Up Next In Commerce

Moving into the DTC space after operating only in retail is a tricky tightrope to walk. You have already-established partnerships that you don’t want to jeopardize and a consumer base that you don’t want to cannibalize. But you also want to bring innovation and new products to your loyal customers, and you want to build more personal relationships with them along the way. So how do you win in all areas? Or can you win in all these areas?Andy Judd is the CMO at Yasso, Inc., and finding the answer to that question is currently at the top of his todos. . Yasso sells frozen yogurt bars, which side note, are the most delicious thing I have ever tasted. Yasso just recently began its journey into the world of DTC. Ultimately, Andy knows that building a profitable DTC arm of the business is one of the toughest challenges in the ecommerce industry today, especially when shipping frozen goods, but he’s done it before, and his tapping into all his knowledge he’s built up from prior roles at companies like ONE brands and Campbell's soup!On this episode of Up Next in Commerce, Andy tells us what the move to DTC has been like so far, including the added challenges to logistics when it comes to shipping frozen novelties, what strategies he’s been using to ensure transparency with retail and third-party partners, and why he wants everyone listening to understand that ROAS is not the same thing as ROI. Enjoy this episode … and maybe also a Yasso bar!Main Takeaways:Deep Freeze: The logistics of shipping frozen foods are still being fully fleshed out. For certain products, such as frozen fruit, or even cartons of ice cream, you have a bit more leeway in temperature states and the risk of thawing and refreezing. With something like a frozen yogurt bar, you have absolutely no wiggle room, which means that there has to be multiple layers of pressure testing, route optimization, and quality control in order to ensure that customers are getting the product they expect instead of a puddle of froyo. It is only after you have optimized every step of that process that you can feel comfortable moving more to a DTC space.ROAS Does Not Equal ROI: In ecommerce, ROAS is one of the metrics you hear about often. And while it’s important, it’s also critical to note that ROAS does not equate to ROI, because ROAS often does not account for incrementality. So be very careful when you are measuring your success and be sure to take into account all of the other activities that bring in revenue and returns. Doubling Down: As Andy put it best, “I have a general principle of double and double and double and double until it breaks. You double until that ROAS really starts to decay at a rate, and then you know where your ceilings are.” A Rising Tide Lifts All Boats: When you are selling DTC on a third-party platform, it is important to be upfront and transparent with your retail partners. Talking through who you’re targeting, how you’re pricing and why bringing incremental customers into the business helps all parties — more brand-loyal customers will buy across all platforms, including in retail — will make for a much more productive 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 and CEO at mission.org. Today on the show, we have Andy Judd, the Chief Marketing Officer at Yasso. Andy, welcome.Andy:Thank you, Stephanie. Great to be here and look forward to today's discussion.Stephanie:Excited to have you here. Like I said, I am getting hungry now thinking about this conversation. My stomach actually just rumbled. I don't know if anyone heard that, but that's how I feel about this conversation today. It's going to be a good one.Andy:Yeah, no, I'm excited. I think we've got a lot of exciting things happening on the business that I think we can offer some interesting perspective to the community.Stephanie:Cool. So, I saw that you have been in the CPG space for over a decade, starting all the way back at good old Campbell's Soup, which I'm like, that's a good history there of really knowing what you're talking about.Andy:Yeah. I've been extremely blessed and fortunate to work with some great companies along the road, those large blue chip companies like Campbell's, down to smaller emerging businesses like Yasso today. Each of them is definitely different culturally, business model, go to market, marketing approaches, not only from the size of the businesses, but also what's taken place over time. I appreciate you said one decade. In that lead up, it is a bit longer than that, but-Stephanie:I think I said over, but I didn't put numbers.Andy:Over, yes. I appreciate you not going all the way to, but yeah, I've been very blessed to work at great companies, great, amazing teams and leaders that have shaped a lot of my thinking. And now I'm happy to hopefully give back some of whatever wisdom I've collected back to your community too.Stephanie:Cool. Well, to start, I want to hear, from a very high level, how do you view the food and beverage industry today compared to maybe even just a couple years ago? How has it changed and how did that lead you to creating Yasso?Andy:Yeah. The speed of change is definitely picking up pace, and I'm not even talking about the realities of the past year, because that's a whole different kind of situational change, but the speed of change has definitely changed a lot. When I started my career, there was a very set number of customers, and we had a lot of customer consolidation happening, but then really, the marketing landscape started to evolve. Obviously, around 2008, 2010, Facebook came on and just rewrote the playbook dramatically. It took a while to internalize that, particularly in the food space, I think we were a little slower to adaptation.Andy:Analytically, I don't think we were quite ready for that moment. But once we kind of got our feet underneath us as a space, it really took off, and now it's how fast can you run to the newest platform to get the most efficiency before the system goes, particularly as an emerging brand, finding those places where I can flank, get the most bang for my limited dollar set versus some of the larger spenders is really important. And I think it's bred a new capability set for today's marketing leaders, that is constant evolution. While, yes, I run, to some varying degrees, the same purchase funnel, the activity that's happened within it, wildly different.Andy:I gave a speech to my alma mater and some marketing students and walked them through like, "When I started my career, here's what we did. We ran TV commercials and a newspaper based FSI. Waited 18 months to see if it worked, and then probably made a decision before we even got the results to do it again, and it's just wildly different from how we activate today."Stephanie:Yeah, that's great. So, you have all this experience, I'm guessing you're starting to see opportunities. What led you to Yasso and what did that process look like?Andy:Sure. So, I joined the Yasso team a little over a year ago and had known the founders for a bit, and known our CEO for even longer. And like many moments where they recognize the step change from kind of the what got you here won't get you there, brought in a new management team to implement a double down on the growth strategy. So, great product. I won't talk too much about the product because you are hungry, but it is a fantastic product. Super creamy, super delicious, great nutritional, clean label, it really does have all the components. But really, it was a bit landlocked on the East Coast, founded and formed in Boston. And this team is rapidly building out that distribution footprint, investing and building the brand.Stephanie:Yeah. Also, how can you go wrong when the founders are kindergarten friends? I mean, that sold me right away.Andy:Absolutely. Yeah, Drew and Amanda, I will say this, have been just fantastic to work with, both in the principles they've set as an organization from a company culture perspective, and how we value employees, and what benefits we give them, to how we make an impact in our community. We do have a 501(c)(3) nonprofit organization called Game On! Foundation. That's a big part of it. And then just this amazing product. As a marketer, I love that moment where it's like, "Build a brand. Here's this amazing foundation."Stephanie:Yep. So, what did your first 90 days look like? Of course, you always come in and kind of study things, see how things are working, but then what did your first 90 days look like? What did your playbook look like to start solving some problems there?Andy:Sure. It was a busy first 90 days. I had just come off of another transaction and was one of the last management members to join the organization. And so marketing, to some extent, needed to catch up. We were also moving the company from Boston to Boulder in that moment, and so there was definitely a team rebuild that happened there. So, first 90 days was establishment of strategy, getting the structure identified and a lot of recruiting, whilst simultaneously starting to build the components of activation to get us to ice cream season in 2020, which I'm sure we'll talk a little bit about, the sheer pivot that took place. Andy:So, strategy, put the playbook in place, get the key components, the critical components lined up, get the right team. Stephanie:Cool. So, you were just mentioning old school close tactics. What are you talking about [crosstalk] for anyone [crosstalk]?Andy:Yeah. Literally, couponing. I mean, I'm not kidding. Now, that evolution of incentive based activation has changed, right? The platform in which you may do that today looks a lot different than the platforms that we used to do that a while ago on. But yeah, I think there's reality to finding consumers and giving them incentives into trial and activating that personal truth in retail. It is not our largest investment, but it's an important one as we think through that funnel, particular in a category like this where taste is so critical that if I can get someone to push past that by giving them a little bit of an incentive and then know that my product is just lights out, is a great way to do it.Stephanie:Yeah. And are these coupons digital? Are they emailing coupons out? How are you doing that?Andy:Yeah. It's a number of different... So, we definitely operate that on owned basis through CRM. So, we definitely give incentives through kind of consumers that we've got into our ecosystem. That is, by far, the most valuable ones, which is keeping those people moving. Then there is outreach programs like Ibotta, that we've used, Shipt, Instacart, which also have, obviously, a shopping mechanism to them to drive trial. I'm sure we'll get into that at some detail as we talk about our omnichannel applications.Andy:And then some in-store placements, tried and true, IRCs, at shelf, to draw the consumer our way. This is definitely a very open trial based category where y'all want to try new things, and I'm looking for options, and if I can grab a millisecond of that scan at shelf by violating that with a save, definitely can do that. So yeah, it's definitely all components digitally, organic and owned, as well as in retail.Stephanie:So, let's dive into omnichannel, which you mentioned a little bit ago. Tell me a bit about how you guys had to potentially pivot post COVID, how you worked with your retail partners. I mean, I know that we're talking about how it can get kind of tricky too when you're, I guess, overly heavy on retail, and then all of a sudden, you're maybe trying to shift to DTC, and you don't want to make your retail partner sad. How did you guys think about that and explore that, especially over the past year?Andy:Sure. So, this brand was, I don't want to say 100% retail when I joined, but for this purposes, let's say it was 100% retail. Very limited investment, even on concierge based programs like Instacart, or even no investment on your platforms like Fresh, or walmart.com, it was very limited in that regard, and there was no DTC at that moment. Some of that is driven by frozen temperature state, right? I don't think... no third party platform has fully figured out that last mile in full temperature state. Retailers are definitely getting their closer and closer, Fresh is definitely pushing the boundaries there and building out an incredible footprint now. And I think COVID has exacerbated or built a lot of momentum to figuring out that for refrigerated and frozen temperature state products.Andy:We already had that in our plan. I think that all indicators of the consumer behavior was headed that way. COVID just made that evolution go faster. So, per my earlier point on change is just getting faster, COVID made this change faster. And so the dramatic shift that we saw, we knew we had to run pretty quickly. So, we were already strategically aligned to what that would look like, and for us that is four primary components of omnichannel. One is obviously DTC, and we'll talk about the intricacies there. Two is the concierge based programming and making sure that we're actively engaged there. Three is third party, and four is partnership with retail, primarily through online pickup and delivery.Andy:And so when we think about DTC, that's one component, but given that we're frozen temperature state, we really have to think broadly because of logistical challenges of working through shipping individual frozen Greek yogurt bars to a consumer's home and making sure that it gets there and it's not a puddle of Froyo is really challenging, particularly in an environment where FedEx is flushed with volume, logistics providers still haven't fully come to terms with the incremental volume in the system. So, it's definitely not without its operational, logistical challenges, but four components for us as we thought through that strategy, and we're diligently building each of them up, some of them simultaneously, and some of them we've kind of said, "Hey, we'll come to that one in a bit because these are more critical to success in the short term."Stephanie:Yeah. So, before we get more into the four pillars and the omnichannel piece, I do want to maybe jump into the operations aspect of how did you figure out this frozen shipping in a way that maybe others haven't so far?Andy:Yeah. So, let's start with our product DNA first. We make frozen novelties in a bar shape, so there's no forgiveness in that delivery, and we have to be pretty flawless against that, unlike, let's say, frozen fruit or even frozen ice cream pints, right? That can have a little bit of give, and the pint carton will hold its shape and kind of refreeze, no different than when you come home from the store. Novelties does not have that. If I have a little bit of give, that's not going to refreeze in what I believe our brand lives up to from a taste and sensorial experience.Andy:So, first and foremost was, we did a ton of pressure testing through a pretty in-depth thermal testing program. We vetted a number of different logistics partners, different packaging constructs, weights of dry ice, amounts of dry ice, what happens in delays, because we saw a lot of delays on ground shipping, hey, should we ship in air freight and taking discounts until the volume's figured out. We did a ton of pressure testing. And each of our products is also different. We make frozen yogurt bars, we also make frozen yogurt ice cream sandwiches. So, we've got a lot of different forms, even within our portfolio, that require a lot of diligence.Andy:So, a ton of diligence upfront, because at the end of the day, when we're asking consumers to buy our product, it is not a small price point for us to get over the hurdle, the cost of that seamless experience, it's not small. So, our goal is definitely very, very low fail rates through that. So, a lot of operational diligence upfront, a lot of understanding of routes and what geographies we do. We have a retail sales rep that was in Phoenix, and he got a lot of product in those early days, because we use that as our... that's the worst case scenario. If we can survive to Phoenix in August, I think we'll be okay. So, a lot of upfront thermal testing.Andy:And then engineering on the actual platform was also a good amount of diligence, and we're still evolving that as you always should be. Your selling platform, in my opinion, should be a living platform, for lack of a better word. It should never get complacent with the architecture that devils in the details on winning the SEM game, winning how consumers work through your sites, winning on how you keep them in the fold and get to repeat levels. We have a really high repeat level. That's really important to us. So yes, diligence upfront operationally, diligence on making sure the platform works right. And then once you start activating, the worst case scenario would be having someone have an experience that's anything less than superb.Stephanie:Cool. So, what does, from a high level, that back end look like? We settled on dry ice, or we didn't. We settled on a really good cooler. I'm thinking about this one cooler that shipped breast milk, it stayed frozen for four days for me. I was like, "Wow, this cooler is like a Yeti," but sadly, there was nothing you could do with it afterwards. So, what did you guys land on and what does that behind the scenes process look like now?Andy:Yeah. And also sustainability was an important factor for us and making sure that whatever format we were delivering in, we didn't want to deliver a format that would have a negative footprint on the earth either. So yeah, we had that extra variable, both the products, sustainability, surviving... like what happens if there's a day delay, right? If there's a day delay on an ambient product, if there's a day delay, most consumers don't get terribly upset by that. If there's a day to lay on a frozen Greek yogurt bar, that is a melted product, because that dry ice won't last forever.Andy:So, for us, it was a lot of diligence. We settled in on a really good package. We do use that insulated foam that put water on it, and it will dissolve. And so it was important for us to get that right. But we're talking about nuances of a half of an inch of that insulation, nuances of two to three incremental pounds of extra dry ice to ensure that. It really was fairly detailed, and I hope if our third party partner is listening or ever does listen to this, they know, one, I'm appreciative, and two, we definitely put it through the ringer on getting those details right.Stephanie:Yeah. Awesome. Let's move over to the four pillars, because I think that's a really tricky balance where you were talking about DTC, third party, retail, concierge, and I want to hear how you balance all four of those in a way that keeps everyone, including you guys, happy.Andy:Yeah. And we think about them a little bit about who we want activating through each of those. For us, incremental reach and incremental consumers into the Yasso franchise is really important. I mean, each of them plays a little bit of a different role in who we're targeting. Our DTC business is primarily pretty deep loyals because it's a pretty big price point, as well as our current baseline standard pack is an eight count. It takes up a little bit of room in your freezer too, so you got to love Yasso bars, which as we launch, we found that wasn't a problem. We definitely found some people that love Yasso bars and could take that volume on. So, that was a deep loyalty pool. It enabled us to get long... some of our tail skews and smart fan favorites available to people, get innovation in their hands early, those things.Andy:Concierge, to us, was a big win, particularly in 2020 when a lot of consumers ran, and we were able to pivot some of our investment and marketing dollars over there quickly. We had played around on the platform, and then back to your 90 days question, I had brought on someone on our team that was able to get in there, get into the self service side of things, had experience with that on other platforms, able to work in partnership with partners like Instacart and Shipt and really build that up, and we started running dollars to that. I have a general principle of double and double and double and double until it breaks, right? You double until that ROAS really starts to decay at a rate, and then you know where your ceilings are.Andy:And so for us, that was a really important one, particularly in the present temperature state. We knew consumer behavior is rapidly changing, we knew we could activate because we have the structure and the people in place to do so, and really win, particularly on buy it again. We knew that as new consumers were coming to that platform... I don't remember the stat I heard. It was something like they'd anticipated 30 million new households for the year of 2020, and they achieved that by April. And so it was definitely a double down on those types of platforms.Andy:And then we had had some initial discussions with Fresh, but it really was at a pretty good standstill. And so we knew we weren't operating on that platform relative to how we operate a retail, and brought in a new partner to help us [inaudible] on the platform, begin doing some more focused work on our side for advertising and in building out detail pages, etc, and really getting to a much better landing place there. And that has been a really nice win for us.Andy:And then the last pillar is that retail piece. And that one I think is evolving, because I think customers... there were definitely some customers that were ahead of that curve more in general merchandising, though, than anything, and definitely in some food categories, but definitely not in frozen and refrigerated food. And we've seen a definite increase from the prioritization of customers wanting to ensure that their platforms are in a good place. And we've seen a lot more requests for dollars flowing to help them build those platforms out. And so right now what we're trying to balance is, how do I see each of those platforms or pillars working together, and how do I spend the dollars accordingly? A lot of analytical rigor to that.Andy:But it's important to be really ready and flexible and flow those dollars to where you can get to the lowest CPCs, the highest ROAS, highest incrementality of households. We have third party analytic partner that helps us to look at ROIs, because ROAS does not mean ROI. If I could impart any wisdom to marketers out there that haven't lived that yet. ROAS doesn't take into account incrementality. So, it is a complement of different analytical approaches to help us flex those dollars across each of those pillars.Stephanie:Yep, I completely agree. So, are there any good lessons or learnings from going onto all those platforms, figuring it out, trying to pull them together eventually, are there any good lessons from that that other people can take away and hopefully avoid?Andy:Sure. I'll give you an example, not necessarily from my Yasso days, but some prior learnings that I had at a previous company. It is a gray space. As much as we're operating in these environments, whether it's DTC or third party platforms, retailers are also operating in these, and a lot of the questions we get is like, "Are you going to be sourcing volume from my retail in order to sell on these platforms directly?" And I think having those conversations with particularly important retailer partners upfront is important to help them understand how you're targeting, why it's good to bring net incremental people into the total business, and that helps all boats rise, how you're going to work with them through pricing strategy, in particular, how you're going to work through them with promotional and merchandising that doesn't create overlap.Andy:I have an example on Black Friday from a couple of years ago. There was a retail partner that was a very important retail partner, it was protein bars, and they operated heavily on Amazon, we operated heavily on Amazon. They were going to have their Amazon push for Black Friday, we were going to have our Amazon push for Black Friday. And we didn't get far enough ahead with them to decide who's doing what and how that may collide at the buy box. And thankfully, we decided to start our promotion early on Tuesday, because if we'd started one day later, that collision would have happened and no one would have been in the office to try and rectify it.Andy:And so what happened is they ran kind of a site-wide promotion across a number of the different brands that they sell as a broad retailer, and that discount stole the buy box and eroded a lot of your media metrics, we had obviously, some inventory challenges lined up in that. But thankfully, we were able to work through that and get it cleaned up. It had some implication with Google Shopping as well, so it was a multifaceted problem. It also gave us the opportunity to use that case as a way to talk through that with that retailer in the future, about lining up merchandising collectively, not independently. And that's not to suggest that we were comparing pricing, it was just more about talking through our approaches and what the implications on their platforms would be, our platforms, Amazon as a platform overall. I thought it led to a really collaborative place overall, but it is sticky, right? It's a bit of a frenemy reality, right? They are competing, but they're also your partners in retail.Andy:And so establishing guardrails and being transparent we found has been very helpful. Because, again, I operate from positive intent, we're all here to do the same thing, which is to drive growth and to give the consumer the right product that they want at the right time.Stephanie:Yeah. So, how do you go about talking to your retail partner to explain the incrementality piece, and this is good for me everyone type thing. How would you go about doing that in a way that makes sense to everyone?Andy:Yeah. Luckily, in the last few years, I've worked on some great brands that do have great stories about bringing in higher value consumers into the fold and figuring out ways to create total value that they may not get. And some of that is, "Hey, you don't have this portion of the portfolio on your catalog for whatever site you may be selling to, that's something that we can have...": I talked earlier about innovation as a way to get ahead. If a retailer doesn't opt into that innovation, that's okay. We definitely want you to sell our core business and operate there, but we want to give our most loyal consumers our innovation. It's also use of proof cases that we can then go back to the retailer and say, like, "Hey, this is a platform that's a little more vetted and has been cleared by our consumer," that, "hey, it's got proof here. This is an opportunity now for you to take that set to new consumers.Andy:It's also important for us to draw clean mapping to that consumer persona. Who's shopping online, and who shopping and retail, what they're looking for. And we've been very diligent about keeping that cleans. And here's who this is on my platform, here's who this is on third parties, here's who this is in your store. And collectively, that is a really nice store. And that's, I think, why we've had some success recently on outpaced growth relative to the marketplace.Stephanie:Yeah. I mean, it seems like it'd be really tricky keeping track of those consumers, seeing the online versus offline, and where are they originating from, and who's attributing to what sale? How do you go about managing all that data and keeping track of it, especially since you're on so many platforms?Andy:Yeah. I mentioned it a bit earlier, but we do have a partner that does regression based marketing, real-time marketing mix analyses for us, and we use them as a way to delineate the incrementality. That gives us a broad view to our mix, but that also helps us to understand which platforms to bet on, one from the other. I think we're at 18 different variables in that modeling, and some of those variables are literally platform level variables, and some of those are different types of campaign level variables. And so it is not without a lot of rigor, but building the model upfront... and I apologize if I'm using some of those key words, but take the diligence to really think about what the data sets are that are going to come at you and establish what they really tell you, back to my comment ROAS is not ROI. It doesn't mean it's not important, but it's not. And having a data system, and a dashboarding approach, and an operational cadence by which you analyze those and bringing all partners into that for transparency, it clears the air.Andy:I think I worked with partners before that have given us feedback that, "Nobody ever tells us this," right? "And our objectives are never your objectives. They're always different." Right? And so getting alignment upfront and clarity of data flow I think is one of those pieces, no different than the diligence we talked about earlier on frozen fulfillment. A lot of diligence upfront pays off down the road, and actually enables a ton of flexibility. It's just really painful. If I could offer any guidance to winning in omnichannel, it's details, focus on details, because the more detailed oriented you are, the better your system will be and the better you'll understand implications of changes.Stephanie:Yeah. I could see partnerships being lost because of you guys maybe coming in there and being like, "Here's the data points we need. Here's kind of how things work," which maybe needs to be lost if someone doesn't want to do that. But what are the most important data points that you asked from a partner that maybe they weren't comfortable sharing at one point, but now many are on board with doing that? What do you go in saying like, "This is the requirements, here's what we need," and which ones were they maybe more hesitant to share?Andy:Yeah. The propensity or the default position of the retailers is not necessarily to share, and that's not, I don't think, in the spirit of not being a partner, it's in the spirit of, obviously, their goal is to build a category, not necessarily an individual brand, and they're trying to optimize the total pool of brands to elevate their entire category. And so obviously, they don't want to do anything that could be detrimental to the totality of that category growth or detrimental to other brand partners that they may have. Some of that is opting in, some of that is dollars and cents.Andy:There are a number of retailers that have really great platforms for data, and some of that is opting in to those. We've made it a purpose to be data centric in how we approach, not just our retail business or our ecommerce business, all of it. And that may lead to a little bit of a higher non-working/working ratio for what it may be. But that makes us a lot more efficient with all the working dollars in that. And so some of it is dollars and cents and opting into their platforms.Andy:Some of it is having a clarity of that strategy that I mentioned earlier, like, "Here's who I serve by platform," and almost drawing a line that says, "Here's how I view the world. How do you view the world?" And soliciting that. But sometimes it means going in with a point of view. And they may not share that point of view, but at least they'll declare, "I don't share this point of view." And so opt in, have a point of view, and then you'll share results. Also, I think it has to be a two-way street. If I'm unwilling to tell them, "Here's how I'm operating in a direct model," why would I ask them to then tell me what it looks like in an online pickup or delivery model? So, I think there has to be some reciprocity that comes along to that. So, don't be scared to buy data and be more data centric, be clear about your point of view, and then you'll have a partnership, and be okay with some transparency that you otherwise may be not wanting to do in the first place.Stephanie:Yeah, I love that. So, let's talk a little bit about customer acquisition. How are you guys acquiring customers and what are your most successful channels right now, or what are some big bets that you're making in new platforms or maybe you're like, "We weren't on TikTok before, but now we are"? What are you exploring right now?Andy:Yeah. Yes is the answer always. Our team has got a great, I think, pulse for that and a great flexibility for adapting to that. And sometimes it's not just new platforms, sometimes it's new activations on current platforms. I think Reels taught us all a good lesson this year. Obviously, TikTok was a great piece of the puzzle over the last couple of years. So yeah, organically, yeah, definitely continuing to build that out. I think from a paid perspective on new platforms for us, I would say the retail environment is definitely pretty evolving. Andy:Other retailers are pushing their platforms more and bringing on new media partners. Target had their big push. I think it was two years ago when they made their media change. So, yeah, I think retail is an ever evolving world because they're recognizing different to sundry, the Amazons of the world that they're both, yes, retailer, but they're also media marketplace. And if I can get a little more down funnel awareness, consideration and purchase, they're operating in that consideration bucket, because I'm already actively involved in food buying behavior. And so I think that's a really interesting place to be playing.Andy:Yasso in particular at this life stage, though, we are moving significantly in that top of funnel place. And so it isn't necessarily new platforms, but it's new to us because we're reaching growth levels, which is such an exciting moment for any brand, where we have the opportunity to make investments in larger platforms. And so this past year, we did a lot of betting on awareness based platforms that otherwise we wouldn't have probably bet on. But streaming audio was a big win for us in this past year. I think COVID definitely helped consumers even more so get into that space.Stephanie:Like podcasts, you mean?Andy:Yeah, like podcasts. Well done. Yes, like podcasts, and even just music as well. But I think those platforms have become a bigger play, which for traditional food, probably hasn't been top box consideration for media plays, but have done really well for us. And then OTT, I think, continues to build. And so those are not necessarily new platforms, but new to us. And when we think about where we are in our life stage, that gives us opportunities to rethink our total funnel, and that's really exciting, right? So, it's, hey, we have the availability to anchor to spending dollars that are scalable on some of these platforms that we otherwise probably wouldn't have been able to afford originally, and now really evolving our down funnel work with retailers in a different way. So, it's evolving, but it's pretty exciting, actually.Andy:I think that is one of the benefits I've seen from this past year, is it's moved our industry forward and our retailer partners forward. Obviously, it's not to suggest that they were at zero state by any means, but I think it's definitely built a lot of momentum.Stephanie:Yep. And when you're thinking about creating good creatives for these new platforms that you're on, how do you go about making something that really differentiates you guys? I mean, it feels like your space is pretty competitive now. How do you stand out? How do you make ads and audio content that really sets you apart from everyone else?Andy:Yeah. Since we came on, we've thought diligently about the balance of internal external creative capabilities, where we need a differential expertise, where we need flexibility internally, and again, diligence upfront, right? So, that declaration of your brand, what it stands for, what it looks like, being very clear with that, so that as you disseminate across the internal and external content creators, whether that's influencer based or UGC, or whatever it is, you know this is it and this is what it looks like so that your brand identity is well done.Andy:And then I think voice is an interesting place, and voice in two ways. One, is having perspective. I think brands that are able to separate themselves, to your point on the competitive environment, have a really clear voice and perspective on things, and they're willing to take a stand and say, "Here's what we believe." Because consumers, from an engagement perspective, are much more likely to go there. It could bring polarization components to it, definitely, that's a possibility, but it won't bring engagement, right? So, if you don't have voice, if you don't have a perspective, you won't have engagement. So, it's kind of one of those. So, perspective is one.Andy:And then, for us in particular, in our category, I think having a definitive sense of humor. It's a joyful snacking experience, right? I typically don't see a lot of people eating our food without the intention of elevating their mood.Stephanie:Yeah. You can't eat it with a sad face.Andy:No. I mean, you can. I mean, there's the old adage of the breakup with the ice cream-Stephanie:Okay. That's more ice cream.Andy:... but you're doing it to elevate yourself, right? So, most people don't enter that space without the intention of enjoying the experience. And so I think it's important for us to bring that levity and humor to our voice. So, having perspective, having a good sense of humor that's definitive and unique, and having clear sense of art direction is really important. And the last piece I would just say is contextual, right? So, not all creative is the same across. Our organic content team I think does a great job with, "Here's what works in Twitter, and here's what works in TikTok, and here's what works on stories, versus reels, versus feed," and bringing that to the game as well.Stephanie:Yeah, I agree based on some of the things I've seen. All right, let's move over to the Lightning Round. 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, Andy?Andy:Yes, I'm ready.Stephanie:I wish my knuckles cracked so I could do it.Andy:I can't do that either, but I'm ready.Stephanie:We tried. All right.Andy:Yes.Stephanie:First, what one thing will have the biggest impact on ecommerce in the next year?Andy:What one thing will have the biggest impact on ecommerce? I would say, for me, last mile. I think the last mile is going to take a big step forward this next year. I think a lot of companies got caught flat footed on it. They spent the better part of last year figuring it out, and I think you're going to see more retail platforms figuring out last mile and betting big on it.Stephanie:Yeah, I agree. That's a good one. What's the nicest thing anyone's ever done for you?Andy:I love the two words, to of my favorite words. Thank you. So, I will always take a thank you and I always try and give them just because everybody's working really hard right now, personally and professionally, and I just think the smallest thing you can do is just to say thank you. So, thank you for having me, Stephanie.Stephanie:Okay. Thank you for coming on the show, Andy. What one thing do you not understand today that you wish you did?Andy:What one thing do I not understand today that I wish I did? There's so many things that I don't understand. I think the biggest one I had a better feel for honestly was how to get ahead on new organic platforms. That's definitely one of the tougher ones. I think we've built a good flexible ability to adapt to evolutions within platforms, but which ones to bet on just because there's so many, I think that's one I wish I had a better gut feel for it, to be able to jump there faster. As an emerging brand, I feel like that's one of our core competencies, is the flank approach and not getting trapped in the big game. And I wish I had a better feel for emerging organic platforms.Stephanie:Yeah, that does seem tricky to stay on top of, to be the first one on there and to be the one that can organically grow, because it does always say there's a lot arbitrage to be had on platforms in the beginning, especially when they're trying to figure out their maybe advertising programs. I know TikTok for a while there, you can get really good maybe ROIs because the platform was so new, they're figuring out their program. Maybe that's gone now, but that's a good one.Andy:And that's the exact point, is that it does happen quickly too. And I have seen brands be very successful in getting there first and grabbing that attention.Stephanie:Yeah. What's up next on your reading list?Andy:Right now, what is next on my... I'm looking over at my books. It is... and I'll show it to you, here. It is Hello Darkness, My Old Friend, by Sandy Greenberg. This is a book recommended by my father-in-law about the story of Art Garfunkel's college friend who went blind in college and his journey. He's a lawyer, and it's just an incredible story. So, that is next on my reading list.Stephanie:Wow. I'm writing that down. So, what was it? Hello...Andy:Hello Darkness, My Old Friend by Sanford Greenberg, or Sandy Greenberg.Stephanie:All right. I'll get it [crosstalk].Andy:Foreword by Ruth Bader Ginsburg, by the way.Stephanie:Oh, sweet. Okay, now, I'm definitely checking it out.Andy:Yes.Stephanie:All right. And then the last one. What ecommerce tool or piece of tech are you experimenting or most bullish on right now?Andy:Yeah. I'm going to go back to our logistics because I'm bullish that there's going to be a lot of progress on sustainable packaging over the next coming years, and as I mentioned earlier, having sustainable frozen packaging is just fantastic. It makes us feel way better about continuing to grow in this space. But I think there's going to be a lot of technology in the packaging constructs. There's a ton of waste in this space. I think brands are getting way more savvy around designing their first rather than trying to re-architect the other retail packs and then doing the best they can. So, I'm excited to see what comes in kind of more the the operational side as much as anything. That's a personal passion for me, but I'm excited to see how that continues to evolve.Stephanie:Awesome. That's a good one. All right, Andy. Well, thank you for coming on our show and sharing your insights. Where can people learn more about you and Yasso?Andy:Yeah. So, you can find us at yasso.com, for sure. Instagram @Yasso, are the best places, and you can find me on LinkedIn, for sure.Stephanie:Amazing. Thanks so much for joining us.Andy:Absolutely. Thank you, Stephanie.

The world is moving toward being decentralized in every area from the internet to big business. What that means is that the way we do things will change, and in some cases, those things are already vastly different than the norm we all have grown accustomed to.Funding and investments are one aspect of the business world that for a long time have operated in silos. But the tide is shifting, and David Koifman is helping to democratize the world of investment through his work at Kickfurther.Kickfurther is an investment platform that uses the power of crowdfunding to help CPG companies fund their inventory and production runs. Most of the deals on Kickfurther are fully funded and closed within minutes, which proves there is an appetite for this kind of investment in the general market. On this episode of Up Next in Commerce, David explains the model and its benefits to both businesses and investors, and he explains how crowdfunding will continue to make an impact on ecommerce companies in the decentralized future. Main Takeaways:Democratizing Investment: For too long, companies have been at the mercy of financial institutions to help fund early production runs or other operational costs. And while that solution works for some, we think that new solutions are still needed. Opening up investment opportunities to the general public is a peek into where the world of funding is headingKeep Proving Yourself: When a company gets a bank loan and pays it off, the business is seen as more successful and its credit rises. A similar thing happens when a company uses crowdfunding for inventory: by delivering the inventory the crowd has purchased and then opening up a new round of funding, a business is building credibility with a consumer and broad investor audience that it otherwise would not have been able to reach.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. And today we're talking to David Koifman, the head of growth at Kickfurther. David, welcome to the show.David:Hey Stephanie. Great to be on the show.Stephanie:I'm glad to have you. So I was looking through your background and I was hoping we could start there because I saw that you've been in sales and partnerships and business development, and it seems like you've had a wide ranging career. So I wanted to hear a little bit about what you did before Kickfurther, and what brought you here.David:Before Kickfurther? I was in marketing right out of college. And then I went into the world of startups in financial technology. I began as a sales rep and grew within a small organization to a much larger organization, led the team, and basically built out sales account management partnerships. And then we were getting to a stage of growth where I wasn't feeling the excitement that I initially felt and joined the team at Kickfurther to do it all over again. So I've been here three and a half years. It's been awesome. We've grown tremendously, and I'm very excited about the next few years to see where it will go.Stephanie:Awesome. So you've always, always had the startup bug, where you're looking for that crazy hectic environment, fast growth.David:Yeah. It's like I see myself as a sales guy who doesn't like just selling. What I like is building the sales process, building the team, understanding the customer. So a little bit more beyond just knowing individual customers and building a book of business.Stephanie:Yep. Got it. So tell me a bit about what Kickfurther does.David:So Kickfurther solves a unique problem that every consumer goods business faces in their early stages of growth. You'll see a lot of companies are funding on platforms like Kickstarter, Indiegogo. These are crowdfunding platforms where businesses raise money to fund their first production run. Production run is when a business is producing inventory. Inventory is the product that they sell. So as that business completes their crowdfunding campaign or determines that they have product market fit, they will need to come back and order more product. Sometimes, they're buying that product from a supplier, maybe a manufacturer in China or here in the U.S., somebody that produces a finished product, and then they receive it in their warehouse and they sell through it. Sometimes they're buying a bunch of raw materials and making a product themselves. Usually that's the case in food or some health and beauty applications.David:But the bottom line is that costs a lot of money, and the faster the business grows, the more they have to invest into inventory upfront. You have to pay for that inventory, it takes months to produce, and then you get it into a warehouse and then you start selling it to customers. And then your customers start paying you. So there could be a long amount of time from when you need to outlay that cash to produce the inventory until you're able to recoup that revenue and put it into the next production run. So as businesses grow, they encounter this cash flow pinch, and Kickfurther solves that pinch. We have developed a marketplace on kickfurther.com, where we will vet companies and structure deals. And then a community of users will come to those deals and participate in purchasing the inventory for that business. The business will then produce the inventory, sell it, and pay back Kickfurther and the users who participated in the deal; we'll make some money and get to do it all over again.Stephanie:Yeah. Very cool. It reminded me of, I saw quite a few real estate investment platforms like this too, where you get the fund, the next three or whatever it may be. So it seems like they're popping up in different ways to have a Kickstarter approach, but also getting people in the market who have the funds to be able to fund this inventory or investments or whatever it may be. So is that the main way that Kickfurther is different, where it's sourcing investment from the community instead of traditional lenders or actual investors?David:Yeah. So I mean, what we're doing is using the power of crowds rather than financial institutions. There's a lot of solutions out there that take money. They borrow money from banks and other financial institutions, and then present it to businesses and take a cut. And what we're doing is creating that opportunity for any individual on the internet, somebody who has money sitting in their bank account, and they want to use that money to make money by participating in a purchase of inventory for a consumer goods business. And so what we do is, it's not a loan. It's not an investment, it's actually a consignment agreement. So what we're doing is purchasing inventory for a business and consigning it to them to sell on our behalf. And as the business sells that inventory, then that triggers the consignment, and then we invoice them for it and they buy it back plus their cost of funding.Stephanie:Got it. Okay. So how do you make sure that you're bringing on companies onto your platform that won't make you nervous, where it's like, are you actually going to sell all this inventory? Because I'm not trying to cover that cost.David:Yeah. Well, there's a pretty thorough diligence process that we go through for every business that goes on the platform. We evaluate everything from their revenues to their supply chain, to how they distribute that product. And it's all verified through documentation. So it's not like anybody can come to us and say, Hey, we need money," and then just go up on the platform. There's a diligence process, just like there would be going to a bank or any other financial institution. I would say our uniqueness is we look at supply chain and distribution, and we assess risk in a very specific way. It's different from a bank. So some of our customers, everybody wants to go to a bank. Bank money is the cheapest. You want to go to a bank and get a line of credit and fund your business that way.David:However, if you're a small business, whether you're a restaurant or a clothing store, the bank looks at you the same. They say, how long have you been in business? Are you profitable? How much have you sold? Whereas we're looking at a very specific sector of small businesses that are consumer goods, businesses with supply chains. And we understand the intricacies of that supply chain and then how they get that product to their warehouse, get that product from the warehouse to the customers, and collect that money through their distribution channels. And so we use that information to determine who has access to capital on Kickfurther.Stephanie:Got it. Yeah, what's cool is that you guys are acting as like the trusted source, so that the community doesn't have to do as much due diligence, or I don't know if they do any at all, but you're acting as like the mediator, to be like, "We've done all the research. We know this company, and it's for the most part trustworthy," and then people can come in and fund that based off of your research and due diligence.David:We do verify all the information that's presented about the company. The individuals still do decide which deals they participate in. And that's based on what they read in the public profile. Some of them will go investigate more. Some of them will actually ask questions on the platform. So you have the ability as a participant to ask the owner or CEO questions before you participate, or during the deal, about distribution or how they're making products, or what if they're worried about competition? Any topic is welcome. There's a lot of additional diligence that an individual can conduct before they make the decision to participate.Stephanie:Cool. And is there a risk rating of, okay, this company is more of a startup one, this is going to be their first time raising money here; we're going to give them a risk rating of this? so maybe you have a higher payoff because of that if they end up selling all the inventory, or how do you guys think about the risk-based approach when it comes to getting investment?David:It's not as simple as just boiling it down to a one to 10 scale or something like that. But there's a lot of categories which each one of the customers that we fund will be shown in. And so you can look at how many years in business, what their revenue range is, how many different wholesale buyers they have, how many times they've gone through the supply chain and produced with their supplier. So there's a number of different elements that, that are categorized in terms of risk.Stephanie:Got it, cool. And what is the average return for someone? If I were to go in there and invest right now in a deal, is there an average range of what you make over one year or that a longer time horizon?David:So the deals range in duration from two to 10 months. So the way we compare deals is on a profit per month basis, and businesses will offer anywhere from one to two percent per month. And so you can annualize that in a way where, if you participate in a deal and then that money comes back to you, then you can redeploy it into another deal. And if you continue doing that, let's say 1.5% a month will translate to about 18% per year.Stephanie:Got it, cool. So what kind of struggles do you see ecommerce brands having right now when it comes to ... Obviously not having money to fund inventory is the high level problem, but maybe what kind of sticky situations do you see brands getting in by either waiting too long to get funding or not even thinking about it. What are some stories that you have around the whole inventory funding?David:Yeah, I think the biggest thing to do is to be proactive and understand what solutions are out there and how to use them before that need comes around. Because being desperate is the worst time to be looking. And if you've run out of inventory as a business owner, you're missing out on opportunities to sell. So like you could have a really successful Q4, and then you get to Q1 and people still want to buy your stuff, but you're all out. And then you placed an order with your supplier, and the supplier takes two months to produce. And then maybe you're in a position where you have to air freight instead of going on the water and you have to pay a lot more money to get it there faster. So there's all sorts of obstacles that come into play. And that's ecommerce.David:A lot of the businesses that we work with are multi-channel sales. So they're selling ecommerce and then they're selling to target or Best Buy or REI. And those companies will place orders, if you don't deliver those orders when you say you will, then you're probably going to lose that opportunity or at least jeopardize it in the future. So it's important to make sure that you have the inventory ready when you're going to need it. And you also don't want to have way too much. So if you buy a lot, and then you don't sell at the rate that you expected, you have a lot of cash sitting in the form of inventory in your warehouse. Sometimes it's going to go bad, if it's a crude product or it's just cash that you want to spend on advertising to sell the product, but you can't because you don't have it.Stephanie:Cool. So if I'm a new brand and I'm looking to crowdfund my inventory, what are some best practices that attract the investors in the crowd? What kind of things do you see connecting with people? How would I write up a good post right now to attract funding for someone to help with my inventory?David:The most important things are that you've done it before. So we don't work with businesses that are doing their first production run. We did in our very early days, and, as you can imagine, it's much higher risk. So we only work with businesses that have at least $150,000 in sales. And once they've demonstrated that, it's good to talk about how you work with your suppliers, what sort of things you do to ensure that you're going to receive the product that you want to receive within the timeframe that you plan on receiving it. So being conservative with time estimates, making sure that you have testing in place so that once your supplier says the product is ready, that somebody goes in and looks at it and you don't get a bunch of broken stuff.David:And then once it arrives, it's important that you have reliable distribution. People want to see good reviews. People want to see lots of reviews. And I would say, if there's somebody who's selling to a wholesale customer and they just have one customer who is placing large orders, that's pretty high risk. Because if that customer decides they don't want to buy anymore, who are they going to sell that product to? So those are the kinds of things that users on Kickfurther are taking a look at, reading through the profile, to decide if they're going to participate. One thing I will say that we haven't touched on is how fast these deals fund. So it's good for us at this point. It means that there's an imbalance in the marketplace in our favor. So the deal flow that we put up gets funded oftentimes in minutes.Stephanie:Yeah, I know. I noticed that, because I'm like, "Hmm, maybe let's see if I should investigate these deals." And I think it looked like everything was sold out, or it was all met to the limit. At least the two I was looking at. And it seemed like it happened really quick, where I'm like, "Hmm, this is competitive."David:Yeah. It's super competitive. So we have the ability to scale our deal flow pretty substantially without having a concern for deals funding fast enough. And as a user, if you're thinking about participating, you're going to get emails, you got to act on it fast. And so we put deals up. They have about 24 hours before they launch. And they always launch at 5:00 PM Eastern Standard Time. And if that, there's hundreds of people that are clicking, trying to get into deals like within a minute or two of 5:00 PM, when they usually fill up.Stephanie:Wild. I think you need more deals then for people to get in on.David:Yep. That's my job. I've been working hard on it. So we we've grown quite a bit. We have aggressive growth goals for 2021, and so far we're on track. It's early, but it's an exciting time to be at Kickfurther.Stephanie:That's great. So what brands are you trying to get on the platform right now? Who are you trying to convince to get on there?David:There's a lot of repeat customers, and we have really good retention. We average over four deals per customer, but they're all across the board. We're pretty product agnostic. We serve anybody who either buys or makes physical goods and then sells them with the exception of regulated things like alcohol, tobacco, firearms, THC, anything that's temperature controlled or perishable. Because of the consignment agreement nature of the contract, the inventory is our collateral in these deals. So we don't want it to go bad. And we want to make sure that it is available to anybody who participated in the consignment, they have to be able to purchase it.Stephanie:Yep. Oh, got it. So if the inventory doesn't sell out, you guys essentially have it in a warehouse, and me as an investor could be like, "I want one of those t-shirts then." Is that how to think about it?David:Yes, that is a way to think about it. So if the business is unable to sell the inventory, and they're unable to pay back Kickfurther and their users for the cost of it, then Kickfurther, based on our contract, will require a delivery of that inventory to us, at which point we'll attempt to sell it, and all the proceeds of that resale goes to the participants in that agreement.Stephanie:Have you had to do that yet?David:We have had to do that. We've been around for seven years. So it's happened, but these days it's very infrequent, and that's why these deals fund so fast as people who are participating on Kickfurther have great returns and they tell their friends about it and they the deals. So the performance, overall, is strong.Stephanie:Yeah, got it. So when I'm thinking about, as a business myself, getting credit and working with banks, you're building up your business credit worthiness. When you get traditional loans, I know we had to take on a couple of last year and it does help being like, "Oh yeah, we took on this size loan, we paid it off." How do you view crowdfunding in that kind of sense? Is it building up a business's credit worthiness or is it so siloed still at this point that it doesn't actually build up the financial view of the businessDavid:In some ways, it does, and in some ways it doesn't. It isn't considered debt to them. So it doesn't operate the same as taking out a loan and paying it back. But there's a lot of transactions that still occur that show the business is selling and making money. So their business credit will improve as a result of that. But yeah, it's kind of a mixed situation.Stephanie:Yeah, yeah. That seems tricky. Because it seems like a really good avenue to not only help the businesses, but then also bring in a lot more players. It seems like it's much more decentralized, which is great. The whole world's moving in that way, but if you can't really use it, be like, "Oh, look at these three different loans I have right now, the market funded them." I feel like the world needs to move to that place, the more of that crowdfunding and the decentralized approach is coming to the forefront.David:Well, the world is moving in that direction, but what's really cool is Kickfurther moves in that direction with the clients themselves. So as we establish a relationship with a business and they come back for repeat deals, we increase their limits substantially. And they have access to lower rates. Basically, they're earning credibility with this community. So let's say they offer one and a half percent per month on their first deal and they complete on time, and then they come back, they can offer less. It's really in the hands of the business owner what they want to offer, and the community, the marketplace, will decided if that business has earned that rate and are able to fund it at a lower cost. So as a customer at Kickfurther, as your revenues grow, you'll be able to take on more funding with Kickfurther, buy more inventory, and do it at a lower cost.Stephanie:Got it, okay. So you're building up that credit worthiness, just in a different hub, but you're doing that by just performing well and, yeah, that makes more sense.David:We will work with businesses who are starting at 150,000 in annual sales, and all the way up to 30 million. So there's quite a range of growth in service by Kickfurther. There's businesses that, once they reach a certain stage, either they're not accelerating as much as they used to and they have the cash flows to fund their own inventory and continue producing, or there's other businesses that have been long and around long enough where they are now exciting to banks and other financial institutions that have very low cost lending.Stephanie:Yep. Is there any guidance or any point where you're like, "Oh, you should probably just reinvest revenue or profits instead of getting a loan." Do you ever give guidance on that? Because I could see a lot of businesses always being like, "Oh, at such a low rate, why don't I get loans?" But then quite a few businesses have a lot of cash on their balance sheet too, and they don't know how to fully deploy it, but they're just so used to getting low interest loans. Is there any point where you've actually advised a company like, "You guys are good. Maybe you should reinvest profits." Or do you even see it from that angle?David:I don't think anybody's coming to us if they don't want additional capital. And I am always very transparent with everybody, and [inaudible] make sure you know, what your options are. We don't make money off convincing you to do one deal. We want that long-term engagement [inaudible] coming back. But I think the reason people come to Kickfurther is they have an opportunity with a buyer, or sales are growing so fast and in a channel where they want to launch a new product, they just don't have the cash to be able to do that. And that's why they're looking for funding solutions. And maybe they go to their equity investor and they say, "Hey, I need some additional capital to be able to take advantage of this opportunity." And the VC says, "You know what, why don't you seek some non-dilutive capital for that? That's a much better use of, why give up five or 10% of your ownership just so you can produce the next run when you're going to have to do another one and another one and another one after that?"Stephanie:Yep, yeah. That makes sense. So, since you're deep in the crowdfunding space, I'm sure you just see opportunities all around. So much stuff could be crowd crowdfunded. Where do you see that world headed? What kind of new opportunities do you see popping up in that space? Or what do you think is missing right now, where crowd funding could be meeting a need?David:I think there's a lot of money and power in crowds. And there's the ability to cut out middlemen and big entities that have been around for a long time and empower individuals to help these business owners grow. It's also not just the money that's coming from them. Why are people deciding to participate in these deals? A lot of them believe that they have an advantage and they have the knowledge in the space. So maybe they want to help the business owner. I've had plenty of users come to me and say, "Hey, I actually work in this space. And I have a couple of distribution opportunities that I'd like to connect with your client about." And I'll make a direct introduction, and all of a sudden they acquire a new sales channel. Or somebody who's got a lot of money and they want to do a side deal. Yeah, I am looking for equity investors, let me connect these two people.David:So those kinds of things happen rather frequently. And that's not going to happen when you're working with a sales rep at a bank. Because everything's coming from the bank's bank account. And actually the money that the bank is using is just coming from account holders and their deposits. So if you're storing money in a bank, the bank is using that money to lend to businesses and whoever else. So we're cutting that out of the mix. And I think it's good for everybody involved.Stephanie:Yeah, I think it's a good reminder too, about diversifying investments and why finding opportunities. Yeah, you don't want to just keep your money in a bank and let inflation just wither it away to nothing. So, yeah. It's cool to hear about opportunities like this that are very different, but will definitely help diversify your portfolio.David:Yeah. And it's really fun, from our standpoint, to work with all these young business owners. I mean like the business is young, not the individuals per se, but some of them just started a few months ago and they've had some real success. Some of them, it's a family business that's been around for a couple of generations, and all of a sudden they're discovering that ecommerce is a way to skyrocket the business. They have a really good product; they just haven't put it in front of the right audience. And they're figuring out how to make this happen financially, and we're there to help them. And it's just really great to be side by side with them as a partner and see that growth.Stephanie:Yep. Yeah. It seems like there's also could be a lot of international opportunities. I know that's a lot more risky once you start going that route and finding people who are doing much smaller scale ventures and being able to help back that, then turn into a bigger thing. But I have read a few stories of finding people doing amazing things in other countries, but they just don't have any kind of funding. Or they can't buy inventory for even 10 things to sell. And yeah, it seems like there's a lot of opportunity around the world, but of course it'd be much more risky trying to vet those projects and companies.David:It is definitely a challenge. It's something that we're considering doing down the road. You probably start with Canada and some EU companies, but there's different regulations in different countries. And also, if we get into a bad situation with a client, we have to pursue them legally. So working in a foreign legal system is very costly, and we try to help businesses out, and so our margins are pretty slim. So being able to afford that kind of activity is probably a ways down the road for us.Stephanie:Yeah. So what are you guys looking forward to for the next, maybe, two to three years? What are you planning for? You said you were going to be growing really quickly this year. What kind of things are you putting in place right now and where do you want to be in the next couple of years with Kickfurther?David:I'd say we want to be a household name for inventory funding. A lot of people are starting their own businesses. And we want to create an opportunity for them to grow at the rate that they're able to grow and have access to capital. And so our goal is to put our name out there in a way where it becomes recognizable to all business owners who are in the right space for us.Stephanie:Yep. Very cool. Yeah, Amazon be a good space, but then sometimes those one-off products that are being sourced and sold on there. So maybe that's not the best space. I'm not sureDavid:Those people are business owners and growing too. So if you have one product that's selling really well, and that's what you want to focus on, sure, that's great.Stephanie:Cool. 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 a minute or less to answer. Are you ready, David?David:I'm ready.Stephanie:All right. What one thing will have the biggest impact on ecommerce in the next year?David:Probably the state of the world. So the ability that people have to shop and travel and continue to live their lives the way they did before lockdowns and quarantine.Stephanie:Yep. All right, cool. If you had a podcast, what would it be about, and who would your first guest be?David:I don't think I would have a podcast.Stephanie:What would you have then, a clubhouse? What would you have then?David:A clubhouse. I think that, honestly, I was a little bit foreign to this whole world of supply chain and inventory finance when it came to Kickfurther, and I've discovered a passion for helping these business owners. So I think the clubhouse that I would have would be one where business owners get together and talk about different solutions that help their business grow, and what vendors they use and what are best practices, just an exchange of information across business owners and vendors.Stephanie:I like that, because yeah, I think even thinking about, "What manufacturer should I use? And how do I even source those people?" Still always feels like a black box and it's referrals. Or you have to know someone and that'd be a good one.David:We make quite an effort to make those resources available to our customers. So, as we go through our diligence process, we cover a lot of topics, and oftentimes customers will identify pain points, and we will say, "If you're interested in these, this is a partner of ours, or we've got a few different options or people you can talk to, to learn more about the solutions in this space."Stephanie:Yep. Cool. What's up next on your reading list?David:Can't Hurt Me by David Goggins.Stephanie:Okay. Nice. Where are you traveling to next when it's easier to travel again?David:In two weeks, I'm traveling to Salt Lake City to go skiing, but that's a drive for me.Stephanie:Yeah.David:Big skier. And whenever the snow comes, I'm out there.Stephanie:I love that. All right. And then the last one, what is your favorite piece of tech that you're using right now? It can be personally or with the business.David:Don't hate me, but it's my iPhone 12 Pro.Stephanie:What's to hate? I have the same thing. It's my favorite. It has the best cameraDavid:I bought it for the camera, but it's really fast. It's a computer in my pocket that does pretty much everything my actual computer does.Stephanie:Yeah.David:Super valuable piece of tech.Stephanie:Yep. I agree. All right, David, thanks so much for joining the show. Where can people find out more about you and Kickfurther?David:Kickfurther.com is the best place. You can find me on LinkedIn, David Koifman, and I look forward to connecting with anybody who's interested. Also, if you're a business owner listening and you're interested in funding with us, you can go to our website, fill out an application, or you can just email me david@kickfurther.com.Stephanie:Yeah.David:Thanks so much, Stephanie.Stephanie:Cool.David:It's good to be on here.Stephanie:Yeah, thanks, David. All right. See you.David:Take care.

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.

If it seems like a new DTC brand is launching every day, that’s because it’s true. In every industry, across every vertical, on every channel, the next “big thing” is competing for your attention, your clicks and your cash. As a consumer, sifting through all that noise and filtering out which companies are worth your time can be a daunting task. And as a brand, it begs the question: how do you set yourself apart from the ever-growing pack?One option is to find a trusted source to vouch for you. Matthew Hayes can be that source, and his new marketplace, The Fascination, is where he wants to lift up some of the most worthy DTC brands coming to market.The Fascination is a product recommendation and reviews publication focused on emerging and purpose-driven direct-to-consumer brands, large and small. Users of the platform have the ability to filter through vetted brands, digest the company’s story, and even transact all in one place.On this episode of Up Next in Commerce, Matthew dives into lessons he learned while building Leesa Sleep, why curation is so important in the rapidly expanding direct to consumer space, and gives his take on why the convergence of media and commerce will be the one thing that impacts ecommerce the most. Plus, I even pull out a few stories from his trip to Richard Branson’s Necker Island.Main Takeaways:Curation Station: The saturation of the market with a new DTC brand every day is creating issues for consumers and brands alike. With so much clutter, it’s hard to stand out. Through measurable metrics, in-depth reviews, and by holding brands up to certain benchmarks, The Fascination created a space that customers can trust, and brands want to be listed. Layers of Use: For a brand to stand out, The Fascination has found that being mission-driven, promoting social good, and leaning into and highlighting the unique aspects of your business will be the most effective strategy. Lessons Learned: While not everyone can pick the brains of the biggest entrepreneurs in the world, when you get the chance, it’s wise to listen. Matthew was able to visit Necker Island and spend time with Daymond John, Marie Forleo, Tim Ferris, Seth Godin, and Richard Branson. Tune in to hear what advice they gave that has been helping him to this day.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, I'm chatting with Matthew Hayes, the co-founder at The Fascination and previously on the founding team at Leesa Sleep. Matt, welcome to the show.Matthew:Thanks for having me.Stephanie:Yeah, I'm very glad to have you on. So I was hoping we could start with maybe Leesa Sleep. Because when I saw that I'm like, "Whoa, you were like an OG in the D-to-C space," and I thought they'd be a good jumping off point.Matthew:Yeah. So I was part of the founding team at Leesa. Yeah, we launched it back in 2014 before everything exploded. Right? So we were very early. We were one of the first BedInABox brands to get out there, Tuft & Needle came maybe, I don't know, six months to a year before us. Casper was literally right before us. And then we were out right around Thanksgiving of 2014 and that whole industry just exploded under our feet. We had the wind at our back for most of our tenure, especially our growth years. But things are a lot different now and t's a different ball game in terms of launch and growing a D-to-C brand in 2021.Stephanie:Good. Tell me a bit about the differences. I mean, obviously the world is very different and there's a lot of new trends coming out about what to expect over the next couple of years, but are there any lessons that you took away from Leesa that are still relevant or is the world just like in such a different place now?Matthew:No, I think it's still really relevant. I think a lot of the stuff that we were learning as we grew is incredibly relevant to the way that we launched The Fascination, the way that brand founders are thinking about things now. When we first launched in 2015, cost of acquisition were beautiful. Like all day we could scale the auctions across Facebook and Google, were very, maybe a fifth of what they are now just in terms of competitiveness. Just, I mean the mattress industry specifically there was 180 entrants after we launched, so a huge amount of volume coming into that space and just generally in D-to-C. So the cost of acquiring just pure play digital customers was going up and people were seeing the writing on the wall and starting to diversify into brick and mortar.Matthew:And so I think that was one of the things that we realized, is we've got to have a diverse channel mix. And so we struck the partnership with West Elm, we leaned more into Amazon. We looked more at international and we actually set up our own brick and mortar stores. So I think the combination of that brand awareness and exposure helped our brand tremendously. Whereas a lot of brands stuck it out, stayed pure plays and they learneD-to-Costly less and overspending on acquisition.Stephanie:Yeah, that's definitely the biggest thing that I see from the past couple of years or past decade is like before you could just focus on paid acquisition, like throw a bunch of money at it and one's really, they're going to come to you either way. And then now it seems like a lot of the, I guess the brands that are ahead are more media companies now, and there's a big spectrum between paying for people versus organic or versus starting a community and then launching a product to them. So it does feel like a definitely a different world than just like pay, and grow, and scale up as you go.Matthew:Yeah. I mean, we're seeing that a lot actually. And I think our notion of how to build a profitable business with The Fascination is quite a bit different. No, we're not a pure play own D-to-C brand selling our own products, we're essentially a marketplace, but what we've done is we've seen the success that media companies have had in building an audience that's super loyal whether that's The Hustle, or Morning Brew or The Scam, all of this audience aggregation and demand with these customer demos, there's so much that you can do with it. And so, we saw a bit of an opportunity and the fragmentation that was happening across D-to-C brand for popping up literally every day. And you start to become a little leery of, is this a good brand? Is this is a good product? Does this align with my values and tastes? And we saw this need for curation across all spectrums of D-to-C really. And we saw an opportunity to really create a media platform and a commercial platform around that.Stephanie:So let's dive into The Fascination a bit. So it's a marketplace. You guys are curating D-to-C brands. I saw you have filters focused on the product technical quality, also the soul of the company. Tell me a little bit more about The Fascination. How do you allow brands into the marketplace? Yeah. And any other details around the platform?Matthew:Yeah, so I mean, people are basically referring to it as a marketplace meets magazine, which I think is an accurate description. It's basically at its core, it's a product recommendation and reviews publication specifically focused on emerging and purpose-driven direct to consumer brands. So in much the same way that Wirecutter or the strategists reviews top products and writes those objective third-party reviews and recommendations, as a media publisher we're really doing that, but we're focusing in on a subset of these D-to-C brands that are new and emerging and have purpose driven values.Matthew:And the idea is to create a single platform where people can come and discover new brands, they can read reviews and research those brands and products, and they can shop deals all in one place. So it's a linear play from discovery all the way through to purchase.Stephanie:Yep. So who are some of your favorite brands on the platform right now?Matthew:There's so many good ones.Stephanie:[inaudible].Matthew:Yeah, I know I'm going to get in trouble for this. We've got badges across the site, which are really cool. The badges call out things like women and minority led businesses, or organic, or made in the USA. And so like Girlfriend Collective is one of our women and minority led brands. Haus is another-Stephanie:Even Haus on, yeah.Matthew:... Yeah, they deal the [inaudible] and great products, great brand story.Stephanie:Delicious.Matthew:Delicious. Yeah. I was just chatting with the founders of Huron, which is a men's skincare line. Awesome story. And then we've got the big names that you'd expect. Like we've got Allbirds on the platform. We've got Warby joining soon if they're not up already any day now. We've got UNTUCKit so, those it's a nice mix of the old school D-to-C incumbents with a lot of really cool emerging brands that honestly I'm intimately involved in direct consumer and a lot of these brands I hadn't heard of for the first time.Matthew:So if you think about like, as it broadens out the halo from the bulls-eye of our tightest demos, there's going to be so many people that are discovering these brands for the first time. And that's really what we want. We want some of these big names to attract people into the site, and then we want a lot of our awesome emerging brands and products to be discovered while you're there.Stephanie:Yeah. That's great. So how are you convincing these larger brands to join the platform? Because I'm thinking your space, I think also is very competitive. I mean, the world right now is headed to a place where everyone wants curated collections. I mean, they don't want to spend a bunch of time everywhere. They want it all in one place. We had the CEO of Fast on talking about, you need the one-click checkout and be able to allow people just to check out instantly and not have to bulk it into a cart. It seems like your space is very competitive too. How are you convincing the Warby Parkers? And the older brands who probably are approached by quite a few marketplace platforms to, "Oh, join us." Why are these brands going with you?Matthew:Well, I think we've really a ton on the story and the user experience and just the overall look and feel of our digital product and what we stand for. I think it's also in our favor that we have been D-to-C operators ourselves and we can really empathize to what these founders need. And we've been fortunate to be in the community for several years now. So we had a few close partners that our spring pad, if you will. Not to mention Nick Sharma as an advisor, who's great at pulling in brands.Stephanie:He was on our show too, man, I was just-Matthew:Yeah, I know.Stephanie:... fortunate.Matthew:And so yeah, between that, and we had some really amazing brands reach out the first day that just totally shocked us. We have a type form application that comes through and we had a couple of 100 brands, including some of the biggest names in the space on day one, which it was super exciting. And just a lot of founders getting really excited by seeing their brands mentioned in our round ups, or seeing products being shared. So I think that the validation that we're starting to provide, and really empathizing with what brand founders need is something that they're really clamoring for. And I think word it gets out fast.Stephanie:Yeah. That's great. So is there any trends you're seeing right now around what customers are most excited about? I mean, I'm guessing you have all this data now and you can see, okay, a bunch of people are coming on during quarantine and buying Haus. We need another type of Appertiff or something to offer that's similar because we see so much engagement there, any trends?Matthew:I think that one of the things that we've seen that's really interesting is our roundup pieces on brands that are making an impact and just the social impact stories are really, really resonating with consumers. And the brands are sharing the stories, which is just amplifying the message that much more. So the general consumer sentiment that we're getting from a qualitative perspective is that a platform like this is very much needed and like, thank you for building it. So I don't think it's even halfway to where we want it to be, or it could be in terms of the overall product development evolution, but we're going to get there quickly.Stephanie:Yep. So how, when you're... You just said that certain stories that you're telling around the brands and the social good aspect of it are really resonating. Is that your main play when it comes to acquiring new customers on your platform is by writing good pieces of content, having the brand share it to get in front of their audiences as well, or how do you think about acquiring new customers?Matthew:Yeah, I mean, customer acquisitions, it's always a challenge for a marketplace like this. And that's why from day one, we didn't approach it as a pure play commercial marketplace where you're just aggregating and selling products. From a consumer perspective, that's really not serving the overall need that we're trying to address, which is discovery, research, and shop and convert. And so the research aspect of that is really where we're going to focus a lot of time and attention and work. And what I mean by that is writing really in depth, thorough product reviews that are authentic, that are meaningful, that consumers value and ultimately Google values that content really highly as well. And so, what I'm getting at is the SEO and organic traction and such. It's going to be a big part of how we grow organically, keep our acquisition costs low.Matthew:There's a lot of performance marketing things that we can and will be doing. Brands have had tremendous interest in doing paid marketing partnerships, whether that's white listing on Facebook, or sponsoring newsletters, or any sponsorships. I think there's a tremendous amount of demand for that. And we really are just dipping our toes into the very first test there. And then I think PR and having, as I said, our brands amplify, our content is also, it's just going to be a latent, organic way to continue to build low cost audience. I mean, I think if you think about the way that Leesa scaled and a lot of those 2015 brand scaled, we know that we can't run the same playbook and build a sustainable business.Matthew:And so as we were launching in early days, it's like being a media company is really hard, right. Coming up with really engaging content every single day, pumping it out, like the Morning Brews and Web Smith's of the world, I take my hat off to those guys because it's not easy, but I think you can already start to see the rewards that we're going to reap from that.Stephanie:Yeah. So what channels are you... Well, maybe actually first, let me talk about the content piece, because that's top of mind for me is, a lot of people say you just need to create good content and that's the key to finding great people. How do you go about brainstorming something that will resonate? Are you actually going through maybe search trends and starting there to see what's going on in the industry, and then writing articles around that? Or is it purely, just like, I want to talk about Haus's story and we're going to talk about what they're doing behind the scenes? Like, how do you brainstorm content?Matthew:It's a mix of all of that actually. So we've got a number of things that we're covering at any one time. A lot of it is when we have new brands onboarded, we've got to write the brand story and we've got to review their products. That's phase one. And that's like an ongoing process as we get up and running. But yeah, we're also looking at industry trends, category wide trends, search trends around specific products or competitive products to see how we can write really compelling content that meets that need.Matthew:And then we're thinking about the cultural relevance, things that are happening topically in everyday life. And we've got a couple of different personas that we look at. And so what are our personas caring about, what's their headspace, and then what are the things that are happening in their specific lives at this very moment in mid January? So as we think through those things, you start to surface really relevant content ideas, and that's where our social content, a lot of our editorial content comes from. And that's generally how we do it.Stephanie:Cool. And what are some of the channels that you're most excited about right now, or you think that there's untapped potential? Are you sticking with the Facebook where of course stick the Facebook? How is sticking with-Matthew:Afterthought.Stephanie:I like that. Hey, they used to be though. Right?Matthew:Yeah. Drop that.Stephanie:Yeah. I mean, when? It's still pretty relevant, but yeah. Are you sticking with Facebook? A lot of other brands still say that's the best place to reach customers. Are you trying out a bunch of new channels and experimenting? How are you thinking about that?Matthew:So Facebook isn't a priority for us right now other than to the extent that we use it for paid social advertising. I would say it's there. Of course it's there. But when we're thinking about building audience, Twitter has been a nice surprise for me, I'm really bummed that I didn't get myself on Twitter several years ago, but Sharon, our audience development team's doing an awesome job of engaging that really passionate community.Matthew:I think LinkedIn has sneaky, organic reach and potential. And we found that a lot of our brand founders are sharing our content there and we're getting a lot of engagement.Stephanie:They're more organic then, right, because LinkedIn is super expensive when it comes to advertising.Matthew:Yeah. All organic. And then stuff like TikTok is interesting as we look at really organic product reviews doing things with founders, I think that's something that we're going to be looking at as well as Clubhouse.Stephanie:Yeah. Clubhouse. I think that's where it's at. I'm on there. I listen to people. I think you can connect with a lot of great people on there. I'm still not sure about the unstructured format sometimes where things can go on for hours and hours, but yeah, it seems like there's a lot of potential there to at least connect with new people. I don't know about selling.Matthew:A lot of untapped potential.Stephanie:Yeah. So I saw that you were also an investor in GRIN. Right. And that's the influencer platform, which is... That's the right brand. Right?Matthew:Yup. [inaudible].Stephanie:Okay. So our guest yesterday that we had on was, that's her favorite new tool that she's looking into and I had not heard of it before. And I'm interested to hear a little bit about how are you thinking about influencers? What attracted you to GRIN, where's that market headed over the next couple of years?Matthew:Yeah. I mean, we've been doing influencer marketing since 2012, honestly. And I think there's going to be a lot more regulation around it for one. So you've got to be buttoned up as you execute itMatthew:So I think that's just part of the industry growing up. A lot of these minors are now celebrities in their own right with huge followings and PR teams. And so the days of just engaging with an influencer that way are over. It's really about adopting a micro/nano strategy where you're activating pockets of a couple thousand followers up to 50 to 100,000 followers and doing it more strategically at scale. And that's where I see a lot of brands and agencies having success doing this stuff. So GRIN is just a really awesome tool for managing that entire workflow. Keeping you really on top of things, you can search for look alikes of an influencer. So if you have someone or something that you want to find influencers around, it's great for that.Stephanie:That's awesome. And how did you think about attribution and analytics around utilizing influencers and seeing if you're really getting the most bang for your buck?Matthew:Yeah. I mean, well, especially with iOS 14 and everything that's going on there, it's always been an imperfect science, we never assume that we would have even close to perfect attribution on influencer activations. So we always treated it very top of funnel and you do what you can in terms of attribution. So you give them trackable UTM parameters, you give them a bespoke promo codes with their name. You give them a landing page experience, everything that you can do to cookie the user on your website and get them into what feels like an authentic customized experience for that loyal following. That's going to increase conversion, I think as much as anything.Matthew:And the vast majority of influencer activity is probably happening on mobile anyway. So wherever you're sending them, it's got to be very mobile optimized because if they switch over, your attribution's lost at that point.Stephanie:Yeah. And I think that authentic piece you're saying, I mean, it has to fit your brand. The person has to not just be saying something just to say it. And I think taking that longer-term approach more of like a partnership and someone who is going to be a part of your brand, even if they start out smaller and grow with you, will be way better than just trying to target a big name, because I normally don't really put any weight in products that large celebrities are showcasing, just because I'm like, I just know how much money you're getting paid and I highly doubt you're using that teeth whitener.Matthew:Yeah, I mean to that point and a lot of grants are basically incentivizing on the CPA or per sale basis with, like you're saying a subset of really loyal influencers and affiliates that they can send that influencer their fall collection of bags and apparel or whatever, and they can get 10 or 15 posts out of it if the influencer continues to see performance. And so I think that's the new way of doing things nowadays.Stephanie:Okay. So yeah, viewing it from a content generation perspective of, they're not just posting once trying to get their product off, but they're also creating an article or blog posts that you can repurpose and pull quotes from or whatever it may be.Matthew:Yeah. And more frequency drives more conversion. So the more you get that brand in front of your audience, the more likely it is they'll finally take action.Stephanie:Yep. So I want to talk a bit about mentorship, which I always love asking questions around this. I saw that you went to Necker Island a few days ago... a few years ago [crosstalk], really? Few years ago. And of course Richard Branson's Island. So I want to hear, what did you learn there? What advice did you hear? I saw, I think Damon John was there, Tim Ferriss, Seth Godin, Marie Forleo, a bunch of great people to learn from. And I want to hear about the stories behind going there. What did you learn, all that?Matthew:Yeah, I mean, it was a life changing experience for sure. Damon is still pretty close to us in the business. He got involved with Leesa after we met, especially with their 110 program, and I really just learn from him the hustle, the grind. He told his story about how he came up with FUBU and really built that business from zero. And so, talking about fundraising with him is a different thing.Matthew:Tim was on the Island too. I was fanboying out when I met Tim actually, because I was obsessed with four hour workweek, four our body and here I'm chatting with him in person. We actually started talking about going up against Casper. At the time, we were pushing pretty heavily into podcasts and Casper was buying up literally every podcast that we could find, that we wanted to go after. And funnily enough, he would really push a micro strategy to us. He said, "You need to go after these very small podcasts that aren't affiliated yet, that have nascent, but growing followings." And we did, we found 10 of those, especially in comedy and gaming, and we stayed with them for years and they ended up crushing for us.Stephanie:Oh, that's great. And did you secure long-term partnerships with this company?Matthew:Yeah, I think we're still working with a few of them honestly.Stephanie:Oh, that's great.Matthew:We just completely sapped the audience, an everyone's got a Leesa now. Yeah. And then we talked with Seth. David and I chatted with Seth Godin, who's a marketing genius. He's like the professor of modern day marketing. And at the time, we had done around 30 million in our first year of sales, which was just crazy. And he was talking about making this leap called crossing the chasm. Basically when you're attacking the early adopter market and you're doing quite well, there's a point at which you have to "cross the chasm" and reach the broader demographic of people. And so I don't remember the tactics that he talked about, but he always impressed that idea of our okay, now we've got to broaden our sphere of influence. We still use that phrase today.Matthew:And then Marie Forleo was there and we had a lot of really good, we like chatted one-on-one several times, because I was incredibly anxious. I've always dealt with anxiety issues in my career, in my past. And so we had some frank chats about vulnerability and putting yourself out there. And once you do that, it just eases the tension, eases the anxiety. And I still use that to this day.Stephanie:Yeah. I was going to say, does it help now? Because I mean, I definitely feel that too. I remember when we first sold this podcast, then they're like, "Oh, Stephanie can new host it?" And just being like, oh, I usually always would have our other team members host the shows and yeah, I liked working behind the scenes and it definitely was hard being like, okay, you just have to do it. You have to get yourself out there. Did it help afterwards thinking through about her advice?Matthew:Yeah, it totally did. And I always think of this idea of demonstrated performance, where it's like, you're nervous about something, you're anxious, you step on stage or you sit in the seat, you put yourself out there and you have a really good performance. And then that just gives you one more step, one more piece of confidence and you keep going and building. And now stuff that I do every day without even looking at my calendar is stuff that I would have just freaked out about all day five years ago. So I think it's just about experience.Stephanie:Yeah. Now I agree. I remember even just thinking about doing video meetings, like when I first was starting out in the corporate world and being like, "Oh, my gosh, my first meeting." I was just so scared and sweaty and nervous and then now taking like 10 a day and being like, not even thinking twice. So yeah, I think just doing the work and pushing past and knowing you'll probably fail a couple of times and who cares?Matthew:Exactly.Stephanie:That's great. And did you meet Richard Branson when you were there?Matthew:Yeah. We met briefly. He gave us a talk which was awesome. He talked a lot about Virgin's impact program, and what he's doing there. And so that was really important to us at the time, because we were setting up our Leesa 110 program and that was cool to hear from him.Stephanie:That's great. So where do you see the next couple of years headed for The Fascination? What are you guys building for? What are you doing in stealth mode right now? What are you planning for the world to look like in a couple of years?Matthew:Yeah, I mean, right now we're really heavily focused on getting the digital product where it needs be to really deliver on a full transactional marketplace that's cutting edge for consumers. So in the next couple of years, we want to have a destination that is super engaging. We want to have brand founders engaging with consumers real time in the platform. We want to have people shopping and reading and researching brands and products all seamlessly, and to be able to buy those products in one click, right? Right on The Fascination.com. And so a lot of things have to happen in the background to obviously make that work.Matthew:And then we're always thinking about, how can we acquire the best customers, bring them in most cost-effectively? And it's always on my mind of like, delivering really solid, meaningful content to the audience, not just fluff stuff, but stuff that's really, really valuable. And so that's what I think we're trying to win.Stephanie:Well. Yeah. It also seems like there's such an opportunity to... I mean, when you have all these brands and they have access to a lot of insights on their customers or who's coming to their website to then build lookalike audiences off of those brands, and then all of a sudden you have access to customers and you're coming from a different angle where maybe if Leesa would have already gotten in front of a customer two times and they're like, "Nah," they then see The Fascination comes in and they're like, "Hey, check out this mattress. It's like a third touch point. That's very separated." But it seems like there's a lot of opportunity there to get insights at a much more accelerated rate than you would get just by yourself.Matthew:Yes. That is the goal. Yeah, there's a whole data infrastructure that we really need to put in place to get the most out of it. And honestly, coming from Leesa for so long, I'm still trying to wrap my head around what that all looks like in terms of affiliate click attribution and how we create audiences and how we do product recommendations. So we're only a month old, but we'll get there. And I can tell you that there is such tremendous demand for what you're talking about. Just leveraging lookalike audiences, leveraging audiences across categories that aren't competitive with one another. At the end of the day, everyone that comes to The Fascination as an interested consumer if we do it right, it's always going to have similar demographic profiles, right. Whether they're a man or a woman. So as you aggregate that at scale, there's a ton of value for brands to be able to tap into that.Stephanie:Yeah. It seems like eventually they'll have to be tools for the merchants as well, to be able to interact with all the platforms they're on. Or like, I mean a lot of sales are moving towards the edge. There's a lot of people say and how do you keep track of that? Like, how do these merchants they're selling on The Fascination, they're selling on Fancy, they're selling on not that Fancy is the same, but there are quite a few places popping up where these brands might be like, "Yeah, I want to sell on that platform or over here," but I don't know if enough tools exist right now to keep track of what you're doing and consolidating it all in one place.Matthew:Yeah. I mean, it's got to be a challenge for these fairly young brands. There's product feed software that'll handle some of that, but at the end of the day there's manual stuff that's always needed once you're drop shipping and wholesaling and you have retail partners. So yeah, we're going to be thinking about it from the other side, just the same, how do you manage 100, 200, 300 merchants and keep them happy?Stephanie:Yeah. Crazy. 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'm going to ask you a question and you have a minute or less to answer. Are you ready, Matt?Matthew:Yes.Stephanie:One minute to answer. All right. Yeah. Prepare, drink your drink, whatever that may be. All right. First thing, what one thing will have the biggest impact on ecommerce in the next year?Matthew:I think the convergence of content and commerce is, is going to have one of the biggest impacts. You've got media companies that are converging in the commerce, they all want to be transactional. They all want a bigger slice of the pie. They all want more lifetime value extraction from their readership. And then I think on the commerce side you see brands and retailers who are obviously seeing the cost rising of customer acquisition in the traditional sense and creating really rich content. It's the only way to do that. So we're diving in right at the intersection with what we're doing at The Fascination and that's where we saw it going. And that's why I think we're bullish on where we're headed.Stephanie:Yeah. Well, it'll also be interesting to do a recap episode on what's happened since some of these brands got into mixing media with commerce. I mean, I'm thinking about NBC, I think did a whole shoppable TV thing. And I remember seeing them launch that maybe in February or April last year, but I don't know what actually happened. So it'd be fun to do a recap of like, here's who launched in 2020 when it came to mixing media and commerce and here is status update.Matthew:Hopefully we will be one of the givers.Stephanie:Yeah. Hopefully. What's one thing from 2020 that you hope sticks around in 2021?Matthew:I think that we've all had to embrace things like this, just getting on video conferences, not having to present ourselves through this façade, in the office I would have never thought about wearing my hat backwards and rolling around in athleisure. And now that's just the norm for everybody. And kids are on work calls and it's just, the whole thing feels a lot more familial. And even if we do go back to offices, I really have loved that work now feels a little bit closer to home because you're in your home, but also because just the interactions, you see more than you would if everyone was in an office environment.Stephanie:Yeah, I agree. And I think it definitely brings a more human perspective too. Like you're saying, working together, knowing someone's kids, seeing them in the background, and then you also have more, I guess, empathy when a mom or dad's like, "Hey, I got to go do this with my kids." It's like, "Oh yeah, I saw your kid connection." Of course you can, whereas I'd say prior to this. Yeah. Not as much of a leniency, I guess for that. Yeah. That's a good one.Stephanie:What is the funniest story or best story you can think of when it comes to either building up Leesa or building up The Fascination where you're like, "Oh, this is a good time or a good story that really sticks in my brain from those years."Matthew:We've done so many like gimmicky things at Leesa. We were growth hacking like crazy and we were throwing stuff against the wall and not all of it stuck. We did a ton of stuff with Barstool Sports. We maybe did a few influencer integrations that wouldn't go over so well today with certain influencers.Stephanie:And with Barstool, I feel like they're so edgy that they can get you in trouble all these days anyways.Matthew:They're very edgy and we purposely like with all of those podcasters and creators, we're like, go be very authentic. And so you can't tell Barstool like, tame it down and not be authentic. But they were a huge converter for Leesa for several years.Stephanie:That's fun.Matthew:So we did a lot of fun stuff. We sponsored Larry at the gambling goldfish, which was a gold fish swimming around in a tank on Barstool sets, they pulled a mattress behind a truck with a Santa Claus riding on it. But we've also done a lot more admirable things, like we did a sleep out for the homeless. We've done a lot of cool things at Leesa just in the experientials side of things that made it fun.Stephanie:Yeah. I mean I have a love for the gambling goldfish. I want to go check that out. That actually sounds pretty funny.Matthew:Yeah. One more thing that we did is I think it was the 2017 NFL Draft, it's shown on ESPN and all the players are interviewed in their homes. And so we sent the players that we knew would be interviewed on TV, on ESPN Leesa mattresses. And we had them put their Leesa mattress boxes behind them and their families. And we got millions of impressions that night because we had Leesa mattresses all over the air on ESPN Draft.Stephanie:Oh, that's fun. See, I love creative stuff like that, where I mean, as long as it actually converts too, I always have the question about TV, does it actually convert or what happened after everyone saw the mattress behind them? Did you guys see a big uptick in sales, or?Matthew:I don't remember if we did or not. I think we saw a bit of an uptick, but I mean, it was such a low cost stunt to do that. It wasn't a swing for the fences, but we also did a ton of TV in heyday at Leesa. And you can really see the brand awareness effects the TV has even though it's insanely hard to track.Stephanie:Yeah. I agree. What is next on your reading list?Matthew:I'm probably going to do Shoe Dog by Phil Knight.Stephanie:Such a good one. I love that book. Yeah. So inspirational. I highly recommend. If you were to have a podcast, what would it be about and who would your first guest be?Matthew:Well, that's an interesting question because we may very well have one soon.Stephanie:Oh, nice.Matthew:Yeah, I don't know in what format it will be. It may be a podcast. It may just be like Instagram TV stories, but we really want to interview, just do flash interviews with our brand founders, asking about their origin story, asking about what makes their products different, fun facts. And I think a groundswell of really interesting stories like that would be fun.Stephanie:Cool. That sounds good. And then the last one, what's the nicest thing anyone's ever done for you?Matthew:Oh, that's tough. I mean, I there's been so many instances of generosity. I think honestly, giving me a chance to make the career switch that I did, and this is a bit of a shout out to David my co-founder, but he really took a chance on me. He's been super supportive of me for years, and it's really gotten me to where I am today in terms of my career and the place that we're at collectively. So him and the people around me that pushed me to make that leap out of the traditional corporate world of consulting. I was really hesitant to do that coming right out of my MBA and looking at a nice salary, and he was one of those people that pushed me over the top to do that. And I'm thankful for it.Stephanie:That's really cool. Great story. All right, Matt. Well, thanks so much for coming on the show. Where can people find out more about you and The Fascination?Matthew:So about me, you can find me on Twitter at MattDHayes, all one word, and then The Fascination.com. Go check it out.Stephanie:Awesome. Thanks for joining us, Matt.Matthew:All right. Thank you.

You’ve heard it time and time again on this podcast: That influencer marketing not only works, but could be the key to unlocking massive business potential for your eComm business. Influencers have the power to take a product – or an entire brand – from unknown to a trending topic product overnight. And sometimes, the community that they build is so valuable, it creates a jumping off point for a business of their own. That’s what Deepica Mutyala did when she launched LIVE TINTED. On this episode of Up Next in Commerce, Deepica takes us through how she progressed as an intrapreneur at BirchBox before she took the plunge and set out on her own journey. And it all started after one beauty video that she made went viral on YouTube. Deepica explains how she went about building a community based on a mission to bring more diversity to the industry, and how she’s been able to tap into that community to create content and launch a successful business with products designed specifically for her community. Plus, Deepica reveals some of the advice she got from her investors and mentors like Bobbi Brown and Andy Dunn. Enjoy this episode!Main Takeaways:Deprioritize the Big Channels: It’s okay to deprioritize big marketing channels such as Facebook in order to explore and engage with users elsewhere. Facebook will always be there, but you might catch lightning in a bottle if you are willing to adapt and explore new platforms. It’s Not a Dirty Word: Influencers tend to get a bad rap, but the truth is that anyone can be an influencer, and that influence can be nurtured for the good of a community and a business. By tapping into the power of a community, growth becomes much more attainable.Start Where You Are: Intrapreneurship is an avenue you hear about less often, but is a strategic way for anyone with bigger dreams to learn the ins and outs of business. By embedding yourself in a business that works, volunteering to help in every department, making connections, and taking all of your learnings to build an initiative internally or on the side, you can advance as a true entrepreneur much faster. More Than A Check: Fundraising isn’t just about filling your bank account, it’s also about adding to your knowledge bank. Deepica tapped into mentors and investors like Bobbi Brown, Andy Dunn, Payal Kadakiam, Hayley Barna and others to learn from their experiences and invite them to be a part of her own growth. Tune in to the episode to hear some of the advice they each gave to Deepica!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, we're talking to Deepica Mutyala.Deepica:There you go, you nailed it.Stephanie:The CEO of a beauty brand, LIVE TINTED. Deepica, welcome.Deepica:Thanks for having me.Stephanie:How many times do people pause when they're like, "I'm about to botch your name, I know it, I know it, ah, there it goes?"Deepica:I mean a lot, but I appreciate the pause and effort to get it right, versus just blatant lack of attempt to try and get it right. So, I appreciate you trying. Thank you.Stephanie:Good. Yeah, thanks. Stephanie:So, I was doing a bit of research, as I always do on my guests, and I'm fascinated by LIVE TINTED. I mean, you have such a great story, so much stuff [inaudible] want to dive into, but first, I think it'd be fun to kind of talk through how you got here, your background, What did you do before you founded LIVE TINTED?Deepica:Yeah. So, I actually started my career on the corporate side of the beauty industry. In college, my first internship was at L'Oreal in New York, and post-college I had a brief stint at Limited Brands, which is now L Brands at Victoria's Secret, which is no longer there because they went bankrupt. So, I was there for a brief stint, but the whole goal and end game was to one day create my own beauty brand. I was that 16 year old girl who grew up in Sugar Land, Texas who said that... I was going to change the narrative of what I saw when I was going down the beauty aisles.Deepica:When I was a kid, I shopped at Walmart predominantly, honestly, that's where I shopped for beauty because, going to shop for beauty wasn't really a thing in my family's life, so when we were just getting groceries at Walmart, I would divert to the aisles and go look at makeup. And I would find myself not reflected in the ads, and I would also not see any foundation shades that worked for my skin tone. And I literally, remember telling my family at 16 that I was going to change that narrative one day, and everything I've done for my career since that point was to get me to starting LIVE TINTED.Deepica:So, it's kind of crazy being now back in Texas, like I was telling you earlier, that it's just really full circle being here, and finding doodles of me writing out what I thought my brand name was going to be, and talking to family members who are like, "It's just crazy that you're actually doing it." Because this is what I wanted to do. So then, after nine months at Limited Brands, I quit my job to take a risk on a startup called Birchbox, which at the time was the hottest tech company... Not even just beauty, but I think overarching, they created a whole category of subscription model that really created a whole new category.Deepica:And so, that was really cool, incredible experience working for two bad-ass female founders who, in my parents' eyes, were really okay with me working there, and taking a pay cut, and going for my dream, because the two founders went to HBS.Stephanie:Oh my gosh.Deepica:And so, they were like-Stephanie:I also read the quote from your... You were saying, "Oh, my dad all growing up would hand me a stethoscope," and then you would instead grab lipstick or something, and I thought that was really funny.Deepica:[crosstalk]. Yeah. It's kind of an Indian tradition where... There's this ceremony that happens... I think it's after your first 100 days, and we just did it for my nephew, where they put things in front of you [inaudible] like a book versus different things to see what you would gravitate towards. And instead of me gravitating towards anything that was in front of me, I was grabbing my mom's lipstick in her [crosstalk].Stephanie:In the purse digging over there.Deepica:Yeah, yeah, which is so funny, and crazy, and full circle now, but yeah, this was always the dream, and it's wild for me to look back and reflect. But I worked at Birchbox, and in true startup culture, you can create opportunities for yourself at a startup. And so, I made it very clear to the founders that I wanted to one day create my own beauty brand, and they gave me opportunities in the company to do that. Then, I had to do it a lot of the times, in my free time, it wasn't like... I still had to do my day job, but if there was projects that I could work on in my free time, I did it, because I saw it as Birchbox was my business school.Deepica:And they always said it as founders, right? But I truly felt it. I really felt like working there was an incredible network of really smart people, and I got to... Literally, you have an idea, you can test it, and just go for it. And so, I got to work on product development at Birchbox. I got to work on influencer partnerships at Birchbox. And when I did that, was my first time being like, "What is going on in this influencer world? And how much are these girls getting paid? What is happening?" Some random girl at Iowa getting paid this insane amount of money to do a YouTube video, and I was just like, "This is wild."Deepica:So, as I was doing that, was when I realized there was nobody who looked like me on YouTube creating content, and I kind of just saw it as a fun hobby. I was like, "You know what, Deepica? At the end of the day, you're not quitting your job, just do it on your weekends. And at the end of the day, all the people in your life that text you questions about makeup and things like that, you can just say, 'Go to my channel, stop texting me.'" So, really, I didn't think much of it. And so, January of 2015, I picked up my iPhone... Because again, I didn't know what I was doing video content wise, I had no clue how to... Ad revenue wasn't even activated. I didn't know.Deepica:And I picked up my iPhone and held it vertically instead of horizontally. The production, it was like I knew IGTV was happening before IGTV was happening. I did it in a vertical mode, and I used red lipstick under my eyes to mask dark circles... And people who are hearing this are probably literally so confused, but-Stephanie:I read that too, I was like, "Well, it'd be funny if I showed up with red lipstick under my eyes."Deepica:Oh my God, that would have been awesome. Yeah, no, I used red lipstick under my eyes to hide dark circles, and I guess that was crazy to 10 million people, because that video went viral, and yeah, has millions and millions of views.Stephanie:And it worked. For anyone who's like, "What did that look like?" I looked at the pictures and the video, it actually works.Deepica:Yeah. So, here's the deal, I basically... That was my biggest beauty concern my whole life, how to hide my dark circles? And it wasn't talked about, people didn't talk about it because it's such a specific problem to specific communities of people. And so, I just did the video that I had learned when I was on set one day, where a makeup artist was using a color corrector under my eyes, an actual product made for under your eyes, and I was like, "What are you doing putting red lipstick under my eyes." And she was like, "Oh no, it's a color corrector, it cancels out the darkness, so when you put on your foundation, you really can mask your dark circles, because you have extra pigments that require kind of additional correction." And I was like, "Well, what's the difference?"Deepica:My brain is always thinking about hacks and simplifying things, and so that doesn't change with my beauty routine. I want to always simplify things. And so, she basically, said, "Not much." And so, I filmed this video and it went viral, and when the video was at 4 million views, I got a call from the Today Show to come on to do the segment on air, and I quit my job that day. I kind of just had this moment of, this could be a cool 15 minutes of fame, or I could turn it into my dream career. [crosstalk].Stephanie:That's amazing. What did the founders say? Because I'm guessing, you had a pretty close relationship with them. I mean, they were letting you essentially, be an intrapreneur within their organization, and test things, and learn, and try, how did they feel about that? Because I saw that they were some of your first investors along with Bobbi Brown, which I'm like, "What? How did you get in front of her?" So, what was that process like leaving and getting them to invest afterwards?Deepica:Yeah, it was really tough. There's two co-founders, and they just had different mindsets, right? One of them was more like, "You are all on a Birch tree, and you're all acorns that will fall into the world." I remember she said... And she's the one that's currently an investor in my company, "I want to see you grow and thrive." And the other one, it's not to say that she didn't want the same thing, but she was really excited about me growing within the company. And listen, she had every reason to feel that way. She helped me get so many opportunities within the company to be able to create what I have been able to do today, and she gave me those opportunities, but it was more like... I was really close to her too, I worked more with her directly. So, of course, it was like one of those bittersweet things, but they're both incredible and really supportive.Deepica:But it was really scary to... I remember when I got... The day I got the email from the Today Show was when I pulled her into a room that day at 6:00 PM, towards the end of the day, and I just was like, "I feel like I have to go for it." And she gave me a really big hug and said, "She's really happy for me." But you could tell it was like a bittersweet thing, which I appreciated, because at the end of the day, that means she felt that I made an impact at the company.Stephanie:That's great. So, what was the Today Show like? Did you go on there and do a tutorial? Tell me a bit about that.Deepica:Oh my gosh, it was wild. So, my sister came on and was my model on air. So, she flew in from Texas. My dad was backstage sitting next to Kid Rock, which was hilarious. Picture this immigrant Indian dad who's like, "What is even happening? My daughter is on national television. And who is this guy with a beard and long hair, what's going on?" It was the moment where I realized that I was meant to do exactly what I'm doing in that moment. I was not nervous, I felt like that was... I was just meant to be there, it just felt that way. You know that Eminem song... What is it? Lose Yourself? You get one shot, one opportunity. I was listening to that backstage, and I literally felt like I had four minutes on national television to show people that a brown girl can do this.Stephanie:Mm-hmm (affirmative) Oh, that's great.Deepica:Yeah. I felt like I could be the Indian Hoda, and just be the next news anchor on the Today Show. I still feel like... I love doing live television, I think it's like... There is a beauty in the imperfections that come with it. And it was surreal, is what the word is, and incredible. And I remember after it was over... The hustle and bustle of live television is very real. The second the segment is over, they're like, boom, boom, boom, moving onto the next thing. And I was like, "That was so fun, let's do it again." Most people were just like, "All right, lady, we're moving on." But then, there was this senior producer who came up to me and she was like, "You should do it again."Deepica:And I was [inaudible] around, and it's so cool because my dad is in the background recording it, so I have all this on camera. But she just was like, "We can't believe it was your first time doing national television, we'd love to have you back regularly." And that was really cool for me, because everyone told me that when you go on national television, it's a cool moment in your life and you move on, and I feel like I proved the exact opposite, that if you have what it takes, you can make things happen for yourself. So, I became a regular doing beauty segments on the Today Show, and was a full-time influencer, which is a thing.Stephanie:Yeah, I saw that. That was one of the first things when I was looking into your bio a bit, and it's like, "Oh, Deepica is an influencer, and I think she's just signed a deal with WME." I'm like, "Oh." So, tell me, now you've got the status, and you're super popular, how did you think about capitalizing on that, and to get out of just being an influencer, and then being like, "I'm going to create my own stuff?"Deepica:Yeah. Well, here's the deal [inaudible] I never grew up saying I wanted to be an influencer or even be famous, but I did grow up saying I wanted to be a CEO and run my own business. And so, when you fall into something like this, it's very weird. But I think what got me through the years where I was just an influencer and didn't have the business side of it was, the end goal was the same. I wanted to change the face of representation for people who look like me, period. So whether that's in the media, or through my own beauty brand, the net goal was the same, and it still is the same.Deepica:And so, what I realized was, I had this opportunity to create a brand around myself that was really once in a lifetime, honestly. And I was just like, "I want to focus in on this and really learn everything I can about the beauty industry." Which at this point, I knew a decent amount. I worked at Birchbox, I had a lot of beauty brand contacts. And really, what I did was, after I quit my job, I emailed all my contacts and I was pretending to be my own assistant, and I was like, "Hello, I'm the assistant to Deepica Mutyala, beauty influencer with 10 million views, Today Show beauty expert, blah, blah, blah, blah, blah, blah, if you want to work with her, whatever."Deepica:And for every 100 emails I sent, I got one reply, and that one reply led to my first job where they asked me my rate, and I had no idea what to say. And then, when they said, "Okay," I realized, damn it, I could have asked for triple. You just learn as you go, and you're your own assistant, producer, editor, manager, agent, sometimes lawyer, which I don't recommend.Stephanie:Nope.Deepica:I'm like, "Bad idea."Stephanie:Yeah.Deepica:But you just learn as you go. And so, I think for me, what got me through being the girl who was waking up and taking selfies, and posting it for literally a career, I got paid to do that, was that I really saw a narrative in the beauty industry that didn't exist when I was growing up. There was no token brown girl, there was always... And even then, there wasn't really a token black girl growing up, that was still in the... Now, I feel like we're finally... It still has so, so much work to do, but I do think that we now have representation happening more than I ever saw growing up, but there still is this tokenism that happens where... I felt like for three years, as grateful as I am, that I've been able to work with every beauty brand under the sun, like a L'Oreal commercial to a Samsung ad that aired during the Golden Globes, and just any beauty brand I could have dreamt of.Deepica:I also realized there's plenty of people out there that deserve the shot to also do that, and there shouldn't just be one of me. There is not just one white girl on the campaign, why shouldn't there be more brown girls in the campaign, more black girls in the campaign? That experience as an influencer is what led me to launching LIVE TINTED as a community platform prior to launching the actual product itself. I didn't plan for that, again, being a community brand wasn't a thing growing up either, but it was lived in experience that truly inspired the idea that, before this launches with a physical product, let's create this united community where they dictate our future decisions.Deepica:And really, for me, honestly, I was craving a home where people were talking about things in the beauty industry that was not a thing, heavy topics like colorism. But then, other topics like facial hair, and things that you just didn't say. And so, we created this almost like collective home where every day we were just posting about faces that I felt like you didn't traditionally see being shown in campaigns. And it just started to organically grow into this very, very engaged community, which then at a point, I was like, "Let's create products for them, it's time." And that's kind of what led to our first product launch in may of 2019.Stephanie:Yeah. We had a really cool company on... Food52, same thing, they build up a huge community first, and then, afterwards, she was like, "Oh, it was only right to then start creating products to service that community." But my biggest question is always like, how did you build that community? How did you transfer the audience from TV to then go into your community? Or from Instagram, or YouTube, or wherever you were, how did you pull them in and get them engaging in a way where you're like, "They're here for the long haul and now I can move on to phase two of a product?"Deepica:Yeah, no, it's a good question. I think for me, I feel very grateful that those three years as an influencer, I created a community of people who felt very connected to me, because again, there wasn't a lot of brown girls doing this. And so, I felt like they would be ride or die for anything I put out into the world. But that is, to me, a huge responsibility, and it was like, "Okay, so now, if I create this brand, I don't want it to be about me, I want it to be about something so much bigger than myself."Deepica:So, if I had just launched it, which a lot of investors in the beginning were saying to me like, "Why do you have to create this community first and spend money on creating content as a community platform and things? You already have a following, create a product, show proof of concept, and build it out." I just didn't listen, and I felt really strongly that LIVE TINTED was bigger than my own identity, it was about a larger multicultural group of individuals coming together and finding common ground in industry where I felt like people were so divisive.Deepica:And so, I really wanted to kind of bridge that gap and create a really powerful, I think, warm home for people. Which, I think, a lot of brands are saying they're doing now, and it's awesome, right? I'm not hating, I think it's all for the greater good. But people are smart, and they can understand when some people are being performative versus not. And I feel very grateful that since day one, we've had values and core beliefs that we've... Of course, they evolve, but the core belief around diversity and inclusion is the pillar that has stood strong since the beginning.Deepica:And so, for me, on an actual tactical level, the first 20,000 followers, I would say, came directly from my following, from... I remember before we even launched it, I was trying to find photos of deeper skin brown women online, and it was virtually impossible. I was just searching and the team was searching, and I was like, "You know what? Let's use the power of social media." And I just posted on my Instagram, "I'm working on a project on stories, if you see any deeper skin melanated brown women, use #livetinted." I'm not even kidding, within minutes, the #livetinted was flooded with just tags. It was just like this community of women who have been thriving to be seen. They are just craving for this industry, who has neglected them, to pay attention to them.Deepica:So, when you ask, how I did it, sure, my following definitely helped do it, but what really did it was that there was just a natural need. These people didn't have another home, and they were excited to finally have it. And so, I also think that it grew from just being a South Asian Brown collective to being much larger. Because again, I talked about topics that were very specific to me and my life. I didn't force it and try to speak to something that I didn't know personally. And with that, I recognized colorism is not an issue in just the South Asian community. To be honest, I'm learning so much as we build this brand that... I had no idea, this is something that so many different cultural backgrounds face around the world.Deepica:And that actually, excited me, because I realized that there is an opportunity to create a brand with pillars that, like I said, unite people from all different cultural backgrounds rather than divide. And so, it just organically grew from there, just by talking about things that I lived in and experienced in my life.Stephanie:Yeah. That's very cool. So, how many people are in your community now?Deepica:Well, it's a tricky number, because I say 600,000 because I include my community as well. Because quite honestly, my whole brand has shifted to just LIVE TINTED stuff, Which I love. Yeah, we're a little over 600,000.Stephanie:Cool. And how do you think about keeping them engaged on the different channels? What are you doing now that's maybe different than when you started out in what? 2015, 2017?Deepica:I mean, yeah, because my brand started in 2015, and then LIVE TINTED started in 2018. But you have to evolve with the times. Perfect example is, hello, TikTok.Stephanie:Yeah. Actually, my favorite influencer is an Indian girl on there with her dad.Deepica:Oh yeah, she's amazing. I love her.Stephanie:What's her name?Deepica:Sheena? Is it Sheena? It's starts with an S.Stephanie:Yeah. She's so funny. But you never see her dad, it's always just his responses to things that she's doing. I've never seen her dad anyways in any of her videos. But she's my favorite. She's hilarious.Deepica:I'm obsessed with her. And yeah, I feel like there's this understood brown community bond where you're rooting for each other, because it's like, so many of us were told to be doctors and go down this traditional path. Yeah. One of my goals for the brand is to spotlight not your traditional beauty influencers, but people like her who are just creative creators. I think there's this incredible creative community that I've come across just from building LIVE TINTED that deserves so much spotlight. We have big plans to only continue to spotlight them in a bigger way as the brand continues to grow, Which I'm excited about. What was your question, again?Stephanie:[inaudible] Yeah. Okay. So, [inaudible] I like to derail things every once in a while, but back to saying... You said you had to change with the times, from what you used to do to what you do now, and you said, of course, TikTok, what are you doing today to keep your audience engaged? And how do you think about treating the different platforms different, [crosstalk] people right now are connecting with them best?Deepica:Well, I think, first and foremost, I don't try to pretend like I know something that I don't know. And so, luckily, at this stage in the business, bringing in an intern that's in college that can do TikTok for us, because I'm like, "Wait, what is this dance move? What's going on?" So, I think hiring subject matter experts is something that I feel like, finally, oh my gosh, because I've been just doing everything for the longest time that now, it's like, let's hire for people to do what they're good at.Deepica:But of course, you have to have a pulse and know what to even hire for, right? It's like, am I looking for an email expert? You have an X amount of budget, if you're going to focus in on email versus... Social versus paid versus all these other marketing levers, you know what makes sense? For example, for us, influencer is such a critical part of the business, because a lot of them are my personal relationships, but we need to continue to grow that network to the people... Just like the girl you just mentioned, there's a whole community of people that are continuing to create and build every year, and so, for me, it's about staying on the pulse and making sure you feel comfortable evolving with the times.Deepica:Facebook is still a powerful, powerful sales channel, for sure. And so, we do need to be relevant on there. But if you're a small team, and you have to pick and choose your efforts, for us, it's been deprioritized, and eventually, we'll get back there. But I'm way excited about LIVE TINTED impacting the next generation and helping them be a more tinted future, where everyone sees beyond the hues of their skin.Deepica:And so, I get really excited about tapping into a younger audience because they are the future of this entire industry, than going towards maybe an older audience. So, these to me, are just the little things you have to keep your mind on, what is your goals? What is the audience you think that you can really tap into? And what are they doing? And then, you decide your marketing leverage based on that.Stephanie:Yup. So, how are you thinking about tapping into TikTok then? I mean, you're mentioning partnering with an influencer who isn't a beauty influencer, but could still probably drive results. And I know earlier you said influencers, and you kind of cringed too in thinking about that. So, tell me a bit about, how do you partner with them? Does it work? How do you make sure that it works? All the details behind them.Deepica:Yeah. I cringed because I feel like the word influencer has been so like... It's been created into this like comedic relief for people, and I think that's what makes me cringe. But one thing that I feel really, really strongly about, is the value of these creators. I think of them as creatives that are just really changing the landscape of marketing. And I think that it's just the word influencer used to really make me cringe because I felt like it wasn't respected. And as somebody who went through being an influencer, and I still am an influencer, at the end of the day, [inaudible]... By the way, something people forget is influencers have always existed, they were just called celebrities before.Deepica:The definition is evolving and changing, and it's going to continue to evolve and change. If you have a platform and an audience, you are an influencer, you have an influence of some sort. And I think it's actually a really powerful thing, if you think about it, because it makes you realize, anyone can be an influencer, and it makes people empowered to use their voice. But the part that I get really excited about, like I said earlier, was this creative community, and how we can work with them. The same way I told you, these girls were just wanting to be seen. These creatives are just wanting to be seen, and they've never been given the opportunity to be seen. So, how is it that LIVE TINTED as a brand can tap into these people, and really invest time and effort as an internal team to search for these people, and work with them, and not go against the grain, and go against who everyone else is wanting to work with?Deepica:Listen, we're still a small company, so paid partnerships is something that I can't wait to be able to do. It's like, are you kidding? I went through it, I want to be able to do it for other people. So, we're working on trying to grow those relationships now. So, when we have a full budget in place, we support these, I would say, underdogs, versus going towards the people that everyone else was going to, because that's no fun.Stephanie:Yeah. And I mean, that's a big theme that I'm hearing too, is finding more of the micro-influencers who have a very engaged following, but they might only have a few thousand followers, versus a million, but those few thousand are ready to convert and really buy the products, and do the things that you're doing. How do you go about finding those people? I mean, it seems hard to have to go through TikTok and Instagram, and find people that might not show up on your feed right away, if you are kind of searching through all that.Deepica:Well, there's a lot of cool tools now that we've actually just invested in, which... Honestly, for me, my plan was to do it the old school way, of just investing the time, finding people, and I think, that to me, was the way to go, but there's supplemental tools, like there's this new platform... I sure don't know if it's new, it's new for us, called GRIN. And it's a way to manage your influencer partnerships and relationships, so you can actually have data and analytics to back up why you're doing certain decisions. And it's like, traditionally, in PR, you send products out, you hope somebody posts about it, who knows if they do? Tracking that is really... It's just a lot, so you need to have the manpower to be able to do it.Deepica:And now there's these tools in place that make it a little bit more scalable, which is really great. But I don't think anything can beat the just human aspect of finding a gem of a person and saying, "This is who I want to grow with." And I now, luckily, now that there's a team in place, I can spend my time doing those things, because, first of all, I truly believe that is the special sauce that comes from a brand, is those little efforts you put in that take time, that really set you apart from the others out there. I don't want to be the person who partners with the biggest TikToker, and not just because of the financial reason, which I think... I don't want to speak for other people, but I think a lot of times, the theme is to go to micro or nano influencers because of budget reasons. And to me, it's really exciting that they're untapped, and have a voice, that they're... You just want to continue to empower that voice, I guess.Stephanie:Yep. Yeah. I love that. So, how do you think about strategic partnerships, or when it comes to when you're getting investors? I mean, I'm thinking, okay, you have Bobbi Brown who is very big in the makeup space, what did that look like? Did you have that in mind when you partnered with her, like, "Oh, maybe you can kind of showcase my line along with your brand?" How does that work? And how did you think about picking strategic investors instead of just going with the first person who might give you money?Deepica:Yeah. That's actually exactly what happened too. So, I learned so much through my fundraising process, so it was my first time doing it, and what I came out of it realizing was, nothing is more valuable than experience, and that includes a cheque. I think I was taking people's cheque, but really, what I was taking was their experience, that's what I wanted to learn from.Deepica:And so, I had a couple term sheets where it was like one large cheque from one VC... Which, by the way, that whole process is a whole thing in itself. But I feel grateful to say that... I actually don't feel like I had as much trouble being a woman of color getting investors on board as much as I think I've heard a lot of my other girlfriends who are women of color, specifically, black women, which is just all sorts of messed up in its own, that... I feel very, honestly, grateful that I didn't go through that, but I also think it's really messed up that I didn't go through that as much. But that process has taught me so much in what I want to do in my future of... There's so much I want LIVE TINTED to do to help other women who want to create their own brands. But when I went through that process, I was like, "Wow, I really don't want one person this early in my business to dictate my decision-making."Stephanie:Yup.Deepica:You're learning so much in the beginning, and the last thing you want is for someone who knows nothing about your business, who just gave you a cheque, to say, "You need to go into this retailer, or you need to do this partnership, or grow this, or hire this person." So, instead, what I did was tap into a network of people who I worked my off to build my entire career, and tell them, "I'm launching my own brand, and you've been somebody who has been a mentor in my life in some capacity." And really positioned it as an opportunity to be a part of the growth of what I'm building. And I feel very confident about that. I still feel that way. I know and I feel very competent about what I'm building, and what the impact it's going to have on the world.Deepica:And so, I went to all of these mentors or just advisors in my life, and they put in more angel cheques, strategic angel cheques, really, just to get their advice. I'm learning from their mistakes. Andy Dunn from Bonobos, the other day, I sent my annual investor update, and he was like, "Just continue to focus on profitability, don't overspend on marketing, learn from my mistakes." I'm learning from all of their mistakes. Payal Kadakia from ClassPass, she would say, "Focus on your why, don't ever get distracted from the why." And Bobbi Brown, she was the first to tell me, "Go on a motherfucking date." That's what she told me to do. She literally, told me to go on it, and she used that word. So, that's why I said that, I apologize [crosstalk].Stephanie:That's okay.Deepica:But that's Bobbi for you. She is such a dope woman. She is no BS. She told me, she was like, "At the end of the day, you will succeed because that's who you are, but you don't want to look back and wonder, what was it all for if you don't have someone to share it with?" And so, maybe that's a part of the reason I came back to Texas, and I'm kind of taking a step back and zooming in on things. But they all give me different advice for their own nuggets of what they went through. And Hayley Barna from Birchbox, is now a partner at First Round Capital, she put in a personal cheque, and I feel like I could always call her to ask her about fundraising advice, because they've obviously raised so much money.Deepica:It's just truly invaluable to be able to talk to people who've gone through the mistakes and the wringer to say, "I'm thinking about [inaudible]..." I'll give you an example right now. Food52, I love what they're doing. You mentioned them earlier, I love what they're doing. I love the idea of a collective ecommerce shop where you're creating content to commerce. I think it's really smart. And I've gotten distracted in the past of wanting LIVE TINTED to also be that as a collective home for inclusive beauty. I wanted to create the next sephora.com that truly zoomed in and focused in on, you won't be on our site unless you are caring about inclusivity. That doesn't mean you have to be a POC owned brand, we will absolutely prioritize it more than most people do, but I had this vision.Deepica:And at the end of the day, I think the biggest, hardest thing for founders to remember is to stay focused, eye on the prize, and I think... That doesn't mean I don't want to still do it one day, but we have way too much momentum happening as a singular brand that I think I just have to stay focused. And these kinds of founders in my life, if I called them, and I'm like, "But what if we, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah." They will all pull me back and say, "All in good time, young grasshopper." [crosstalk].Stephanie:That's awesome. And I mean, that is the time when a lot of founders do kind of want to start seeing profit, want to go big, want to experiment a bunch of different areas, and I think that's really smart. And I also love Bobbi Brown's advice too. I mean, I love the personal aspect when you find people like that. Deepica:Another thing, on the Bobbi Brown thing, her specifically, we met through the DM.Stephanie:That's great.Deepica:Yeah. You can connect with anyone in the world, you have no clue what the power of social media... There's so much negative that comes with it, but there's so much positive. And I remember on my launch day, I was in New York City doing a ton of press, and I went to Jersey to meet with Bobbi Brown in person, and she was like, "Wait, your launch day is today, and you're here?" And I was like, "Yeah, you're Bobbi Brown." [crosstalk].Stephanie:I'm here.Deepica:Yes, of course, I'm here. Because to me, she was doing inclusive beauty before inclusive beauty was inclusive beauty. And as a Jewish woman who grew up in New York, I just find it to be so impressive that she recognized that... She sees it as like... Obviously, I care about making sure that everyone feels represented, that's how she sees it, and I feel like I wanted to learn from that person. I want to create my own Bobbi Brown cosmetics one day, and I feel like with her guidance, I'm well on my way.Stephanie:Yeah. That's cool. So, I mean, you have a lot of good mentors and investors. I mean, Andy Dunn is another good one. He actually was our first investor in our company too-Deepica:Oh, wow.Stephanie:[inaudible]. So, good people you got there. What is something that they're guiding you on right now for 2021? How are they kind of... I mean, Andy has Walmart, but he got to look at... He has a lot of things that he can see around ecommerce at Walmart. What are people like that saying right now? Like, "Hey, Deepica, you need to start preparing for this. Or we're seeing this shift at our company, so maybe you need to kind of pivot, or adjust, or do something different to be ready for this new world." Anything high level like that?Deepica:I think the biggest theme and general advice, is slow and steady growth for the win. And that's very different from what I was told when I was first fundraising in 2018, it was all about the next billion dollar unicorn company. And I have a couple of people who were unicorn companies, Payal Kadakia as an investor, and it's like, they are all also advising me like, "Just don't get caught up in the noise, don't get caught up in the quick turnaround story." And the more I'm seeing what's happening in this bubble, that's kind of bursting, it's like, "I'm so happy that we didn't take on a ton of funding, we're growing slow." And I'm going through the fundraising process right now for our Series A, and the reality is that we don't need to fundraise right now. It's this back and forth of like, we're doing really well and we can go really slow.Deepica:But at the same time, like you said, Andy is with Walmart, and one thing we're exploring right now is retail partnerships. And so, one thing that I think is very apparent now is, it's a very different ecommerce and D2C climate than it was five years ago, as we know. And I think the idea of being omni-channel, it's not an option. We have to be omni-channel to also beyond just like the business and the metrics, because myself being, again, that 16 year old girl who dreamt of having her own beauty brand, it's about impact too. And I want my physical products to be able to be touched and held by people who are in store. And again, go down those beauty aisles and actually see yourself represented. And I feel like we're the brand that needs to do that in a big way.Stephanie:Yes. Beauty feels hard to me though from ecommerce. I mean, I'm just thinking about... I went to Tarte, which is of course, a beauty website, and I was ordering things on there, and it still feels so hard to figure out what you need to buy based on your skin tone. And it's asking me all these crazy questions, which you're probably like, "Yeah, those are obvious ones." Like, do you have a pink with a yellow undertone there?Deepica:Undertone.Stephanie:I'm like, "I..." And it literally has 50 options, and I'm like, "I don't know, am I pink? Am I yellow? Am I green? I'm not really sure." So, beauty feels hard. I mean, I know obviously, being in retail, being in person is important, but during this time right now, where that's been a little bit harder, how did you think about adapting your ecommerce experience in a way that people could know what they wanted, or what was meant for their skin? It just feels so hard.Deepica:And it is really hard. That's totally true. We're actually going through a site revamp right now, and it's all going to focus on community, which I know is such a buzz word. But the best thing we can do is tap into all these people who, again, have been just dying to be seen and be featured. And they're not like the person with all this following, whatever, this massive following. And to me, what we can do is... The best marketing tool we have is them, and see them, the product, have them create the content, have them be the things we feature on our website, so people like you can go directly to the site and see themselves and say, "Oh, well, I look like her." It just helps.Deepica:I think Rent the Runway is the first example I saw of a company that... I remember shopping it and picking a dress, because I saw girls who had my body type, and I was like, "Oh, well, she..." All the reviews, I think it was [inaudible] that they used on their website that is really great customer review experience. And I remember when we created livetinted.com, I wanted to use [inaudible]. So, we do for our review system, because I wanted it to feel really real, a yelp kind of situation where you're truly feeling like you trust that person telling you which product works for you.Deepica:So, it's tough, but there's tools and ways to make it better. And I think just leaning into people and humans, and having them be a part of the experience, and creating a really strong customer service experience so they want to meet that review, is all important.Stephanie:Yeah, that's great. I also think that technology is evolving to a place now where... You should be able to have your face in front of your camera, and take a picture, and then be like, "Here's exactly what would go best with your skin tone or something."Deepica:It's getting there, and there's apps and stuff too where you can do that, but lighting is such a factor. We're getting there, but with beauty, it is tricky. And I think all the tools I've seen this far, none of them have worked for me. That was one of the business ideas I wanted to do in college, I was like, "It's just too hard to shop for beauty online." We'll get there though.Stephanie:Yep, I think so, too. All right. So, 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 a minute or less to answer. Are you ready?Deepica:Yeah, sure. Okay.Stephanie:All right. What one thing will have the biggest impact on ecommerce in the next year?Deepica:I would say new ways of leaning into people and community. Yeah. I just said that, but we're currently revamping our ecommerce site, and the biggest thing we're focusing it on is people and experience, and tapping into the human aspect of what people are looking for when they're buying something, which is as emotional as a color corrector to solve their dark circle issues. And so, I think if you continue to focus in on people, community, how they can drive purchase decisions, you'll thrive in the ecommerce world, especially in beauty where things are very... You want to see yourself reflected.Stephanie:Yep. I love that. What's the nicest thing anyone's ever done for you?Deepica:Wow. Is this personal or business? I mean-Stephanie:Whatever comes to mind, whatever you want.Deepica:This is the first thing that comes to mind, because we just talked about it. You should always value every person you meet in life, because you never know where it's going to lead, and come back, and connect, and help you in the future because... I didn't work directly with Hayley at Birchbox, but when I quit my job for her to... She introduced me to XFactor Ventures, which is our first VC that came on board, that gave us our first cheque, which then created a ripple effect that made other people think we were legit, that created another ripple effect. And I think that confidence in somebody who only... I worked with her but at a very bird's eye view and stuff, and so it's kind of like... I'm so grateful for that. And not just her, just generally, I think, when I think about the people who have taken the bet on me, I think it really makes me feel like I'm here for a reason, and I have shit to get done.Stephanie:Yep. That's great. What ecommerce tool are you most excited about right now?Deepica:Right now, it's GRIN, that's the one that we're literally doing trainings on right now. We're really trying to optimize. I think the influencer partnership space is something everyone's trying to figure out and find a way to scale, and I'm hoping and hopeful that GRIN can help us do that.Stephanie:Yeah. Wow, that's awesome. We will check that out also. If you were to have a podcast, what would it be about? And who would your first guest be?Deepica:Well, I'm working on getting this started, but it's going to be... It will be called Hue To Know, which was... Instead of [inaudible] To Know, Hue To Know.Stephanie:Yeah. I like that. That's cute.Deepica:And we had a whole video series for LIVE TINTED when we were just a community platform, where we interviewed people, they came on, and they talked about their identity and culture, and it was all these... To me, they were dope creatives, again, people that you should know about that you may not, like a black Muslim rapper, or a gender nonconforming South Asian artist. And these people who were like, "I'm going against the grain and creating a path for myself, and living tinted." That's really, to me, what that means, and what LIVE TINTED stands for. So, I want to bring them on as a guest, and create it into a podcast form. And my first dream guest would be Meghan Markle, because I think she's incredible.Stephanie:That sounds great. Well, if you need help getting off the ground, you know who to call.Deepica:Great. Okay. Cool. Yeah.Stephanie:All right. And then, the last one, what is your favorite business book where you often go back and think about it, or read quotes from it, or whatever it may be?Deepica:Man, I wish I had it so I could show it to you right now. This was a pile recommendation. It's called Financial-something, Financial Terms... Financial... I'm going to have to find it and send it to you.Stephanie:[crosstalk].Deepica:Yeah. But she told me... Before you go into fundraising process, as a person who's never done it before, there's a lot of terms that get thrown around, like convertible notes, and cap tables, and all this stuff. I didn't know what I was doing, so she was like, "It's going to feel like you're reading a dictionary, and it's going to be dense, but you want to be able to walk into those meetings with full confidence, and I highly recommend that you read it." And so, I have to look for the book and find the name. There's a lot of different terms in there, so I'm blanking on the title itself.Stephanie:Yeah. I think there's a good book that it reminds me of called Venture Deals by... I think it's Brad Feld-Deepica:That's what it was.Stephanie:Oh, is that what it is?Deepica:Damn it, it was Venture Deals. You're right. Yes. Yes.Stephanie:Okay. Well, [inaudible] because I'm like, "That's a good one too." Where I remember-Deepica:That was it.Stephanie:... when we were thinking about raising money, I'm like, "All these terms, I don't know what they are. Pre-money, post money, cap table. Oh my God, what are we talking about?" So, that's a good book for anyone raising money right now.Deepica:That was it. Mm-hmm (affirmative).Stephanie:Awesome. Well, thanks so much-Deepica:[crosstalk] But it's a good book, but yeah.Stephanie:Yeah, yeah, yeah. It's a good book. And then, after you read it, you're like, "Okay, I'm done with that for a while." Awesome. Well, thank you so much for joining the show. It was so fun having you on. Where can people find out more about you and your work?Deepica:Well, I'm obviously, going to plug LIVE TINTED first. LIVE TINTED is L-I-V-E T-I-N-T-E-D, livetinted.com. @livetinted all on social. And then, you can also follow me at @deepica, D-E-E-P-I-C-A on all social outlets.Stephanie:Amazing. Thanks so much.Deepica:Thank you for having me.

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.

We’ve all seen it — maybe some of us have even fallen for the trick — you’re on an ecommerce site and a big “Wheel of Savings” pops up. This innocent-seeming discount offer, though, isn’t what it seems, and it’s doing damage to the end-user spinning the wheel, and the site the wheel pops up on. The world of malvertising and browser extensions has been causing headaches in the ecommerce world for years and brands are constantly looking for ways to fight back and regain control of their websites. Matt Gillis is helping with that mission. Matt is the CEO of clean.io, which offers real-time protection against malicious actors and code for some of the most-trafficked websites in the world. On this episode of Up Next in Commerce, Matt takes us through some of the methods bad actors are using to install malicious code on ecommerce sites, and he gets into the nitty gritty of why browser extensions like Honey and Wikibuy are hurting brand bottom lines, and why those extensions are making marketing attribution nearly impossible. But he also offers some solutions, too, so that ecommerce brands can finally win back control of the user experience. Enjoy this episode!Main Takeaways:Good Guy or Bad Guy?: Traditionally, malvertising is done by bad actors who infiltrate websites and take over through ads. But in the world of ecommerce, the bad actors are actually manifesting in the form of Fortune 100 companies that profit from website extensions like Honey and Wikibuy, which disrupt the user experience of the customer on the original ecommerce site. Solving that problem is the challenge for ecommerce brands that want to take back control.Sneakily Effective: In the malvertising world, the bad actors are at the top of the marketing game. They can achieve a 100% click-through rate at little to no cost because they are using sly, untraceable strategies. Targeting and eliminating those malvertisers is critical in order to level the playing field for ecommerce marketers to have success moving forward.Last Line of Defense: Publishing platforms hold most of the responsibility for the end-user experience. Everybody has a role to play in minimizing the risk of malicious buyers or advertisers, but ultimately, the publisher is the last line of defense against malvertising moving into the user experience, and they should be held accountable.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone. And welcome back to Up Next In Commerce. This is your host, Stephanie Postles co-founder at mission.org. Today on the show we have Matt Gillis, the CEO at clean.io. Matt, welcome.Matt:Stephanie, thanks for having me. I'm excited.Stephanie:I am very excited to have you here. We were just talking about how cool your background is, and I think that's actually kind of a fun place to start of where you're at in the world. And tell me a bit about your background.Matt:Yeah. Hey, so I'm in Baltimore and we actually just took possession of this office in February, right before the pandemic. And so the irony is I've been here every day since the pandemic started pretty much.Stephanie:By yourself?Matt:But I'm by myself. So we have 4,000 square feet. We just did the mural right before the pandemic and no one on our team has been able to experience it pretty much. But yeah, cybersecurity company located in Baltimore, we're about 45 people, I guess you could say solving this problem of untrusted and malicious JavaScript that is ruining user experiences in revenue across the internet. That's us in a nutshell.Stephanie:Cool. Well, I am really excited to dive further into clean.io. Before we do that though, I was hoping you can kind of go through your background because I saw you've worked at places like AOL, you've been in publishing. You've been in ad space. Tell me a bit about what you did before you came to clean.io.Matt:So full disclosure, I'm old. And so I've been around a little bit. I've had some fun. But yeah, I think key things I've spent probably the last 20-ish or so years in a couple of different capacities. Right out of university, I started in the mobile industry and mobile at that time was just making phone calls, that's it. There wasn't even texting then.Matt:In fact, my job back in those days was I would stand on a golf course at a golf tournament and let people make free phone calls because that was the cool thing to do then. No one had cell phones and if they did, they were like those brick ones. You remember those ones that you couldn't fit in your pocket?Stephanie:Yeah. And you were the cool guy like, "I've got access to an awesome phone, anyone want in?"Matt:Yeah. And listen, men and women would come up to me and they'd be like, "Can I call back and check and see if I have any messages?" And so that was the cool thing to do then. I know it sounds so crazy that was a thing at some point, but yeah. So I worked at mobile operators in the early stages of my career.Matt:So I worked at Bell Mobility in Toronto, Canada. I'm from Toronto. And then I moved down here to work at Verizon Wireless. And at the end of my tenure at Bell Mobility and my tenure at Verizon, I was focused on some of the services that you live by on your cell phone today. So this was in kind of late '99 and then the early 2000s of things like video on demand on your phone, playing games on your phone, downloading ringtones on your phone, I'm sure you did that.Stephanie:Oh, ringtones, yeah [inaudible].Matt:They were, obviously a huge business at some point.Stephanie:Now if my phone rings I'm like, "Stop it, what are you doing? Who's calling me? Don't call me, text me."Matt:Put it on mute. Yes, exactly. So I was kind of part of the foundational days of things that you would do with your phone, before the iPhone. And then I went and took a swing at being an entrepreneur and joined a little small video game company. Our biggest game was Who Wants to Be a Millionaire? We did a lot of TV game shows. So we did, Are You Smarter than a 5th Grader? And things like that.Matt:So I kind of walked the mile as a publisher for a while and then Capcom, which is the Japanese video game company acquired us. So I ran their publishing business for a few years and I got to experience what it's like to be a publisher and how hard it is to make money.Matt:And that was kind of in those early days of the iPhone where I'd say to people, "You'll go and spend $5 on this latte, but you won't pay $5 for unlimited use of a game over a period of time." And this is back in 2008, 2009. And so we had a real struggle and people weren't wanting to pay for our games. They want them free and free became kind of the thing on the iPhone.Matt:And so recognizing that struggle, I actually joined this company called Millennial Media, which was one of the earliest mobile ads platforms for app developers, helping app developers make money with ads. Some of our biggest customers at the time were like Words with Friends, if you've played Words with Friends-Stephanie:Yes, I have.Matt:... ads in every game. So we were kind of one of the foundational tech partners with folks like Words with Friends and various other games across the internet and apps. Did that for eight years through an acquisition with Verizon and AOL. And then we acquired Yahoo. So I ran the publisher platforms business at the combined entity of those companies, which was awesome.Matt:And one of the biggest problems in my time over that period was this thing called malicious ads, or malvertising as they call it. You probably are familiar with when you're scrolling away on your phone and all of a sudden it redirects you and says, congratulations, you won an Amazon gift card. And you're like, "I didn't click anything." Or spin the wheel for your chance.Stephanie:Yeah. I did that once I fell for it. I was like, "Oh, I spun it." I couldn't help it.Matt:Never spin the wheel, Stephanie.Stephanie:I only did it once, but yeah, afterwards I'm like, "That was a bad call. Why did I do that?"Matt:Yeah. So it was a big problem in my past life. And there were a few folks that were solving this problem and two of them were folks that I had worked with at AOL. When I left, it was called Oath at the time, which is Verizon Media now.Matt:I went and had lunch with these guys and they told me that they were spinning up this company called Clean Creative and set to solve this problem of malvertising. And I didn't have a job and it was getting too cold to golf. And so I said, "Hey guys, can I be an intern?"Matt:And so I came and hung around for a couple of days a week. And I was like, "You guys are really onto something here because this was a massive problem in my prior life." And so I said, "Hey, can I have the keys?" And they obliged. And that's how I'm here, started as the CEO two years ago. And we've kind of been blowing it up ever since. That's awesome.Stephanie:Yeah, such a fun story. So what is your day to day look like now? And what's your best day in the office look like while you're there by yourself? Are you around skipping around bicycling around the big office? What is your days look like?Matt:I do pace and I get my steps in over there. Day-to-day, we're startup, so we're small. And so as any of your listeners would know at a startup you do everything, and you take the trash out and you sign big contracts, hopefully you raise money. You kind of do run the gamut. So it's a little bit of everything. If you've worked at a startup you know that generally speaking, there's epic highs and epic lows. And so you have those days where you are the king of the world and you and your team are high-fiving and celebrating. And that's a little different now because you got to do it all virtually.Matt:Part of being at a startup is you get that culture of everybody generally speaking, being in an office like this, but we're a widely distributed culture now. We were before the pandemic where we kind of had, I don't know, five or six or seven locations among all of our people, but now we have 40 locations. So it's just like any other gig except there's really no net underneath you. You're walking this tightrope and hopefully you get to the other side.Stephanie:Yes. I definitely feel that.Matt:It's fun though. Isn't that why you do it?Stephanie:I mean, yeah, it's definitely really fun. Other times you're like, "Oh my gosh, I'm responsible for so many lives." And then other days it's like, "This is fun." So it's a good balance.Matt:Yeah. I mean, I won't lie. I had months of sleepless nights when we were raising money. We most recently raised our series A and we started raising it in March, right at the beginning of the pandemic. And yeah, all these people's jobs, for me, the pressure was on me to make sure that we could raise money and continue on this mission.Matt:The reality is, is the people behind the scenes are the ones that actually made my job easy because they're the ones that enabled me to go and tell the story of our massive revenue growth and our massive traction and our product market fit and all of that sort of stuff.Matt:Startups are hard, but there's a reason that many people once you leave the big company and you actually go and take your swing, that becomes the thing that you keep doing and doing and doing because you like having that euphoric feeling.Stephanie:Yeah. No, I definitely agree. And I mean, I think it's a good reminder too, as the CEO at any company to kind of get out of your way and hire a team that can support you and do things, but then let you do the higher level things like selling, raising money, such is a good point for, I think a lot of business owners who want to kind of stay attached to, "I've always been coding." Or, "I always did this part of the business." You need to step away and find people who can step in for you so you can go on to the next thing.Matt:Yeah, and focus on your strengths. Don't try and overcompensate and really... We did this thing called StrengthsFinder with our leadership team. And it was really about figuring out what are the strengths across this group of people that are practically leading the company. And you go, "Okay, well, I'm really good at this, this and this. And you're really good at this, this and this. Wow. We compliment each other. I should continue to keep doing this stuff. And boy, we should just let you handle all of this sort of stuff." So yeah, hire a diverse team and hire people that are way smarter than you and you'll be successful.Stephanie:So how have you seen the digital security landscape change? Maybe even over just the past year or two, what new things are popping up, what should e-commerce owners be aware of right now that maybe wasn't happening last year or two years ago?Matt:I would say that where we cut our teeth was in this malvertising space and what it is, is malicious JavaScript that's kind of being injected into the user experience through ads. And what we've seen is that the bad actors, the people that are doing it, are getting even more sophisticated over time. They have figured out how to get around the systems. They've figured out how to get around the checks and balances.Matt:And we kind of stumbled into this e-commerce world where we were protecting, we're protecting some of the biggest websites on the internet. There's seven million websites that run our code. Probably many of the websites that you go to everyday either to get your news or to read entertainment gossip, or that sort of stuff if you do.Stephanie:No.Matt:I'm not saying you do Stephanie, but we protect all of those sites; every single page view on those pages, we make sure that the user experience is protected and revenue's protected. And by the way, in that world, it's folks that I would say, delivering malicious JavaScript. What we started seeing in the e-commerce world is there's this whole phenomenon of what I would call untrusted JavaScript.Matt:Now in either case, the premise is you own your website. You should be able to control everything that executes on your website. You should be able to protect your user experience. You should be able to dictate your user experience because it's your website. On the malvertising world, what we saw happening was if folks had ads on their website, they had lost control of the user experience. They had lost control of revenue because any bad actor could just buy an ad and take over the user experience and get you to spin the wheel.Stephanie:Only once, but yes.Matt:Only once, but it happened. And so in the e-commerce world, what we've noticed is there's a lot of stuff happening on e-commerce sites, just like there is in any website that is without the permission or without the authorization of the person who owns the site. The biggest problem that we kind of dug in and gone to solve for is, if you ever heard of these things called Honey or Wikibuy?Stephanie:Yeah.Matt:So these are Chrome extension, Safari extensions, Firefox extensions. They sit resident on the user's device and Stephanie, when you're out shopping on your computer and you get to check out, Honey will pop up and say, "Hey, I've got coupons for you. Do you want them?" You as the user you're probably like, "Yeah, I'd love to get a discount. I'd love a better price, if I can get it without having to do any work." Honey does all the hard work for you.Matt:We think that's not really in the best interest of the merchants because they own their website and now someone is injecting code in and disrupting the user experience, disrupting your revenue. So just like it is in this malvertising world, the same phenomenon is happening over here. The difference is Honey is owned by PayPal. Wikibuy is owned by Capital One.Matt:So the folks that I would call "bad actors" in this world are actually fortune 100 companies. They're folks that you would expect to be able to trust. And what they're doing is they're actually injecting code in to disrupt the user experience and disrupt revenue. And so that's the problem that we've gone out and solved.Matt:We just launched our product that's called cleanCART. And what it is is it's a Shopify app and it gives Shopify merchants the ability to protect their carts at checkout and make sure that they can prevent this sort of code from disrupting user experiences in revenue. So it really is giving control of the websites back to the merchants.Stephanie:Oh, interesting. So when you implement that you just can't get coupons or are there other pieces that it kind of protects as well, or the user can't see coupons from a Honey or something, or are there other things that your app is also protecting against?Matt:So we're in, I would say the second inning of the baseball game. So early stages. We're really focused on to start is blocking the automation of these coupons. So we don't want to block you as a user going in and manually inserting the coupon. We think that's the intended use case. But what we think is unfair is that someone is standing beside you at checkout and handing you a mitt full of coupons and actually not even handing them to you, they're actually giving them and just scanning them all to make sure that they all have a chance to work.Matt:If you think about this analogy, the grocery store would never let someone come and stand beside the checkout and save you 30% off your grocery order while you're already ready to pay. And I think that's the phenomenon that we're trying to solve for in the earliest days, which is, let's prevent the automation from happening. Let's not prevent people from manually inserting coupons. Let's give control back to the merchants because it impacts them in so many different ways. Obviously, it impacts them from a revenue loss perspective.Matt:I talk to merchants every day. Many merchants are complaining that these injections are literally scraping and pulling 30% off of their cart value at checkout. So someone who had $100 cart, they go to checkout, Honey runs and it knocks their cart value from $100 to $70. That's kind of bad for the merchant, especially if that person was going to convert anyway.Matt:The other key thing is Honey and Wikibuy and these other discount extensions have made it really hard for merchants to have discounting strategies that they can track. And so what's happening is that promo codes are ending up in the wrong hands. It's creating an attribution nightmare for merchants where they think that this social media influencer or this Instagrammer, or this YouTuber is driving tons of sales and lo and behold, Honey has grabbed that coupon and is injecting it.Matt:And now every order that comes through where Honey was present on the page is applying that person's code. And so now the merchant not only has bad data that is going to ultimately drive their marketing decisions but now, they're also losing revenue and they're paying out affiliate fees to folks that generally didn't deserve that affiliate fee. So I think it's created a bit of a nightmare.Matt:And so, we felt this kind of pent up demand for this product. And that's exactly what's happened is that no one has solved it. We think we're first to market. And we think it's important that people are fighting for the merchants. There's been 10 years of growth in e-commerce over the last year. The pandemic driving a lot of that.Matt:And we think it's important that merchants really get control of their websites, get control of their margins, get control of their revenue and really get the right data to make the right data-based decisions of how they're going to run their marketing programs.Stephanie:Yes. I think that's a really cool story. You were just talking about how you were looking at a problem that people were complaining about, and then now you guys are like, "Well, let's solve it." Because I've read, I'm trying to think where this was, where they're talking about going to Reddit and looking at some of the threads of people talking about problems that keep occurring and occurring and how you could build businesses just based off Reddit threads. And you guys did that, just looking at problems with what merchants were struggling with. So a really cool example of how to build a business is look at all the problems that are going on and jump at solving it.Matt:Well, and I think the other key thing here is as you know is solving the problem, but also during that process of your hypothesis that you're going to develop of what you're trying to prove, it's you also need to prove that people pay for it. And that's, I think part of the foundation of what we've built here, obviously on the malvertising side, but also on the e-commerce side is it's a big enough problem. People need to protect user experiences.Matt:If you think about just in the internet in general, it's very expensive to create content. It's very expensive to drive traffic. And once you've done those two things, why would you leave it to chance that someone might come to your website and have a crappy user experience? Protect your user experience.Matt:It happened last week on the Harvard Crimson on the crimson.com where somebody was on Crimson and they got one of these redirect ads that took them to this landing page that said, "Hey, you're a Verizon customer click here and take the survey and answer these nine questions and you'll have a chance to win." And this user actually took to Twitter and said, "Hey @thecrimson, which is, I think their Twitter handle, you've got a crappy user experience. Why are you letting this happen?"Matt:I never even saw a reply from the Crimson. But when we did some investigation on what was going on, they don't even have protection on their website. So it almost feels irresponsible at this day and age to not be protecting your asset because your asset generally speaking, isn't your website, your asset is your users.Matt:And so protect your users, make them feel confident that when they come to your site, they're going to have a great experience. And so that's really what we've focused on is just delivering technology that solves a problem that people are willing to pay for. Because obviously without that, we don't have a business.Stephanie:So when thinking about like the Crimson example, that's all from a bad ad being run on their website, correct?Matt:Mm-hmm (affirmative).Stephanie:Someone was able to buy that ad unit have bad JavaScript, and then that's when they were sent to that Verizon survey. I'm I thinking about that, right?Matt:You're totally thinking about that right. And what's interesting about the thread is that when this woman went on to Twitter and said, "Hey, this is what happened. And here's a screenshot," there were a whole bunch of people that piled onto the thread of like, "Oh, here's what I think is happening." "Oh, you have a virus on your computer." Or, "Oh, you have a bad extension on your computer or whatever." Everybody had a hypothesis of what's happening.Matt:And so we actually went and captured the threat and reverse engineered it and said like, "Here's exactly what's happening." And yeah, it's all coming through ads in that case. And there's so many great things of the open programmatic ecosystem.Matt:So programmatic media being able to buy a single oppression at a time by single user real humans, real devices, real networks, like you know I'm having a one-to-one engagement with this person and in the malvertising world, that's a feeding ground for bad actors because they get to do the same thing.Matt:And quite frankly, they're better at it than any other advertiser out there because they're the ones who know how to pay 20 cents CPM and buy an ad and actually get 100% click-through as opposed to the rest of the world that's just hoping that they get a half a percent click-through rate. And so they figured out how to buy that ad, that ad renders on your device.Matt:And then usually it's like an onTouchEvent. So when you actually just touch the device, they put a transparent overlay on your device. And that turns into a click or they'll auto click something on your behalf, or however they decide to inject their technology. But yeah, it's as simple as that. And I think it's lucrative, otherwise-Stephanie:They wouldn't be doing it, yeah.Matt:What they do is they try to do it at the lowest possible level without getting caught. So if you think about sophisticated marketers, what do you do? Well, you pick the right users, you maybe frequency caps so that you don't lambaste them with ads. You want to hit them at the right time with the right message and all that sort of stuff.Matt:And so these bad actors have figured out how to very elegantly and in a sophisticated fashion, they'll hit you with that ad. But the reality is they'll probably frequency cap you to one so you can't reproduce the experience and that's how they evade getting caught in most cases.Stephanie:Yeah. Very interesting. I didn't understand the whole backend of how that works. I mean, I do spend a lot of time thinking about building incentives for advertisers because we build up our own ad networks to advertise our podcast and we bring on partners all the time.Stephanie:And it's really funny thinking through how to build incentives for especially newer advertisers when you might say something like, "Oh, we'll incentivize you based on a download." Then all of a sudden you're getting all these fake downloads. No, not downloads. We'll incentivize you based on consumption. Like, does someone listen to the episode? They wanted to hear it.Stephanie:And then you see instead of actually having good people come through and consume the episode, the advertiser will say, "Okay, I'll pay you to review the ad or review the podcast, which makes it show that you were consuming it because you had to for maybe a minute to then be able to review."Stephanie:And it's always interesting trying to figure out, I mean, and these people are not good actors maybe, I'm not really sure. But it's always very interesting thinking, how do you incentivize people to do the right thing and actually deliver and not try and always get around the rules and just meet a number which I'm sure a lot of the platforms deal with the same kind of thing, but-Matt:It's interesting you use the word incentivized, and that was a dirty word in the early days where most advertisers didn't feel that the word incentivize was a good user because they didn't truly have the intent to do the thing that you want because they were being paid or a bounty or whatever the thing is.Matt:I saw the evolution of incentivized in my mobile career where it became really hard to get people to consume video commercials, like 15, six second whatever that metric was. And in the games world, they figured out this thing and they actually rebranded it instead of calling it incentivized video, they actually called it rewarded video. And-Stephanie:I feel like that's a little more, I don't know.Matt:Well, listen, and so I talk about one of the apps that I love is this app called Candy Crush. And I've been playing candy crush for almost 10 years now, I think. And when's the last time you played the same game for 10 years? Like never?Stephanie:Yeah. That's impressive.Matt:But they've artfully integrated video into their app. And I think if you run out of lives, you can watch a 30 second spot that is unskippable. So you have to watch the whole thing. And then if you, do you get rewarded with that extra life or whatever it is, maybe a lollypop, I don't know. But yeah, so I think there's different ways to approach it. But you're right, usually when you figure out the bounty, everyone else figures out how to capitalize on the bounty.Matt:And I think the interesting thing with Honey and Wikibuy is they've figured out how to get paid for the bounty or get credit for the bounty when lo and behold, they didn't really do anything. All they did was they had code that was resident on the machine that allows them to kind of get credit for that user purchasing when I think it's questionable whether they had any influence on that.Stephanie:Yeah. I've kind of thought that too, when seeing different Instagrammers with their promo codes for e-commerce site. And I always thought like, "Oh, how does that attribution work?" Because I mean, she's sharing it here, but I'm sure it's very easy for someone who doesn't follow her to also find that code outside of a Honey, but just be like, send it to my friend, "Hey, use this code." They never even followed her and now, they've got 25% off or something. So it does seem like attribution can be tricky, even if someone's not using Honey. How do you think that world's changing right now to make it easier for merchants to track where their sales are actually coming from? It feels very messy.Matt:Oh, I agree. I think it's a total mess. That's why we focused on the automation because I think that's one of those low hanging fruit, but big problems. Honey will tell the world that they have 17 million or so users. I don't know if Wikibuy which is now called Capital One Shopping, I don't think they announced how many users they have. But what I can tell you is both of those companies are spending a tremendous amount of money acquiring new users.Matt:Every time I log into Twitter, usually the first ad that I get is from Honey. All throughout the Christmas season, the holiday season just recently Capital One which owns Wikibuy Capital One Shopping, they were running TV commercials for this product with Samuel L. Jackson and John Travolta. So there's like a tremendous push for them to grow these user bases.Matt:In talking with merchants and we've got, I don't know, we've got maybe 25 merchants using our product right now. And we're in closed beta. That problem that you just mentioned, which is, "Hey, I worked with an Instagrammer and I gave them a code. And all of a sudden two days later, I've had a vitamin company tell me that story. I've had a sporting goods company tell me that story. I've had a toilet paper company tell me that story.Stephanie:They're using Instagrammers?Matt:They're using Instagrammers. They're using YouTubers. They're actually using podcasts as well.Stephanie:I mean, interesting to see how they're partnering on toilet paper.Matt:Because they're partnering for the audience on these podcasts and they're hoping that they can get that audience to find out about their product and again, then they're incentivizing them to come and become a customer. It's basically the same net story. The vitamin company told me they're like a supplement company. They partnered with one of the biggest triathletes in the world.Matt:Let's just say they had 50,000 or 100,000 followers, but you've got to imagine they're probably rabid followers. If you're into that, then that's probably the gold standard of who you would listen to. And that person did some blog posts and did some Instagram posts and posted their code and as soon as it happened, they saw a surge in sales attributed to that person.Matt:Now, the marketing person at the company was like, "Oh my gosh, we figured it out. We nailed this. We knew that people would be rabid about that person's content. We knew that person had so much influence to get people to come and buy." And then they're like, "Oh my God, it's Honey." Because literally they went from zero sales to 80% of their sales that had coupons was that person on Monday.Matt:I think it's a frustrating problem. And I think the sophisticated marketers have woken up and are like, "Man, we're bleeding money." One merchant told me that when they started kind of parsing out the attribution that Honey was costing them. They did about a million and a half in revenue online per month, so call it a $15 million business give or take. They believed that these promo code extensions were costing them about 150 grand a month, 10% their overall value.Stephanie:I mean, we just had a guest who they ranted about their hatred of Honey, I mean, even on the show. So I think it's maybe a couple episodes before maybe when yours is going to go out.Matt:Call me. We can help.Stephanie:Yeah, I'll send the link so you can hit him up.Matt:Absolutely.Stephanie:He was not a happy dude about Honey. But I guess when I think about promo codes, it kind of feels archaic to me. Maybe this is just a me thing, but it feels like where QR codes were where all of a sudden they're gone and you don't even think about them anymore. Promo codes kind of feel like that to me too of just, it feels like a manual old way of attributing things.Stephanie:How do you think about attribution when it comes to influencers and stuff or anyone, without having to use a code? Are you guys even thinking about a new way of doing things or do you hear of people trying new ways of attribution that isn't like I'm putting in a manual like Stephanie 20, to get my 20% off? Is there a new way of doing it?Matt:I mean, we're thinking through all those things. I think the challenge is specifically if you're using these one-to-many mediums. In a perfect world, I think you'd have a unique code for every user and so you'd have to authenticate. We'd know that that code went to you Stephanie and if you redeemed it, I would know that you actually bought something and you bought something because of this engagement that we had. I think in these one-to-many mediums it's, how else can you do it? And some of the challenges that the one-to-many mediums like think of YouTubers.Matt:One of the companies that we're working with has a problem where they have a very high dollar ticket item. Their item that they're selling is about 1,000 bucks. And obviously, if somebody grabs a code of 20% off that you're losing 200 bucks, it's a lot of money. Their problem was that they were doing YouTuber videos and they were publishing a code within the YouTube video to reach the audience. And for them, it was extreme sports, the audience that they were going after.Matt:Well, literally the next day, and I don't know if you know how Honey works. If you have a Honey on your machine, the very first thing that Honey does is it scrapes out anybody who manually puts a code in. So in order for Honey to be able to grab that code, it has to happen once where a real person saw the code and was motivated to go and type it in and buy.Matt:If that happened to me, if I got that code, I would go in and type it in. And if Honey were on my machine and then I hit okay, Honey will scrape that code out and now everybody who comes after me gets access to that code whether they saw that YouTube video or not.Matt:The problem for this company is spending a lot of money engaging with YouTubers and creating videos and obviously, doing the presentation layer of these offers. Well, once Honey gets a hold of the code... And what they've also found is that Honey and the other extensions, are not very merchant friendly. The relationship between Honey and these merchants is actually quite adversarial. And so it leaves them with no other option.Matt:I guess the two options: one, you just keep running your YouTube thing and you resign yourself that you're going to be paying out a 20% discount to everybody who comes and has Honey; which that stinks, that doesn't feel right or you need to reach out to the YouTuber. You need to recut the video. You need to recut the voiceover. You need to kill that code. You need to put a new code in. And so it's made this sort of marketing endeavor with YouTubers and Instagrammers and you name it very hard, because you're actually turning off codes.Matt:We saw one email which was interesting. I always say to people, let's remember we're all consumers too, you and I buy stuff on the internet, even though we're deeply entrenched in the businesses that we're running. I have Honey on my machine, so I can understand what that user behavior is, so that I can actually talk with merchants.Matt:One of the folks on our team bought a pair of shorts from one of these companies that advertises on Facebook and Instagram. And they were out of stock after he had ordered it, so they sent him an email. And they said, "Hey, listen, sorry you didn't have it but guess what, here's a code. You'll save X percent. But please, make sure you use it within the next 48 hours because Honey has been grabbing our codes and we're going to shut this code off."Matt:How can people market, if you constantly have to play whack-a-mole. And if you now think of the analogy, it's back to what we do in the malvertising side. If you aren't going to solve things with software, you're basically playing this long cat and mouse game that you won't win.Stephanie:I mean, that's why I think about merchants turning on and off codes.Matt:It's a nightmare.Stephanie:We were handing out swag and me just trying to... I had unique links that could work for more than one person and just thinking, "That could be tricky and go really bad." But I guess that's why I just think codes just feel, like I said, a little bit archaic. Why can't I just go to a YouTube video?Stephanie:I mean, the internet knows so much about me and where I'm at anyways. It should say, "Hey, Stephanie watched Matt's video where he was talking about this toilet paper." And then all of a sudden she's at our website, you can say, "Stephanie, a 20% coupon awaits you when you go here."Stephanie:And then when I get there it should know who I am and then be like, "Your coupons applied. And it will be applied for the next three days on this website or whatever, because I know where you've been and what you saw and where exactly you came from." Why can't it just work?Matt:I mean, I wish it was all that simple. Listen, we are taking obviously, technology solution to what we think is a longstanding and challenging problem. And in the malvertising world, the people in ad operations were literally playing whack-a-mole. Like, "Let's figure out where this bad ad came from." "Turn that demand source off." Or, "Turn that buyer off." And guess what, the bad actors, they just pop up again.Matt:And so we believe that, and I've seen and talked to merchants who are like, "Listen, here's how I solved the Honey problem." And they're like, "We actually created promo codes for 10% off, but the promo code was Honey is stealing your data."Matt:Because if you use Honey, you know that when Honey pops up it'll actually tell you the codes that it's implementing. They went on a mission to discredit and put the fear of God in their buyers that Honey was doing... They were like, "Honey is doing nefarious things with your data." And guess what, Honey D listed them as [inaudible].Stephanie:Well, there you go. Now, you know how to do it, I guess.Matt:The irony is, is that was three months ago that I talked to that merchant. And yesterday they cameback in and said, "Listen, we have a problem again."Stephanie:Honey added us again.Matt:No, this time they've got a Wikibuy problem. The problem is going to be never-ending, I think. Ultimately, we're hopefully going to give e-commerce companies the tools that they need to go out and be able to operate their business and focus their time on the things that really matter, in my mind, which is driving incremental revenue; not playing whack-a-mole with your promo codes and having to go recut YouTube videos. Hopefully, that's one of the big things that we help solve for.Stephanie:That's cool. I mean, I do like the idea of that one merchant you were mentioning where they said, "If you act within the next 48 hours or whatever, it'll only lasts this long." And I just had a guest yesterday who said that. I think it was either Burger King or McDonald's made it so if you're within 20 feet or something of a McDonald's they would send you a code and say, "You have five minutes to get to a burger King to get a free burger or something."Stephanie:And I'm like, "That's interesting." That's a good way to make people act quickly if you know something's expiring, I know I act a lot quicker. But I mean, of course, solve the problem that's number one. But I do think that's an interesting marketing tactic too.Matt:And make it measurable. I think that's the key thing is that... I often say, "What gets measured gets managed." And so hopefully, what we're doing is we're taking one of the things out of the equation that is making measurement really challenging for merchants. Again, using the triathlete example, yes, the marketer was high-fiving the rest of their team going, "We finally solved this." And then when they actually looked at the data they were like, "Damn it. I guess we got to go back to the drawing board."Stephanie:It's also just so tricky too, knowing how much of those people would have bought otherwise or not. So even looking and being like, wow, we have all this attributed to this one promo code and maybe it was because of Honey. But how many of those people would have bought if there wasn't some promo in there? It's just hard to know.Matt:We're solving that problem. We're giving merchants some deep analytics on exactly what's happening on their site, because we think there's a blind spot there where they don't know. For instance, how many users actually came to your site that actually had an injection capability? One of the extensions of Honey, Wikibuy, Piggy, Amazon Assistant, you name it. So we give them that lens.Matt:And then we give them the lens of, what were all the promo codes that they tried to inject? What was the most popular promo code? And stack rank those things and then going deeper down to conversion rate. And guess what, what we're seeing in these early days is that when you block Honey and Wikibuy at checkout, the vast majority of users actually still convert.Matt:And so that to me is the icing on the cake which is, guess what, you take control back of your website. You take control of your margins. You take control of your revenue. You now have the data you need to be able to go out and drive incremental sales. We think that's pretty powerful.Stephanie:I mean, that makes sense. I've heard a couple of times that also, discounts don't matter as much as you would think. I think they were talking about, they did a study between 10% off and 20% off. And actually, they were kind of the same when it came to consumer happiness. And what can be worse though, is if someone has the ability to go in and put a promo code in or something and then it doesn't work.Stephanie:I don't know if you remember those days of just going to the internet promo code for macys.com and trying out 10 different promo codes and all of them failing. I was way more unhappy then, than just not having one at all, just buying at full value.Matt:Let me tell you the opposite of that which is the worst-case scenario, in one of our merchants experience and that's why they're using our software. They're in the home interior space, so they do drapes and carpets and wallpaper and all that sort of stuff. And they were trying to build favor with interior designers because they wanted interior designers to know their site and know their stuff and all that sort of stuff. And so they did a very exclusive but unfortunately, a promo code that Honey got ahold of that gave interior designers 50% off.Matt:Well, lo and behold, as soon as one designer used that code and also had Honey on the machine, that code then got swept up in the Honey and everybody, every order that had Honey was now getting 50% off. Their customer service nightmare was that they couldn't afford to give every consumer 50% off, so they actually had to cancel orders; believe it or not.Matt:They called customers and said, "We can't honor your order with that coupon because that coupon was not intended for you." Created a customer service nightmare for them. And that's what they want to do is, they want to control their user experience. They want to control their revenue and their margins.Stephanie:Oh my gosh, that's horrible.Matt:Out of control. But think of that disaster of having to call someone and say, "Hey, I know you wanted to spend $500 with me, but only pay me 250 bucks. I can't give you 50 off but I can give you like 15 off, that's kind of what you were probably entitled to." So anyways, just trying to get control back in these merchants hands and let them control their destiny.Stephanie:I love that. When thinking about back to the now advertising piece, how much do you think it's on the publishing platforms? Is it their responsibility to make sure that they continue to increase their efforts to make sure bad actors aren't out there anymore?Stephanie:I mean, I know they're probably doing a lot. A lot of people like to hate on the publishing platforms and they want them to always do more and more and more. Is it maybe on them or maybe not on them anymore to continue to try and track those bad actors, who like you said are kind of popping up here and then they shut down and then open up a new account and do one off things and then shut down again. How should we think about leaning on the platforms like that?Matt:Well, I say to folks, the value chain in that industry is actually quite wide. And so from the bad actor who's putting their hands on the keyboards to the consumer, there's a whole bunch of players in the middle. I think it's on everybody to really have defenses in place and to make sure that they're protecting...Matt:So if you're at the front end, if you own the demand side platform that the bad actor's using, you need to have your own checks and balances to make sure that you're not bringing in malicious buyers. But all through that value chain, the onus is on everybody. But at the end of the day what I say is, the only person that can be responsible to that end user, is the publisher.Matt:Pick your publisher, if you are Fox News or you're the New York Post or you're the Washington Post, you're the one that has that ultimate relationship with Jenny or Johnny consumer who is surfing your site and consuming content. So you're the last line of defense. You're the one that created the site. You're the one that drove the traffic. You're the one that is using ads to monetize your traffic. It's really on you I think, ultimately.Matt:Now the publishers, all those folks that I named and there's millions of them, they all want to look upstream and they should. And they should hold everybody accountable upstream. But I think they're the ones that are really the that last line of defense.Matt:Because if you go to one of these sites and you have a crappy experience, you don't really care that it came through an ad. Like the woman at Harvard Crimson last week, she didn't know the origins of why it happened. And here's the other crazy thing, she knew that when she went to the Crimson, she was delivered a crappy experience.Matt:Now, the crazy part. First time we've ever done it, we actually did a private webinar with the end user because we wanted to explain to her here's exactly what's happening. She told us this story, she said, "Listen, I use ad block." And obviously, the risk to publishers are, if you don't create great experiences, your users are going to start using ad block.Matt:What she said was, in the desire to get real news and in the desire to really understand what's going on in the world and in the desire to actually make sure that real news publishers are actually getting compensated, she turned her ad block off and this is what happened.Matt:So shame on the Crimson for not delivering a great experience, because guess what? Now that user's like, "I'm not turning ad block off the next time I come to your site. You're not going to get paid for the traffic that I'm going to generate." So again, it really goes back to the publishers, the onus is on them.Stephanie:And thankfully, I think there is like new technologies popping up that maybe we'll be able to enable them or even just thinking about implementing. I mean, I've seen some advertisers looking into blockchain and having that as being kind of like a more source of truth to be able to know a one-to-one relationship and knowing who's behind... You don't know exactly who's behind what, but if you have it in a way where they sign up and they can't just start creating a million different accounts because they've got their one single one that they can go off of, it seems like there's a lot of ways that it can improve over the next couple of years that maybe hasn't been so easy the past decade or so.Matt:I agree. Obviously, there's industry bodies all trying to figure this out together. There's companies like us who are innovating and coming up with new and unique techniques to block these sorts of nefarious actors. I do think the biggest and most important thing is to recognize that the bad actors aren't just sitting still waiting for somebody to solve this problem. They're innovating honestly, a more rapid rate than many of the industry leaders that you would expect that have hundreds or thousands of people trying to solve this problem. Bad actors unfortunately, are innovating at quite a rapid pace.Matt:So the problem I think is going to evolve and change. We've seen it evolve to not just being ads but obviously, compromised Chrome extensions that just seems to be a great vector. And so I think you're going to see the problem move around and especially, if there's a lot of money in it. If there's ways for these guys to make money, you're going to see them salivate with... You're going to put up this defense and they're going to figure out this way to get around it.Matt:And there's so many different browser types. There's so many different machines. There's security flaws. There's zero-day. There's so many ways for these guys to actually buy and target, to only focus on iOS 13 and below and blah, blah, blah to reach their audience.Stephanie:So tricky. Hopefully, it'll get solved over the next decade. Cool. Well, with a couple minutes left, let's move over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Matt?Matt:I am ready.Stephanie:All right. First the harder one, what one thing will have the biggest impact on e-commerce in the next year?Matt:Listen, I think it's been the gold rush for e-commerce merchants over the last year. In many cases I talk to merchants, they're like, "It was raining money last year." Sales were up five X, 10 X, who knows. I think the next year is going to be that year where folks actually look to efficiency, and they look to figure out where there are holes in the boat that they haven't had to look before.Matt:And I think that plays to our product because I think in many cases when it's raining money, you almost turn a blind eye to some of these sorts of things. But I think now folks are like, "Listen, if I can be more efficient. If I can take control of my revenue and my margins, I'm going to do that."Matt:So I think that's probably, this is the year of people now are catching their breath and they've figured out their distribution and they've figured out their fulfillment and their warehousing and all that sort of stuff and the panic that they had to do to keep up with the pandemic growth. Now, I think it's a deep breath of like, "Okay. Now, let's look at the math."Stephanie:Yeah. I agree, that's a good one. What one thing do you not understand today that you wish you did?Matt:What one thing do I not understand. I think the affiliate landscape is complex. I think there are a lot of legacy ways in which people have calculated incrementality and I'm not sure if they're all believable. And I hear a lot of feedback from merchants where it's kind of like they just brush it under the rug and they're like, "I know I'm probably paying for stuff that I didn't really get, but let's just let it go." I think every percentage point matters. That ecosystem, because I hear there's good guys and there's bad guys and I'd love to really dig deeper on that. And I think that's a big opportunity for us as a company.Stephanie:That's a good one. What's the nicest thing anyone's ever done for you?Matt:Wow. The nicest thing that anyone's ever done for me.Stephanie:I like to go deep.Matt:Yeah. That's a deep question. I think I've been fortunate throughout my whole career in that, I have been given opportunities that I probably wasn't ready for. And by the way, I had never been a CEO before I was at this company. And so, who knew that I'd be able to do it.Matt:But I think it actually starts way back to when I first graduated and I was seeking my first job. And I had a mentor that took a risk on me and gave me my shot. And I worked my butt off and hopefully that translated and he and she felt great about what I was doing. So I think the nicest thing, I've just been given opportunities that I don't think I deserved and hopefully I earned that respect and trust over time.Stephanie:That's a good answer. If you were to have a podcast, what would it be about and who would your first guest be?Matt:Wow. This lightning round is hard.Stephanie:Good. Needs to be.Matt:If I were to have a podcast. I love gadgets. I'm one of those guys that buys the infomercial type stuff. I bought one of those Rotisserie Showtime girls 20 years ago, I still use it.Stephanie:Worth it.Matt:Maybe it could be interviewing people who've built made for TV products and really understanding the backstories behind how they came up with the idea and how successful they were and God knows how much money we all made them.Stephanie:That's good. We had Kevin Harrington on the show, he was the original OG shark in Shark Tank. He basically made the infomercial. And it was very interesting hearing his perspective of how it started, where it's at now and Shark Tank.Matt:I'm fascinated by that ecosystem, it's super cool. And by the way, I always do buy one of those stupid things for my wife for Christmas and she hates me for doing it because she's like, "You're just burning money."Stephanie:I had fun buying it and watching the infomercial today.Matt:Believe it or not, one of my coworkers gave me a Squatty Potty for Christmas.Stephanie:I actually feel like those have good value though, the science is there. It's just a weird thing to buy your wife, if you got that for her. Someone gave it to you, got it.Matt:I was given it, by one of my coworkers, "By the way it works."Stephanie:And their marketing, I think that's the Harmon Brothers who did their marketing with the whole unicorn and they did the Poo-Pourri thing.Matt:Oh yeah, it's super cool. I love those kind of gadgets.Stephanie:That's a good one. I would listen to that show. All right. And then the last one, what's up next on your Netflix queue?Matt:Well, on my Netflix queue, I think I've got three episodes left on the Queen's Gambit.Stephanie:Love that show. That was a good one.Matt:I'm a documentary guy. I actually will tell you that I've been kind of hooked on HBO Max for a little bit. And I just finished the Tiger Woods documentary last night, which was fascinating. Nothing that you hadn't been told before. This guy through adversity has come back multiple times; knee surgeries, winning on a broken leg. So I'm into those sorts of stories. One of my guilty pleasures is The Bachelor, so it's on my DVR. I'm playing catch up on that.Stephanie:That's great.Matt:I love reality TV and that sort of stuff.Stephanie:I like where your head's at, me too. Well, Matt, this has been a very fun interview. Where can people find out more about you and clean.io?Matt:So you can find me at matt@clean.io. So if you want to send me an email, obviously happy to help you guys in any of your challenges and would love to hear your challenges if they're similar or if they're different than ones that we're solving for. Hit me on LinkedIn, so you can find me there. And our company website is clean.io.Stephanie:Awesome. Thanks so much for joining us.Matt:Thanks Stephanie. Thanks for having me.

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.