainly a piece of growth, but I'd also encourage to really, especially in your early days, like growth's not that challenging to come by, you're starting with a smaller number and really putting the emphasis on word of mouth and expanding your return on ad spend. I think it's easy to get caught up in high growth, but you want to make sure those founding principles are there from day one. Jordan: I think generally as a piece of advice, that's one thing I think we've done well at Caraway and I learned from my prior experience. I just see a lot of sellers and vendors I think focusing on top-line growth a little too much in sacrificing something that's going to be more beneficial in the long-term. Stephanie: Mm-hmm (affirmative). Yeah, that does seem like something that a lot of companies, especially over the last couple years, have lost sight of. Because, like you said, I mean, when you have these VCs who are telling you that you need to hit these crazy growth numbers, it is kind of like, well, we just have to do whatever it takes to do it and to hit those numbers. It seems like in the process, a business wasn't actually built behind the scenes. Kind of like a fake business where there's only ads, buying customers, but then not having a good product and I think we're seeing a lot of the problems from that right now. Jordan: Absolutely. I think a big piece of it, too, is it's really building that mentality internal with your team and building a culture where it's just as much exciting to lower the cost on something as it is to increase growth or launch a new, fun marketing initiative. For me, I'd love to see more founders and teams focusing on that sustainable growth. Stephanie: Mm-hmm (affirmative), completely agree. Is there anything top of mind that we missed in this interview before we jump into a quick lightening round? Jordan: Nothing off the top of my head. Stephanie: All right. The lightening round, which is brought to you by our amazing sponsors, Salesforce Commerce Cloud, is where I send a question your way, Jordan, and you have a minute or less to answer or 30 seconds, whatever you want to do. Jordan: Perfect. Stephanie: Are you ready? Jordan: I am ready. Stephanie: All right. What's up next on your Netflix or Hulu queue? Jordan: Oh, tough question. I'm excited to watch Ozark, season three, have yet to get to it, but I've heard it's a good one, so that's been at the top of my list to get to. Stephanie: Nice. Yeah, that is definitely a good series. If you were to have a podcast, who would your first guest be or what would the podcast be about? Jordan: Would love to focus a podcast on brands that really focus on doing good for the world and, whether it's non-toxic products or eco-friendly products, really hear more about their journeys to creating those items and hearing about the larger impact that they have on the world. Stephanie: Oh, that's a good one. If there's any sponsors out there, hit Jordan up. We can help you out with that. All right. A slightly more difficult one where you might have to think for a bit. What's one thing that will have the biggest impact on Ecommerce the next year? Jordan: I think the short answer to this and tying it into, obviously, what's going on in the world is I think people staying more in their homes and what that means in terms of general macro online sales, brick and mortar. I think we'll come out of this with really a different world and excited to see how the retail landscapes starts merging with the digital landscape. Stephanie: That is a great answer. All right, Jordan, it's been such a fun interview. Thanks for coming on the show. Where can people find out more about you and Caraway? Jordan: You can check us out at www.CarawayHome.com and thanks for having me. This was super fun. Stephanie: Yeah. See you next time.
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.
If you think back to just a few years ago, when someone asked you to name a company that delivered food, you’d probably only be able to name a few pizza joints or the local Chinese food place. But today, the world has shifted and online food delivery is a booming business. Last year alone, Grubhub sold $6 billion worth of food, and the company delivers more than 500,000 meals per day. So how did Grubhub enable this massive shift to digital meal purchasing? On this episode of Up Next in Commerce, we welcomed Alex Weinstein, the SVP of Growth at Grubhub, and he explained to us exactly how the company has been able to become a market mover. From the initial education process to then focusing on customer retention, Alex and his team have been deep in the weeds of it all, and they have built a culture of experimentation, data analytics and a focus on ROI to stay ahead of the curve. Alex explains it all here. 3 Takeaways: Measurement and incrementality are important. You have to understand whether or not where you’re putting your dollars is making a difference, and sometimes the answer will surprise you True experimentation is necessary to create new methods of measurement, marketing strategies and growth opportunities. So the question you have to ask as a leader is how can you create incentives to allow people to take risks and learn? The time is now to learn about the newly-online customers that have trickled into your business due to COVID-19. In understanding their needs, you will be able to ensure retention and set yourself up for the new reality we live in 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. I'm your host, Stephanie Postles, co-founder of mission.org. Today, my stomach is rumbling, because we're talking all things Grubhub. Alex, welcome. Alex: Thank you for having me. Stephanie: Yeah, thanks so much for coming on the show. I just pulled up the app earlier to be like, "What should I have for lunch today?" Because it's 12:00, and it's time to order something. Alex: What did you end up ordering? Stephanie: I'm looking at pad Thai right now, we have a really good Thai place down the street. That's usually my go-to, but I started to get influenced by sushi, so if you have any advice, let me know. Alex: I don't know the restaurants in the area, but look for those that are well-rated, and look for deals. We have a ton of deals going on right now. Stephanie: Ooh, nice, that's perfect. You are the SVP of Growth at Grubhub, correct? Alex: That's right. Stephanie: I'd love to hear a little bit about your role there, and what brought you to Grubhub. Alex: Sure, sure, thank you. I've been at Grubhub for a little bit over three years. My responsibility is for the consumer business. That is, how do we get more new customers to try us out for the first time, and how do we get existing ones to order with us a little more often? And hopefully they'll return. Alex: This spans all aspects of marketing. We do a whole bunch of stuff in-house. I'd love to explore that a little bit later. But it also involves a lot of work cross-functionally, across the product. When I say product, I don't just mean our apps, but the totality of the experience that the customer has, from our apps to the delivery, to customer care, if that's ever necessary. Stephanie: Very cool. Previously, were you at, I think I saw Microsoft and eBay, or what did your past life before Grubhub look like? Alex: That's right, that's right. I actually am a very strange Head of Marketing. I'm a software engineer by training. Stephanie: Oh, interesting. Alex: I've written a bunch of code. I switched over to product management, and then darkness had me, and I somehow ended up in marketing. I indeed was at eBay before this, also for around about three years. Similar role, maybe a slightly more narrow role, focused on customer retention, marketing technologies. Stephanie: Very cool. I'm sure that was great help working at a marketplace, albeit not maybe a three-sided one, but still maybe a really helpful to transition to Grubhub with as your background? Alex: It very much was. I have to admit, I thought I knew marketplaces after eBay, then when I started Grubhub, I discovered so much complexity. Our business, exactly as you said, is a three side marketplace. Restaurants, food delivery drivers, and consumers. It is a hyper local business. People who live in Palo Alto whole heartedly don't care how many restaurants we have in San Jose, and how good our delivery network is in San Francisco, right? Alex: It has to be block by block, and we have to make sure that we have good restaurant selection there, good demand, and good supply of drivers. Otherwise, if the three sides aren't in alignment, bad things happen. Stephanie: Yeah, that seems like it would be really tricky to keep all that balanced. How have you found success keeping everything balanced? Like you said, it's so hyper local, I'm thinking there could be a driver over in Sunnyvale, and they're definitely not going to go to my local Thai place to pick up the order that I'm looking at. Alex: Yeah, this is where a lot of fun in this business comes from, and a lot of complexity in this business comes from. We have to be really good at predicting things, and predicting demand. And we have to be really good at engaging all sides of our marketplace so that drivers actually want to be online at the time when we want them to be online. Alex: Consumers end up placing additional orders if perhaps we have a little bit too much supply. Restaurateurs want to create deals. Basically, being able to influence three sides of the marketplace in a automated, personalized, hyper local way, is really the only way we can survive, right? This, to me, is super joyful, and super complicated, and where a lot of learning, personally, for me, has come from. Stephanie: Yeah, I'm sure every day it's adjusting a little bit more, and you keep have to kind of changing things up and experimenting a bit. How do I think about where Grubhub is at right now? To me, it seems like it's the market leader. How many meals are being delivered? How much is that in dollar-wise of food that's being sold? How do I think about that? Alex: We're a public company, all of those numbers are public. Quick summary for you. We deliver more than half a million meals a day. Last year, we delivered more than six billion dollars worth of food. Of course, with the arrival of the pandemic, the demand for food delivery has also increased. The expectation of all of our constituents, and of our community, all of us, have risen tremendously. Because, from something that restaurateurs really on for a portion of their revenue, they now rely on delivery as the majority of it. Alex: For consumers, where they would perhaps order delivery occasionally, now is the only way for them to order restaurant food. A lot of expectations on us have increased throughout these past couple of months, even though we already started from being quite a large company with high expectations. Stephanie: Yeah, have you had to adjust quickly with everything going on with COVID-19? What have you seen, other than increasing orders, and how have you had to pivot to meet the customers and meet the drivers in where they're at today? Alex: Yeah, absolutely. Well, most definitely, yes. First and foremost, we began by focusing on safety of all the participants of our marketplace, right? This began with our work on personal protective equipment for our drivers. We distributed hundreds of thousands of PPE sets for free for our drivers. We invested a bunch of work into enabling contactless delivery within our apps. Which, of course, is something that makes the entirety of the marketplace safer. Alex: We basically have to take our product roadmap, and, in many ways, revisit it fully, and focus on things our community demanded of us in that moment. Similarly, we had to do something like that with marketing, as well, because we had a certain strategy. You of course know that a lot of our effort is in making sure that consumers can get the best value on Grubhub. If you spend money on food delivery, your dollars will go the furthest on Grubhub. This really is our brand positioning. Alex: When COVID came, we had to take a pause, because this rewards positioning, or this value positioning, really had to take a step back, because consumer's interest... Sure, they were looking for deals, but they were looking to be safe, first and foremost. Secondly, they were looking to support their community. So we had to reposition a lot of our marketing work to make it so. Stephanie: Yeah, that makes sense. I'm thinking that could be a trend that stays around, even after everything's over, keeping that contactless delivery at least as an option, and thinking about how to actually prove you have the safety measures implemented, and you're tracking that every month. Are you all thinking about how to scale that and keep that for the long term, or is it more just a short term play until the pandemic's over? Alex: Couple thoughts for you. One is, I don't think that we're going to be looking at a pandemic being over and everything coming back to normal. I think we need to get used to the new normal, at least until the vaccine is here. Which means that people's lifestyles, their habits, will be fully adjusted by then. Alex: As such, it's not like we were developing a set of patches for three months, and then after that, we just turned those patches off. But also, there's meaningful, positives coming from this change, right? Like any crisis, it is both a danger and an opportunity. What we've discovered is this contactless delivery, for example, besides making everyone safe, it is actually making our network a tiny bit more efficient. The delivery driver does not need to engage with the consumer in-person. They can just drop it off, take a photo, and keep going, and keep working. Which shaves off a small amount, but in the grand scheme of more than half a million deliveries a day, this starts adding up. It helps our drivers earn more, and it helps our overall network be more efficient, which means food comes to consumers faster. Stephanie: Yep, yeah, that's definitely a good change. There's a lot of food delivery players in the market right now. How do you create an experience that's completely unique to Grubhub? Where people, they're like, "That's where I want to order through." Alex: All of this, in our minds, has to do with differentiation. And you're exactly right, maybe two or three years ago, where consumers didn't really know much about the food delivery category. A lot of what we had to do was to educate them about our existence, which is why a lot of our marketing, a lot of our product, was geared towards a first-time experience of someone who's never gotten anything delivered other than a pizza. Because really, that was the state of the world, right? You would ask an average consumer on the street, "Name a couple companies that deliver food," and they would name pizza brands. Stephanie: That would've been me a couple years ago, too. Alex: Totally. Stephanie: I'd be like, "Domino's." Alex: Yeah, yeah, absolutely. Maybe Chinese food, if you've ever tried it. An average consumer didn't know that there's hundreds of restaurants that deliver to them, and that they can find them on Grubhub. So that was the focus of our messaging. Alex: Three months ago, even before COVID, if you asked an average consumer to name food delivery brands, they would name us, and maybe a handful of our competitors. In that environment, I'm prompted, right? This is unaided awareness. Not, "Have you ever heard of Grubhub?" But, "Name a food delivery brand." Alex: Our work switched from creating awareness to driving consideration. Helping consumers understand, what is it that they get if they buy from us versus perhaps one of our competitors? Last year, a lot of our focus has been on stating this extremely clearly and delivering on that experience quite precisely. As I mentioned a little bit earlier, it is all about value for us. Alex: Now that we're entering a bit of a new normal with COVID-19, we're beginning to come back to some of this foundational brand positioning. Talking about rewards and value. We have a TV spot that's actually launching today and tomorrow on national TV. We're one of the biggest spenders on TV in both the category. Stephanie: Oh, interesting. Alex: Generally we're one of top 200 brands advertising on U.S. television that talks about rewards and value. You might be scratching your head and wondering, "Why in the hell is a digital first brand spending so much money on TV?" Stephanie: Yes, I was wondering. Tell me. Alex: It actually is kind of counterintuitive. We, maybe about three years back, we started scratching our heads and thinking, "Okay, if an average consumer doesn't really know what food delivery options are out there, how do we create that awareness? And how do we do that in a way that can confidently map the efficacy of our spend?" Because creation of awareness, let's face it, is the most expensive thing a company can do. Stephanie: Yep. Everyone wants it, but then actually implementing it, tracking it, and seeing how it did, seems a little tricky. Alex: It is so very tricky. Most mechanisms for doing this are actually kind of arcane, right? You do media consumption patterns, which, frankly is a large-scale survey that perhaps an agency would run and say, "Okay, New Yorkers, they absolutely do not watch any TV. They spend a bunch of time in the subway, true. And then they're all very much on digital." Alex: So, a brand that's trying to advertise in New York then would say, "Okay, television in New York, totally worthless. And our consumers are probably just like the average consumer in New York." That's kind of how the line of thinking typically goes. We, despite having a general applicability product, right? Everybody wants food delivery, right? Everybody from 18 to my mom, most definitely could benefit from food delivery. Alex: And yet, what we discover, is that the media consumption patterns of an average New Yorker are not the average media consumption patterns of our consumer. Moreover, what we discovered three years back was even though our intuition was that someone who orders food delivery online is most likely an early adopter of technology, and most likely a cord cutter, right? I mean, if you're about to order food online, you of course are ordering your socks from Amazon. You of course are watching shows on Hulu Plus without any commercials, as opposed to on cable TV, right? Stephanie: Yeah. Alex: Of course that intuitively made sense, which is why we've been spending a lot of money through digital video channels. That intuitively made sense. We stumbled upon a set of techniques that allowed us to, with confidence, compare the efficacy of our awareness spent between digital video and the digital awareness darlings of Hulu and YouTube and Facebook for some of the dimensions, here. What we've discovered is that the bull drought of digital first is actually not as efficient, not at all as efficient per dollar spent, comparing to the- Stephanie: Oh, interesting. Alex: ... boring, stodgy, nobody watches it, cable television. Stephanie: Is it because of the audience that's there, where the digital, like you were talking about, advertising to them, they may already know about you and it's an easier conversion, whereas the people who are keeping the TV running in the background all day, maybe actually need the ad right then and there where it can put a little inception on them and they can hear about it a couple times while they have the news on? Alex: Yeah, I think that's one of the reasons. Other reasons are that, just on a per impression basis, your digital video is dramatically more expensive. Even though I'm a nerd of machine learning, and I love personalization, I don't believe that personalization can cover a five X price difference. It can make something 50% better, but not five steps better. Stephanie: So how do you think about creating that culture of experimentation like you're talking about, where most companies right now are probably not focusing on TV campaigns? How do you think about putting a budget behind that and actually empowering a team to do that, where when I think about teams who are running with marketing budgets, or just budgets in general, it's very scary to not show a great ROI, because you either aren't going to get that budget again. It's a use it or lose it type of culture, it seems like every company operates that way. Maybe Grubhub doesn't, but how do you think about creating good incentives and a culture of experimentation to come up with some of those projects? Alex: I think a culture where you ask for confidence in measurement for your spend is a good culture. Where you ask for feedback loops is a helpful culture. Now, you can take this too far, and you can start trying to map everything to revenue or [inaudible 00:16:56], and that doesn't particularly help with upper funnel marketing campaigns. But, the other extreme isn't particularly better. I see a lot of marketing organizations end up in that spot, where we say, "We demand perfect measurement," from what they call performance marketing. Alex: And the brand marketing side, the one where vast majority of dollars actually have to be spent to create awareness, is not working to the same level of rigor, and the same level of intellectual honesty with measurement. To your question about how to actually create those frameworks for the team, a couple things come to mind. Alex: The first one is, trying to pursue incentive alignment. If people on your team genuinely believe that learning and optimality of investment for the entire team is how they get promoted, is what the company actually values, they will pursue exactly that. Let me give you- Stephanie: Let me hear an example. Alex: Yeah, let me give you a counter example. A counter example is what happens if you hire an agency to manage your Facebook spend. Have you ever heard an agency that managers Facebook spend come back to you and say, "Your Facebook spend is terribly inefficient. You should spend less on Facebook." Stephanie: Definitely never. Alex: Right? That's what their incentives are, they get a portion of your Facebook spend. The same exact thing happens for your TV agency. The same exact thing happens for someone who's managing your Google spend, right? If you have a bunch of outsourced agencies, each of which is responsible for one of your channels, their survival, their ability to feed their children, depends on you being able to spend more money on the channel that they're managing for you. Alex: Of course, they don't have an incentive to try to tell you, "Hey, take money from Google and put it into Facebook." They will personally suffer. A setup like this creates a true misalignment of incentives. Let me contrast that with, let's say, an in-source structure, or perhaps a structure where you have a larger performance agency that is able to reallocate dollars between Google and Facebook without personalty suffering. Alex: In a structure where you in-source, which is how we operate, you're able to create a shared destiny, and you're able to say, "Hey, person running Facebook. Your incentives are all about learning." So if you have a current level of performance, which is a certain level of incremental CAC, and a certain level of incremental LTV. Your goal is to improve that by this percentage over the course of next quarter. Alex: Find some way to do so through whatever experiments that you're able to run. One of the potential outcomes is an improvement in efficiency by reduction in spend. They're able to raise their hand and say, "Hey, I actually want to spend your dollars. Take away some of my budget, and reallocate it over to TV, because they can spend it better. I hear they have a way to spend at a lower incremental CAC than I can." Stephanie: Have you seen that in your culture so far, of people actually being like, "Hey, you can have this budget, move it over here"? It seems like a lot of times, people are personally tied to their budgets, and whoever has the bigger budget is the more powerful one, and I haven't often, at least in my previous days at other companies, I haven't seen people say, "Hey, you can have this budget and move it here." Alex: You are exactly right. A lot of our, I guess, legacy from many of our previous jobs, associates the size of the budget with the influence in the organization, most definitely. This is where the job of a leader really is to create the right incentives and to catch people doing something right. Alex: If you hire somebody off of a company that had that culture, of course, their initial inclination will not be to raise their hand and say, "Hey, my area isn't working so hot." You need to indoctrinate them, if that makes any sense, into a world where it's okay to raise their hand and do it. The way you do it is by upholding folks who do this, and pointing at them and saying, "This person is doing it right," and celebrating their successes. And celebrating their experiments, where, perhaps, they didn't see the immediate success, but they learned something. Alex: So, as a leader, I think you have a lot of power to create these incentives. As such, structure what your team actually holds as valuable versus not. If you point to enough examples like this, you'll actually end up transforming the culture, even for someone who comes in from an organization that wasn't like that. Stephanie: Yeah, it seems like it would also allow someone to wear multiple hats, and kind of become a polymath when it's like, "I don't just focus on Facebook ads, or I don't just focus on this kind of marketing." They get to experiment with a bunch of different areas. Have you seen that happen in your organization? Alex: Oh, most definitely. My paid social folks, just like everyone's, they were super focused on Facebook. What we discovered is them raising their hands and being very creative, and being some of the first folks who ever tried TikTok, for example. This was a little while back now, but we were one of the first handful of brands to invest a lot of money into TikTok, and do large scale experimentation with them. What we've discovered is if you're one of the first ones, there's very meaningful... Effectively, arbitrages to be had, where you're able to not only get a great deal, but shape the product to your liking. As such, get a temporary advantage over the rest of the market. Stephanie: That's fun. How did you think about creating your first campaign on TikTok? When your team presented this idea to you, were you like, "Yeah, let's do it," or were you a little hesitant? What was the first campaign you had go out there, versus what does that look like today? Are you still utilizing it? Alex: Oh my God, this is quite a story, to be honest with you. The team came to me and said, "So, we're thinking about doing TikTok." My reaction at the time was, "TikWhat?" They explained this to me and I read up a little bit about it. My immediate reaction is, "Okay, you are attempting to sell a luxury product." Let's face it, ordering delivery, you're still buying food from restaurants. It is a luxury product in many of the cases, right? To, "You're trying to sell that to people who have no disposable income of their own. The average customer of TikTok at the time just could not have their own credit card." Stephanie: Yeah, they have allowances, maybe. Alex: Right? Exactly. "Why in the world could this possibly work, you guys? Our average consumer is fairly affluent, and you're now trying to go into a different demo. How is that even remotely possible?" But, luckily, at that point, I had already observed that my team knows better than me, and that they have much, much better ideas than I do. Essentially, we just did a test. We did a small test, and we experimented in earnest. Surprise, surprise, they came back and they showed me the numbers, and they were meaningfully better than Facebook at the time. Stephanie: Wow. Alex: We ended up investing more. That was genuine, true learning. Not just for the organization, but frankly, for me. There's multiple possible explanations for why it ended up being so efficient, and I can go into some of them, but the thing that matters to me most is that the crew felt inspired to pursue something new. They felt passionate enough about it to structure a test when there was no framework, really, out there. And they were unafraid enough to basically tell me that I'm wrong, and that my intuition is off. Alex: That made me feel like the culture is actually right. The culture is exactly what I want it to be. The opposite of that, where you're going with the highest paid person's opinion, if that makes sense. Stephanie: Doesn't work. Alex: It doesn't work, because all of our intuitions, no matter how successful we've been previously, we are sometimes wrong. Why hire smart people if you don't trust them to try things? Stephanie: I think there's a good mix between trust your gut, but also don't trust it, because you could be wrong. Yeah, go with other people's ideas, as well. How do you think about those efficiencies that you're mentioning when you're exploring new channels like TikTok? Alex: Sure. To me, it's indeed about being open-minded and experimenting with new types of media, and being unafraid to try things that aren't immediately, obviously, going to work. A similar type of experiment happened with Snapchat a little bit earlier, where I also was convinced that this can't possibly work for the same reason. Luckily, I, again, was wrong. Alex: I guess a pattern of learning is what inspired me to basically create this incentive structure for the team, where they're unafraid to raise their hand and say, "Hey, the way we've been doing this before is really off." If you want, I'll tell you a story of a channel that's not really a channel that I guess formed my opinion on that topic. Stephanie: Yeah, let's hear it. Alex: This is a story of a couple marketers that were attempting to turn a specific city around. Alex: As we talked a little bit earlier, we can be doing super well in one city, and not well at all in another city, or in a corner of a city. A lot of what we do has to do with how do we turn a specific city or neighborhood around? This couple folks, their job was to turn a specific city around, and I was expecting them to come to me and say, "Hey, I'm going to take the budget that you've given me, and I'm going to buy some Google ads, and I'm going to buy some billboards, and maybe I'm going to buy some Facebook ads." Alex: What they did instead, these were two marketers. What they did instead was actually really curious. They experienced the product for themselves. They placed a couple of food delivery orders, and they came to me and they said, "Hey, I don't want to buy any ads," they said. "Instead, whenever I was placing the order for food, there really weren't enough food photos. I was ordering from restaurants that I hadn't ordered from before, and I don't really know if their pad thai looks good. I don't really know if their sushi is something that I want to try." Alex: They were in your position. They said, "Screw it, I'm not going to buy any ads. I'm instead going to hire some photographers to come into those restaurants and take the photos. Then after that, I'm going to measure the incremental impact of the added photography, and see if the efficacy of that is actually comparable or high enough, comparing to the efficacy of ad spend." Effectively saying, "I'm going to open a brand new marketing channel, and that marketing channel is going to be photos." Stephanie: Photography. Alex: I'm like, "Okay, let's just do it." Stephanie: A whole brand new, the vision, of Grubhub, just photography. Alex: Exactly, exactly. These two folks get on the phones, start calling photographers, start calling restaurant owners and scheduling appointments to have the photographers come in there. That becomes basically their job for the next two months. Alex: Then they organize a really [inaudible] visitors for these specific menu pages see the photos, and others don't. They do some serious math to try to say, "Hey, here's the incrementality in here, and here's the efficacy of the spend comparing to what Google ads would be, or Facebook ads would be." They discover that those photos are actually a better way to spend marketing dollars, than any actual marketing. Stephanie: Yeah. Alex: I, at that point, am kind of floored. I come to them, I'm like, "Okay, you guys are on fire, this is amazing. Let's take your thing and give it to operations and scale up this thing." They say, "No, no, you don't understand, you don't understand. This whole project sucked. We spent our entire days on the phone with restaurant owners, trying to schedule appointments. We are going to make it better." Alex: I'm like, "Wait, what's going on?" They say, "No, no, instead of scheduling appointments with the restaurant owners to take photos, we are going to rent Airbnbs and photo studios around town, then order food from the restaurants, bring it to those Airbnbs. Our food stylist is going to make it look good, and we're going to take photos." Stephanie: Oh my gosh. Alex: I'm like, "Wait, wait, what? What?" Stephanie: That's another level. Alex: Yeah. My immediate reaction from this is, "Have you ever seen delivered food? It does not look good." They obviously told me to go pound sand, as they should have, and they showed me the first photos from these experiments. Oh my God, those first photos look much better than anything taken in a restaurant, because food stylists are really good at their jobs. If you were able to control the lighting, you're able to take much better pictures. Alex: When they actually tried it, they discovered that instead of doing two photo shoots a day, the photographer, who's the most scarce and expensive part of the whole operation, is able to do 20 photos shoot a day. Stephanie: Wow, that's efficient, that's amazing. Alex: As you can imagine, at that point, my mind was completely blown. We indeed operationalized this with folks whose day job was operations, as opposed to marketing. This was the example of really learning what learning means. Stephanie: Mm-hmm (affirmative). You kind of picked the markets to do that in, or you kind of see a market not doing so well, and those are the ones that you focus on getting the good imagery for, versus allowing that... UGC content to work well in other markets, or how do you think approaching that? Because it seems like something that would be really hard to scale, ordering a bunch of things all the time from every market in the U.S. How do you think about creating those campaigns? Alex: Yeah, yeah, yeah. With hundreds of thousands of restaurants on the platform, we indeed have constrained resources to do these photo shoots when we can. We can't do all of them next month. We had to be somewhat thoughtful on prioritizing things. A few things came to mind for being able to select the right restaurants to do this in sort of the right markets. Alex: First is, conversion. If consumers land on the menu, and end up buying stuff anyway. Well, that's cool, I guess they don't need the photos. If on the other hand, conversion isn't amazing, but the number of visitors to the menu page is super high, hey, this might be an opportunity to actually add some photos and improve that conversion. Alex: By digging into the data, and looking at where the majority of the incremental impact can be, we develop this framework for allocating this constrained resource, which ended up effectively being an investment of marketing dollars into a channel that's sort of marketing, but sort of not. Is it product? Is it operations? I have no idea. Stephanie: It's something, all the above. Alex: Right? Stephanie: How do you think about, you mentioned incrementality quite a bit. How do you think about that throughout your organization, when developing these experiments and seeing what works and what doesn't work? Alex: Sure. First, if you don't mind, allow me to define it as- Stephanie: Yes, please. Alex: Because I think that's super important. Incrementality, to me, is what would have happened anyway? If you didn't do your glorious marketing campaign, or this amazing product improvement that you just rolled out. This is a difficult question, because it's really attempting to attribute the entirety of this success, or entirety of what's happening during a campaign, to the campaign. Alex: Let me give you some intuition behind this, right? Let's say you go to, I don't know, gap.com or something like that. You see a banner in there that says, "10% off." Well, obvious, a lot of people are going to click that banner, and a lot of people are going to use that coupon to get 10% off of their transaction. The key question, though, is, what portion of those people would have transacted anyway? Stephanie: Yeah, they went there directly. They probably would have. Alex: Exactly, it's clearly not zero, because before you launched that awesome 10% off coupon, some people were buying jeans yesterday. Being able to, with confidence, judge what that incremental behavior is, and what is the incremental CAC, and incremental LTV, is super important. Simple back of the napkin as to how you judge this is, let's say yesterday, a hundred people bought those jeans. Today, 110 people bought those jeans. It's not a real AB test, obviously. But all 110 people used your 10% off coupon. You can wrongly suggest that all 110 converted because of your coupon, or you can look at the truth in the eye and realized 110 used the coupon, but 10 really only needed it. Stephanie: Do you think a lot of brands are missing this when they offer these discounts, and maybe unintended consequences that could come from it? I could see a lot of consumers, if they get used to you always having discounts, then they just wait. They're like, "I'm going to wait for that next 10% off coupon," then they don't have a buyer at all. Alex: Yeah, it is super dangerous. I do think that in some industries, there's exactly that happening, right? We know of the right times during the year to buy a TV, so we don't buy a TV until then. We know when the right time of the year to buy home improvement equipment, and we don't buy it until then. Exactly what you're describing is a real danger. Alex: It's not just a danger of delaying the purchase, it's a danger of create a permanently less profitable business. Imagine is, every Friday, Grubhub was to, let's say, give all our consumers three or five dollars off. Not only are Thursday orders going to be delayed, because our consumers are going to be like, "Hey, I don't really care when I get takeout. I'll cook one night and I'll get takeout the other night." They'll delay it until Friday, but those Friday orders are going to be less profitable. Alex: So we permanently teach our consumer base, if we take that route, to not only delay their orders, but to make them less profitable. That is a real issue and something you got to be super careful with, which is why you must measure incrementality. Stephanie: Yeah, especially right now. You see so many people discounting everything, it's kind of scary to think. How are you going to come back when your entire, everything on your store online, is 80% off? How do you come back from that? Alex: Most definitely. Now, if you have physical inventory, the opportunity cost is not zero. Right? Let's say if you're selling digital goods, for example, right? Let's say you're selling access to, let's say a song, or a book, right? Your fixed costs in that situation, your cost of an action, is terribly low, right? As opposed to if you have goods in the warehouse, and you aren't able to sell them, there's very meaningful fixed costs for you that you need to deal with. Alex: It might be, actually, quite reasonable to be running these high promotions, but if you are, you better be running it as a real AB test. You better be able to confidently say that this is the true incrementality of this 80% off coupon, and that's the true value that I'm getting out of it from both not needing to keep these products in the warehouse, but also from just sheer revenue from the consumer. Stephanie: Yeah, that makes sense. Do you have a good platform or way that you've set up metrics and things like that to measure that incrementality in a way that's not really manual, and then you can just kind of see how the campaigns and what they're doing is performing against each other? Alex: Yeah. In lower funnel channels, it is actually fairly easy to set up a platform for this, and we have. There are tools that you can use for it, right? Google Optimize, for example, or Optimizely, right? We have a combination of in-house and these third party tools to do product experimentation, for example. Alex: For things like CRM, couponing in the apps, or issuing emails with coupons, or push notifications, really good experimentation platforms don't exist off the shelf. We had to do some math ourselves. Some of that math turned out to be fairly fine tuned to Grubhub's needs. Here's what I mean by this. We're an LTV business. It's not just about the immediate transaction, it's about what happens after that transaction. Stephanie: Yep. Alex: For example, if a consumer ends up converting at a higher rate, and then afterwards has a poor experience and doesn't come back, that actually is terrible, terrible, terrible. Your typical, immediate conversion optimization tool, would just look at the first part of this. Oh my God, they converted at a better rate, great, awesome, keep it. Stephanie: Yay. Yep. Alex: We had to build tools specifically designed to capture these long-term effects. We typically look at the results of these long-term activities over the context of a month, right? So we need to see what happens to consumers for a meaningful amount of time to have high confidence that it indeed is net beneficial or not. Alex: Of course, we're able to look at things fairly early, and if something's a terrible idea, we're able to kill it early. But, in order to be able to confidently say what is the impact on the LTVs, we had to build tools. These in-house tools for many CRM things that we do today. Stephanie: Got it. Alex: Even then, it's just for lower funnel. It's just for CRM and product. How do you judge the incrementality of TV versus billboards? That is a whole other, super complicated story. Stephanie: How do you think about the intersection between your CRM and your content management system and your actual commerce platform? How do you create a good environment where they all interact together, and people can see a holistic view of everything that's going on? Alex: Great question. I don't think I have a perfect answer for you, other than enabling as many work streams for experimentation as are possible. That is, allowing the CRM team to run experiments on their own, without involving a bunch of product people, without involving a bunch of finance and analytics people. Similarly, allowing the front end or pricing optimization team to run experiments on their own, and do very specific price optimization experiments just by themselves. Alex: The more work streams like this you have running in parallel, the more you're going to be able to learn, as an organization, per unit of time. Stephanie: That seems like a great answer to me. It also seems like you would get a lot of, you could have a customer with a negative experience, but it would be because of maybe the restaurant. It seems like you guys would have a lot of insights into maybe how to help restaurants improve, where it's like, hey, every time someone orders this thing of sushi, you always forget the wasabi, and man is that making people upset. Do you ever send that data back to restaurants to improve the products as in their food, or the customer experience, or anything like that? Alex: Most definitely, you hit the nail on the head. We are in a really unique position of knowing not just who the people were, or when they placed the orders at your restaurant, but knowing exactly what they ordered. We can see exactly that pattern, right? We can tell you that on Tuesday night, the reviews for people ordering sushi, are actually worse than on any other night. We can help you see that, so that you can train the person that's working on Tuesday night. Stephanie: [crosstalk 00:43:21]. Alex: These kind of insights... Yeah, totally. These kind of insights are exactly what we believe is what is something that we can uniquely provide to our restaurant partners, besides demand. Of course they come to us because they're interested in demand, particularly now. But we can do more, and we've been building a lot of systems specifically about that, that are effectively... you can think of this as recommendation systems in the grand scheme of the word of giving recommendations to the restaurants about how they can lend the totality of their business more efficiently. For example- Stephanie: It seems like that could be a whole different business for you guys to also operate. Alex: It's quite synergistic in our minds, right? If we're able to make our restaurants more successful, it actually makes us more successful, in turn. Because, those consumers who are placing orders and are not getting any wasabi with their sushi, they are ultimately not happy with Grubhub. We want them to have an amazing experience. Alex: Whether the restaurant wins just on Grubhub, or throughout the totality of their experience, because, let's face it, that restaurant might be serving other delivery platforms, and soon enough, hopefully, dine-in, as well. That retraining is going to help the restaurant across the board. We actually very much welcome that. That means that we're able to create the value not just for our platform, but for the restaurant, and increase the chance that this restaurant will, ultimately, be successful. Stephanie: Mm-hmm (affirmative). I think that's a really good point, especially as a lot of brands right now are shifting quickly to the world of Ecommerce and trying to figure out how to sell online. There's going to be a lot of new touch points that they maybe aren't anticipating that could actually hurt the consumer experience. If you've got the UPS guy throwing your box over the fence, and it's getting crush, there's a lot of things that actually, you maybe wouldn't even think of, as a brand, of, "That's not my job," when really, everything form start to finish to delivery and afterwards, and the follow-up, all of that's your job. And how do you think about controlling that experience with so many touch points? Alex: You are so right. The totality of this is their job. From the first ads that they see on TV, to what shows up when they look on SEM or on paid social and discover your brand there, too. The first purchase experience to the interaction with the UPS guy, to the interaction with customer service. All of that, in totality, is what the brand relationship really is, what the product really is. Alex: As marketers, we can't just care about that ads. As product people, we can't just care about the bits installed on the phone. They, in their separation, they don't particularly matter. As you saw from my story with the photos, that really was quite profound to me, right? We kept looking for a solve to get more customers and more sales through marketing, and that solve wasn't there at all. The most efficient solve was far outside. Stephanie: Mm-hmm (affirmative), yeah, such a good reminder for all brands to think about that, like you said, totality of the process. Because you have a software engineering background, I feel like I'm allowed to ask you tech questions. I saw on your, you guys have a blog on Medium, or your engineering staff does. They were talking about how they were creating discount codes using crypto. It made me wonder, what other kind of technologies are y'all experimenting with, or seeing success, or how did you think about running the platform that Grubhub's built on now? Alex: Sure. A few things are super important. One is having a scalable platform that can withstand demand, and that can withstand massive spikes in demand. As luck would have it, most people in Chicago, want to get dinner approximately at the same time. Stephanie: Yes, who knew? Alex: Right. What a pain in the butt. We've been trying to convince them to maybe come a different... No. Stephanie: Come on, 3:00's your time, come on. Alex: Exactly, exactly. Your dinner delivery window. Which, of course, creates formidable demand. Not just on the services in the backend of our systems, but a formidable demand on our logistics network. A lot of our work goes into being able to spike in response to customer demand. Let me give you one intuitive example of this. Outside of COVID, before COVID, when rain would start during dinner hours, demand would massively spike. Alex: At that moment, we're supposed to magically materialize a lot of drivers on the road doing deliveries. Being able to do so, technically, and when I say magically materialize, I'm of course referring to creating incentives and creating appropriate communication channels with our drivers so that they actually want to get on the road. A lot of our engineering work has to do with how we were talking about in the beginning, balancing the three sites of the network, and being able to respond to either a massive spike in demand, or response to a set of orders that were placed in the specific part of the city on the logistics side. Alex: Or, respond to an onboarding of an enormous partner, like Shake Shack, or Sweet Green, or Taco Bell, with their own unique needs. Remember, we work with such a variety of restaurants, right? We do point of sale integrations with a variety of our enterprise customers, which of course means that we have to have nimble systems that are able to onboard those same customers. They have to be resilient, as well. So, a lot of our work has to do with both scale and being able to deal with these spikes. Stephanie: Got it. Any favorite pieces of tech that you guys are implementing or trying out right now to help with those large spikes in demand? Or where you guys think the future is headed that you're kind of preparing for? Alex: Favorite pieces of tech. Huh. Huh. I'm going to think marketing tech. Braze has been an outstanding tool for our marketing teams. What we've discovered is it effectively enabled a whole work stream of experimentation for our CRM teams. They're able to run pretty sophisticated experiments completely independently from engineering, which increase our velocity of experimentation. Stephanie: Hmm, that's awesome. I'll have to check that out. Cool. So to zoom out a little bit, 30,000 foot level, what kind of disruptions do you see coming in the world of Ecommerce? What's on your radar right now? It doesn't have to be for Grubhub, it can just be in general. Alex: I think that the disruption is already here, where over these past couple of months, we've seen the portion of online transactions, and portion of consumers who have tried buying things online just catapult through the roof. All of those new consumers, let's face it, my 90 year old grandmother is using Zoom now. All of those consumers are a new opportunity. They have very different expectations. They don't yet know much about your brand. Alex: Being able to understand this newly online wave, and heightened expectations of the consumers that already happen online, but perhaps not as active with your service, right? Those, I think, are super important. This to me takes us back to velocity of experimentation, being more important now than ever. That is, truly learning from your customers. Observing them, creating experiments, measuring, and getting a feedback loop from them, so that you're able to focus and find the one thing that you can improve to make the whole story better. Maybe photos. Maybe it's something else. Stephanie: Yep. Yeah, I love that. It definitely seems like with these new people coming online, you have to have a bunch of different tactics to meet them wherever they are. The ones that have been working for the past year, might only work for a subset of the people because you have 50% more people that you need to market to, or develop a platform for, and it's going to be very different with how you approach those new consumers than what you've been used to. Alex: Exactly. Stephanie: All right, so, we're about to jump into the lightning round. Any higher level thoughts, Alex, that you want to share before we do so? Alex: If you're able to structure your organizational incentives to focus on learning and feedback loops, I think now you're going to see an even bigger reward for it in the form of market share, in the form of growth, in the form of being able to adapt to the world around you and leapfrogging the competition. Stephanie: Yeah, completely agree. All right, so the lightning round, brought to you by our friends at Sales Force Commerce Cloud. It's a fun and easy, quick round of questions where you have a minute or less to answer. Are you excited and ready, Alex? Alex: Very scared. Stephanie: Dun dun. All right, first one. If you are starting a podcast, what would it be about, and who would be your first guest? Alex: Whoa, what a fascinating question. What a fascinating question. I am obsessed with all things culture, and how do you actually create the right incentives for a technology/marketing organization? I love Simon Sinek. He is outright amazing. I learned a ton from reading him. I would probably to get him and if I can't, I'd get one of my former mentors in there, as a consolation prize. Stephanie: Oh, that sounds good. I would listen. I would be your first listener, and I would give you a five start review. Alex: Oh my gosh, thank you. Stephanie: You got me at least. What's up next on your reading list? Alex: Hmm, next on my reading list? I am reading Russian sci-fi novels these days, as a means of escaping from a tiny, one bedroom apartment. Stephanie: Any good ones that we should check out? Alex: I'm actually reading them in Russian, so I don't know- Stephanie: I was going to say, unless they're in Russian, then I don't know if I'll be able to read Russian quick enough to read it. Alex: Oopsie, oopsie, I do have a few people at my work who've been reading Tolstoy before the whole COVID situation started. I don't know if I'd recommend it now, Tolstoy does darkness extremely well. We have enough darkness around us now. Stephanie: That is true. Yeah, maybe not. Alright, well, what thing do you normally buy at a store that now you're just going to buy online after everything with COVID? Alex: What a great question. Only online now. Hmm. Stephanie: Tricky, tricky. Alex: I used to, actually a lot of my electronics. I used to come to the store and look at them and experiment with them. I have a feeling that I'm never doing that again. I used to come to a Best Buy and just try to look at different mice and monitors and all that. I got a new laptop and a new mouse online. I really like them, and I really like the experience. I was unafraid of returning them. That's it, online I go. Stephanie: Yeah, completely agree, especially as a lot of these companies are making the return experience a lot more seamless. Yeah, I could completely see the same thing happening. Buy things, test it out, and send it back if you don't like it. Alex: I was just chatting with a colleague about this exact same thing with returns around fashion. I think there's a lot of innovation to be had with moving the fear in fashion through that. Stephanie: Yep, completely agree, except I could see them having to now to figure out a way to resell those items in a way that proves that they've been quarantined, disinfected, and yeah. I was just thinking about that the other day. Man, that's tricky, especially for second hand market places to try and prove to the customer that these items are clean and good to go, and you can buy them. Alex: I agree. Solvable, I think, but I agree. Stephanie: It is solvable. All right, so the last final question. What's up next for Ecommerce professionals? Alex: I think we're going through a time when from being on the early adopter, early majority demand for most of the brands. We've become the critical source of revenue for every single brand. If you think that your company was going through a digital transformation, and is now trying to make digital just a better channel, hold on to your seats, because it's not the only channel, and the majority channel. So, the demand for expertise in our area is increasing very rapidly, and the demand for learning in our area is also increasing rapidly. I think this is a wonderful time to be in Ecommerce. I think this is a wonderful time to be learning and doubling down on Ecommerce. I'm excited for all of us to be right at the center of this transformation. Stephanie: I love that, love the positivity, and yeah, it's definitely an exciting time to be alive and experiment and try new things. This has been a blast Alex, thanks so much for coming on the show. This is your second appearance on a Mission podcast, so yeah, we're so thankful that you came back and joined us again. Alex: Stephanie, thank you very much for inviting me. Stephanie: All right, talk to you later. Alex: Cheers.
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.
There are more than eight million dynamic pages that run on Lenovo.com, where the majority of shoppers go to buy their products. It is a massive Ecommerce platform that has to work for more than one billion website visitors per year. Ajit Sivadasan is the Vice President and General Manager of Lenovo, and even though managing those pages is part of his job, what he’s more interested in is making sure that those pages are offering relevant content and an efficient experience to a new generation driving Ecommerce growth. On this episode of Up Next in Commerce, Ajit explains why figuring out what content is relevant to Gen Z will be the driving factor in how successful your Ecommerce platform will be. 3 Takeaways: There is a massive demographic shift happening in the consumer market, so rather than focusing on producing more and more content, companies need to focus on producing content that is relevant to this new audience of digitally-native consumers Customer irritants are data points that matter and constantly change. Constantly addressing those irritants – from delivery time to language on the credit card processing screen – has an impact on consumer satisfaction and your NPS Behavioral economics states that humans are predictable and predictably irrational. Therefore, you have to take this behavior into account in everything from website design to offering comparisons of products as a counterbalance for the fact that humans will deviate to the path of least resistance more often than not 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: Hey everyone. This is Stephanie Postles, your host of Up Next In Commerce. Ajit, how's it going? Ajit: Good. Thank you for getting me on the show, Stephanie. Stephanie: Yeah, I'm excited to have you on. So I'd love to hear a little bit about your background at Lenovo. You've been there 15 years, right? Ajit: Close to, yeah. This is my 15th year. Stephanie: So I'm sure a lot has changed since you joined the company back then. Ajit: Yeah. I joined Lenovo in 2006, and came to Lenovo to build a consumer brand online. And obviously, when I joined, we didn't have much of a infrastructure or even sales. We were in a very limited set of countries. We were actually in four countries and we probably had a very small amount of revenue. Since then, obviously, we have scaled the business about 10X on revenues, and profits have grown about 10X. And we have scaled from four countries to 35 countries. And in the process, we have seen several acquisitions. We acquired the Motorola brand. We acquired the System X brand. So we have had to integrate all of those businesses. So Lenovo has gone from a company that's sold PCs, to being a company that basically is trying to drive intelligent transformation for its enterprise customers, and for its consumers around the world. Obviously, we have a footprint in more than 165 countries. So it's exciting. Ajit: When I joined the company, we were number six in the world. Obviously, we've been number one for a number of years now, and have a significant market share in the PC space, and we continue to make progress in the data center space, which we acquired from IBM. And the Motorola phones, you might have seen some of the latest phones that we introduced. We were the first ones with the foldable phone, that was a take on the Razr phone, the iconic Razr phone. So, yeah, it's been very exciting. We have obviously enjoyed our ride. I'm very excited because we get to interact with a number of customers on Lenovo.com and really bring the technology to life, and the brand to life, using the platform we have. So yeah, it's been a good ride. Stephanie: That's awesome. And what does your day-to-day look like at Lenovo? Ajit: I manage the platform for Lenovo, which is basically Lenovo.com. And since it serves all of our stakeholders, we have the Lenovo.com footprint in more than 90 countries. So I have to manage both the sales side, which is primarily a combination of B2C and SMB. And then I have to manage the enterprise side of the customer. So mostly B2B customers that buy from us using a procurement type of strategy, where we actually service them one-on-one. So I have the sales part, which is basically running the whole end-to-end business, all the way from marketing, CRM, UX/UI design, sales and marketing, phone sales, to really even trying to help with the supply chain piece, working closely with our supply chain organization. Ajit: But then the other side is really trying to figure out how to position Lenovo.com to become a brand voice, and figure out how we bring to life all of the innovation, and the products, and the enterprise strategy we have, for the stakeholders that come to Lenovo.com around the world. We get over a billion people coming to the website any given year. So it is a pretty substantial property. And so we have a ton of work that we need to do to manage all of those aspects that take care of basically all of the customer needs we have. Stephanie: Wow. What are some of the key learnings when it comes to moving globally? So it started out, I think in 1985, and it was just a reseller in China, right? And then, now it's a global company. What has that transition been like, and what have you learned in the process as you open up new countries and start selling there? Ajit: When I joined, obviously, my journey beyond Lenovo, was at Gateway. I was at Gateway for five years. So I've been in the PC space for about 20 years. And what you have to really understand is, all the transitions that have happened in the business model. When I started, internet was relatively new, and people used it as a very siloed organization that was doing just the phone and the web. So it was very limited. But today, as you know, 70% of the traffic that comes to the website is mobile traffic. The patterns have shifted quite a bit. So the business model transformation that has happened over the last 15 years has been interesting. Ajit: And what you see is, initially when we started, a lot of our colleagues around the world were maybe a little apprehensive. They were worried about things like conflict. They were worried about issues like pricing and things like that. And what you notice as things have evolved is, what you find is that, that is a very complimentary system. A number of our customers that are very sophisticated, technology-focused, innovation-focused, want to buy online. They want to be able to customize their products, they want a full breadth of products. And then there is a bunch of customers who would like to go to retail stores, look at our products, touch, understand it a little bit better before they actually make a purchase. So what we have found out is, thought we had a lot of skepticism, maybe even like six, seven years ago, that has changed into, people now trying to figure out how to leverage the business models, including connecting retail and the offline presence we have. How do we get our enterprise customers the best experience possible? How do we make sure the supply chain is responsive? How do we get them more capabilities that love them to buy products on credit, allow them to buy using a subscription type of service, give customized services that add them for SMB customers. Ajit: So, if you really think about it, the evolution has been quite interesting. And look, day-to-day, there's tons of things that you need to do because it's a fast-pace, technology-driven, very innovation-focused space. And people like Amazon and others, they're really driving the paradigm as far as online commerce is concerned. So it's not sufficient for us to just look at our traditional competitors. We also have to understand that the customers are getting sophisticated, and their expectations are much, much higher than what they used to be. So in many ways, the decision to go into a country now, is much more driven by the customers, than it is even proven by our direct stakeholders. And when I say stakeholders, internal folks, because customers really demand that you actually have an online presence. And they really want to transact with you online. So the transition has been interesting, but I think it's accelerating and the business models getting very complex. And our ability to actually react to them fast is going to be critical, as we move to the future. Stephanie: Yeah. I completely agree. So I heard that you have eight million dynamic and other pages, on lenovo.com. Maybe it's more at this point, compared to when I heard that stat'. How do you keep up with all the pages that you have, behind the scenes, being custom, depending on who's coming, depending on what country they're coming from? How do you make sure that it doesn't turn into a black box? like an algorithm when it starts getting too much stuff in it, you're like, "I don't even know what's happening behind the scenes anymore." How do you keep up with the pace? Ajit: A lot of this is automated. If you really think of our bulk of the products... I'll give you an example. So we sell thousands and thousands of third party products, accessories. Whether it is hard drives, whether it is even headphones and monitors and lots of things that are serviced and provided by other companies. And those are all managed automatically. So it's in a database. It's a data-driven process. So you don't have to worry about it. But if you multiply those into the number of countries, suddenly the numbers look staggeringly big. Now, having said that, it still is a pretty big number of pages. And clearly, there is a process for us to manage level one, level two, level three type of page, home page, right? If we look at the efficacy that is periodic checks on usage of the pages, there's teams basically managing content across the site, across the countries. Obviously, there is a strategy for how many layers of product pages we want to have. We look at data to understand who is using it, how often are they using it, and things that are not being used. Obviously they get [inaudible] as time goes by. Ajit: But more and more, it is clear to us that we need a very cohesive data strategy for formality content. So the formats customers prefer for content is changing. A lot more focused on videos, a lot more focused on how to do things, through a short-form video. Even content that you provide in terms of words are very succinct, and to the point. So you let customers pull the data, pull the content, as opposed to publishing everything and letting the customer go through stuff. Clearly it takes a lot of time and effort. And the key is to make sure that your systems, from the product management, all the way to what the customer actually sees on the glass, all managed in a way that makes sense. And that clearly is a challenge, because you've got a lot of legacy systems. And what somebody puts in as they're designing a product, may be marketed different from the marketing content that somebody needs to see in order to make a decision on a sale. Ajit: So you really have to figure out the process, streamline it. You need to make sure, periodically, you look for paradigm shifts. You need to understand demographics. 70% of the population that's going to be in the workforce is going to be millennials. And I can tell you that they are not really interested in reading a lot of stuff. They prefer much short-form formats, and they like videos and things like that. So if you're not connecting with them, and your engagement is not right, I think you're going to have a problem in the long run. So, I think the page count is less of a problem, than relevance. And I think that what we really are trying to do is to figure out how to be relevant, and drive content that truly drives engagement with our audiences. Stephanie: That completely makes sense. Are there certain trends that you see coming that Lenovo is preparing for, when it comes to, like you said, videos, preparing for millennials? What things are on your radar right now that you're preparing for the future? Ajit: So I'd say a couple of things on that. We are definitely seeing a pretty significant shift in demographics. Though we see a bimodal distribution. And by that, we see a lot more older people, and we see a lot more younger people. And the number of people in between actually is very low. So you would see very young people. 60%-70% of the population will be in the 20-30 age group, going forward. Which means that, these are native millennials. These are generation Z, Gen Zs, who basically are native digitally. And therefore, their expectations and how they consume data, and how they consume information is very, very different. So we have to really worry. I think everybody needs to worry, if you're online, as to how they are going to be part of your community, how you're going to get engaged with them, how are you going to keep their interest in the products that you have? Ajit: Part of the challenge is that they are so sophisticated, and are pretty much, in my mind, no nonsense, in terms of technology, that it's highly unlikely that they are going to support anything that is cumbersome, or verbose, or anything that basically takes away from efficiency, in terms of how they deal with online content. And so, I think the big challenge is for companies to truly make that shift of saying, "Look, this was the audience in the past. They had a very different predisposition to how they looked at data, and how they analyzed things. And then there's this new generation that truly is looking at content differently." Ajit: Now, the key points will be when they start truly having money in their pockets, and they're going to be in positions where they're going to be making decisions for companies, in terms of purchasing, technology decisions. And many of them already are making those decisions. And then if you are not able to engage with them appropriately, I think that you have a challenge. So truly trying to figure out how to build that relationship with the gen Z, millennial audience, I think is key. We are definitely looking at a couple of segments where we believe that that's an area that we need to really get good at, which is, gamers who are basically a big part of the online ecosystem. They are very sophisticated. They know exactly what they want. They are very community-driven. They're very content-driven. Ajit: And so, the proxy for us, at least in my mind is, "Look, you now have to figure it out how to engage these people online." Because you will learn from that set of experiences, that if you are, as a brand, not able to work that in your favor, it becomes increasingly challenging, I think, for the brand to have relevance in the future. And so, we are really focused on gamers. We believe that we have to cater to them end-to-end. From content, from products, online experiences, capabilities, giving them access to a broader set of products and portfolio, game titles, being able to give them subscription services and other things. Ajit: And the second audience that's really, really important are students. So a big part of students are going to be online, and quite frankly, this Covid crisis brings out the issue much more readily, where you see high schoolers, pretty much all schoolers, including colleges, basically offering courses online. And everybody's online study. I can tell you that it looked like a big deal when it happened, but we have been thinking about this thing for several years now. And this crisis obviously has accelerated that thinking even more. But the reality is that this is going to be the new norm. And, what is interesting is that a lot of people that aren't online students, because of the fact that for 1,000 years we have always told students that they need to go to a school, and be an apprentice, and study and learn because they can find a job. Ajit: And now, companies have come out and said, "Look, you don't really need a college degree to get a job. All you need is knowledge. And if you're good at something, then we'll figure out a way to test you, and you'll be fine. You don't need a formal degree." And we think that that trend will accelerate in the coming years. And I think that universities and colleges and institutions will figure out how to deal with it. And then at the same time, people like us, brands, we'll have to figure out how to engage this audience. Because, they're looking for information, they're looking for technology, they're looking for solutions. And the question is, "Can we provide them solutions and technologies that make learning online easier for students?" So that is the audience. Obviously, we make PCs, and we make phones, and we made monitors and all these things that really are part of the technology solution that enables people to learn online. And therefore, we believe that we should figure out how to engage with this audience who are basically online, and in a direct way, so that we understand their needs much more concretely. So those are two segments that are key. Stephanie, you had a question? Stephanie: Yeah, that makes sense. When it comes to thinking about this new generation, and they're, like you said, no nonsense. They want things quick. The website better be super quick. They better be able to buy fast. They have, I'd say, a higher risk tolerance when it comes to ordering online, as long as there's a good return policy. They're probably okay with just buying right away and hoping for the best. How are you thinking about your retail strategy? Because like you said, a lot of people in the past have been used to going into stores, and trying things out. Do you see that being something in the future? Especially with Covid, it seems like a good forcing function, where it's pushing more people online, and to just try it instead of having to experience it in person. Are you all shifting your thoughts around that area? Ajit: Well, I think Covid clearly will be an outlier. It will accelerate the digital transformation. But I still think that retail will have a pretty important place and role to play in the long run, but it will get redefined. And for our part, we are doing a couple of things. We are trying to figure out how to help our resellers, how to help our retail partners, and quite frankly trying to connect offline and online in a meaningful way. So where we own stores like in China and India and other places, we are trying to figure out how to connect the online experience with the offline experience, so that people can buy products online. They can go to the shop and order it online there. So really trying to figure out how to manage the customer experience a little bit more readily. Ajit: Now, having said that, I think the interesting transformation that's happening is really trying to connect the social, the retail, and online together. And if we can, at some point, get the mobile piece to work, then it becomes a very, very interesting value proposition for the customer because you truly have the customer for the whole cycle. So if they are outside, we know where they are, and therefore we can give them recommendations if they're interested in looking at our product. If they're online, obviously they can do things online. But if they do stuff on their phone, we can actually translate some of those things meaningfully to their desktop, and therefore we make it very, very easy, experientially for them to experience a good a brand experience. So we don't have to act surprised when the same person is in two different places, or as two different ways they connect to the brand. We just need to figure out how we connect those pieces. Ajit: And I think that these are the types of business model shifts that we will see accelerated as we go through this crisis and beyond. I think that people are finally trying to figure it out, "How are we going to connect this?" Look, Amazon has already done some of this with what they have done with Whole Foods and the Prime. So they've figured out how to connect the store to Prime users, and the online stuff. So the blueprint is there, and I think that most companies are doing some stuff. But I think that you're right. It's going to get accelerated as this crisis progresses. Stephanie: Yeah. I think connecting those platforms is key to making sure you understand the customers and can deliver value to them wherever they're at. Are there any technologies that you guys are experimenting with, to try and connect that online, to offline, to social, and mobile? Ajit: Yeah. It depends from place to place, and it depends on the companies footprint, right? In China, obviously, I think we are the most progressed in terms of the technology piece. We have a substantial online, merged with offline footprint, which connects WeChat, and online cloud, and our application layers, which allows our customers to actually be connected fully with the brand. And it actually connects all the retailers also to the brand in a very, very meaningful way. So that is, I think, the aspirational model for everybody. We have a very different model in Japan, as an example, where we are connected in kiosks, in the retail store, that's connected to the online world. In Taiwan as an example, we have an offline store that we are connected to. In India, it's the same thing. It's an offline-online model. Ajit: So yeah, the business model is different from different country to country. But it also depends on who is innovating more, and what's the landscape look like in the country? So it's not one size fits all. And I would be remiss if I didn't mention that privacy, as an example, is a key consideration in some countries, and some countries they're more relaxed. So it just depends, also, on some of the privacy laws that enable customers to share information more freely versus some others where you can't. Ajit: But my sense is that depending on the country, and depending on the business, you will see hybrid models emerge. They already are emerging. And some will have much more traction than others. But I would see a lot of partnerships being formed between online companies and offline retailers, to really manage the customer experience to be much smoother, and much more productive, going forward. Stephanie: Got it. And I saw that Lenovo is leaning more into focusing on the consumer and their needs, and becoming a more consumer-first company. Is there certain data points that you all are using to meet your consumer better than you were before? Or were in that end-to-end consumer journey do you see the most room for growth or improvement? Ajit: Yeah. Lenovo's history and its heritage has always been a product company. We have some of the best brands in the world, whether it's Thinkpad, Yoga, Moto, System x, these are all brands that are at the top of their game when it comes to their specific categories. Stephanie: I used a ThinkPad at Google. I love my ThinkPad. Ajit: There you go. And nine out of 10 people that I speak to in the business will tell me the same thing. I used to use a ThinkPad before I worked for Lenovo long, long time ago, as well as a consultant for Deloitte. And there's plenty of people who actually use ThinkPad because it's an iconic brand. So we always have been a company of engineers, historically. But as we move into the internet era, and as digital becomes more mainstay, it is absolutely critical for us to really understand what our end users look like, what they are doing with our products, how do we collect feedback that's more direct? And truly, really understand and have a pulse on what the customer sentiment is for our brands. Ajit: It becomes extremely difficult for us to get feedback more directly, as from an indirect channel, because of the fact that we don't really talk to the customer directly. We have to remain and collect information in an indirect fashion. And depending on the privacy laws and other things, it becomes very, very complicated for us to collect information. Having said that, three or four years ago, as a company, we decided that it was such an existential reason for us to really start thinking customers first, and truly trying to figure out how to connect with them, and drive digital transformation, that we decided to start measuring all of our customer segments, whether it's direct or indirect, in either use proxies or direct measures. But mostly, the entire company has been on a Net Promoter Score basis, and trying to understand how customers value our products and our services, and what they actually think about the brand. Ajit: So our employees and our executives get paid based on a customer satisfaction metric. At one point, it was actually imperative, in terms of how they got paid. So we take this very, very seriously. And the transformation is clearly much more evolved than what it was three years ago. And now, pretty much every group in the company has a customer-focused metric. Whether it's product development and supply chain, eCommerce, or our global accounts customers. So everybody is measured on a customer-centric metric, which allows us to then drive the focus that's stated. And it's one of the top priorities for our COO, our CEO, my boss who basically runs all of the PC plus the IDC group. It's a key focus for him. So clearly, it's something that we take very, very seriously, and we are all trying to evolve with this one metric that we can look at and say, "Are we making absolute progress as a company, or not?" Stephanie: Got it. So a lot of times, metrics can actually have unintended consequences where maybe someone's trying to meet that metric and they're not doing the best thing to meet that. Did you see that when you guys were thinking about creating that customer metric? Did you see anything go wrong where you're like, "Oh, that's actually not a good one to rely on?" Any learnings throughout that process? Ajit: Yeah, look, e-commerce, we have been measuring customer satisfaction for the last, I don't know, 13 years or so. So as soon as I joined the company, two years into it, I figured out that, "Look, we need some form of getting feedback from our customers." So we have a very robust and mature process for eCommerce that we've been collecting roughly 20,000 customer feedback from a survey that we do online. So we have had a model for a long time, that uses the feedback. The biggest challenge, always, I think, is trying to figure out correlation of what factors will drive it. I think that's been the big controversy. So is it delivery metrics? Is it quality metrics? Is it product design? Is it the call center experience? So, I think there is a ton of data, and we have requested data to find out the top factors. And those factors keep changing. So- Stephanie: What are the top factors right now, that you see? Ajit: So what we see is product quality is undeniably the number one thing that the customers actually value. Hybrid customers truly value delivery. So delivery times and making sure that you're keeping your commitment in terms of products. They definitely value help in the call center as a metric. So there's probably a list of about 20, that we track. And the big ones really are product quality, delivery, out-of-the-box experience, those kinds of things. Service, as an example, right? We do surveys of customers on their service. That's a pretty important part of their feedback. But the purchase survey that we do is more around the purchasing experience. And customers are not shy, and they give you exactly you know what is important to them. And the one thing that we find is that some of the metrics that are difficult to move. Like product quality, as an example, Lenovo's product quality is very high. So it's always in the 90% range. And for us to move a percentage point on product quality is very, very difficult. Ajit: But there are several others where, like delivery and other metrics that float a lot more in this, there's ability for us to go change that, if you are focused on trying to drive certain changes. So the key for us is to say, "Which are the metrics that we can influence, that the team can actually take actions? Whether it's on the website, whether it's on trying to do training, or whether it's really trying to figure out how we message things to the customer differently, do proactive phone calls." One of the things that we do. But the key is to really identify those things that truly can be moved meaningfully, and we can put energy behind it, and then keep going. Ajit: Last year, we moved our CSAT score, or our NPS score by almost 35%. So that's a pretty substantially good jump, in terms of effectiveness. And that's because we identified a few things that we thought compelling. We had a business management system around it, we made IT changes. So all those things configured into us focusing and moving things in a certain direction. So I think that's the key. When it comes to customer-centricity, the challenge is that the customers are not standing still. Their expectations are going up every single day. So you have to do a lot more, to make meaningful progress. So you can't just stop. You have to continually change and continually improve the processes. Ajit: And that's always tricky because you have to really be at it, and you've got to use data to really understand what's changed, what's moving, what's the new irritant? You have to do social listening, you have to really start scanning your data that you get from your customers to figure out what's the new irritant, and how are you going to manage them. So it is certainly not an easy process. It's a very challenging process. But it is also something, I think, that is very, very important, if you, as a brand, need to keep your customers happy. Stephanie: Yeah, I completely agree. If you were to point to, the larger theme of being able to improve your customer satisfaction score, what was the largest thing that you changed, or adjusted, that made it so you could improve that score, by, I think you said 35%? Ajit: Yeah. So the one big thing that we changed was, we always had a very high amount of customization on the website. So ThinkPads, as you know, can be customized. And obviously, a customized product takes a longer time than if you had something in stare. So we have traditionally had a lot of our ThinkPads customized. And we made a conscious choice to really figure out how to keep stock of some of our high-flying products, or the fast-selling products. And so, that is a pretty significant shift, because when you have to ship something centrally from one warehouse, versus, you have to ship products from a warehouse or a manufacturing facility to a distribution center, and manage inventory, it obviously is not as efficient as trying to run something directly from the factory. Ajit: But we made the choice to move some other products to local distribution, to speed up delivery of our products. And that definitely helped. And we had some issues with supply. We're having some industry-wide constraints on some of the supply. And therefore, this whole process of managing inventory locally really helped us manage customer expectations a little bit better than what we're used to. So that is one example of what we did, that really helped. Ajit: Now, we also made a number of changes on the website, from messaging, whether it's a credit card processing screen, or whether it's a product page, or whether it's a configurator design. Any number of things that we feel are irritating customers, we have it list of maybe 500 items that we work through at any given time. And everybody is going through those things and fixing it. And then that incrementally adds a little bit of help. But the big ticket items are always around supply, product quality, call center management, pricing, promotion challenges. Some customers see discounts that are different, and I.e. managing those correctly... So it really is those big buckets that we want to make sure that we are focused on, we're fixing. And ultimately, the customer feels like we are being responsive to their needs. Stephanie: That's really fun, haring how you're able to drill in on a few of those things, and shift customer perception and happiness so much. Are there certain metrics that you use when it comes to, like you said, looking at what's irritating the customers, or where the website is maybe failing in certain areas? Is there a set of metrics that you look at, maybe bi-weekly or weekly with your team, to see how things are doing? And if so, what are those metrics? Ajit: Yeah. So when you talk about metrics, we have a website, a technical side of looking at metrics for the website, which is the IT organization that basically looks at all the technology stuff. It is, "What does the response time look like? What is your mobile performance? What's the page performance? 404 errors, page not found, the timeout errors on your checkout page, blah, blah, blah, blah. So there's probably like 100 things that somebody looks at every single day and then we manage those by exception. So we know what the numbers are. There's somebody constantly looking at those. Ajit: Then that is the website feedback mechanism, which is, when a customer comes online, something like our opinion lab, or a survey mechanism that basically allows customers to give you a feedback. So we randomly select customers that are on the website. We actually give them the opportunity to respond to the experience. We collect experience on their research process, their buying process, the website complexity, blah, blah, blah. So we get a ton of feedback from our customers on that particular thing. And then like I mentioned to you, we have this thing called the online ordering experience, and the purchase experience. So we get 20,000 or so responses every two weeks from all these countries, which we analyze. Ajit: Then, we obviously have social listening, where we actually listen to what the customers say. And then that is a common section where customers give us comments, and we use some form of AI stuff, to actually binge through all that stuff, to really get the sentiment analysis, and big ticket items that are coming back. And we take all of these things into a composite score that then allows us to go look at and say, "Where are we falling short? What are the benchmarks? What's the threshold? What's the competitive benchmark that we should be looking at for each of these categories? Best in class." And then we benchmark ourselves and figure out what actions we need to take, based on why this mentions the regression analysis to say, "Okay, these things actually have a meaningful impact through the customer experience. And therefore, we got to go figure out how to remove people who are giving us ones twos and threes. How do we increase our nines and tens? And then everybody in between, how do we move them up," to basically minimize the customer irritations that we have in the system. Ajit: So it's a very systematic process. There is a team that basically looks at it. There's a supply chain element that's very real. There is a services element. There is a phone sales element. There is a chat sales element. So it's a very complex set of metrics that basically transcends all of the functional groups that have a small stake in that experience, as the customer goes from the website research, to buying the product, getting it serviced, talking to a customer rep'. So we take the end-to-end customer with journey and figure out all the points, if they touch something, and figure out how to measure them, so that we have an accurate understanding of where the irritant is, and what we need to do to make it better. Stephanie: Got it. So I know when it comes to getting feedback, I go on websites all the time and it's asking me to do a survey, give feedback, and at least for me, I don't normally do it. I just X-off, and I try and find what I want. How are you incentivizing these potential buyers or buyers to give you the feedback, and take these surveys, and get them to do what you want? Ajit: It's tricky. You have to do it in a way that doesn't bias the sample. And that's what I'm most worried about, is that I don't want to incite people to do the wrong thing. So what we do is, we have a... What I've noticed is that the core customers, they are actually always very vocal, especially if they are a brand loyalist. So we get a steady stream of feedback on brands loyals, which is great because I think they are finicky, and they are brand zealots, and they really take pride in making sure that they're providing feedback on things that they like and things that don't like. And quite frankly, it shapes perception and product strategy in many ways because it's a big group of customers. Ajit: The tricky part is the random customer, or the customer that truly hasn't built a relationship with us but just bought something. Those folks, we have to figure out how to drive the subscription into the process a little bit more meaningfully. We periodically a 5% off coupon. We periodically send out emails to people who have bought product. We always send out emails to people buy products for us, saying, "Give us feedback. Tell us what is it that we have done well, and what are the things that we haven't done well." On the phone, obviously, we have more success because we get a chance to talk to people. But it's a combination of things. In the past, I remember like five, six years ago we would run contest that basically gave prizes for people to actually participate. And then we reduce that a little bit, because it may tend to bias the sample a little bit. Ajit: Look, online reviews is the other one. We have a very robust online review process that we have on the website. So we get a ton of online reviews of our particular products also. So we use that, sometimes, to also incent people to give us more feedback. So there isn't a one size fits all answer for others. It just depends. Again, in some countries we get local feedback, and some others... And so, countries where we don't get as much feedback, we try to figure out what's the right way? Can we leverage our community? Can we leverage our brand? And other things. Can we gamify it? So there's lots of strategies depending on which country and which part of the world you're in, to incentivize the customer to actually engage more readily. In some countries it's a challenge. Just because it is challenging in countries like Europe, where trying to get around some of the privacy laws can be tricky. So it's a balance. But we have tried discounts, newsletters, contests, reviews, and rating, promoting them. Ajit: Having said all that, I do believe that building a community and trying to nurture that community is probably the easiest way for us to get more and more feedback, which is what we are trying to do, is to try and figure out how to engage these customers more meaningfully over a longer period of time, beyond the purchasing. But we're connecting them with the brand. And then, I think that that solves some of the feedback issues, because I think we can get a much higher response rate when that happens. Stephanie: Yeah. I've heard a lot of brands leaning towards that community aspect, at least from the people that we've had on the show. What are some of the initiatives that you guys are doing, to create that community? Ajit: Well, I won't give away all the secrets, but- Stephanie: Just give us a couple. Come on. Ajit: So the big communities that we are focused on, obviously one is SMB. SMB, we fundamentally believe are underserved. And I think that there's going to be a lot more SMBs in the workplace, going forward. Because I think a lot of them are millennials and Gen-Zs are very entrepreneurial. With the advent of technology progressing the way it's progressing, and digital technologies becoming more ubiquitous, but with the online space, I do believe that we will see a lot of internet businesses springing up. It's no longer really difficult for somebody to actually open a business or start a business if they have a good idea. So you will see a significant number of people actually coming online in the SMB space. And we are obviously very aware that we need to provide them an experience, a community, and a set of resources that make them productive and useful. Useful in the sense that, we give them something that is useful for them to be more productive. Ajit: So part of our challenge is to try figure out what is really important for them. So we definitely think community is important. But the work, I think, is very, very important. And the question is, "How do we drive relevance? What is really important for the SMB customer as they are online, beyond the products that they buy from us? How do we get them more out of technology? How do we get the more out of their work, their productivity, and how do we make sure that they are ultimately successful as they are part of our ecosystem?" Ajit: So I'll give you an example. Maybe they can hear from other SMB customers who are probably struggling with similar challenges. Maybe the ability to belong to a community that has other people doing similar things, or at least dealing with broad themes that they're dealing with, money, resources, training, those things become important. So the question is, "Can we provide some of those things to our SMB customers that make their lives a little bit easier, and therefore their affinity for our brand a little bit higher?" So that's one thing that we are definitely doing for SMBs. A lot of work to be done. We are just at the very, very early stages. But we do believe that a well thought out, longterm strategy will definitely help our ecosystem and our customers. Likewise, we will be thinking about students and gamers, and trying to figure out what we can do meaningfully to nurture the relationship we have with them. Stephanie: Got it. Have you shifted your strategy around online learning, students, gamers, since Covid started? Did you guys have to go into a quick pivot mode to start doing something different or planning for a different future than what you were maybe planning for six months ago? Ajit: Well, we started this strategy two years ago. Haven't changed much. So therefore, we do have a leg up because we have been thinking this for a little while. Covid just made it a little bit more easier to sell, and get traction. But the strategy we are on has basically been in place for a while, because we have been building IT capabilities and some of those things that we need to service our customers. This is not something you can just spin up in a day. These take much, much more longer-term. And there's plenty of partnerships and relationships that are [inaudible 00:42:24]. So it's not, certainly, something that you can just copy, or you can just do. It is capital-intensive. You need to put money into it. You need to do a lot of development. Do you need to really start thinking about the strategy much more clearly? So it's certainly not something that's the thought about yesterday. But I think that there's a lot more that we need to do to be relevant and to drive this to a scale. Stephanie: Cool. So I've heard that you like behavioral economics. I was wondering- Ajit: Yes. Stephanie: Yeah. I watched a few videos. I'm like, "Oh, me too." What principles have been useful, or how have they shaped the digital experiences that you build at Lenovo? Ajit: Yeah. Look, pretty much everything that you do on a website, or you do on business lends itself to some of the principles from behavioral economics. And some of them that are really interesting... I became a fan of behavioral economics with Dan Ariely, who basically is local here at Duke. And we had Dan come to campus and speak to our people a couple of times. This was like maybe seven, eight years ago. So I've been a big follower of it. And clearly, what I understand from it is that people are predictable, and they can be predictably irrational in how they make decisions. So sometimes, common sense is probably overrated, believe it or not, when it comes to some of the design principles and some of the things that we do from a merchandising and marketing standpoint. Ajit: So big couple of things for me is, look, people want to compare things, right? And they freeze when they're not able to compare things that are similar. If you give them these similar things and ask them to compare it, they always rationalize it to something that is a common denominator. So as an example, you don't have to bet an apple to an orange. Obviously, they are very different fruits. And to ask them to really say which one you like more becomes a preference issue, more than a rational exercise. And so, if you're truly asked them to assign value to it, more likely, they are going to say an apple cost $1 and an orange costs 50 cents. So maybe the apple is 2X better than the orange. That would be the natural way of thinking. Ajit: Now, when you tell them to compare a PC of one kind to a PC of a completely different kind, they are likely to be completely lost because they just are not able to understand the fundamental differences between them. Or, it would take them an inordinate amount of time for them to actually compare the products, disparate products. And so what they do is they start thinking about price. And price is not necessarily the best way to make a decision on something that basically is going to be your technology partner for a few years, and going to make you productive in the kinds of things that you need to do. Ajit: So I've realized that look, you have to really enable a comparison of products in a much more meaningful way. So make sure that the customers don't have to really go out of their way to think about how to compare products. And obviously, it's challenging when we have so many products coming out at this breakneck speed, that some of the technology cannot keep up. But to me, comparing things is an important paradigm, in my opinion. Stephanie: It brings back the memories when I used to open up a bunch of tabs to compare products before the company started shifting to that comparison model. But I do still think there's a long way to go when it comes to, especially comparing tech. Because when I'm looking at a computer and it's saying, "Here's all the specs of this computer." A lot of those things, I don't even know, why would I want to upgrade? Whereas if it said, "Well this means that you'll be able to store this many pictures versus this." Or, "You'll have a much faster internet speed," or, "Remember how your computer's working really slowly when you try and open up Photoshop? It won't do that anymore." It would be nice to start seeing a more consumer perspective of, "What does this do for me?" Instead of just being like, "It's this many terabytes," and all the technical specs to it. Are you all thinking about that kind of shift, or how are you incorporating them? Ajit: Definitely, comparison of products is a big thing. Search, how you do search comparison is a big thing. So we are absolutely focused on it. And to make things worse, the mobile form factor doesn't facilitate very readily, comparison of complex things. So we have to figure out more elegant and meaningful ways in which we can have people compare products on a small form factor like a phone. So yeah, clearly very, very important, on top of our list. Always challenging, always evolving. So yeah, we have to go figure out how to do that. Ajit: One other thing that I would tell you when it comes to behavioral economics and behavioral science is, bias, the role of bias. And I think that this is a big one because I think people will generally, when they're making decisions, executives like me included, we make decisions based on anecdotal evidence, based on what we have done. And we take that size, and of one, and we try to generalize, hypothesize our theory based on a bad experience or a good experience. And we extrapolate that to the population and end up driving everybody crazy and not looking at numbers the right way, and ignoring numbers, and making decisions that are suboptimal. Ajit: So, the work by Kahneman and some of the work that the Israelis have done, especially because it seems like that's where all of the cool stuff is coming from on behavioral economics, from the Hebrew University, the work is really, really telling us not to be biased, and to suspend judgment, and to really focus on what the data tells us, and to pay attention to not fall into the trap of the bias. So, it takes a while, and it takes a lot of effort, but I think it's a good reminder for us to really focus on managing and minimizing our biases, so that we can make optimal decisions that affect our customers in a very positive way. Stephanie: Completely agree. Do you all do trainings at Lenovo? Whether it's for the executives, or the employees, when it comes to how to create surveys and look at the data in a non-biased way, and collect data from certain people, where it's not biased. Do you do anything around that to teach those principles? Ajit: I also teach, sometimes. So I have been pushing this very heavy and hard with my teams. And obviously, a lot of the executives read these books, so it's not lost on them. But look, because we have such a huge direct customer-facing interface, the focus on the online space has to be much inordinately higher, because I think the impact is much, much higher on the direct interface. So we are definitely driving this. A lot of our people are classically trained. They all go to classic UX/UI trading. But more and more, I also have started relying on quantitative data at scale, for making decisions, rather than opinion. So I am not, and my team hates me for this. But I'm not a big fan of qualitative information. I would much rather not ask people anything and just look at the data and interpret the data and start making decisions. Ajit: Because people say one thing, and they do another. And it's not a new notion. I think a lot of people know this. And at scale, when you're talking about tens of millions of records, I think the data doesn't lie. In fact, if the data says that, then that's what we should do because it services a majority of our customers positively. So that's the other principle that I use is, "Don't ask, just look at the data and try and make decisions based on the data. Try to understand the data, and then design your tests and your experiments based on what you see, rather than asking a bunch of people in a panel, and they'll tell you some stuff." And I'm sure it goes in some places, but I am always skeptical when that happens because I'm worried about bias. Stephanie: Do you think, from your experience, a lot of companies are still focusing on that qualitative data and it's actually leading them down the wrong path, or they're creating either new products or new website experiences that are probably going to fail because they're using that qualitative data? Ajit: I am sure people are. But I think people also... They all read these same things. But I think there is probably enough anecdotal evidence that suggests that there's lot of people who still use those principles. So I don't know the exact number, and any guess that I would venture would be wrong, so I would not venture it. But my sense is that yeah, it requires activism, like for some of the people and the executives, to actually read the books, get interested, get excited, and then drive everybody to get to follow it and understand it. It's a field that's still evolving. So it takes effort. Right? And then the infrastructure that's needed to do at-scale testing, and A/B testing, they're not cheap. It's expensive. Ajit: So, I think the question is, how many people are driving digital transformation? How many people are digitally savvy? How many companies are? And my sense is that that's a very small number. I think everybody's talking about digital transformation now, because of all the issues that are around them. But I can tell you that the number of companies that are digitally savvy after you take out some of the tech companies and the internet companies, is very small companies. There are a few who companies have a pretty big gap. So my sense is that they're not, probably, using it as much. Stephanie: Yeah. I completely agree. So, zoom out a bit for the last couple of minutes. In the world of e-commerce, are there any big disruptions you see coming or what do you see in the future, that you guys are planning for? Ajit: Well, I think this whole transformation, this whole crisis actually points to the fact that the digital transition will be much faster. I think that people have realized a couple of things. One, travel, may be overrated. People have realized that education, going to school, sitting in classrooms, may be overrated. People are going to realize that working from home is not such a big deal. And so, I think the workforce productivity, the online education, travel as a paradigm, and how companies operate, all of that will, I think, become ripe for disruption. So you will see, increasingly, technology solutions practices that's going to upend a lot of the work practices, and the educational practices. So that's happening. That's going to happen, and it's going to accelerate. Ajit: Clearly, I think that this will also boost some of the technology things like AR, VR, IOT, both from home and from work. I think it'll accelerate some of those things because it'll be a natural extension of some of the things that people are doing. I think the move to cloud is going to get accelerated, because I think everybody wants access to everything. As 5G comes, I think a lot of these things that are laborious today might experience a complete revival, and complete transformation when it comes to speed, and feel, and what's possible. So I think that the time is right for us to get much more digitally-connected. Ajit: The last one is mobile, in terms of what's going on with mobile and how mobile is going to get a face, or as 5G comes on. So it'll be interesting to see how retail, how millennials and gen-Zs, how SMBs, all of these groups of people that make up a pretty significant part of the population... I think students, gamers and SMB is probably at about 40% of the world's population. So you'll see that there's going to be a significant shift, quite rapidly, in the next three to five years. And there's going to be a considerable amount of disruption that'll happen as a result of this. Ajit: You will see winners and losers. This will be probably a long list of people we're going to go out of business if they're not able to adapt quickly to some of the changes that are happening. The companies that get it naturally will have much bigger gains, which will make them much more competitive, and difficult to beat. So you will see a lot of winners and losers emerging out of this whole crisis, and as the digital evolution continues in a significant way. Stephanie: Yeah. I love that answer. So before we move on to the lightning round, which is where we ask a question and you have one minute or less to answer, are there any other high-level thoughts or words of wisdom that you want to drop in the podcast? Ajit: No. Well, I just tell the people who are in this space, the eCommerce space, that their time has come, finally. So they should just buckle up and help their companies and see where the ride goes. Stephanie: I love that. All right. So the lightning round, like I said, brought to you by Salesforce Commerce Cloud, is where I will ask a question and you have one minute or less to answer it. Are you ready Ajit? Ajit: Okay. Stephanie: All right. What's up next in your travel destinations, after we're allowed to travel? Ajit: I would like to go to Cuba because I'm running very low on my cigars. Stephanie: Wow, that sounds cool. All right. What's up next on your Netflix queue? Ajit: I just finished Ozark. And I'm trying to figure it out how to watch The Last Dance. But it's not on Netflix, unfortunately. Stephanie: Maybe Hulu? Ajit: I've been watching Heist. So maybe I'll keep watching that. Stephanie: Cool. What's up next for... Is it lunchtime there? I guess a little bit past lunch. What's that next for dinner? Ajit: Dinner, I had cooked on the weekend, some lamb curry and some roti. So I'm going to just reheat that and eat it. Stephanie: Yum. What's up next on your podcast list or your reading list? Ajit: Ah, reading. I'm reading The Billion Dollar Whale. Stephanie: What's that one about? Ajit: It's about this dude, Wall Streeter, who basically flees a billion dollars right under the nose of Wall Street and big finance people and everybody else in the world. So it's like DiCaprio movie. Stephanie: Oh, which one is that? The Wolf of Wall Street? Ajit: The Wolf of Wall Street. So it's loosely a character like that. So I'm just a quarter into it. It's unbelievably engaging and interesting. Stephanie: I have to look into that. Ajit: Yeah, you should. It's pretty cool. Stephanie: You have a few, you said? A few more books that you're working on? Ajit: I still haven't finished Homo Sapiens, and some of the books that he had written. So I'm still trying to figure it out when I can finish those, with things slow. Stephanie: All right. What's your favorite tool or technology that you're either learning right now or you're thinking about implementing in the future? Or it could be a skill? Ajit: I don't know about skill. I don't know very many skills. Technology. We are constantly thinking about technology. And the big technology that we are thinking about is how to drive the subscriptions business. So it really is trying to figure out how to give customers the convenience of buying something as they pay-for-use concept. Because I think it's becoming very, very clear that the reason why people like Netflix and Adobe and some of our other customers and clients are successful, is because people are able to pay. And in [inaudible 00:58:45], I think that business model is very appropriate. People don't want to spend a lot of money upfront. So trying to figure out how to make their lives a little easier. Stephanie: Awesome. Yeah, I definitely- Ajit: Hello. Stephanie: Subscription business. All right, the last big one. So it sounds like you guys are doing a great job of staying ahead of expectation, and your competition. So in your opinion, what's up next for e-commerce professionals? Ajit: Well, I think it will become a key priority for most organizations. I think the digital transformation plus e-commerce, if they are in a business that does e-commerce, will become a major priority. The key will be to try and figure out how to build out that strategy in a meaningful way. If they are global, I think they have to figure out how to make it more global. If they are not global, they have to figure out how to get more local. Either way, you really have to figure out what that business model will look like. And it's not going to be easy because you have to deal with legacy systems, and you have to deal with legacy operating processes, and you have to deal with the legacy sales force and the legacy set of go-to-market strategies. So trying to figure out how to meaningfully make sense of it. There's a bunch of companies that are doing well. But there's going to be a bunch of companies that will have to figure this thing out. So they will be busy, and they will be in demand. Stephanie: Awesome. Love it. Any final plugs before we hop off the podcast? Ajit: No. I just want to say that if you have good people that work for you, you should try and figure out how to hold on to them, because it's going to get a mad rush to get to good people. Stephanie: Oh yeah. I completely agree with that one. All right. Ajit, it's been a blast. Thanks so much for coming on the show. Ajit: Thank you so much, Stephanie. I enjoyed our conversation.
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.
They say that a goldfish grows to the size of its tank. But what if that small fish is ready to launch into a bigger pond? That is the situation Sea Bags has found itself in recently. With a rabid following and millions in revenue, the Portland, Maine-based retail store has outgrown its initial eCommerce setup and is ready to grow into a major totes and accessories brand thanks to growth fueled by personalization, storytelling and an incredible social media presence. On this episode of Up Next in Commerce, Laura Hnatow, the Vice President, Marketing & Ecommerce at Sea Bags, explains how she is helping to expand the eCommerce platform using a cross-platform social media strategy, and she digs into the re-platforming experience she is leading to help Sea Bags utilize tools like A.I. and M.L. to grow their business both online and as they expand to brick and mortar locations. Key Takeaways: Content, social media and UGC utilization are critical in building and maintaining an active and engaged customer base Re-platforming offers an opportunity to utilize new tools such as A.I. and machine learning to introduce new forms of personalization in product offerings as well as marketing strategies The power of storytelling is the most important tool in your toolkit to differentiate yourself from the competition 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 the show. Laura: Hi, thanks for having me. Stephanie: I'm really excited about you joining me today. I just was browsing through your website, Sea Bags, and I wanted to buy like about five things. Laura: Oh, that's flattering. Stephanie: Yeah. It's awesome. An awesome product. I'd love to hear a little bit about what Sea Bags, in your own words, and why you joined it. Laura: Yeah. Sea Bags is a company based in Portland, Maine, that manufacturers bags, totes and accessories from recycled sails from sailboats. We gather those sails one at time from the boating community all around the country, and bring them back to Portland, where we cut them down one-by-one. Each sail is a little bit different, therefore each bag is a little bit different from the next. People come to visit us in Portland, where they can actually see the bags being made on the waterfront, at our building that actually overhangs the water, with the hum of lobster boats outside, along with the sewing machines and the seagulls. It's really a great experience in quintessential Maine. Laura: The reason why I joined Sea Bags... It was almost seven years ago at this point. The opportunity was presented to be by the current CEO. It was the story effectively. The whole story about the brand. It was so compelling. I've worked for a number of brand manufacturers before, L.L. Bean and Cuddledown. They all had great manufacturing stories to tell, but this story was so much more authentic and rich. It was that authenticity that made the story so easy to tell. They also had built the brand up on these three core tenets, that drive the business every day. It was this very defined mission behind the company, of being made in the U.S.A., sustainable in product and practice, and also committed to giving back to the community generously. Those three things guide all of our decision-making in everything that we do. With such a clear mission and mandate, in terms of how we were going to grow the business forward, to me it seemed like a no-brainer to join that team. Stephanie: Yeah. That's very cool. What is the story behind Sea Bags? I think it started with the Founder's dad. Right? Laura: Yeah. Many years ago, the original founder, Hannah, her dad, he was in the sail bag-making industry, for the actual bags that hold sails in between seasons. He made a recommendation to his daughter, "You should try to figure out what to do with these old sails. They're just going to landfills." She crafted the first ones. It's our current COO, Beth, who actually grew the business from there. She partnered with her and then grew the business to where we're at now, with the help of our current leadership and CEO. Yeah. It started as a hobby business, and now has really ground to be a lifestyle brand. Stephanie: That's amazing.The one thing I really liked, which I didn't know before, was I didn't realize that sailboat sails actually can't break down. So when you guys say you're focused on sustainability, you really mean it. Nothing would happen with those sails, if you didn't transform them and give them a second life. Is that correct? Laura: You're absolute right. Yeah. Predominantly sailboat sails are made out a material called Dacron. Dacron has an element of plastic fiber in it. It's that resilience that lets the sail hold up to the strength of the wind and actually propel a sailboat forward. But it is that strength in the fiber and how it's made that makes our bags so durable as well. Because of that inability to break down in the landfill, we knew that that material, itself, would be perfect for a bag. They wear like steel. People have gone into our store to show off, "Here's my bag. I brought it 15 years ago." They wash it regularly in the washing machine. They look great. Yeah. They do wear really well. Stephanie: That's so cool. How do you convey that uniqueness to your customers, especially through an online experience? I saw some really great videos that you all had on your website, which I thought were amazing. Is that part of the way that you convey that? Laura: Yeah, absolutely. Storytelling is one of the things that we do best. Like I said, that's why I joined the brand, is this rich story. We do a lot of content creation on our team. It's easy to do content creation when you have a lot to work with. Building really great video content... We have a new line of products all the time. We have new partners that we're collaborating with regularly. So being able to stitch together different videos, content pages on the website. We integrate a lot of user-generated content into the website and our marketing. Laura: So things like customer testimonials, but also customer images. We have a very rich user-generated content campaign, called our Sea Bag Citing campaign. It's a hashtag. And customers in that campaign will tag us and show us all the places they take their Sea Bag. It's really a great opportunity for us, because when we see a great picture, instead of us having to go out and stage a photo shoot, we've got a really authentic image of somebody vacationing using their bag in the environment that it was intended for. Stephanie: Yeah. I was very impressed when I saw your social media following and how engaged people were and the really great photos they were tagging you all in. I definitely see the world of online sales seems to be moving to social media and building a community. How do you think about building that up, and creating relevant content, and keeping those followers engaged? Laura: Yeah. I'd say it's one of the things we're really good at, but it's also probably one of the things that's the most challenging in what we do. Because people spend a lot of time on social media, but everybody's competing for their attention. I have a social media team with multiple partners on it. I've tasked them with making sure, across all the platforms, that, number one, we're showing different content, to keep different types of people engaged. And the other thing is that we're hitting the breadth of content that I'd like us to do. Laura: They have a filter that they put all of our content through, to make sure that we're showing the right variety of, and frequency of, things like behind the scenes images, testimonials, new product launches, PR news that we're doing. We're trying to make sure that we hit the breadth. And also, we're tailoring it to the specific types of platforms. Obviously Facebook and LinkedIn are not a synonymous platform so we make sure that some of the content goes on one location and we speak to those audiences a little bit differently. Laura: I think customers want to be invited to participate and we do a lot of that with either surprise and delight opportunities, where we ask people to come and bid on something for a chance a win to a wristlet. A wristlet is a small item. It's not like a vacation getaway. But that alone... people love the gesture. They love to participate. It's really interesting. When somebody does win a prize, it's funny how authentically and genuinely thrilled for the winner the other customers are. It does become very communal. They're like, "Oh, my God. I'm so happy for you. Great job. You're going to love it." Laura: Then we also find that customers... Getting back to this idea of engagement. This is delightful for us. Customers sometimes answer on our behalf. We'll get comments that say, "Do you have this bag in this color? Are you ever going to offer this again?" Before we can even comment, we'll have other customers saying, "Yes, they have it. You can go to this page." It's almost like we've got these brand ambassadors stalking us right within our social media. That is so flattering. It really does speak to a highly-engaged social media following. Stephanie: Yeah. That's amazing. Having people who are working for you and your brand without even asking. Laura: Yeah. Yeah. Stephanie: It's a key strategy, if you can figure it out. Laura: It is. It's great. Stephanie: Are there any new emerging digital channels that you are excited about or focused on right now? Laura: I think in terms of new channels, I don't think there is one. Social media really is where we're spending a lot of our time as a channel, in terms of trying to grow audience and engagement. We are playing around with some things like influencer marketing, which is important. I think some people might not call it new and emerging either. We're doing quite a bit in just dabbling in lots of different spaces. There is a lot of overlap. I think video is probably where we found the most success, in terms of developing content and distributing. Video specifically for Facebook has been fantastic for us. We're repurposing a lot of that video content again. We like to recycle. We put it in a lot of places. We're trying to incorporate it into the site. We use it for things like Instagram Stories. It's been really fruitful, so that's been really fun. Stephanie: Very cool. Any key strategy that you have when it comes to guiding a customer through that buying journey while utilizing social? Laura: It's interesting. We have a really defined and fine-tuned digital marketing strategy. We work with a great partner that helps us distribute all of our paid advertising. That would include paid social. One of the things about paid social that I think is challenging for people... I do chat with folks who say, "Facebook doesn't really work for us." I am always surprised to hear that. I think part of it is, it's the type of content that you're putting out in terms of advertising on Facebook advertising. Making sure you have the right mix of video, and static ads and then dynamic remarketing ads are really important. Laura: I think the other thing, too, is how you measure it. Of course, there's different attribution models. Last click attribution and first click attribution. Of course, Facebook measures the performance differently than some other folks might measure it. We base it on Facebook's measurement. When you base it that way, you'll see that the programs themselves actually perform much better than if you base it on the other attrition models out there using Google Analytics. Stephanie: That's interesting. I definitely see Facebook stepping their game up with the launch of I think it's Facebook Shops just yesterday or the day before. Laura: Yeah. It's so interesting. The landscape is changing quite a bit. I was actually talking about this recently with the CEO, because we see organic shifting quite a bit. We're doing a lot, in terms of SEO on the website and building organic content. We have a blog that we try to regularly publish. It's made a big impact on our SEO, but then all of a sudden when you have the search results pages changing to favor, again, more ad space? You do immediately see a falloff in your organic search results. Paid search all of a sudden is also doing much better, but you're also spending a lot more money perhaps than you had intended to. Stephanie: Are you guys doing any quick pivots to try and bring back the organic searches? How do you think about that when things change so quickly? Laura: Yeah. I don't think there is a quick pivot with organic. Organic is a long game, as always. The pivot that we're doing right now, and I wouldn't even call it that. We are looking at our digital strategy on a daily basis and really refining things. So if we see something taking off, we are chasing it. A great example is shopping at one point was doing very poorly. We didn't know why and watched it for about a week or two. It was right when things were headed down to a flat line period at the end of March. Everybody was in kind of a lull. Then all of sudden things turned around and a lot of e-commerce folks were seeing a spike. As soon as we saw that spike, we chased it. I think that's the thing. You really have to be on top of it and know when to chase it and keep increasing your budget. Laura: We've increased our budgets in area like shopping more than we've typically been comfortable. I would say the same goes for Facebook Prospecting. We found that Facebook Prospecting is performing incredibly well for us. We do a lot of prospecting with video ads for Facebook as well, and those are very productive too. Stephanie: Very cool. Did you have to adjust any messaging when it came to acting fast on that? With everything going on with the pandemic, did you kind of change how you target people and market to them? How do you think about that? Laura: We changed the messaging. Yeah. We definitely wanted to make sure we weren't being tone deaf to what was going on. We definitely pulled down any ads that had anything to do with travel-related products. We have a great travel collection. We pulled down all of those because nobody was going to be traveling. I think the thing that we did more so than the actual ad strategy was our product strategy changed a little bit. We wanted to look at our product from the viewpoint of how we could add more value to it, to help solve problems for people who were now stuck at home and still had life to conduct. Laura: The example I'll give is Easter came around and people were kind of caUght off guard by the idea that, "Oh, our Easter family celebration is not going to happen. The Easter egg hunt is not going to happen. I have a grandchild. How are we going to commemorate this holiday that is very important to a good portion of the population?" We quickly partnered with a local chocolate company that had just laid off most of its workforce. They were able to bring back five of their employees to help produce chocolate to put in our Easter buckets. Stephanie: That's great. Laura: Within a very short period of time... We thought, "We might sell 50 of these over the next three or four days." We sold over 700. It was one of those things that every day, we said, "How many more do we need?" It was really a matter of how much chocolate could the chocolate maker make in that short period of time? It was a real success story, in being able to reach out, help a fellow business in the community, but also solve some problems for customers. The comments we got from customers were unbelievable. Just saying how appreciative they were because they weren't going to be able to see their family and bring them something. This is how they were able to do that. Laura: So that was really rewarding. That afforded us a lot of opportunity in our digital advertising to reach new customers, to convert customers who were prospects and who were already looking into the brand. It was more about just being relevant with a message that solved a problem for customers. So then we took that same product strategy and same digital strategy and expanded it onto Mother's Day, and Father's Day, and Graduation. Even though a lot of the stay-at-home orders have been loosened a bit? I think a lot of people are still looking for some convenience to eliminate any unnecessary visits to stores that they don't want to make. Stephanie: Yeah. I completely agree. That's such a good strategy, to find partnerships like that. I could see that lasting into the future, where a lot of brands start thinking about who they can partner with. That seems like it would help future-proof both brands, if they figure out ways to work together and send business to each other. I think we'll see more of that over the coming years. Laura: Yeah. I hope so. I know for our brand, we're not going to stop doing it. It was a pilot that was a success. Now we've realized there is an opportunity here and the customers see the value in it. We've always been very collaborative as a brand. We typically do reach out and collaborate with a handful of companies that are like-minded in their business practices and approach. What we often bring to the table is that we're a sustainable product and they might not have that same messaging in their product that they can offer. Or the fact that we're a Made in the U.S.A. product, which again is really valuable to a lot of brands to partner with us. So we have similar mindsets and very much focused the Coastal lifestyles perhaps. Laura: A more recent relevant example, we're partnering right now with Life Is Good. If you're not familiar with that brand, they are an apparel and accessory company that basically delivers the message of optimism in all of their designs. Really quirky designs that we are now able to add to a Sea Bag, and then with these really important optimistic messages during this time that we're all going through. It resonates really broadly with customers. That's another example of ways that we reach out and collaborate. It's given Life Is Good an opportunity to have a Bag story that they sell to their audience, and it gives us a different story in terms of different designs and messaging for our audience as well. Stephanie: That's great. When it comes to messaging, does the consumer know the background of the flag, where it came from and the journeys that sailboat went on? Do they have any insights into that, so they can find of feel connected to their bag even more? Laura: Yeah. It's interesting. We would love to be able to pedigree every bag, but when you start talking about 700 tons of sails that we've saved from landfills, it's really, really challenging to figure out how we could actually catalog that many sails. On a one-to-one basis, no. But what we do is when we take a sail in, our customers are so great about wanting to share the stories. So we've had many cases where a Sail Trade, is what we call it. The customer will bring a sail into our store, for example. Just show up and unfold the sail right in the middle of the retail store and start talking about, "Oh, this is the sail that was on my grandfather's boat. As a kid, we sailed." They just go into this long elaborate story. What we try to do is get somebody from the marketing team downstairs to take notes, and talk to them about it and basically interview them a little bit about what the story behind the sail is. Because that stuff is so meaningful. Laura: We have a really great one on our website called The Santana Sail Trade Story. The gentlemen, Ben, tells the story about how this boat meant everything to him. He had this boat since he was 15. At this point, he was in his late 40s, maybe early 50s. He still has the boat but was retiring the sails. He talked about the different moments that that boat was present for his life and every smudge and stain on that sail means something. He hoped that everybody who buys a bag really understands how meaningful the heart of the sails are. Stephanie: That's great. Feeling like you're connected to a community like that, and another person, without even knowing them, I think it's super important. What people are going to want after all this. Now we're all getting in the state where we're connecting with people that we don't even know online. Laura: Right. Stephanie: We're getting used to that now. I think moving in that direction is really smart and also just fun. Knowing that you have something that has experienced things that you could never even think of. Laura: Yeah. Yeah. We like to say that carrying a Sea Bag is like carrying a story on your shoulder. Stephanie: Yeah. That's great. Have you ever had a sail come through where you're like, "This is from a pirate ship?" Laura: I don't know about that. There is a type of sail called tanbark. It's like a dyed tan-colored sail. The lure of tanbark, it's not often used in sail manufacturing today. It's definitely not as common. The lure is that the pirates, they used to use tanbark sails so that they wouldn't be seen on the horizon with the sunset. It was the way that they were able to sneak about in the ocean and not be spotted in the distance with a bright white sail. Stephanie: That's cool. So if you see one of those come through, you'll know. You'll know where it came from. Laura: Yeah, exactly. I do think we have some tanbark on the site right now. It is definitely a little bit more rare and we tend not to offer it all the time. But I think we have a handful of tanbark designs right now. They're just so cool because they are really uncommon and we don't always offer it. Stephanie: I'd also be giving the side eye to whoever brought that in, like, "What did you do to get this sail?" Laura: Exactly! I could be looking for their medallion. "Are you actually a pirate?" Stephanie: Yeah. I know. "Tell me." Obviously retail is on hold right now, but I saw you guys were expanding. Expanding actually one place that is close to my heart, Rehoboth Beach, in Delaware. Laura: Yeah. Yeah. Stephanie: We used to go there every single summer. I'm from Maryland. Such a cute beach town. How are you thinking about utilizing brick and mortar stores? How are they lifting each other up and accelerating your e-commerce as well? Laura: That's a great question. By the end of this year, we'll have 33 stores, spanning 12 states. That's really exciting for us because when I joined the company, we had two stores. That's a lot of growth. We open four to six stores a year. We're opening eight this year, alone, which is really, really exciting. I think that one of the important things with meshing the retail business and the online business is just a general omnichannel approach. Right? Laura: Our CEO likes to say that the e-commerce site is our biggest retail store. It carries all the products for the brand and you can see them all there at any time. And you go to our stores, and the stores may have most of those products but some different selections that might be regionally appropriate. For example, you mentioned Rehoboth Beach. There might be some coastal nautical chart bags down in the Rehoboth Beach store relevant to that regional area. So there's some things like that. But we try to do... Stephanie: Crabs all over the bags and whatnot? Laura: Right. Yeah. To customize and be relevant to that local region. If you were to go to a store and they didn't have a product, the great thing is that you can log onto the iPad at the store. They can get the bag for you that you were looking for and ship for free. We're using an endless aisle concept that leverages the flexibility that we have as a just-in-time manufacturer. We make our bags on demand for customers. It's great to have that flexibility, where we don't have lead times to worry about. We're sourcing everything locally here in the United States. Most everything we source is within New England. That's really criticaL, in terms of being able to take an order and turn it around in a matter of days. Stephanie: Yeah. That's huge. With all this expansion that you guys are experiencing, how have you had to adjust your technology, your platforms you're using. What does that process look like with such a large amount of change that you guys have been experiencing? Laura: Yeah. It's great. I'm actually really excited about this. It's very timely. We decided right in the beginning of this year to move forward with replatforming our website. It's a huge endeavor. We realize that over the last six years, we've been on this very exciting ride of growth and expansion. Quite simply, we've outgrown the website platform that we're using. I do find it really rewarding to think that we have squeezed every ounce that we could get out of the current platform we're on. There's nothing that we have left unturned. Laura: Embarking onto this new platform, we're working with Salesforce Commerce Cloud. There are so many new opportunities for us to improve the customer experience and to refine our practices, in terms of how we approach selling to customers. Using new technology like artificial intelligence and machine learning, personalization, I think we're going to be as a team much more efficient and much more sophisticated in how we are able to speak to our customers and give them what they want. It's going to take us a lot less time to manage that. I'm really excited about being able to grow the business utilizing those types of tools specifically for the e-commerce website. But the great thing is that it really does trickle into the other channels as well that we sell in retail, for example, too. Stephanie: Yeah. That's very cool. Tell me a little bit more details around how you plan on using AI. When you think of using that with Commerce Cloud, what are your ideas around how that's going to improve the consumer experience? What does that look like? Laura: Yeah. We have some personalization currently on the site that we do. Not too much. It's mostly personalized recommendations. I'm really looking forward to using that, in terms of... One of the most exciting things for me is the merchandising of the site and making sure that the predictive sort of the categories. When a customer lands on a page with 150 different wristlets, that the ones that are most relevant to them are actually rising to the top. It's not based on a static presentation of what we think is the most important things to put at the top. Laura: I think that's really important. One of the things on our roadmap after the site is launched, is to actually take a look at the marketing opportunities in terms of email marketing and how we can pull some of the artificial intelligence into the journey map of the customer and how we message to the customer in their lifecycle. I think a lot of those components as well will be really exciting to start to create not just a series. I think in the past, people have created a welcome series, or a trigger series after they buy X product. Laura: I think instead what I want this to be is a more dynamic opportunity to generate emails to customers that are, again, pulling in predictive content. So the customers have performed certain activities, and then the machine learning decides, "Okay, great. Because they did these five things, the most relevant thing to put here is this item and a message about this." That's what I'm excited about. And then being able to look at that data. I think the data is so exciting too, and knowing what works and what's not working. And being able to do site tweaks and adjustments to it will be really helpful. Stephanie: Yeah. I completely agree. I was just going to ask, were there any metrics that you paid attention to in the past that you think it will be way easier to get to? Or that you weren't able to access easily because it was too hard to maybe compile all the data and see it easily. What are some of those metrics if so, that are now going to be accessible to you that'll really help? Laura: I'm not sure if this definitely going to make it easier. But what I'm really more excited about is seeing... The measurements are customer lifetime value and customer acquisition costs. Starting to really understand the customer lifecycle better. So that once we see customers logging onto the website. Also, we just launched a Customer Loyalty program. Getting customers more engaged and in the habit of, "To get your reward points, logging in and making sure." We're keeping track of what customers are doing and delivering them relevant content, as opposed to just sending them too many emails. Laura: I think I was telling you, I'm in the process right now of cleaning out my email and unsubscribing from everything possible. I don't want people to have that experience with our brand. Saying, "You guys just email me too much." I want the contact that we're sending them to be interesting. The one thing I will tell you, and again this goes back to how we engaged our audience is. The open rates on our emails are really high. The click through rates are high. Our customers, like when we do these auctions periodically on the website. Laura: After the auction is complete, we usually take a look at who won the auction. We'll just see who the customer is. What's their lifecycle like? Almost every time when we do this, the customers email open rate is over 80%. They're highly-engaged people. Of course, they're participating in an auction. You would assume that. But it is so interesting to see somebody opening that emails from us. That to me, is a real testament to the strength of the brand and how engaged people are. Stephanie: That means you're definitely doing something right. For sure. How are you assembling the team for this digital transformation that you guys are about to undergo? How are you thinking about aligning your organization and your team members so everyone can help make this transition quick and easy? Laura: Yeah. That is critical. So what we did, it's probably not so different than what a lot of other folks might do. I assembled a core team. A Project Manager whose in charge of managing the project with our Systems Integrator. Then I have a Lead Developer in-house. His job is really to get into the technical details behind the development and transition. Because he has been primarily responsible for all of the development on our current website. I'm on the team, more from a strategic guidance standpoint and decision-making. Then our CEO has been really involved as well, which I really appreciate. Laura: This is the biggest project that our company has undertaken in the last six years, to do this type of major replatforming. It's a totally new platform. We've done some previous site launches and relaunches, but this one's pretty huge. I still have a number of other people on my marketing team who will participate and we'll start pulling them in one-by-one. We'll also embarking on a training curriculum, that we're developing in-house for our team. That's going to be going on while we're doing the developing, so that we're ready to go when the site's ready to launch. Laura: We're also looking at peripheral technology that is impacted by this transition. So an example I might give you is, our shipping platform and how we ship products. That was impacted. We needed to make a decision to shift to another provider. We assembled pilot team to get together and review the technology available and the vendor. We got all our decision-makers in one room and everybody agreed said, "Yes, let's do it." We've been making these decisions quickly. Kind of in that agile methodology of those sprints. Laura: Part of that is a function of how the Systems Integrator has outlined and structured the project. We have a very tight timeline, too. We're looking to have the website launched by October 1st. We started it in mid-March. We're definitely on an accelerated scheduled and we don't want to miss any milestones. Knock on wood, we are currently on target. So I'm excited about that. Stephanie: That's so fun. I can't wait to see the new site and try it out. Are there any digital commerce trends that you guys are preparing for, as you're launching this new platform and putting out a V2 of the brand? Are you preparing anything in the e-commerce space that you think is coming down the pike, that you're thinking, "We better get ready for this, or this trend?" Laura: No. I can't say that we're focused on anything like that right now. We're definitely mostly looking at the capabilities of the new platform. Like I said, the AI and machine learning component is so rich, that we see that as foundation to changing how we approach, how we do our marketing strategies and communicate with customers. So I think that's really the biggest opportunity for us. Stephanie: Very cool. One side question I had was, when you have your customers tagging all these photos and they're flowing into your website, are people able to buy from those photos right now? Laura: Yeah. On a limited basis right now. When we launch the new site, it'll much more prolific. You'll be able to buy from almost all of them. Stephanie: Yeah. That's great. Laura: I think that's really critical and it's important. Stephanie: Yeah. I know. When I was looking at all the different photos that you guys were getting tagged in, I'm like, "Oh, I want this Bag." There was this one alignment. It was like a tan orangeish bag but it had a duffle bag, and a bigger bag and there was like three of them together. I'm like, "If I could just click in and get this set, it would be so much easier than going into the website and trying to find out what this is called, or trying to figure out which one it was." Laura: Yeah. It's really interesting. The thing about user-generated content is that the customers put the product in context that we wouldn't necessarily be able to in our marketing because it wouldn't make sense. I'll give you an example. Just this week, we received a review from a customer, that was a picture of what they were calling a COVID Survival Pack that they were sending out their friends. It was a Sea Bag's beverage bucket bag. A beverage bucket is kind of a like a tall 14-inch high bucket that has handles, and the interior has six pockets for six beers. Then in the very middle is like a cavity that you can put ice and it has a grommet in the bottom, so that the ice can melt and escape out of the bottom of the bag. So it's a collapsible cooler. Laura: While they were filling the buckets with six Corona beers, and then put a roll of toilet paper in the center. They were mailing these out to their friends as COVID Survival Packs. It got such a laugh for us. It also is great, in terms of giving other customers ideas on ways to use our product in a way that is memorable and fun. Yeah. There's a lot of that. But like I said, that whole idea of content creation... While a lot of stuff can come from us and we can push it out, when it comes our audience, it's even more relevant. Stephanie: Yeah. That's such a fun idea. I want one of those Survival Packs right now. Person whoever made that, please send one my way. I want lime as well. Laura: Yeah. The lime would be great. Stephanie: Yeah. That's a necessity. That's a good point, too, for larger brands. We work with a lot of larger brands developing podcasts for them and whatnot. When you have your customers, where they can actually interact how they want. They don't have to go through the brand policy team and all these approvals and things like this, where maybe 80% of it would never get past the company's PR team. But when the customers are able to engage the way that they want to, it seems like it allows for more organic conversations to start and just things that maybe wouldn't normally get past the actual internal policies. It makes it more fun to have those customers who can do that stuff. Laura: Yeah. Absolutely. I agree. Stephanie: So to shift a little bit. Are you the founder of Women in Retail Leadership Circle? Laura: No, not the founder. Stephanie: Tell me about that. Laura: I'm very flattered. No. Women in Retail Leadership Circle is a national organization that basically connects senior women in leadership, C level and director level, in retail organizations. They were started about seven years ago. They're backed by NATCO Media. I was a founding advisory board member, on the team there. So I've been involved over the last almost seven years. They've grown significantly in size over that time. It's one of the most energized and engaged leadership groups I've ever participated in. They have an Annual Conference that I can say is nothing short of transformational. It has been rescheduled this year for October. I'm hoping that I'll be traveling, to be able to go to it. Laura: Even so, during COVID. The conference is usually in April. They were very quick to figure out how they could be of service to their audience. They set up peer groups that leaders could participate in on a biweekly basis with opportunities to share advice and experience with other senior female leadership. During more normal times, they do regular what they call On The Road Events, where you can connect in a major city, like Boston or New York, over an evening of cocktails or something like that with leaders like Rebecca Minkoff talking about her leadership struggles perhaps. It's a great way to collaborate with other companies. Laura: I've been able to uncover new tactics and strategies for growth. I also use it as a tool to refine my leadership style, because there's a lot of inspirational leadership that we share in those, like I said, events that they sponsor. They're doing a lot of stuff virtually right now. The thing I like the most about it, is it's noncompetitive. It's just great personal development at the senior leadership level, which I think there doesn't happen to be a lot of that typically. A lot of the personal development that happens in organizations usually is more at a junior level. Stephanie: That's really cool. Is there anyone in the industry that you look to for not only leadership, but maybe different tactics or strategies that they're trying out or doing? Do you keep an eye on anyone to incorporate at Sea Bags? Like incorporate what they're doing? Laura: Yeah. I look at a lot of brands, which is the reason why I need to pair down my emails so much. I do. I track a lot of folks. I also follow a lot of people on LinkedIn, because I feel like it's just a great opportunity to see what everyone's doing. As a brand, we try to spend time benchmarking and keeping our eye on brands, again, that are very, very correlated with our DNA. Coastal lifestyle brands, like Sperry Top-Sider, Life is Good, a very inspirational brand. We have a lot of partnerships like that. We also try to keep an eye towards some more local name brands too that we partner with, and just benchmarking what they're doing. Laura: And we also share a lot of information too. An example of that would be Stonewall Kitchen, which is a gourmet food brand. They also are on Sales Commerce Cloud. While we were going through this whole replatforming project, being able to reach out to people within our network and benchmark around what their experiences were on their websites platforms and technologies that they're using is really important. Stephanie: That's great. Having that little network that you can tap into and be like, "Hey, how did you guys do this?" Or, "Does this work better, or this strategy?" That's really fun. And all about, once again, tying it back to having that community that you can tap into to get answers from and learn from people who've already gone through that. Laura: Yeah, absolutely. Over the years, that's one thing that I learned very early in my career. Some of my leaders, actually one that I'm still working with today, who is on our Board at Sea Bags, taught me how important that skill of networking was and that networking is a two-way street. It's really important to make sure that you're not only asking things of people and keeping in touch with them, but you're also being a value to them as well, in terms of that networking relationship. Stephanie: Yeah. That's such a great point. Coming up next we have the Lightning Round, which I can tell you a little bit more about in a second. But do you have thoughts or ideas that you want to share before we move onto that? Laura: Geez, thoughts that I want to share. Stephanie: Anything that we missed? Laura: I'm sure there's something we missed. But I think we covered a lot, too. I'm excited to hear what the Lightning Round is all about. Stephanie: All right. Cool. So the Lightning Round, bought to you by our friends at Salesforce Commerce Cloud. It's where I ask a question and you have one minute or less to answer. Are you ready? Laura: I guess so. Stephanie: All right. What's up next on your reading list? Laura: Oh, on my reading list. I am about to start... I'm like one chapter in. A book by the founder of IDEO. I think his name is Dave Kelly, if remember correctly. It's a book all about innovation and idea generation and how to approach innovation a little bit differently. I'm really excited about that. I'm definitely one of those people that reads multiple books at once, too. Stephanie: Yeah. Me, too. I think they did have a space here in Palo Alto, right down the street from us. Laura: Yeah. I think you're right. I think you're right. The name of the book is The Art of Innovation. Stephanie: Okay. Cool. Laura: It's Tom Kelly. I got his name wrong. Stephanie: Tom Kelly. Got it. For everyone, Tom Kelly. Yeah. That's really funny. We went and we were touring office spaces. We toured through their building. It was very forward-thinking and innovative. I mean, just like what you were talking about. It was all about R&D and trying new things. It was cool to see the inner workings of their space. Laura: Very cool. Stephanie: What's up next on your Netflix or Hulu Video? Laura: Oh, I am watching Ozark. I know I'm a little painfully behind. Yeah. I'm trying to make my way through into, I think, season three of Ozark. I am really enjoying that and it's a problem I will sometimes stay up way to late trying to fit in just one more episode. Stephanie: Yeah. Me, too. I love that show. What's the next conference you're excited about attending? Laura: I am really excited about the Women in Retail Leadership Conference. Like I said, I hope it's happening in October. This is, as I mentioned, it's a transformational opportunity for me to go talk with other senior female leaders about their challenges and opportunities and where they're seeing growth within their companies. I've walked away from this conference before getting lots of new ideas, new business opportunities and third-party partners to work with and collaboration opportunities. So that to me is what I'm most looking forward to and I hope that it still happens, especially because it's in Miami in October, which will be a really nice time of year to be there. Stephanie: That's very cool. I'll have to check that out. What are you doing for fun these days? Any passions that you have? Laura: I am actually, after this podcast, going to jump on my boat with my husband and two kids for the first time this season. That is actually our big passion. This is the kickoff to boating season in Maine, Memorial Day weekend. Usually while I'm on the boat, the things that I do is knit. I've been knitting a sweater for four years now, that I am committed to finishing this year. That's my goal. Stephanie: You have to post a picture when it's done, so we can all see it. Laura: I will. I hope it actually fits. I'm kind of laughing at it going, "I don't even know if this is going to fit." I end up probably giving it as a gift. Stephanie: Yeah. My mom got into sewing and knitting and all that. She was trying to make us outfits, just for fun. Sweaters and things like that. She ended making one that ended up having to go towards our Shih Tzu dog because it... She was like, "Oh, this went really wrong." Laura: Yeah. It can go wrong quickly. That's what I'm worried about. I've ripped out a few rows of this a few times and I'm not sure I recounted correctly. So we'll see. I post a picture regardless of what it looks like. Stephanie: Great. It's a journey. Laura: Yeah. Stephanie: The next hard question. You guys at Sea Bags are moving quick. You're having to transition platforms. It's your job to stay ahead on the expectations and your competition and all that. What do you think is up next for e-commerce pros? Laura: Up next for e-commerce pros. I think that we really are going to have to focus on is how to take omnichannel retailing to the next level. I think that that term, omnichannel, is really broadly thrown around. I think that people don't really understand what it is. I think that we need to be able to deliver a seamless customer experience regardless of where they're shopping and figure out, also, how to do it without inconveniencing customers with asking for their information repeatedly. Laura: I think that's one of the challenges in retail, is being able to know when somebody places an order in one of your retail stores, and being able to translate that into their customer profile so that you have, again, that really full 360-degree picture of that journey of that customer and really knowing what their full lifetime value is. Again, so that you can come back and customize and personalize their shopping experience and make it more rich. They feel valued because they know that you're speaking to them in a way that is informed and caring about what value they play for your brand. Stephanie: That's a great answer. Laura, it's been blast. Thank you for coming on the show. For all our listeners, go check out Sea Bags and don't forget to subscribe, rate and review this podcast. Let's help spread the word and spread stories like the one Laura shared today. Laura, thanks. I hope to have you back. Laura: Thank you so much for having me. It was an absolute joy. Stephanie: It really was. Yeah.
“What will my customers like and buy?” The timeless retail question today is answered with enterprise-grade purchasing, inventory, and sell-through analytics for big box sellers, but not SMBs. SMBs have long made these decisions with their guts and intuition. But what if a marketplace powered with those same analytics could enable small shops to purchase with the same information? Faire has discovered this opportunity is worth $1 million in sales per day, and growing. Faire is a wholesale marketplace that helps retailers find and buy wholesale, while also connecting makers with physical stores or businesses. and it was built using a data-first model that evens the playing field for those small shops. On this episode of Up Next in Commerce, Marcelo Cortes, the Co-founder and CTO of Faire, joined us to explain how the company got started and the steps it took to reach the billion-dollar valuation it boasts today. Much of the success is thanks to Faire’s ability to analyze data and iterate based on what that data tells them, but it is also built on a sense of community between makers and buyers, who have been able to find each other in a world filled with outside noise. Key Takeaways: Implementing personalization throughout the buyer & seller journey is key when setting up a two-sided marketplace You need to have a message people understand quickly that really resonates with them Being able to iterate quickly and build on the go allows you to be more nimble and capitalize on data you are collecting to create a better business and 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: Hey everyone, and welcome to Up Next in Commerce. This is your host, Stephanie Postles. Today, we have Marcelo Cortes joining the show, the co-founder and CTO of Faire. Marcelo, how's it going? Marcelo: It's great. It's great to be here, thanks for inviting me. Stephanie: Yeah, thanks. It's fun having someone, you said you were in Toronto, or a little bit north, right? Marcelo: Yeah, that's right. Our office in Canada is in Kitchener-Waterloo, which is about an hour from Toronto. Stephanie: Cool. Do you ever make it out to the San Francisco area? Marcelo: I do in normal times, I go very often. I usually go there once a month. Stephanie: Next time you're around, you'll have to stop by our studio and we can do an in person interview. Marcelo: Yeah, that would be great. I hope that can happen soon. Stephanie: Yeah, I hope so too. Fingers crossed. I would love to hear a little bit about Faire, and your background and role at Faire. Marcelo: Yes, of course. Faire was founded in 2017. Me, Max and Daniele are the co-founders, the original co-founders. Jeff also started the company with us, but he left and came back after a few years. Faire is a wholesale marketplace. We help retailers, basically mostly physical stores, brick and mortar, find products to buy wholesale. Then on the other side of our marketplace, we have all the brands or makers on our platform that are selling products, and we help connect those makers with the physical stores. Stephanie: Very cool. The makers reminded me, in a way, of the Etsy makers that normally would never be able to have their products in a large retailer, like a Nordstrom. Is that accurate? Marcelo: Yeah. We are somewhere in between Etsy ... I would like to say there is a little bit of intersection with Etsy, but a little bit a level above as well, where we do have smaller manufacturers or makers that have a small operation, but we also have some more sophisticated ones that have warehouses and things like that. Stephanie: Cool. How did you think about creating Faire? How did that idea come about? Marcelo: Yeah, it's an interesting story. Max, who is our CEO, back in the day after he graduated from school, he was working on bank consulting. He was always an entrepreneur by heart, so he was always trying to do businesses on the side. A friend of his asked him if he was willing to try to build a business of selling a product or distributing a product in the United States. The product was actually a physical umbrella, a rain umbrella that was manufactured in New Zealand, called Blunt Umbrellas. It's a very cool umbrella. It has cool shapes, cool colors, doesn't break with wind. He was like, "Yes, let's do this on the side." Marcelo: That's when he learned how the wholesale industry works, especially in North America. He searched on Google, how do I start selling products, or how do I distribute products wholesale like everybody else does? Basically, there were a few ways. You can go find sales reps or hire sales agencies to have all the sales reps trying to sell your products. You have to go to trade shows. He did all of those things. Eventually, he got this company to be successful distributing the product in North America. But at the same time, throughout all this process, he couldn't stop thinking that there's a lot of areas here that could be improved with technology. This whole market is really in the dark of technology. Marcelo: Years later, we met at Square. We all worked at Square together for four or five years each. Combining the expertise we had there with dealing with small businesses with this idea of, how can we really add technology to wholesale distribution, make it better? We finally came to the conclusion that ... we found the data that's available online as well on products, and on makers and on retailers, we could put it all together and build this idea that could add a lot of value to everybody in the industry. Stephanie: That's awesome. Were there any technologies or insights that you gained while you guys were at Square that you took into the business when creating Faire? Marcelo: Basically, there isn't anything .... technology that's advanced. There were combinations of many smaller things. For example, the fact that if you think of a small store, a brick and mortar store that might have one to five locations, which is usually our target audience, they're trying to compete with much larger brick and mortar stores, big buck stores, or with eCommerce. They have no data. If you think of Walmart, they have data on all their products. They know what sells well where, what time of the year. The little store, they're buying products basically all by intuition. They see a few products, they look at it and they have to make a decision whether they're customers are going to like it or not. Marcelo: We realized that we can actually build something that will give them the ability of having the same type of tools that much larger businesses, or big buck stores, or eCommerce platforms have, to make much more well informed decisions on what products are going to work well in their stores. On top of that, another thing that we learned a lot of course at Square is how to deal with underwriting the small businesses. We helped Square do Square Capital, which is the landing program that they have at Square. Part of that process, we learned a lot about how do you decide how much credit to give to a store like this? That's also part of what we do. Marcelo: As a store comes into our platform, we give them the ability to buy products that they can pay 60 days in the future. We give them credit to buy products, and we allow them to return any of those products if it doesn't work. So, basically- Stephanie: Yeah, that's huge. When I saw that you all did that, I'm like, wow, I don't know how you make that work. But not only giving store owners credit and saying you don't have to pay me right away, and you can return products? I haven't heard of anyone else doing that. Marcelo: Yeah, that's how we are combining and adding technology to this ecosystem to make those things possible. We have to do our job well to be able to offer these value propositions. We have to make sure that we are recommending the right products to the stores, and guiding them into buying the right amounts as well. We can't just let them buy way more than they would be able to sell. We should be steering them away from products that we don't think are going to perform well in their store. If we do that part of the job well, the other part is also making sure that the makers or brands that we're onboarding on the platform are also very high quality and good, so that, again, the products that we are selling have a much higher chance of performing well in stores. Stephanie: How did you build that platform to cater to different types of clients? I can see the one person in Arizona making bracelets versus the larger person who's used to fulfilling large quantities, because maybe they've sold on other platforms before, and then different sized retailers. How did you build a platform that caters to all of them? Marcelo: Yeah, it's a very hard problem. That's another place where technology is used to our own advantage. We need to be very good at serving customers differently, and providing a completely customized experience to different types of stores. That's what we do. That's why data science is so important for us, and we have a very strong data science team tackling this problem of ranking and personalization. The reality is, we really treat each customer differently. Every different store that comes to our platform, they have a completely different experience. If you are a store that sells gifts, you're going to see a lot of gifts. The more we learn about you, the things that you like to see, the search that you make, the products that you sell and you buy from us, the more accurate we get at serving you products that will connect well with your store. Marcelo: But what we can't have, for example, in our platform is that you are a store that sells apparel mostly. You come to our website and all you see is candles, or back products or things that are completely disconnected from your business. From day zero, we have spent a lot of time and effort making sure that we have data, and we are very data driven, and we are building a very custom experience for every different person that comes to our website. Stephanie: Yeah, that seems super important because it can be really easy to get lost when there's tons of products, and you're automatically seeing the wrong one to start with. How do you gather that data on, especially a new customer who's never bought from you before and they're coming on for the first time, how do you have any data to even know what to show them? Marcelo: Yeah. Sometimes it's hard. Sometimes we can't do it and we have to start with products in different categories, and then start to learn as they navigate the website. But there are things you can do in advance as well. Even a brand new customer ... they usually have a reason why they came to your website. A lot of those reasons are they were recommended by somebody, they clicked on a link somewhere. If they come from an ad, it's very easy to know what's the ad that they clicked on, and we at least have some idea of what caught their interest. Obviously we have too this mark into serving things or products that are related to what are where they came from. If they clicked on an ad for a candle, we're going to show them similar types of candles, or of course that same candle that they clicked on. But we are also trying to show, oh, here's some apparel categories as well, or here's some best sellers in a different category. Marcelo: Again, we have to show relevant data, and then show enough of other types of data that we can give them a chance to tell us more about who they are and what they are interested in. Stephanie: Got it. Then most likely, I'm guessing you encourage that sign up process, so then you can learn more and more about them. Then you can recommend products even further after that? Marcelo: Exactly. As they sign up, we have some quizzes. We ask them for more information. We keep adding and changing how we do that, of course. But we will try to do a Netflix style, like, what are the types of products that you're interested in, or categories? How big is your store? Things like that. The reality is, we are in 2020. Every little store, brick and mortar store, they have a presence. Once we learn who they are, what store they are, we will find if they have a website, and we will learn more about them by looking at data that we can see online. Publicly available data that's on the internet as well. Stephanie: Got it. Yeah, that's so cool. I saw that you leveraged machine learning and AI to recommend and show these retailers what's going to do well in their store. How do you know what would do well in San Francisco versus Washington DC? What do you utilize to help teach the retailers what they should and shouldn't buy? Marcelo: Yeah. That's obviously part of our secret sauce. There isn't- Stephanie: You don't want to share that with me? Come on, Marcelo. Marcelo: No, I can share it for sure. It's just ... there isn't a very easy answer. It's not like, oh, if you're in San Francisco it's for sure that you're going to sell candles very well. But there is a lot of input and a lot of signals that we gather. I can give you some examples that make a lot of sense and they're very obvious. For example, we have so many stores on our platform today. There's a lot of correlation. Remember I told you Max was selling those umbrellas, Blunt Umbrellas? Stephanie: Mm-hmm (affirmative), yup. Marcelo: Even from his time selling those umbrellas, he realized and he learned very quickly that there are correlations between products as well. If there is a store that sells well the umbrella, there are some products that will also sell well in that store. They could be completely different categories of products. It could be a watch. It could be a sunglass. But the customers that are usually interested in this Blunt Umbrella, which is a high end umbrella, are also going to like and very likely buy products that are in a similar style, or similar type of high level upper cost product. Marcelo: Imagine now instead of one umbrella, we have millions of products that we sell, and we get data back from these stores. We know what's selling in each one of these cuts because they're buying it again from us. So we start to be able to correlate things. You can have a gift shop in New York, and you're selling three products that are very similar to a store in San Francisco. Now you add the fourth product, and that product performs very well in your store in New York as well. It's very likely that that store in San Francisco will also have that fourth product performing well. Stephanie: Got it. That's really cool. Have you ever thought about running on the side a point of sale system that you can put in the store, so then you don't only have access to the stuff that's sold from Faire, but then you have access to their entire inventory and catalog? Then you really have full insights into what's happening in that store, what sells together. Then you can even recommend things at, I guess, a better pace? Marcelo: Yeah, 100%, we have thought about that. Stephanie: Are you doing it? Did I already uncover more secret sauce? Marcelo: Maybe. What we do today, of course we don't have our own point of sale system today. But what we do is, we integrate with their point of sale systems. Stephanie: Got it. Marcelo: We add value to them if they connect their point of sales with us as well. For example, imagine that you are a small store and you just placed an order for 20 products. Then next week, you're going to receive all those products in your store. You need to start selling them right away, but you restore all of them in your point of sale. So it takes time and effort. You need to type in the prices, the descriptions. You need to upload photos to the point of sale system. If you were a store that gave us access to your point of sale system, we do that completely automated for you. As you place an order, as soon as the order arrives in your store, all the products automatically show up in your point of sale system. Stephanie: Got it. Yeah, that's definitely- Marcelo: Of course with that, we get some more data from the point of sale that we can help with recommendations as well, and learning more about what performs well in your store. Stephanie: Cool. Yeah, that's awesome. When you started out, did you build your eCommerce platform from scratch? Or did you buy and eventually move everything over to custom? What did that transition look like? Marcelo: Yeah, that's a good question. We actually built everything from scratch, and we built it on the go. On the early days, we started ... and we went to Y Combinator in San Francisco. When we were accepted at Y Combinator, it was end of 2016, I was still working at Square. Max had left already. Daniele was still working at Square. We basically quit our jobs at Square, and we started Faire in January, 2017 at Y Combinator. We had nothing built. We had this pressure that three months later, we would need to do a Y Combinator demo day presentation to thousands of investors, and we needed something to show. Usually the companies that join Y Combinator, they have been doing something already for a year or two, and they get there to try to scale their business. We started from scratch. Stephanie: I was going to say, that's ... well, maybe it's not unheard of now because I think they do accept a lot more people now. But back in 2016, if you didn't have an actual product, you probably weren't going to get accepted if they couldn't see something. So that's awesome. Marcelo: Yeah. But then what we had to do is build it on the go. That's also a lot of how ... it dictates a lot of how we operate today and through the history of the company. We have always been very data driven. When we started, of course we knew this idea of let's let people try the products before they buy. We told Max, we're like, "We really believe in your idea, but let's prove that people really want this." Marcelo: Again, without any technology or any website, we went into stores that Max had contacts with because he used to sell the umbrella. We told them, "Listen, we are going to give you products that we think are going to do well in your store. You don't need to pay us. If you sell the products, you pay us. If you don't sell them, we will come back and pick the products up." The stores were like, "You just want to give me free products to try to sell? We're going to do it, for sure." Stephanie: Yeah, no brainer. Marcelo: That's how we validated the idea. We also got lucky because we had no idea what we were doing when it came to picking products, so we just bought random products. Turns out that one of the products we bought, it's called Pyropets. It's this candle in the shape of animals. When they burn, the skeleton of the animal shows up. Stephanie: Oh, that's awesome. Marcelo: Yeah, it's pretty cool. Stephanie: I need to look that up. Marcelo: It's very cool. They have many different animals. That was one of the products that we gave to the store in San Francisco. The feedback we got from the store right after was that, "Listen, I would never have bought this candle to sell in my store. But since you gave it to me for free and I could try it, I put it on the shelves," and the candle happened to become one of their best sellers. Stephanie: Wow. Marcelo: That's when we saw, okay, there is definitely something here, especially if we can use data to find actual good products, not just random products that we picked on the internet. From that point on, we started to build the experience on the go. Very quickly, we built a website where people could place orders. They would see products and place orders. Everything in the background happened manually. An order would be placed on the website. Basically, people would be able to add products to cart and check out. We didn't even collect payment information. We weren't even charging people. We would deal with payments later over the phone. Stephanie: Oh man, that's great. Marcelo: Yeah. We would get an order. We had one contractor that we hired in the early days, he would be in charge of calling the manufacturer and placing the order over the phone. He would call the maker and be like, "Hey, just got an order. Five Pyropets to be shipped to this store in San Francisco. Here are the details. Here's our company credit card, we're going to pay for this order." There was no automation, nothing else built behind the scenes. Again, we kept building it on the go behind the scenes very quickly. Marcelo: Fortunately, there are a few good things that happened with our company. Very quickly, we found product market fit in the summer of 2017. We started to grow a lot. But by that time, we had automated all of this process. We financial managed to build all the technology so that all this order placement with the makers, and the fulfillment and everything, was fully automated. But it was really like building the train as the train's going forward. Stephanie: Yeah. But a lot of people ... some of the best advice is do things that don't scale in the beginning. That's how you learn what you actually need to build on the backend, instead of doing it all upfront and realizing, oh, that's actually not even how the seller or buyer interact with our platform and now we need to redo it. Now you guys are valued at over a billion, right? A billion dollar valuation, or higher, probably. Marcelo: That's right. Stephanie: That's insane. Congrats, that's awesome. Marcelo: Thank you. Yeah. Stephanie: When you were setting up your website in the beginning, is their any best practices, either setting up the buyer side or the seller side where you're like, we've seen this work really well on the buyer side of the platform? Or these types of ... setting up the eCommerce like this, or having certain pop ups or anything? Anything that you would recommend to someone who's looking at starting a marketplace, or improving the marketplace that they're already running? Marcelo: it's very hard to learn without doing it. We didn't have any facts. We never built a marketplace or an eCommerce platform before. What we did do is, we moved very fast and we built very simple things. We spent a lot of time scoping things down. We thought we had very good intuition that something is going to work. Of course, eCommerce is a problem that's figured out today. There is many very successful eCommerce platforms that you can see how they do things. We always looked at the successful examples when we built our things, and then we tried to build our own version of it. We built the simplest thing possible. We all talk about building the simplest possible thing, but we really tried to do it. We spend time removing anything that would be essential, but we managed to build things that would add value. Marcelo: We built things very fast. We launched things very fast. We gathered information on how people are using it very fast. Then we integrated a lot, improving the experience with our learnings. Many times, our intuition was wrong, and things that we built were not the right things, and we shut it down. But at least we didn't spend a lot of time doing those things. Stephanie: Was there anything that you shut down that you see a lot of other store owners using right now where you're like, oh, we saw that didn't work well, you might want to look into that on your store? Marcelo: Well, it's hard to know what is not working for other people. It might not have worked for us. There is one very interesting thing. It's not really, I think, we'd do it. But when we were in the early days trying to finding product market fit, our very first idea for Faire, as I told you, we walked into these stores and we told them, "Just keep this product. If you sell them, you pay us. If you don't, we are going to take them back." This is pretty much a consignment system. That's what we wanted to build. That was our very first big mistake, I think. We were very sure that we could build a successful consignment eCommerce platform where we would connect to the point of sale systems in the stores, and we would know when they sell something, and they would pay us when they sell. They would keep things, I don't know, until they don't want them anymore. Marcelo: Turns out that the word consignment, the term consignment is really ... people really dislike it in our market. They think of consignment as products that nobody can sell, and they are willing to give it to you for free to try to sell it for them. Stephanie: Yeah. That's what first comes to mind when I hear that word. It's like when you go and you can sell your clothes to a company, and they're like, "Well, we can either do consignment or we'll just give you money upfront." You're like, oh, I'd rather just have money because I don't want to take that risk of you not being able to sell it because you bury it down in a bin somewhere. Marcelo: Exactly. It turned out that whenever we told people consignment, they ran away from us. We couldn't understand it. We're like, it's a good thing, we're giving you very good products. We've built this machine that finds good products, and we'll let you carry them for free. Then we changed our message. We started to call it try before you buy. We're like, listen ... we completely erased the word consignment from our vocabulary. We were like, "This is try before you buy." Stephanie: That's great. Marcelo: You get the products, you have 60 days to pay. Within those 60 days, you can return anything. If you sell, great. Basically, we didn't change much of the consignment idea, but it completely changed how customers understood our business. Stephanie: Yeah, that's great. Such a good lesson too of how little things like that can go a long way, and how just doing those simple tests could really help your business completely transform into a way bigger one if you stop using certain words that maybe are throwing someone off, that you're so deep in the weeds you didn't even realize it. Marcelo: 100%. There is this, of course, concept that people talk a lot of, product market fit. But in this case, there's this other concept that people don't talk much about, which is the message product fit. You need to have a message that people really understand quickly what you're trying to do, and it resonates with them. Stephanie: Yeah. You guys would have to have two different messages, one for the buyer, one for the seller, and not try and make them both be the same, I'm guessing. Marcelo: 100%. The way of selling Faire to a maker or a seller is much different than the way we sell to the stores or buyers. Stephanie: Do you have different teams focused on that messaging? Because it seems like it'd be hard to where different hats where it's like, one second I'm trying to think how the buyer things, and then I'm going to shift over and think how the seller thinks. Is it different teams, or the same one working on all of that? Marcelo: Yeah. Today, it's completely separate teams. Sales teams, ops teams, everything is completely separate. The market team is the same. The messaging is one team that creates both. But how we deal with them internally in operations and sales is completely separate teams, and also product. There is teams building products for the makers, and there is teams building products for the retailers. Stephanie: Cool. That's awesome. I saw you guys had a podcast that you just launched, and it made me want to ask a little bit about your content strategy. What was the thought behind launching that podcast and the goals behind it? And what kind of ROI you're looking at for that project, if any? If you want to talk a little bit about that, that'd be great. Marcelo: Yes. The podcast was also part of a thing that we wanted to do for a while. But our customers, even though we are online, our customers are not online. We are dealing with offline local retailers, and they love community. That's one of the initiatives that we're trying to build, to help them with community, to listen to each other's stories, to learn from each other's mistakes and connect them more. It was especially important to launch it now with this whole COVID-19 era. People need more information- Stephanie: Yes. Yeah, perfect timing. Marcelo: We rushed it out at this point to really get more data and get more information. And really, to support more of the retailers and makers in this time that they really need it. Stephanie: That's great. Marcelo: Yes, thank you. For me, I love listening to it. It's so ... I am motivated to listen to our customers stories, and how they are struggling or how they are being creative to deal with these issues. The feedback I have seen so far has been amazing as well. People really love listening to each other's stories and hints. Again, they see that other people are also struggling, they're not alone in this. They feel more connected. So far, the feedback has been amazing. I personally love to listen to these stories. Stephanie: Yeah. No, that's really fun. I love anything like that that shows I'm not the only one in the struggle right now, and then that you can bypass any future struggles that maybe you don't have to go through if you hear someone else detailing it. You can skip right over it, if possible. Marcelo: It's called Brick and Order. Stephanie: Brick and Order? Marcelo: Yes. Stephanie: Is it on Apple, Google, everywhere? Marcelo: Yes, it is. Stephanie: Cool. Yeah, we will also link that up in our show notes so people can find it. Marcelo: Thank you. Stephanie: Because it sounds like it's a good one. With the pandemic right now, and putting out different types of content and all that, how have you had to shift, if at all, your business model? Because I'm assuming what people were coming to buy before COVID-19 is very different than what they're coming to your site to buy now. How did you have to think about shifting not only what you were maybe recommending, but also what you were suggesting to stores who are probably, a lot of them closing down right now? How did you make that transition or shift? Marcelo: Yeah. COVID has been very big for our company. It hit our customers really hard. Our customers, of course, are small stores. Most of them are still shut down at this point. It was a big transition for us as a company, as well as for our customers. We are this high growth startup that has been adding more customers on both sides of our marketplace very quickly, and a lot of our focus is on growth and adding value to these stores. Suddenly this happened, and we had to shift focus very quickly. Marcelo: The first thing we did when this whole thing started to happen is, of course, to take care of the employees and making sure that everybody's safe. We started working from home very quickly, I think seven weeks ago. Then very quickly, we shifted focus to, okay, now how about the business? Very fast, we had to change from this high growth mindset, sell, sell, sell, to how do we help our customers get through this pandemic? For us, we are a well funded company. We have a lot of money in the bank. It's easier to, again, slow down and survive for whatever it takes, a few years, a few months. But we were really worried about our customers. We're like, what's going to happen with these small brick and mortar stores or the small makers around? Marcelo: We started collecting data. That was the first thing we did. We ran surveys with thousands of makers and retailers on our platform to understand their financial situation. We were asking things like, do you have money in the bank to be shut down for two, three months? How is it going to affect your business? We collected all of this data. We of course shared the aggregate of the data with the community, with everybody on our marketplace. Then we changed focus very quickly to try to help makers and retailers do the right things for them to survive. There was so much confusion on what's going to happen, so much information all over the place that they had a hard time, and they were all overwhelmed with it. Marcelo: We tried to inform them. We tried to guide them on what are the right things to do right now. We changed our focus from growth to helping our customers survive this pandemic. We built tools to help them apply for the government relief funds. Stephanie: That's great, much needed. Applying for that was crazy. Marcelo: Yeah. We tried to help guide them through it and help them understand all these programs. It's a lot of legislation, a lot of language. We tried to spend hours ourselves learning about everything, and writing it in a very simple way that they will understand it, and they know what applies to them and what don't apply to them. We built financial calculators so that they can understand what are the things they need to do? Do they need to renegotiate rent? How can they reduce expenses so that they can basically survive longer with the funds that they have? Marcelo: Then the next thing that we did is really, okay, now another way of helping stores survive this is helping them adapt to this new world. First thing we did is help stores and makers, makers that could sell essentials, they could make different things, or they were already making those different things that were essentials. We started to help them focus on that. For stores, the same. We're like, listen, you might not be selling gifts right now, but you could be selling masks, you could be selling hand sanitizers. You could be selling other categories, like food, that's still in high demand. We definitely changed recommendations. We guided people into adapting their business into this new world. Stephanie: Wow, that's great. Did you see the makers be be able to shift and adapt quickly, or what did that look like when you were recommending maybe tangential things, but also maybe something that hey hadn't focused on before that. Marcelo: Honestly, it really impressed us at how resilient our community is, our customers are. Most stores, especially small business owners, they have survived for so long against brick and mortar stores. They survived Amazon, giant online eCommerce, to keep their business operating. So they are also surviving. They're being super creative on how they change their business to survive this pandemic. Stores, of course, struggled more than makers because, again, they were completely shut down, and some of them didn't even have access to go to their store. Makers adapted much faster. Some of them already had wide presences, and they just had to switch more of their traffic to online. But the stores also were very resourceful. They are really trying very hard to survive. They are doing a lot of the things and following a lot of our recommendations as well. Stephanie: That's awesome. Yeah, that's so great hearing how you shifted everything you were doing to focus on how to help them, give them the tools that they needed that didn't exist in the marketplace, because who knew that this was coming down the pike? What were some of the top learnings from the survey that you sent out that you heard? Because something that comes to mind I just heard about was that apparel retailers, smaller ones don't have more than two month often times of cash on hand to keep them going. What were maybe some overall themes that you got from your survey that maybe you were surprised by? Marcelo: Yes. At the time, and remember that the survey was done over a month ago now when this whole pandemic really stared, but I'll tell you some of the numbers and the things that we learned here. Stephanie: Yeah, I would love that. Marcelo: 76% of the retailers only had enough capital available for up to three months of operating expenses. Stephanie: Wow. Yeah, that's crazy. Marcelo: At the time, and I'm pretty sure this has shifted a lot since then, but at the time only 30% of the retailers had anything with regards to selling online. Stephanie: Some of that seems hard to believe. It makes you realize the importance of surveying someone and not just going forward with assumptions that you have about them, because I would've never thought the numbers were that high. Marcelo: Yes. We keep trying to survey them more often as well to see how it's changing. Other things that we learned was that 45% of retailers, they were already connecting with other businesses. Again, trying to build more community, learning more from each other and sharing information. 41% of the makers at that time had already started changing or reprioritizing their product assortment. Stephanie: That's good, being scrappy entrepreneurs. Marcelo: Yeah. Of course, we adapted. We started launching and selling a lot more face masks. Today, we have already over 200 brands that are selling face masks on our platform. The masks that we sell, they are produced in the United States by local makers. Most of the products that we sell are actually today still made or partially made in the United States. With the results of the survey, we tried to also create a lot of educational content to help everybody else learn about what's happening and how people are shifting their focus to try to help more of our customers to do it as well. Stephanie: How are you getting the word out about that educational content? How do you bring traffic to the content you're making? Marcelo: Yeah, there is a few ways to do it. Of course, we very often email all this information directly to the customers on our platform. We have two blogs. We have a blog for makers, we have a blog for retailers. We have community forums for retailers and we have a community forum for makers as well, both on Facebook at this time. We also have hosted a few webinars that had almost thousands of people attending at the same time. Stephanie: Oh, very cool. How do you see the webinars paying off? Do you see people enjoying that? Do you think that's a good use of time? What have you seen perform the best? Marcelo: We got amazing feedback from the webinar. People oversubscribed. We actually had a hard time dealing with all the subscriptions because ... the platform we were using was not ready for the amount of people that showed up. Stephanie: That's a good problem to have. Marcelo: Yes, always a good problem to have. But me, being the CTO and having to deal with the technology makes my life harder. Stephanie: What did you do to have to try and quickly ... Marcelo: We used to platforms at the same time, and that accommodated all the traffic. But yeah, people came back and they watched again and re-watched it. They shared it a lot. Webinar is not a thing that we have done a lot, but we are definitely going to be doing more of it. Stephanie: Yeah, that's very interesting. With everything that's happening now, what kind of digital commerce trends or patterns do you see coming down the road? Especially because you're so close to retailers and makers, it seems like you guys would have a good idea on what the future could look like if you had a crystal ball. How are you maybe thinking about what the future looks like, and how to adjust Faire based on where you think it's headed? Marcelo: I really wish I could ... Stephanie: Come on, Marcelo. Just tell me the future. Marcelo: I had a crystal ball. Of course, we can't tell the future, but we can pay attention to how fast and what direction things are going. It's obvious that everybody's trying to do things differently online and remote. How that's going to affect makers and retailers too, yet to be seen. I think honestly, from my own personal experience and from the platform, there will be a lot of behaviors that will change, that we do expect to change, but they are for the better. For example, curbside pickup is a thing. I don't think it was nearly as popular as it has become. I think it is going to be a thing that will stick with us. People do enjoy the ability of buying something, and whenever they have a chance, they go and grab it. Marcelo: I think for our platform specifically, that's going to become a very powerful thing. Because now, as I said, we launched this shop neighborhood. We can get consumers to find cool products online that they would never have found otherwise. They will find all these stores around them where they can go and find those products, they can buy it online and go pick it up. Not only go pick up the product that they bought, but they can also see all the other products in the stores, and actually meet the people that are selling this in person. That's one thing that people already loved in local shopping. They like the experience of walking into a shop, and talking to the owner and listening to the stories of the makers or the products. Stephanie: Yeah, that's how eCommerce started. I think back to, I don't know if you watched this, Marcelo, but Little House on the Prairie, huh? Any fans of that? They would basically, the shoppers would go into the store, and they would talk to the store owner and say their problem. He would go in the back and figure out exactly what they needed, and then would check back in with them to make sure it solved the problem. It's getting back to the roots of Little House on the Prairie days. Marcelo: Yeah. My prediction if I had a crystal ball here, if I were to make a prediction for the future is that, what this is going to change is that it's going to make the relationship between online and offline stronger. There will be more intersections. There is a world in which you are both online and offline at the same time, and that's the wold we're living in. We have been getting to this world slowly by having only online interactions and only offline interactions. I think what this is really accelerating is the merge of the two where you have both online and offline experiences with the same companies at the same time. Stephanie: Yeah, I definitely can see that happening. Are there any digital transformations or tech transformations you see necessary to make that happen? Marcelo: I think the technology, a lot of the technology already exists. Of course we have all this video technology, video chatting, video broadcasting. They have been available for a while now. But the applications of these technologies are going to change a lot. Again, another thing that we are working on, I feel like I'm here just marketing the things that we have been doing, but- Stephanie: Hey, that's all right. I'm sure people can learn from it. Marcelo: Another thing that we are working on is a product that will allow people to connect virtually, the same way that they have been doing offline. Think about it as the experience of a local market where makers are going to just be able to show videos, or have a live experience where they connect directly with many or very few of their customers at once, in a private or public type of meeting set up. Stephanie: Got it. To deepen the relationship that maybe all was virtual, or through just emails or just ordering, and you never know who's on the other side. You're trying to enable that relationship more kind of in person, but virtually? Is that how to think about it? Marcelo: Exactly. It's hard to give you more details yet, but we are going to be launching it this summer. Stephanie: That's great. When it comes to thinking about digital transformation, I know earlier you said that you would look to successful examples of other companies, of how they set up their eCommerce stores or strategies they were utilizing. That was the early days. Is there anyone now that you look towards as a leader when it comes to digital eCommerce, or someone that you're following closely where they have best practices that you guys like to keep tabs on? Marcelo: I don't think there is one company. I think, of course, coming from Square, we look a lot at Square and what they have been doing. But I think our platform is special in the way that we combine these local stores, these local relationships into an online global marketplace. I think of our platform as being or having some intersection with Pinterest, for example, which creates a very nice experience for people to navigate through things that they are interested in. We as a platform, I want our customers to enjoy this experience of finding products. Our customers, if you think about it, they start at a small store because they love to find products to show people, to sell, to show their friends. To be able to get these type of people to shop online, we need to create an enjoyable experience for them as well. They need to come to a website where they enjoy navigating, they enjoy looking at products. We're going to show products that are always relevant. They can keep diving deeper into a category and finding new, cool products that they like. Marcelo: Again, it's not just looking at eCommerce, but looking at what are the platforms that are offering the best possible experience that really get people to be hooked onto them? And trying to merge it all into our own platform. Stephanie: Yeah, I love that. I think that's such a good reminder that just because maybe you sell clothing, you shouldn't just look at other clothing companies. You should maybe look at how food companies are doing it, or like you said, looking at Pinterest and how they display images. Trying to just tap into completely different verticals to then pull those best practices up into your company, I think is super smart. All right. We have a couple minutes left. We always do a lightening round at the end where you answer a question in a minute or less. I was thinking about starting with the harder one first, and then doing the fun ones afterwards. How does that sound? Marcelo: Sounds good. Let's try. Stephanie: All right. All right, Marcelo. It's your job to stay ahead of tech and expectations and competition in the industry. In your expert opinion, what's up next for eCommerce pros? Marcelo: Oh, I need to think. This is a hard one. Stephanie: Yeah, got to start with the hard one first. Then we get to the fun ones. Marcelo: Yeah. Answering from experience, of course, that's very important. That's Faire. eCommerce is not just about showing products anymore, or letting people navigate through categories of products. The future of eCommerce is really a very customized, personalized experience. Data science is mandatory for successful eCommerce today. Stephanie: Yup, completely agree on that. All right. What's up next on your reading list or podcast list? It can be your own podcast, if you want, the Brick and Order. Marcelo: It's definitely our own podcast, talking about podcasts. I have enjoyed it so much. It inspires me to keep doing my work. The next book that I'm reading, I have just started, is Finding Genius, which is VC related. It's not really eCommerce, but it's pretty interesting. Stephanie: That's great. Yeah, exploring different industries and verticals. That's what it's all about. What's up next on your Netflix or Hulu cue? Marcelo: I have just been watching random things. I haven't had much time to watch TV lately with all the things we have been doing. I finished watching The Vikings on Netflix. That was the last series I watched. Stephanie: Very cool. Marcelo: After that, only random movies that I just find. They might even be old movies. There's nothing exciting. Usually I fall asleep if I start watching it. Stephanie: Hey, that can be a good way to slowly drift off to sleep. Marcelo: Yes. Stephanie: Once you can leave your cottage in Toronto, what's up next for travel destinations for you? Marcelo: Oh, that's an easy one. I was just about to grow on a cruise. Stephanie: Oh, where to? Marcelo: Actually, I was considering going on the cruise when this whole thing started. Max and Daniele were telling me, "There is no way you're getting to a cruise ship right now." We were going from New York all the way to the Caribbean and back. Stephanie: Oh, fun. Well, hopefully- Marcelo: I'm hoping to do that at some point in the future. I was really excited about it. Stephanie: Yeah, I hope so too. All right. Then the last one, what's up next on your shopping list? It can be tech stuff, it can be something you saw on Faire that you're like, I want to try and order that. Groceries, anything. Marcelo: On Faire, I have been ordering a lot of things. The next thing that I want to buy is a drone. Stephanie: A drone? Okay. What kind of drone are you thinking? Marcelo: As I am at the cottage, that's why I want to buy a drone. As I have stayed at the cottage since this social distance has started, I would love to have a drone that I could use to explore the forest around us here, and maybe find some of the animals that are around. Deer, and rabbits and things like that. That's next on my shopping list. Stephanie: That's fun. Well, maybe all the COVID stuff has a little plus that is making you explore different hobbies that you didn't have before. Marcelo: Exactly. Stephanie: All right. Well, this has been a really fun interview. Everyone go check out Brick and Order after this. I know I'm going to do that. Marcelo, thank you for coming on the show. Marcelo: It's my pleasure. Thank you very much for having me.
Listen to Noelle (2020) talk about her internship at Universal Studios this past summer. Stephanie: You're listening to Gear Up, the Duke Career Center's student produced podcasts showcasing real students summer internship experiences. My name's Stephanie and today we're talking to Noelle, who worked at Universal Studios this past summer. Noelle: Hi, I'm Noelle. I'm a senior here. I am a Psych and VMS double major with a French minor potentially, if I can pull it off. Stephanie: I'm a French minor, too. Noelle: Aye! Stephanie: Where did you work this summer? Noelle: So this past summer, I worked at Universal Content Productions, which is the television studio in NBC Universal. So I was in Los Angeles on the Universal Studios lot. It was pretty cool. Stephanie: That is cool. How did you find out about the position? Noelle: So I did the Duke in L.A. program sophomore spring, which was where I got my first internship in L.A. and then just through really incredible Duke alumni I met there, I stayed for the summer and ended up working on the Universal lot and then loved it so much that I kept in touch with all the alum and kind of circled back and went back this past summer. So all thanks to Duke alum. We love them. But yeah, that's kind of how I found out about it. I reached out to Lisa Katz, who is co-president of NBC Entertainment, who I've formed a pretty good relationship with over the last year. Stephanie: She is a Duke alum? Noelle: She's a Duke alum. Stephanie: That's cool. Noelle: Yeah. So many Duke alum high up in the entertainment industry you never would know. But I've kept a pretty good relationship with her the last two, two and a half years. And I was like, hey, I'm really interested in doing this. She sent my resume to the right people and a few interviews later here we are. Stephanie: So what exactly were you doing day-to-day, I know nothing about the entertainment industry. Noelle: Umm most people don't. Day-to-day it was different for me because I was lucky that I got to work, I like alternated departments for days. So Monday, Wednesday, Friday I worked in Current Programing and then Tuesday, Thursday I worked in Development. So the difference is kind of Development is bringing in new projects, new IP, which is intellectual property. So like if a new book came out, I'd read that and like write coverage or like analyze the book and see like, would this be a good television show? Like, what demographic would it reach? How did I feel about it? Stephanie: That's cool. Noelle: Yeah, because I mean, the main demographic they're aiming for is basically people our age. So having somebody in the office that is 21 and like, would you watch this? And if I said no, then obviously they're going to take that into account. So that's kind of what I would do in Development. And then Current Programing was more kind of working with people who were on the shows. And I mean, I got to work with everybody who was writing like the last season, Mr. Robot and like Homecoming with Julia Roberts. It's very, very cool stuff. Stephanie: So it's very production oriented? Noelle: Yes, very much about production. Stephanie: Did you get to meet the people on the shows? Noelle: Some of them. Some people would just randomly walk in the office like Morgan Freeman came into the office one day and I was just sitting at my desk and I heard like, I feel like I hear God's voice. So I like walk into the lobby and Morgan Freeman's just standing there, he's like, hi, how are you? And I'm like, hello. Oh, hello. Stephanie: You were like I'm the intern here. Noelle: Which is just so obvious, honestly. But I loved it because I didn't really do a lot of like intern work is what I would call it. Like sometimes, like if they were really swamped, they'd have me like, go get the president's coffee or something. But it wasn't like all Excel spreadsheets and copy and paste this and clean the kitchen. It was very different.
Stephanie is a launch copywriter who helps service-based businesses showcase their personality and unique brand voice, so they can confidently sell their products and services online. Her passion is helping women find their voice and create successful launches that increase their income and impact on others. She’s helped hundreds of clients do this by creating personality-infused websites, landing pages, and emails. Stephanie lives in North Carolina with her husband, 2 children, and over-sized lap dog, Ellie. When she’s not helping her clients create successful launches, she can be found reading a book, watching Netflix, or enjoying a delicious taco! This episode gives our entrepreneurial listeners tips can be used for writing landing pages, emails, or any other material comprised of a launch or selling online. Stephanie explains the importance of professional copywriting for new businesses and we understand how a few examples of this can increase conversions. Listen in as we gather some tip, like: Knowing your audience to write better copy Write about them, not you Selling with benefits instead of features Keep your copy simple and concise Be clear versus clever Write like you speak - conversational copywriting Make calls to action easy to see and uncomplicated Want to contact Stephanie? You can find out more about her copywriting services on her website. What’s more, make sure your next launch is on the path to success. Download your free sales funnel checklist from Stephanie! Find Kim Ransom on my: Website Instagram or Facebook
Fun of Missing Out ACT ONE We start with a bunny funeral. Oh it’s the trailer. Is this the one that released? It’s confusing… there’s like presidential march music, LeeAnne’s wedding, a lot of the same blue event being shown. Stephanie’s opening credit look is wild. It’s like a fruit roll up. As part of the checkins we see Cameron get her dog a manicure. Her dog must hate her. LeeAnne visits her venue. She talks about how her hair is blonde now and she’s getting back to her roots but does air quotes for ‘haha.’ Leeanne’s wedding planner shows up. Looks like Austin Pwers. Leeanne gets really excited about this gold square candle piece. Its hideous, and the mirror behind it isnt even a mirror. The lady goes ‘and it’ll have REAL CANDLES!!” Leeanne is not going to invite Dandra to the wedding. These two are donezo right…? What is going on with leeannes face? From some angles she looks good. But from other angles I feel like I’m not looking at the same person… the lips got bigger, the nose is a little different. AT D’ANDRAS HOUSE MORE drama with D’andra and the family business! They stopped doing christian infomercials and lost a ton of money. Dee told the financial person not to tell Dandra what was going on with the business. I don’t trust Dee guys. Dandra isnt allowed to take money out of the trust. Dandra says she likes nice things and doesn’t want to give them up. ACT TWO Stephanie and Travis at home. Stephanie’s interview look with the glitzy high collar is like a version of what Dorit would wear. D’andra’s 50th birthday is coming up. Stephanie wants Travis to talk to D’andra because he has the same relationship with his dad as she does with her mom. Stephanie thinks D’andra and Leeanne can fix things. I think this is a terrible idea. BRANDI’S HOUSE Oh good. More screaming children. Brandi feels like Brooklyn is getting too sassy. She thinks her ‘aunt flo’ might be coming. I’m so glad we see that Brooklyn is putting on spray tan because this entire time I thought her face and neck were two different colors in the promos. ACT THREE Dandra and Dee visit her dad’s grave. They discuss him on a bench. Dee’s make up is terrifying. D’andra’s dad predicted they would not get along. D’andra twists this into something about the company. D’andra explains that Dee gets $60,000 a year from the company. D’andra has taken a pay cut and wants her mom too as well. She dances around the issue and finally asks her. Dee is fine giving up the $60k. This scene is being scored with diabolical music. Isn’t this a good thing? D’andra is saying they’ve discussed this before and Dee said no. Well, Dee obviously saves these things for camera. She doesn’t want to look like a bad person. The interviewer asks D’andra if she would give up the trust so her mom couldnt control her anymore. She says no. I don’t blame her. Also, even if she did give it up, she would still be under her mom’s thumb because her mom has an emotional hold on her. Where’s Kameron?! ACT FOUR Kameron packing for a trip. Her daughter… is a ham. Stephanie calls Kameron… why is kameron allowed to go on vacation and miss the first event of the season? I don’t believe in anything Kameron says. It’s allll draggedddd outtttt. KAmeron says Fomo is fun of missing out. Kam calls Leeanne to warn her that dandra will be coming. The voicemail gets disconnected. MEET KARY Kary has a very friend of aesthetic. New girl is here. Why are we flashing back to their meeting?! We need to see her meet everyone Dandras husband is grilling outside and all the smoke is coming in. CLOSE THE DOOR! Dandra talks about the relationship counselor which I guess never happened. Kary knows leeane through cary duber. ACT 5 KARY AT HOME Now Kary is getting ready for spring break?! Why are people just dipping out of town left and right?! Kary’s husband is steven colbert. Thank god Kary has an older child that seems normal and not a huge ham. The key to a perfect housewife child is one that is sensible and can’t stand their housewife mother. It’s the perfect combination. STEPHANIE AND BRANDI TRY TO GET LEEANNE AND DANDRA TO MAKE UP These two were always going to make up because they had real love their, and they’re both ultimately ‘real’ people. Even if Brandy is annoying. Leeanne, however, is two different people, and D’andra is stubborn and kind of a brat. It’s just a bad combination. I love that Leeanne shows up wtih the same hair color as D’andra. They also blend in with Brandi’s hair a little bit which will be confusing going forward. D’andra tells us after reunion that Rich sent a text message to Jeremy that Rich was going to expose Jeremy for some affair he was having. D’andra says Leeanne made the comment about Cary’s husband, so why isn’t it ok for Dandra to ask Leeanne something similar? She has a point, but also then Leeanne says she learned her lesson. FUNNY -- Then leeanne says, your posture and everything makes you look like you think you’re better than me. You’re right. You are better, you’re richer, you’re prettier. Stephanie: You’re both amazing. Leeane has a point. D’andra is sitting up straight formally and hoitey toitey. I think Leeanne’s soft spoken thing is calculated and she’s doing it on purpose. ACT 6 D’andra apologizes to Leeanne again. D’andra: “It wont serve me any good going forward.” Leanne: It didn’t serve you any good then. D’andra takes that personally. They nitpick and react over every little thing. Brandy: How do we get to a point where we can laugh about it?! That’s really how brandy’s brain works… it’s not that simple. I don’t think they’ll ever laugh about this. I’ve truly never felt less hope for the future of a friendship after this apology. D’andra does a toast with Leeanne and D’andra does this fake formal thing with Leeanne that I think doesn’t go over well. She does do a bit of a holier than thou thing. OMG Leanne gets up to roast D’andra in the next episode and I’m terrified!!
Summary:Jason Pereira, award-winning financial planner, university lecturer, writer, speaks with Stephanie Holmes Winton, Founder and CEO of CacheFlo. CacheFlo is a fintech company focused on giving advisors and clients what they need to manage their cash flows. Built off of psychological proof and Stephanie’s experience helping people manage money, CacheFlo is a real-world approach to helping people change their habits with money and manage their spend holistically.Show Notes:● 0:45 - CacheFlo is a tech company focused on providing expert level advice and tools to companies to inform them about their cash flow● 2:51 - The principles Stephanie used to create CacheFlo● 3:30 - People make good money but didn’t know where the money was going● 3:45 - The technology Stephanie created gives her clients tools to alter their behavior and create good habits when it comes to money and their cash flow● 4:45 - How to change the way people spend money● 6:42 - Why Stephanie decided to create software● 11:00 - The customer and advisor experience with CacheFlo and how it works● 15:16 - The main goal of CacheFlo is to reduce the fears and difficulties to manage finances● 18:00 - Cacheflo frees up up to $2,500 a month for many clients● 18:43 - The question CacheFlo answers is “How” to put a successful financial plan together● 21:38 - Nothing is the same from one moment ot the next. Rather than micro managing small tasks, CacheFlo prescribes a holistic spendable number. The client can then choose where to spend that money.● 28:00 - The software also finds client’s money that can be spent● 32:00 - How CacheFlo creates a financial health score that is built off of reality● 37:20 - The challenges of being a lone founder3 Key Points:1. Many people make plenty of money. That is not where people get into financial trouble.the problem is people don’t know how they spend their money.2. CacheFlo is a real-world tech solution that helps people know their financial limits.3. It is more powerful to manage a holistic number rather than micro-budgeting differentareas of life. CacheFlo helps people get to their monthly spend number.Tweetable Quotes:- “We are in this to prevent money from hurting people.” –Stephanie- “You think you know what everyone wants but you don’t know until you know.” – Jason- “The market isn’t what they say, it is what they do.” –StephanieResources Mentioned:● The Fintech Impact● Itunes to access the podcast● Refer to Jason Pereira ́s Linkedin for Information about the Fintech event● Woodgate Financial See acast.com/privacy for privacy and opt-out information.
Ep. 73 - What do you get when you combine southern accents, babies that don't sleep, politics, social media and a hungry Stephanie? You get this seriously super fun new episode from your favorite Peas! In Ps & Qs we get a question from a parent about why they are having a hard time engaging with their daughter about politics on social media. In the Split we get new research about how forgiveness works! It's a great show! Please like share and love! --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/learntolikeeachother/message Support this podcast: https://anchor.fm/learntolikeeachother/support
Stephanie Fox is in the House! She is One Solutions awesome Middle-East director, aswell as the spearhead for our projects for youth! In this episode you will hear exactly why we the world is so blessed to have her working on how to end conflict, and how to educate a new generation of kids who know how their mind works. In this podcast you hear us talk about:- Stephanies work in the UN in Palestine, and challenges she met while trying to help. - How she went from feeling hopeless about conflict resolution to hopeful. - What she feels is the ONLY thing we need to know to stop conflict at it's source. - How looking it the mind is easier and more sustainable than trying to fix problems. - How ending war might seem crazy, but do-able if you actually go to the source of the issue. - About creating a whole new generation that grow up know about their own innate wellbeing and where their experience is coming from- About A Curious World, an animation dedicated to show kids where their feelings come from. And MUCH MORE! This one is packed with discussion on how to deal with real life global issues from a whole new perspective. About Stephanie: Stephanie Fox has 14 years experience in international development and education with NGOs, the private sector, and the United Nations. In her five years with the UN in Gaza, she supported a humanitarian effort with a $100 million annual budget that provided education, health, social services, and housing to more than one million refugees. She developed and launched the UN’s first satellite channel in the Middle East, which is currently viewed by people from more than 20 countries in the region and is providing emergency education to millions of Syrian refugees. As One Solution’s Middle East Director, Stephanie spearheads One Solution's regional work in sharing a new understanding of the mind with a variety of audiences including young global leaders, refugees and mental health professionals. Here is a recent article by Stephanie:You can read about A curious world here:https://www.acuriousworld.org/
Fertility Friday Radio | Fertility Awareness for Pregnancy and Hormone-free birth control
Stephanie Risinger is a Fertility Coach, and a Licensed Marriage and Family Therapist. Stephanie has been a therapist for nine years, and she decided to start her podcast, The Holistic Fertility and Wellness Podcast, after experiencing several years of fertility challenges and pursuing holistic approaches to improving fertility. She found that the information she sought was not as easily accessible as she had hoped. She worked hard to find resources and is now sharing those resources with others through her podcast. In today's show, Stephanie shares her own fertility journey with us. After her 9 year journey with fertility challenges, Stephanie is expecting her first baby! She shares how she managed to maintain hope throughout her journey, and how she was able to maintain her own sense of identity and worthiness during the years she was unable to conceive. Topics discussed in today's episode Stephanie takes us through her 9-year fertility journey Stephanie shares her experience with the adoption process The importance of understanding your menstrual cycle How to manage infertility when it feels like everyone around you is getting pregnant How to navigate conversations with friends who get pregnant while you're struggling with infertility The impact infertility has on relationships The unexpected way infertility affects grandparents Challenging the idea that your body is broken and instead choosing to believe your body can do it How fertility challenges can impact your intimate relationship with your partner What it was that finally made the difference for Stephanie and lead to her finally being able to conceive naturally Connect with Stephanie You can connect with Stephanie on her Website, and on Facebook, and Twitter Resources mentioned Holistic Fertility & Wellness Podcast | Stephanie Risinger Holistic Fertility & Wellness Podcast | Understanding Your Menstrual Cycles | Lisa Jack FFP 076 | The Emotional Connection to Fertility & Health | Aimee Raupp FFP 134 | Optimizing Sperm Health | Motility, Morphology & Sperm Count | Why He Needs To Get Tested ASAP | Marc Sklar Cora Tampons | Organic Tampons That Work Join the community! Find us in the Fertility Friday Facebook Group Subscribe to the Fertility Friday Podcast on iTunes! This episode is sponsored by Cora! Made from 100% organic cotton, Cora tampons were designed not only to help you manage your periods but also to preserve your health. For every month of tampons you buy, Cora gives a month of pads along with menstrual health education to a girl in need in India. Click here to receive your first month's supply free of charge. *Please note that Cora only ships within the United States. Fertility Friday | Fertility Management Masterclass This episode is sponsored by my Fertility Management Masterclass! Gain clarity and confidence using the Fertility Awareness Method and improve your cycle health at the same time! Click here for more information! Music Credit: Intro/Outro music Produced by J-Gantic
In this episode, LaToya Allen, developer at Big Cartel and founder of SheNomads talks about apprenticeship and mentoring, finding community while working remotely, how companies can be more inclusive for hiring women and people of diverse backgrounds in technology, and avoiding burnout and maintaining balance. LaToya Allen: @HashtagLaToya | latoya@shenomads.com Links: CodeNewbie Ep. 34: Newbie Story: LaToya Allen The SheNomads Podcast Garage Cowork (Polanco) Dear Tech Companies: Focus on Diversity, Not Foosball The SheNomads Job Board Women in Tech Wellness: Chicago Resources: Practical Object-Oriented Design in Ruby by Sandi Metz Exercism.io The CodeNewbie Twitter Chat Transcript: BRANDON: Hello everybody and welcome to Episode 44 of the Frontside Podcast. I'm your host Brandon Hays and I help run the Frontside. STEPHANIE: Hello, I'm Stephanie Riera and I am a developer at the Frontside. BRANDON: Awesome. And we have a special guest today, LaToya Allen. So you're a developer at Big Cartel, is that right? LATOYA: That is correct, yes. BRANDON: Cool. We wanted to talk a little with you today about your day job, your work with SheNomads, your recent blog post about inclusivity and how you balance all that stuff for people. We wanted to start, if we could, by having you introduce yourself for the listeners that don't already know you. LATOYA: Sure, my name is LaToya. I am a software developer at Big Cartel and I'm also the founder of SheNomads. BRANDON: Cool. We actually listen to your podcast and found out some cool stuff about you. One of the things is you used to tend bar. Would you be okay telling us a little bit about your story about how you got into software, what you did before that, and why you're doing this now? LATOYA: Absolutely. I was bartending in Chicago, trying to figure out what I wanted to do with the rest of my life because I knew that it wasn't staying up until 5 in the morning, making Martinis for folks even though it was fun and I do appreciate that time of my life. One day my yoga class got cancelled and I needed something to do. I ended up stumbling upon some coding tutorials and I really fell in love with it. I noticed that hours had gone by, I wasn't bored, I really felt engaged, and it didn't really feel like work to me. It felt like something that would be a cool hobby. I, like many people at that time, felt that you needed a college degree to become a software developer, so I really looked at it as more of a hobby. I started going to different meet-ups in the city and I discovered that wasn't true. And I was lucky enough to find people that are willing to help teach me when I was very early in my career. BRANDON: Cool. And I guess the rest is history now, right? You've had a couple of jobs since then and you went through an apprenticeship program and after the apprenticeship program, you're developing lots of different kinds of software. Are there any software projects you're working on now? I know I met you at Ember Conf but you're doing less of that now. Are there any software projects now that you're fun and exciting, like what languages are you using? LATOYA: At work, we are primarily a Rails app. I've been doing a lot of work in Rails, a little bit of JavaScript. I had the opportunity to learn Ember when I came on to Big Cartel. So, that was pretty cool. As far as side projects, I started an open-source project for SheNomads as a way to help teach folks how to do simple things like create a pull request in GitHub or just the basics of working with Rails. But SheNomads has become an entirely different thing since I started that, so I don't do any coding outside of work right now, unfortunately. [Laughs] STEPHANIE: How long was your apprenticeship? LATOYA: I was an apprentice at 8th Light in Chicago and I was there for one year as an apprentice. STEPHANIE: And is that where you learned Ember? LATOYA: No, when I left 8th Light, I landed a job working in FinTech for 6 months. And then after that, I went to Big Cartel and Big Cartel is actually where I learned Ember. STEPHANIE: What was your apprenticeship experience like? Do you have any advice or anything that you think really helped you along the way? LATOYA: I got to learn from some pretty great people such as Mike Ebert, Colin Jones, just off the top of my head. I learned from a ton of people when I was there. Ginny Hendry was also very helpful. Basically at 8th Light, they really focused on test-driven development and pair programming which test-driven development is a lot of fun and tests are great, that they're very in these days. I got to learn how to test-drive applications and languages such as Ruby, JavaScript, Clojure which is probably my favorite language that I'd never get to work in because it's not popular enough, I guess. I think I did a little bit of REST while I was there as well. And then I was working in frameworks such as Sinatra, Rails, and I worked in ClojureScript as well. STEPHANIE: Nice. I also wanted to ask if during this journey of becoming an engineer, were there any experiences that helped shape the way that you think today? And I'm asking this because I'm curious to find out where the 'She' in SheNomads comes from. And why not just make this a very general digital nomad type thing? Why was there a focus on being a woman? LATOYA: Because I am one. [Laughs] I'm a woman. I think that people tend to think in gender in terms of their own. So for me, it was just fair enough for all to come up with the name SheNomads. STEPHANIE: Gotcha! Obviously, there is a difference, it seems like, in becoming an engineer when it comes to being a woman. I've participated in a lot of events and usually I have women come up to me afterwards and talk to me. And they usually tell me their experiences and how they know that they haven't been participating. They know they haven't been going to hackathons and other events. And I asked them why and 90% of the time, their answer is they're just intimidated. They don't want to be the person raising their hand in a room full of guy developers and hoodies. They don't want to be seen as the amateur or the person that doesn't know. So, I wanted to see how your experience was if it was similar to that or if it was any different and see if there is anything you learned along the way. LATOYA: Look, we all know that tech has problems. I live at two different intersections in the majority of people that are in tech being I am both a woman and I am black. Being a woman – not just a woman, but being a woman of color in tech does come with its challenges. For me personally, I have never been one to shy away from raising my hand in a room or speaking up in a room. But I think that tech in a lot of ways did dole that part of my personality because I wasn't being listened to. I wasn't being considered. For example, there are plenty of times where I've been in a meeting, I've been showing my code and someone else takes credit for my work. And I just don't even bother to say anything because honestly, it's like, "What's the point?" At that point, you just find another job. Or I've been in situations where I say something to someone about the code or about a test or about a change that we should consider and then someone who happens to be male turns around and says basically the exact same thing. And while no one really reacted to what I said, people say, "Oh, that's such a great idea." I have also been in meetings where people don't even look me in the eye for the entire meeting which is very awkward when you're sitting in a room for an hour and you're the only woman in that room. And the person leading the meeting can't even bother to look you in the face. So I think that it's been an interesting journey. [Laughs] And don't get me wrong, there've definitely been a lot of positives with it. But to your question, those are some of the things that I've experienced and it certainly made me aware of how women or people who live at different intersections of the majority of folks in tech get treated and how we need to do better. STEPHANIE: Yeah. I think you and I are kind of outliers. I'm also a woman of color, I would consider, I'm a Latina. Nothing really stopped me from attending meet-ups and hackathons and I've always been very straightforward about what I know and what I don't know. So, that's never really been an issue for me but usually, I'd be probably one of two women out of a room of like 40 people. It's not very comforting. So that's why I'm wondering is there anything for women that aren't like ourselves, do you have any advice for women and for companies that want to be more inclusive, what can they do, how can they be more proactive or get over that fear or intimidation? LATOYA: Absolutely. So, one of the first things that I tell them to do when they are thinking about getting into tech is find communities that will be supportive of you because there weren't a lot of boot camps because Chicago was full of meet-ups. And because there were meet-ups like Chicago Women Developers, I was able to find that community [inaudible] and women were very forthright in sharing their experiences, both good and bad in tech. So, it definitely helped to prepare me a bit. [Laughs] But also when I had bad days, when I had times where I knew I wasn't being treated equally, it was easy to say, "You know what? I'm going to a meet-up after work because I can knock with you people." So, definitely finding a community. STEPHANIE: Sometimes, I feel like those negative experiences where you feel like you're not being respected or you're not being treated equally, at least for myself, that was like adding wood to the fire. That just made me want to succeed more. It made me want to become a developer. It just made me more passionate. I guess for other people, it can have the opposite effect. But I feel like the best revenge is to have them see you succeed. BRANDON: I wanted to ask kind of a follow-on question there about SheNomads. You talk about finding community being really important and you were lucky because you're in Chicago. But now, it seems like you're doing more travelling and there are other people that travel a lot. Is that where you found kind of a hole, the people that travel sort of nomadically? It can be difficult for those people to find a community. Is that where that comes from? Or what was the genesis of SheNomads? LATOYA: SheNomads started because when I landed the job at Bog Cartel, I knew – and I discussed this when I was interviewing with them as well, so it's very transparent. I knew for me working remote from home, that working remote from wherever I wanted home to be within reason as long as there's WiFi and espresso, I promise you I can work from there. [Laughs] So, I started my podcast actually because I had no idea how to work remotely. I had no idea how to pack a suitcase for three months and I didn't know how to find good co-working spaces. I didn't want to feel isolated while I was in the road. So, it kind of evolved. I started a Facebook group for it as well and that was very helpful because for example, I was in Tel Aviv, I was there for two weeks and I didn't know anyone and I really wanted to meet other women who worked in tech. And through the Facebook group, I was able to meet someone who ended up taking me to a co-working space that's sponsored by the government there with free food, free coffee, free WiFi where a lot of other people who happen to be digital nomads who work in tech were as well. For me, it ended up being this thing. It ended up being like an international community but that wasn't the intent when I started it. It's just like a lucky coincidence. BRANDON: And so now, you're putting a retreat together around that. Can you tell us a little bit about that? LATOYA: Yes. After I started the podcast, I started talking to them about their experiences. I knew that I wanted to really dive into it. I wanted to find a digital nomad retreat. But the thing is that the ones that I was coming across were very reflective as the tech industry as they are now. They're very young, people working for like 18-hour days and drinking beer for the rest of the time. And I looked at the attendees and it's like, "Okay, you're all men." [Laughs] And I didn't really want this thing for a week or two in a house full of drunk 22-year old dudes. It's just not for me. BRANDON: You don't want to stay in the front house, huh? LATOYA: Yeah. For me, I like my sleep, I like my yoga, I really like doing things like journaling and standing a long time. And I also enjoy what I do. So for me, I was like, "Okay, I want to be somewhere beautiful where I can have free WiFi, where I can practice yoga, and where I can talk to other people who want to work remotely but maybe want to explore a city." So I was working for Mexico City and I happen to have found the most beautiful house just south of the park. And I was speaking to one of my friends who was a yoga instructor and she said, "Yes, I will come. I will lead morning yoga. I will lead candlelight yoga at night. We could do some [inaudible] actions of people who are into it." And then I had been working in a co-working space in Mexico City and I told them about my idea. They offer to sponsor 30 hours for each attendee and that's Garage Cowork, it's in Polanco which is a gorgeous neighborhood in Mexico City. And then I used to work with a friend who's now the CTO of MealSharing.com. He said, "Hey, first of all I wish I could be at this retreat." But since it's women only, we talked about MealSharing.com sponsoring an authentic Mexican cooked meal for us. So, that's how they got involved. BRANDON: It sounds like things kind of fell together in a way that actually is going to create an experience that, I have to imagine, you're happy with the idea of. LATOYA: Absolutely. I'm very excited because if this already existed, someone else will be getting my money. But since it didn't, I just said let's make this happen and I feel very lucky that it all just kind of come together very organically. STEPHANIE: You recently had an article on Medium. I wanted to ask about that. What made you feel compelled to write this article about how companies approach what they write on their careers page? LATOYA: I had been talking to a friend who started tech a little after I did. And we had both attended the Sandi Metz POODR workshop together which is amazing. If anyone listening to this is a Ruby dove and you want to up your skills, I would highly recommend it. So we attended that workshop together, it was a great experience. I keep talking to women who are significantly underpaid, underappreciated, and are having all of these problems in tech. And so, I was just lying in bed on a Sunday night, working at careers pages and I was thinking about reasons that women leave tech because they keep coming in but it almost seems as if we're losing them too quickly. And I was thinking about these reasons why. I was looking at careers pages and it dawned on me that the careers pages of these companies were not very inviting and that I would not want to work on the companies based on those careers pages. Even though some of them, I knew people that worked at them and I knew that they were all about diversity and inclusion and they were paying women practically, if not the same, as what they're paying men. And I knew that they were positive work environments, so I knew that people were learning from them but the way the companies were presenting themselves was so different. So I thought, "If I was applying for jobs," and I'm not, I'm very happy at Big Cartel and I'm very happy with what I'm doing with SheNomads but if I was, I wouldn't apply at their company and this is why. And I just sat there that Sunday night in my bed, flipping through careers pages and I just noticed a common theme and it was that they weren't very inviting. They seemed to think that alcohol was a bigger selling point to the people they wanted to attract than things like maternity or paternity leave. Their pictures looked like they were trying to throw a party or something. I don't know. It was just – I was very surprised. STEPHANIE: Yeah, it seems to be the popular thing right now like this whole Silicon Valley vibe culture type thing. But it's interesting. I have two friends that are both recruiters for tech companies and mainly trying to find developers here in Austin. And last weekend, we were having the same conversation about how they don't like to admit it, but they have seen over ageism and just general discrimination. How they have seen countless times people that were definitely qualified for the position but because – I think one of their examples was a young lady but she was Indian. And this company that was looking, they were all white guys and they had rejected her because she wasn't "culture fit". But I find that very interesting because I think, as a company, you would actually benefit from having people of all kinds of backgrounds, someone who's 20 years old to someone who's in their 50's or 60's. They must have different sets of knowledge and experiences that could benefit the grander picture. LATOYA: You would think so, you think companies would think that way but unfortunately, a lot of people don't. For starters, if you are a person who isn't interested in working with women or people of color, you're going to look at a careers page in the opposite way that I would. You don't want to work with people over the age of 35, people with brown skin, people who identifies varying genders. Those careers pages are going to attract you. STEPHANIE: Right. LATOYA: Which is unfortunate but that's just the world that we live in right now, and I have had people say this to me as someone who is a woman and someone who is a person of color. But a lot of companies, unfortunately, once they have a base of all straight cisgendered males, for them it becomes a liability to bring in women or people that live at other intersections because they have to worry about things like the woman getting hit on because she's the only woman that these 30 or 40 men can look at all day which is ridiculous, I think. But at this point in time, sometimes they just say it's a culture fit thing when really this is a law-suing happen thing. BRANDON: I saw this rag regressive 1940's thing about a woman in the workplace. [Laughter] BRANDON: And it's both hilarious and really sad because that actually sort of regressive feeling has just kind of morphed into that law suit type of thing. It's the same exact thing of just like breaking that sort of mono-culture and people are fearful of it because they don't know what the consequences are going to be. That cost-benefit calculation doesn't happen because a lot of people in tech haven't experienced what a diverse workplace is and does and the benefits of bringing people from different backgrounds would care about different things. And so, I'm curious. We kind of talked a little bit and one of the things I want to ask you about we already kind of covered is why people don't do that. Why do people continue doing that if it's not that productive? I'm curious to see if there are things that you've seen companies do like what attracted you to Big Cartel and other companies that would be able to bring some people from different backgrounds? What are the things that companies do currently or you'd like to see them do that would make it more attractive and more inclusive? LATOYA: I think one thing right off the bat that I noticed about Big Cartel and one thing that I noticed about many companies in tech that I'm really excited about is that they put people first. And I think that when you operate from that standpoint, you're not going to have problems that come with creating a diverse or inclusive workspace. You're not going to have women wanting to leave because you're treating them like human beings. So, that's first and foremost. I think some companies really care about the people that work for them. They really care about their client base, their user base. So, for me personally, I always recommend that if people aren't happy at their current situations and they want to find something more inclusive, look for companies that put people first. That's the first thing. I think the benefits that they offer and the way that they talk about their benefits are really important. I have no intention of being a mother; there are lots of great mothers out there and it's a lot of work in the world's best [inaudible] in my mind, anyway. I also wouldn't ever interview with a company that didn't have a good maternity leave policy. It's one of the things that I look for upfront. So, even just putting your maternity leave policy and paternity leave, if you have it, on your careers page can be a really big seller. I think starting early on, once you have your core team in place, if you haven't already had women or people of color or someone who isn't like you, this may be a good time to stop and think about why that is and what you can do to pull in diverse candidates. And there's also reaching out to communities that do have them, like SheNomads is one example of many communities that exists. There are also bigger more established communities like Girl Develop It, for example. Reach out with them, host a couple of meet-ups at your space, if you have it. If you don't, figure out a way to work with them. BRANDON: Right. So you're saying if you make it a top-of-mind goal, you will find ways to reach out because there are people out there looking. LATOYA: Yeah. BRANDON: But they may just not be in your immediate vicinity. In my experience, that's the actual problem. The problem is that it's not in my proximity to see and know these people that are involved in these communities. And so, connecting into those communities naturally, organically, and through effort is a way that I've actually seen people grow that. That's how you can kind of go from saying 'I care about diversity' to actually growing a diverse and inclusive workplace. LATOYA: Absolutely. I think another thing that folks that can do is have a remote position. You get a remote culture going if it's something that you're comfortable with. I understand not everyone wants to work from home and not every company will do well having remote positions open. But if it's something you're open to, that is a great way to do it because you might be living in an area where all the people are like you. So, you're going to have trouble getting someone to drive in a car. So, there are two other ways that I was thinking that people can attract diverse candidates. I'm actually launching a Job Board for SheNomads. I got to the point -- it's actually once the article came out on Medium that a lot of people were emailing me wanting to know how they could find jobs and a lot of companies were emailing me wondering how they could find diverse candidates and like what they could do to be more welcoming to other communities. So I said, "You know what I'm going to do? I'm putting together a job board." BRANDON: So where is the job board? LATOYA: The job board you can find on SheNomads.com. BRANDON: Cool. There are a lot of things – and this is really what I wanted to drill into was the blog post helps kind of point at the problem, "Hey, your careers page is sending messages that are actively turning away people that you want working for you. You say you want a diverse workplace but it's so far down the list of your actual priorities, or at least whoever it is that's running your careers page, that you're actively turning people away that you don't even realize you're losing people through that funnel that are bouncing out before you even have a chance to meet them and know them and know what they can bring to you." And so, that's actually a really big deal and a big problem in tech. I also appreciate your jumping in and that we have some sort of concrete things a person can do. Get involved with GDI or with Women Who Code. We had a thing here in Austin and I ran the local Ember meet-up for several years and it's a lot of work and it was really challenging. One thing we noticed was that there were only two or so women, on the average, at a meet-up of 30 people. And I recognized it as a problem but I didn't feel like there was anything I could do about it. And so, I handed the reins of running the meet-up over to a group of people that included the women. And sure enough, the women were like, "You know, we might be able to do something about this." Stephanie actually got involved with this, and they held an event for women and it's changed the makeup of that meet-up significantly. You can have an impact on this stuff. You just, sometimes, have to step out and think differently about the problem. LATOYA: Yes. BRANDON: I'd like to shift gears a little bit and talk about – you're involved in so much stuff. Running SheNomads, running retreats, you have a full-time job, you're traveling a bunch and balancing all of that stuff, I have to imagine, is really tricky. And I'd like to dive into that and have you kind of talk about like do you ever get burned out? Do you feel like giving up? What do you do to manage that? Do you have preventative maintenance that you do? What is it that you do to try to keep all that together? LATOYA: One thing that I find very interesting is you asked me specifically about burn out because burn out is something that I recently experienced. I am not good at knowing that I'm setting myself up for burn out. I'm not even good at knowing that I'm in burn out until I'm there. For the most part, I think that I've gotten better as my tech career has evolved. So for example, when I first started, I was working a lot of hours. There were days when I had to be in the office at 7 in the morning because I was mentoring people who were in London even though I was in Chicago. So for me, there is no more of that. [Laughs] One thing that I really like about working at Big Cartel is that most of the team is on the West Coast, so I get to do things like sleep and if I want, I can go to the gym, I can run all of my errands before I even start my work days. Once I start my work day, all of I have to do is worry about work as opposed to waking up and not having time to do nice things for myself, not having time to run errands and I'm starting my day having all of these stuff on my mind. For me personally, working remotely allowed me to become a more balanced person as well. I don't like riding trains with crowded people. When I was working downtown, it would take me an hour to get to work every morning. If I have to go downtown in the middle of the day, it might take me like 20 minutes or half an hour just because there's not as many people running around. Also for me, I didn't particularly like going to the grocery store. At times, you can go to the grocery store if you have a 9 to 5 job. If I realize that I don't have anything for dinner, I can just tell my pair, "Hey, do you mind if we take a 20 minute break?" And then I can go to the grocery store and get whatever I want, knowing that I'm the only person at the grocery store. I mean, it gets a little bit to my inner introvert but I know myself well enough. Let's see here. Practicing yoga is something that's very important to me and taking walks as breaks is something that's very important to me. I think when you love what you do, it can be hard to take breaks. So, it's always nice to be pair programming with someone and have them say, "We haven't taken a break in a while." I find that when I work on my own, I don't take as many breaks. When I take a break, I pop my yoga mats always open. So, I'll do yoga for 10 minutes or take a nice little walk outside or just get away from my computer for a while. BRANDON: It sounds like working remotely kind of gave you the flexibility you need to implement your own self-care regimen, the one that works for you. LATOYA: Yes. And I would not have even thought to implement this regimen had it have not been for working remote, I think, because it's not as easy. It's bad enough being one woman amongst a hundred men but then you're that cliché woman with a pink yoga mat walking around the office trying to find some space. BRANDON: I actually did use to work in an office that had a yoga studio on site. LATOYA: That is so nice. BRANDON: Things like that do exist but I have to imagine that's about as uncommon as it gets. LATOYA: Absolutely. I had the idea of starting a meet up which I started in Chicago called Women in Tech Wellness. Basically, we get together and we practice yoga for an hour. And then after that, there's a little bit of networking. Luckily for me, Braintree is sponsoring the event which is so great because it allows us to keep it free. I think having free and low cost events in tech are really important because there are people that are trying to figure out how to break into this and if they have to spend $10 or $15 to go to a meet-up, they're not going to go. Also, it's nice to go to a meet-up where you might be stressed when you show up because you just left work but you know in an hour, you're going to be feeling really good. Plus the Braintree office in Chicago has this amazing atrium where we do the yoga. So when you're lying on your mat, you're looking straight up into the sky and you see plants and you see all of these amazing stuff. It's just a great place to do yoga. So, thank you Braintree. [Laughs] BRANDON: I think that's really cool. I have one question, though. Do you ever have the ironic circumstance of the things that you create to help you and other people find balance wind up actually contributing to your overall sense of being overwhelmed? LATOYA: Oh, absolutely. There's only 24 hours in a day and right now, I am all of SheNomads at SheNomads party of one. [Laughs] I would love to get to the point where I can afford to hire a couple of people just to help even if it's part time. So, absolutely. Doing a podcast is a lot of work, booking guests is a lot of work. I would say that organizing the meet-ups is fairly easy just because I'm lucky enough to have people that wanted to step in and help there. But yeah, I think having a few things on your plate other than work is always going to contribute to a little bit of imbalance. BRANDON: Stepping back and looking at the arc, you haven't been in tech for a million years but you've been in it long enough to start drawing some themes through it. If you look at your career like where it's been and approximately where it's going, are you starting to feel like there are some themes to the stuff that you do and some themes that are kind of common threads in it? LATOYA: I can tell you some themes in common threads. Yes, for my personal tech career. For me, I really care about code and I really care about people, so I'm glad that I was able to early on learn clean code and learn how to refactor and learn test-driven developments. First job I had at 8th Light taught me all those things. I think for me, that is a theme that will be throughout my career. Test-driven development, who knows, 10 years from now there could be a better way to write clean code, but for now, it's the best way I know how. And finding community, even though I am absolutely happy with where I'm working. Big Cartel does a great job at creating an inclusive space, but still I like being a part of a tech community. I know that's not for everyone but it's something that I think I will continue to do. BRANDON: From just my casual place of observation of seeing what you do, definitely finding and creating the communities that you want to see exist certainly seems to be a theme. And I think it's really cool that you do the SheNomads stuff. I think it's really cool that you run that podcast. For a person that hasn't been doing this for 15 years, I think it's really awesome that you found a community early on. It's something that certainly has accelerated my journey as a developer. I haven't been a developer forever, either. So I appreciate seeing you do all that stuff. I think it's a really good example for other people that getting involved can benefit everybody and you can have an impact in ways that are sort of uniquely yours. I mean, certainly the stuff that you do is sort of unique to you and your perspective and I think that's really cool because it winds up benefiting a lot of other people. LATOYA: Thank you. I wish I would have said that as my answer. [Laughter] BRANDON: It's sometimes easier to see from the outside in, even as a casual observer. STEPHANIE: I did want to make a comment about balance. That's something that's very important for me. It's something that I've been trying to implement in my daily life. I recently started going to the gym and I try to work out either early in the morning or in the afternoon after work. Sometimes, I realize that even when you try to do something, you still don't accomplish what you're trying to do like keeping that balance. I started this about two months ago. And last week, I realized that I was not in balance at all. I spent Monday, Tuesday, and Wednesday really focused on trying to learn certain things. I was going over Clojure actions and trying to destructure and get rid of components and change the actions from where they originally were. I'm a junior developer, so I feel like if you are an apprentice, it's really hard to not be in this state of overdrive of like you really want to accomplish things. You really want to learn as much as you can and just be a sponge and absorb everything. But if you're spending eight hours, give or take, going over these things, at the end of the day, I just feel sometimes my brain is just like it's done. I can't even formulate sentences. I can't function. I just get home and I want to keep working on this but I just literally can't. I think on Wednesday, I just had a horrible headache and I got home and I was like, "I'm just going to lay down for a little bit." Laying down turned into a 3-hour nap and I will go [inaudible] 8:00 and I felt so much better. And then on Thursday, when I came in, everything just made sense to me. All of the problems and everything that didn't make sense before made sense. And I hadn't reviewed, I hadn't done anything, all I did was I got a nap. But I feel like there's definitely this struggle when you are wanting to achieve and prove yourself and to get to this next level, it's really important to try to remind yourself to give yourself breaks even during the work day because if you can't continue, if you're at this point of mental fatigue, it doesn't matter how much longer you're sitting in front of the computer, trying to read about it in the documentation, it's just not going to do anything. So, I wanted to ask if perhaps you ever had those moments of frustration especially in the beginning as you're trying to learn all of these difficult concepts. LATOYA: For me, yes. I love taking naps. I consider myself a professional. Luckily, Big Cartel is very flexible, so if I feel like I need a nap instead of lunch, I might take a 2-hour lunch break because I'm taking a nap. And for me, there's just something about resetting my brain through sleep that allows me to be more productive in a way that's just walking away from my computer and doing something else. Also, I spent two months this summer working abroad. So, I worked from the UK, Israel, Spain, Portugal, and Norway. So I worked abroad for two months and because of the time difference, I would wake up in the morning and work for three hours and then I would have all day to do whatever I wanted which primarily meant being a tourist in some of the most beautiful places, I've been very lucky to place my eyes upon. And then I would do another three or four hours pair programming at night and I think that I was able to get more done and I had a greater sense of clarity because I had such a big break. I was only working for three or four hours and that's it and you're taking three or four break because no one else is awake yet. It's almost as if you're working two separate days. I think I would like to go back sometime soon, actually, and do that again because I'm not getting up at three in the morning here to work for three hours and then take a break. STEPHANIE: Definitely. And that makes sense. It makes sense to stimulate your brain in a different way. Looking at the beautiful buildings and reading about the history and walking around and being outside. Even just a 30-minute break can just be just so wonderful and be like a refresher for the brain. Nice. Before we go, I wanted to ask if you have any shout outs. LATOYA: I do. I will give you three resources that I tell everyone who's a junior developer, where they should look in to break into tech and what they should look for. Number one, I kind of already mentioned a little bit, but Sandi Metz has a great book called POODR. She also has a POODR workshop. If you can go to that, I highly recommend it. I know that she offers scholarships for that as well, so you can apply. Number two would Katrina Owens' Exercism. It's a great way to learn how to code. It's also an open-source project. So not only can you go to exercism.io and pick a programming language and work with people on teams to learn how to code. But if you want to contribute to the open-source project, you can. And the third thing would be the CodeNewbie twitter chat. I love it. I really need to get my stuff together and be there on Wednesday nights. I believe it's Wednesday at 8 or 9 Central – don't quote me on that. But those are the big three things I like to shout out, even though you only asked for one. [Laughs] STEPHANIE: That's perfectly fine. I was going to ask you anyway if there were any open-source projects or programs that you are involved in. LATOYA: Yes, I have been involved in exercism in the past. I think I might have mentioned this, but I tried doing open-source project with SheNomads but I would need someone who's like at least a mid-level developer to come in and help out all of the juniors and the people that are trying to get started to learn how to code because my time is very thin these days and I'm trying to maintain some level of balance. STEPHANIE: Right. And that's a huge challenge too. So, lots of time management and just time is a resource itself. BRANDON: There are a lot of mid-level developers out there that are looking for, "Hey, how can I contribute to open-source?" So, it sounds like you have a project that if people out there are looking for a way to contribute to something meaningful, then you have stuff that you could certainly use help on. LATOYA: Absolutely. If you want to contribute, you can email me or tweet me, find me on Facebook, do whatever, and I will happily add you as a contributor to the project. BRANDON: That actually is the last question I want to ask. How do people get a hold of you to volunteer for this or ask additional questions or find out more about the retreat? LATOYA: The three best ways are number one, you can go to SheNomads.com and if you wanted to find out about the retreat or the job board, there are contact forms there. Number two, I am always on Twitter. You can tweet me at either accounts. My personal account is @HashtagLaToya and then I have a SheNomads account, so it's @SheNomads for that. And then the third way is email. My email is LaToya@SheNomads.com and I always am up for answering any questions you may have. BRANDON: Awesome. LaToya, thank you so much for coming. I really appreciate you sharing your experiences with us and you've certainly learned some unique things. I think your take on self-care actually is really sharp and something that people don't think were talked about enough. And it probably [inaudible] as a developer in lot of ways and I think people can learn a lot from that. I wanted to thank everybody else that's listening to this. I'm Brandon Hays. I'm on Twitter also @tehviking. We are @thefrontside on Twitter. And Stephanie, you are also on Twitter, is that right? STEPHANIE: Of course. I'm Stephanie Riera and I'm @stefriera. And thank you so much, LaToya. It was a pleasure talking to you. BRANDON: Absolutely. Thanks everybody and thank you, LaToya. We will see you all next time.