Customer development and product testing

In this episode, host Josh interviews Simon Hammer, VP of Product at Vimbly Group, about acquiring and managing e-commerce brands. Simone shares a case study from the cocktail shaker market, illustrating how focusing solely on quantitative metrics led to missed opportunities. He emphasizes the importance of qualitative customer feedback, brand storytelling, and product-market fit to build lasting brands and avoid competing only on price. The discussion highlights key lessons for e-commerce leaders: assess market potential, listen to customers, and continuously test and iterate to stay competitive.

Chapters:

Introduction to Simone Hammer and Background (00:00:00)
Josh introduces Simone Hammer, his background, and experience in e-commerce and investment banking.

Approach to Brand Acquisition and Quantitative Analysis (00:00:55)
Discussion on traditional quantitative methods for acquiring brands and the limitations of focusing solely on numbers.

Case Study: Cocktail Shaker Brand and Market Dynamics (00:01:38)
Simone shares a case study about their cocktail shaker brand, market share, and the impact of COVID-19.

Competitor Analysis and Information Memorandum (00:03:08)
Simone describes obtaining a competitor’s information memorandum and insights into their strategies and market position.

Market Changes and Increased Competition (00:04:07)
Discussion on rising freight costs, increased competition, and the challenges faced in the cocktail shaker market.

Brand Building vs. KPI Focus (00:05:05)
Comparison between their KPI-driven approach and the competitor’s focus on brand building and storytelling.

Consequences of Ignoring Qualitative Feedback (00:06:59)
Simone explains the negative outcomes of neglecting qualitative customer feedback and the resulting price competition.

Importance of Qualitative Customer Insights (00:07:53)
Emphasis on the value of qualitative data, customer feedback, and brand building for long-term business success.

Lessons Learned and Industry Trends (00:09:01)
Reflection on industry trends, the necessity of qualitative insights, and the risk of competing solely on price.

Host Reflection and Question on Customer Feedback (00:10:04)
Josh reflects on his own business practices and asks Simone what customer feedback they missed.

Specific Customer Preferences Missed (00:10:53)
Simone details specific customer preferences, such as the shine of the shaker and the appeal of the stand.

In-Person vs. Online Customer Insights (00:11:55)
Insights gained from in-person customer interactions versus online feedback and the importance of customer development.

Three Key Takeaways for E-commerce Success (00:13:43)
Josh summarizes three actionable takeaways: market opportunity, listening to customers, and continuous testing.

Closing Remarks and Future Follow-Up (00:16:48)
Josh thanks Simone and mentions the possibility of future episodes to check on progress.

Links and Mentions:

Tools and Websites 
Helium 10

Key Takeaways 
Identifying Market Opportunities: 00:13:43
Listening to Customers: 00:14:47
Testing and Iterating: 00:15:49

Transcript:

Josh 00:00:00  Today, I'm excited to introduce you to Simon Hammer. Simon is the VP of Product at Vimbly Group, a New York City based firm that scales and invests in tech enabled businesses where he has worked for over ten years. He currently runs Vimbly Group's e-commerce business unit, as well as having his hands involved in a number of Vimbly Group's eight other business units. Prior to the Vimbly Group, Simon was a healthcare investment banker at a boutique investment bank in New York City, where he focused on raising capital and mid-market mergers and acquisitions involving biotech, healthcare, technology and healthcare service companies. He has a bachelor's degree from Cornell University, and I met Simon at the Billion Dollar Seller Summit earlier this year. And Simon, I'm excited to welcome you to the podcast. Welcome.

Simon 00:00:50  Thanks, Josh. Really appreciate that. Nice intro. Thanks for having me.

Josh 00:00:55  As you look to acquire other brands, and I love that you kind of were an acquire or aggregator before the aggregator theme became pop became popular. So you're not on the the bandwagon there.

Josh 00:01:08  You can be like, no, we were doing this long, a long time ago. You know, I think that that's really interesting, Simon. I think you've taken this approach that's actually a little bit different than I think the typical answer is, right, because I've listened to a bunch of other people that talk about acquiring businesses. And I'm looking at these specific numbers and, you know, I'm trying to draw conclusions and, you know, kind of look at 2020 and what happened during Covid and say, okay, this was an artificial bump and it's all very quantitative, right?

Simon 00:01:38  All the quantitative stuff that you're talking about like looking historical, it's a given. Right. We always do that. We've always done it. And for the longest time, that's all we did. And, you know, one of our brands right now is going through a major shift in that it, for such a long time survived on three products. Basically, there's a whole, you know, there's more skews, but there's basically more Asians.

Simon 00:02:02  But there's there's effectively three basins. One of those. basically a shell of itself now. And part of the reason why is because, you know, actually, if you'll divulge me for a second. So, pre-COVID and even through the first, you know, a couple years of Covid and depending on where you want to, you know, start and stop it, I guess. or, you know, where the beginning till now is, I guess. But first couple of years of it, it was doing incredibly well, right? It was something like anywhere between 25 and 35%, or it accounted for 25 to 35% of our gross margin. That gross margin, including everything from landed costs, three PL costs, FBA costs, advertising, marketing returns, all that stuff. Just not just not like overhead and, and software, things like that nature. But but gross profit. Right. And so it was a large part of our business. this one product and you know, during the beginning of Covid, I got my hands on a competitor, one of our biggest direct competitors.

Simon 00:03:08  Their information memorandum, which is basically like their, this deck. it's like 50 pages of their business because they're trying to sell their business. Okay. And through like, you know, like, you know, my partner Sam, he has just a ton of connections in the entrepreneur space, a ton of connections with these brokers. And so we get a lot of deals right across a lot of different industries. and so we just happen to get our direct competitors information memorandum. Right. So this gave us everything about their business, right? We knew the numbers. We knew. we knew, who their suppliers were, right? What their strategy was, what their projections were like. You know, you name it, we knew it. And, I mean, we were like, we could look on helium ten and know that we were dominating. But then we saw the real numbers. We were, you know, we were dominant player in the market. and then all of a sudden, right, like during Covid, you start seeing freight costs go up.

Simon 00:04:07  You start seeing, a lot of sellers into the space. The cocktail shaker space is kind of the space that we're playing in for one of our brands. and this is where the the set, you know, was established. and, you know, was this, you know, what's called roughly like 30% of the business. it had basically, started having rank weed, right? The ran...