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Hitting The Mark

Author: Fabian Geyrhalter

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Conversations with founders about the intersection of brand clarity and startup success with your host, brand strategist, and author Fabian Geyrhalter.
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Visit Clare onlineSupport the show-------->Fabian Geyrhalter:        Welcome to the show, Nicole.Nicole Gibbons:            Thanks so much for having me.Fabian Geyrhalter:        Absolutely. No, it's so great having you here. You are the founder of Clare, where you saw a huge opportunity to paint the interior paint industry in new, specifically with designer-curated colors, mess-free peel and stick paint swatches, which are really cool, and premium zero VOC paint delivered to your customer stores. You set out to take the pain out of paint, which I read somewhere on your site. That's not me saying this. You're your modern brand that has pioneered an easier, faster, and more inspiring way to shop for paint. Your mission is to help people everywhere create a home they love.Clare is just a little over four years old and must've been born out of the interior design company you're also running, but your career started at Victoria Secret where you served as the global director of communications and events. Tell us a little bit about how did that idea of Clare, how was it born? How did it all begin?Nicole Gibbons:            Yeah. Well, I just want to correct one thing. We're actually only two and a half years old. Yeah. So we're a very young startup in our trajectory, but the idea was really born out of this desire to help people create beautiful spaces. I spent, like you've mentioned, a decade working in retail as a PR executive. While in that job, I started side hustling to explore my passion for interior design. So I did that sort of overlapping for about five years, more or less writing a blog every day and doing dabbling in small interior design projects on the side. Then finally at the beginning of 2013, took the leap to focus on building my design business and my personal brand full time. So after doing that for a few years, I started thinking about what would be the next extension of my personal brand.I never wanted to just be an interior designer. I loved the Martha Stewart approach in that she parlayed her career as a food and lifestyle expert into products that spanned multiple categories and just this massive career that enabled so many people to buy into the Martha Stewart aesthetic. So I started thinking about what I could do in the home space that was along those same lines and explored a number of business opportunities and kind of stumbled upon this white space that is paint.As a designer, I bought lots of paint. I shopped for lots of paint. I helped lots of people choose paint colors, whether it be my private clients, people that I would help doing television projects, or even just folks who would write in on my blog, or be a social media where I was just sort of offering unsolicited free advice when they had questions.I realized that shopping for paint is a really difficult process for the average person. If you're lucky enough or fortunate enough to be working with a designer, or an architect, or someone who can guide you, the process is quite easy. You have someone that you trust who makes the selections for you and you pretty much trust their judgment and sign off, versus the average person who's going at it alone, walks into a Big Box home improvement store, stares up at a wall of 3000 colors. If they want something as simple as white paint, they think it's going to be easy. And then they realize, Holy pal, there are 300 shades of white. How do I know which one is right? And then sort of thus begins this cycle of this painful experience, decision fatigue.Once I realized how the industry was structured, it's highly consolidated, there are really like two or three major players that dominate the whole entire paint market. It just felt like the perfect opportunity. The companies that dominate the paint industry are centuries old. So these are brands that are so giant. They really never felt the pressure to innovate or modernize.When I started Clare and really kind of came up with the idea, probably around four years ago or so, there were so many other industries where difficult shopping experience had been improved and modernized. Think about glasses with Warby Parker or mattresses or all these other categories where someone took a product that was really difficult to shop for and made it an easy, convenient experience. As someone who is incredibly passionate about home and about helping others create beautiful homes, this just seemed like the perfect opportunity and it was a massive market. I didn't want to just do a furniture line or something that would have been more expected and obvious for an interior designer to pursue. I really wanted to build something from the ground up, tackle a massive market, and create a sort of industry-changing business model and brand.Fabian Geyrhalter:        That's remarkable. Those peel and stick paint swatches, it sounds like nothing, but it's so huge, right? I mean, if anyone who went through that painstaking process that you just hinted at on how to come up with the perfect paint choice, you have to get all these tiny little cans, which by the way, is horrible for the environment, all these tiny little cans from paint stores. And then you have to paint on your house, most of the time on the exterior interior, depending on what you paint, and you keep going back and forth between the hardware store in your home. It's a mess, but those swatches, they seem kind of like post-its by nature. It's just so simple. You just put it on the ball.How did you guys around to matching the color on, because we're talking about print and "paper," versus paint, which is such a different medium. It must be so hard to match that identically. I think you guys pulled that off, right?Nicole Gibbons:            Yeah. I think we nailed it. I mean, the interesting thing about color that most people don't realize is that color is a science, and any color, really all forms of color has data associated with it and can be broken down into numerical data so that when you're in the color matching process, you can actually measure the accuracy of our paint swatches to the finished actual paint finish within the most minutiae of a Delta E.So it's actually quite a scientific process to ensure the color match. It's somewhat manual, somewhat scientific. You might have to go back and forth a few times until you get it right, but if we can kind of measure to make sure that you're within pretty much an exact match range and that's how you ensure color accuracy.So we have a pretty detailed process. I think a lot of like with traditional paint brands, when you have thousands and thousands of colors, and they're not offering peel and sticks watches in most cases. So there's the little tiny paint chips that you take off the wall at the hardware store. A lot of times people feel they don't match. I think when your pallet is to the point of being four or 5,000 colors deep, you sort of lose some of that quality control.It's very difficult to maintain 100% accuracy when you have that many colors and especially if you're not actually controlling your distribution channels, because a lot of people also don't realize when you buy paint from a Big Box store, they're carrying multiple brands. So they have to have a color it dispensers or sort of colorant in store that work across all the different brands that they carry. So with that, you almost lose a little bit of quality control as well, because you're working within a colorant system that maybe isn't proprietary and there's just more margin for error for the output in the store to look different than the swatch.Fabian Geyrhalter:        Clare is 100% D2C. It seems like having your paint salt at a hardware store would go against what you stand for as a brand, but would you toy with Clare experience stores or pop-up stores of any sorts?Nicole Gibbons:            Yeah. My belief and the whole reason I started Clare was that I felt that the paint shopping experience needed to be re-imagined. We started online because that's where our competitors were not, but I think that there's a huge opportunity to reimagine the future of what a paint store looks like, or what a paint aisle within a Big Box store might look like. So that prospect is super exciting and definitely something we think about, and it's really a matter of timing and opportunity, and those kinds of two things being aligned before we'll probably make it happen.Fabian Geyrhalter:        Which obviously is not during a pandemic. But other than that, it's an interesting opportunity. Absolutely. Let's talk about the evil side of paint, how to dispose of leftover paint. How do you navigate sustainability with Clare?Nicole Gibbons:            Yeah, I mean, I think for us, sustainability is a focus on kind of two major things. One is the product and how it impacts your home, and your health, and the air inside your home. And the other are just business practices. So things like our packaging and other efforts that we make to ensure that we're really minimizing our impact on the environment.So a lot of people don't realize that paint as an industry is one of the most dishonesty and misleading industries out there. It's a chemical product first and foremost. So no matter how you try to spin it, there is no such thing as a safe chemical paint. It's still a chemical product at the end of the day. Now you can certainly have a better formulation, but it's still a chemical product. It's not like the paint is made of grass and leaves or whatever.Fabian Geyrhalter:        Yeah, yeah.Nicole Gibbons:            So the paint industry has really been misleading with customers about what's in their paint. Even stemming back from like the 40s and 50s when paint was made with lead, which as we now know, is very toxic and harmful to humans and to the environment, but one of the biggest paint companies in the world knowingly continued to sell paint to their customers for decades, knowing that it was harmful to human health and didn't stop selling lead paint until it was banned by the federal government in the 1970s.So that's a very good example of how the paint industry has historically operated at profit over people, I think. Even in more recent times, every few years, in fact, one of the major paint companies is paying massive fines to the FTC for misleading marketing.Several years ago, when the government started regulating, or the EPA started regulating VOC contents and paint, and stands for Volatile Organic Compounds, it's essentially like carbon emissions and CO2 emissions that are emitted by a lot of paints, not Clare, but when the government started putting these thresholds, so they would say, canopy can't have more than X volume of VOC content, what brands ended up doing, and another important thing to understand is how paint is actually sold at the point of sale.So generally companies like a Big Box store or a hardware store will stock a base paint formula, which is essentially like a white paint. And then the colorant is dispensed at the point of sale. So brands would manufacture those base formulas to fit zero VOC thresholds, but then the colorants that were being used were not zero VOC.Fabian Geyrhalter:        Interesting.Nicole Gibbons:            So people thought that they were buying a product that was better for them, healthier for their homes, et cetera when in reality, as soon as you've chosen your color and they put the color in the can at the hardware store, you have a paint that's now back to being filled with chemicals. So even that type of misleading was happening in more recent times.So for us, transparency is super important as well. All our paint is zero VOC. It's GREENGUARD Gold certified. GREENGUARD is a green certification that applies to many products, but GREENGUARD Gold is the highest tier of GREENGUARD certification and for paint. What that means is, they actually put the paint in an environmental chamber that's meant to mimic the air inside a typical home environment, and it measures the off-gassing for two weeks to ensure that it stays below the zero VOC threshold during that entire time, because paint can continue to off-gas for years actually. So when you buy a paint that's not zero VOC, it will be emitting carbon compounds into your air potentially for years. A lot of people don't realize that. Especially nowadays, when we're spending all of our time inside in our homes, it's very important that we make better choices and there's just so much harmful stuff all around us. So we just wanted to minimize that as much as we possibly could.A lot of our packaging and products, like some of our paint supplies and things are made from recycled materials. So whenever possible, we really try to make the best possible choices and we are not doing everything perfectly admittedly. As a young company, there's still a lot of room for improvement. There are certain things that we want to make even more sustainable, but I think we're off to a really good start and we're as transparent as we can be with our customers. We hope that that gives them competence in our brand and in our product.Fabian Geyrhalter:        I love this. Just in my last episode, I talked about that same idea where even though you're trying really hard and you think like you're doing everything as well as possible, there are some things that you yourself know as a brand. You're not quite there yet. You talk about that too. I think that alone is such a huge difference when you think about the paint companies from the 40s and 50s, right. It is so nice as a consumer today to see brands talk about not only the things they do well but also the things that they know want to improve upon because that is just as important and that's how you feel like a brand is really transparent.Let's talk about transparency for a second here. Moving over to your brand language, which is really real. It's very down to earth, you had an instant post about wop remixed, which of course, stood for where there's paint. Your colors are named Headspace, Whipped, No Filter, and Dirty Martini. How did the brand language manifest itself? Did it start with a mantra that you set and then it organically built from there?Nicole Gibbons:            Honestly, so much of it is an extension of me and my personal brand voice, to be honest, but also like the customer that we're reaching and what I think resonates with them. Also just looking at the market and looking at traditional paint brands, I think paint brands are pretty boring. We wanted every element of our brand experience to feel memorable and to evoke emotion. So when it comes to things like the color names, we wanted to have fun with that and create names that made you feel something. Our brand voice on social media, we want to be relatable. We want to talk about what's happening in pop culture and relate our product back to that because that's what people can care about. That's what's top of mind.We don't want to just be this faceless corporate entity that no one actually cares about. We want to be a brand that people connect with and they follow us because we are approachable and, or entertaining, and inspiring. So that's super important. We try to have those core brand, voice pillars of being friendly and approachable, carry throughout every aspect of the brand from the website to our social and more. It's really just, I think, another way that we differentiate ourselves from the market.Fabian Geyrhalter:        I was just about to ask that, how do you set and keep those standards as it relates to the voice? You just answered that there are certain pillars around which you want to navigate as you talk to your customer. But talking about naming, how did the name come about? It's a very modern take on naming. We have many first-name brands floating around, but not Nicole, it's Clare.Nicole Gibbons:            Yeah.Fabian Geyrhalter:        Once you try to actually get some help finding a perfect color, you agree that with a message on your website that says, "Hi, I'm Clare. Think of me as your personal interior designer. I'm here to help you find the perfect color for your space." What's the story behind the name? Who is Clare?Nicole Gibbons:            So it's so funny. I wish I had a more profound name, but originally, when I was thinking of names or when Clare was just in the idea phase, I wanted to be able to talk to some people about what I was working on. So initially, my only intent was just to come up with a working title, just like a good enough name for now and then come up with something perfect later. So I probably spent like 20 minutes. I was looking on a baby naming website where you can reverse look at, like name meaning. So if you wanted your kid's name to mean happiness or whatever, you type in happiness, and it tells you all the names that relate back to that.So I literally typed in things that tied back to color. So I looked up adjectives like bright, and colorful, and vibrant, and whatever, and saw what names came out. Clare just sort of stood out. Clare comes from a Latin root word, clarus that means bright and brilliant. There's a lot of fun wordplay there, both brilliant and bright in terms of color, but also brilliant in terms of being innovative and forward thinking as a brand. I Googled it. There was no other brand that really had the name Clare. There was like an insurance kind of, I don't remember exactly what they sold. There was something, but in a completely non-competitive space.So it was a name that was available and it was a good working title. And then as I really started kind of moving forward with the brand and doing some conceptual branding work and things like that, it sort of just stuck and it fit. There was no other name that made sense. But I think originally, I knew I wanted a name that was personified so we could really build a personality around the brand. That's why I went to a baby-naming website. And I wanted it to be friendly and approachable. And I intentionally wanted a feminine name, because in the paint world, all of the brands that dominate are these hyper-masculine names, Sherwin Williams and Benjamin Moore.Fabian Geyrhalter:        So true. Yeah.Nicole Gibbons:            I think they are not appealing to who's really making the household decisions, which is usually the woman of the house. I felt like paint brands are overly masculine in their appeal.Fabian Geyrhalter:        Yeah.Nicole Gibbons:            I think part of the reason is because a lot of them are catering to professionals and a lot of pro painters are men. But at the same time, when you think about the DIY market, the people making the hustle decisions are women.Fabian Geyrhalter:        Yeah.Nicole Gibbons:            I think the big brands are kind of failing to really resonate in an authentic way. So that was something that was super important as a brand founded by a woman in an industry that is dominated by men to take a complete 180 approach to every aspect of our brand, including the choice of name.Fabian Geyrhalter:        So interesting. I never thought about how those paint names are just absolutely not reflecting today's do it yourself customer. Super interesting. Your selection is still narrow and it's highly curated, and that is by design, less is more. A recent customer review on your website stated, "The limited, but lovely colors totally saved me from having an existential crisis over the thousands of options from other brands. How do you control the number of options to give your customers once you introduce a new color? I know you just introduced a couple of new colors, how do you play this game of keeping things fresh, but yet having it very curated so that people don't freak out about the 4,000 options of white?Nicole Gibbons:            Yeah. Well, I mean, we launched with 55 colors and originally, we believed that those covered most of the use cases you would ever have in a home, right? There are certainly opportunities to expand the palette and mix in a few new things, but it's not hard to keep things curated relative to the traditional paint brands that are in the thousands.Fabian Geyrhalter:        Yeah.Nicole Gibbons:            Building on from that original 55, our approach has always been well. If we're going to introduce new colors, let's make sure they're colors we know our customers will love. So, so far every new color we've introduced has been crowdsourced or with some sort of crowdsource feedback from our customers. So they'd either voted on the colors, or with our most recent set of colors, we did a march madness style paint playoffs bracket. The predictions from the customers ultimately dictated which colors ended up in our palette. The two newest colors that we launched were actually a part of the original, like our paint playoffs from last year where we ended up introducing a blue and a green, but there was also a pink and a yellow, but that were super popular. So we introduced those after the new year, this year in 2021. That's always core to us is making sure that we include our customers in the process. And then another core part of our color differentiation is that we're designer curated. So even the colors that our customers helped choose were sort of pre-vetted by me through my interior designer lens. Our original 55 colors were curated by me.I think in the future, there might be some collaboration opportunities with other designers to kind of maintain that voice of authority of being interior designer-curated colors. But I think that having that expertise behind the color palette, as well as input from customers to ensure they'll love the colors really helps to take the guesswork out of the process, and again, give people less choice, but the best choice, right? So really just simplifying those decisions for the customer to help them get to faster decisions, because that's another terrible thing about the paint industry is because there's so much choice. People get paralyzed and it actually takes them a really long time to make a decision, and the buying journey can be really, really long.Fabian Geyrhalter:        Yeah, absolutely. Looking back, because I thought your company was founded 2017, but that's I think when you just started laying the groundwork, and really it's a very young brand.Nicole Gibbons:            Yeah.Fabian Geyrhalter:        What was that one big breakthrough moment where you felt like, "Okay, we are moving from startup into brand right now." What was that one moment? It could have been a seed funding or Series A, could have been a moment that you had with a customer where you felt like they totally get it, it could be sales figures, whatever. What was that moment where you set back and you're like, "Wow, this was a special moment."Nicole Gibbons:            Honestly, I think it was the Daily Launch because I had spent probably almost two years at that point, a whole year just thinking about the idea and then another year actually putting that idea into making that idea a reality, and raising capital, and then building behind the scenes all before we launched to the public.So on the day that we launched, we had a tremendous amount of press coverage and the media really got it and described our brand relative to the competitors in the market. I think really captured well how we stood out. And then immediately the customer feedback was super validating. And kind of like the quote that you read from the customer, we heard that kind of thing since day one. "This has been the best easiest paint shopping experience I've ever had. I'm never going back to the Big Box store again." That kind of thing, we heard from the very beginning.Again, are we doing everything perfectly? Probably not. Still a ton of room for improvement, but the basic premise and the basic problem that we set out to solve, I think immediately was validated that we were solving a real problem and creating a much better experience than what these brands who have been around for 200 years have not been able to create. I think we're super proud of that.We're still at what feels like in the beginning of our journey. So there's a lot more room we have in the works to continue improving upon the paint shopping experience, but I think we're off to a great start.Fabian Geyrhalter:        You might be surprised, but I never heard that answer. And I asked that question pretty much on every show, because I think it's so interesting, but usually it's not right when you launch, and usually it's when you launched it, you get some good customer feedback, but that the press was immediately so interested because they themselves knew here is a category that hasn't been disrupted yet, and that hasn't been done in the right way. I remember fast company said the Warby Parker of paint is here, right? So it very, very quickly happened that the press led this conversation, which is, I mean, that's the biggest success you can have if that happens immediately upon launch, because then you know everyone will see a need for this. So that's really great.Well, on the flip side, was there any brand fail that you went through where you felt like, "My God, we just did a huge [inaudible]," and maybe something that listeners can learn from?Nicole Gibbons:            Yeah. I don't know if it's so much of a brand fail as more of a business fail or a general marketing fail. We so far, thankfully, have not had any major snafus with our brand voice or anything like that, but we're going through this really painful experience right now in that when we launched, I didn't have a technical background. I'm a very non-technical founder. So I hired a super talented team of people who were great designers to build our website. But at the time, without knowing then what I know now, we built an overly complex custom website. We're a small team. We don't have any in-house developers. So it requires a lot of resources to maintain our website.Then on top of that, I think the architecture wasn't as clean as it could be and it has just created so many problems for us. So two and a half years in we're actually re-platforming our website fully onto Shopify, which is such a great e-commerce platform. Especially when we had zero customers, in general, with MVP, you kind of start small and grow from there, but we came out the gate with this super custom website that looked beautiful, but behind the scenes is just kind of really messy and complicated and it just creates a lot of backend pain points. So we're going through that process right now to re-platform. It's a big undertaking. Actually, I feel like it's more work to re-platform the site than it is to build a brand new site from scratch, because there's more that can go wrong.When we originally built our site, we didn't have any customers yet. Now we have hundreds of thousands of people that visit our website and we don't want to disrupt that experience or lose functionality that was there before. So there's just way more room for errors with this kind of next go around. Yeah, it's taking up a lot of time that we didn't intend to be spending.So I would say launch your brand on Shopify, because you're going to learn everything you need to learn. Maybe when you get to a certain scale, you can go custom, but that was a big lesson learned in what I would consider somewhat of a failed, because I just didn't know better and we just spent way too much developing and building the site that we have that doesn't actually function the way we need it to.Fabian Geyrhalter:        Well, and you come from an interior design background. So of course, the design is most important in the beginning, right? And so one thinks. Think about tens of thousands of people starting shopping on Clare.com immediately, but since you're successful, that happens next. So I think it's extremely important that you talk about something which some people might not think is important. It can be extremely disruptive to a business. I work with an agency that does a lot of Shopify websites. For them, it's the exact same customer that keeps coming back to them. They created it in a different environment, then everything was really clunky. And then it becomes ... I mean, we're talking about a lot of money being spent when you have to redo a site in Shopify.Nicole Gibbons:            Yeah.Fabian Geyrhalter:        This is important.Nicole Gibbons:            It's a young startup, so cash is king, so to make a costly mistake is really painful. This is definitely a very costly learning experience.Fabian Geyrhalter:        Yeah. No, totally. Like you said, it's not necessarily a brand fail, and it's not necessarily fail period, because it's just kind of like, it's that whole fail forwards ideas. It was a logical thing to do, to do a site that just looks good.Since this is a branding podcast, I love having my guests always answer this one question, and it's not an easy one, what is one word that can describe your brand? If you literally think about your brand inside out, the culture, what you stand for, your customer, your offering, if you would put it all through a funnel, and outcomes one or two words of like, this is what we stand for, what would it be for you?Nicole Gibbons:            I would say inspiring. That's a word that I think permeates every aspect of our brand experience and how we hope that our customers perceive us from the shopping experience. That is a world of difference from that cluttered aisle and a hardware store in full of inspiration to how the brand engages with us on social media. We want to be there to guide them and there to inspire them, to create a beautiful home that they'll love coming home to every day, and in our color assortment in just our overall brand voice. We want people to walk away feeling inspired by Clare. So that would be the one word that I'd say sums up-Fabian Geyrhalter:        I love it.Nicole Gibbons:            ... everything we're about.Fabian Geyrhalter:        Yeah, absolutely, absolutely. Now that we talk about branding, and I've warmed you up, what does branding mean to you? I mean, obviously you lived in the world of branding all your professional life in one shape way or the other. You were in Internet Kiehl's, then there was the Victoria Secret job, and then you're running your own service company really as interior design. So I think you've seen a lot of different facets. What does branding mean to you?Nicole Gibbons:            That's a good question. I think it can mean many things, but if I had to simplify it, it's creating an aesthetic that could be translated into a lifestyle. I think of Clare very much as a lifestyle brand, but also everything I did before in my career ultimately was around building a lifestyle. So I think in the world of e-comm consumer, you can't just be a nameless, faceless brand because right anyone can create a logo and a tagline, and come up with a name and call it branding. But I think it's truly branding when what you've set out to achieve is absorbed by your customers and that your customers actually relate to, and your customers can derive value from. So that's kind of a little bit of a long-winded answer, but that would be what I think of as branding and what I think creates a successful branding.Fabian Geyrhalter:        I absolutely agree with you. Yeah. It's like there's the foundation, which everyone needs a logo, and a name, and colors, and all of that good stuff, but that doesn't make a brand. That's important to have, but what makes a brand is really the soul of it. And that might start with the founder who injects it into the company, or it might be certain principles, or a greater purpose.Nicole Gibbons:            Yeah.Fabian Geyrhalter:        I'm glad that you said that. Absolutely.Nicole Gibbons:            It can't just be some abstract thing. It really has to resonate.Fabian Geyrhalter:        What's a piece of brand advice for founders? Maybe even commerce founders, as a takeaway from what you learned besides starting on Shopify, obviously, but from a brand perspective, is there anything that you can advise the next generation of founders on?Nicole Gibbons:            Yeah. I would say focus on experience, you know. I mean, even from the school of Jeff Bezos, but something that I can attest to within Clare is, if you can continuously deliver a delightful experience for your customer, that is what's going to propel your brand forward.Fabian Geyrhalter:        Absolutely. Absolutely. What's next for Clare besides potentially looking at the impersonal retail experience, which I kind of pulled out of you? I'm sorry if you didn't mean to talk about that, but what are you really excited about with Clare for the next, I don't know, six months, a year?Nicole Gibbons:            Yeah. I mean, six months, I think in the world of startups still is kind of forever, but just thinking about new products and how we can continue to deliver more for our customers. So we have some exciting things in the pipeline there. Obviously, I touched on this new website that we're in the process of building, which aesthetically will probably look quite similar to our current site, but hopefully, we'll deliver a better just overall experience. So I think that's like a top, top priority that's going to take us even through Q2 and have some cool partnerships in the works. So creating opportunities to reach more customers, but also without giving away too much. But yeah, just creating a cool opportunity for us to get in front of new audiences and things like that. So, yeah, I'd say in the short term, those are the key things that we're most excited about.Fabian Geyrhalter:        Very cool. Where can listeners learn about Clare and start painting the walls on you?Nicole Gibbons:            Yeah. Well, visit us at Clare.com, spelled CLARE. You can also follow us on social at Clare Paint, and we hope to see you soon.Fabian Geyrhalter:        Thank you so much for taking the time to be on hitting the marketing call. We really appreciate it.Nicole Gibbons:            Thanks so much. Thanks for having me.
Visit behno onlineSupport the show-------->Fabian Geyrhalter:Welcome to the show, Shivam.Shivam Punjya:Thanks so much. Thanks for having me.Fabian Geyrhalter:Absolutely. Your background leans heavily on marketing. You earned a Master's at Duke University in global health, social entrepreneurship and international development, so it really isn't far-fetched that you're now running a brand that has equality, sustainability and philanthropy woven into its brand DNA. But what may come as a surprise is that you're running a luxury fashion label specialized in women's handbags. How did this come about? Tell us a little bit about your journey and the brand's journey.Shivam Punjya:Yeah. It was definitely very unexpected, that's for sure. I was actually in grad school studying women's reproductive health in the field in India doing my thesis research and I came across a lot of study participants that were textile weavers. At the time, I didn't really make much of it. I was more focused on gathering my data to write my thesis. But when I came back to Duke to actually sit down and write, the Rana Plaza collapsed in Bangladesh and that was a very emotional moment for me. So many of the women that were murdered in the atrocity were very similar to the folks to the folks that I was working with in the field.I was emotionally very unnerved. I was talking to my family. I have a very large family - two moms, two dads. My mom's younger sister married my dad's younger brother and we live together and do everything together. And I was talking to my two dads and they essentially told me, "Either you make peace with what has happened or shut up and do something about it." As a family, we decided to jump into the space to build a factory to topple traditional manufacturing in the fashion space and do it in a different way. And how do we infuse ethics and sustainability at a very core part of the brand DNA?That's how I got into the space, so very unexpected. I was actually going to go into healthcare consulting. That's been a dream of mine since I was in university days. And it was a little bit of a moment with my mothers. They were so appalled with the idea of me jumping into an industry that I had no idea about. But here we are and it's been six years.Fabian Geyrhalter:That is amazing. First of all, it's a very unusual way to start a company. But then again, it isn't because it's all about passion and you were very passionate about this. But what is unusual is ... "So we started a factory." That is not something that you usually immediately do. Usually, you start outsourcing to other factories. But I believe in your case you just basically had to build a factory based on your ethical standards because you couldn't see it done that way anywhere else.Shivam Punjya:Exactly. And I think that you hit the point exactly. And I think what happened was for us, we didn't ever really see ourselves in the beginning having our own fashion brand. We thought that we would manufacture for other fashion brands.Fabian Geyrhalter:Interesting.Shivam Punjya:But what we started to realize is that when we talk to people about Made in India, people were skeptical of working with us. What we started to realize is that we needed to set the gold standard for what could come out of our factory, which is why we created Behno. And we wanted to showcase a luxury product that was really tailored that was not made in a sweat shop and not hippy dippy in aesthetic. We put some of the presumptions that people have against products coming from India, especially in the fashion space, and that's how Behno was born.Then we also started to realize that there was immense potential to actually create a brand manufactured in India that would sit in the global marketplace, so that's kind of how the brand started. Yeah, we initially wanted to manufacture for other people and now we have changed our business strategy a little bit so we've pivoted away from that factory to make Behno products exclusively, but that's the initial stepping point.Fabian Geyrhalter:And you started with women's fashion and then you moved more specifically into handbags. Is that correct?Shivam Punjya:Yeah. We made the pivot about two years ago. We launched with women's ready to wear. Full collection, knitwear, wovens. And we realized that our social impact on the backend was directly related to how financially well-backed our business was. And women's wear, it was a tough space to be in and was not necessarily something that we were getting a lot of traction on. And we started having a lot of buyers comment on handbags that we were designing and styling in our look books and we decided to make that pivot then. And I think that was one of the biggest breakthrough moments for us.One of my mentors, Denise Seegal, was helping me navigate these paths and she serves as our acting CEO and she founded DKNY with Donna. She used to be the president and CEO of a lot of Americana brands like Calvin Klein, Nautica, [inaudible 00:05:11][crosstalk 00:05:11]-Fabian Geyrhalter:Her name rings a bell, even for those not in the fashion industry. Yeah.Shivam Punjya:Yeah. She helped me make that pivot and I think that was single-handedly probably a moment where we started to realize where Behno really could be in the fashion space and we felt that the buyers were interested in it, there was room to play with other factories and make significant partnerships there while converting MSA Ethos, the factory that we built, to have a slightly different purpose.There's been a lot of pivots but I think, yeah, to answer your question, we started off with women's wear, now we focus on leather goods.Fabian Geyrhalter:And let's talk a little bit more about that ethos. What does it entail? How do you run your business differently than, let's say, the typical luxury fashion house?Shivam Punjya:I think one of the biggest things is understanding that when we manufacture a product, we are working with communities that are very different than ours. And I think this comes especially ... to become a point for brands that manufacture in developing spaces but our headquartered in the west. And I think that as a brand we spend a lot of time in the field. Myself, pre-pandemic, I was going to India nine to 10 times a year. My design team was going five to six times a year working with the factories, working with the artisans, working with the garment workers on the floor at the factory.And I think this single-handedly might be one of the more important elements of our brand's ethos and our brand identity, also, because I think ... I'm not a garment worker. I'm not an artisan. I do not know what it takes to be a garment worker or be an artisan. And I think that it required us to interact and have relationships with the people at the grassroots when we're trying to impact change in that same space. Top, down policy. Very colonial. India's a colonized country so I think they had a history with that. And what does it really mean to build capacity with people at a grassroots?I think this is one element that's very important to me personally but also to the brand where we include the folks that we're working with and the communities that we're working with at the center of our narrative.Fabian Geyrhalter:And did you see any changes in the industry since you launched roughly six years ago? Is your concept of your standards, the Behno Standard ... Do you see other fashion companies slowly starting to adapt to that new way of thinking?Shivam Punjya:I think six years ago it was very difficult for me to get an ear to talk about ethics and sustainability. Fashion always has known that we have had issues in how we manufacture and the product life cycle and the trendiness of it all. But six years ago, not everyone was open to talking about it. It was still one of those subjects that people didn't know how to interact with. Now, every publication is talking about sustainability on a day-to-day basis.Fabian Geyrhalter:Yeah.Shivam Punjya:Since six years ago, there's been tremendous changes. Also, when we created the Behno Standard six years ago, it was very much a grassroots standard created with me having spent time on the grassroots with communities in academia coming up with the Behno Standard ranging from six different categories addressing healthcare to women's rights to family planning to eco-consciousness. And now, so many folks have come up with their own standards. There has also been, to that extent, some green-washing where people don't necessarily know as a consumer what's really making an impact and what's being done for brands to play now in that space where if you aren't sustainable, they're a little bit worried about how that might impact their top line business.Fabian Geyrhalter:That's really interesting. The idea of green-washing and now it's like ethos-washing or whatever you would call it. I agree. Now it is the thing to do and now everyone is doing this. Really, from a consumer point of view to understand which brand is actually walking their talk and which is not is extremely difficult. With the Behno brand, how do you showcase what you're doing? How do you make sure that people don't think, "Oh, here's yet another one that's doing it this way."Shivam Punjya:Yeah. I think it's very much about talking about the process and inviting people into the process and letting our consumer have a stake in that process. Ultimately, when we look at our business model our consumers are probably one of the largest stakeholders. They allow us to progress and make the social impact that we're trying to have. For us, we have a section on our website which talks about the sense of Behno and what that makes ... what does that do for the brand? And how does the brand contribute to it? And I think it's about peeling away the curtains and inviting someone into that space.That's one very aggressive way that we try to be a resource for our consumers. But what we require our consumers is to ask their favorite brands, "What are you doing?" And I think that's the space we try to use to answer that question.Fabian Geyrhalter:Fantastic. Yeah. Absolutely. And then on the flip side, you talked in the beginning of our conversation about how there was a certain perceived connotation about the Made in India brand. Like the idea of Made in India and what it means to the western consumers based on their, again, preconceived notions. How is that being seen now by your customer? And are you ... Do you feel like you're actually making an impact and you're changing that? And do you see that maybe people start thinking about the Made in India label as something different today?Shivam Punjya:We've been very lucky to get significant press around our ... over our mission.Fabian Geyrhalter:Yes, you have. That's why we're here.Shivam Punjya:Yeah.Fabian Geyrhalter:I have read about you in a lot of places. Absolutely.Shivam Punjya:Yeah. I think that the perception is changing. What we are learning is when we were doing ready to wear ... I'll give you a very frank example. We had a buyer from a very reputable store come in and she loved the collection and she asked where the products were manufactured and we did mention that they were made in India. She didn't proceed with the order. And I think that speaks to some of the strong presumptions. But now we're working with the same store and they see the product and they see the design aesthetic and they see the quality of the product and they completely have changed their perception.And I think that's something that we love to see. I think that's very important. And I think that India has always been a space where a lot of luxury brands go for all of the hand embroidery and hand embellishment work. You have some of the largest houses doing this work in India and I think the supply chain uses developing spaces so aggressively but seldom do developing countries get the recognition for that supply chain.Fabian Geyrhalter:It's really cool. It's really, really interesting. Can you share the meaning behind the brand name with my listeners? Because Behno doesn't mean too much to them but I know it actually has a really deep meaning for the brand.Shivam Punjya:Yeah. Behno means sisters in Hindi. And the reason why we went with sisters, Behno, was a few reasons. In our garment factories, a lot of the female colleagues are referred to each other by their first name followed by the suffix of Behn, which means sister. So, if I had a garment worker colleague named Nene I would call her Nene Behn. And the plural of Behn is Behno. It's talk to an idea of a community of sisterhood that exists in these spaces. And then I also have a lot of sisters in my own life. My mother's a sister and I have a sister of my own, so it just felt very apropos to use Behno.Fabian Geyrhalter:And I believe now when you're prompted ... On your website when you're prompted to join the email list you're actually asked to join the sisterhood, right? So it becomes woven into the brand language, as well.Shivam Punjya:Yeah. I think that when you support a Behno product or when you support Behno, you ultimately are becoming a part of a very curated, eco-conscious, sustainable, ethical consumer. And I think that that's something that we should wear very proudly. And I think that these sort of communities are important to build because that's how movements start. That's how change happens.Fabian Geyrhalter:Absolutely. 100%. Let's move over to talk about Instagram because I know you're extremely active ... or maybe you're not even that active on Instagram but you're very popular on Instagram. You've got a lot of followers yourself, personally, as well as your brand. I personally always go to a brand's Instagram feed first to truly get an idea of what they're doing right now and who they are in ... their most authentic selves. You really get a good idea of what a brand is about. And I felt the same when I went to Behno's Instagram feed, so I wonder for you ... do you feel that Instagram is more important to your brand than even your website, which I know is something that we wouldn't have said five, 10 years ago. But do you feel Instagram has that kind of importance at this point in the marketplace, especially when it comes to fashion?Shivam Punjya:I think that for the industry at large, social media, Instagram specifically, has been very important. I think for our own business model, I think the website still serves as the primary source of information and discovery. I think that Instagram is more complementary to a consumer's experience. And this is purely from the data that we have; how many people are coming onto our website or shopping with us through Instagram. I think these are some of the numbers that we have, so I think it is more supplementary for sure.But I think that Instagram ... if you're not there it does take away some engagement that's very valuable for us as a brand both on a product level but also on an ethos level, especially when I'm hearing about big companies like Bottega that are stepping away from Instagram. And I think that's very interesting to me because what does that speak to the industry at large? But I do know that as an emerging brand we do rely on it quite a bit.Fabian Geyrhalter:That is really interesting and that's the first time that I hear that. Why do you think they're doing that? Why do you think they step away?Shivam Punjya:I think Daniel Lee is tremendously brilliant. I think that his team ... I'm sure there's some sort of strategy behind it. It's not just ... They're not just switching their switch one day and saying, "Let's be off of it."Fabian Geyrhalter:Sure. Yeah.Shivam Punjya:I think there's definitely something very meticulously planned behind that decision. However, I do think that it's an overload where I'm constantly on my phone. I feel like that I'm communicating with a lot of our editors through Instagram and I think that maybe people just need a breather. And I think people need to just experience life outside of our screens a little bit more, especially in today's world where the pandemic encourages us ... really, forces us to stay at home and work from home and limit our outside exposure.But it's a different time. I'm always on my phone and I would love to not always be on my phone. I think that might be another adding factor to brands maybe reassessing the role of social media.Fabian Geyrhalter:I wish you would be right. I have a feeling that brands still are not that empathetic about their customers now. I think it is something that most probably most of us feel the pressure and the burden that we are constantly on our phone because of everything that you just said.Shivam Punjya:Yeah.Fabian Geyrhalter:And changing that, I think, is ... It's important for all of us, for our health and for our sanity to go out and to experience other things. And like you said, now this is really ... it is different. But I do wonder if that is a brand's perspective, unless you're that empathetic, which sadly most large brands, especially fashion brands, I don't see them as being, which is different from Behno.Shivam Punjya:Right.Fabian Geyrhalter:You really lead with empathy. And talking about which ... And still on the topic of Instagram, on June 6th of last year, 2020, so four days after the hashtag #BlackoutTuesday took over social media, you guys did something different. And I'm going to read the post that you guys posted back then. It said, "PSA: As an emerging label, we want to do our part to make space. For every order that comes in, we're committing to return 40% of your order back to you. Please redistribute these funds to support a Black-owned business. It's an honor system. Can we count on you? Click the link in the bio to text us for a list of resources."I thought that was really clever, as you put the decision power back into your customer's hands. It talks about transparency. It talks about empowering others. And you empower your customers to then make a choice on their own. And I'm wondering, like so many of these quick, instantaneous ideas that ... which is the power of Instagram, right? You have an idea, you put it out there, you see if it works. Did it work? Or was it too complex for your audience to grasp how detailed this goes? You have to text and then select something and then you have to give money back. How did it work?Shivam Punjya:Logistically, it was relatively a simple process. I think the consumer was well aware that they would pay full price and then we just refunded back 40% of all the orders that did come through. Did it work? It was not maybe as greatly a success as maybe we thought it would be. But then again, we didn't intend this to be a sales campaign.Fabian Geyrhalter:Yeah.Shivam Punjya:This was not something that we intended to make up for a sales promotion that we would do at key holiday period during the year.Fabian Geyrhalter:Right.Shivam Punjya:That was not our intention. So, for us to compare ... I don't know what I would be measuring against if it worked, but what did come through is conversation.Fabian Geyrhalter:Right.Shivam Punjya:And I think that a lot of people were very shocked that we would do this.Fabian Geyrhalter:Yeah.Shivam Punjya:And a lot of people were curious why we wouldn't just donate to a reputable nonprofit doing work in the space directly. For me, I think, like you said, we need to empower ourselves. It's our responsibility to do the work on our end, as well. I think that as a brand we could have easily donated to a nonprofit but that takes accountability out of our own hands. And I think that as consumers we have a responsibility to play in discovering, supporting, being allies and, really, being in solidarity with the Black community. I think we wanted to make very clear that it wasn't just our responsibility as a brand but it also was our consumer's responsibility.Fabian Geyrhalter:Yeah. I absolutely love it. And it really was a statement more so than a sales campaign, like you mentioned. Absolutely. Because that would have absolutely backfired, too. That's not what it was about. But I really like the thinking behind this and not jumping right onto the bandwagon on #BlackoutTuesday but taking a couple of days and thinking about, "How can we really do something that is in line with our brand?"You keep using text messaging as your main source of contact for your audience. On Instagram you say, "Click on our link and text us 'Hello' and we'll be in touch." And the same thing happened with that campaign. Do you see text being a new means of customer communications? Or does it work well for you?Shivam Punjya:It works tremendously well for us. I wish more brands that I love had those sort of services. I think that building a relationship with a customer service representative at a brand is so important. I think that when I hear feedback from what we hear from our customers is very real feedback. What they don't like about the product, what they ... maybe could be done differently. I think it helped product development. But on the flip side, it also encourages us to talk to our customers about the product and the raw materials and the supply chain. And I think that is something that we also really take a lot of pride in.But lastly, a lot of our customers like the product but don't necessarily know what might be good for their lifestyle, so it allowed our team to help them find the right bag or them. And I think this level of communicating is very different than an email because you can also email a client servicing email address but I think that this is quicker, it's instantaneous. There's a level of intimacy that we get over these text messages and their conversations rather than email communication.Fabian Geyrhalter:That's really wonderful and refreshing to hear. I talked about a year ago, maybe a little over a year ago ... I talked with Michael Lastoria, who's the CEO and founder of &Pizza and what they do is they actually have ... They don't have Slack internally. They don't have any of these systems. They don't even use email. The entire communication for the entire company is via text message. It was amazing to me to hear that. And he said very much what you said now, just that he uses it internally, that people want to communicate on their terms and that's how people communicate these days during the day. You text everyone, right? You text your friends, you text your family, so why not be part of this infrastructure that they already enjoy? And everything becomes more amicable and more personal because of it.Shivam Punjya:And not only that ... Just to quickly add on.Fabian Geyrhalter:Yeah, yeah, yeah.Shivam Punjya:I think as a luxury ... a contemporary luxury brand, how do we bring white glove service, which is very big in the furniture world, into a handbag company? And I think that's also very important to us is how do we create a luxury experience at a price point that's a quarter of a luxury bag's cost? And I think that's something that's very important, too. And I think people ... I, as a consumer, love to be taken care of and love to be looked after. And I think that we want our consumers to feel the same way where there is a team of people that are looking after them and there for them if they have any questions at all.Fabian Geyrhalter:Absolutely. Yeah. Absolutely. Looking back at your journey, or rather the Behno's journey, what was one big breakthrough moment where you felt like, "You know what? It was a startup but now we're actually ... we're turning into a real brand. People know us, people talk about us."? I know ... and you mentioned that you got tons of press for what you're doing and for your product. What was the one particular moment or one particular article or something where you felt like, "Okay, this is it. We're moving up."?Shivam Punjya:I think one big moment was when my mentor Denise Seegal decided to join on as acting CEO. I think that was a breakthrough moment for the company. And the day that we decided to pivot into handbags. I think that single-handedly impacted the way that we positioned ourselves in the space.Fabian Geyrhalter:Yeah.Shivam Punjya:Because now we were playing, again, a lot more of a competitive market because handbags ... There's only so much utility and function and design changes that we can really make. But it became a moment were we were forced to put on our creative and branding hats again and change everything. And then, of course, that change allowed a lot more marketing opportunity, as well, where we were able to redevelop in a more obvious way what our branding standard would look like.Fabian Geyrhalter:And I suppose it was more niched out, right? You had a better overview of what's going on in that particular niche of the industry.Shivam Punjya:Absolutely. And I think that a handbag is quite possibly the last thing someone puts on to finish up their look, even probably after they put on their shoes. So, I think it's not necessarily the first product people buy but I think that it definitely is the last product people think about. I think that that, in itself, is very important. How do we allow us to communicate with our customers that this is the product that will finish your look?Fabian Geyrhalter:Very interesting. Yeah. Come think of it, that actually comes out nicely in some of the posts on Instagram, too, where it is about finishing the look, which psychologically it's fantastic that you went through the journey to understand when does your customer actually think about your product and then you replicate that.Somewhere I read the following ... It must have been on your website or Instagram or maybe in one of the articles about your brand. It said, "Our founder envisioned manufacturing to be radically different where garment workers in factories weren't just a part of the supply chain, but instead an intimate part of a brand's core DNA." And brand DNA is so crucial for any company to really think about and to really understand. And the best brands can state their DNA in one or two words.If you look at Everlane, it's radical transparency. If we look at Zappos, it's customer service. I guess now they just call it Wow. That's their brand DNA. What is one word, two words that can describe your brand on that ultimate DNA level?Shivam Punjya:Our tagline is, "The world's finest consciously-made handbag." But I think the one word to describe us would be investment. For us, that word had a multifold meaning. Investment not only in the communities that we work in; the garment workers, the artisans. You're investing in a product that we encourage you to have in your wardrobe for many, many years. And I think that a lot of people assume investment handbags to be those in 1000s of dollars, like the Armez, Birkins; an investment piece. How do we define investment in handbags?You can look at spending $400 on a handbag as an investment if you intend to keep it in your wardrobe, love it the way you would love a bag perhaps someone would spend $1000s of dollars on. But then, also, you're investing in yourself and you're investing in how to finish the look. And I think that investment, for us, has multiple different [inaudible 00:28:32][crosstalk 00:28:32]-Fabian Geyrhalter:I would have thought of so many words and investment would have never occurred, top of mind, right?Shivam Punjya:Right.Fabian Geyrhalter:It is such a great word because of this multifunction that you just described. Great. Absolutely fantastic. You come from the marketing background and then you really studied science and humanity and now you've been running a brand. You've been pivoting along the way, you learned a lot. What does branding mean to you today?Shivam Punjya:Branding is everything. It means that we have to look at every aspect of our brand from the same set of lenses and making sure that we're completely aligned internally as a team and as a company but we're also aligned externally with our consumers. And I think that is probably very tough because as a small brand, emerging brand, we're constantly changing. And we have to be nimble and we have to pivot. But through this journey we need to make sure that there's a consistent tone of voice and, for me, that's branding.Fabian Geyrhalter:Yeah. Really, really well said. If an entrepreneur is listening to this and he or she is manufacturing products right now, which a lot of them are and a lot of entrepreneurs are listening to my show. Or they're planning to produce something in the future and they're inspired by how you set your ethical standards. What are some tips for them to follow into your footsteps? To move from exploiting cheap labor like everyone else is to creating a nurturing environment? You also have a little bit of a legs up because you have your family ties with India and it probably was not easy, but easier for you to create this intrinsic community and really, really work hands-on.What are some steps that you think entrepreneurs should take when they say, "You know what? I'm going to raise my hand. I do want to have my product produced in an ethical way."?Shivam Punjya:I think something that's very important is to not be scared to ask questions to the manufacturing partners that you may bring on and work with. I think that's very important. There's no shame in asking questions and challenging the manufacturers that you may work with. That's one thing.Secondly, I also think that change has to happen at many different levels. And there is this notion in the industry where you only work with people who do things from the very beginning a certain way; that are already very ethical. But my goal has also been ... and I think I have some peers in this space ... is how do we work with people who are maybe not doing things the right way but help them change their business practices? I think there's also that level of engagement and capacity building that can be done.As a small brand, you can work with a factory that maybe doesn't hold to the standard you may have for manufacturing but slowly encourage them to change their practices. Invest time in helping them change those practices. And I think that it can become a collective effort.Obviously, the easiest thing would be to find a factory that adheres to your ethical standard, sustainability standard. A more challenging approach would be to partner with someone who's not doing that and then work with them to change.Fabian Geyrhalter:And that's how you create real change. That's just really, really wonderful. I love that. I just talked about this the other day. I used a product ... and I think it was something really random. I think it was something like peas. Like split peas for a soup. And I looked at the package and on the very bottom it said that this packaging is not recyclable. And then it said below, "But we are working really hard to find a solution to make it recyclable." And to me, that was so great.You see a lot of packaging that is not recyclable and you're just like, "Well, does this really work with the brand that I'm buying?" It's kind of weird. But saying that we're actively working on changing that, that we're aware of the waste that we create or a problem that we now put into your hands and we know that it is not in line with what you came to expect with our brand, I think is wonderful.I got a wine shipment. I think it was a case of wine. And it was packaged in those styrofoam containers and the brand is totally the opposite of that. It's all about organic farming and sustainability.Shivam Punjya:Right.Fabian Geyrhalter:I got that wine and the first thing that I saw was a little note that was printed on the top saying, "Shame on us, but we have to do this right now because we ran out of stuff." But it was great because they knew that customers think about these things.Shivam Punjya:Yeah. And I also think that as a young brand you have to take ownership for the negative push of your business, too. I think that just talking about the positives doesn't do anyone justice because I think that part of growth and change is addressing the negative. And I think that the ownership aspect, like you were mentioning people talk about on the packaging, is extremely important. It's always growth.Fabian Geyrhalter:I totally agree. But only if they actually really, honestly feel that way. Because a lot of brands really don't care and then they shouldn't state anything because they don't even want to change anything. So, I think that idea that it needs to be ... If you're a young brand and you care about these things but you're not doing them right now, you know that you will do them in the future. Talk about this. I think it's super important for customers to actually understand.We're coming to an end of this, but listeners who fell in love with Behno, where can they get their hands on your handbags? No pun. And how can they learn more about how you run your brand?Shivam Punjya:Of course, we invite all the listeners to come to Behno.com. B-E-H-N-O .com to learn more about the sense of Behno and what makes us us. But if you also are interested in product, it can be found on Behno.com. But we also sell to Nordstrom's and then we have all of the international distributors as well. That's kind of an easy way to learn about the brand.Fabian Geyrhalter:Fantastic. Awesome. Thank you, Shivam, for having made the time to be on the show. Really appreciate all of your insights and the story that you shared with us.Shivam Punjya:Thanks for having me. It was such a nice time talking to you.
Visit Pampa on InstagramSupport the show-------->Fabian Geyrhalter:Welcome to the show, Emmanuelle.Emmanuelle Magnan:Hello, thank you for having me.Fabian Geyrhalter:Absolutely. It's a great pleasure. You are calling in from Paris, and almost guaranteed, most of my listeners will not be familiar with your brand, Pampa, and that is because you are a boutique floral arranging and delivery service in Paris. So, not US-based or international, but your Instagram is exploding, and the New York Times has even found you, and now so have I.I even believe that this is your first solo audio interview in English, which flatters me. This is really cool. I read somewhere that you or your partner, one of the two of you, said, "We are always trying to twist the flower world. That has been old school for a while." Tell us a bit about how Pampa started in 2016, what the inspiration was, and why you and your co-founder thought Paris needed yet another flower store.Emmanuelle Magnan:Yes. Well, I should start by presenting Pampa and telling you a bit what it is exactly, because precisely, I think we're more than another flower store. We are a new kind of flower brand, englobing a flower shop and a creative studio that is dedicated to companies and brands. We started out in 2016, as you mentioned. We started a small, online flower shop.And really quickly, we started working with the coolest and most prestigious brands, artists, et cetera. And I'd say we have a new approach to flowers and the flower industry, more modern, more colorful, more eco-friendly, also, as much as we have the possibility to be.Concretely, what do we do? We are a B2C and B2B company. On the B2C side, we are a flower shop. We sell fresh flowers on weekly arrangements we have ... Sorry. We have weekly arrangements available in three sizes, that's it, and we also deliver dried flowers. And on the B2B side, we are a studio, as I said, and we have three types of services, which are design, gifting, and even workshop animation.Basically, when we started out, what we wanted to do first was disrupting the online market. At that time, it was dominated by three major competitors that had been there for ages, and that were, in our opinion, not really in phase with the needs and tastes of our generation. They had been on the market for ... Some of them 20 years. They were one of the oldest companies on the internet, maybe one of the first companies, e-commerce companies.When we were developing the business and benchmarking, we had four main observations. One, there was no clear differentiation from a competitor to another, like they were ... If you went from one competitor to another, they had the same website, same kind of products, same level of services. Secondly, their product offering were always on the ... built, sorry, on the same model.Fabian Geyrhalter:Mm-hmm (affirmative).Emmanuelle Magnan:They all had dozens of different arrangements in different shapes, colors, with various types of flowers. Some were exotic, some were red roses. You didn't ... It was kind of slow and tedious customer experience. You would arrive on the website, and you would be like, "Oh my god, there are so many different kind of arrangements. I don't know what to choose." And we figured out that there was another problem with that, that was stock management issues and high waste potential.Fabian Geyrhalter:Right.Emmanuelle Magnan:Right. So then, the third observation that we had is that there was a big lack of transparency. You didn't really know who makes the arrangements, how are they delivered, who is behind those big platforms, et cetera. And finally, we figured that there were actually no strong brands. Yes, there was Interflora, that is one of the oldest ... It's the oldest service. It was there before the internet, by phone and so on.It's a brand, because everyone knows it, but there was no ... For us, it was missing this modern thing about it that we, the young generation, wanted to identify with. You know?Fabian Geyrhalter:Yeah. Oh, yeah.Emmanuelle Magnan:So, we thought, "Okay, competition is strong in this market. There are already hundreds of florists on the streets. Our value proposition should be, first of all, one weekly arrangement, available in three sizes, delivered by bicycle." Actually, nobody did that at that time, it was really bold to go on the market that way, because ... Well, we didn't want to repeat the same mistakes.For us, it was a kind of mistake to propose on the internet so many different arrangements, right? So, we thought we could do as new ... In restaurants, the new kind of chief, what they do is that they go to the market, and they see what is available at the market, and they come back to the restaurant and they just design one single menu. You know?Fabian Geyrhalter:Farm-to-table. Yeah. Exactly.Emmanuelle Magnan:You know what I mean?Fabian Geyrhalter:Yeah.Emmanuelle Magnan:And so we thought we could do the same with flowers, so that's what we wanted to ... the spirit of what we wanted to design. And secondly, we thought, "Okay, let's do a mobile-friendly website on which you can order your arrangement in three minutes." Thirdly, we wanted to have a more humanized and less product-centric approach, be it on the communication or customer support level. Those brands were ... Well, those platforms were a little bit on Instagram, they were starting to be, but everything was so product-centric, you would see the arrangement, that's all, on a table in a vase.And what we wanted to bring was people in the way we would communicate around the product. It's not just about flowers, it's about people who make them, people who consume them. Consume is maybe not the right word, but people who buy them, et cetera.Fabian Geyrhalter:Mm-hmm (affirmative).Emmanuelle Magnan:And also, we wanted to be really close to our customer, and be at their service. At the beginning, we did ... I mean, we still do that, actually, we do everything we can to deliver an arrangement, because it's so important. When you want to offer flowers, you're putting your heart into it, right? So, we will do everything in our power to make this delivery possible.Lastly, what we wanted to do was an emphasis on branding, with our brand codes coming from other disciplines, like fashion, for instance. That's what we ... I mean, that was the basic concept. And that's how we launched. I don't know if it's clear.Fabian Geyrhalter:It is very clear. You just checked off all of the boxes that new companies and startups need to check off when they launch a business, so this is really, really great. And I mean, it's music to my ears. When I said, "Why did you think Paris needed yet another flower store?" Right? Because it is so well known, the Parisian flower markets, and it just ... It goes hand-in-hand with it, but everyone is doing the same, and you just really looked at every aspect of the business and said, "How should this be done in 2021? What would people really need today, and how can we work on sustainability? And how can we bring up a different style?"Talking about your style, your actual brand style, that's how I found you. I literally think I was just scrolling through Instagram and I found one of your arrangements, and then I saw the logo and I saw the colors and I'm like, "Wow, that's wild. That's different." And that's how I literally reached out to you, without knowing too much about the brand. Then, the more I read, the more excited I got to have you on.Your style, the brand style, and the style of the bouquets, it is super eccentric. It's loud, it's graphic, and the New York Times had this article where it said ... I don't know exactly what the article was, but it basically talked about, "Here are 10 cities," and the best, most different flower shops in each one of the cities. And Pampa is part of it, and when you literally scroll through that article, yours is the only brand that stands out.I mean, you scroll through it, and suddenly it's like, "Whoa!" Because it is, it is so loud. Right? You can't mistake your bouquets for anyone else's because they're so distinct. So, I'm wondering, since you are also ... You're a co-founder and you're a creative director at Pampa. Tell us how this unique style came about. I mean, it is very specific. It's very distinct.Emmanuelle Magnan:Right. Well, first of all, thank you for saying all this. You can't really see it, but I have a big smile on my face because it's such ... It's all my work and all my heart are into this, and we worked so hard to develop this brand, and this new kind of product, and to innovate and to be singular and one of a kind. I mean, we work a lot on it, but it's also so natural. I think our team is made of people from various horizons, and they have been working in different disciplines before. They come from architecture, interior design, circus, so it's ... My co-founder, she comes from the events ... How can I say that?Fabian Geyrhalter:Event coordinating? Emmanuelle Magnan:... for big events and yeah, event organizations, right? So we are all very creative, and I think it's also thanks to that team and this mix of profiles that we are able to create such powerful brand. But where it came from, I think ... Well, so I'm the creative director, right? And I co-founded the company with Noélie, and when we started working on the project I had already so many mood boards, and I had been thinking about this project for so many years, because I was a flower lover, and I was also very ...Well, I wanted to create a brand, that was my passion, also. Anyway, I'm color obsessed and very sensitive to color schemes and harmonies, so there's a big work on color associations. Everything we do is a research in colors, there's a big work on color associations. Everything we do is like a research in colors, and another big characteristics of our style is that in every arrangement we do, we mix a dozen of different flower varieties. It gives these wide, large spirits, and I think it's a real, and that's what we wanted to create, it's a real experience to look at our arrangement, because you have so many things to look at.I think what we're looking for is what we say in French, [French 00:13:48], this extra-special something that will twist an arrangement. Sometimes, we put disco balls or feathers, glitter. We are playing with flowers as ... And thank you for saying that, I think it didn't ... It hasn't been done before, I think. We are exploring creativity in flowers, we are-Fabian Geyrhalter:It's your canvas. The flowers are your canvas, right? And then, you just start-Emmanuelle Magnan:Yes, it's ...Fabian Geyrhalter:Yeah.Emmanuelle Magnan:Exactly. It's colors and flowers, and I'd like to say that you can actually think of our arrangement a little bit like an outfit. It's a set of colors that go together. Imagine if the stripes of your shirt was matching your shoelace, and your hat was matching your belt, et cetera. We like to create ... Yeah, a color scheme and the flowers are a big inspiration. We are trying to find the most singular and always with small details, that maybe we are the only one to see, but we are trying to ...There are thousands of different flowers, and we are trying to show the variety of it, and we are trying not to use what every florist use, actually, and has been using for so many years. We are trying to show the beauty of flowers with our arrangements.Fabian Geyrhalter:I saw one interview with you in a French publication, I believe it was, where you talked about how one of your bouquets was inspired by a Nike Air Max. And I'm wondering [crosstalk 00:15:51]. So your inspiration, really, comes from anywhere. And like you said, it's very close to fashion, and you talked about you have an architect on the team, and it's really...It's kind of like this multi-art-inspired endeavor when you start working on your arrangements. Are those moments of inspiration, like a Nike Air Max, are those being shared with your audience? Do they actually weave into your storytelling, or is that more something that happens behind the scenes?Emmanuelle Magnan:I think it's both. Sorry. I think it depends. About the Nike shoe, actually, it's because Nike launched a shoe that was designed by women, for women, and they contacted us to ...Fabian Geyrhalter:Oh, how cool.Emmanuelle Magnan:... to launch for the ... Yeah, we were so proud.Fabian Geyrhalter:That is awesome. Emmanuelle Magnan:Yeah. In terms of branding, it's like Nike is the ...Fabian Geyrhalter:That's it, that's the Holy Grail. It can't get bigger than this. Yeah, yeah, yeah, so you literally did an actual project for Nike to create arrangements.Emmanuelle Magnan:Yeah. We worked in one of their Parisian store. We made a flower installation, and we were also there to ... for giveaways. If you would buy this pair of shoe, of Nike shoe, this precise pair of shoe, you would get a Pampa gift, a Pampa flower gift. So, there was this activation. And also, they partnered with a fashion Instagram magazine. Well, fashion magazine that is based on Instagram, and they asked for artists to create a piece inspired from the shoe.I was one of the selected artists, and it was so fun to make. And so, everything can be an inspiration because I think it's, again, this work on color and texture, and we are also very ... We come from, as I said, Noélie come from the music industry, the events' industry, and I used to work also in that industry when I was in agencies, and we love music. We love party, we love celebration, and all this kind of ... We take inspiration in so many different things, actually.And yeah, we share that with our community, to answer your question. On Instagram, we share a lot of things. We show a lot of behind the scenes, and at some point ... We don't do it that much anymore, but I think I should do that again at some point. Each time we would do a new weekly arrangement, each week we would associate it with a music that we like.So in our newsletter, it will have the song of the week, and stuff. And yeah, and sometimes I can be inspired, sometimes ... I don't know, we did a '90s-inspired arrangement with psychedelic colors and ... So yeah, I think it's a mix of pop culture and arts, visual arts, and flowers-Fabian Geyrhalter:And I think knowing that story behind the bouquet it's just so exciting, and it's so much fun to know that there's actual thought being put into it. Right? Which is the exact opposite of those Interflora, huge floral shops, because there is no ... I mean, yes, they work together and they're all nice, but there's no huge inspiration behind it. There's no story behind it, and I think that's what ... That's what creates brands, period. Right? When there is a story behind it, so I think that that's really exciting.I love how you started talking a little bit about your background, because you come from the agency background. You worked at TBWA, which is actually where my wife also worked, but she worked in the LA office, and you worked at all kinds of fantastic agencies. And that career, actually, being organized, overseeing projects in the creative field, I'm sure that shaped the ability for you to create, but also to run Pampa, right?Emmanuelle Magnan:Right, for sure. Exactly. I started working in agencies as a project manager after I graduated from business school. During that time, I worked with such talented creative directors, communicators, brand strategists. It really allowed me to build myself a brand culture, also have a keen eye on aesthetics, actually, and a sense of style in all direction.I was working with people who have such an incredible taste, and educated me in that way. That's when I started doing mood boards, and that's also where I learned how to code CSS, how to use InDesign, Photoshop and so on. I learned by myself, because I was ... Actually, I was just dreaming to be on their side. I wanted to be the art director or the creative director, but I was a project manager.And actually, it was such a good training. I mean, being a project manager gave me this ability of anticipating everything and every problem.Fabian Geyrhalter:Totally.Emmanuelle Magnan:Yeah, and it gave me the skills of prioritizing, organizing, working with methodology and excellence, because you always, when you work in an agency, you have to be very exigent so that your client is satisfied, and you have to be very ... rigorous? I don't know if-Fabian Geyrhalter:Yeah, yeah, yeah. Rigorous, yeah.Emmanuelle Magnan:And yeah, and it helps me every day in my job, in management, and also in creative direction. I'm so glad I did that in my previous professional life, and yeah, when I was in ... I think it was before I went to TBWA? Yeah, I started thinking about this flower project. I was passionate about flowers, I used to offer a lot of flowers to my friends, my mom who was not in Paris. She was in another city, so I experienced a lot those websites we were talking about before.Fabian Geyrhalter:Yeah.Emmanuelle Magnan:One of the first agencies I worked at, I met Noélie, my co-founder. We were together working on a music festival, and we actually run into each other few years later, and we started talking and we figured we both wanted to launch a product in the flower industry, a project, sorry, in the flower industry. And that's when I decided to stop my ... Well, I found this job.I had this job at TBWA, so I went there, because I thought I could learn ... still learn so much, and ... Sorry. I got a little bit lost. I took this job at TBWA because I thought I could still learn and have some money, save some money so I could start my business.Fabian Geyrhalter:Right.Emmanuelle Magnan:And then, I decided to quit and to launch Pampa, because we had this idea and we believed in it so much that I told myself, "Okay, we only live once. You have this idea, just go for it, and go express your creativity," because yeah, being a project manager was great, but at some point I just wanted to be on the creative side and express myself.Fabian Geyrhalter:Well, and being a project manager, it's stressful, but you don't see the rewards as much, right? Now, it is stressful, but you actually see the rewards. Right? You create your own journey, which is just amazing, and that's the beauty of entrepreneurship. Right? I think it's really interesting that you actually quit your job before you really started the project.I mean, you always thought about it, but to me, this is so important. I did things like that in my life, where I basically had to completely quit something and have this risk, this huge risk of like, "Well, what if it doesn't work out? What if the next thing ... "But because you have that, that fire behind you of, "Okay, I only have that many months to go," financially, "This really needs to work out. I'm putting money in, I put all my energy in." I think you have so much more of a drive than if you do two things at the same time. You still have your day job, you start working on it at night, like it's a very, very different thing, so it's cool to hear that.Let's move over to social media, because that's a huge part of ... In my eyes, I believe, but I'm not sure, I believe that that's a huge part of the success of Pampa. You have over 73,000 followers on Instagram, which is huge. I mean, for any US-based consumer brand, but for a small brand from Paris that is working very regionally, this is really, really remarkable.Obviously, as you said, you launched digital-first, but how did it get there? How did it explode that much? And what did you learn from it? What are some secrets you can share of how you guys actually pulled off your Instagram following?Emmanuelle Magnan:Well, it's one of the things we are so proud about, is that we gained each of these followers organically.Fabian Geyrhalter:Yeah.Emmanuelle Magnan:We never acquired any follower base, or never used any bots. I'm so glad we did that. One third of our audience is from Paris, the rest is from diverse cities in France, because actually, we deliver outside of Paris. We deliver our dry flowers outside of Paris.Fabian Geyrhalter:That's a really long bicycle ride.Emmanuelle Magnan:Right. More on that later.Fabian Geyrhalter:Okay, okay.Emmanuelle Magnan:No, but I will explain that to you when we get into that subject, but yeah, we don't deliver in bicycle-Fabian Geyrhalter:Yes, I had a feeling.Emmanuelle Magnan:... outside of Paris. But yeah, one third of our audience is from Paris, the rest is from other cities in France. And actually, 25% is from abroad, and 4.5% is from the US, actually. When I was-Fabian Geyrhalter:There you go, I'm one of the 4.5.Emmanuelle Magnan:Actually, I saw that while I was preparing the new podcast, and I ... Yeah, actually, you are 4.5, from the US, so I think it's [crosstalk 00:28:15]. Maybe if there's anyone listening that already knows us, hi. How did we get there? I think there have been a few levers that I'm going to list, but I think the quality of the content that we are producing, posting, is key. We always put a lot of efforts in using our own content, and we created something that is very eye catching and it hooks people.So many people tells me about our Instagram grid, actually. And actually, so many [inaudible 00:28:55] repost our contents. Anthropologie in the US once regrammed one of our posts, which is totally crazy-Fabian Geyrhalter:Oh, that's cool.Emmanuelle Magnan:You're a small brand from France, from Paris, Anthropologie is so big. Anyway, there's also tons of people telling us that we put color in their feed and in their everyday lives, so I think they just enjoy getting shots of nature and color and that's also why they follow us. They don't necessarily buy from us every week or every month, but they just are so glad to receive this positiveness into their everyday life.That's one part. And in terms of actions that helped us grow our community, we did work with influencers, but for free, though. They loved our brand and product so much that even big influencers that are ... The maximum that we did, she had like one million followers, and they were happy to collaborate for free, actually, because they ... Yeah, they love the product and the concept, so that, I think, that for sure helps us grow the community.We also did some sponsored campaigns on Facebook and Instagram that were product focused, but I think it naturally generated following, because even though it was product focused, it also worked on awareness, so we gained a little bit of them like this. But mostly, it was organical, real organical word of mouth. And also, we have had a lot of amazing PR opportunities that came to us also organically, if I can say.Fabian Geyrhalter:Mm-hmm (affirmative).Emmanuelle Magnan:If I can say it like that. We had the 8:00 PM TV news broadcast in France, that generated a lot of awareness, and a lot of following. You mentioned New York Times. We have been twice in Teen Magazine of the New York Times, which is crazy for us, and very soon, when we started the brand, very quickly we were in Architectural Digest, and other French TV shows, so I think it really helped us grow the community.But we never really ... It came to us, really, because we were so focused on operating the company and just ... How can I say that? Sorry. Responding to the demand, we didn't ... We never really invest that much in communication. We developed our content, and we shoot everything in-house, so that's a kind of investment, but actually the communication itself-Fabian Geyrhalter:That's amazing. Yeah, yeah, yeah. PR just came to you [crosstalk 00:32:19]. Yeah, yeah, yeah. No, you didn't have a PR agency at that point, right? It just all came to you. It was all ... And a lot of that was, most probably, through you being out there, on social media. Right? Then, it just started spreading, and then you started getting into TV and all of that, that's just ... One thing leads to another.Emmanuelle Magnan:Exactly. At the beginning, the first thing was word of mouth. As Noélie and I came from other networks of ... We used to work in agencies, we ... other companies, et cetera, so we knew people from other past experiences, right?Fabian Geyrhalter:Yeah.Emmanuelle Magnan:So I think at first the word spread in Paris, and each time someone needed flowers, they would say, "Oh, you should go to Noélie and Emma's project and you will see, Pampa, it's really cool, it's new, it's fresh," whatever, and it started like that. And yeah, and then I can remember the first influencer who talked about us on Instagram. We had like 800 followers, we had launched one month ago, and suddenly, it was 10:00 PM and I remember I was going to the market that night and had to wake up at 3:00 AM. And I was watching our following base grow and grow, like, "New follower, new follower, new follower."Fabian Geyrhalter:Oh, wow.Emmanuelle Magnan:She had just done one [inaudible 00:33:58]. Out of the blue, because a friend of hers who knew us talked about us on his Facebook page, and she reposted it on Instagram, and we gained 1,200 followers in one day. That was amazing for us at the time. And it's still quite amazing, because today things changed, and it's really difficult to gain a lot of followers in one shot.Fabian Geyrhalter:Yeah, yeah/Emmanuelle Magnan:Things evolving on the Instagram game, and I think it's not really the case ... It's not really as it was four years ago. But yes, so it's that mix of things that ... And we have now this incredible community, and we want to take time to share more with them. We want to do more. Actually, we do a lot of content that is purely visual, that you look at and, okay, it's nice to watch.But we want to make more tutorials, we want to make more things that are interactive, so I hope this year we will have some time and some ... Yeah, some time, actually, to put that into place.Fabian Geyrhalter:To get the community more involved [crosstalk 00:35:24]. Yeah, yeah, yeah.Emmanuelle Magnan:...and to grow it even more. Yeah.Fabian Geyrhalter:Before we talked for a second about the delivery method, because you pride yourself in the bicycle delivery, but on the other hand, you also scaled, you're now in different cities within France. I do know that sustainability is important to the brand, right? You're trying to leave a very small environmental footprint, you're composting green waste, even though you're trying not to have much of it, because your whole company, the way that you have that one bouquet, basically, a week, it's already all made for that. And then, of course, the deliveries with the bicycle.How do you push sustainability? And talking about scalability, how scalable is that as you expand?Emmanuelle Magnan:Well, your question on scalability is actually super relevant, and I'm going to explain why. But first, I'd like to just introduce ... make an introduction on what is sustainability in the flower business. There is A, a notion of origin of supply, right? Well, if you do work with local growers or not. B, there's a notion of green waste management.Like you said, we compost our waste. What is waste in the flower industry? It's of course the flowers you cannot sell, but it's also everything you ... When you receive flowers, you have to prepare them, you have to cut them, and there is all the parts ... There are all the parts that don't go into your bouquet of flowers that don't pass the ... Sorry. There are other parts that don't go in your bouquets, or don't pass the quality test that go into a bin.And in Paris, actually, there is no green waste management for free, so we work with a special company who comes every week and take our-Fabian Geyrhalter:Oh, wow.Emmanuelle Magnan:... waste and compost it. C, in sustainability in the flower industry, there is a notion of delivery process. Right?Fabian Geyrhalter:Mm-hmm (affirmative).Emmanuelle Magnan:Do you deliver by truck, by scooter, by bicycle? There is a notion of durability. Fresh flowers are so ephemeral. How do you cope with that? And there's also a notion, I think, of wellbeing of your team, and create safe and ... a pleasing space to work in.As far as origin of supply is concerned, [inaudible 00:38:05] small, and at that time 90% of our supplies were super local. We worked with producers around Paris, when the season allowed it. Otherwise, it came from European countries, but mostly from end of winter until middle of autumn, at the beginning we were working with French growers.But during the first two years, each quarter of our business grew by 20 ... Sorry, each quarter of our business grew by 25%-Fabian Geyrhalter:Oh, nice.Emmanuelle Magnan:So, sometimes we had so much work, so many orders, that logistics couldn't keep up. Going to the flower market at 3:00 AM, three times a week was not in this instance sustainable, no?Fabian Geyrhalter:Right. Emmanuelle Magnan:Business-wise, but also on a personal scale. I mean, it was-Fabian Geyrhalter:Oh, it's killing you. Yes.Emmanuelle Magnan:I was so tired.Fabian Geyrhalter:Yeah, of course.Emmanuelle Magnan:And it's also less time to manage your company, and to create other things than the arrangements. And deliveries from the flower market here are really uncertain, they are expensive, and they are often late, and we work on a very tight schedule. Every morning, at 9:00 AM, we have dozens of orders leaving our studio, and at the time we were doing a lot of events when ... Well, before COVID.Fabian Geyrhalter:Yeah.Emmanuelle Magnan:We had sometimes 10 different projects for 10 different brands in 10 different venues in one day.Fabian Geyrhalter:Wow.Emmanuelle Magnan:It was madness, so at some point there was no way we could remain profitable and healthy without working on a proper supply chain. And we wanted to work with our local growers, but unfortunately, we didn't manage to create a system where we could be ... we could have supply on a regular basis, because we are so ... We look so much into quality, we want to deliver the freshest flowers as possible to our customers. It's so important for us, that we need the flowers to come, but come in our workshop every two days, maximum; because we don't want to deliver flowers that have been in our workshop for five days and they will last three days at our customers'.It's no question. So we figured we had to start working with most organized people in the market, and that is Holland. They are really good and they are specialists of flowers for ... It's been like that for centuries. And so, we have been working with them for two years and a half now, and we have flowers that come from France, Holland, and Italy. We have buyers in Holland that connects us with very good producers from those countries.And we try to be as local as possible, as close to our studio as possible. We would love to have our flowers coming from France only, but it's actually impossible. The scalability you were talking about, at some point you have to make choices. Actually, we opened a physical shop a few months ago ... In December, so actually one month ago, and in that shop we will be more flexible and we will have less time constraints, so we are aiming at a super local supply, with flowers being grown by a new generation of growers who know our constraints and can adapt easily.But as far as our website is concerned, we need to have something that is very organized. It's always, you have to make choices so that you are ... You do the maximum bet. And beyond flower supply, because flower supply is one thing, but ... It's important, of course, but it's not everything. So, we are developing an eco-friendlier system as a whole, so we sell this one fresh arrangement online to reduce waste.When we launched Pampa, we directly started working with Olvo, who's a bicycle delivery cooperative. They are specialists of urban, eco-friendly logistics. And all their courier are actually wage-earning employees, so they are not like freelance who struggle and ... It's very important for us that everyone is well ... [French 00:43:26]. Well paid for their work-Fabian Geyrhalter:Well taken care of. Yeah.Emmanuelle Magnan:Yeah. And so, in Paris 95% of our deliveries are made through them. And in the rest of France, there's no way for us to do that, unfortunately, so when we'll find delivery partners who can guarantee a delivery with electric vehicles, we will for sure start working with them, but we're just being patient and wait for the rest of the chain and industry to evolve, so we ... For sure, I mean, the deliveries we do outside of Paris are made in a traditional way-Fabian Geyrhalter:Right.Emmanuelle Magnan:We finance the compost of our green waste, and also another way of reducing carbon footprint is to work with durable flowers, right? We work with fresh flowers, but also we work with dried flowers, and silk flowers that are seen as very old fashioned, but that for us can be amazing, aesthetically speaking. But also, because we can do rental and amortize their carbon footprint, and use them maybe like 20 times. So it's really interesting. We're trying to innovate in that sense, also.Fabian Geyrhalter:Mm-hmm (affirmative).Emmanuelle Magnan:And then, we created 10 sustainable jobs, and we try to give a correct lifestyle to our employees by paying them a notch above the rest of the market, and we provide them with pleasing work conditions and good hours. They don't have to go to the market during the night. Yeah, we are trying to be conscious on every side of the company. You know?Fabian Geyrhalter:Yeah.Emmanuelle Magnan:Sorry, that was a very long answer.Fabian Geyrhalter:No, no, no. It went into all aspects of keeping a brand sustainable and building a business in a certain way, which is fantastic for everyone to hear. We talked about Pampa for a good 40 minutes or so. If you would take the entire brand idea and entire brand story and what it evokes, and you would have to put it into one word, right? Like big brands, usually you're able to define a brand in one word. For Cola-Cola, they want to be seen as happiness, for Everlane it's transparency. What could it be for Pampa, in one word?Emmanuelle Magnan:I think that would be colorful, without any doubt. Because yeah, colorful is ... Sorry. Concretely speaking, yeah, it's the use of color, but for me, it conveys so many things beyond the actual ... this actual meaning. It's a spirit which conveys joy, emotion, celebration, and-Fabian Geyrhalter:Optimism.Emmanuelle Magnan:Optimism, positivity, and positivism. I think it's so important right now in the context we are in. It's our mission. Our mission at Pampa is to really change someone's day by bringing joy and color to their everyday life. That's our mission statement. So, by all means, we are aiming at surprising people, and I think the color helps changing their day, and helps them ... It's like a therapy, you know?Fabian Geyrhalter:It totally is.Emmanuelle Magnan:It's a therapy through color.Fabian Geyrhalter:I think it's funny [crosstalk 00:47:33]. It's so funny that you say that, right? Because, really, when I think about how I got in touch with your brand, is because I saw one of your bouquets on Instagram, and I just stopped in my tracks. And it was because it was so colorful, right?And then I went to the site, and it is so overly colorful and joyful and different and fun, and that's ... It's so great that that is your brand's DNA. It's your mission, it's your vision, that's what you want to provide people with. I think it's fantastic.I think this is interesting because you come from the world of brands, right? Working in ad agencies, and your co-founder with event coordinating and all of that. This is all very intrinsically about branding, but now that you've been running your own gig for a couple of years now, what does branding mean to you now, now that you've actually done it? What does it mean? How would you describe branding?Emmanuelle Magnan:I would say that I think it's absolutely central, especially in B2C. For me, it's partly how you will hook your audience, and create a community around your product and service, because you can have your product and service, right? They can have all the features, all the technical features they need to have to be attractive, but with a brand, it's how you'll create emotions. It's how you will create self-identification. It's like, "I want to be part of the gang." You know?Fabian Geyrhalter:Yeah.Emmanuelle Magnan:For us, and for me, it's a guidebook for everything we do. Everything we create, everything we communicate, I'm like ... Every time, I'm like, "Is that Pampa? Are we creating enough?" Sorry ... I can't find my word in English. "Are we game-changing?"Fabian Geyrhalter:Yeah.Emmanuelle Magnan:"Are we game-changing enough?" And at the end of the day, I think it's also very, practically speaking, it's a way to exist on a highly-competitive environment flower market is, and flower industry. So, when we started, it was very competitive, but now so many projects arrived on the market since we arrived on the market.Fabian Geyrhalter:Mm-hmm (affirmative).Emmanuelle Magnan:You need to stand out. And for me, branding is ... Yeah, it's about creating something higher than just a product. It's more than something commercial. It's a belonging, I don't know if it makes sense-Fabian Geyrhalter:No, totally. Yeah, yeah, yeah. Yeah, I always say it's infusing soul into what otherwise is just a product, right? Then, I think people feel that, that it has heart and soul, versus your competitors who might just ... Yeah, those are nice products, those are good products. There's nothing wrong with them, but would you follow them on Instagram? Would you engage with them? Would you be excited about the product?It's a different kind of aura that you put around yourself that attracts people, which I think is wonderful, and that's why I love being in the business of branding, because I think it's actually very meaningful. It's not at all something that is just fake. It's actually the opposite of fake for the ones that make it as a brand, like you and your partner, so ... Great, well-Emmanuelle Magnan:...and it's so interesting to explore how you can create a brand and make it ... always make it evolve, and yeah. Fabian Geyrhalter:No, exactly, and it has to be ... You have to be repetitive so that people know this is truly your brand, but you constantly have to innovate, right? And how do you do those two? And I totally agree, it's super fascinating. All right. We have to come to an end here, we could talk for a long time, but listeners who fell in love with your brand just now, how can they get Pampa if they're in Europe? Do they only get it in France, or do they get it in other places in Europe? And for those of us in the United States, and other places around the globe, where can they follow you on social media?Emmanuelle Magnan:Actually, we just launched the deliveries in Europe, so-Fabian Geyrhalter:Oh, great timing.Emmanuelle Magnan:... get our dried flowers, they can go to pampa.co, on our website and order. And to follow us, so there's Instagram, of course, Facebook, Pinterest, and you can also subscribe to our mailing lists, because this is a good way to get information and new products and stuff like that.Fabian Geyrhalter:Perfect, perfect. And for those of you who heard us talk about Pampa, I just want to mention it is actually spelled P-A-M-P-A, so Pampa for you guys, just so you know who to follow. Thank you, Emmanuelle for having been on the show. I know it was not easy for you to go through this in perfect English. You did so amazing, we're so appreciative of you doing this interview in English as a second language. It's really amazing, and thank you for all of your insights and for your time.Emmanuelle Magnan:Thank you for having me, and giving me this opportunity to speak about Pampa.
Learn more about Two Blind BrothersSupport the show-------->Fabian Geyrhalter:Welcome to the show, Brad.Brad Manning:Thank you very much, I'm glad to be here.Fabian Geyrhalter:Yeah, absolutely. I would have love to truly have the two blind brothers on the podcast, but Brian had just an emergency this morning, so I will pick only your brain today Brad, and that's just all right.Brad Manning:Well, to be honest, he usually ruins it with all the less intelligent things he says, it's usually insults directed at me, so this will actually be maybe the most productive interview we will ever have.Fabian Geyrhalter:Look, I staged everything but now you totally ruined it. We didn't really want him on the show. We figured this out a long time ago you and I. I'm super thrilled, I'm super thrilled to have you in the show. I can't believe that you went on the Ellen Degeneres Show before you end on mine, but I forgive you guys, because my show wasn't around in 2017, and that's why, so you're all good, you're clean.Brad Manning:Well, yeah, we just missed your email. I promise that was it, yeah. We told her to hold off but she was begging, begging to have us on, so we had to do it.Fabian Geyrhalter:I heard about that. It's a little bit embarrassing for her, but you got to do what you got to do. Really, really excited to have you. You guys went from selling your first shirt to your physics teacher back at school to being one of the fastest growing cause-driven companies in the US and all of that happened within one year. Your success and your story and your brand name, they're all very interlinked. Would you mind getting a quick introduction to the listeners who are not familiar with your brand, The Two Blind Brothers?Brad Manning:Sure. My brother and I have a rare eye condition called Stargardt disease. What that is, is it's a juvenile form of macular degeneration. A lot of people's parents or grandparents have macular degeneration. It's about 11 million people in the US who have a retinal eye disease, most of them is that adult macular degeneration and it's something that we grew up with. Our version of it was very rare. We really had no interest in starting a brand or a business around it. We both went to the University of Virginia. I ended up working in finance, Brian worked in sales for a data company. We just had this moment of serendipity where we were shopping in a store, and if you are blind or visually impaired sometimes shopping can be a big pain. You can't see the sizes, the labels, the prices. The way that we would always do it is just grab something beside it. We love the way it felt, and then we do all the other work to figure out if we wanted to buy it.On this particular day, we ended up buying the exact same shirt after having lost each other in the store. We were also, at that time, really fascinated with our recent medical, huge almost a miracle that they had reversed a very rare eye disease in children and we just decided, what if this could be our way to give back to a cause that we had always been close to, the foundation, Fighting Blindness, funding these early researchers, and make the softest clothing that we possibly could, and that's when we came up with the idea for our clothing brand, Two Blind Brothers.Fabian Geyrhalter:That's amazing. You are really on an end-to-end mission. Each shirt has a braille tag on its sleeve, your for production moved to an organization for the blind who are now manufacturing all of your clothes. You give a hundred percent of your proceeds to help find a cure, which, as you just mentioned, it might not be quite out of reach. There's a lot of clinical trials going on right now. Here is a very optimistic, hopeful thought. What is they find a cure? Do you have your brand roadmap all laid out on how the mission will pivot, perhaps to ensure everyone gets a treatment or to expand to other related causes? What is that end goal if you reach that first end goal?Brad Manning:Well, I'll tell you this, and this has just been a huge truth about, I'm sure anybody who runs a small business or a small brand can relate to this. The objectives seem to change every 3 to 6 months, in terms of where is this going, what are we doing. The mission is always going to be the same, keep funding the research. The truth of the matter is, it's not like a ... there isn't, at least not in a foreseeable future vision pond, but there isn't a one-size-fits-all solution. The truth of the matter is, we are going to be in this fight for a long time. The positive news is that it's really just that. It is just a matter of time.A lot of the science has been proven out. There are some of these rare single gene conditions, for example, that are actually being checked off the list. The one example I give, LCA called lebers congenital amaurosis, the therapy is called [inaudible 00:05:42], but there's many like it that are coming down. The mission is always going to be the same. The truth is the real spirit of the project beyond the donations of the research is really about empowering this community. That's actually been the thing that's been the most fun and the most exciting for us. We didn't really, maybe naively, didn't anticipate the role that the community would play in this. For us, it's almost like going back in time to our younger selves when we were maybe struggling with different aspects of the visual challenges or talking to or our mother. We hear from a lot of parents that are trying to get advice on how to raise kids who have a visual challenge, and that's been one of the most rewarding parts of the experience.Fabian Geyrhalter:You started by making a super soft shirt, which is such a huge part of the founding story, that's where even the idea came from, by being able to differentiate a product by touch. Now you make sunglasses, all very much relate back to what is at the heart of your brand. Offerings keep growing into socks and into backpacks, etc. Does it really matter? It's a mission-based brand, right? Does it really matter at this point what you sell, since the cause is at the root? As long as they are well-made products at a decent price point, are you at that point where you could literally start selling pretty much anything that is a lifestyle product and that is just a good product?Brad Manning:Yeah. People who are very smart on branding and marketing, which is actually not Brian and I. We learned this all along the way. There are some brands, guardrails, obviously that attentions to things that are soft, sunglasses that protects the eyesight. Really, and then more, we'll probably get into this with some of the other questions, but the truth of the matter is it's all about authenticity and what makes sense and what you actually believe in. That's been one of the fundamental aspect of this project, is when Brian and I decided it was going to be a brand called Two Blind Brothers. That's a general term that refers to him and I as individuals. In a way, it's forced us to be extra critical about the decisions that we're making for the customers in the business, because it ultimately reflects on us personally. My aunt Marilyn isn't happy with the socks that she's getting. I hear about it like it was my fault for getting her order late. It's very personal, but authenticity drives all of those decisions.Fabian Geyrhalter:You said a lot of the really important things here. First off you said, "Look, Fabian, we're not the great brand marketers and we had to learn this." I think you're giving yourself not enough credit, because the idea of how you branded yourself, Two Blind Brothers, the entire philosophy and how it's injected into the product and how it's so seamless, and yeah, maybe you guys don't have the brand knowledge, but you sure intrinsically have it in you, and that to me is ... and that goes back to authenticity. You just want to do what's what's right, and you put basically "your name out in the door", and you allow people in. When brands do that, it just ups the ante a little bit of what is being expected by themselves off of their own product. But really, you guys-Brad Manning:You know what it is. The way I think about it is it was purely bottoms up instead of top down. No one in their right mind would think of how much money they're going to make or or how much breadth or scale they're going to get. If they are creating a nuanced mission around blindness with premium priced clothing brand, but there's a few businesses that are probably more competitive than it, restaurants maybe. This is not ... this started from a place of, what are we 100% in love with doing, and if it were to fail on those merits, then now it's going to be just fine with us because we were so excited about it. From the branding perspective, I think something about that works because it allowed us to ... we started with what was 100% true and real and exciting and passionate for us. Then, we went out and found people who shared that feeling. I guess what I mean is it didn't start from that top-down perspective where you think about your ideal customer, your ideal market, product market fit and those types of important questions.Fabian Geyrhalter:Totally, totally, absolutely, totally get it. But I look at you now as a brand, and I look through your Instagram feed, which usually is where you look at how brands are really behaving these days, because it's already so authentic, Instagram versus the website and everything else. You guys are just creating one great brand campaign after [inaudible 00:11:35]. I hate calling it campaign, but just stories that you put out there for the sunglasses launch. For instance, you stated if you lose a pair of sunglasses, we send you a replacement for life. Again, very heartfelt since it is something that happens to everyone, but super close to the cause as well as visually impaired are obviously sadly losing glasses all the time like you stated in the video, you're like, "This happens to me daily. It ought to be it happens monthly, like this is just my life.Then you had the hashtag, #blindreturnchallenge, where you urged people to send back one of those many, many Amazon packages. I guess, especially now during the pandemic, those tens of Amazon packages that pileup in front of people's doorsteps every day, and instead of those, return those and instead, help your cause. This past Thanksgiving, which was just a couple weeks ago, now you ask people to shop blind. I thought that was amazing. On the website it reads, "Would you buy something that you can't see? We promise you'll get something you'll love. If you don't think it's perfect, you can return it, no questions asked. Trust us, 100% of the product that donated to the foundation fighting blindness to help find a cure for blindness. After November 30, all of these items disappear." What you're doing is really genius. It goes so deep into your brand. It talks about trust, which is everything that anyone who is visually impaired is exposed to. This is their lifeline, you trust everyone around you to help you, to guide you, to be faithful.Then in the end, it's scarcity. "Hey, this is only for a couple days." The idea of the whole point is trust, give it a shop, you'll love it. This whole conversation is really amazing, and with all of these creative campaigns, what I wonder, because I only stumbled upon the last three, four, which one of these, and it might've been the last one, was the most successful? Which one do you feel totally tanked? We love hearing that too.Brad Manning:Yeah. Shop blind, the Shop Blind Challenge totally transformed our business.Fabian Geyrhalter:Wow!Brad Manning:It accounts for 90% of our sales. What we do with it now is every three weeks or four weeks, however long the particular period is, we change the product. If you are a repeat customer, you're not going to get the same thing. Those products get rotated out and then we have the new challenge with the new products, slightly different price points, but the Shop Blind Challenge is by far the most successful. The way we think about it is, as a small brand, we got addicted to Facebook and Instagram ads early on in that we saw that if we put a dollar into these ads we were getting some gross margin, some net margin back. We were also get, in terms of sale, we were also getting all the brand awareness around the folks that maybe decided not to purchase from seeing that ad.We started leaning really hard into that. The question that we, and I'm sure there's better marketing jargon to put it in, but the question that we are always asking is how do we compete with the 10,000 other clothing brands or blindness related charities that are trying to get people's attention? It starts from the premise of, we need to say something, explain something, create something that is so difficult to ignore and the most interesting thing that maybe somebody has heard that day. What we realized is the bar, to rise above the noise, is just a little bit higher than most people think it is.We thought we had a great story to begin with, good enough for it to get featured in some of the great publicity we got. But once we realize that we actually, you got it, we had to push that envelope and think about what was the most creative thing that we could come up with, and then the best ideas are the ones that only you could do.Fabian Geyrhalter:Uh huh (affirmative).Brad Manning:It doesn't makes sense for another brand to do. They could come up with maybe a version of it, but they wouldn't be Shop Blind. It might be their mystery box or something. The thing that only your brand could really make sense to stand for, that's where the best ideas are going to come. That's, at least, the principle that we operate on.Fabian Geyrhalter:Absolute truth. Then you do it in a bold manner too, and I think that's important, because even if you have an idea like that, Shop Blind, then to pull it off and to hundred percent go with that idea that people do have no idea what they're going to receive and you don't even have teasers, there's none of that. Either you go 100% or you don't even get into those waters. I think a lot of brands, they tiptoe around those things. It's like, "Well, but we got to give people something." Then it's, again, it's decisions by committee and its larger companies and they just can't pull it off, because quite frankly, they just don't have the guts to do it.Brad Manning:Well, to the point you just made, and if people don't understand the Shop Blind, they could watch it on YouTube or they could Google it. Essentially, you described it with that description, but we're just challenging people to pick a price point without any info on the product, no image, no nothing, and just basically trust us, in the same way that trust has actually lifted up my brother and I in a lot of circumstances. If we can't see a menu in a restaurant, yes, we can get a magnifier, yes, we can ask for the braille, a braille version of the menu, or we can use text-to-speech on our phones, sometimes the easiest thing we can do is ask the person at the table next to us or ask the waiter for their recommendation. These little acts of trust lift us up and so we thought we could challenge people to trust.Here's something very interesting about the analytics on Shop Blind. We do have a full clothing brand, so we have T-shirts and hoodies and things of that nature. To send somebody something while shopping blind you have to have them their gender and their size. Although there are some items, let's say a beanie or a scarf or a blanket, for example, that's single [skew 00:18:36] where you don't have to ask somebody gender and size. When we ask people that one extra step to say, are you shopping for a man or a woman? Or, what size are you shopping for? We actually lose a lot of conversion rates. People actually liked ... they like the purity of the experience and when we start interjecting what they would think of is their normal shopping behaviors, it doesn't connect as well.Fabian Geyrhalter:Interesting, very interesting. It does make sense come to think of it, because this is not been buying a shirt, this is them getting into an experience, and it should be uninterrupted until they receive it. Super interesting, and thanks for sharing that. I think there's a lot to think about with that. You talked about this, like trust is everything for when you're blind and hence you translated that into your brand through the campaign we just talked about, and only you can basically run that campaign really in that sense. But on the flip side, trust is also the holy grail for all brands, for every brand. Gaining and sustaining trust with your audience is what all marketers and founders strive for. How do you feel trust is being earned for brands these days?Brad Manning:To be honest, I don't know. I think it is so hard to differentiate. I think the first place I just witnessed it as a consumer was actually in media, where all of a sudden there's this great decentralization because anybody with an iPhone and a YouTube channel can offer to entertain or inform people. Somebody might speak exactly to the points and topics that you care about, and then I feel like I saw a little bit of it with the major retailers, where they used to be all on convenience, but now there's just so many nuanced brand that are taking 1% or a quarter of a percent of those customers, and it hurts those brands that have super strong trust, strong brand or the ability to differentiate. All I know is I don't know how you can run an ad or a marketing campaign and just say, "Hey, we make a great quality product for a great price." It's just there's too much noise in regards to that.Fabian Geyrhalter:Yeah.Brad Manning:it's really tough. We've had flexibility to ... this is all for the mission and for the community at the end of the day. We have maybe some ... we aren't forced to guide to the same metrics that may be a similar business might need to look at, which can do more for the customer.Fabian Geyrhalter:Yeah, yeah. I think one of the holy grails to trust is actually authenticity and you guys just so embody it that you don't think about it a lot, but I think a lot of brands today, that's how I see them gaining trust, because they're just extremely transparent and authentic and truthful and that is that next wave of startups that can do it, because they're small. They don't even know what else to do. Quite frankly, it is fascinating doing this pandemic where a lot of smaller businesses suddenly have to lay everything out in front of the customers, of like who they really are and that they're struggling for instance, and suddenly people actually react to that. They want to give, they want to know the story behind the business and what's really going on inside of the sausage factory, so to speak.I think that there's a really interesting trend that's happening right now for better for marketing but for worse, of course, the reason why this is happening currently. Switching over to the visual aspects for a second here, branding is obviously often seen as a very visual thing, which of course is just one component, there's much more to a brand. Mainly, it's heart and soul and it's storytelling, which are both huge reasons your brand is doing so well. Both you and your brother are also gifted speakers. What lessons have you learned in creating a brand that leads with heart and soul and gut instinct and empathy? Perhaps any advice for founders out there on how to craft their stories? Your story is, it's one thing to live that story, it's another thing to be able to voice that story.Brad Manning:Yeah. A few things come to mind. There's a couple of quotes and examples that I really like. One is the more personal, the more universal. We thought we were alienating people when we first started by being so focused on this particular retinal eye disease mission. The fact of the matter is when you can expose something that's very true and very personal to you, it actually connects other people because we all have those things that we care about. The second is there is method to being a great storyteller. You have to be able to paint that vision for people and walk them through why you are so excited about this, because you are must be, fundamentally must be the biggest cheerleader for what you're doing. How you feel about it ... and by the way, Brian and I learned this when we would get teased about our eyesight when we were little.When a bully would come up to us or somebody new would come up and say, "You can't see that. What's wrong with you?" When we would be shy and cower and try to qualify ourselves, it only made it worse. When you could look at that person and just say, "Oh, I got crappy eyesight," and then next question and move on, you saw that the way that you frame something is the way that people interpret it. It's very important to know to be able to frame those things. Then the other thing I'll just add because this really blew me away, the first time we launched the Shop Blind campaign, it was Brian and I doing a video, explaining what we already explained here about why we're doing and would you trust us, would you Shop Blind, a second grade teacher bought the Shop Blind experience for her class, explained the concept to them, and her teaching is just in the back video there.The kid, when she says, "I don't know what's in the box. I don't know what I got. It's all about trust," the kids lose their minds, and even though it was just socks, when I was in second grade, I didn't care about that, but maybe they just like the surprise, but she sent us that video and we worked through the permissions and we had to make sure no kid;s faces were in it, but we ran that clip as our ad, and in it killed everything else we were doing. It was amazing. That didn't take a fancy camera or brand guardrails that we express to her before she recorded that. Authenticity punches above its weight right now. When people can tell that there is no BS that the message is being filtered through, it draws people in really hard, and sometimes the most underproduced thing actually will be the thing that outperforms the most.Fabian Geyrhalter:Absolutely. I saw that video that you're talking about, which obviously ... you have to see that video if you just searched for two blind brothers. Like you said, it was so well-performing it pops up immediately. I was wondering, was that, not produced or staged, but was this something that was done by someone purposefully that afterwards it will be posted? But it just doesn't feel like it, and that's what makes it. Back to you guys, I'm a keynote speaker myself and I'm super interested in this topic, but something like a random question, I have to ask you this. We keynote speakers, and the audience knows that, we love having our confidence moan at monitors. As they call them in the industry, it's basically our cheap monitors that are on the stage that the audience can't really see and we can catch our thoughts. Knowing that you're not hundred percent blind, are you able to see them or do you have your speeches a hundred percent memorized and you don't have a fallback plan at all given your condition?Brad Manning:I absolutely love that you've asked. We've never been asked this.Fabian Geyrhalter:I assume so.Brad Manning:I'll tell you exactly.First of all, Brian, we have a blast with the speak, for whatever reason, I don't know because it is just fun to tell your story, it's fun to connect with folks in person. We've really enjoyed the speaking. Frankly, we probably should've talked to people who have done it more to get better at it. We really don't have great vision for reading prints. We can read really large print. We don't have any monitors but I'll tell you this, we are one advantage, and it is just that there's two of us on stage. The fact is, we practice, we 100% memorize it. We don't try to script it per se, so we have major points that we walk through. But the fact that there's two of us there actually helps a ton and in fact, when one of us forget something or screws up, it almost is more fun.Fabian Geyrhalter:Yeah, yeah.Brad Manning:That, I think, gives us a lot of ... it actually gives us a certain type help.Fabian Geyrhalter:Confidence, yeah.Brad Manning:We have that backup.Fabian Geyrhalter:That's amazing, because guys like me get a confidence monitor, you get a confidence brother. I listen to a couple of your speeches and they are so great and I really want everyone to check out the speeches because you actually learn more about the brand too. But the way that, it's like playing ping-pong, like the way that you guys finish your thoughts and, obviously, you're brothers and you've been going through this challenge together, and now you're business partners together, so you literally can finish each other's sentence. But you can also make fun of each other and you can poke each other, and as we know from the beginning of the show today. I think that there is ... I could totally see that, but I never would've thought that that's your confidence monitor, basically. Super interesting. I'm glad I asked that random question.Brad Manning:Yeah.Fabian Geyrhalter:We talked about the audience, we talked about ... in the beginning, you talked about community and how important that was for you, and you weren't really, really sure about that. How important was community in the end to the success of your brand? How do you now foster your community? Because you talk a lot about people doing repeat purchases and it's like once they're in your universe, they really want to be part of it, and they want to feel like they're part of this small community.Brad Manning:It's everything. The fact of the matter is the only way we get any traction is when somebody you empathizes and with the mission, frankly, we hope and we aim that when someone buys something from us they're like, "Oh! I didn't realize how great this stuff is. I just thought the story was cool." Our aim is to always have them as a customer for the product, but the truth of the matter is, most people initially find us or come to us because they connect with the story and it's been everything. But from Brian and I's perspective, it really shook us up because ... If you've watched any of those longer talks you may have heard some of these stories.There was a kid who reached out to us who was 19 years old, who said he was a college student and he had been sleeping a lot, and that he was just diagnosed with retinitis pigmentosa, which is a disease that can cause total blindness over a 15-year period. It closes in around your peripheral vision, then your center vision. He wrote in our customer service line, he wrote this sentence that just crushed us. He said, "I've been sleeping a lot because I'd rather be asleep dreaming in 20/20 vision than awake knowing that I'm going blind."Fabian Geyrhalter:Wow.Brad Manning:He followed it up with some encouraging words. He said, "I just saw what you guys are doing, I connected with some folks and I'm social and I'm just feeling a little bit better than I have in a while and just wanted to thank you." When we started this project, it was about having fun and doing something nice for the foundation fighting blindness. As soon as we started getting messages like that, it called on a sense of responsibility that we never anticipated. That type of attitude that we may have been victim to when we were five and seven years old, that's not acceptable. Er view that as unacceptable and we want to do what we can to get out there and for any single person that may find themselves in a situation where they've been challenged and now they feel like they are less them, that really hits home for us. That's where the community is what inspires us to do this every day actually.Fabian Geyrhalter:Absolutely, yeah. That's a big story and that's how community is being built instantaneously, if someone asks for help or you feel that, and then obviously, this is how one thing leads to another. Well, talking about community and assistance, being on Ellen was a game changer for you as a brand, but it was the result of you telling your story to literally anyone and everyone who wanted to listen until the Ellen producer saw a piece you had, I think, on Now This!Brad Manning:Right.Fabian Geyrhalter:I'm such a firm believer in this idea that most interview in podcast, TV, radio, etc, opportunities are good ones because you just never know who is listening. This is really, really fun for me today because I did a course for a company called Mental Box up in San Francisco five years ago, didn't think much about it I just did it. Just today, in fact in the morning, I closed a really nice big branding project because someone in Kuwait who found me through that course that I recorded in San Francisco has been following me ever since and today we signed a contract for a nice branding project. You just never know where this moment starts where someone gets in touch with your brand, with your, I call it your brand atmosphere.Brad Manning:Uh huh (affirmative).Fabian Geyrhalter:When they poke through that atmosphere to find you. Here's the Two Blind Brothers, you don't know when they first find you, but it could be any of these random things, and with Ellen, that was the exact same thing when they just found you on a different interview. What are your thoughts on spreading your word? How important to a young brand do you see traditional PR and media in times like these, in times of social media?Brad Manning:It's tough. To be honest, somebody else other than me to make the case for PR and media. All of our any sort of earned media publicity opportunities have come from people seeing our ads on Facebook, Instagram, and now TikTok, as we just do our thing advertising to customers. We haven't ... and it's because it's so easy. Back in the day, you needed that intermediary because you didn't have the contacts or the way to get in touch with people. But it's a good truth teller. When you go and reach out to all these companies, you do get a lot of crickets because the truth of the matter is this person who you want to feature you is still capable of finding exactly the type of story they want to feature.Fabian Geyrhalter:Yeah.Brad Manning:It doesn't mean it's not worth the test or worth the exercise, but it is a difficult situation. Everything we've gotten has come in through our customer. Even if we do a speech or a corporate order or something, it all comes from the social ads. But there is a refinement period. Brian and I's first interview was a Fox spot. We just started the business, we have sold all maybe 30 shirts, and it was Fox spot local news segment, and those segments started forcing us to learn how to express our story. That was really critical that it's almost like if you've given us ... like giving a speech, the first time you do it, it's the worst experience ever. By the time that you're forced to do it 50 times, it's like drinking water, it's so natural.Fabian Geyrhalter:Yeah.Brad Manning:That's how we view it. Yeah, it's hard to measure the value of it. I just know that it is valuable, and we enjoy it, and like you said, it all snowballs on each other, one thing leads to the next.Fabian Geyrhalter:Yeah, absolutely. It's all interlinking. Now that you've successfully grown your mission-based brand for a little while. What does branding mean to you?Brad Manning:A big part of it is reputation. It's not coming from a marketing background. Originally, we thought about it as almost like our reputation. What's your first impression? What do your lifelong friends, What do they say about you? We view it as like, we are in it for the long term, and so we want to make sure that the people that we're connecting through the business will always think a few things about what we're doing. One, that we're a hundred percent committed to the cause of blindness, both on the research side and the community side.Two, we're trying to make the softest products in the world that we possibly can. Three, we're going to be authentic. We're going to say how we feel and what's going on in that moment and just see how it goes. That's where we come from. There's an element of it that is critical that was not a strength for us. All the copy and the colors and the visuals, we were lucky to have people help us with that. That element, that's a big skill set and that part of it, it's critical as well for at least getting people in your front door.Fabian Geyrhalter:Yeah. You guys are the visionaries, the two of you, which is wonderful to say of two visually-impaired founders trying to change the world really, but that's it. You have your team around you that can assist with other elements like the visual brand. What is one or what are two words that can describe your brand? If you literally take everything we talked about for the last 40 or so minutes and you'll put it through a funnel, and in the end you have to say, "Two blind brothers equals what?" Like for instance, Everlane, which I'm sure you're familiar with, for them it's all about radical transparency or Zappos, which sadly has been in the news with the passing of Tony Hsieh. They were all about service. What Two Blind Brothers in one word or two words?Brad Manning:That's tough. I would say a couple. I would say what we try to communicate at the end of all of our speeches are is friction equals growth. Friction equals growth. You get hit with challenges in life and it's about embracing them and moving toward. That's what unlocks all of your resourcefulness, assertiveness, creativity. It's not about the visual challenge, it's about how you respond to it. Those are the characteristics that actually matter. The reason that it's really around that is because that is the message that we find is most valuable to the community that needs it the most. We love all of our customers and we hope they love the product and the message that the person that were out there fighting the hardest for is that kid who got diagnosed with blindness who doesn't think that he's going to have a normal life and doesn't think that he can compete in a real world. Our message to him or her is that friction, a challenge equals growth and your greatest challenges can be your greatest gifts.Fabian Geyrhalter:It's beautiful and it's such a universal message too. For everyone in their life, friction equals growth. It's really fantastic.Brad Manning:Yeah, I was trying to put it in three words because I was trying to hit the two words. There's a quote that there is no growth without friction.Fabian Geyrhalter:YeahBrad Manning:That's the simple way to say it, there is no growth without friction.Fabian Geyrhalter:Yeah, yeah. But I actually like friction equals growth, because the minute you arrive at a point of friction, which you do in life on a daily basis, some are minor and some are major, that you know this is not friction it's actually, it means growth. Like this is your sign that now it's time to grow, and I think it's really, it's inspirational but not at an inspirational quote type of cheesy way. It's actually really applicable.Brad Manning:Yeah.Fabian Geyrhalter:Listen, people listening to you for the last 40 minutes who fell in love with what you do, what would you like for them to be doing right this minute to support and also benefit from your brand?Brad Manning:I would say two things. I would say, if they want to learn more about us, they can Google "two blind brothers" or go to twoblindbrothers.com. For the folks that are interested in branding or running their own business, Brian and I feel very lucky that we decided to experiment with this passion of ours, and it's led us on this incredibly fun and rewarding adventure. I would encourage anyone out there who's got something that they've got a unique passion for, just keep running at it because you'll be surprised how easy it is to connect with the people that resonate with what you're doing. We live in the digital and social age. Fifteen years ago, there is no practical way to start a clothing brand or any project to target to a nuanced audience, now it's completely different. Just words of encouragement to all those.Fabian Geyrhalter:Brad, you are such an inspiration to all of us listening right in the field of branding and marketing, but most important to those who are impaired in whatever way, and because of your amazing success now feel that they can turn their impairment into their superpower. I want to thank you for what you're doing, for how you're doing it, that you're doing it, and of course, that you took the time to be on hitting the mark. Thank you so much, and please give my best to Brian as well.Brad Manning:Absolutely. Thank you. The way that folks hear about us is because of folks like you and your listeners lifting us up. We were incredibly grateful to be able to share the story with you.Fabian Geyrhalter:Absolutely my pleasure.
Learn more about Rotten TomatoesConnect with PatrickSupport the show-------->Fabian Geyrhalter:Welcome to the show, Patrick.Patrick Lee:Hi, thanks for having me, Fabian.Fabian Geyrhalter:Absolutely. So you and I met when we were mentoring a cohort of the Founder Institute. I'm not sure which cohort it was. They all blend together, but re-reading into where you come from and your journey outside of Rotten Tomatoes, I actually realized that we both started off in print design. And then we moved on to web design before we both learned how to focus on one thing and by doing so, it created clarity and with clarity, as it usually does come success. You said that in an interview, and it literally is part of my brand strategy holy grails. You said that companies are trying to out feature themselves instead of having research sharp focus. And that really is the story behind Rotten Tomatoes, which launched 20 years ago, which is crazy to think about. And despite lots of handovers over the years, it is still the trusted resource for movie fans. How did that journey begin for you? Take us back to the time you were an undergrad at UC Berkeley.Patrick Lee:Right. So when I was at UC Berkeley, I felt like I wanted to do a startup. I didn't know what, but I wanted to do something with friends and I just felt when people graduate, they just go all over the country and find jobs. And I wanted to keep everyone together. So that was actually my reasoning for doing something. I started originally at a hardware, we were selling computer system components. It was my first company. It didn't really go anywhere, but I convinced three other friends to drop out of school. From there we did that for a few years. I ended up doing my second company, which led to Rotten Tomatoes. My second company was a design firm and we were doing... Originally, we were doing all kinds of things. We're doing print design, 3D design, web design for any kind of client. But we eventually focused where we only did web design for the entertainment industry.            And there, we started doing stuff for Disney Channel, ABC, Warner Brothers, Horizon, MTV, VH1. We made the online flash game for Who Wants to be a Millionaire. And the Rotten Tomatoes startup was actually created by our Creative Director, Senh Duong. He was a huge Jackie Chan fan and he wanted to know when the movie Rush Hour was coming out, what all the critics were saying about the movie. And so he went out to the library and started gathering reviews because back then a lot of reviews were not online. So he would go and find the magazines, find newspapers, read the review and write down a quote and then go back home. And he started working on the site and his idea was when you open up a newspaper, you would see an ad for a movie, and it would look like a movie poster filled with quotes.            But the thing is those quotes would always be good, even if the movie was not. So if the movie was actually good, they'd be from professional movie critics like Roger Ebert. If the movie was not good, they would be from a radio station DJ or something like that.Fabian Geyrhalter:Yeah, yeah. Patrick Lee:And people who are not professional critics. So Senh's idea was what if I include all the quotes good and bad, but only from professional critics. And so that's what he did. He attached a score to it and launched. So it was interesting is from when he had the idea to actually putting it out live, it only took him two weeks because he built everything in Static HTML. He actually couldn't code at the time, built his Static HTML and he only covered the wide release movies coming out that week. So that's how he was able to do it as basically one person.            And so we hosted the site for him over the course of a year, and it started getting more and more noticed and getting featured on like Netscape and Yahoo. Roger Ebert wrote an article where he pointed out his favorite movie websites and he includes Rotten Tomatoes. And I remember specifically the day Pixar released A Bug's Life. We saw a spike in traffic on Rotten Tomatoes and it turned out it was coming from Pixar. So over the course of that first year of hosting for him, we're like, "Maybe this could be at the company." And so we talked to him and decided to join forces where I went out, raised a million in funding for the company. And we transferred our whole team of 20 some folks from our design firm, all to focus on Rotten Tomatoes.Fabian Geyrhalter:Wow. That was the end of your design firm. And that was the beginning of Rotten Tomatoes as a company?Patrick Lee:Yeah. It took a little while for us to transfer a design firm off to another group to takeover because we cannot just automatically just hand over the clients, but we were transitioning our design firm off at the same time we were ramping everyone over Rotten Tomatoes. And then it was kind of crazy because we essentially closed funding in January, 2000. And then two months later, the internet stock bubble burst.Fabian Geyrhalter:That would've been one of my questions. Right. Because you were smacking midst of that because I remember that time clearly. How did you guys manage to get through this?Patrick Lee:It was tough. We actually had to let go of a lot of folks. We went from 25 to 21 to 17, to 14, to 11 to seven over the course of a year. We essentially... and even at seven, everyone took at least a 30% pay cut myself and our marketing person, Paul went to zero. So even at seven, we were going to four or something or three. And we basically told people, we cannot survive with this head count. And we told folks that start looking for a job. There's a few that were like, "Can you please stay? We would really like you to be able to stay." And then everyone else, we asked if they can find something and we essentially kept them hired until they found something and we accelerated some of their vesting and everything because we didn't want to let them go.            But it's just... It would have been impossible during that time, because once the market crashed, it was impossible to raise more money, but also most internet companies were generating revenue through advertising. And when the market crashed, most of that advertising money was coming from other internet companies. And so when that market crashed, all the revenue also dried up. So it was like, you can't respond and you can't generate almost any revenue. And so tons of companies, ground business, and for us, we knew, we just had to like massively tighten our belts to just weather the storm.Fabian Geyrhalter:And did you have to pivot in any ways or were you just basically tighten the belt and say, we've got to get through this because you were still dependent on advertisers and that's just how it was?Patrick Lee:We didn't pivot because Rotten Tomatoes was... It was working. The main thing we had to try and do was tighten the belt and then slowly start trying to actually generate revenue because when Senh was doing it by himself, it wasn't bringing any revenue in. And so we actually started trying to sell advertising, but what worked for us is because the market had crashed. We were already selling advertising in that new world and figuring out as everyone else was trying to figure out. We were also trying to start putting in affiliate deals to help sell things like movie posters and DVDs and CDs. So those kinds of things and sell movie tickets, those kinds of things help to bring in revenue. So a lot of it was figuring out how to monetize the site as well as how to continue growing the traffic and growing the brand.Fabian Geyrhalter:And this is a question which I believe you already hinted at the answer, but I asked my listeners, to submit some questions and Ash Barber, one of my listeners here he's admitted this one. And I thought it was really good, when you launched Rotten Tomatoes, what set you apart from the competitors? And so now, I guess, or was there even any competition at the time? I mean, were there any reviews online at that point, movie reviews?Patrick Lee:At the time, the closest thing probably would have been actually Roger Ebert had a TV show called Siskel and Ebert.Fabian Geyrhalter:Remember that.Patrick Lee:Where they had two folks and they would do thumbs up thumbs down, but it was essentially just two people. There were some movie sites that had movie news and gossip. There were lots of different reviewers who were gradually coming online, but they're all solo reviewers. What Rotten Tomatoes did, was we basically aggregated all the reviews into one place and then give you a score. So that was something that no one was doing at the time, outside of Roger Ebert, but that was two people and we were doing probably about 50 to start with and then gradually other companies started mimicking what we were trying to do. But when we came out, we were original.Fabian Geyrhalter:I always saw Rotten Tomatoes as an anti-brand, and maybe that's because of the name right the name and everything, and it always seemed very... the brand seemed to be a little bit grassroots, low and the glitz and glitter of a shiny brand design. Was that something that you did on purpose or was it just organic the way that it was built by one guy and then slowly you guys continue to it. But even today you look at Rotten Tomatoes, the actual website, right the.com and it still feels very, very grassroots and very minimalistic.Patrick Lee:Actually, I think when it first launched, when Senh designed it, it was much more artsy looking, had a lot more personality to it. I mean, that's a name, but if you looked at the logo, if you looked at the way the tomatoes were, they actually looked rotten. The logo, I think there was worms and stuff on some of the tomatoes and everything. If you can go to... I think it's the way back [crosstalk 00:09:55] to late 1998, you can see the early version of Rotten Tomatoes. It looked very different. It gradually with all the different owners and stuff, they kind of, I would say took a lot of the personality out. They made it a lot cleaner, almost more Facebook like, and then the last owners Fandango, they actually rebranded it where they change the logo, change the color scheme and everything,Fabian Geyrhalter:Interesting, because I was wondering about the Tomatometer, right? Your Rotten Tomatoes rating system, it's the opposite of common visual language where red means no. And green means go. Red is bad or stop. And green is great or go, and with Rotten Tomatoes, it is and I believe it always been, but maybe it hasn't that the red tomato means great. And the green splash means rotten. Has this been around always like that?Patrick Lee:Yeah. So pretty much from the beginning, that's what Senh was doing. We cleaned it up after we raised funding and we put our whole team on it. We did clean things up. So we use a lot of the same color schemes to try to maintain the same personality, but made it a bit cleaner, more friendly looking. Right now the funny thing is, yeah, we've always been sort of reversed where the green is bad and the red is good. It was [inaudible 00:11:18] with the funding or rebrand. They actually changed the Rotten Tomatoes logo from green to red, which I think it looks fine but it's actually confusing because red is supposed to be fresh for us. So Rotten Tomatoes, technically it should be green because green look rotten. Yeah, so that's a little bit confusing.Fabian Geyrhalter:Yeah. I thought something was off there with the color scheme. So that's really interesting. And I mean for obvious reasons, you're one of the few brands that lead with a negative, right? So you let the name rotten, right. Instead of anything positive for celebratory, I know the answer, but I'm asking for a friend here. Well, a few thousand friends who are listening at this point, how did you guys come up with the name?Patrick Lee:Right. So, Senh's idea was back in the day, if it was like Shakespeare times, if people were up there performing some play and it was terrible, people would take rotten fruits and vegetables and throw them at the actors. So that's how he came up with Rotten TomatoesFabian Geyrhalter:It's amazing how one thing leads to everything, right? I mean, what we just discussed about the tomatoes and the colors and it's really just one name can drive everything in the brand, very often made it be a good thing or a bad thing for you guys. It definitely worked out.Patrick Lee:Yeah. I think one thing that was quite good about the name was it's hard to forget when you hear it. It's so strange that it sticks in your head. I do remember when we first started going out and try to talk to studios about the site, they would just laugh when they heard the name, because it was so weird, but it's memorable. And that was good. And I think as far as it being a negative, it actually worked out well for us because it basically saying that we're not afraid to tell you when a movie is bad. And so we're not paid off by the studios or something like that, so that you can trust the scores. And I think that was very important for us.Fabian Geyrhalter:Too strategically, that's very sound right. I mean, that that's the brand story. I mean, it's not just what's on the movie poster, it's actually, everyone's voices. Everyone who's professional and actually makes a lot of sense. What are your tips for naming? I know you have many because we'd be in a session together where you give tips to startups to basically not screw it up. And naming is so important, right? It's so difficult to go back once you actually set a name and once you start having some success. The worst thing is when suddenly you realize that it means something horrifying in a different language or in a region that you want to expand to, or if suddenly there's a trademark issue. What are some of your tips that you give startups?Patrick Lee:I would say looking back for what we do with Rotten Tomatoes, there are two things that I think worked for us, was one, we did pick up a memorable name. I think that helps. It was something that pretty much was not out there at all. So there was no real danger of us accidentally having the same name as someone else, obviously try and get one where you can get the URL and these days are the social media handles. And then the big, big thing for us was I think is important in general is like business focus, really focusing on what your company does, but I think it also applies to a brand and marketing is what does your company do? Because if it's really clear, really focused, it makes it easier for people to understand what you do. And when they understand what you do, they can actually tell other people about it. And so then the brand can actually spread.            So with Rotten Tomatoes, we were movie reviews. Like, that's all that we were. And so it made it really easy to tell the people and when we were running it, 30% of our traffic actually came from just word of mouth. And I believe it's been like that forever. Yeah, you might've come up across it through a search engine, looking up a movie, an actor, a director, but also very likely someone else told you, "Hey, go check out Rotten Tomatoes."Fabian Geyrhalter:And so you think, because the name is so memorable, it just sticks in people's minds?Patrick Lee:Yeah. So that's one thing, but also because it's so focused around movie reviews, then when people are like, "Hey, I'm trying to figure out what to see." Other folks will be like, "Hey, go check out Rotten Tomatoes. It will tell you what is worth seeing."Fabian Geyrhalter:Right. Right. The name isn't focused as much as the brand itself. Right, exactly. So it immediately contours up movie reviews. That's all it does. I mean, that's the one single focus of the site and of the brand to you?Patrick Lee:Right. Right.Fabian Geyrhalter:Yeah. Absolutely. You're a serial brand builder, besides Rotten Tomatoes you also started six startups, I believe across three countries, the US, China and Hong Kong. And currently you in Taiwan, I think, you're an international entrepreneur. You targeted... With five of your companies, you targeted consumers with four of them, tech and entertainment. You raised outset funding with four of them, two of them exited, having gone through all of this, what does branding mean to you? I mean, all of these startups branding was to some of them was probably a crucial component. And to some of them, it was an important component, but not the most important if it's not a consumer brand, but what does branding mean to you?Patrick Lee:I think it's what I was saying before. It's specifically around focus. That was a one lesson I learned the hard way where of the six companies I did, the second and the third are designed from the Rotten Tomatoes were very focused where we're doing web design for the entertainment industry or Rotten Tomatoes, where we're just doing movie reviews. The three I did after Rotten Tomatoes, weren't focused, we were trying to do too many things. And it ended up becoming too much work. We couldn't focus our resources to actually build something that really people wanted. And from a branding perspective, it was hard for people to know what it is we were doing, who we are et cetera. And so I think the most important thing for any business to do is to be focused.            And I believe focus also carries over to branding and marketing as well. I mean, one good example is, I believe this is true across any kind of company across any kind of industry, not the startups. Look at fast food franchises. Every one of them is pretty much known for one thing. Like if I say the name you'll immediately know, like Panda Express, KFC, Pizza Hut, Domino's, McDonald's, In N Out Taco Bell, Krispy Kreme, Dunkin' Donuts, right? Each one of them you're immediately like, "Oh yeah, that's hamburger. Oh yeah, that's chicken, et cetera." Right? You look at Krispy Kreme, I mean, it's literally a single donut. Like when I think of Krispy Kreme, I thinking of that one classic donut, that's it. And the folks... You don't see folks out there who are like, "We are going to be hamburgers and Chinese food and donuts."            I mean, I'm sure some restaurant like that exists, but not a successful one, not one that has really blown up. And so I think it's important for business to be super focused, but being super focused will actually help with the brand and make it much easier to market.Fabian Geyrhalter:I totally agree. Focus creates clarity and I 100% agree with that. Obviously you went through many, many, successes with all of these startups outside of Rotten Tomatoes and I'm sure there were a lot of fields. It's enormous brand field, meaning like, was this something related to branding that happened with one of your companies where afterwards you felt, "Oh my God, what just happened here?" And it actually goes back to maybe the naming or maybe the brand design or maybe it was messaging that you have to completely switch over after you realized that it just did not stick to the customer. Was there anything like that in the journey that comes to mind?Patrick Lee:Not really. Just because I feel like the times it failed, it wasn't necessarily because of the name. It was because we just weren't focused enough that we were trying to do too many things. And so nothing stuck to the name, but I believe in all the cases where the companies didn't work or the projects didn't work, it was more... Had we been more focused we could've kept the same name and I think it still could have worked because I mean you'll see names attached to any kind of project, right. Look at Yahoo, look at Google. I mean, those weren't... I mean, Google, I guess technically is a word, but like a lot of times Yahoo is a word as well, but they weren't anything associated with search, right. So you can almost put anything in my opinion, but it has to be focused so that when people hear the name, they will immediately think about what it is. Like the best of case examples would be something like Xerox or Kleenex where it's like, literally it becomes the thing in that whole category.Fabian Geyrhalter:Yeah. Yeah. And you see a lot of these example when companies have to pivot because of that, right. Because they lose focus. They suddenly do two or three things, and then suddenly the name doesn't work for them anymore because they lost that focus, instead of staying in one certain segment or one specific offering, they just start expanding and it happens over and over and over again. And that's also when brands start being like map brands, right. You can't really put them... You can't put your finger at it. Like, what are they now really doing?Patrick Lee:Right. Right. I mean, when the company starts growing, it will be a big issue for them because they're going to add more and more features and product lines and stuff. And then the question is, do we try to have the same name, but then for new product line, or do we actually just have a completely new brand? And so you'll see that where Google goes and gets Google video. But then it just couldn't work against YouTube. And there's probably a lot of business reasons for it. But also I think from a branding perspective, it just was easier for people to think about like YouTube where it's a new thing and so it can attach to that, what it does more easily than something like Google video. It happens over and over again like Facebook with Instagram or Amazon with Zappos.Fabian Geyrhalter:Yeah, yeah. Bringing up Zappos is a tough one, [inaudible 00:22:37] because it's timely, but I want to take you back for a second when you were running your design shop. And just before you got your first really big, massive entertainment clients, I think you told this story on a podcast on a different show that I listened to. Do you have a night to prep for this? And you talked about how you got to work with Disney as a company, despite having no prior portfolio pieces in the entertainment industry at all. Which of course, now we know that was a big thing for you doing film sites and being an entertainment industry. How did you get to work with Disney because I love that story?Patrick Lee:Yeah. It was pretty cool. We were originally doing a lot of work for the tech industry. So we had connections to motherboard manufacturers, like ASUS and folks like that. And so we're doing a lot of that, but it wasn't really something that we were super excited about as a design firm.Fabian Geyrhalter:Bread and butter, yeah.Patrick Lee:One of the people we were working with at the time his daughter was at Disney and he was going to be at, I think it was COMDEX in Las Vegas. And he was like, "Hey, come over. You're not going to make intros to other tech companies, but you should also meet my daughter because she's also at Disney channel and a producer there on the website." And so I was like, "Oh, that's amazing." So we went over, we met her and she was like, "Oh, your stuff looks pretty good. Do you have anything that's like entertainment related, that I can go and show my team and my boss?" And we didn't.            And so when we got back to the Bay area, after the trip to Vegas, I went out and I essentially called a bunch of folks because our team at the time was very small, a bunch of different friends who could either code or do graphics or things like that, that weren't part of the company. And I just basically brought them all together. We did like a pizza party. We went on to Disney Channel site and looked up their schedule and we found movies that were coming up that they didn't actually have a website for. And one of them was Mighty Ducks 2. It was like a hockey movie, kids hockey movie. And so we went to Blockbuster rented the video.            We all had pizza, watched the movie. And then we essentially split everyone. I think it was like more than a dozen people. We split everyone into teams to essentially build different parts of the site. So we built a site, we had two fully working games in shockwave. We built icons, wallpapers, bios of the characters, everything. It was a fully featured site.Fabian Geyrhalter:Amazing.Patrick Lee:We tried to mimic the Disney Channel look as best as we could, but we didn't really know all the rules. And then we did that all over, like one weekend and then come Monday morning, I send it over to her. And I was like, "We don't have anything on portfolio that really matches Disney Channel, but we made this." And when she saw it and she was like, "Oh my God, there's no way that we would have known in advance to build something like this."            And it wasn't exactly Disney Channel style. So they couldn't use it as it was, but they actually really liked the two flash games we made. And so they ended up buying those. And at the time we were just out of college, we were charging $500, $1000 for really simple websites, things like that. They bought the two games for I think it was 12,500 total. So it was like an order of magnitude more than what we were making up to that point. And we did have to go and clean it up. And then that's how we first started with them. And then they slowly would give us requests for proposals, for new projects. And we were always super aggressive coming in faster, cheaper, better, across everything we were better. And got to the point where we were actually for a while, the lead developer for Disney Channel.            One of the guys who was basically the main person in charge, he switched over to ABC because they were like sister companies. And he even brought us into ABC. So he had us do the online flash game for Who Wants to be a Millionaire back when the show was at its peak. So it was really cool and we really enjoyed it. And it was an example of just being super, super aggressive.Fabian Geyrhalter:Yeah. Well, I am the price, right in hustling. It's like, "Hey, we have nothing. We have no chance. We only have a weekend. What are we going to do?" You know, be miserable that we just don't get that gig because we have no examples of just build something from scratch, which sounds like a completely crazy idea. And the reason why I wanted you to share this particular journey is because we have a lot of creatives listening to this show. And a lot of them want to move more towards brand strategy and how like creatives are, they move around different areas. And so for them, that's a fantastic story, but for any other entrepreneur, I mean that hustle that you guys show it's amazing. And then it was your biggest client for a long time, right? I mean, that was your main client.Patrick Lee:Yeah. Yep. It was. But the thing that was really good for us was because we were working with them in Disney. I think within that space in general, folks move around a lot. So a lot of times when we got new jobs, it was because someone moved to MTV or VH1 or other places, Warner Brothers, and they bring us with them because they knew we did a really good job. And essentially our job was to make the producers look good for choosing to hire us that they didn't make a mistake. And because we did a really good job of doing that, they brought us everywhere.Fabian Geyrhalter:Right, right. That is something that I see in design, branding, advertising over and over. Right especially with larger companies, CMOs are constantly on the move. I mean, they stick around for a year or two and then they move on. And if you just have a handful of them where you've made great impressions, you're constantly busy because they come in and they want to see change. And then they want to make things happen. And if you're a trusted partner, that's absolutely what happened. But all of that changed for you once Rotten Tomatoes came to fruition. And I know the way that you explained it is you basically slowly had to let people go. You basically advised them to look for a new job. And at the same time you had some amazing clients that a lot of your competitor web design firms would have most probably drooled over. Did you just send an email to your clients and saying like, Hey, here's what's going on, let's be in touch. But here are five companies that I think would do a good job." How did you move clients somewhere else?Patrick Lee:We didn't actually move clients. We basically, there was a company that we were passing our overflow clients to, when it just didn't fit, it was either not entertainment or it was like too small or something like that. Generally if it was not entertainment related, we would pass it to this group rather than just purely say no. And they were doing a good job with the companies we were passing over. And we basically we're like, went to them and said, "Hey, do you want to just take over our company?" So they actually took over our company design [inaudible 00:30:06] and so when we transitioned, it was more about like transitioning our internal producers and team, but to the companies like the media companies working with us, we were still design director.Fabian Geyrhalter:All eggs in the basket with Rotten Tomatoes.Patrick Lee:Yeah, exactly. We had a huge discussion at the time about, should we try to do both? And we were very worried that we wouldn't have been able to properly split the two. And with design companies is like, every time the client wants something, it's like, they want it yesterday. And they always have these last minute changes. And we were very nervous that it would continue to happen. And every time it happened, we'd have to pull folks from Rotten Tomatoes over to help out on stuff. And so that's why we were like, "No, I think if we tried to do both, neither one's going to work." But looking back, had we known that we would have had to let go of so many people, if we could have just taken the people we had to let go put them all on design reactor, and then really, really strictly cut it off where the two and not help each other. I think that could have worked.Fabian Geyrhalter:Interesting. Well, if all goes to plan, this episode will literally kick off 2021. It should post on the 1st of January, which I think mankind can't wait for that day, even though I don't think we're going to switch everything on the first day of suddenly life is going to be great again, but let's just hope for 2021. But so this is going to go live on the first. What is your... What are your thoughts about branding like moving on? What is your vision for brands this coming year? It doesn't necessarily have to do with branding, just brands overall. Do you have any thoughts of what may change, what may flourish, what may feel, what are some thoughts for the new year, as far as start ups go and brands go? Where are things heading in Patrick Lee's crystal ball?Patrick Lee:That's an interesting question. I wouldn't say I'm like an expert on branding or anything. I still think the biggest thing would be just focus in general across all companies, all brands, especially startups, especially new creatives is to not try to do too much, to not try to have your brand represent everything and everyone, because then it represents no one, I think that's super important. And then just for 2021 in general hopefully it's a fresh start. I don't think it could be worse than 2020 across anything just on so many levels. It's just been just such a crazy year. So I think moving forward for brands in 2021, I think maybe just having more positivity, more hope would be just good. And I think also just to have people and brands and everything, to be more focused on helping each other out, supporting each other, how we can work together, support one another and not be so divided across everything.            I think with COVID and all these other things it's been just a really tough time for a lot of people. And I think now more than ever, we need the country, the world to just support each other more. And I think if brands could sort of capture some of that spirit, I think it would be good.Fabian Geyrhalter:Yeah, absolutely. And I do believe that a lot of brands, especially to smaller brands not necessarily mom and pop shops, but anything from, from third level to mid size, they had to be more authentic this year. They had to be more transparent about what's really going on. And so I think that something happened there with that transparency on the authenticity where they started to connect more with the customer, and they didn't even know, they don't have to have this big brand, divider between them and the customer. I think that's going to keep going in 2021. I think people, brands, well, people and brands that both actually the same brand is just a bunch of people. It's like they will... I think that they will really start celebrating that because everyone will have a big sigh of relief I hope once the vaccines come around and I think that we're humbled enough throughout this year, where a lot of them had to literally survive, the entire brand had to survive and a lot of them had to pivot and just a lot of stuff was going on in business.            That they just going to sigh with relief, and they're just going to be with open arms towards the customers, whoever is willing to start paying money again for their services. I do hope, and I do believe, and I think that what you said is a prelude to that thought. I think that everything will become a little happier and more transparent and more authentic in the new year. I really hope so.Patrick Lee:Yeah. I hope so too.Fabian Geyrhalter:What's next for you? I mean, six startups that you have under your belt. I know you've been doing a huge amount of mentoring. We've done some of it together in one session, but I know you mentored in an incubator accelerator in Hawaii for a couple of months lately. What are your goals in 2021? What is going to go on in your professional life?Patrick Lee:That's a good question. I've been trying to figure it out. So I came to Taiwan. I just got here about a week ago. I'm still in quarantine and trying to figure out what the next step is for me. I don't know if I have the energy to do another startup. They take so much out of you. Past few years I have been doing a lot of advising and mentoring, and I do realize I really like working with startups. I really like helping startups. I also really liked the intersection of tech and entertainment. So one thing I'm exploring the idea around, I don't know for sure if I will do it was a possibility of maybe doing a fund that invests specifically at the intersection of tech and entertainment and probably to invest pretty early, like pre-seed seed stage. So that's something I'm looking into, but I don't know for sure that that's what I will end up doing, but that's currently what I'm researching.Fabian Geyrhalter:Well, I mean, if you put all of these different areas of backgrounds together, and you have some circles and then smack in the center is the funds. It does make a lot of sense to me, right? All of the experience, all of the mentoring, your own journey, all of your connections and into passion for startups and for tech and entertainment and there it is. And once again, there are so many funds out there, but actually creating one that is so highly hyper-focused once again, it's about focus could be really amazing. Well, I hope you check back with us. I would love to hear once you're there and on this podcast, I only feature founders and investors. So who knows, maybe you're going to be back in a year as in with your investor head on, I'm talking about your brands.Patrick Lee:Sure, sure. I would love to come back to this. Feel free to reach out anytime .Fabian Geyrhalter:Listeners who appreciated your advice and they want to follow along on your journey whatever's next, where can they find you online best, where can they connect?Patrick Lee:I would say the best is LinkedIn, Instagram, and basically rotten doubt everywhere, like Rotten Tomatoes doubt, like no doubt. So rotten doubt.Fabian Geyrhalter:That's awesome. That's really good. Well, listen, Patrick, thank you for calling in from Taiwan, doing your quarantine and just having settled in. Super appreciated. Thanks for your time and be in touch.
Learn more about EIDUCatch Bernd's TEDx TalkSupport the show-------->Fabian Geyrhalter:Welcome to the show Bernd.Bernd Roggendorf:Thank you very much for inviting me.Fabian Geyrhalter:Well, it's really, really good to have you here. It's funny how you actually ended up on hitting the mark. Just to give my listeners a bit of background. I was invited to speak at Harvard Business School back in March of this year, which was really exciting and I very much looked forward to it. And this was just when COVID started to emerge in the Western world and I remember I was the only one at my gate at LAX Airport actually wearing a mask and people were just staring at me and they were laughing at me.And so during the flight over to Boston, I get a message from the CEO of your organization, Arne, who was also supposed to speak at the same event. And we decided we should meet up the next day, but that never happened since the event got rightfully canceled that very night because of COVID fears. So in a way, the one thing I get out of Harvard was this episode with you Bernd. So here you are. It all happened for a reason after all.So you co-founded Ableton, the tremendously popular and important software that helps millions of musicians, especially electronic music producers, unleash their creative potential. One of your other co-founders is Robert Henke of Monolake, who did a fantastic Depeche Mode remix a couple of years back. I feel required to mention this because a lot of my listeners know that I'm a total music nut and I'm a Depeche Mode vinyl collector who also toys in music as a hobby.So I would love to talk about the Ableton for the next half hour, but as hard as it is to believe you have been off to do more important things, which we will focus on today. You're you still changing the world of software, but now in a much different and tremendously meaningful way. Five years ago, you founded the education social enterprise, EIDU to improve education standards for 800 million children who live in $2 or less per day. How did this come about? How did you leave Ableton? Give us a little bit of that backstory.Bernd Roggendorf:Well, that's a funny story. It all started in 2010 I think, if I remember correctly or '09. Several things came together; one of global things were the financial crisis which somehow got me thinking a lot about the world but more personally, I was diagnosed with having a tumor in my spine. It all went well, but I was confronted with death and thought about that.And then on the other side, Ableton was already developing super well and it was so well set up. And I said it's my baby and in some point those babies you're at the position where you think that work it needs to grow on its own, and it needs to walk on its own. And I had the feeling with Ableton it's so well set up, I would be able to leave without destroying it.And so all these things together got me thinking was, I noticed there's something in me that I couldn't fulfill within Ableton or something else. And I'm not this guy that can do a lot of things together at the same time. So like if I do one thing, then I need to let go all the others. And so I had to say goodbye to Ableton which was super hard. I was crying, thinking about that. But at some point I realized that I have to do it because there was something I wanted to... I had this very naive idea of like the word is so unequal and so unfair, and I wanted to use my time and my money and my skills to help to get rid of these extreme inequalities.Fabian Geyrhalter:And so then you went on a pretty extreme trip yourself to witness how world is on the other side, right?Bernd Roggendorf:Mm-hmm (affirmative)Fabian Geyrhalter:Can you tell us a little bit about that? And you took your entire family with you, which must've been a crazy experience.Bernd Roggendorf:Absolutely. Well, it was like this. I was reading a lot after quitting Ableton, I didn't have any idea of what to do exactly. I felt like a teenager. I was very naively, "I want to help the world," but had no idea how. And so I read a lot of books and talked to a lot of smart people. But at some point I felt like this is all way too theoretical and way too second hand, I wanted to understand how poor people are really thinking and living and what do they need? And do they need any help from us? And if so, what kind of help do they need? And I will experience that firsthand.And so I talked to my wife and she fell in love directly, more than me even. I just sat there and was like, "Should we go?" "Yes, we need to go. Let's do that." "Okay. So let's do it." And then our children at that time was three and five. And we said, "Okay. Let's take this trip and let's take them on the trip. It will be like the greatest experience they will ever have in their life." And so we did and traveled around the world for eight months and tried to live as close as possible to very poor people.It started already with the most extreme part of the whole trip because for three months we went to Kibera, which is one of the biggest slams in Africa, in Nairobi. And we went there with a small organization called Manager Without Borders, it's a German organization. Very tiny, and they try to find companies around the world in low-income countries that need support. Companies here when they go to Ernst & Young or any other [inaudible 00:06:42] company, but tiny companies and of course, with no money at all. And they try to find on the other side managers, who are willing to support those companies.Fabian Geyrhalter:Amazing.Bernd Roggendorf:-organization and went for two months. We actually at the end stayed three months to help in a project in Kibera. It's funny because they thought, I'm coming from the music field so it was a company that focused on theater and dance and so on and stuff. Well, probably a band can help them. I'm a programmer. And I did my best. And I'm not sure if I really helped them. I probably didn't hurt them. When it comes to developing aid, you need to be careful to not even hurt because it's so tricky. And so I hope I didn't do that. I'm not sure if I really helped them and that's so unfair.I did it because I really wanted to help, but probably I learned and I gained much, much more than anybody I tried to help as well because I learned so much about how life is in the poor areas of the world and really their thinking and what is going wrong and all these things. And it was totally amazing experience for me and for my wife as well and for my kids. Of course, it's probably like completely changing. It was funny because at the beginning when we saw them, you couldn't see any difference. You couldn't see that they were actually in any way thinking, "Okay. This is crazy what we are doing here." It all looks the same. It's all people around the world. And yes, it's a lot more crowded and it's a bit more dirty and they all are black, but who cares, right?Fabian Geyrhalter:Yeah.Bernd Roggendorf:That's the funniest thing. For them, it was totally easy. And it was like an amazing experience. I learned so much.Fabian Geyrhalter:And so when did that idea of EIDU come about? Did that happen during the trip or did it happen at a much later stage?Bernd Roggendorf:Pretty much when I returned. So I returned from the trip and with all this experience. And mostly I was thinking, "It's just way too complicated." I was like naively thinking, "Okay. I want to help the world, fix the world." And then I realized it's so amazingly complicated to help something. Typically, what you experience, you try to do something at one corner of the problem space and then the next problem comes up and this, and this and this. It gets so complicated and you never find a good way of really entering this problem space, because it's so complicated.So I was thinking, "Okay. I need to start smaller." And I was thinking about, "Okay. I do something in Berlin, helping the people here that's what I know more." What I thought is, if I want to help really the poor, I need to live there. And that was just not an option from our family point of view, was that we wanted to go back to Berlin, not stay forever. And so it was pretty clear I cannot do this.And then my daughter came to school, she was then six. And pretty much from the first day she was using learning software and I watched over her shoulder because well, first I'm her father and second, I'm a software developer so I want to understand software and how it's working. So it was super interesting to see that and how she can interact with the software.And what I realized it was like the software's typically done, it's a lot of repetition and practicing of exercises or of principles you have learned already in the school. Was like, so you learnt how to addition and subtract two numbers and then you do that at home and practice that. Which is good and it's definitely helping, but this is not enough for countries in Africa. Because typically, the teachers are not able to provide this basic knowledge of how numbers work and like very basic things.But what I saw sometimes it was Lara, my daughter, she was able to grasp a new concept just by interacting with the software. Almost never it worked, but sometimes it worked. And when I saw that I thought, "Well, when it's sometimes working why shouldn't it work always." It's pretty much a question of good software, of great software. She was like, it's probably a super tricky problem but it's a solvable problem. And if that's the only thing that hinders us from educating the whole world, well then we should try it.And then the other part that brought me thinking, and that was experienced from my trip around the world, that pretty much everywhere we were; we were like at the most rural areas of the world and most isolated islands and still, if you took out your smartphone and hold it in the air you had a great signal. It's so extreme. It's like you go to the poorest areas and the people are constantly thinking about how do they get enough money to pay for the food for the next day but they all have a mobile phone in their pocket. Not yet a smartphone, but a mobile phone. It was pretty clear. And that's what all the numbers are showing. It's like smartphones will be everywhere, it's just a question of time. The prices are so low now and all the forecasts are saying it will grow within the next 10 years to almost every corner of the world.Fabian Geyrhalter:You basically bring learning to smartphones for schools around the world?Bernd Roggendorf:Exactly.Fabian Geyrhalter:And who creates the content?Bernd Roggendorf:Well, that was a long journey. So we started on our own. That's when I thought, "Okay, let's try it." I couldn't find a good software that worked out of the box, so I thought "Well, then we need to create this content ourselves." And we started with it and it worked quite okay. And it's just at some point I realized, to teach all the different subjects to all the different grades and then with the local specifics and with the few languages. The space of content that is required is so gigantic. I realized okay, I will never do that. I was like, "I need to get partners on board and need to do that together with others." And it's not so long ago.Pretty much just this year, we actually invested heavily in that to get partners on board. And now it's like we are constantly integrating big content providers who actually build most... We have some that are especially designed for African contexts. But we also work, for example, [Anton 00:15:08] is the leading software in Germany and we are just incorporating that content. We would talk to all big companies around the world that create these type of content and ask them to allow us to use their content. It's rather easy to sell because basically what we say is this market doesn't exist.Fabian Geyrhalter:Of course, yeah.Bernd Roggendorf:You have no way of reaching them and you have the content, it's ready. You don't have to do anything, just give it to us and we will help hundreds of millions of children. That's rather easy to-Fabian Geyrhalter:And so for them it's hopefully I assume not about monetizing but instead it is about basically giving back, right? For them it's a great part of the brand.Bernd Roggendorf:Absolutely. And that's how the whole company is built. It's like we do all this for helping the world, perhaps at some point we might be able to make a business out of that mostly to make it sustainable. Not even to think about making profit, but to make it so that we don't need to rely on external funding. And at some point, we might also create a business model or more money than that and we might also be able to pay back a bit to the content providers. But that's very, very far away and that's not part of why we are doing it.Fabian Geyrhalter:So you're running like a nonprofit but you legally are not a nonprofit entity, right?Bernd Roggendorf:Yes.Fabian Geyrhalter:Okay.Bernd Roggendorf:And I like to see us as a for-profit, not because I want to make profit. Honestly, I earned enough money with Abelton and I don't need any more. Currently, we are even changing the company to rather go be a nonprofit like Abelton itself. I'm not in the thing for money but there are so many people around in the ecosystem, being it funding people or employees who all need to make money somehow. And thinking about having this business mindset thinking, how can you create value that people actually would be willing to pay for it? It's so good that they are willing to pay. And even asking the poorest of, would you be willing to give us a dollar per child per year? Which pretty much everybody in the world could do. But if you do that for hundreds of millions of children, it's a lot of money. And you can create great products with that. I would never say we are nonprofit, I want to stick to it as well.Fabian Geyrhalter:Well, I like that. Some of the listeners heard the episode with Scott Harrison of Charity: Water, and he's got a very, very smart way of how to divide those two. Here's a nonprofit part and here's actually how we need to make money, because we need to feed our own people too, right?Bernd Roggendorf:Yeah.Fabian Geyrhalter:So I would encourage anyone who finds this conversation interesting to also go back to that episode. But let's talk about the big pivot that happened this year to becoming this platform that's a little bit like the Apple store, where everyone can kind of like plug in. Did that have to do with COVID? Was your company affected by all of that school closures, et cetera? I assume it was.Bernd Roggendorf:It was dramatically. Actually, the change came beforehand because what we did is last year we thought, "Well, can we actually ask the schools to pay for the service?" And we did that and we saw it's like we actually get 20% of the market to pay for it. In this amount, I think on average they paid €1.5. So roughly $1.70 per child per year, which would already finance quite a bit of what we are doing if you scale it up. But what we saw is that we only get 20% of the market to do that. And at least at that point what we were offering we couldn't convince bigger parts of the market basically, of the schools that were existing and we were inviting. And the funny thing is, just because we were getting to just the small part of the market, our costs went crazy because it was pretty much to acquire... If you anyway invite 100% of the schools to your meetings and show what they do and give them devices and explain them how we do it and all this, then pretty much your costs are already gone.Fabian Geyrhalter:Yeah, huge.Bernd Roggendorf:And so we said, "Okay." We calculated it through and we saw it doesn't work, which is not very rare because pretty much nobody finds a way of a business model with the very poor. It's really, really hard to do that. It was tried all over the world. I would say there are two main examples who made that work, and that's Coca-Cola. You can get Coca-Cola everywhere around the world. But that's almost the only brand that you really see around the world all over the place. And then what you see is all over the place is mobile. Every place in the world has mobile in there, you can buy phones and smartphones and mobile services.Fabian Geyrhalter:And are there any lessons you can take from those two companies and apply it to your company?Bernd Roggendorf:For sure we tried a lot, but what we saw is we cannot get it to... At least at that point I was always thinking, at some point we probably might have enough product value it provides so much value for the users that they need to continue and that they are willing to even give us a bit of money. But at that point we were just there.But on the other side, I was always thinking... And that's also a tricky thing of like, if you try to make it with a business then you typically have the business mechanics at work. Which means, you usually easier get the ones who have more money. When it comes to education, that's definitely it's the wrong thing. Who needs the biggest support? The poorest. The danger was way too big from my point of view that we will at the end would end up with something that we just cater for. Still within those poor, more the [inaudible 00:22:55] ones and more the better-educated ones. And so I thought, there will be enough companies and there will be enough tries in this direction but I want to try to find something that really can reach the very, very poor.And that's why I thought because what we also did in this testing, at some point we did give out phones for free. To explain that a bit, so what we have in mind is in the long run everybody will have a smartphone, that's our assumptions. So at the end, we only need to provide software which is free and we could scale that up for the whole world pretty much for no money. So the devices is the tricky part in the game.But right now they don't smart phones, so what we do we provide the teacher with just one smartphone. So we simulate what will happen in 10 years from now, basically. And once we do that we say, "Okay. We put our platform on it and then use it in your classrooms like you think makes sense." We give them some training what makes sense, but we saw different ways of using that that's why we... It's pretty much the teacher is in control in the classroom. They are the masters and you cannot do it besides them. If you do something besides the teacher, you typically end up dying very hard in terms of usage because the teachers are the ones who constantly push for. Well, it's like we are here to learn and to get the kids all over. And that's why I also I didn't want to think about a parent app, for example, that focus on parents which is also very common. Again, you will not reach the poor, the people in total need. So we said, "Okay. We bring one phone to the teacher, explain them shortly how to use that and then they are starting it right away."When we do that for free, then we have activation rates higher than 95%, so pretty much everybody. We get all the schools to participate. And through that we can reach so many children, even the poorest ones. And the funny thing is, as we just take one device and share that in the... So the app works like this; on the one side there's teacher content for the teacher to be a better teacher, so giving them teaching materials and explain them how to do better lessons and prepare for them better. And on the other side there's self-learning on it so for the children, for the students.You don't need to do anything, because at the beginning you just take photos of all the children which is basically setting up all the accounts for the children. And then we only show the picture of the first child, the teacher gives it to this child and then the child clicks on his picture and does exercises typically for 10 minutes. And then the picture of the next child appears and then this child gives the phone to the next child. And we teach that to three-year-olds and they learn it, after three days they know it by heart.So we have a system where the teacher can introduce this platform without doing anything basically, besides charging the phone in the night. They don't have to do anything. It's so easy for them to get into the system. I would say that's our main point is, we make it so easy to get started so that they actually try it. And then after some time they see, "Okay. This is actually helping my children." They actually learn those concepts better and they get more attentive. And actually what the schools are reporting, kids are coming earlier to school and leave the school later and parents are bringing their kids to our schools and things like that because it's very attractive for the children and the teachers see the value as well.Fabian Geyrhalter:It's amazing. I mean, I hope that some executives of T-Mobile are listening to this because what a great way for them that would be, to have a partnership to give away phones with your software on it. That seems like the next iteration of the TOMS model of a one-for-one model. If I actually spent $800 or some insanely silly amount of money on a new iPhone, that I would know that one phone ends up in a school in Nairobi that actually touches 40 kids. I'm sure you already went down that aisle, but it seems like a very obvious direction to go, right?Bernd Roggendorf:Yeah, and it's like we are always playing around with this idea. Should we ask for charity? Should we get the world to finance that? Perhaps at some point we will do it. I'm hoping that we can fund it through other channels because we see that we can grow this so fast. We have now the ability.What we do is we go to slums. And typically, that's an important thing which many people don't know. It's estimated that more than 50% of the poorest third in the world, the vast majority go to school but the majority of those schools are not public but private. And then you say, private school for the very poor, what is that? We have millions and millions of extremely low cost schools around the world. For many, many decades were not known at all, but in those statistics they were shown and all this. It's a recent trend that we get data about those schools.For example in Lagos, a city of Nigeria. We will start operating very soon in a couple of weeks and they have I think 1,200 public schools or so, something like this, and 18,000 private schools. So the vast, vast majority in the city is going to private school. These low cost schools it's really funny how they work, because they typically get fees from the parents around €5 to €10 per child, per month. So it's tiny amounts.If you think about it's like, if you have a class of 30 people with €5, well, it's €150. You need to make school with €150 euros per month, including everything; including the classroom, including the tables and the chairs and everything, books. So it ends up you don't have anything, besides chairs you don't have much in your classroom. Of course, you need to pay the teacher. So what can you pay with this amount of money? Pretty much teachers who are not educated themselves, who have very little pedagogical education themselves.And so the funny thing as it is that even they are... And they have much less money than the public schools but as they are so near to the customer. Because if they don't do well, the parents send their kids to the next school which is 100 meters from your school. So it's like extreme competition there. And so it's amazing how well they function.There's pretty good research, especially in India where we have the same situation, there are hundreds of millions who are really still very, very poor. Although we also see how the development of India but there's still a huge part of the population is very, very poor. And in those poor areas, it's like there's many, many, many private schools.We have pretty good data about their learning outcomes. They are not better, but they are pretty much the same as the public schools and they do that with like a 10th of the budget. It's very interesting to see these two markets. Because when you go to the public schools they all say, "Well, talk to the government." And then you talk to the government and they say, "Well, that sound's interesting. Let's do a pilot next year." And so it takes forever and forever. Which we will do.We said, let's start with the private schools because it's so much easier to talk to them. We can just invite 100 directors of those schools into a meeting, tell them what we do and if they like it they will start on the next day. And that's actually what we do exactly that. We go to the slums, we invite these privates school owners and tell them what we do and offer them, "Well, you get your first smartphone right away. Send us the teacher of the early grades and we will give them a short training and then you get your first phone. If you use that to heavy extent like we say, we want to see at least 10 hours per week of usage." The thing is, it's every day, you need to do it for several hours to do that, to get to that amount. And that's what we get, it's like we get 95% of those schools right away, but in the first week they have more than 10 hours of usage.Fabian Geyrhalter:So currently, so you must have a lot of "boots on the ground," in Nairobi and all over the place, who actually are working for your company to get the word out?Bernd Roggendorf:Mm-hmm (affirmative). Well, it's like we started heavily on the ground in Nairobi because that was our learning lab, to learn how to do all these things. And then came Corona, it's like we have to do it very differently. In the beginning of the year, we were right at the point where we tried everything out and we were preparing everything to massive scale and then from one day to the other everything was shut down. All the schools in Africa were closed. All our schools were from one day to the other, not existing anymore because it's private schools. We saw pictures now from our schools where in classrooms have chicken farms and stuff like that, but they have to make money somehow.Fabian Geyrhalter:Yeah.Bernd Roggendorf:So all our schools were gone, basically. And in Kenya, it's still like they will start beginning of next year, that's what they said so far. So once they open up, we will go back and start extending in Kenya as well. But thankfully it's like there's one country in Sub-Saharan Africa that had not closed the schools and that's Ivory Coast.And In Ivory Coast we just started because we found out very late in the process because it's French and we didn't have the software in French so we excluded those countries from [inaudible 00:36:31]. But at some point we said, "Okay. Let's look at all the countries, perhaps we find something where we can actually operate now during Corona." And then we found Ivory Coast and then within three weeks we translated everything into French.And then last week, we did the first test meetings. Well, we invited I think they were like 35 or so schools there. And they are all starting to use the app now. We just heard last week that Nigeria is opening up, I think in two weeks from now, so we will start doing sales meetings in Lagos very soon.And we do that and that's the funny thing is, we have learned a lot how to do these meetings and how to do them effectively and fast and all these things. But as we couldn't travel we said, "Okay. How can we do that? How can we do that remotely?" Actually what we did is, we hired people remotely, just through video calls and discuss the things. Then we did the training remotely of those things. Then we did tests town halls remotely. And now we are up to do pretty much everything completely remotely.The great thing is, as all this is digital we can monitor everything. Every click of every child, we know. We see on our data. And typically, although we don't rely on an internet connection, we provide internet connection to collect the data and to update the software. I think it's something like 80% of the data we get within the first 10 minutes. So we are almost real time, but we are not relying on real time.Fabian Geyrhalter:It's amazing, really amazing. What COVID took, COVID gave back from a business perspective, right, for you?Bernd Roggendorf:Yeah.Fabian Geyrhalter:I mean, there's a lot of pivots that happened then a lot of streamlining operations, et cetera, et cetera. Pre-COVID, how many schools has EIDU been in or how many kids has it affected?Bernd Roggendorf:It was all testing, we were testing.Fabian Geyrhalter:Okay.Bernd Roggendorf:I think we had 400 schools with roughly, what is that, roughly times 200.Fabian Geyrhalter:Okay.Bernd Roggendorf:60,000 or something like that. I'd say 80,000 children.Fabian Geyrhalter:Yeah. It's a good amount.Bernd Roggendorf:And it's not like that all these kids were active at the same time. But what we know is we can reach those kids because they are in the school. So when we start with just a phone, we just provide the first class and then if they use it heavily, then we provide the second phone and the third phone and over time we reach all those kids over time.Fabian Geyrhalter:Right. Let's shift the conversation a little bit over to the EIDU brand. I mean, obviously Ableton is very much a brand, it's a brand experience, musicians light up when you mention even the word because it just stands for so much in their lives. So when you think of a mission-driven organization like EIDU which almost classifies as a nonprofit brand usually gets all but forgotten about, yet it's super crucial because there are so many stakeholders. I mean, we talked about it. The content providers, teachers, the kids and then there are many different languages. I mean, there's just a lot of people involved that are exposed to the brand and then on top of it many different languages, like you just got French on board over the last couple of weeks. Many who will just judge the branding by its look alone because they don't speak the language, how did you go about branding with EIDU? Did you see it as an important factor from day one?Bernd Roggendorf:To be honest, not really. Well, it's like I know from Abelton experience how important it is, but probably my helping heart was just thinking, "Well, I just need to provide the right thing then it's working." We talked to some branding people and thought about these things. The tricky thing is, typically when you think about these branding aspects you directly think for yourself and people here and your future employees and funding people and all these things, what is the right branding?Besides we need to find funding and we need to find employees, our customers are thinking very, very differently and looking at the world very, very differently. So we always thought well, let's first see how we can really solve the problems. But that says, I think branding is super important for us. I think we are still very early in terms of really using what we think the brand is and how it's positioned to use that for all kinds of things in terms of marketing and how we talk to the world. But it's still early, but I'm sure it will be very important.Fabian Geyrhalter:Right. And it seems to, when I get the message from Anna, your CEO and I quickly checked out the company to see if they're legit, like who is EIDU? And I looked at the site which I think right now when we record this is down but it should be back up when this is airing, I was super impressed because it was very brand forward. I mean, the logo feels extremely likable, it's very colorful. It feels like there was thought being put into it and to me that was very surprising because 99.9% of mission-driven nonprofits don't care about branding, for exactly the same reasons that you just mentioned, right?Bernd Roggendorf:Yeah.Fabian Geyrhalter:But I do believe that it can actually be extremely important to convey a message and to get people to actually like the product and to associate themselves with it. I mean, just the two colors in the logo, they're so vibrant and it feels like there's something going on between color one and two. There is meaning in it. At some point when you actually went through that exercise, you did it in a meaningful way, I assume.Bernd Roggendorf:Yeah. And we got support from branding people and the design people. I think that, that's what I learned at Abelton was how important are these things, that you really should take the time. Not from this or it's too far from the aesthetic point of view. But I actually like beautiful things and we want to see beautiful things. It's nice to see beautiful things and make things look nice but the more important thing from my point of view is more the consistency with your thinking, why do you do all this? And what do you want to achieve with that? And all these things. If you do that consistently with the branding, then it helps to spread your message. Even if it's subconscious, you feel all these things, people notice them and it's important.Fabian Geyrhalter:Absolutely. The name EIDU, it is so close to edu which obviously stands for education and is synonymous with it's .edu the main extension for organizational entities around the world. What does the name stand for?Bernd Roggendorf:It's not an abbreviation, what everybody asks us for.Fabian Geyrhalter:Yeah, I thought so too.Bernd Roggendorf:No, it's actually like it's a synthetic word which we came up, because it has exactly this what you said. It has the education in it and on the other side when you speak it typically, it depends on where you are. But many people say EIDU and how we found ourselves. So and if you say, "I do," it's I do something.And that's pretty much what we think in terms of what we want to get the children to do. They need to get active because that's the biggest problem in low-income education is that kids are just passive, they are just like this old picture. It's like their head is open and stuff is pushed in there and they need to remember it and then it's closed. And they need to get active, they need to do it on their own. They need to learn the things on their own. They need to experience it and try the things out and take a very active role in their learning. And that's why EIDU makes us so much sense to us.Fabian Geyrhalter:That is such a fantastic story. I would have never in a million years guessed this and I'm a naming guy and that's hilarious. But the idea that EIDU actually is one of the first things that they would learn, right?Bernd Roggendorf:Mm-hmm (affirmative)Fabian Geyrhalter:It's the action that you want them to take, et cetera, et cetera. And did you test the word before in different languages to see if it's easy for them to say or did you just know that based on your travels?Bernd Roggendorf:No, not really. We tested it. And it's not super easy because especially the E-I is pronounced differently in different areas even in English speaking countries. It's not totally clear if it's EIDU or AIDU and so this wasn't perfect for us. There are other awkward names in the word. We thought the ones who are using us, are using us so heavily we can easily train them in pronouncing it correctly. So we were very sure the name will stick and the people will understand that's EIDU and will understand that and will use it. And in general, I think it's easy to pronounce in all kinds of languages. So it's working quite okay.Fabian Geyrhalter:And brand purpose became such a big buzz word, one that I myself am actually using quite a bit. But looking at Ableton and EIDU, both are actually very purpose driven companies. And I wonder, isn't any company purposeful in a way. If there's no purpose, what do you give to the world? I mean, even if it's just a simple product or enhancement. So to me, purpose and mission are quite different. How do you see the difference from what you did with Ableton, to what you're now doing with EIDU as it relates to brand purpose?Bernd Roggendorf:Well, it's two fold. The difference is first of all I think we started not like... I think Gerhard and me founded Ableton, right from the very beginning we wanted to create the best product in the world. So we were driven by great products. But I would say the difference in EIDU it was very clearly we need to help people, we need to help and we need to support them that was more, more focused on. I think Ableton was from the beginning at least more product-driven and I think we are a bit more user-driven, which is definitely not true anymore. Ableton is super user-driven and thinking about the customers, it's definitely. And the users, it's totally in central. But it was a bit different.Fabian Geyrhalter:What is one word that can describe your brand? I call it your brand DNA. So for Everlane for instance, it would be transparency for Harley-Davidson it would be freedom. What would be one word that sums up EIDU?Bernd Roggendorf:That's a tricky one.Fabian Geyrhalter:I know. I like putting people on the spot with that. Obviously-Bernd Roggendorf:I have one. It's potential.Fabian Geyrhalter:That's great.Bernd Roggendorf:And it's two-fold. It's the potential of every single child, which we need to unleash. And it's so huge, the potential, in every single child. There's so many possibilities that this kid could grow into, but on the other side it's also like it's such a huge potential when you look at the world. It can change everything, if we educate the poor.Fabian Geyrhalter:Absolutely. As we come to a close, I would encourage everyone to listen to Bernd's Ted talk, I will add the link to the podcast notes. Where else would you like people to go? How can they follow you? How can they get involved? What can they do to help your noble and really amazing mission?Bernd Roggendorf:Well, go to the website and contact us first, like writing us an email or send us any message. But go to the website, you will find the ways to contact us. But get in contact, please.Fabian Geyrhalter:Perfect, very good. Well, Bernd, I really appreciate your time. This was a really, really great conversation, I'm sure everyone enjoyed it. Thank you for spending the whole hour with us.Bernd Roggendorf:It was great. It was so much fun. Thank you very much.
Learn more about Outer AisleSupport the show-------->Fabian Geyrhalter:Welcome to the show, Jeanne and Vasa.Jeanne David:Thanks for having us, looking forward to chatting with you.Fabian Geyrhalter:Oh, absolutely. It's such a pleasure to have both of you here. So Jeanne first, congratulations, Outer Aisle ranked 63, I think on the overall Inc 5000 list. And it is the second fastest-growing privately held foods company in all of America with a two-year revenue growth of I don't know, like close to 2,000%. So amazing success. Congrats on that, love having you here because of that, but let's hit rewind here for a second, because you have a fascinating story. You quit your position as an executive director of the Arthritis Foundation, when you were around 50. Not to put an age on anyone but that was about the year. And you wanted to do something both impactful and meaningful after the tenure.And now fast forward to 2020 and I see an article in Inc Magazine with the fantastic headline, The Matriarch, hovering above a large portrait of you. So you successfully employed your entire family at this point from your husband to all four of your sons with a brand that creates cauliflower bread. How did this come out? Give us a quick history here before we jump in.Jeanne David:Yeah, it really is interesting. So not that I wasn't, obviously before 50, not that I wasn't doing anything meaningful. So I mean my tenure at the Arthritis Foundation was very meaningful. I was helping people and changing lives through what we do and really impactful. It's just that all of my life before that my career had been taking a job and keeping a job because I had to raise four kids and put them through college. So I had to be contributing in that manner. So I had never had the luxury of sitting down and figuring out what I wanted to do. So I just knew after Arthritis Foundation, it was time for something new. I had been there six years. I had done what they hired me to do. It was a part of a whole change in Southern California and region and I was part of that team. And it was very powerful what we did in those six years.So I hit 50 and I just was like, what do I want my next career to look like? And I was given the extreme luxury by my husband by saying, "You know what? I really want you to take your time. Our boys were all in their 20s." And I didn't need to be so busy earning a salary for the first time, because everybody was out of college and we weren't actively funding them at that point. So it was very much of a gift. And he is like really take your time and just figure out what the best fit is for you. So I was working with a headhunter who looked at me one day and said, "If you could have any job you wanted in the whole world, what would it be?" And I could not believe how paralyzed that was for me, like, "Oh, my gosh, I said, I have no idea." And he goes, "Well, I'm not going to work with you until you answer that question."And he said, it's a really important question and it was very interesting. It really kind of just started me on really thinking about those things. So I was really trying to take a job that or I actually was, I'm a natural born entrepreneur, but I was really looking at the kind of, I had hung that hat a few years ago and said, it's okay, working for a company is great. So anyway, I really just was looking at what gifts do I have uniquely that I only, that kind of from the premise of we're all created very uniquely. And we each have gifts and talents that we bring to the world and when we focus on what those unique gifts and talents are, we're the best the people around us are the best and the world is a better place. Because we're bringing what I believe we were all uniquely created to do and bring to this world.So that's really the journey that began and then it came out of our own journey of transforming our health by taking out basically all of the empty processed carbs and sugar out of our diet which totally transformed our health and being committed to that lifestyle. So it's a bit of a long journey, and I don't want to get bogged down in that, but that's how I then Cauliflower Pizza Crust is being seen on Pinterest to give you the idea of where we were. Facebook and Instagram were not the big thing. Pinterest was that moment. And cauliflower pizza crust was there. So we had taken bread out of our diets. Certainly we're not eating pizza, no pasta, none of the empty, high carb foods. So we had really shifted to veggies to substitute for those high carb foods. So I saw a cauliflower pizza crust, I was like, "Wow, if I could get this, that would be amazing. But if I could get it at [inaudible 00:05:39] form, that would be even more impactful, because it's quite cumbersome to eat, to a little bit of protein and vegetables, and we were eating a little bit of fruit not much at all.So our day consisted of I mean vegetables and protein. So that was a bit cumbersome. So it was really out of our own need, and what we believed would be the wave of the future because of diabetes and everything else that was becoming very preeminent and inflammation based diseases. And again, it kind of gets, I can get very deep on all of those things. So I don't want to get into the weeds right now but it was our own journey that basically created the product line. Then I naturally thought, within a week, I had the whole product line in my head and I couldn't turn it off. And our youngest son said, "Come on, let's bring this to market." I was like, "No, no, no, I'm not bringing a product to market.-- No, I'm not going to do it."And at the end of the week, I kind of relented and because I believe that it was such a great product that had the ability to transform health and create this shift out there, which I believe is pretty basic to our health and to the diet that we find ourselves in today as American. So anyway, we decided to do it and make it a family project. I often talk about it, the file is still called family project on my computer.Fabian Geyrhalter:It's a bigger family now.Jeanne David:Yeah, we felt like it was a great thing to bring our kids who are now in their 20s while they watched me do different businesses when they were small. At this age, they could see what it took to bring a product from concept to market. And we felt that that was a valuable education for them to all be involved in. So we set up Thursday conference calls every Thursday, and we'd all weigh in. So anyway, that's the family part of it, we gave them each a little bit of interest in it and the youngest joined us in operations. Once we got our first region of wholefoods, he was in his career path, all of them were in their career path. So we'd never intended for them to come work for the company full time. We really were big into independent, and then being independent and finding their own way in their 20s, which I think is pretty critical.So it's just now that they found their own way a few of them have wanted to join in, which is then they all play a role. Two of them actually worked for the company, a third one does all of our commercial insurance and he's been involved in our insurance from day one as a risk manager and now he actually underwrites it all and oversees it all and that's huge. So he doesn't actually work for the company but that's the component he handles. And then we have another son who's an M&A and he just helps advisors, and is actively involved on the finance component.Fabian Geyrhalter:That's so great. That's so wonderful. So you're growing a brand based on six family members, how do you hire? How do you create a company culture that others feel invited to? This must be quite challenging, right, especially for the first couple of hires when you did those. I mean, I ask this because I feel brand and culture are always so very related and they really go hand in hand.Jeanne David:Yeah, I would say and Vasa will have some input on this because he's known us from the beginning. So we're a family and so that kind of lends itself to a culture right? Because your employees, really we do love family and we do encourage family. We constantly see that it's... I talk with our employees every day, we do gratitudes every day. I pop in their office and we really do see it very much as a family. It has that feel. So Vasa, can you... So I would say that's very much part of our DNA and then it also lends itself to the brand and the love and the kindness and building upon that. Vasa, I'd love your input here as well, because as someone coming into that.Fabian Geyrhalter:Vasa, can confirm or deny this.Vasa Martinez:Yes, as it pertains to hiring and culture, the family thing is more of a positive than a negative. It's more inclusive than exclusive. There's no sort of like rites of passage or any sort of things, I'm the youngest of eight, and when I came in, there's a clear warmth. And it was much different as we've seen the growth over the past two and a half years, that warmth has remained. It's not as though, when you grow the culture is one of the things that's probably the first kind of dissipate. It's not one of the things with Outer Aisle. And that's why I think that family is a huge component of the branding the hiring process. I mean, when you're hired, you're kind of like, it feels as though like when we were all children, we went over to our friend's houses, after school, it kind of feels like that, but with a very intentional way of going about business. Everyone's there for a reason to play their part, to do the best they can, to be the best they can be as an individual. And for a team and for me, that's one of the biggest things that has strengthened and been the backbone of our aisle is that the family is it is the heart, it's everything.Fabian Geyrhalter:I think that's super interesting because it could go both ways. And this is it makes so much sense that if a brand is grown that way, that that will be one of the big pillars behind the brand, culture makes a lot of sense. So your brand is grown and made in Santa Barbara. I know that that's where you reside, but that adds a tremendous layer not only of authenticity and of beauty to your brand story, but it's also a layer of complexity. Is that sustainable as you grow?Jeanne David:Yeah, we've fought hard to stay here and remain here. I mean, when it came time to build our facility we looked elsewhere. And for a lot of the reasons people do and then we said, we love Santa Barbara, this is where we live, why would we choose to leave where we love to live, to go work? So we said, "No, we're going to do what it takes to spend the expensive it is," because that's what it is, it just cost more to do business here. And that, that was worth it, as opposed to moving to Nevada, let's say because of the employee pool, the real estate there, the amount of big buildings you can find there. So we've been very fortunate, we found a great manufacturing facility in Ventura. So our first facility was in Galena, right outside of Santa Barbara, North and then we went south this time, because Santa Barbara certainly doesn't have the kind of space we need. So we're just 20 minutes outside [crosstalk 00:13:34] way.Fabian Geyrhalter:I mean, for those of us like myself who know the area very well, it is definitely, it is the green zone. I mean, this is really where farming happens and it's just a little bit south from Santa Barbara. And as a consumer if I see Santa Barbara or if I see even Ventura on the packaging, it rings true. It feels very authentic, rather than...Jeanne David:Right. It evokes a certain and Barbara especially, it evokes a certain [crosstalk 00:14:03].Fabian Geyrhalter:Yeah. Absolutely.Jeanne David:So yeah, definitelyFabian Geyrhalter:How did the name Outer Aisle come about? I'm super intrigued by that.Jeanne David:Yeah, so the name Outer Aisle is a really unique thing. We kept trying to, my husband's an attorney so he was definitely set on making sure that whatever the name we chose for this company was trademarkable. So we had all kinds of names. Everything in the food space is really taken. We're not a tech company and we can call ourselves Zulu or Hulu or something like that.Fabian Geyrhalter:Right.Jeanne David:So you really have to be kind of conscious and meaningful in the space. So we were at deadline. We had set a hard deadline for a final confirmation on our names. Most everything we chose had been already trademarked and this one popped in at deadline that day. We ran it through the USPTO and it had not been trademarked. We were able to grab it. And as many people know, at that time, it was just beginning to be out there that if you're shopping healthy, shop the Outer Aisle of the grocery store.So it was becoming known but it we had to explain it a lot in the beginning of our name, but that was the evolvement or the evokements that we wanted to have with the name. We wanted it to evoke a healthy thought in your mind. So the Outer Aisle when you shop, the Outer Aisle of the grocery store, you're shopping the healthy product. So for us that's what it was.Fabian Geyrhalter:Yeah, it sets you up for world domination too, because you can basically take the entire Outer Aisle of the grocery store in the future. This is all you.Jeanne David:Exactly. That's critical. That's a critical thing. We knew that we were going to be more than cauliflower. And remember, now when we started, cauliflower was not cool. So we started a veggie sandwich since because the cauliflower craze had not hit yet. So we were the first to market with cauliflower but we knew that we did not want to limit ourselves to one kind of vegetable.So then our competitors came out and we were criticized for that early on, very interesting and then applauded for it two years later.Fabian Geyrhalter:That's how it works. That's how it works.Jeanne David:Yeah, exactly.Fabian Geyrhalter:I always advise my startup clients to not pigeonhole themselves, because either they will pivot, meaning they had a bad idea and it's going to change but they're still running with the company name, or they will expand into different categories and they just don't know. So if you have a super descriptive name, it's just not made for growth. And you don't want to exclude that.Jeanne David:Yeah, and for us, we knew we were going to expand beyond cauliflower. So when our competitors hit market and were branding themselves, specifically cauliflower [inaudible 00:17:28] to cauliflower. So we were criticised by a broker that was like, wow, you didn't name yours, like people don't know immediately by your name and then go forward two more years, you're like, wow, you were right, [inaudible 00:17:42]. So it was kind of funny. But we knew all along what our long play is.Fabian Geyrhalter:And your positioning currently is very much to revolutionize the bread industry. How did this idea come to fruition in store talking about Outer Aisle, right? I mean, can you find your product next to fresh loaves of baguette say, is it in a very different area?Jeanne David:Well, it's interesting. So what we're seeing out there in the market, and what was happening when we came in for these brands, it's all about disrupting the old distribution channel that has our product roll. It's so much chemicals and crap that we really want to revolutionize food and you're watching that. So what's happening as we look at bread, the bread aisle is shrinking and the ambient bread aisle is shrinking. And what we're seeing is a refrigerated set that is beginning to come into play. So there's a gluten-free like if you walk into Sprouts today, there's a gluten-free bread set that's a coffer that has just refrigerated breads in it. In whole Foods there's a whole case that is the gluten-free breads or the better for you bread.So that's the trend we began to ushering in because we were the first to market, we were first in our category. So I was working with the whole foods forger to talk about where you're going to go and we really wanted to be in the Outer Aisle, we did not want to be in the bread aisle ever. We would never have an Ambien product. We wanted to be refrigerated on the outside of the perimeter of the store. So yeah, so that's that and that's what they were beginning to do and that we began seeing that happen.Fabian Geyrhalter:Yeah, no makes a lot of sense. And I just talked recently, to Cole of Alpha Foods in an episode and he told me about the growth of his company, during this pandemic, since people are now growing old of eating the same old food at home day in, day out, and they're looking for fast, easy, and hopefully at this point also healthy alternatives. Did your brand experience the same upswing during the last couple of months?Jeanne David:Yeah, I would say, he did, he already had a huge online component and Vasa can probably speak to this, because this is the way he manages that. That's his wheelhouse. So Vasa you want to take this?Vasa Martinez:Yeah, for sure. So early on, during the pandemic, we saw definitely a huge upswing both on Amazon and Dotcom. And as this progressed, you see more and more people preparing for e-commerce, a lot of folks who were more retail driven have pivoted and started building out their internal teams are working externally, with agencies or consultants to build out that platform. So it has gotten more competitive over the past few months, but there was an upswing early on, and we've been able to sustain that and work on our retention efforts to keep things going smoothly. But there sure was an uptick early on, particularly for I'm sure the shelf stable pantry items. But for us, we definitely saw one as well being a perishable, refrigerated and frozen item.Fabian Geyrhalter:And while I, this is going to be a good conversation for both Jeanne and Vasa. When did you start to actively invest in branding? Since packaging is key for a product like yours. I mean, first its packaging, people must fall in love with the package. And then later on, it goes into Instagram, social, e-commerce, all of that. But for brands like yours, the package is so important. Did you go through a lot of iterations in the beginning? Was it literally, was it just created by the family? How did you start off? How did it evolve?Jeanne David:In the beginning, it really, I look back and I cringe at what we had on the shelf before Vasa came on. We did hire a graphic designer early on, and thought it was good at the time. And obviously, we thought it was good because we went to market with it. But right around that time, five years ago, I would say was the beginning five, yeah, about five years ago was really this explosion in food and brands. And you began to see really a lot of morphed in branding. So we went through when Vasa joined us, I would say that was kind of the beginning of our branding and we did a hard rebrand, launched that. He joined us in April of 2018. That year, we did, we began a brand, a new branding, and then launched [inaudible 00:23:12] app store by March of 2019. But I would say all of the end of 2018 was when we were working on it-Fabian Geyrhalter:So very recently.Jeanne David:... creating it.Fabian Geyrhalter:Yeah. And copy is also extremely important for branding, your copy is wonderfully crafted. Just to give my listeners a quick taste, no pun, but we're officially over bread, but we're definitely not over pizza, sandwiches, hamburgers and tacos. We're Outer Aisle, we're going beyond the grain who's coming with us? So when and how did you define the brand personality and the tone of voice? Obviously, I know when now because that was just a few years ago. But how did you actually define that personality in the tone of voice as you started going into the different social channels, social being extremely important to a brand right now, especially you give me your Instagram following. How was that determined? Is that something that when Vasa came in, he was like, this is our brand personality? And it was a team exercise, or was it more intrinsic?Jeanne David:I think I'll answer a little bit and then I'll hand it off to Vasa to finish my sentences. But I would say part of it is who we are, who we want to be. We want to be family. We want to be approachable. We wanted to be fun. So you go through all of those exercises, but it very much was our values, our authenticity. So it was very much in line with our values. We wanted to always be transparent. Our ingredient list is clean. It's very transparent. So we wanted to be a little tongue in cheek, approachable, never elite or proud or, Vasa you can speak a little bit better to that. And it was a process we went through, but it was very much organically developed.Vasa Martinez:Yeah. So the back half of 2018, we had engaged with a couple resources to basically bring the new visual and voice elements to the brand. During that time, I was still mainly focused on organic and paid social. But from a very high level, we wanted to make sure that things were very authentic and relatable. The North Star for Outer Aisles, as long as it feels as though, Jeanne would say it. For me, at least, it makes sense and going back a little bit deeper on this. For me branding isn't necessarily what's on the package. Prior to the rebrand or refresh, the package was nothing to write home about, but it still did its job. Because for me what branding is, is really reputation and what that means is the integrity, the ethics, the transparency, the relatability. All of these things add up to that, and the brand, the packaging is just more like a business card, at least in my opinion.And with all of those things that we addressed early on with organic social and how we treated customers, every time they reached out that one to one relationship, every single time they asked a question where they could buy, how do I get this crispy? Whether it's email or comments on organic or paid anything like that. I think that's what really defined it and that reputation has sustained us along the way. The package has improved, and it will continue to evolve. But for the most part, it's the personality and the heart of the brand, which is that family element, to me that really is the branding.Fabian Geyrhalter:Makes a lot of sense and what does branding mean to you, Jeanne, I mean, you've been through a lot with this brand. Now that you've done all of this, what is the essence of a brand to you? What does branding mean to you?Jeanne David:Yeah, I mean to me it's truly the essence of who we are. So our packaging just displays what we stand for, like we're beginning to now be able to truly differentiate ourselves as a lot of brands come out. And while they have cauliflower in their ingredient list, it's dried cauliflower. So from the beginning, our brand would always be fresh vegetables. We would never do dehydrated that ground into a flower kind of vegetables, to just make it feel like you were getting vegetables, [inaudible 00:27:59] and it was a very specific thing we were doing. And that was so key to get across to our customers that they knew they were actually getting a product made with fresh vegetables, which has a whole different impact in your system and in your body. So always from the beginning of that knowing, wow, you're getting a really great quality, clean label product, that you would be happy to feed your families that you would be so proud to be eating.I mean, we wanted this product because we wanted to buy it ourselves and there was nothing on the market, any anything like it on the market. And we knew like we don't want words you can't pronounce in our products. We eat very clean and it's really usually just one ingredient. And if we eat something that's already made, then we want to be able to know what every single ingredient in that product is and not have anything else in it. So we just felt like that was the revolution we really wanted to be a part of and so that was the brand represents that. It represents that authenticity and that transparency. Yeah, and it's fun and it's lively. We're a lively bunch. Vasa can attest to that. I think it really, we just really continued to stay true to who we are and make sure that the brand was truly representative of who we are.Fabian Geyrhalter:Yeah. Authenticity [crosstalk 00:29:48].Jeanne David:Vasa, do you have any other?Vasa Martinez:No, I think both of those really address it.Fabian Geyrhalter:And looking back, when was that moment where you felt like your product could turn into a brand. Like where in the beginning, obviously you launch the product and you were just hoping for the best. But what was that moment? And that might be linked to sales figures? Maybe not. But when was that moment where you just came home and you said, "You know what? I think we're turning into a brand. I think this is it. We just made it to that point."Jeanne David:Yeah, I would say, as Vasa joined us, and really began... April of 2018, a lot of things began to really change. I describe it as it was, like gasoline on a fire. In 2018, we grew 25% month over month. So that means the product began, our velocities at shelf were really, really high. So that meant that the consumer was really loving what we were doing. So I would say Vasa, that to me, that's when we're like, "Okay, we've got market acceptance. We've got concept acceptance" Because again, we were the first one to market, so nobody was eating cauliflower bread, and it was even too offensive to call it cauliflower bread in the beginning. So to really know that the wave was, and the trend that we were really hoping to set with that, and then I would say the branding along with that was really the moment. Vasa, would you agree?Vasa Martinez:Yeah. So I came on board the end of April, early May we started doing our first posting, and it's not very often you immediately see traction. And during that time, yeah, IG was a little bit different, Facebook was a bit different. There's certain conditions that were maybe more favorable than the now, but either way, the traction was something where I was like, whoa, there's something here. Aside from the product solving a huge problem, I believe that there's a correlation between the how big the problem solves, and when you solve a bread problem and make it low carbon actually tastes good and have good texture. It made sense to me when we started seeing people with product that the sentiment was nearly 100% positive. So everything was tracking in the right direction, and I would say, as a few months progressed summer 2018 hit. I would say that's pretty accurate as when I realized all right, there's really something here and we started gearing up for it.Fabian Geyrhalter:That's fantastic. And I always like to come from the high notes to feels like especially with packaged goods like that. I mean, so much can go wrong. I mean, from the manufacturing from the plant all the way to the market, the packaging, how the copy was there [inaudible 00:33:22] enormous brand fail that you look back to and you're like, Oh, my God, I wish that they would have never happened. Which is something happened with your branding, where you felt like, "Okay, this is something that we will never do again."Jeanne David:Vasa, I'll let you speak to that.Fabian Geyrhalter:That's the easy way out Jeanne.Jeanne David:You have better insight than I.Vasa Martinez:Man, I'm really on the spot here.Fabian Geyrhalter:If there's nothing there's nothing, I-t's totally fine.Vasa Martinez:Yeah, I'm probably going to take the fifth on this one.Fabian Geyrhalter:Yeah, no worries. Usually with packaging, there are all of these horror stories about that one, I talked to Stacy of Stacy's Pita Chips. And she had like, okay, how long do you have? Because there's so many things that can always go wrong. So I always like to highlight something like that. But if there's nothing on top of your mind, then it's totally fine.Vasa Martinez:No, I don't think there's anything on top of my mind [crosstalk 00:34:29].Fabian Geyrhalter:Okay, cool.Vasa Martinez:Normal growing things, but definitely taking the fifth.Fabian Geyrhalter:Okay, perfect. Something that I always like to do with my clients. At the end of our brands workshops, we really like to define the brand in one word or two words, really kind of like crystallizing. If you would describe what that brand stands for, and I call it the brand DNA. Like what would that be just in one word, what would Outer Aisle be? Do you have any thoughts on that? If it's one or two words that basically describe the essence of your brand?Vasa Martinez:Jeanne, do want to go first on this one?Jeanne David:Yeah, the essence of our brand, I would say pure, clean. Yeah, those are the two words that come to me, but those aren't [inaudible 00:35:27]... I think more of the product quality in that probably not as much on the brand. Vasa, what would you say?Vasa Martinez:If I just choose one word, for Outer Aisle, I'm going to stick with a running theme that I've gone with, and that's family. I think that's the one that's the common thread throughout all from the inner weavings of how the organs set up and the departments and how people are treated so great and the love and respect. And even on the packaging below the allergens, it says, love and kindness added. I think for me, when I look at Outer Aisle, when I read about the brand story, when I observe how Outer Aisle operates when I'm looking from the inside and outside, objectively, family is that word.Fabian Geyrhalter:Family and health most probably right? Yeah, a combination of the two. Jeanne, do you have a piece of brand advice for founders as a takeaway, now that you went through, starting a company in your 50s, which it's not easy to actually start doing a consumer product from scratch. But definitely, at this point in your life, just to push for this and to say, this is really what I want to do, which is so inspirational. How did you like, are there any things you learned where you say, you know what this is something that I would like to share with other founders, as a takeaway?Jeanne David:I would say, I discounted how important the whole branding piece was. And I would say it was huge, and I probably should have paid attention to it sooner. But we were kind of bootstrapping it, you don't have money to spend on marketing much less the kind of money experts really charge for that. But I would say we decided to just, to do it and it was the best thing we ever did. The other thing is we had a group which I liked. We had someone who was kind of best in class on voice and they were the ones that really helped us with the voice how do we translate who we are and what is that voice. And so we had someone work on voice, someone work on design, Vasa was working on social media and integrating that component. So it was a group effort and it was a very focused effort for about six months and that was probably the most important thing we did for the company and the brand.Fabian Geyrhalter:Surrounding yourself with a couple of experts in the niche and then and then working together on creating something great as a brand that's fantastic. I think that's super super important. And I guess not just one person instead of hiring just one person but actually finding the best guy in voice, the best guy with this and it was an agency. So Vasa Would you say that was true that that was an important time for us?Vasa Martinez:Yeah, definitely. Voice is definitely important, got to be consistent with it after it's identified. That was definitely a strong investment and always is a strong investment is to invest in that visual branding and voice branding as much as it is any other part.Fabian Geyrhalter:And it immediately stood out to me that's why I quoted the website copied because it comes through really, really naturally and organically no pun intended. But as we slowly need to wrap up, listeners who fell in love with your brand just now, where can you get a slice of your non bread? Is it all over the US? Is it only in California? Where can people pick it up?Jeanne David:Vasa, would we say Store Locator is the best way to go but it is national we're in, should be in every whole food. We've just gone through a little bit of a hiccup there but should be back on shelf. We had a UPC switch that caused quite some issues out there. But I think we're pretty much back on shelf there at every wholefoods in the country. So hopefully this is our big national account. But we've got a store locator that should get you to, lots of independent natural stores. So yeah.Fabian Geyrhalter:Fantastic.Vasa Martinez:You can find us-Jeanne David:And online.Vasa Martinez:... online at outeraislegourmet.com. If you click Find a store, anywhere that's scanning Outer Aisle, you can filter by product, whatever you're interested in. You can also find this on Amazon by searching Outer Aisle or Outer Aisle Gourmet. And then if you're in Canada, we actually serve as DTC orders or e-commerce orders in Canada through Sweet & Sprouted, our Canadian partner there. So Google Sweet & Sprouted or find at Sweet & Sprouted on Instagram, and you can order our product and they'll deliver to you anywhere in Canada.Fabian Geyrhalter:Fantastic. Very, very good. Well, thank you both for having been on the show. We really appreciate your time and your insights. This is really great.Jeanne David:Thank you, Fabian, enjoyed being on the show.Vasa Martinez:Thanks so much.
Learn more about Alpha FoodsSupport the show-------->Fabian Geyrhalter:Welcome to the show Cole.Cole Orobetz:Hi Fabian, great to be here.Fabian Geyrhalter:Absolutely, good to have you. So earlier this year you completed a 28 million dollar funding round. Your plant-based frozen meals are hard to miss in the US where you are in over 9000 stores I believe, but now it might even be more. How has this bizarre year of people hoarding food, and supply chain issues across the industries. How has this treated Alpha Foods? How are you guys hanging in there?Cole Orobetz:Yeah well we did, timing was really fortuitous for us to have closed that round basically January, February right before COVID really changed the landscape of everything. And so we had raised the money to execute on a 2020 business plan, and when things started to shut down in March we took a bit of a step back to just survey the landscape. And really what we saw was a huge surge in people purchasing the products, loading their freezers. There was some scarcity mentality, obviously people didn't want to be left with no food products to feed their families. So we definitely saw a huge spike in sales for the first few weeks.Cole Orobetz:And we were very fortunate as well to have a rock solid supply chain, and great manufacturing partners so didn't have a supply disruption to speak of. But one of the interesting things that we saw occurring was the consumer being home bound for more meal occasions, and we had just more opportunity to reach out to them, connect with them just in a different way that we have before. So really that was a big game changer for us, and we did evolve our marketing messaging, our content creation to be a lot more interactive. And we saw a really great response from our consumers who were engaging with us digitally, and so far to this point I guess we're coming into September things are still going really well for us.Cole Orobetz:And I think the awareness that plant protein meal solutions, and options are a great viable alternative to the meat counter part. I think that, that has resonated with more, and more consumers over the last few months than perhaps it had previously.Fabian Geyrhalter:Which makes so much sense, and first of all I'm happy to hear that. I assumed that things would be going pretty well for you during this strange situation that we're all in jointly. But it is really fascinating to think about how people are actually interacting with your brand more now. And the reason why I say fascinating, because I recorded a lot of founders over the last half year, and none of them actually mentioned that. But it makes a lot of sense because people are at home, they actually spend more time with products just because they are stuck, and they start falling in love with some products, and they start to actually get to know new product, and then engage with them. So this is mainly via various social channels I assume right?Cole Orobetz:Yeah that's right. Instagram would be number one but we've also seen an uptake in Pinterest as well as Facebook groups for sure. And I think that would be pretty common across most if not all brands in the consumer space.Fabian Geyrhalter:Sure. Yeah, yeah, absolutely. And I did hear that, and I don't know where I heard that but that you either a plant, or that you actually did expand into Asia, and I believe that Hong Kong was one of the places. That obviously must have changed, or did it, or how did that go?Cole Orobetz:Yeah, so we launched there last year in food service and retail, and it's been slowly building in Hong Kong as well as five other countries in Asia. Really the only thing that slowed down was the food service side just because people were not really going out to restaurants, and other places quick serve. But generally speaking we've been very strong in Asia starting with Hong Kong down to Singapore, Taiwan, Thailand, and mainland China. And one of the exciting things for us was the partnership with KFC in Hong Kong with our Alpha Chicken Nugget.Fabian Geyrhalter:Oh that's fantastic.Cole Orobetz:Yeah that was really exciting. And so that did still take place, and launch successfully even though COVID had obviously changed the landscape, and it clearly had hit in Asia first before North America but that didn't, it may have delayed it by a month or two. I'm not sure of the exact time delay effect, but it did launch at the very end of June, and is still ongoing.Fabian Geyrhalter:That is quite a compliment for your plant based chicken right? Because they take their fried chicken pretty seriously over there.Cole Orobetz:Yeah, yeah you're right. They definitely do, and we were thrilled to hear that they had selected our nugget for the test, and we know that it's been selling very well. So we're hoping that, that's just the beginning with KFC, and are looking at other products, and other regions right now specifically around the chicken platform [inaudible 00:05:42].Fabian Geyrhalter:Which is pretty new for you right?Cole Orobetz:Yeah, the nuggets launched about a year and a half ago at retail in the US. And so it's still early for the nugget here in the US, but it has clearly become our hero product of the entire line. We've got 28 retail product but that one by far is receiving the most fanfare, and we think that it's got the biggest potential out of all the products in our product lineup right now.Fabian Geyrhalter:Well and just to talk about being fairly new, the entire company is only five years old. So congratulations that's an amazing lineup of skews after such a short time.Cole Orobetz:Yeah, thank you, we're going to be coming up to our fifth birthday at sometime at the end of this year. So it's been, we've definitely covered a lot of ground in a short period of time that's for sure.Fabian Geyrhalter:So this is maybe the anniversary of podcast episode because this will air at the end of the year. So I'm a little ahead of time right now when we record this in August.Cole Orobetz:Okay, sure.Fabian Geyrhalter:But let's talk about Asia for one more second because I think it's fascinating from a design, and branding, packaging perspective. Since you're also on the shelves there how did the brand have to adjust for that completely different consumer mindset, or did it?Cole Orobetz:That's a great question, and obviously there are language, and cultural barriers, and considerations that me personally, I don't have, I can't add a lot of credibility to what may or may not resonate in the language that I don't speak, or in a country that I don't live in. But we have partners on the ground there that were able to take our base brand product, and package, and include it in a standard retail array of all I guess USA spec packaging. So we didn't actually change the look and face of the package for the initial launch of any of the products, but what we can see is when we get updates on the marketing side on what our partners are doing there at retail and food services it clearly has evolved to be a message that resonates with those that speak Mandarin, and live in the regions.Cole Orobetz:And one final thing I will say on that as well is that we are going to be doing a China specific package probably launching towards the end of 2020, or early Q1 with a name that's been developed that resonates with a Chinese consumer in mind. Because there is no direct translation of when you put our brand name with the product name, they don't always fit, and go together, or make sense.Fabian Geyrhalter:Yeah.Cole Orobetz:So I think there's been a number of companies that have learned that the hard way over time that you probably just can't do a direct translation to every language you want to put on your package. And so we've been very thoughtful about how we approach the launch in a package that is not USA spec. But they do sell all English label USA spec packaging of our products, and others right now in [inaudible 00:09:05] retail shelves, but clearly there is an opportunity to probably connect with consumers who want a local language packaging-Fabian Geyrhalter:Interesting.Cole Orobetz:On the shelf, or in their freezer.Fabian Geyrhalter:Yeah, that's really interesting. Going all the way back, on your website there is an our story section but it is really not as much of the heartfelt founding story than a mission, or a purpose statement which in itself is very important. But I did hear that the actually founding story is quite interesting as well, I think it involves a blizzard, and a plant based bagel dog? How did Alpha Feed start, and what is your personal background, professional background coming into this?Cole Orobetz:Sure, no you got the two points, the blizzard, the bagel dog bang on. Yeah, so a bit of a background on myself. Born and raised in Canada, and mostly grew up in Calgary Alberta which is like the Texas of Canada. And really grew up eating animal products every day of my life without question. That's just what was put on my plate. That's just what we ate. And so that's the background of how I grew up and in relation to food.And I ended up going through with the professional accounting program [inaudible 00:10:30], and landing in a venture capital role in 2010, and that's where I got my start in food and beverage. We invested in food and agriculture technology, and during that time period we saw a ton of different brands, and companies grow, and flourish, and also make mistakes along the way. So that was a really valuable learning experience for many reasons, and to also see that the great success stories as well, and there were a number of those along the way.But one of the entrepreneurs that I had met during that time Loren Wallace was the founder, and CEO of Good Karma Foods. And we were in discussions for a funding round from our fund to Good Karma, and didn't end up completely the transaction together. There was a just a better deal on the table, but we stayed in touch professionally, and as friends. And the blizzard and bagel dog story is he reached out to me in 2015. He said, "Hey man, I've got a product concept for you. It's plant based." And he's a lifelong, or nearly lifelong vegan. And I said, "Okay, send it up." I thought to myself it would taste like sadness. It's made from plants. There's no way that I will like this.So anyways the FedEx arrived. I threw these things in the freezer, and yes they were a vegan bagel dogs which is a vegan hotdog wrapped in a bagel. Yeah so in the freezer it went, and I went traveling for a couple weeks I think, and came back. And did come back to the first part of winter, and this nasty blizzard hit Calgary, and it was dinner time. I had nothing to eat in my house except for frozen berries, and I didn't want those. It was cold, and so I said, "Well if I can't get out of the house I need to eat something so I'm going to try this bagel dog." And I tossed it in the oven, and loaded it up with whatever I could find in my fridge, and I absolutely loved it. I just devoured this thing. It was so good.Fabian Geyrhalter:It didn't taste like sadness after all.Cole Orobetz:No, that was not the main ingredient. That's right. It was actually quite delightful. And the light bulb went off me which was if me as a meat eater, and at that point I had been starting to reduce my meat consumption considerably just for some personal health reasons. But it was still tough to find something I could get excited about, and so that a-ha moment was, "Well if I can enjoy this product, and love it, and crave it then there's got to be hundreds of millions of other people out there that will have the same experience."And so that was really the genesis of how Alpha came to be. And a few months later Loren and I had started the journey of Alpha. I think it was February 2016 when we got going. And really our vision was to build a globally relevant plant protein company that could bring delicious products to the plates of meat eaters who are looking for a delicious plant based option but perhaps weren't excited, or perhaps they didn't know what they didn't know about plant based eating. And so the first wave of products that we had created and launched were to be convenient, and it had to be delicious, and they had to be made out of plants, and that was the three North Stars of our first line up of burritos that launched at Walmart in 2017.Fabian Geyrhalter:Not a bad place to launch.Cole Orobetz:Mm-hmm (affirmative), yeah.Fabian Geyrhalter:I talked with Chris Kerr the day of the Beyond Meat went public, and he was a key investor from day one with the company, and that brand went into the same direction by being able to actually place their patties in the meat isle of markets, of the frozen food aisle. Right? Which was a huge win for them, but I'm sure also for the meatless community as a whole because I feel that catering to basically meat eaters is really, really difficult because everyone comes in with your attitude. Right? Where you would only eat it if you're stuck in a blizzard. How do you convince people? Is it just tons of samples at stores, or is sampling the way the go? What was the journey like to convince people?Cole Orobetz:No, it is really the million dollar question. Of the entire consumer population that is open to eating something there that meat, I think it's about 90%. I'm sure the numbers have changed. How do you get their attention, and how do you convince them that it's safe to try, and that they won't be disappointed. And I know that every plant based company out there is asking the same question, and they have their own take on it.But to address your question, absolutely tasting is believing, and getting product samples in front of people, ensuring they're prepared properly is really the first stop. And also they have to be open to the idea that it could be delicious, and not be made of what they think it's typically made out of. And funny enough some of our earliest investors are the biggest carnivores that I have ever but they came in to the opportunity after having tried some of the early product samples. And they were on their own journey of, the doctors told them that they had to reduce their meat consumption for various reasons.So that is really the first step for, in my opinion is the awareness. Okay I need to eat less meat. I think I can eat plant based protein, but I don't know what's out there. It's a whole new world, and that's where I was a number of years ago. And so I think that where Alpha sits is we're that transitional brand by making plants easy to consume, to prepare, and enjoyable it takes the edge off of that extreme lifestyle shift that some may think that you have to make to go [inaudible 00:17:06] to move and evolve into a more plant centric diet.Fabian Geyrhalter:Well and I'm almost certain that one of the best marketing tricks to happen to the plant based industry was the virus, and the quarantine. Quite frankly if you have to eat three meals a day, which those of us who are lucky in the western world, at some point you just run out of options, and you don't want to see meat anymore. Right? Even if you're a 100% meat eater, at some point being at home you're just, and you don't want to cook anymore either. So at some point just finding a product like yours is most probably pretty logical that that would happen.Cole Orobetz:Yeah, you're right absolutely. And another factor too is that there were empty refrigerated coolers that used to have chicken, and beef, and pork-Fabian Geyrhalter:Right.Cole Orobetz:And turkey, and all the meat that people would be used to seeing. And so I think it was a combination of yes being home bound, cooking all your meals from morning to night in your house, but also going to the grocery store for that potentially nerve-racking grocery run during a pandemic when there's a risk of being sick, or whatever, and going to your usual meat cooler and not finding the steak, or the burgers that you used to buy. And so with the awareness that the virus had actually had a really big impact in the meat packing plants, there started to be a number of sources of information, or these proof points that something is going on with meat. I can't buy it. These people are getting-Fabian Geyrhalter:Right.Cole Orobetz:Sick that are working in the plants.Fabian Geyrhalter:Yeah.Cole Orobetz:And maybe I should be aware of something different. And I think that, that also had a big impact on the consumer awareness, and appetite for plant based protein as an alternative source. And you're right, eating three meals a day with all the same animal proteins cooked in the same kitchen can probably get a little monotonous. And I think in our, especially Alpha's broad lineup of both prepared meals, solutions, and ingredients it became a great brand to connect with for some of those consumers that were just looking for something different.Fabian Geyrhalter:Because it's easy, it's not only easy it's also very approachable. Right? Because you have the burrito, you have the pizza. You have staples that people understand.Cole Orobetz:Yeah.Fabian Geyrhalter:So it's not like they go into a garden patty that's called Garden Patty.Cole Orobetz:Right.Fabian Geyrhalter:It's like, "No, here's your crispy chicken patty." It just isn't chicken.Cole Orobetz:Yeah, yeah. And that is really again the essence of the Alpha brand and DNA is those familiar products, familiar formats, familiar flavors that people had probably tried, or see on a daily basis in restaurants, and other places they go. So it just happens to be made out of plants. And so that takes the scariness factor out of trying plant based if they've never tried it before.Fabian Geyrhalter:Yeah.Cole Orobetz:And everyone's eaten a, well not everybody, but many people have eaten burritos. I think everyone knows what a pizza is. So you're absolutely right, and chicken nuggets as well. Those are staples I would say most people are pretty familiar with.Fabian Geyrhalter:I think the idea of the brand DNA potentially, or the DNA of the company being around familiarity is really, really interesting because I tried to put my finger on it because the way that you named the product it's really in your face right? The Alpha burrito, the Alpha chicken wing, but also the packaging. It's black. It basically fits into the typical freezer product. There's something about the familiarity which I always wondered how much does it pop out, how much does it stand out, but that is all strategic to actually make it feel more familiar. It's really interesting.How did the name come about Alpha? Alpha has a lot of connotations right? An alpha person, alpha in religious settings. There's plenty of connotations, but how did it come about?Cole Orobetz:Yeah, another story I guess with some roots that were prior to us actually starting the company. And it really stemmed from the actual vegan hotdog inside that bagel dog which was the vision was that would be the best plant based hotdog out there, and Alpha is another name for the best, or the top. And we happened to have a hotdog at that time, and so the Alpha dog gave rise to Alpha Foods, and that's really how we view the products and the brand is best in class, and a leader for taste, texture, eating experience, and just enjoyment factor of the food product.Fabian Geyrhalter:Well and it says a lot about you as a brand too subliminally, because the alpha kid always gets the food.Cole Orobetz:That sounds right.Fabian Geyrhalter:Yeah, you're the one who's just rising to the top.Cole Orobetz:That's right, you got it.Fabian Geyrhalter:Let's talk about the importance of branding for a little while here. The Alpha logo type plays a very central point in your identity even on the packaging. Alpha leads the product as I already talked about. Right? The Alpha nugget, the Alpha burger, and not only are you the co-founder, president, and CFO, and maybe a lot of other things too of a fast growing CPG company but you're also a founding member of the Angel Group which is an angel investing group that you and I talked offline a little bit about before the podcast for early stage CPG brands that invest in brands that are already on the shelves. So branding for you must play a crucial role in your professional life. What does branding mean to you being in the CPG space? What does it mean to you?Cole Orobetz:Well I think to me it's how I relate to the products and [inaudible 00:23:29] with the company, the products, and I guess values at a deeper level, or I guess how I might think about a company, or a product when I'm not potentially using it. And it has that kind of stickiness factor in mind. For Alpha we wanted to create a really inviting brand, and message to our consumers that plant based was approachable, and not scary, and that they didn't have to make extreme lifestyle shifts to enjoy the product. And I think that's really how we're in a position for success as a bit of a disruptive brand making plant based easy, and enjoyable for people to substitute, and ditch their meat products.Fabian Geyrhalter:How important was data to you in the beginning? Were you a very data oriented company, or did you even sometimes go against early customer data, and you launched something that you weren't sure people would actually resonate with?Cole Orobetz:Yeah, I wish we wouldn't have had more time, and resources in our early days to focus on data, and that's the honest answer is consumer data is very expensive.Fabian Geyrhalter:Yeah.Cole Orobetz:And it's time consuming to capture. So there was, no there's definitely enough data out there to give us direction on consumer preferences, on where the market is going in the plant based sector. It's heating up at a fairly high level, and we triangulate a number of pieces of data from the market as well as some consumer feedback on early products to really refine our product mix in our early platform of products.And then there is some element of just a gut feel for certain opportunities, and products to develop that we had to have absolute conviction that you're not always going to have 100% the data you need to make perfect decisions based on those kinds of facts. I wish we could, and still don't. It's everything is moving, and especially during COVID there's a whole slew of data sets, and consumer preferences that have changed, and probably permanently. So in our early days we definitely used some directional intelligence data, but we didn't have a perfect data set to it to make those exhaustive decisions with.Fabian Geyrhalter:Which is fascinating because data is so important to [inaudible 00:26:10], and you coming from that background, and now having made it through the first five years of running a start up yourself, and seeing the growth, and seeing the hurdles, and the typical start up fails I'm sure that go along with it because it ain't easy. And regardless if you already have a product, and you've got the perfect experience it's still not easy. Has that experience changed the way that you invest in companies now?Cole Orobetz:I think a little bit, and I would say for early stage investing, angel stage before you get to the growth stage of a company, and looking at investing and past proof of concept, I guess for me it was boiled down to a few things which is the management team, the product itself, and the sector. And if you have directional intelligence that the sector itself is doing well, well there's an opportunity there. If the product seems to have a fit, or address a consumer need state without extensive data that's great because it pays great if we're talking about a food or beverage product, and then the team. Is the team capable?So I think those three factors would get me through I guess an angel, or early stage investment decision more so than data because in the early stages there's a time factor, and an execution factor, and that really is mostly driven by the team. And if they have a product in the right sector you have to give those three factors an opportunity to get to the point where they are uncovering data, or potentially paying for it, or obtaining it to further refine the next phase, or next stage of the company because you're right data becomes more, and more important as companies grow up. It drives a lot of the decision making resource allocation where companies will, and will not invest, and also to refine product mix, or products on the shelf that may be doing better, or worse than a benchmark. So it becomes much more, and more important in I would say that growth stage, but in early stage it's really tough to make decisions based solely on data.Fabian Geyrhalter:Right, right, I can see that absolutely. Looking back at Alpha Food, I know you mentioned that you got into Walmart pretty early on, but what was that one big breakthrough moment where you felt like now you're changing from being a start up, and you're actually turning into a brand? When did you feel that? This may, or may not be directly to sales figures right, but when was that moment where you just looked at your business partner, and you're high fiving, and you're like, "I think we just made it to that step."Cole Orobetz:Yeah, well I guess looking back I don't think there was any single moment in time because there have been so many. There's so many wins and great moments on a daily, weekly, monthly basis. And we've really been building this brad brick by brick, and consumer by consumer. So definitely getting three straight years of distribution expansion, looking back at the end of each year and it's been one of those proud moments. But I would say the overseas expansion, and the KFC partnership was really monumental, and validating for us. We had clearly started in the United States, and didn't really have any ambitions to be global, or international until we had really ironed things out in the US, and done a great job.And it just so happened that the opportunity to sell into Asia with a partner on the ground, Green Monday came along, and we pursued that, and a number of months later we had landed in a KFC. And that was really cool to see the press, and the images, and the excitement factor of a product that had been developed here quite some time ago. So yeah I would say that was definitely one of those highlight moments for us.Fabian Geyrhalter:And I love how you started this with there's a highlight every day, every week, every month. That's the founder spirit. That's the only way to get through it because there's going to be tons of fails along the way as well. And I always love to at least talk about this a little bit because I think it's inspirational for other founders to hear about the road not always being perfectly smooth. I know I talked to Stacy of Stacy's Pita Chips about this, and she had so many answers to this question, and I'd love to keep this question definitely for my CPG founders that I interview. Was there a ginormous brand fail that you went through? Because I know with packaging a lot can go wrong right? With translations, with how things get cropped, or even having a food product so much can go wrong. Was there anything in the brand level where you felt like, "Oh that was a big faux pas, and maybe I should bring this up because others can learn from it." Not to put you on the spot but definitely putting you on the spot.Cole Orobetz:Yeah, yeah. Well I would say not one gigantic brand fail, just dozens, probably hundreds of small ones because the consumers obviously only see the finished product but what came before, what appears on a package can be very challenging. And before we got to our first logo, and look and feel of the first package we went through four agencies, and must have seen over 100 different versions of our logo-Fabian Geyrhalter:Oh wow.Cole Orobetz:Concepts, and there was at one point it looked like we were going to be a space company sending things into space. And it was really, there was a time factor for us, there's pressure on us to put this brand together. We wanted to go out and sell it, but we just couldn't find an agency, or the creative spark to get us to that place where we were really happy with a design that could be on a website, or a consumer placing package.So the initial logo and design was challenging, and I think one of the other moments that sticks out was when we printed our first commercial run of the burritos that were going to Walmart we had the word vegan on the front of the package. And it's true we are a vegan food company. We typically use the term plant based instead of vegan, but it is a vegan product. And we were so proud of the burritos that came off the line, and they were going into Walmart our first customer, and consumers were going to buy it, and love it. And I think it was not even a week after we got those out the door did we see a study come out, I think it was John Hopkins University that said, "Don't use the word vegan it means poor taste, and it means that it's less healthy to consumers." According to this survey.Fabian Geyrhalter:Yeah.Cole Orobetz:So we thought, "Ah, damn." So now we have to go back and spend more money on redesign, and change the plates, and garbage the packaging, and just be okay with those products that are in the marketplace. So I can't recall what we swapped it for, but it got yanked, and got put on the back. And we are certified vegan now, but it's just not something that apparently according to studies, and surveys, and things that's just not something you want on the front panels. So that was more of a funny little road bump, speed bump along the way, and we evolved in that pretty quickly.Fabian Geyrhalter:Well in talking about the power of branding right? The word vegan has been branded, and mislabeled for such a long time that it now stands for something right? And if I read vegan even in 2020, I am still a little bit more held back than if I read plant based. And I think that too is because of branding. Right? Because plant based that's Beyond Meat, that's Impossible, that's a lot of other brands that started celebrating that word. It is amazing what a word can do.Cole Orobetz:Yeah, that's a great point. And I think that the word vegan can unfortunately bring up I guess extreme lifestyle change, or choice for certain consumers who may think it's just a bad word, and may not really understand what it means. So the term plant based is really the, it's made it safe for people to explore and enjoy food products that are the same thing as vegan but just a different word.Fabian Geyrhalter:Well and anyone had vegan food even as a meat eater, and that's why it took you a blizzard for you to try it again because it has changed a lot in the last five, 10 years.Cole Orobetz:That's right.Fabian Geyrhalter:And there's one thing that I would like to add to what you have said before about going rounds, and rounds, and hundreds of designs with agencies until you actually found finally that right design. I think one important step is to really in the beginning look at the brand strategy, to really refine what is the brand, what does it stand for, what is the mission, what is the vision, what is the positioning in the marketplace, what is all of that together with the agency so they can actually then derive something. And I think that happens a lot in start ups that, that is either not being taken seriously on the agency's side, or it's just there is no time from the founder's side because you just need to get design, and you need it now.And I think that is a step that for founders in my eyes is extremely important as I work with founders on creating the brand. Because at that point they can't say, "I like this." Or, "I don't like this." But it's like, "Does this go back to our plan? Is this great for our customer? Would they love it?" Right? There's this fictitious third person that can look at the design during the process, and that's usually the customer right? And that's what we need to focus on. So I wanted to put this in there.Is there any piece of brand advice from your end for founders as a take away as we're slowly coming to an end here. Anything that you learned over the years where you would say, "Look this is something that I know about branding." Maybe specifically for CPG product, or else wise?Cole Orobetz:Yeah, branded wise I think definitely what you just touched on about the brand strategy, the vision, the mission, all of those items. Having those front and center before getting to a pretty design. 100% agree because it really narrows the scope, and the array of options that you will be presented with when coming to that first wave of designs which is exciting, but I think what you just touched on is something that I wish we'd probably would have spent more time on in the beginning to get to our brand that became the face of the company, and the face of the products, and so on. So spending more time up front I think, and unfortunately it can be expensive but I think it's one of those investments that just has to be done the sooner the better.And also I think that there's definitely an interesting shift that's happened through COVID with the retailers where they may not want to bring on brands that appear to be too risky because of potential supply chain disruptions and things. But I think also for founders, and those developing a food brand there's a bit of a fake it until you make it mindset that you need to put something innovative and cool, and fresh in front of a retailer, and really act like a grown up company to get that shelf placement because they do need to offer new products, and innovation for their consumers. And so I think that, that's something that brands and founders shouldn't be scared of is really swing for the fences, and bring the best foot forward even though the company might be small, and still getting on its feet.Fabian Geyrhalter:Great, great, great take away. Listeners who'd like to get a taste for your plant based meals where can we find Alpha Foods? I guess 9000 plus stores so there's a pretty good chance they will find it.Cole Orobetz:Yeah, I'd say that's a pretty big number of places to buy physically. You can go onto our website. There's a store locator on eatalphafoods.com so type ina zip code, and there's definitely stores that will pop up, and we're also actually going to be selling online through our website as well. That will be a great way to get products directly to the door that may not be all available at the same location. Because that's one of the pieces of feedback we get is not all products are available at every store, but many of them. So being able to purchase online where many consumers are going now is important. So we invested in our direct to consumer business.Fabian Geyrhalter:Great, great, good move, good move. Well, I invite everyone to check that out. And thank you Cole for having been on the show. It was a real pleasure to have you on.Cole Orobetz:Yeah, likewise thanks, Fabian. I appreciate you having us. 
Learn more about Unbound MerinoSupport the show-------->Fabian Geyrhalter:Welcome to the show, Dan.Dan Demsky:Hey, how are you?Fabian Geyrhalter:Very good. Very good. Good to have you here. I love your backstory. I listened to another podcast interview, mainly because it actually resembles my story a little bit as I grew my design agency organically to a point of, under parenthesis, great success, at least to the outside world, but I myself just felt really stuck. So I flipped the switch and I started over, and it seems like you were doing something very similar with a video production company. Tell us a little bit about your journey and then your big epiphany to switch from the service industry to the product industry, which is always a very smart move.Dan Demsky:Yeah. Well, I had a really, really good experience and a good journey doing what I was doing, but I never originally intended to start a company. I was doing freelance video production with my best friend and business partner. And we started getting really busy, and before we knew it, we had a company. It wasn't like we thought, "Let's start a company," we were just doing little projects. But being so busy, we started having to hire people to help, and then our client roster grew. And then we had a small downtown studio in downtown Toronto, and then a big office. And then we had 20 employees, and we're like, "How did this happen?" It just happened. And it felt really good. It was really cool. And we were in our early 20s, we felt we were so smart and so savvy.We were dumb and young, but we felt smart and savvy at the time. And it went on for years, but somewhere along the way, the business just, it didn't call me like at once did, it didn't excite me like it once did. And a lot of the realities of having a company and then the journey of entrepreneurship really blew up in my face. I love the journey, I love the ups, I love the downs. I love it all. But I felt at one point I'm just in the wrong place. And just for years, I was trying to think, "Well, is this what I'm going to do for the rest of my life or am I going to figure out something else?" And what I realized is the people around me who had e-commerce product businesses, they had a different level of scalability to their companies. They had a different level of freedom.There's something different about what they were doing in their business model that just drew me. So I knew I need to create a product business and that product is going to be sold online. But that's as far as I was really able to wrap my head around where I wanted to go. So that's not a lot of information to give yourself of what you want to do. It's not an idea, that's just like, "I think I want to have a business that has this business model at a high level."Fabian Geyrhalter:Which is really unusual, Dan. Because usually, people on my show, they're like, "I was sitting around and suddenly I'm like, 'I need to fix this,' and that's how the... Or I had this huge passion, and out of this passion suddenly grew a business," like with your first business. And so it's very unusual, but it also makes it a lot of sense. I can 100% relate to that, where at some point, you just look at the lifestyle of other people around you and they're not working their butt off like you are, and they don't have payroll like you do. They didn't do like production work which started with cool design and strategy, and suddenly it ends up just churning hours in payroll.But really, just thinking about, "Okay, how am I going to flip this around and what am I going to do next?" So you must've gone through months or years of just thinking about what could that be.Dan Demsky:Yeah. And first of all, there's nothing wrong with a service business, but what matters in a service business is that, I think, you have to be passionate about what the service is. Because when I was really into the video production, when we were into what we were doing, every day, the challenge, all the work we were putting in was exciting and fun, but once I lost the passion for it and it was no longer calling me, that's when I figured out I needed to get out. So yeah, on a simple level, I was just thinking of the business model, but what I started doing was we started ticking on a chalkboard or a whiteboard or on a piece of paper.Every couple of weeks we'd meet up and we would think, what is a potential business idea that could be a product? And we would just throw ideas at the wall. And so many of them were terrible. They were just bad ideas. But what we did that was right was we just were thinking, I was framing my head around, "We can do this. We can create a new business that's going to be a product business." And that opened up the lens for me to look at the world and, even on an unconscious level, try to think, "Well, what is that thing going to be?" And you do need that moment. Like you just said before, a lot of entrepreneurs, they say, "Oh, I need to solve this problem, or I have this thing I'm obsessed with," and then that idea comes into fruition and they go and they chase after it and they make it happen.I didn't have that, but what I did have was the hunger to find that. And if you're not looking, you're not going to find it. So it wasn't until I had that moment where I have identified a problem, I identified the moment where I'm like, "I could create this product that I wish existed." Then it was like, click, boom, there it is. I'm going to go do it now. But it took years. You said, did it take weeks, months, years? It took years. We were tinkering with ideas for probably two to three years before we laid the groundwork to start moving forward on a specific idea.Some of them we ideated with a little bit more, moved a little bit down road, thought, "This is a good idea, but maybe in not good timing. This one is a bad idea." We'd just go through them. But it took, I'd say two to three years until we move forward saying, "This is the idea that we want to go out on."Fabian Geyrhalter:And so when you say, we, was it you and your significant other, or you and a potential business partner? Who was it?Dan Demsky:My two best friends.Fabian Geyrhalter:Oh, that's great.Dan Demsky:Yeah. We didn't have a business idea and I found some strategic partners, so it was me hanging out with my buddies. So we'd go, we'd sit at a lunch, like on the lunch break or on a Friday night and we'd have some beers and we'd just throw some ideas at the wall. So it was kind of a social experience, we were just having fun. But the intent was like, "Let's figure out a product business because that's what we want. That's the life that we want to live. We want to start a new business, but we want one that has the scalability of a product business. Let's just figure it out, and let's have beers and that fun while we're doing it."Fabian Geyrhalter:Yeah. And it's really interesting because suddenly it's two other people that need to be excited about the same idea, which is double as hard, three times as hard suddenly, to actually find that idea where all three say, "You know what? This could be it. This is it. We all feel like this could be a great product."Dan Demsky:Well, this is the way I always look at it. I feel like you can have friends who are just there for you, to support you emotionally, whatever. And then you can have friends that have utility and function in your life that they have skills that you could work with. And I don't look at that as a negative or a sour way of looking at what a friendship could be, I think utility is a good thing. I can go out for beers on a Friday night with any group of friends, but why not go out with the ones who have that zest for wanting to do things with you, to create things with you. There's that old adage, "You're the average of the five people closest to you." That to me is the most important way to live your life.If there are people that are close to you and they're not ambitious and they don't care to take more out of life, that doesn't mean they're bad people. They could be great people, but may you can have people a little closer to you that do have that, because if they do have that zest to want to do more in life, to build things, to create things, and those are the people that you spend your most of the time with, that becomes the bar in which you want to live your life. And that's just the people I surround myself with. Now, having said that, I'm very lucky because these are the people I grew up with, these are my lifelong best friends. We just happened to be this way.And maybe sometimes we all push each other. Maybe I'm the most ambitious one day, and that makes them want to roll up their sleeves a little bit more, but in times when I'm not my most productive and I'm not my most ambitious, one of my business partners, Andrew, for example, or Dima, they're firing on all cylinders, and I feel, "Ah, man, I got to work harder. I want to do better." So I work really hard to make sure that I'm surrounding myself with great people. And I'm lucky to have great people in my life. And once you have that, going out for beers on a Friday night is more than just telling inside jokes and taking a whiskey shots and drinking beers. It becomes like a pen and paper on the table and you start to think of bigger ideas and you start to create together.It's still just going out for beers at the end of the day, but the results of it are a lot more palpable.Fabian Geyrhalter:Couldn't agree more. Couldn't agree more. And the actual idea was born, Dan, I believe, on your honeymoon, right? Or when you were traveling with your wife?Dan Demsky:That's correct. You want me to tell the story of that? I discovered Merino wool as a way to solve the problem for my previous trip with her, which was when we had way too much luggage, all of which was hers, none of it which was actually needed or worn, and I had to haul stuff up hills for her and it was very frustrating. And on our honeymoon, we decided to travel with just a carry on. And the way to do that, I was Googling, "How do you travel overseas with just to carry on?" And I discovered Merino wool on a Reddit post where this guy said, "I pack Merino wool t-shirts because they're antimicrobial, antibacterial, odor resistant." Now, if you wear these multiple days in a row, even if you sweat through them, they'll never smell and they'll be just as fresh as the first day you put it on."I thought, "Perfect, I got to find this Merino wool." And I went out looking for Merino wool stuff, but everything I found looked like active wear, as it was. Now, Merino wool, we didn't invent this material, it was already being used in stuff for outdoors, stuff you can do a trip with, stuff you can run a triathlon with, stuff like that. And because it was made for this purpose, it really had that aesthetic. So I bought some Merino wool stuff and it performed as promised, it performed brilliantly. But when I look back at the pictures from the honeymoon, I'd be at a cocktail bar and I'd be wearing this t-shirt that had a reflective logo on it, and a cut that seemed a little bit more athletic wear.I look at a place, and I remember feeling out of place. And I thought, "Why can't I find more simple, stylish, timeless, classic type of?" I'm talking about a plain black v-neck t-shirt or crew neck t-shirt, but something that fits a little bit nicer, that doesn't have those reflective embellishments, doesn't look like I'm supposed to be going out for a run, maybe something that I can put on a nice pair of pants on and a watch and go out to a cocktail bar and I feel like I was in the right place. And it was very hard to find. So after years of searching, I was like, "Aha, I want that product for me, and I can't find it. So maybe I should go create it."So I went to these two guys and I said, "This is the idea. This is what I think." We were all looking for something. And I pitched them why it made sense. Andrew was the first person who went and he got some Merino wool clothing, he was like, "Wow, this is the best stuff ever." But he felt the same way about what was available. We had to figure out how to manufacture clothing, and let's do a crowdfunding campaign to see if the market actually is interested in this angle for Merino clothing that we haven't seen out there. But that was our start.Fabian Geyrhalter:That's really great. And so what you actually did is you then took the story and you changed it around a little bit for your website where it talks about the three co-founders traveling together to see live bands, that's how the idea was born, but you did that spin on the story ever so slightly, because you started to understand your target audience at that point, right?Dan Demsky:No, no. This is who we are. I've been going to see this band, Fish, with my two business partners since we were in high school. We have traveled all over the world. We don't come from money, we were just hobbling together little ventures in order to be able to pay for all these adventures that would go on together. And that's just who we are. The idea was born out of the aha moment I had when traveling on the honeymoon. But when I brought it to them, we were just thinking about how well this fits into like the way we live. And we're not really fashion people, it's is not about clothing, it's about living simply. This thinking translates far beyond the clothing, it's about having less things in your life, but better things. Living simply.That's why it was so easy to get the enthusiasm in them. I came up with this idea for my own traveling without them, but I came to them and it's like, "It fits perfectly. This fits perfectly to who we are." And that's what makes it so easy for the marketing side of things, because this idea is so authentically us that all of the talking points about the product and the brand, it just falls into place naturally, because this is us. If this brand existed before we created it, we would just be customers.Fabian Geyrhalter:Yeah. Because the target audience is you. I mean, it's your pain point, it's how you like to travel. And quite frankly, my life was very different 15 years ago when I didn't travel just with a carry on, and now all I do... I mean, Europe for three weeks, carry on, it doesn't matter. Like even skiing vacation, it doesn't matter, it's all carry on. But it takes a lot to actually get to that epiphany, and then it takes really good product to take with you. So that it's very versatile.Dan Demsky:That takes preparation and thinking, and then we just make a little part of that a little simpler, and that was our whole thinking. We said, "What products could we make that would reduce the largest amount of load in someone's backpack or carry on suitcase?" So that was when we started with just t-shirts, underwear and socks, because we were thinking those are things that you need to bring lots and lots of. So what if you could bring less, how much packing is reduced?Fabian Geyrhalter:In your Indiegogo video, you talked about wearing a single one of your shirts for, I don't know, like a month in a row or something outrageous.Dan Demsky:46 days.Fabian Geyrhalter:Yeah. Yeah. And my first thought is, "Wow, that's disgusting." No stink is great, but no washing is just gross. So to me, that falls into that just because you can do it doesn't mean you should category, but the underlying idea must've resonated with your presumably 20 to 40-year-old meal traveler type audience. I see people on Instagram talking about how they're wearing your shirt traveling through Thailand for 18 days straight without washing it. So that was the proof point. The idea that, "Listen, that's how you can... " That doesn't mean you're going to actually wear it for 18 days like the guy in Thailand.Dan Demsky:Here's the thing, do you want to wear it 46 days in a row? Probably not. Can you? Yes. And the whole thing that we were doing there, and we were making this campaign thinking people are going to say that's disgusting. But the truth is this, it's just a sensational claim, that's true. We can, and I actually did it. I actually put this to the test. And if you watch our video in our original Indiegogo video, you'll see, I worked out in this thing, I saunas I would make it sweaty as it could possibly be, and then I would just air it out. Now, when you put on a pair of jeans, if you walk out on a hot summer day, even if you sweat a little bit, you're not washing the jeans after everywhere.People wash their jeans for two reasons, one, they get them actually dirty, like they spill something on their jeans or they get a muddy or something, or two, they just feel it's about type, like, "I haven't watched these jeans in a while. I'm going to wash them." Or maybe they've gotten a little baggy, they want to tighten them up a little bit, so they fit a little more fitted or whatever. But people don't think it's gross to wear jeans multiple days in a row because the material is in the same way that Merino wool is, it's not going to smell and it's not going to carry the bacteria.In fact, jeans carry no more bacteria after multiple wears than they do when they're brand new, so people are used to this and they're comfortable. But the paradigm shift of having that to your t-shirt is a lot for people to grasp, because they go, "You have sweaty armpits." [crosstalk 00:18:07] and they're just conditioned to it. At one point, you get conditioned to realizing that you just wash your shirts whenever you want. So the real thing is this, as you go on a trip with these shirts, and if you are staying in an Airbnb that has a laundry machine and you want to wash it, you've only worn it once or maybe worn it three times or four times, you wash it. Why not? You just totally wash it.But if you can't wash it, it's not going to smell, and it's not unsanitary. It's completely, completely, okay to wear. So we were sensationalizing by doing the whole thing for 46 days in a row because that's what made us stand out. So that was a complete marketing thing.Fabian Geyrhalter:Totally. Totally. And that's why I bring it in.Dan Demsky:But practically it's true.Fabian Geyrhalter:Yeah, and that's why I bring it up too, because you got around $400,000 of crowdfunding with your campaign. And so if you do the math, that's like close to 2,000 people, I guess, buying $200 worth of clothes from an unknown, unproven company, no reviews, no actual products at the time. That's amazing. And that's how you did it. You just knew that there's a very small target audience, that is actually really large, but it seems like a micro target audience of guys in their 20s, 30s, that like to travel, like to travel really lightly. And they're okay wearing a t-shirt or two for a good number of days, and this is their solution.Dan Demsky:Right. And let me tell you something. When we were creating this campaign, I had a few friends that have created crowdfunding campaigns before successfully, and then I contacted people who I didn't know who had done it. I did a lot of research to learn, how do I do this? I really want this thing to work. It was very important to me, because I told you I was unhappy with my other business. And a lot of the advice I'd get is, "Don't position this as a travel product because you're narrowing yourself so much, it could be so much bigger." But for whatever reason, we decided to focus on that niche. And I'm really, really happy we did because when you look at crowdfunding campaigns, what a lot of them really do is they're a very, very direct problem-solving product.It solves a specific product and the campaigns almost feel like infomercials in which they beat you over the head with, what is it that this product is doing that is a benefit to you. So for us, we narrowed our niche by making it a travel product so that we could specify all of the messaging around solving a problem for travel. We didn't really focus as much, or did talk about how it doesn't smell, but really if you watch the campaign, you look through what we're talking about the most, it's about all of the ways in which traveling gets better when you have a product like this. You'll breeze through the airport, you won't have to wait at the luggage carousel, you don't have any risk of your things getting lost.You're not going to look like a big tourist schlepping a huge heavy suitcase through a tourist area to be a target to scammers or people who are trying to sell you things. You just blend in and you can focus on the experience, and your vacations are better. So all of a sudden, anyone who's traveling, they can now have an idea of this solution that can help them travel better. And that could be because they just care to have more of an experience-based travel style, or they could be older and it's a pain to have to carry all those heavy luggage, so it solves that problem. But we really, really focused on the travel thing specifically to narrow our messaging down so that all of our marketing and everything could be all about one thing and not trying to blanket everything and appeal to nobody.Fabian Geyrhalter:It is so smart on so many levels. That is something that anyone can learn from that is launching any company, because, A, first you start narrow so you know exactly who to talk to and what to say to them. And then you can always broaden up over time, which you have. I mean, now you go into women's clothes, now you go into underwear, socks.Dan Demsky:Well, I'll tell you one thing that's changed for us that we weren't expecting.Fabian Geyrhalter:What's that?Dan Demsky:We never expected that the entire planet would stop traveling at once.Fabian Geyrhalter:Yeah. Let's talk about that a little bitDan Demsky:So our travel messaging, which worked really well for us, and we were fine with Facebook ads or messaging over the course of about three years where we would A-B-C test ads so we would know that this word in capital letters would work better than if it wasn't. So refined for traveling, and all of a sudden, none of it mattered anymore, so we had to go basically take all of our best performing ads, our Holy Grails of ads went garbage, complete garbage. And we had to change everything from our website, it was no longer about travel. And we thought, "You know what, one day we wanted to get to this point where we broadened outside of travel. Well, now we've got a chance, we have no choice." So we slowly changed everything and we broadened out. Now, travel is a point of our messaging, but it's not the entire messaging anymore.And we can sit on the backs of tens of thousands of customers who love our product, who come back for more. We've always known this, the people who want to refine their traveling in the way that we were positioning it, they're very conscious about how they're traveling. They tend to be intelligent people who are trying to get something different out of traveling, it's not just about photography and outfits, not that there's anything wrong with that, but they're looking more for the experience and tracking their travel to being more optimized.And we knew that when these people buy our product for travel, they were going to see the benefits that this clothing could have outside of travel. It can reduce the amount of stuff they have in general, the amount of closet space they need. Then it could be more environmental because they don't need to run their laundry machine as much. There's a million reasons why this has beneficial outside of travel. Now, we have the use cases for them and customers are adapting to that, and we could focus a little bit more of our energy on how there is a broader appeal.But I always felt very, very grateful that we decided early to focus just on travel, and I think there is a good lesson, as you said on that, that it's easier to focus on one narrow thing and one narrow demographic of people because then you can really, really hone in on your messaging and really, really speak specifically to a certain group of people. And from there, you just start to expand. The expansion becomes very natural.Fabian Geyrhalter:Well, I was giving a speech last year when they were still speeches in an actual conference room. It was actually a Vegas speech, which was really exciting, and one of the people afterwards in the Q&A said, "Hey, if you niche so much into an audience, don't you run out of things to say? Don't you run out of content?" And I was like, "No, it's exactly the opposite." If you know your audience, you can go so deep into it because teachers keep giving you content. They just keep telling you what they want, how they feel, what they like. And you just keep going and going, and going and go deeper, and deeper, and deeper. So it's actually the opposite. The more you niche-Dan Demsky:Exactly for something like travel. There's a million ways of traveling, a million places to travel, a million styles of travel, travelers have so many interests. And even in the marketing, it's not just about the messaging and the content, it could also be just about refining how you say the same thing, like I told you. Sometimes it's just about, do you want to yell things? Do you want to write things in capital letters, like this word? That could be the difference, but if you're focusing narrowly, you can tinker with the smallest things and see what works better. And it's just a much, much better approach because you can go endlessly deep.Fabian Geyrhalter:Well, and another thing that you said prior that you're doing with your approach is something that a lot of people, especially when they go with crowdfunding campaigns, they forget about this, is the idea that it's not about the products, it's about the experience. And very often, what you do with a product on Indiegogo, you just go into the details because guess what, the product doesn't exist in that shape, so all you want to do is talk about the product. But what you do is you talk about the experience with the product, which is really what people buy into, because they want to be you, in your shoes, and you just happen to wear this product that gets you to this enhanced experience.And that's something that... You made it sound very easy like that's just how it is, but it's not, it takes a lot of thinking to actually end up there.Dan Demsky:It does. It takes a lot of thinking, but I'll tell you what the most important thing, and I don't think it gets talked about as much as it should. It really has to do with timing. We did all the work, so let's just go under the assumption that if you're going to launch a new product, you do all the work, you can't be lazy. I read everything I could find on how to launch a crowdfunding campaign. I worked really, really hard to make sure that the pro... We went through so many different iterations of the prototypes to make sure the shirt fit the way we wanted and the quality was the way we wanted, and it drapes the way we wanted.We worked on our messaging, our photography, all of that stuff. So just assume that you did a great job and you left no stone left unturned on that. If I were to release this product today, it probably wouldn't work because the reason why I really think it did work is because I had that aha moment where like, no one's doing it this way. And people, when they think of Merino, when they think of wool, they think, "Oh, is that going to be like a scarf?Fabian Geyrhalter:Or scratchy.Dan Demsky:It could be scratchy and bulky, it can't be a comfortable t-shirt. So for people who are involved in this world of active wear and outdoors wear that know Merino well, they already know and love it, but we're not going to speak to those people. They already have Merino Wolford there, use case. We're going to speak to new people, people like me that just discovered that Merino wool could be a super fine material that's a comfortable t-shirt and we're going to speak to the urban traveler, it's not for the people who are with the canoe, it's for the people with the cocktail that are maybe doing a business meeting, and they don't know this thing exists.There was the whole timing element because I felt like no one is doing this the way I wanted, that was the single crux of why I thought this thing could work. It's like, we're not just another fish in a sea of companies doing this, we're going to do this our way, and we're going to speak about this our way, and no one's doing it this way. That was the exciting part to me.Fabian Geyrhalter:Well, and it's interesting because in a way you are a little bit of anti-brand. It's super basic stuff, and you're trying to have people actually buy less clothing in their lifetime. So you actually want people to own les, of course, you want them to own your stuff, but on the flip side, your product could be seen as a commodity. We noticed there's tons of t-shirts using the same fabric, it's basics made out of a very specific material, which is not the honorable. So in the way, brand in the end of the story is really everything for you. I mean, from the get-go, that is it.Dan Demsky:Everything. Brand is everything and our customers. For our customers... And you know what it is? If we're going to talk about... Brand is so much more than just how cool your website looks and your logo looks. Brand is everything that the customer feels when interacting with you, and just boils down to trust. I'm not scared that we are in a red ocean industry of t-shirts. It doesn't scare me because we have... As soon we're going to have 100,000 customers that the large majority of them, they just trust us, they know the way that our shirt fits, they know that we're very, very radically focused on quality of the product and the experience that they have.If there's any issues, we'll deal with them, we make sure to ship as fast as we possibly can. They know the product quality they're getting, they don't need to look elsewhere. So other players would come in and they could undercut us, but if we take care of the problem, giving you the t-shirt that works for you, that fits the way you want it, that it's performed as promised, we deliver it on time, our customer service is good, you can trust the experience, they don't need to go elsewhere.And these are people that are looking for simplicity, they're not looking at, 'Well, I'm going to go and find a way to save five bucks on the shirt. I'm going to go and find... " I don't need to solve that problem. I'll give you an example. Right now, we use Zendesk is how we handle our customer service inquiries for our business. And there's this other company that keeps contacting us saying you should switch off Zendesk. They're very persistent, but I tried to tell them as clearly as possible, I'm like, "Look, I admire your hustle and your sales efforts, but you have zero chance. You have zero chance of us switching on Zendesk because Zendesk is working as promised. And the hassle of changing for me is not worth whatever it is that you're pitching."It's cheaper, has a little bit more fun... I don't need any more functionality. This part of my business is working well. So Zendesk as a brand owns me right now. And that's the way our customers are, we solve that problem for them. If they want the best black t-shirt, our black t-shirt is the one that they buy. They don't need to go to Gap or H&M or find some other Merino wool company that's springing up. But you know what, a lot of companies have sprung up after that have pretty much copied or what our messaging is. It doesn't bother me at all, I feel flattered.And it's ultimately all we need to focus on is make sure that we care so much about our product care, so much about our brand experience, and care so much about our marketing. That's the brand because that's the way that people find out about us for the first time and then the way that they interact with us throughout the whole experience. And then ultimately, what matters the most is product. And if that's what a brand is, the brand is, what do we make? Do they trust us? And how do we make the customer feel when they interact with us? And we focus all our energy on there, and that's the most important thing we have.Fabian Geyrhalter:And that most probably also safety over the last couple of months, because we've travel being gone suddenly as you already said, it must've been a huge shock to the system. First, you have to change the entire messaging, you have to really rethink that, but this is at a point where you already have, I guess, you said up to 100,000 customers at this point, these people are repeat customers and they make referrals. And then suddenly, it's a machine just keeps on working even though travel is down, but it must've still impacted you, right?Dan Demsky:Yeah, it did. It did, but it forced us to become more mature of a company to be honest, because we grew fast and to be perfectly blunt, it made us a little lazy, and that was a big life lesson for us. We were growing without trying at one point, and maybe after 10 years of entrepreneurship and going through ups and downs, I think I needed a breather. So I wasn't working as hard leading up to COVID, and that wasn't something that I consciously did, I just in hindsight noticed. I let myself get a little bit more tired and lazy, and I had a great growth business and things are good, but then we got scared, man.When COVID came around and the travel industry was grinded completely to a halt, our sales, they declined drastically in that first month. And we were used to 100% growth month over month. So any month compared to the year before, at least 100% growth. And then in the first month, our sales were down 50%. We've never even just stayed the same let alone down. So we thought, "Oh my God, this is really, really bad." We almost went into like the war room to figure out what are all the things we can be doing to get our revenue back up.And everything we did, there were things that we could have been doing all along, but we weren't. And I think that the world changed, a little bit of normalcy has crept back in since then. So I think organically, things have gone back up, but we have done a lot more to get our business back to growth, back into growth mode, and what's where we are again. And the lesson I got from that was never, and this is not just about the fact that a pandemic can come in and dismantle everything you've worked so hard for, that's an extreme.But what happened was the little bit of success we had, bred a little bit of laziness, and all that laziness, this is the lesson, all that laziness did to me was stop me from achieving what my own greatness was, "Now, do I need to make more money?" It's not about money, it's not about I need this company to grow, but why would I not want to continue to challenge myself to do the best I can, to grow in the best way as I can? And the laziness I had, and I'm not that lazy, I'm a productive person, but by my own standards, compared to who I've been when I started this company or when I started my first business or when I'm in my optimal hustle modes, it's like, that's me challenging myself to be the greatest version of myself and to take the most from life in this short period of time in which I'm so lucky to be alive.So it felt like the little bits of laziest I had, was denying myself of being what my potential is. And that's the lesson at the core of what I learned, it's like, it took a pandemic to scare me a little bit, but it's like never, ever get comfortable, because when you get comfortable, you get lazy. And if you get lazy, you just become mediocre. And I think I had a tiptoe towards thatFabian Geyrhalter:And I think on that note, it's also important that one doesn't have to go in 110% all the time, too. Consistent laziness is one thing but I think that the pandemic teaches a lot of entrepreneurs that actually suddenly taking time out for a week or two and not being on 110%, it's actually quite healthy, but I know exactly what you're talking about. And I think it happens with a lot of us, when business is going really, really, really well, even though we have to work hard, we work hard in processes we're used to, everything is going swimmingly, but then once things are one things slow down, we freak out.So instead of using the time when things are great to keep R&D, to keep innovating, to keep thinking about processes and looking at new client options and strategic positioning changes, whatever. So I think it's a really, really good lesson to learn. Looking back, what was one big brand fail, where you felt like you launched this product, or you were doing the Indiegogo campaign, and then the product was there, was there some point where you felt like, "Holy smokes, we totally went into the wrong direction," with either the messaging or like a video or something that you do with the production, or was this something where you just felt, "Oh my God, we totally screwed that up." Something that people can learn from?Dan Demsky:Honestly, the failures feel, some of them feel glaring to me all the time, but they might be... Sometimes I look at our packaging or our product page and think, "Oh my God, this is such trash." And then I read every day a review coming in and saying, "This is the best packaging ever." I'm always harsh on myself, so I don't even know where to begin.Fabian Geyrhalter:But there wasn't one big thing where you were like, you know you totally-Dan Demsky:I hate to bring up the exact same thing we just talked about, but the big failure that I had was not continuing, and it's something that I'll continue to try to drill deep on, but to get lazy is the failure, because there were so many opportunities. We could have grown a lot more and you have to constantly....Always, always live with thinking about this, you're lucky to be where you're at and it could all end soon, and fight against the tide. And I agreed, not at the expense of your health or the relationships you have with your loved ones or anything like that.That could be a real big detriment, but that I think was the failure because I think we could have been so much further along, and it's all just the little moments of laziness we had, which we're not there anymore right now, which is great.Fabian Geyrhalter:No, absolutely. Last big question. If you would take the entire Unbound brand and you would distill it into one word, maybe the experience or a feeling, if you think about the Everlane, you think about transparency. If you think about Coke, they want you to believe happiness. What could be one word, I call it your brand DNA, what could be one word that you could put to describe Unbound, unless it's unbound, which of course, it shouldn't be.Dan Demsky:We have three words, but the first one is the one that I think encapsulates the most of who we are, and that's simplicity. It's simplicity in the design, it's simplicity in the market we choose to tackle, it's simplicity in the life in which it help with travel. It's about reducing the brand ethos. Our number one core value that we live by in our company is less, but better. And that's the way that we think about how to run our company strategically, it's how we think to live our lives, it's how we think of about our product line.That's why we don't follow any trends, this is what clothing that's in style. We only focus on stuff that's timeless and classic, something that you could have worn... If you saw a picture of yourself wearing our t-shirt 15 years ago, that's going to look completely normal and good. And it looks good today, and it's going to look good in 15 years. We don't have seasonality, we don't have spring, summer or fall, winter lines, we just have our core products. And that's who we are, from the inside-out, we're all about simplicityFabian Geyrhalter:And simplicity is what everyone aches for, and simplicity is also the toughest thing to accomplish as a company, as we see with all Fortune 100 and 500 struggling as to innovate how it's simplicity. Someone who knows simplicity quite well is your pug who's been lying next to you, snoring away during the entire interview. And I think we heard him or her, so you got to at least give a little introduction.Dan Demsky:Yeah. This is my pug, Walter, he's laying right next to me. I'll be honest, sometimes I'll do a podcast interview or I'm on an important meeting, and he knows that he could get under my skin, so he'll jump on the ground and start barking and just ruining everything. Although you hear him snoring, this is-Fabian Geyrhalter:He is good.Dan Demsky:Yeah. He's not distracting and barking, the reason he does that is because he knows that what I'll do is I'll stuff a little thing with peanut butter and he can eat it. And he's been conditioned to know the more... I'm getting better at, and this sounds weird, but there's a tone in my voice when I get serious about something that he's able to identify, so I've tried to-Fabian Geyrhalter:Oh, I'm sure. Yeah.Dan Demsky:So he's constrained me to be more natural to who I am and not be so serious, because if I'm serious, this is a serious podcast or a serious phone call or whatever, he's going to clue in and ruin it all.Fabian Geyrhalter:Walter, the mascot of simplicity.Dan Demsky:Yeah. It's the snoring, we should be lucky, that's all we got.Fabian Geyrhalter:We are. We are. Listen, as we come to a close here, where can people learn more about Unbound? Where should they be heading?Dan Demsky:You just type in Unbound Merino. Unbound, U-N-B-O-U-N-D, Merino is M-E-R-I-N-O. We're on Instagram, Facebook, Twitter, if you Google us, whatever, that's where you'll find us.Fabian Geyrhalter:Awesome.Dan Demsky:And the website, of course, unboundmerino.com.Fabian Geyrhalter:Of course. Of course. Thank you, Dan, for having been on the show, really appreciate it, great insights. Good luck with the next couple of months and years of your company. And I can't wait to try out some of those shirts myself, hopefully, for a future international travel at some point in my life. Until then, I guess, I'll take it camping.Dan Demsky:Yes. Thank you so much. It was great to be on your show.Fabian Geyrhalter:Absolutely. My pleasure.
Learn more about JulySupport the show and get on monthly mentorship calls with Fabian. Join here.-------->F Geyrhalter:Welcome to the show, Muhammad and Eric.M Saigol and E Rauterkus:Thank you very much. Yeah. Good to be here.F Geyrhalter:Yeah. So we're taping this just a few days into August and I have to say, when are you launching July, if not in July?M Saigol and E Rauterkus:Well, actually we did launch July in July, which was a great start to the company. This is Muhammad speaking. We had a great release in the first of the three of our units, to actual customers in the month of July...F Geyrhalter:Oh fantastic.M Saigol and E Rauterkus:... which was very timely and fitting for our brand and actually also our journey. We started this company last July. So it's a very significant path for us. But it's a hot summer and we've been continuing deliveries through July into August and into September as well.F Geyrhalter:So currently people can pre-order it, but you're already delivering, which is amazing. That's great.M Saigol and E Rauterkus:That's right. So the way that we structured it is we allowed people to start joining the wait list and then beginning pre-orders. The demand has been phenomenal. So we actually have several different shipments of units coming in and we kept selling out of them. So it's still been on pre-order now till September. But we have already delivered those customers for the July slots and then the August slots.But we've just been so humbled and frankly overwhelmed by the tremendous reception that we received. People willing to put that money down for a product that the subject will receive after 30 days or even more than 30 days. And we're just so excited to bring July to all these different homes.F Geyrhalter:How in the world did you pull this off in 12 months? I mean, we're not talking about some technology company that writes code, we're talking about an actual... We're talking about R&D, we're talking about product, manufacturing, staffing, the whole shebang. How did you pull it off?M Saigol and E Rauterkus:Yeah, that's a great question. And I think in a part of our approach that was seen as so important for us as we were starting off. Muhammad and I actually, we met... we worked together prior to this in a software setting. So I think we learned a lot there, and then to some extent, we took some of the learning there and really tried to take it into this space.I mean, it involved hardware, it involved manufacturing. I mean, where we can build a product quickly, get it out into the market quickly, learn a lot quickly. It launched relatively quickly, and we kind of used that as a foundation. So it's been a great journey, and we think we took a lot of the approaches from software that hadn't been evolved into the hardware yet, to get the products to market.I think, for us, the key was to just be really focused. Focused on what the goal was, that we wanted to launch this product for the summer of 2020. And then be really focused on what we were building. I mean, really, a laser focus kind of tunnel vision on what were the pain points that we wanted to solve in this space. And then how do we solve it. You know what I mean? We could talk about the process that we went through, but I think it was that focus and setting those goals early on, that really enabled us to stay on track.And in the year timeline, but also even within the midst of, what is it I'm looking for, a more unusual year than anything, than most years. So we're really excited that we were able to launch this product, within that one year period, and we are super excited to grow it here as well.And you know, one thing I'll add to that as well, when we got started on this journey, we had so many ideas of what we could do with the window air conditioner, how we could change it, what we could improve. But what we wanted to do is not just go away into a black box and think about what Eric and Muhammad want the window AC to be, but we wanted to learn what actual customers want from their window AC.So in the summer of 2019, as I mentioned, we started this company, July. We actually quit our jobs. We'd been working together before. And we put up a really quick website and we started reselling regular window ACs, that you can buy on the market today, but we'd sold them with our service model so that we could get into customer's homes so that we could speak to customers, understand their purchase journeys, understand what frustrated them about the existing ACs. So we took all of those learnings. Eric and I actually installed over a hundred ACs ourselves.F Geyrhalter:That's what I was wondering. It sounds like you were actually going home to home, in a hot summer in New York, installing air conditioning units. Well, your former coworkers must have been so proud of your journey. They're like, "You really made it guys. Good job."M Saigol and E Rauterkus:It was a lot of fun, honestly, it was so much fun. We got to interact with so many customers in a way that you wouldn't normally get the opportunity to see them in their lifestyles. Being in their home, getting this moment, while you're doing the installation, to talk to them and speak to them in a kind of casual setting. And then of course, learning about the product itself, with these installations. Eric and I had so many difficult situations because the product today is not really built out for the consumer that it's serving.So we took all these learnings, both from the customer, from the experience of the installation, and we said, "Okay, what are the key things that we need to do? And how can we achieve that in a 12 months' cycle?" And that's really how we did it. We mentioned that we focused and that was so critical to us because frankly, if we had just kind of gone down an endless pathway of thinking of new things, we wouldn't have been able to come to market in such a rapid period of time.F Geyrhalter:And you kind of hinted at that, but not only did you pull the whole thing off in 12 months, but there was the virus and still is. And I know with manufacturing founders, that is a huge disruptance. I mean, even for the ones that already have the entire chain completely figured out, for you guys, that must've been a huge disruptor. On the flip side, I'm sure that consumer demand must've been skyrocketing because everyone's suddenly stuck at home.I know that I purchased an AC unit for my back studio at home where I'm now, which is a quote unquote studio. It's literally a small little studio because I had to move out of my office, right? So suddenly ACS became something that were important for people where they never even thought they would actually put in a wall unit. How did that affect you positively and negatively?M Saigol and E Rauterkus:Yeah, no, I think there are words inside to that point. 100%. The work from home situation, it did help us here from the demand side, but on the supply chain side, there were disruptions. We had a global supply chain, from day one. We knew that was a focus of Muhammad and myself, just how could we source the best in class pieces of this product from wherever they were.So there was no question, there was a lot of disruption, as we got started, but luckily, things that we were able to continue progressing. There were a few situations where the vendor was really shut down and where we didn't really see that vendor coming back online, so we had to pivot to a new vendor. Luckily, we had a couple of other vendors in the back of the line, and lined up, as we were doing the initial processes, when we were finding who we were going to partner with.So we were able to make some kind of key pivots early on. As the crisis unfolded, we were trying to shut down initially, then they were reopening, as the US was shutting down. And we were able to kind of squeeze our way through that. There was no question, there were some delays, but I think that was a big learning for us as we go forward too, is that we need to set up an organization that has some supply chain durability and flexibility, so that as whatever crisis converges, we are to where we can set up to pivot things around as needed.Then there's no question on the other side too. Yeah, exactly what you were saying, consumers, and some consumers that we've sold to this summer, we've noticed, they've never bought this product before, and that's quite interesting for us. There's a few different dynamics that drive that particular question, that one of them is exactly what you were describing. People who have managed to go without AC in the past because they only needed it for a few days and were mostly at work. And now, they're all stuck in their homes.And that's what's driven Muhammad and me, because earlier, with our presales introduction, we wanted to get out into the market, start selling these units quite early on, in the summer, while we were top of mind with people and then obviously delivering them as rapidly as we could, given the challenges that were on the supply chain side. So we were quite fortunate that we were still able to get everything moving this summer, butwe'll look back on it, I'm sure, in 10 years, and chuckle that this was the year that we started it.F Geyrhalter:Yeah, absolutely. I mean, there's something really interesting happening in the last couple of years when it comes to consumer trust, and you alluded to this prior. I know that your product design actually came from the same people who were involved with the luggage company, Away. And with Away, it was the same problem where they weren't able to deliver on time. And that kind of became their big brand story.People fell in love with the brand instead of the actual product. Like they wanted the product really badly, don't get me wrong, but then they had this weird time where they had to wait for, I remember, quite a long time, and the ladies at Away were really smart in figuring out, "Okay, if we don't have the product to touch people's hearts, how can we touch people's hearts?" And that's when they really started to think about brand and that's when they created this photo book that they sent out, instead of the actual product, blah, blah, blah, right?So I'm sure that for you too, a little bit of those pivots, must have been brand pivots where you suddenly thought, "Okay, well, we can't quite deliver, maybe as we promised. We know we will and people are eager, but now we actually need to start thinking about communications and how does the brand actually communicate?" And I think that's a huge opportunity today. Actually, it's interesting how that happens.M Saigol and E Rauterkus:Yeah, absolutely, and for us, the branding is such a critical part of the story, and really two aspects of it that are so important. Number one, it's the feeling that this brand invites to the customers, in a way that the customers today or potential future customers, but also the authenticity and the transparency. So from day one, when we knew these disruptions were coming up, we wanted to be very clear with all of the people, as they joined our wait list, that we didn't have an exact date for them yet. We didn't take any money from customers till we knew when these units were going to be arriving, because we didn't want to put them in a situation where they've paid and it's going to be delayed.So, beyond just the brand itself, which we love and we think it's so important to customers today, and therefore it should be important to all brands, is being open, honest and transparent, every step of the way. Customers know that this is a strange time. Everybody is experiencing it. If you try to hide the fact or if you try to pretend, it's never going to develop a strong relationship with the customer. So that's really one aspect of it.And then you have the other side, in terms of what we created with July, we're so proud of and we think it's so important. Yes, it's the design of the product, yes, it's the features and functionality, the environmental aspects of the product as well. But it is also, the fact that there hasn't been a fresh brand in the appliance space in decades. I mean, if you think back to the 1950s and the 1960s and even onwards, some of the biggest, strongest brands in America were the appliance brands. GE Appliances meant something. It was a mark of distinction in the home. You see all the old adverts of families proudly displaying their appliances. They had a lot of meaning for the family, for the home, in those earlier decades.Over time, that has shifted. These brands no longer mean what they do in some of their most traditional categories. 70% of customers who own a window air conditioner, do not know which brand it is, even though it's sitting right there in their window and they're looking at it so frequently. And this is because of the lack of differentiation in the space. Both visually, but also in terms of the brand.So for us, it's a very important admission and a very key critical component is, we want to bring back that life into branding the space and really create July as that 21st century branded appliance feel that actually means something to customers. That they're excited about, that they know we'll be honest with them, that they know we'll try and do right by the environment and that they know we'll give them a service and an experience that is unmatched.F Geyrhalter:Well, and I think it's interesting because you lead very much with kind of like mid-century modern design. Very simple, very clean design, right? There's not much to it and that's exactly what's to it, right? Because usually, there's too much chunk, right? You just cleaned it up. You have this magnet piece that you kind of clip on on the top and that's it, right?? It's the cleanest thing ever.Which makes me, by the way, wonder if that magnet couldn't be used for a July logo magnet? But that's a different story. But The Wall Street Journal actually calls it, summer's unlikeliest status symbol. So that's pretty amazing. I mean, it's exactly where you wanted to be, right? That people actually talk about their appliance brand again. Which they haven't for so long?M Saigol and E Rauterkus:Yeah, no, for sure. And I think that's a great example of something that came out of our process that we went through last summer, where we'd gone into the customers' homes. Muhammad described it earlier, but we were selling kind of just normal units you could buy at Best Buy. We're on bestbuy.com. That gave us that right to get into people's homes. What really jumped out to us was, people didn't want an appliance-looking thing in their window. They didn't want the lines and the dots. They didn't even want a nice looking appliance in their window.I remember, one quote from a customer was, "Why does it look like I put a washing machine in my window?" We would ask, "Would you love to have this in a drawer?" They wanted it to dine outwards, especially where you look at the window air conditioner unit, where in the markets that it's in and in the homes that it's in, like the market, the urban, America's oldest and populated cities. These beautiful old buildings, the window space is quite valuable and quite small.F Geyrhalter:Yeah.M Saigol and E Rauterkus:People are taking them so much, and then there's this thing that looks like a washing machine.F Geyrhalter:Yeah.M Saigol and E Rauterkus:So that just came from that experience of getting into there, giving ourselves a right to be organically in our customers' homes, talking to them. They want a design piece. Then they want to feel that it's their space. So we went around that summer and did those hundreds of installations and deliveries, and no two spaces are the same, and no two aesthetics are the same. Some people want to have a more cozier home, other people more industrial. The list goes on and on.So we wanted it to be a really clean... We approached it as being a really clean design piece, that could sit in anyone's home. It had this kind of platform for infinite customization, for anyone's home. That's when it really came together for us, and that we're really excited about.We launched this year with three covers, as you described. It gave us a really unique opportunity to explore materials that haven't been explored in appliances in really ever, or in quite a long time. We have done in wood and ash, we did a panel, we also did a really awesome fabric. My personal favorite is a gray fabric panel. We explored these interesting materials you don't expect with the clients, you expect more with the furniture, or a speaker, a very nice speaker, something of that nature.For us, it's just this opportunity to grow and kind of build this platform and we want to have many, many more of these kinds of front panels, collaborations, et cetera. We can express our brands in a way that really works in an individual customer's home. So yeah, it's exactly what you're saying, we want that product moving into a home, so it sits naturally there. If it sits naturally there in a beautiful way.So honestly, at the time, and currently, it is definitely a conversation piece, I think, in our customer's home, but hopefully over time as more and more people get their July, we can just be these really beautiful actually longterm panels.F Geyrhalter:Totally. I assume July is targeting first and second time apartment renters who have no AC, but I do have to say July the brand, not the window unit, has, how shall I say, an over the top hipster look, right? So now I hope I will not offend you, but this was within the big reason why I so badly wanted to have you on this very brand-centric show, because it is super intriguing.How did the graphic design look come about and what was the idea behind it? Because it very much begs to be hip, but the design language is kind of borderline, how shall I say, it's peculiar. It's interesting. There's an orange ticker band that scrolls and says hot indefinitely. And a dingbat color with its harsh radiant gradation. So overall, it feels like aspects could have been designed by, I don't know, Microsoft Clippy, but it appears to be making fun of itself or even that super hipster brand look of today, right? So, was it irony or was it not, or how did this come about?M Saigol and E Rauterkus:Yeah, absolutely. So maybe, I'll start with kind of what we envisioned for the brand and then we can talk about its visual transformation as well. So for us, what you usually see in this space is your traditional ads of an air conditioner as almost someone who's wearing a winter coat inside because they're so cold and it's keeping them warm.We wanted to kind of turn that on the head. Summer is the time when you need window AC and what we wanted to do is instead of depicting summer as this thing you want to hide inside your home and prepare a winter coat, we realize we love summer. Summer is one of the most wonderful times of the year. You get to go outside, you get to the beach, you get to be free and outside, and you're not cooped up in your home like in the winter time.So with July, we wanted to embrace that magic of summer, that feeling of joy, that feeling of carefreeness because we want our customers of course, to remember July when they're thinking about their summer plans or what they're doing about the summer. So for us, it was, instead of taking that kind of negative summer, where it's too hot and too sticky, it's that summer is a wonderful time and July will help you enjoy it even more then maybe previously.In terms of the visual direction, so a lot of that filter through, you'll see, we use a lot of summery iconography. The hot, hot, hot décor. Again, something similar to summer. But what we also wanted to do was, there have been some great new brands in the past few years and it comes to be that there are ways that an aesthetic is established. We wanted to be a little bit different then that. We wanted to push the envelope in terms of what the visual design would be, and make sure that it fits with our brand, which is very fun, which is very lively, which is very joyous. So we wanted to have a little fun with it.We've created a website that you've seen in all of our materials, where there are these fun elements. There are different colors. They are bright colors because we wanted this to feel different. We didn't want people to say, "Oh, this looks just like those other six brands, and other six categories that I've seen." But it's something really fresh, something that's unique to us and that really fits and resonates with our brand. And that's really how we came to July.F Geyrhalter:How did you decide on the brand name, July?M Saigol and E Rauterkus:The name, July, really stems from the brand that we wanted to build around summer, around the season. We wanted to make sure that customers knew, when they thought about summer, when they thought about the season, they would also think about us as a brand. July has both, it's about that fun, it's getting out there, it's enjoying yourself, but you also know it's going to be hot. So we want people, as the heat starts to sink in, as they start to talk about the month of July, that they also think about the brand that will help them stay cool in their home, in a beautiful way.We did, we struggled with the brand name. We wanted to find the right name that would encapsulate this identity. And what we love about July is that it's immediately recognizable. It's distinct from other brands as well, and it really relates to this feeling of summer, which is still critical to what we do.F Geyrhalter:And it makes tons of sense, right? Your domain name is july.ac. Your Instagram handle is, @feelslike.july. It seems like there were a couple of corners that you had to cut, in order to be able to call yourself July, obviously, because there's lots of Julys out there, not only the month, but people with the name July, et cetera. Does it really matter or does it not matter, because people just look for July air conditioning and they'll find you?M Saigol and E Rauterkus:So we thought a tremendous amount about the name in terms of how it will present itself to the world. We looked at SEO, we looked at the availability of various handles, like the Instagram handle, et cetera. And July is common. There's no two ways about that. But what we really look at, at ads, is there any other brand competing in this space for the board of knowledge around July, and the answer was none. Other than the fact that it was a summer month, there wasn't really any other brand.So what we've seen is that people are looking for us. They're coming and searching for us. You search July air conditioner, or July AC, we'll be right there at the top. So as a lesson to all the brands, I think it's less about the name itself and how common that is and more about how are people looking for your brand and how will they find it? Is there anybody else that they might come across by mistake instead of you if they're searching for something? And really, we haven't seen any adverse impacts of that, so we're very happy with where we landed and how it's going.F Geyrhalter:That's fantastic. That's what I thought and that's what I hoped. And you, Muhammad, you come from a product manager background, which included a stint at the New York Times, and you both met at Boston Consulting Group's Digital Ventures where you gained experience in launching innovative new businesses in a lot of industries, right? Med Tech, Elder Care. Now that you've gone through this journey yourself, for a year, now it's more difficult, now you're actually in it, what does branding mean to you? The idea of branding. What does it mean to you guys?M Saigol and E Rauterkus:Yeah, so branding is so critical in all these different respects, but what I think the most important thing, regardless of what industry you're in, regardless of what company we're talking about, it is about the relationship that you have with your customer. It is how they think about you, how they feel about you and perhaps most importantly, how much they trust you to deliver for them and to do the right thing, more broadly.M Saigol and E Rauterkus:So, brand is not just branding. It's not just the visual identity. Of course, that's one piece of it, but it's much deeper than that. It is, what is the connection? What is the emotional connection that you have with a customer that makes them not only want to come to purchase from you, but want to tell their friends about you, that want to share it with the world and spread it, and then come back of course, again and again.I don't think you can be surface level with the brand. You can't just say the right things and have winning copy and have beautiful images. You have to walk the walk if you want to really survive. Customers are smart, customers, they can smell lies and dishonesty, and by the way, the important thing, even more important to me than branding, it's actually taking actions to deliver against the promises that you make to your customers.F Geyrhalter:And you are smack deep inside of that right now. As their delivery truck's pulling in and I know Eric had to put himself on mute for a second to get some product in. And I love that. I mean, we were right in that right now. So it's an exciting time.But you guys have actually much bigger goals, I heard, namely to become the 21st century consumer appliance brand. So are you planning to be a house of brands as we call it? So starting with July, on the AC, and then moving into different categories within the appliance arena? Each new brand being one on its own, or an audience or name or a marketing campaign?M Saigol and E Rauterkus:Yeah, that's a great question, and I'm back, and I apologize about the truck there.F Geyrhalter:No worries.M Saigol and E Rauterkus:But no, and I think that the way Muhammad and I always look at it is, it's always an evolving kind of question, looking at where do we want to go, et cetera, and how we want to structure it. But I think what you've hit on is exactly right. What we see is such an interesting opportunity to be this 21st century appliance company, especially in this large appliance space. And for us, the window AC was that perfect starting point.And it's exactly what Muhammad hit at earlier. It's that these appliance brands of the 1950s and the 1960s, they meant something to the consumer. And they meant something from a product perspective, from a design perspective and from a functionality perspective in that right to own this product and then to kind of embrace that in your kitchen, and your home. But then they also meant something from a brand and a service perspective. You know the Maytag Man, a kind of a classic example from a bygone era. But it was quality and it was trust, and that kind of has fallen away.We especially think for the consumers, and in my generation and the generation above us and the generation behind us, these people who will be the majority of homeowners in the next 10, 15, 20 years. They're looking for a brand in this space that does really high-quality products that fits into their style. But in addition to that, brings a modern service smile to them, in a way that you can get these products, in the way that you buy these products, and then the way that you maintain and engage with these products.So that's where we see that it is such an awesome kind of opportunity for our brand to grow into. The reality is these brands that kind of dominate the space in terms of market share, they have lost really all connections and relationships with the customers, from a product design perspective, and also from a sales and a customer communication perspective. So, our goal is to be laser focused on the window AC here, and the AC space in general, as we roll out this product, but we think a lot of these same dynamics kind of take hold and cross over.F Geyrhalter:This may be a little bit too early to ask, but any idea of what your next brand may be tackling?M Saigol and E Rauterkus:So, we've been investigating across the spectrum and we've seen so many opportunities in different categories. Right now, we haven't made that decision yet as to what the next phase will be, that we'll be tackling. But it will be an appliance that people are craving new design at an affordable price point and they're just looking for a hassle free way to get it into their home, with a brand that will have fantastic customer service, that will do the right thing for the environment, and then will deliver them a delightful experience. So, more to come from us. We're going to see tomorrow the future. We'll let you know.F Geyrhalter:Awesome. And on your site, you're saying that in addition to implementing this technology, and I'm quoting you here, "We, as a company, are trying to do our part in mitigating the impact of cooling on our planet. July will be offsetting the emissions of every AC we sell with a partnership with carbonfund.org and dispose of customers' old Acs in an ecologically friendly way, avoiding refrigerant leakage that is harmful to the planet. We are and will continue to invest in technologies that create a more sustainable future of cooling." I mean, this makes so much sense, right? So, is the idea of cooling people in a new, a different and definitely a hotter world, the big drive? And will you focus mainly on that aspect of appliances or could it go anywhere?M Saigol and E Rauterkus:Yeah so, it is certainly our focus. It is very important. We think there is great opportunity. That's why we started here, to build a better product, that are better for the environment, and that you can get them in a more easy manner. There is a lot of opportunity in this space.But the cooling space is just one way to go about that mindset. You know, the way that we approach it is, whatever we do, we want to make sure we do it right and we do it well and we deliver for our customers. So we'll never be in a situation where we've spread ourselves over so many different verticals, just doing one product here and one product there. So right now, I guess, there are many more products in this space that have a lot of the same issues and customer frustrations that we want to solve, but then our ambition comes from the outcome. But, we'll always take it and pace it out to the right level, to make sure that whatever we are doing is really delivering on our promise.F Geyrhalter:Absolutely. Now, edutain me, as we come slowly to an end here, edutain me with this AC naïve question of mine, but it's been on my mind. I feel one of the utmost important aspects of installing an AC unit has been left out of pretty much all online installation videos. The parts are not even included in the unit to do that and it seems to potentially be the same with July, which was surprising and likely means that my assumptions are all incorrect.So here you go. I'm talking about how to ensure that no thieves can just open the window, right? Usually people after they install the unit or get the unit installed usually, right, because most units are not as easily installable as yours, but usually people end up cutting a piece of wood and blocking the window that way, which seems like a perfect, additional eyesore that begs for innovation, surprise and delight. Are you guys tackling that or does it not even need to be tackled and I'm missing something?M Saigol and E Rauterkus:That's a great question. There are a lot of kind of other things around, whether we see, add-ons, if you will, but I think, we'll slowly be tackling them as we come across things like that.Exactly as you said, this was another great example of a learning that we learned on our journey last summer, which is our easy installation frame, and it just boggles the mind that no-one else is learning about this. That was one of the worst parts, people around you doing other installs, 100-plus installs, where you were up in these high-rises in New York dangling out of a back-heavy box. There are these kind of spokes, these metal elements on the back, cutting your hands, and you're sweating because it's hot and you're trying not to drop it.So we focused a lot on this installation system, that we designed and developed, and we're super excited about that. And yes, exactly to your point, it locks itself into place so you can actually mount it to a window. So that makes it so that window can't come open, around the top of that installation frame. It prevents that risk. But there is a lot of different things.Like you said, there are some sort of quick-lock locking seams, and a safe install, like a locking system that you can secure with a window. One thing we did this year is we rolled out these custom filters and we sold them in our unit, that really are the first kind of filters for a window AC that actually does something, that purifies the air. So we see a lot of other opportunities to improve on this space.But we're really excited about new learning solutions that appear, that gives the customers a safe, easy, reliable way to take it in and out of the equipment, which is all as safely as we could, to try to not lose your window all year round. It's very, very safe.F Geyrhalter:So even if it's just a "fix this with three screws on the top", you can't possibly pull the window up from the outside because the unit is too heavy, I assume?M Saigol and E Rauterkus:Right, that's exactly it.F Geyrhalter:Okay. And that's what got me. Perfect. Thank you for educating me. I appreciate it. So what I always like to finish off with is if you would be able to describe your brand in one word. So July, right. With Coca Cola, it used to be happiness. Maybe it still is and no one knows. Most people don't care. With Everlane, it's definitely radical transparency, right? Zappos has customer service. What is one word that could describe your brand? If you're able to just put it all, the entire brand into one?M Saigol and E Rauterkus:Yeah, I'll give you three words. That is dealing, and you know for us it's about capturing the joys of being outside. The freshness and the vibrancy of color and life that blossoms into summer. Being able to go to the beach, sitting out, dining outside on your rooftop in New York. Just getting out there and being free and taking a road trip, or whatever it might be. So for us, what we're trying to do with July is capture that feeling of summer, and actually bring those delightful moments even into your home.F Geyrhalter:Which in my eyes, despite your smart product, is one of the smartest moves you've done, from a brand perspective. To actually celebrate what people fight against when they put this in their house. I think it's really brilliant. Do you have a final piece of advice, maybe brand advice, but also maybe just product advice for product founders who are struggling right now during this pandemic to bring their own ideas to realization? Do you have any advice for them as you look back at your one year journey? You already talked about focus and I already checked that off as one big takeaway, but is there anything else where you say, "Look, here's something that we learned that we just really wish everyone would do."M Saigol and E Rauterkus:Yeah. I'm sure we do. I have one, I'm sure Muhammad, you have something like that. Yeah. I'm sure we have many. I'll let you go first. Feel free to jump in. You know, 100%, the thing that I have learned here in this process is, how can you find really clever ways to test concepts, particularly in a low cost manner, early on? That's been so important, from the first Muhammad and I have been taking. I think it's the reason why we had a lot of opportunity, by getting over a lot of the problems that went ahead.You know what I mean? You can come into this summer, with the pandemic here, et cetera, and because we found some clever ways to test things. The last summer example, it was a great one. Those went into brand too because we actually had a test brand that we were using last summer, and we evolved. We made some changes to it because we were likely to make some changes as well, as we launched the brand.So we just challenged ourselves to look at this place and see what would be good. It was pretty standard to say, "Oh, we don't have a real product, we're going to sell ACs now." So we got a developer on the project, telling him we were selling AC systems. We said, "No, we actually need to sell ACs today that are not our own product, and that's worth doing and we can learn a ton from that. And then we can design and develop our own product beyond that."So that's been my biggest learning and what I'll take, and what we'll continue to do over the course of this company and into the future. It's just finding clever ways to get real products out there, real brands out there, even if they're test brands, to real people who would actually think about and engage with your product and your brand. And then do it in a low cost way and then take it from there and build on it.Things don't have to be perfect. You know that's the best kind of learning as well. You don't have to have the perfect brand. On day one, as you start to test things and everything. You don't have to have everything locked and loaded. There can be a lot of open questions, but you answer a lot of those questions within the process.So that's my biggest thing that I tell everyone, is just think of a creative way to get out in the market and do something with your idea. And that will ignite the entire process. So something we did and something we'll continue to do for sure.F Geyrhalter:Absolutely. Muhammad? M Saigol and E Rauterkus:Yeah, absolutely, that's one of my biggest take-aways as well, just as Eric said it. It couldn't be more important than overemphasize. And then on the branding side, what I could say is, be willing to take a little bit of a risk with the brand. Don't just fit it into exactly what you're kind of seeing out there.Have your own perspective on aesthetic, have your own perspective on design, make sure that it actually relates to the brand promises that you have developed and what you're delivering for your customers. But customers will respond to something that looks fresh and looks different, that makes them smile, that they haven't seen before. So put your own perspective, put your own brand interpretation of the current general aesthetics and don't be afraid to do that. It will pay dividends.F Geyrhalter:And what you just said is exactly why I wanted to have you on the show. So thank you. That was fantastic. You got me back nicely too, which I was begging for. So I do appreciate it. So this will most probably air at the end of October, but still listeners who fell in love with July and they're already, they're either still sweating it, or they're already sweating and thinking about the next summer, how can they get their hands on it?M Saigol and E Rauterkus:Exactly, exactly. So around October, you can always come to our website at july.ac, where we have these really awesome programs heading to the fall and into the holiday season, where you can reserve, you can lock in your July for February, for the end of the spring, early summer, according to when you want it to be. Just make sure, you have your unit reserved for delivery on that first hot day.So you'll be able to cover when, say, pick what unit you want, the size that's right for your home, the front panel that speaks to you, and you'll be able to lock in your delivery date for spring of 2021. So you'll stop on over and we're always there to answer questions as well. So please chat on our website, call us directly or email us with any of your questions and we can get your unit right as the season starts next year.F Geyrhalter:That's awesome. Thank you both for having been on the show so early on, with your brand. This was a big delight, to use your words, to have you on. And it was a blast and also, it was extremely insightful. So thank you so much for your time, and best of luck for the next month, to get through the hot summer with your brand and then for your brand extensions in the years to come.M Saigol and E Rauterkus:Thank you very much. Thank you. Yeah, for sure.
Learn more about Anna Sheffield Fine JewelryLearn more about Bing BangSupport the show and get on monthly mentorship calls with Fabian. Join here.-------->F Geyrhalter:Welcome to the show, Anna.A Sheffield:Thanks for having me. I'm so happy to be here with you today.F Geyrhalter:Oh, thank you. It's such a pleasure. You have two physical ateliers, right? One in LA on Melrose and one in New York City on Bleecker. How have these past four months affected your operations and brands? How did you have to pivot like everyone else?A Sheffield:Oh, it's been, yeah, very interesting. Fortunately for us, we were already kind of doing remote with me being back and forth between LA and New York. So, we had a little bit of practice. But at the onset, we closed both of the store locations and we shut down our production office and our headquarters.So, in the beginning, it was just a small remote team. I had to furlough most of the team in the beginning because there was nothing for them to be doing while the cities were shut down. We've since brought almost everyone back, which is amazing. But we pivot into really ... Yeah, we're so fortunate that we still have a clientele that's been waiting and is thrilled to have us back in the flow.But we pivoted to being mostly virtual appointment, which we actually do a lot of that anyway because we have clients from all over the world and they can't always come to New York or LA. So, during that time, we just got to hone those skills and really work on better ways to be digital, with our clients. So, customer service and sales and showing them stones and talking about the capabilities for making things bespoke.So, it was really just shifting to that digital platform and kind of going quietly for a minute. And then we've been able to ramp it back up over the last couple of months as things kind of shifted in Los Angeles and in New York, both, sort of at different paces. But by and large now that the stores are back open part time, we're doing appointments in real life, which people are also really thrilled about. And that's encouraging.F Geyrhalter:Yeah, yeah. Well, first of all, congratulations. That's a big sigh of relief that everything went the way it did. It also sounds to me that because you had to dive much deeper into digital than you usually would have, most probably you come out a little bit stronger and smarter with your digital and appointments because I assume it's difficult to show stones over Skype or like Zoom.A Sheffield:It is, but actually, we have a few of our, and I mean, this is fortunate too, we work with a lot of different vendors for stones because they come from all over the world and I kind of cherry-pick the different people that we work with based on their ethics and their products and a number of things for diamonds as well as precious and semi-precious gemstones. So, a lot of them actually have pivoted to being more digital as well with having like really great videos of their product. So, there's a lot of beautiful assets that we have to work within terms of showing clients what's possible.But also over the last couple of years, we've really leaned into being able to advance the kind of dialogue with our customers and even with potential customers via the website. So, we've done a lot of kind of building out that knowledge base where people can kind of tap into, like, oh, what does this brand think about sustainability? How do they approach it? Or how do I learn about diamonds in the tone of voice that this brand has?So, we have a diamond school and we have a getting started so that people can kind of understand how to get through the engagement ring process or just different love stories or impact like all the different givebacks and things that we do. So, we really worked on doing that in a robust manner on our website in the last couple of years. And that definitely helped during this time also.F Geyrhalter:Yeah, I mean, look, this is a fascinating ... There were so many things that you said that we're going to have to dive deeper into. But just to start with the diamond selection part, it is a nerve-wracking, overwhelming journey for anyone, right? Because it is so hard to understand because there's a list of 10, 16 ways that you should judge a diamond. And the question is, I mean, how much of that is really visible to the eye and how much of that within the industry do you feel is a little bit of an upset. What do you think is really important?A Sheffield:Yeah, to me, I think imperfections and oddities are beautiful. So, from the onset, I've always kind of embraced that and put those forth as options for people and really trying to take what feels a little bit stereo instructions.F Geyrhalter:Yeah.A Sheffield:Like, oh my god, how do I put this together, the four Cs, the blah blah blah, what matters, what doesn't matter.F Geyrhalter:Right.A Sheffield:And really this distill that in a way that makes it easy for people to understand that they can trust us because I am honestly interested in conveying that information but in a way that makes sense for people. So, I really love what's meant to be the tippy top is the white diamond. So that's what's been held aloft as the purist white diamond with no inclusions with a perfect cut, with the largest carat. That's supposed to be the thing, which were the size. So, those are the things that were meant to be the most perfect.And then what I really to do is show people, yes, that's possible. But also like an off white stone, especially if it's an antique diamond, can be really beautiful, especially if you're putting it in yellow gold. Or I like gray diamonds and that's really a diamond that has so many imperfections that it looks grayish or even has speckles and spots, or intergalactic beautiful fractal sort of crystal in layers within it.And if you were looking at white diamonds and then moving over to a gray, you might be like, oh my gosh, that's not a very nice diamond. But really, they're beautiful. So, I've always kind of embraced that and tried to walk people through it.Champagne diamonds are actually just on the scale of brown, but they have their own sort of set of really beautiful hues. And when we're selecting champagne diamonds, we pick the ones that have kind of pinkish hues or really nice kind of subtle, kind of vanilla cream soda kind of tones. So, there's a lot in it that's kind of aesthetic still and it doesn't have to just be technical. So, we try to present that. And also to design things that work with those stones.F Geyrhalter:I guess it was John Legend, who in one of his majorly cheesy songs said perfect imperfections.A Sheffield:Exactly. Yes.F Geyrhalter:I love that idea of perfect imperfections. And I love what you just said because, I mean, that creates character, right?A Sheffield:Mm-hmm (affirmative).F Geyrhalter:Not in the diamond term, but yeah, absolutely.A Sheffield:We got it actually. Yeah, we call it the fitzy character.F Geyrhalter:Oh, no way, perfect.A Sheffield:Yeah, because it feels like, why not take that into consideration?F Geyrhalter:And it's so good.A Sheffield:Everybody individually has different tastes, so allowing for that, some people sparkle, some people prefer luminescence, some people prefer color. It's good to sort of have character as part of it.F Geyrhalter:Yeah, yeah, absolutely. While we talk about this, I want to read two sentences from your bio to set a little bit of the tone for this. Throughout her career, Anna has demonstrated a deep commitment to the highest standards of jewelry production and to giving back both missions fueled by the inspiration that she gains from the worlds of art, nature, spirituality, and indigenous arts and crafts. Ethical sourcing, responsible practice and philanthropy are core pillars of the Anna Sheffield brand and can be seen through her use of single-origin gem sourcing, reclaimed melee and recycled gold, as well as initiatives like the Future Heritage Fund, which in partnership with the New Mexico Foundation, the NMF, aim to preserve and protect the cultural heritage and landscape of the southwest.A Sheffield:That's a lot.F Geyrhalter:I know. You know what's so amazing? This is two sentences. I could have written it. It could have been a German sentence structure.A Sheffield:Yeah.F Geyrhalter:But I mean, there's a lot to talk about.A Sheffield:Totally.F Geyrhalter:Especially when you talk about ethical sourcing, which I'm really, really interested in and there were many instances or let's say a few instances where I wanted to go out and look at that myself and it was always very, very complicated for me to actually get a lab-grown stone for instance. But you source only recycled gold and conflict-free stones and you do also work with diamond Foundry to source lab-grown stones. How has that impacted the industry? Is lab-grown the future in diamonds?A Sheffield:I think it is to some degree. I think there will always be a desire for natural diamonds, like mined diamonds. But what I try to do in that respect is to mix in the reclaimed as much as we can. So, the melees or the tiny little diamonds that are in pave, and even to some degrees side stones up to about three millimeter, I couldn't get reclaimed stones. So, I try to incorporate as much reclaimed as I can.But we also have the opportunity to do Foundry for the manmade, so the lab-grown stones and then to try and offer antique, or even to go through more single-origin or even just working with vendors that have just a really transparent supply chain.So, I think that lab-grown is an important element for this industry to be able to investigate and I think for clients to be able to ask for it really, and that people should be able to supply. But in some cases, for example, with champagne diamonds or gray diamonds, that you can't really make those. That's not doable in a lab.F Geyrhalter:Interesting.A Sheffield:There are limitations to the carat size. There are limitations to the clarity and color. And in some instances, it depends on the company, I like Foundry because they are carbon neutral. But in some instances, I don't see that it's any better for a company to use a ton of fossil fuels to manufacture a diamond versus mining for it.F Geyrhalter:Yeah, right.A Sheffield:And there are also a lot of them that are treated after the fact. So, they heat them to make them more white because they turn out yellow in the original crystal. So, there's a lot to it. There's still just so much beneath the surface that is not customer-facing, that's more industry-sided knowledge.F Geyrhalter:Yeah.A Sheffield:And I think that it's important that those conversations happen for people as well because I think the consumer needs to know the difference. And they need to know, oh, if I'm not only asking for conflict-free or for a lab grown, I'm also making sure that that lab-grown is from a zero-carbon company, or that the natural diamonds are coming through some sort of a supply chain that's traceable. So, you know that the cutters are being treated well. That the rough has been chosen by someone that you trust.F Geyrhalter:Absolutely, yeah.A Sheffield:There's a lot of different layers to it. So, yeah. As an industry-wide standard, I don't think there's a lot of really client-facing information about that. So, I've really worked to bring that forth as much as we can, as much as I'm aware or can be to try to improve on it. And I think to set new standards as a small company, I think it's important.F Geyrhalter:That is important. The term alone "lab-grown" makes me assume that the output is indefinite. I mean, is it very easy to get lab-grown diamonds these days? Do they just pop them out like there's no tomorrow, or is the process very different than that?A Sheffield:It still takes time and it takes a lot of energy. And again, there's different ways that you can grow the diamond crystal. So, lab-grown can vary between companies, but the Foundry has a certain way that they grow their stones. There are limitations. So, you won't find a lot of larger size, carat size stones. And you won't find a lot of high clarity stones. And often they're going to be in a low color because they don't treat their stones. So, there are limitations as well. So, you can't just decide, "I want a 10-carat, perfectly white diamond," and just push a button and print it out.F Geyrhalter:Okay. Yeah. That was my naive question, which as a shopper, that's what you think. You're like, "Lab-grown, oh."A Sheffield:It's good to know.F Geyrhalter:Yeah. And that's what I realized, too. As a typical male consumer in this world, very last minute shopping. So, what I do usually, it's like a week or two before anniversaries or anything, I'm like, "Oh, yeah, that's coming up. I need to do something." And that's why I have never been able to get a lab-grown diamond because it's always too late. Because it actually takes a little bit of planning for those things.A Sheffield:Yeah, exactly. A lot of diamond jewelry does, especially if you want something bespoke because it takes time to source the stone and then make the piece and get it shipped to you wherever you are.F Geyrhalter:Exactly, yeah.A Sheffield:Yeah, hence, we try to send lots of reminders for those things.F Geyrhalter:Well, yeah. And hence, my wife hasn't gotten any bespoke jewelry in a little bit.A Sheffield:Yeah, so planning ahead.F Geyrhalter:I mean, reading up on you and your personality and how you run your brand, you talk about the spirituality, as well as reclaimed and recycled a lot with your jewelry. So, I am brave and maybe sleep deprived enough to ask this rather esoteric question.A Sheffield:I love an esoteric question.F Geyrhalter:Well, let's see. Let's see, you will. To what extent do you feel that some of these stones that are reclaimed carry the soul or the spirit of the person who actually used to own them? Is that a consideration for you? I know some people buy a house and then they walk into the house and they're like, "Oh, someone deceased in this house. We can never live here, right?"A Sheffield:Yes.F Geyrhalter:You know where I'm heading with this.A Sheffield:Of course.F Geyrhalter:How do you feel about this? Because I mean, you feel the stones that you receive, right, and I mean, for you, it is an art?A Sheffield:Absolutely. Yeah, I do think that many things, many objects, I think the objects can carry a resonant kind of feeling not only from a person that might have held them before but also their origins, which is why the sourcing is so important.F Geyrhalter:Right.A Sheffield:But I think with all things that have that kind of base level of sentience or some sort of attachment spiritual, energetic kind of their own sort of glow, if you will, I think people can perceive those things, even if it's only a slight perception. But I think when you're looking at diamonds, and I don't think this goes so much for the melee because they're very small and they've been sort of cultivated from all these different sources. But if you're picking out an antique center diamond, for example, and you're looking at four or five, old euros or old mine cuts that these are pre-World War I, so, even potentially more in the late 1800s.So, if you're looking at these stones and you know that they're antique, you're imagining that, yes, these have probably been set in jewelry before, may or may not have been an engagement ring, could have been something else. But the chances are high that this has been someone's talisman, someone's amulet, someone's piece of jewelry at some point in their life.And I do think that when you're looking at them and you're interacting with them, that you can kind of tell which ones are that have extra shine to them, and which ones are dull or don't have that kind of beautiful resonance. So, I think that's one of the good things about letting people choose their stone. Even with a modern diamond that you know hasn't been in someone else's jewelry before, there's still that feeling of where it came from, its provenance, what it went through to get to you. And I think that it's important for people to sort of have that time to be able to look at something and feel it and choose it. And there are definitely folks out there that do not want a recycled or reclaimed diamond. And there are people that might just get that stone and then put it in some sea salt and let it sit out for a full moon overnight or something to leave it. Those are all possibilities too.And I think it's important with any gemstones, personally with my own jewelry, too, I take things off now and then and I just kind of let them do their own little clearing. Put them on a crystal or I'll put some sage or I'll clean them with saltwater or something just to get the energy moving through them.F Geyrhalter:Yeah, yeah. Well, I am glad I asked.A Sheffield:Yeah. As witchy as you want to be would be my answer.F Geyrhalter:So, talking about witchy, you have a cult following, I would say, which includes countless celebrities from Jennifer Lawrence, Meryl Streep, Kerry Washington, Helen Mirren, Charlize Theron, et cetera, et cetera. I could go on. But obviously, it's not always been like that. I mean, you started somewhere. How did you start off? And did you always have the drive that you knew that you wanted to create your own brand at some point?A Sheffield:No, it was a total and complete accident actually, which was I think fortunate because I think I can overthink things. So, it was kind of good that it happened in a more meandering way. But yeah, I was right out of art school. I kind of thought, oh, I should have a little sole proprietorship so that I can do my thing and sell my art and maybe make things for people if I want to make something. I do steel, metal arts and stuff.So, I got a sole proprietorship thinking, oh, this will be just an easier way for me to get paid when I've worked with a gallery or do an open studio. So, I chose a name, Bing Bang, B-I-N-G B-A-N-G because it felt like two hands with a hammer and an anvil getting stuff done. And it was just a total fluke because I was like, nobody will ever know this name. I just have to publish it in a paper and then my sole proprietorship is active.And so, I started with that. And then I was making jewelry a little bit in addition to my art because I was making sculpture at the time. And I would just make jewelry when I felt stuck or just wanted to do something that wasn't so heavy. And then I started wearing that jewelry and then people would see it and ask about it. And then I would be like, "Oh, I'll make you one." Wear it into a little store in my neighborhood and try on jeans and they'd be like, "Oh my god, that ring is so cool." "Oh, I made it." And then, that's how it started.So, I didn't really plan on having a brand whatsoever. I didn't pick the name thinking that I was going to have a brand. So, that was the first bit of the happy accident. So, then as that grew and I still do that brand-F Geyrhalter:Yeah, Bing Bang is around, right, which is amazing.A Sheffield:Yeah. We'll be 20 years this year. So, I started in 2001. And it was my first sort of foray into that whole thing. And I had no experience in fashion. And I had never thought about branding or advertising, or even really designed for that matter. I didn't know anything about the fashion industry. So, I just kind of went with it. And it kind of took me to this place where I was living in New York and Bing Bang became my full-time gig.I wasn't really making art anymore. I really just leaned in to doing jewelry and all these things that I didn't really know were working, I kind of learned about in retrospect as I really learned about branding and marketing. So, there were a lot of fun things. I didn't realize that there was this thing called managed scarcity, which is when you run out of something and people are like, "Oh, my god, I have to have it." Basically like the line at Supreme is managed scarcity is their business model.F Geyrhalter:Right.A Sheffield:And so, early on with Bing Bang, I was making everything by hand. We had early success with celebrity. That's way before Instagram, before the internet really, but I was selling at Barneys and making everything by hand in Brooklyn. And all of a sudden, a celebrity would be wearing, Drew Barrymore, or Jessica Simpson, or somebody, Maggie Gyllenhaal would be wearing something of ours.And they would get credited and People or Star or Us Weekly, and it would be like, Bing Bang Jewelry at Barney's and then it would be like, they'd call me frantically. "Oh, my god, those earrings, we don't have any left. There's people that want them." And I was like, "Okay, well, I'll start making them today and I'll have them [inaudible 00:21:36] in a couple weeks." And people will be like, "What? I have to wait?" It was like this whole thing. So, getting little by little, I was like, okay, I have to figure out hiring people. I have to figure out branding. I didn't really have a logo. I never had a business plan.So, in the beginning, Bing Bang was just this thing that I built, like a little castle out of Legos, one little brick at a time. And then watching it evolve has been so magnificent and so fun. So, by the time I started my fine jewelry brand, I really had gained a lot of experience. So, that was magical. And to be able to have that opportunity basically to learn on the job and to start with something that was just really fun for me and it's always been fulfilling, it was a little like lower stakes because it didn't have my name on it. It was always like Bing Bang. It's like this little-F Geyrhalter:Right, right, right.A Sheffield:It's a little crew, a little team. And it is still a team, which is wonderful. So, when it came time to start the fine jewelry, I had just sort of reserved my name because I was making art. I was like, "I'm a sculptor. I want to use my name for my art."F Geyrhalter:That's why I was wondering, yeah.A Sheffield:And I didn't really have an intention of being a jewelry brand or doing a brand or being a brand. So, when it came to it, and I really wanted to start playing with fine jewelry, I started to explore diamonds and gold and making fans growing up, I started this brand and my big name in my 20s and I was in my 30s. And I was like, I want things that last and I want to make things that are precious.And so, it was really interesting in the beginning to kind of look at it and try to unravel that like, what is my brand. That was the hardest of all because Bing Bang really came so naturally. It just fell into place. And building my brand has always been much more complicated.F Geyrhalter:Well, you were reluctant using your name, right, because that's a big step.A Sheffield:Yes.F Geyrhalter:I mean, I did the other way around. So, we actually founded our company at the same time. I founded mine in 2001 as well. But I actually started with my name. I started with Geyrhalter Design. Then I realized we're doing more than design. So, 10 years later, it was Geyrhalter & Co. And then I realized, well now, I'm doing something totally different. I need to change my name. And plus, what if I ever want to grow or sell my company. It should have a different name, right?A Sheffield:Exactly.F Geyrhalter:I pivoted into FINIEN. And now everyone is like, "Hey, why is your company called FINIEN if you're only a consultant with a couple employees?" And I'm like, "Well."A Sheffield:Different journey.F Geyrhalter:It's a journey. There's a lot to it. But why were you so reluctant? Was it because of everyone else in the industry? Was it a norm that everyone used a name? And that's why you wanted to go against it?A Sheffield:Yeah, by and large. I mean, when you look at the big boys like Tiffany's and Harry Winston, there's a lot. Even among more contemporary designers like David Yurman, or, yeah, people use their name and I don't know. I just felt very reticent to do that. I felt shy. It felt like I was really ... With Bing Bang, I could always kind of hide behind this like, it's an us thing, like we.Whereas once I put my name on it, it was like I'm the solely responsible for whether this is good or bad. I'm solely responsible for the success of this thing that is like where is unintelligible where the line is between me and it. So, that was hard. And like I said, as a spiritual person, it's also like, oh my god, do I really want to put myself out there like that?F Geyrhalter:Yeah, yeah. Yeah, for sure, for sure. And I mean, did that idea of branding then affect your company culture? Because obviously, you have a good amount of employees now.A Sheffield:Yes.F Geyrhalter:On the one hand, that is your name on the door, right?A Sheffield:Mm-hmm (affirmative).F Geyrhalter:Nice, big and shiny, everything you always feared.A Sheffield:Yes.F Geyrhalter:But on the other hand, your brand is very purposeful and there are plenty of shared values your team can be inspired and driven by, right?A Sheffield:Yeah.F Geyrhalter:How does that work with the team? How does that brand relate to how your culture actually works?A Sheffield:Well, I think it's interesting because I've always been such a part of it. We are independently financed. So, it's not like I have to answer to anyone or that anyone else has to answer to anyone. So, it's always been a bit of a community. And it started small. So, everyone that's worked with me, and I'm still friends with, been close with many of the people who've worked with me over the years, it's such a group effort. And it's one of those things with small companies, where everybody just kind of does whatever needs to be done. It's like a ship. Everybody has their role, but also it's like when things are happening, it's just like, "I'm closest, I'll do that" or "I can manage that." Or "Why don't we do this together, it needs four hands." So, it's always been about this kind of group effort.And I think people seeing me really be in the company, running the company, making decisions, helping, I've done everything that everyone can do in my company now, with the exception of those who have incredible expertise. But I used to upload everything to the website. I used to take all the photos. I used to style everything for the cases and write all the copy. So, it's been good in that way just to, I think, to be a part of a team where people can really see that all my team can see that I'm in it. I'm in the trenches. I'm doing things. I'm working all the time. And I'm trying to be a good leader.But at the same time, I think where it comes to the branding, same thing, I never started out with a brand guide and a deck and an investor. It was always kind of I'm making it up as we went along. So, with my company, I did end up eventually doing a brand guide. And it was amazing for me to work with people whose expertise is just that. I worked with my brother and a few others. And we went in and really mined for that information, really pulled forth the values and the pillars and the ideology and the ethos and aesthetic, and all of these things that are just ... So, they're tangible, but you have to really be able to walk all the way around them to identify them, to put words to them.So, we did that exercise. I think it's been maybe about four years ago. And it's been so instrumental even for me to be able to have that to look back at and to share with new employees as we expand to bring new people on as we open new stores or look for new marketing opportunities or add new content franchises to our social media. It's really great to have this kind of bible as it were that you can look to for many of your answers. And also, if there's things that are no longer resonating, then you can realize where you're evolving.F Geyrhalter:I so agree. I just did one of these workshops on Thursday and Friday with an Italian interior design company of all places, which was nice because I felt like I'm actually going out of the country. I think at 4:00, they started mixing negronis and I'm like, "Wow, that's nice." And they have to go in a cigarette break. And I'm like, "Oh, okay."A Sheffield:Oh, Italy.F Geyrhalter:Oh, it was so beautiful. But the reason why I say this is because afterwards, they said, "Oh my god, Fabian, you're a miracle worker." And I'm like, "I'm not a miracle worker because everything that came out of the workshop was from you." Right? So, basically, I'm just a therapist. I just get it out of you.And so, it's really great to hear that from you after you've been in business for so long. And then finally, you realize that you are expanding, you are hiring, you need to put all of these values down, you need to put the pillars in stone.And to actually feel that relief and to have this clarity moving forward that now it's all on one page or on a couple of pages and here, this is our brand, right? Even if you grew it very organically and authentically, those things are important. They're not fake. Either they come from you, which I think is so important.A Sheffield:Precisely.F Geyrhalter:Talking about Italy in one of your Instagram posts, you cited the famous Benetton campaign from the [crosstalk 00:30:32] by Oliviero Toscani, who was a big reason why I decided to actually study communication design and advertising. In the post you say, it makes me remember that the brands we support have the option to integrate the present with the future we want to see. I hope that we can continue to bring that belief into our brand and exemplified at ASG as united in the bold vision of all for love.So, that being said, which is so great, and I love seeing that because this entire campaign to me was so ... It was just so important in my growth as a designer in the way that I wanted to make a dent in the world as well. How has the Black Lives Matter movement influenced the way that your brand communicates in these sobering but also very empowering and very important times? Did things change for you? I mean, it affected every brand, right? And everyone was kind of standing their deer in headlights like now, but ... Right?A Sheffield:Yes. Well, I think, I mean, the good in it like you said is that this is bringing a lot out into the light. And a lot of people are being held accountable. And everyone is being required to look really sobering, take a really sobering view of themselves and their businesses and the businesses they support and their friendships and their families and the world we're living in.So, in many ways, I think it's wonderful. And I think that you can only change what you're willing to work towards. So, I think this is a good moment for America and for the world. And I think that that's why the Benetton campaign felt so relevant to me because that was a really early moment for me in my life is like, I don't even know, I was probably seven or eight, looking at these shiny, beautiful ads in a magazine or as I was going through in airport and seeing these beautiful faces and thinking, oh, my goodness, that is beautiful, not even knowing the word "compelling" but feeling compelled.F Geyrhalter:Yeah, yeah.A Sheffield:And I've always tried to find ways that we could do that, not just with our visual, not with our creative and marketing, but just with our words and with what we really strive to do with this brand. And because we make engagement rings and wedding bands, and fine jewelry that mark moments in people's lives, I don't want anyone to feel alienated from that, not just because of the price point but because of what our visuals look like and what kind of models we're using or how we speak to people, and also how we use our platform to support in moments like this.So, one of the good things that we did that I felt was empowering for us was to be able to lean into sharing information because we are a platform with a lot of followers. So, being able to aggregate content from others and to share and amplify messages from those who really deserve to be heard right now and to champion different causes that I think are really important, like the trans movement, the Trans Lives Matter Movement is so important. And I have friends that are trans and I have since I was in college.And I think that being able to look at that from a personal perspective, but also, oh, well, how can I use my brand to show people that maybe don't have a trans person in their life or that haven't had first-hand experience with this, to show them that this is beautiful and sacred and that it's important to be able to have this dialogue and to rally the troops. This is where we can help. But also, this is where we can listen. And this is where we can learn. And this is how we can bring our message forth and act.So, I think that trying to find ways to use the brand to be a part of that conversation is really important. And I feel like I don't want to say we've done a good job, but I think we've been authentic to that purpose. And I think thankfully, it's always been part of our dialogue so it didn't feel like it was a leap because since we mentioned it earlier, but the Future Heritage Fund I started about four years ago, 2006, I think, because I grew up in New Mexico and in my early life, I lived in the Navajo Nation. My parents were working for the Indian National Health Service. So, I spent the first few years of my life living in the Dine community. And I was a child, but I was there within this beautiful community.And the artwork in our house and the other people that we lived near and the whole southwest is very steeped in the Native American cultures that are there the Navajo, Dine or the Pueblo tribes, the Apache tribes, there's a lot of that art and artisanship and culture and belief systems and sacred places. So, I really wanted to bring that into my work.And as this person who left New Mexico and moved to New York City and has this kind of different life, a very different life than I would have had if I had I stayed in New Mexico, to be able to take that and show how important it is to support these artists and communities and to talk about cultural preservation and try to really, I don't know, just share this experience that I've had firsthand growing up in this place that's so beautiful, and to not only talk about the problems there, but also to talk about solutions.So, I think it's really important too to approach this conversation where it relates to the indigenous people in America. And so, it is also part of this movement, I believe, in so many ways. So, I think, having been working on that for the last five years, it was also really important to at the beginning of COVID lean into that too because it was adversely affecting in a lot of native communities here in the states.F Geyrhalter:Yeah. I'm acutely aware of that too because I worked with an organization called the Wind River Foundation, and they are very much working towards the same goals as you explained. Actually, there was so much that you just said. But it came right back to the question. But I would actually urge everyone to look at your Instagram account because you're doing amazingly on your Instagram account. I love the stories. I love the cameo stories that you created, which are not Cameo the brand, which I interviewed them here too, but it's actual cameos.It's extremely authentic. But it's also very, very well curated. And it's just a pleasure to follow. On your website, you also state this and I absolutely love that. You say it's around us, between us, within us. It's alchemy. So, with that, and since we're slowly coming closer to an end here, I want to ask you the big question, which you knew I would ask you. What does branding mean to you, now that you've done this for almost 20 years? What does branding mean to Anna?A Sheffield:Well, I mean, to me, it's the stories. It's those things that people can hear you, tell and they can conjure up their own images, and they can feel where it relates to them and really feel enveloped by the mood and the meaning that you're putting forth with your stories. And I think that can be told in words. It can be shown in the product. It can be a part of our visuals. And it can be also how we speak to things like the cameos. These are amazing people I love that I want you to know about and they're going to have a little cameo on my Instagram today.So, taking all the different stories that we have and putting them out for people to experience I think is what branding really, what it really is at the end of the day because it's taking something so visceral and moving it into something physical. And for people to have an experience around that, I think it has to be multilayered. It has to be multisensory.F Geyrhalter:I absolutely love that. And that's also the reason why I wanted you to be on my show so badly because it's not easy to do what you just said in the jewelry, fine jewelry space. It's really, really difficult because everything is stereotyped, right?A Sheffield:Yeah, very much, yeah.F Geyrhalter:It is an entire stock photography industry. And so, to actually be able to stand out and to create an authentic experience and yet be able to scale you do is really amazing. So, I think there's a lot that our listeners can learn from just analyzing your website and your Instagram. And I would actually encourage everyone to go to your website because just going through the ethics section alone is it's a joy.A Sheffield:Thank you.F Geyrhalter:I mean, it's a beautiful site. Its functionality is really fantastic. So, it's a pleasure. If you can take your brand and you put it through a funnel and outcome is only one word, what would be your brand's DNA? What would be one word that could encompass the entire brand?A Sheffield:I think what you just said, it's alchemy. Alchemy is definitely the one word because there's magic in how things come together. And that's exactly what we do. There's alchemy not only in the diamond that came out of the center of the earth that was forged by fire and pressure and this is an amazing, cosmic thing. But also taking that little diamond and putting it into something that honors it like a setting, that design that really shows what it is even those perfectly imperfect ones in their best light and then how that also then becomes a part of someone's life and a part of their love story. And that there's an alchemy in that and how it becomes an heirloom or talisman that then holds all of this energy, and all of these memories, and all this meaning.So, I feel like alchemy is really that, where these different things combine to make something so much greater, so much more profound. And I think jewelry should absolutely be that. Even with Bing Bang, we work towards maintaining meaning in what we do, even though it's less expensive and more attainable and more fashion-forward, younger, still there's an alchemy in that too in those moments in our life.So, I think particularly with fine jewelry though and with the materials and the clients that we serve, I think that the alchemy is just absolutely the end all be all because it feels everyone has a part in it too. The changes and the transformations are what among so many people touching, feeling, experiencing, wearing and being with the jewelry.F Geyrhalter:And what you just said over the last couple of minutes is the power of having clarity in your brand, being able to actually put it down to word like "alchemy" that is so all encompassing, I mean, really tells the entire story of what you do and how you do it and why you do it in one single not overused word. It's so powerful. I mean, I love that. I love hearing that. It's really, really great.To finish things off, do you have any brand advice for founders that are fresher to the whole intrapreneurial journey, that you feel you can leave them with, anything you learned over your years where you feel like, you know what, I'm going to leave the show with these thoughts.A Sheffield:Sure. I mean, this advice is pretty standard for me. I feel like, we all know, our intuition is so powerful. Those little gut feelings and the senses that we have about what's good and what's bad, I think it's important to follow those as much as you can, and to not let anyone tell you that that's a bad way to do business. Because there's all this conventional wisdom that there should be data. Of course, there should be data. That there should be experience, of course, there should be experienced.But also you can't undervalue how someone just having an idea and believing in it can make something really wonderful happened that no one else has done and that those stories come up time and again. But I think that really trusting in yourself is so important. And I think it's one of those first things that you, I mean, at least for me, I would think, "Well, I mean, there's no reason why I should think this is a good idea, but it feels like a good idea."Sometimes I don't follow my own advice. And I don't follow my own intuitions and that's okay, too, because you have to fail to learn. You have to have moments of doubt to come out the other side with more direction and more conviction. But I think that, yeah, the one thing I would say is just to follow your gut.F Geyrhalter:And I've been I've been hearing this quite a lot in my podcasts lately and that is a really good thing because I'm really glad that more people hear that because it's actually not easy to trust your gut. It sounds like it would be easy, but it takes a certain personality. It takes certain charisma. And it takes guts to listen to yourself and to just say, "I'm going to go against the grain. I'm not going to look at data. I'm just going to go with this because my instinct tells me."And I think a lot of it comes with experience where you start ... Because you know, you yourself just know that this might be the right direction.A Sheffield:Exactly.F Geyrhalter:And you have the experience to say, I'm just going to go down that path.Anna, it was so great having you on. I have a feeling that people can find you ... The best way to start is annasheffield.com, right?A Sheffield:Yes. That would be a big part. And on Instagram, the same, it's @annasheffield.F Geyrhalter:Perfect.A Sheffield:And then Bing Bang if you want to look at the beginnings and how that's evolved over 20 years, how I stayed 20 for 20 years. It's @bingbangnyc and same for the website. So, they're both worth looking at. I love both brands and I still wear both brands. So, I think it's kind of cool for people to see the connection between the two.F Geyrhalter:I know. I know. It was really interesting for me, too, as I researched your brands a little bit more. Anna, thank you so much for having been on the show, for taking the time out of your day. Stay safe, stay healthy.A Sheffield:Yeah.F Geyrhalter:And keep trusting your gut, right?A Sheffield:Yes, yes. I will. I do my best. Thank you. Thank you for the wonderful questions.F Geyrhalter:Oh, my pleasure, my pleasure. Thank you so much.A Sheffield:Take care.
Learn more about The Financial GymSupport the show and even get on monthly mentorship calls with Fabian. Join here.-------->Full Transcript:F Geyrhalter:Welcome to the show, Shannon.S McLay:Thank you. So happy to be here.F Geyrhalter:Yeah, thanks for being here. You are the CEO and founder of The Financial Gym, a fitness inspired personal financial services company that to me shouts millennials and Generation Z. I have proved since my brand consultancy's creative lead, Chessy, brought up your brand to me and she shared the surprise swag bag with me that comes with a tote saying, "Money is my spirit animal." It also has a little card that's signed by you. Then I had to look into Financial Gym a little bit more because she was super excited about it. She just signed up. I had to immediately invite you to be on the show. I'm a huge proponent of financial literacy and empowerment. How could you not be, right?S McLay:Right.F Geyrhalter:I'm originally from Austria where things are a little bit different than Europe when it comes to financial literacy and the whole social environment, but here in the US, it is definitely a crisis. I heard the statistic. I believe it was even a Forbes article that I researched where they mentioned The Financial Gym, but they say that about 40% of Americans would struggle to come up with even $400 to pay for an unexpected bill. That is unbelievable.Obviously, what you're doing is crucially needed here in the US, creating that kind of platform that speaks the language of the next generation is absolutely heaven sent. How did it all start? Give us a quick tour of what happened in the last, gosh, like eight, seven years, something like that, right?S McLay:Seven years. Seven very long years stated. And yet they've gone by in a flash. So yeah, we are dealing with a financial health crisis and it's been around for a long time. I wasn't really aware of it until I became a financial advisor at Merrill Lynch, and I became an advisor after a 13-year career in financial services where I was working for investment banks, for a hedge fund briefly. I was always around money and making money, so I didn't think too much about my own personal finances, my solution to my own personal finances was always, "I'll make more money," and I always did.So I just didn't even think about it. Then I became a Merrill Lynch financial advisor, because I felt like I needed an advisor. I was now in my early 30s and about to buy a home, and have a child, and all that reason to feel like you need some financial planning. When I looked at the financial advisory space, I became woke to it and I always say 85% or pretty much old white man and no offense, I will say I love men, I married one, I birthed one. They're fantastic, but money is really personal.It felt very unfair if somebody couldn't find who they wanted to work with. I thought if you can't beat them, join them. So I became a Merrill advisor. To work with me, you have debt of $250,000 in assets. You didn't even count as a client unless you did, and I didn't think anything of that. I thought this will be easy for me to find clients. I have been around money, and I was finding clients.I laughed, because the gym never would've existed if I took the advice of my first Merrill advisor/mentor. He said, "Pre-screen all your meetings. Make sure that they have money before you even meet with them. Because if they don't have money, they won't even count. So they won't even waste your time." I remember thinking to myself, because he was an old white guy like, "Okay, boomer." Before, okay boomer was a thing, right? I was like, "What?"I was like, "I have plenty of time. I can meet with whoever I want to meet with and I'm not going to ask somebody how much money they have before I even have coffee with them." So I needed a point of taking every meeting, and one of my first meetings with what I would then call my pro bono clients was this woman who was looking for a financial planner and came through a friend of a friend. We sat down and it was like a scene from a movie.She was like, "I have 250,000 of student loan debt. I make $50,000 a year and all this stuff." Like, "Oh my God." The kicker for me was she said, "And I feel unlovable. Who would want to marry me with all this debt?" I had no idea how to help this woman. I hadn't seen a profile like this before and I thought a Merrill Lynch wealth management package is going to just depress her. So I couldn't help her at Merrill, but I wanted to help her, and I figured out and did a plan on the side.Then I became the process of becoming the worst financial advisor ever, because I loved my clients with no money. I found real joy and passion in helping people figure out their finances, and that led to I call the Oprah Ah-hah week for the gym where I started with a meeting with a couple. We were doing their quarterly review, and they had $1.3 million invests with me and their portfolio was down 3%.It was like the end of the world for them. They are like, "Where's our money? How are the kids going to go to college? How are we going to pay our bills?" I spent an hour of my life making them feel better about being a little less rich. It was just really soul-sucking. I thought, I guess this is what an advisor does.Then two days later, I had a plan meeting with a pro bono client. I did a plan for just like we do at the gym, just bulleted, "Here's how much you need to save. Here's how you deal with the student loans. Here's what you do with the credit cards." At the end of the meeting, she said, "You know you're saving my life, right?" I was like, "This feels so much better than that meeting." It was the ah-hah of, "I need to create a business for people like this," which is the majority of Americans like you're saying.It all came to very clearly. It's interesting I think about this a lot, because I never wanted to start a business. I never wanted to be an entrepreneur, but in that moment, everything was very clear. I was also in this weight loss journey and I remember thinking around the same time like when I wanted to get physically healthy, I had so many places I could go to physically healthy. But if people want to get financially healthy, where would they go?That was my dilemma is where do I send these pro bono clients to a place that's going to treat them like human beings with care, and decency and respect just because it doesn't matter what's in their bank account. I thought, if you want to get this financially healthy, you go to a financial gym. It was very clear to me I said, "It's like H in our block, but fun and cool, and advisors or trainers they wear jeans and T-shirts." People pay a monthly membership fee just like a regular gym, and that was seven years ago.F Geyrhalter:That's amazing.S McLay:In a long seven years.F Geyrhalter:No, I'm sure. What a great story. It literally came to you the whole gym analogy came to you immediately, because of the situation that you were in, but did it all start with that brand name of financial gym and everything just, it all just came together right in front of you?S McLay:Yeah. You know what's really funny is I'm a blonde so I tell people, "I'm not really that creative." It's very clear to me.F Geyrhalter:Hey, I'm a blonde. I'm creative. You're putting a bad wrap on those.S McLay:No, I own my blondness. I just remember thinking it's a financial gym, a place to go work out. The funny thing about the brand over the seven years is that you can imagine I've had brand specialist say to me, "Have you ever thought about changing the name? Because it's just so obvious." They don't like it because it's so obvious and I'm like, "But I like it because it's so obvious." Because in my mind we're like the Kleenex of financial health. Where else would you go but a financial gym to get financially healthy?That always surprised me when we got into the branding process formally. So seven years ago I thought it's financial gym, we own the trademark for it. I thought this is it, it's financial gym. Maybe at some point I thought maybe we're the money gym, but we kept coming back to Financial Gym, because I didn't want it to seem like a cash payday loan place, which would feel more like a money gym. I said, "It's Financial Gym." Then we went through this formal branding process after we raised our first round of venture capital money.Everybody that we interviewed for the process wanted to create a new name. Everybody wanted to create a new name.F Geyrhalter:How interesting.S McLay:Yeah and I was like, "Money is confusing enough. I don't want what we do to be confusing." I don't want to be glitter and we're a financial services company. I just don't understand that part of branding, but that's me. I just always wanted to be very clear about it. What's funny is that we had people who didn't love it, but our clients get it. It's clear to people when they come to us what we do even if it's not totally clear exactly how we do it, they get the concept.F Geyrhalter:Totally. You just talked to the wrong brand specialist. If you would've talked to me Shannon, I would've said, "Keep the name." Look, there's something to be said. The whole reason why I have this podcast and now we're on episode 50 or 52, God knows what, is because I can't hear myself talk about branding anymore because I do it all day. Actually, listening to people who did it and very often, there was so much gut instinct involved in creating the name or creating what the brand stands for. So often, it goes against a lot of the brand thinking, right? That specialist like myself usually bring to the table.I think that is what is so fascinating to me, because it doesn't all need to go exactly according to a big book that has been written about this is how branding needs to work. Financial gym literally after you have that name, the language was just so easy, right? To create the actual language. It's funny, so your client met with a BFF, that's your best financial friend. The call to action on your website says, "Let's crash some goals." Trainers introduce themselves by saying, so trainers not advisors, trainers introduce themselves by saying, "You're about to get financially naked with me.Your podcast is called, "Martinis and Your Money." The description reads, "Shannon created this educational and entertaining podcast combining two of her favorite activities, drinking and talking about money." How have you defined the brand personality early on? Because that tone of voice, it is so authentic. It's not really crafted. It just feels authentic, but it's such a fine line to come across as hip and empathetic versus unauthentic especially with this group, right? If we're talking mid-30s and it seems like that's most probably the group like late 20s to early, early 40s. That's the sweet spot most likely.S McLay:Yeah, it is. Our youngest client is 17, our oldest is 74, because we always say just like a regular gym, anyone can work out here. Yeah, what's interesting is finding the authenticity of the voice. I worked in financial services for 13 years, and so I knew the voice that wasn't going to be. It was that. It was like as long as it didn't feel like that, then it was this in my mind. I knew very well what the jargon and what I didn't want it to be.So whenever we have gone through those iterations or finding the right tone in the balance, and we went through a lot of those exercises in that branding process that we went through a little over three years ago now of what is the voice. What's interesting going back to the feedback you got from the team, they wanted us to have a more serious voice, because they're like, "Well, you're authoritative. You want to be the authority." I was like, "Yeah, but we don't have to be in their phase about I don't want to have to wear a Hilary Clinton pant suit for me to have authority. We can have it in a more casual way."It was always really important for me that our authority came through that we were actually saying versus what we looked like and the jeans and T-shirts and all of that was really important to me, because that was definitely not something I saw at Bank of America, at Merrill Lynch that I thought was really important, that I haven't seen anywhere else that was really important for us to have.We stuck very true to it. It's funny because I always envisioned jeans and T-shirts like I'd seen trainers are ... Really, actually our trainers are allowed to wear anything from below the waste. It's just the financial gym T-shirt above the waste. I don't love personally jeans and T-shirt look. I don't personally love that. I think it's funny I created a brand that I wear it every day and I don't necessarily love it.I've been on the Today Show. I've been on CNBC. I've been on Squawk Box and they're like, "Are you going to wear a T-shirt?" I was like, "Yeah, I'm wearing a T-shirt. I'm not changing for you guys." The only challenge we had on the Today Show is they wouldn't let me wear the logo, so I had to wear just a black T-shirt. Friends and family were like, "Why are you in jeans on Today Show?" I was like, "That's our brand."So if people can't see, hear what I'm saying and know that I'm in authority and they're going to get focused on what I'm wearing then they are the wrong people for us anyway.F Geyrhalter:No, totally. I mean, you have to exclude many in order to gain some, right? That's the whole idea. Coming from that background where you have been in a very stiff and unattractive environment in the financial services industry, especially when it comes to the advising part, you want to do everything exactly the opposite, right? So whatever they do, like you said, it is so easy. How do they do it? They all dress up in blazers. How are we going to do it? Jeans and T-shirts. It was like a nice blueprint for you to follow.Your brand icon, we have to go there, because we're talking branding. They're actually my initials, it's FG, which is really awkward whenever my employee gets mail from you. She's like, "I just got a cup with your initials on it from Financial Gym. I'm not sure what I'm going to do with it." In all seriousness, why did you opt out for that simple FG instead of like an icon or anything like that that your tribe can wear proudly? Especially now that I know you went through a branding.S McLay:Yes. You know what's so funny Fabian is that did not come ... An icon did not come up in our initial branding. We went through with a many branding process a year later where we came up with the BFF concept. The icon didn't come up again. The icon actually did not come up until a recent board meeting with a recent board investor who asked about an icon. Again, I don't know a lot about branding and nobody had brought it up. We had the FG logo is like our smaller logo, but there wasn't the talk of some unique symbol.So actually, it's something we're in the process of creating. One of our clients is working with us who does design work. We're working on an icon to replace, yeah. That will be a thing in the past, your initials. We are working on an icon, so actually that process just started two months ago. We started the icon process.F Geyrhalter:That is fantastic.S McLay:We're right in the middle of it. It's funny you had mentioned that Fabian.F Geyrhalter:Well, there we go.S McLay:I wish we did it three years ago, but again, I didn't think about it. I was so upset we had to pay so much money for the branding experience, because again, I just didn't know anything about starting a business. I remember seeing the price tags of the services and I was like, "This is insane. They're picking colors? Why are we paying so much for colors?" My lead investor is like, "You just don't understand branding, Shannon." I was like, "You're right. I guess I don't."F Geyrhalter:Now that we talked about how Shannon does not understand branding, yet she creates a brand that people love, and it's a very empathetic brand. I know that Chessie, my creative lead, when she got all the swag and everything and she met with her advisor whose last name by the way is Penny, because I'm never going to forget that. She's like-S McLay:Yes. So Ashley is her trainer. I love her.F Geyrhalter:My financial advisor's last name is Penny. I'm not sure how I feel about that, but I'm like, "This is the funniest thing ever." She is as hip as it gets and she's as brand educator as it can get because she works in the brand consultancy, right? Creating brand mark. She just absolutely love the entire brand experience. So obviously, by using you don't know anything about branding, that is absolutely incorrect. What does-S McLay:I've learned, Fabian. Three years ago, I did.F Geyrhalter:You learned on the job.S McLay:Yeah, I've learned. I always tell my team, "All we can do is get smarter every day. We might not get today right, but we'll get tomorrow right." So I have learned a lot about it over the three years. So I'm getting it.F Geyrhalter:What does it mean to you now? What does branding mean to you?S McLay:Honestly, so I didn't get it three years ago just because of the cost of it. Especially for start-ups, I wish, and there are some more agencies that are more start-up focused, but every day you're running out of money, and you're trying to create the brand and not run out of money before people even know the brand exists. So I just wish there was a better model early on. That being said now, it is truly everything. It's the way that your clients engage with you and identify you. It's the way your team identifies with each other.It really does the tone for everything. I joked about picking out colors, but you know what's funny is I had no idea what our colors should be. We went through the process though and our agency was like, "Well, you don't want to pick green, because it's too obvious, right?" They struggled with us, because they were like ... I was like, "No, it's definitely this name and it's definitely green." We explored other colors, but I was like, "We just have to be green, but not a funny dotty green."What's interesting is, so we have our Financial Gym green, my CMO. She knows the green fonts by the numbers. She could tell you exactly what our power green is or like green and then-F Geyrhalter:She better, yeah.S McLay:She does and she does them often and people ask her. What's funny is after years later, you see the green and you know it's our gym green. We've had clients say, "Oh, that's Financial Gym Green," or we had an employee who works from home. Her husband was like, "I want to paint the room that she does her virtual calls in Financial Gym green," and he did. So when she's on calls, you watch her and it's Financial Gym green. She feels connected to it through our green. So yeah, it just interweaves in so many ways.F Geyrhalter:No, absolutely. You already mentioned a little bit, but let's talk a little bit about company culture, because I just personally think it is so crucial. How do you keep a unified vibe, a unified brand language and the feeling of belonging when I assume the majority of your staff are "trainers," right? So they're out on their own working with your clients. How do you keep that in sync? It is a challenge for everyone, but since you have a very specific operation.S McLay:Yeah. I think honestly, it is around the gym concept and financial health is our mission. I feel very fortunate that we have a business that is mission driven, because it just influences and impacts everything. Financial health is our mission, it's clearly tied to our name and the work that we do. So that's easy to translate. About two years ago, I did ask as we were expanding, I have a mentor. Actually my mentor was the CEO of SoulCycle, Melanie Whelan, and not one of the founders but she's a recent CEO.I was asking about how we could grow, because we had set this really special group of initial employees and this initial location, and we knew we're opening new locations. I said, "How do we keep this secret sauce as we grow?" She gave a number of great ideas. One in particular was to create very strong core values for the company and for everyone to buy into that. Then core values is just the interconnectivity of your team. The core values are actually very much tied to our brand too, because even in the way, like I knew core values from my Bank of America days, which I never ... It was so corporate. I don't even really know what our core values are. It was just something I got in the employee handbook, and I didn't really connect with.So I pooh-pooh that idea initially, but then when she said it I thought, "You know what? We can do core values, but in our brand." So our brand voice, our core values, it actually starts with we believe in. It's this collective of being part of a gym, being part of a community, but even our core values start with "we." We believe in dot, dot, dot and then that's a few different words that define who we are, and that do one of our core values is gymsplaining, which is we ... As opposed to man slang we say we're explaining things in English, financial literacy in English and we believe in the power of it.So it goes into our core values too. Our employees are even reviewed and graded on their core values, and we fired people over core values issues. Because we do practice them and live them, we expect the team to.F Geyrhalter:So many thoughts on what you've just said. First of all, what you said prior and it fits into this that you wish that there would be brand help for start-ups that is actually attainable and easy for them to actually manage. I created this course called, "eRESONAID." So from resonating and aid, RESONAID. Literally, it's like a brand workshop in a box that founders can do. In the end, it is all about their core values. The funny thing is that I ask them to finish the sentence with "because we believe," which is exactly where you're heading with this, right?It's a couple hundred box and it empowers them to actually take a lot of that in house, which sometimes is the best way for entrepreneurs to actually work, because they have it in them. It's just they need the guidance, and they need a process, and they need a framework to actually voice all of this. So I thought that that was really interesting. Talking about mission, so mixing politics and business used to be a no, no, right? But those walls have clearly come down more and more over the years, but especially in the past couple of months which were ... What a roller coaster, right?They were so horrifying for this planet and then they were also so uplifting and empowering, and there was so much positive change because of it. How does Financial Gym see its role in taking stances, and showcasing shared values with its tribe?S McLay:Yeah. The last three months have been extremely challenging as a leader. I'm not going to lie. I think I'm really excited for where we're going and how we've done it. The gym has always been a place of security, because money is the ultimate taboo topic. So one of our core values is in our gyms and our community, and creating safe place for people of any type of person. That's always been our mission. Our mission is financial health and it doesn't matter what the person looks like who's getting financially healthy, and that's always been a practice.So when we make statements as a company or actually one of our core values is empathy. So when it comes to making those statements, I'm actually excited that we can remind people that that's what we do every day, but it's also who we are. It all comes back to our mission, and especially recently to remind people that black wealth matters. It's a challenge we've seen behind the scenes at the gym.Our client's information is private, so we're not ... unless they want to be profiled or talk about their financial experience, we're not putting it out there and publicizing it, but we've known internally the struggles. We see it. We've got a very diverse client mix. We have a very diverse employee mix, and we know. So I'm actually excited that we're now talking about this even though the conversations are hard and challenging.I'm excited that they're coming more to light, because that's how we move forward and that's what we're committed to, and committed to profiling more of that and highlighting more of that situation. We embrace those conversations and we embrace our community that's very diverse. So it all works together. At the end of the day, it's financial health and it doesn't have a look to it.F Geyrhalter:Yeah. How has COVID-19 otherwise, well, in the financial downturn obviously how has that affected your brand? It seems like you would be in higher demands, but also your audience might like the spending power now, right? Even if it's just a very small monthly fee.S McLay:Yeah, so when COVID-19 first happened, that was extremely scary for us because our clients pay a monthly membership fee, so they could cancel it anytime, and that's really important for us to be flexible. So one of the first things we did, we did pause our costs, our monthly fee for people who did lose their jobs from COVID-19 and still continued to work with them. Then we were waiting to see what other dropout we had. The interesting thing is our business has not done better. It's done extremely well because we've just really proven our model, because it's been such an extreme roller coaster ride financially from the financial markets to unemployment, to concerns of recession, to the importance of emergency fund.All the work that we do on a daily basis has been highlighted and compounded during this. So our retention has been extremely high, and we've never gotten more five star reviews in the last three months than we have, because we're just proving our model of, "Gosh, don't you wish you had a BFF for this ride?" It's crazy.F Geyrhalter:It's also a time now where people have more time to think and to plan and to look inward, and to really rethink their life because they're stuck at home.S McLay:Right. Yeah.F Geyrhalter:In person appointments at the gym and events have also been a huge component of your brand, right? Have you pivoted that? How did that affect you?S McLay:Thankfully, we've always worked with people virtually. We've always had the virtual model, because for until just this year actually, we only had one location in New York, and we work with clients in all 50 states. So with the same results. So we know how to get results virtually and we've moved everything virtually. Our in person events are all now virtual. We have our local money tribe, which is our local community groups, they're all virtual. Everything's gone virtual.We've actually seen more engagement, because it's easier for people to get to these things in their home. We've actually seen more engagement on the virtual side. We are in the process of reopening our gyms. We will open all four of them in early July and what we'll be doing is testing out first with our employees and how they can go back in and commute, and all that kind of stuff. Then we'll open it up with different limitations and capacity, but we do have clients who use the gym. As a co-working space, we have a lot of freelancing clients and people have their own businesses.So we still want to be there for them in the safest way possible. My COO has been inundated nonstop with the PPE preparations and how do we do this, because we are committed to opening again and being that safe space again.F Geyrhalter:Yeah, because I was wondering, the way that it worked, so please correct me if I'm wrong, but in the first month you meet your trainer and that's really the big month, right? You get the analysis, you get the plan, but then I was wondering how does Financial Gym provide continuous value to its members? I think you just answered that, right? The idea that you're constantly there for them, there's events, there's groups, and I didn't even know about the co-work space. It sounds like that's also part of the financial thing.S McLay:Yes. There's the accountability, so once people become clients we start tracking your money and we have a system that's like mint.com. I would say anybody can do a financial plan. Financial plans are actually very easy to do. They're just a template, but not many people can seek to a financial plan and that's where we really excel is that accountability, and helping clients through the situation understanding the behavioral finance aspect of it as well. I think that's part of our secret sauce we've learned over the last seven years is being a BFF for our friends is really listening to people and their money stories. That's really guided how we work with our clients and get them the success that we know we can.It's funny we have people just like a regular gym or a fitness program who'll quit early on because they're not seeing results right away. They're like, "Oh, it's a waste of money." It's funny that anchors my trainers more than anything because they're like, "They gave up on themselves." I could've either, they're just like, "If they just gave it some more time. If they just gave it a little more effort." That's the biggest frustration for my team because we know that just like physical health, some people just take a little more time. It just might take a little bit more time to figure out what we need to do, but over a year of working with us, 90% of our clients hit their goals. So we know we can get there. It's a partnership to get there.F Geyrhalter:I think that that is really the amazing component of your brand. Instead, you are not cookie cutting this. Yes, there is like these are the five, six steps to create your plan, and all of this is in a way, cookie cutter. Like you said, it's like, "Yeah, it's actually quite simple," but then the idea to actually listen to your clients, which sounds so logical, but you coming out of the industry you're like, "Well, that's not really how it works." It's like, we listen to how much money you have and then we take it from there.With normal people, I don't know the percentage in the US, but with your potential clients, the emotional baggage that is involved with money, it goes all the way to how you're raised, and it goes to inferior complexes or it goes to ... There's so many complex parts to it that if you feel understood and if someone is dear with you eye to eye and they say, "Well, I know how you feel. Let's get you over to this and I'll do that slowly over the next month." That must be huge. That must be a game-changer.S McLay:Yeah. We do have a number of secret sauces and that is one of them, I mean, just a great example is with COVID-19, I did a review for some clients. And one of my clients spent a thousand dollars in Costco in early mid-March. I was like, "You didn't buy appliances, or [crosstalk 00:33:52] spent a thousand dollars in Costco." It was right when the pandemic was kicking off and people were freaking out, and she was freaking out. She was in the store and she was just like, and she even called her husband from the store. She's like, "I'm freaking out. Come stop me," but he was like, "I'm 20 minutes away so I can't."She loaded up her cart with a thousand dollars. Then two weeks later spent another $500 somewhere else on groceries. I know them. I've been working with them for three years. This is not normal, "normal" for her. She's like, "I just lost my mind. I was so freaked out." I was like, "Did you return any of those things?" She's like, "No." So then now they have to work through their pantry. So one of their exercises for this next quarter is the pantry challenge.I was like, "You are going to be eating." Their pantry, which expanded to their basement. I was like, "How do you even have room in your home for all these things?" That's the work we're doing. I wasn't like, "How could you spend a thousand dollar?" I didn't shame her for it. We don't shame our clients. I get what drove her to that, but I was like, "You know we got to lay off the food this quarter. We got to do all that."F Geyrhalter:Look, she's not the only one, so she can feel good about it. I had to extend our pantry too after my wife came home from a Costco run that was very unusual, very unusual Costco run. It's amazing that you actually talk in that detail and that depth with your clients, because that's really what is necessary. So looking back, what was that one big breakthrough moment? I always love to hear that from entrepreneurs, because it's so difficult. It's not easy being an entrepreneur. It's not easy being a founder. It's not easy being a CEO, you're all of that.When was that moment where you felt like, "You know what? We're turning into a brand. This is going to be real and this is going to be big."S McLay:I haven't had the big moment, but I've had a lot of little moments and that all add up to I'd say the breadcrumbs on the trail that keep you going, and that tell you to get sometimes as an entrepreneur, just to stay in yourself it's breadcrumbs. It's a few things. I didn't put the Financial Gym brand concept out there right away when I first left Merrill, because it was just me bootstrapping it. Even though I always knew it's going to be Financial Gym, I called the bootstrap company Next Gym Financial, because in my mind I always thought, "Well, I could go back and work for Merrill." Like this, "See what happens."I had a handful of clients and then when I finally raised my first investor money, I decided to put the Financial Gym concept out there. It's interesting, because you could see the number of clients that I have from 2015, because that's when I put the Financial Gym name out there, grew significantly. I have a handful clients who started in 2013 when I left, but I have a number of clients now this year who I'm five-year reviews, because I just even put the name Financial Gym out there and they got it. That was always surprising to me, or I love that because it was like just the name sold the business without trying.So 2015 was a big ah-hah. Then just a number of little moments like we have our first location in New York, and I was walking up Madison Avenue wearing one of my gym T-shirts, and this woman yelled from across the street, "Financial Gym, I love you guys." I was like, "Oh my God." New York is so huge and I was like, "Oh my God, I love you too." She knows the brand. Or when I see people tag us on social media and see the experience they're having, they're like, "I love the Financial Gym." Or hearing from people who post things on social and their friends are like, "I heard about that place."From across the country, it's just sometimes because the days are long, but you're like, "We did this. That people have heard about it." Your employee, I don't even know how she found out about us. How did she find out about us?F Geyrhalter:I don't know. It's word of mouth, right?S McLay:Right. There she is. [crosstalk 00:38:23]F Geyrhalter:No, exactly. No, absolutely. I think that those are the moments where you just have to sit back and you just have to really let it get you positively, where you actually notice these moments, because everyone's going at a crazy speed, building their companies, but to let that sink in. I had the founder of Farmgirl Flowers on and she said it was so cute. She said it was the same moment. She was walking on the street, and she was delivering flowers, and then someone was shouting from across the street, same story of like, "Oh my God, Farmgirl Flowers. I love the flowers. It is so great."She just had to pretend. She would have loved to say, "Yes, it's my company. I'm the CEO," but she was just like delivering flowers, so she was all ashamed just like, "Yeah, I love working for them. It's great," and she just kept walking. It's a big moment. As a brand strategist, to me, the most exciting part is once I work with my clients and I do it usually in one day, and at the end of the day, I really want to take the entire brand and describe it in either a two word phrase or just one word of like, if we could actually take a funnel and put all of your brand thinking, the entire Financial Gym with all of its trainers and BFFs and we put them in, what would one word be that could describe the brand?S McLay:Empowerment.F Geyrhalter:Great. Yeah.S McLay:Money is power. There's something so phenomenally, life-changing about getting to watch somebody go from a point of fear and shame around their finances, which is the two words we hear all the time at the gym to truly feeling empowered by their financial situation. It's why I do this every day. It's like a drug.F Geyrhalter:Yeah, it's empowering to you too, right, to get up in the morning and do this, and to everyone of the trainers. Now that we slowly come in to an end, do you have any brand advice for founders as a takeaway? After listening to your journey, I think it's super interesting the way that you did things, and out of your gut instinct, a lot of right decisions were made. Any thoughts for a founder who listens to this and finds your thoughts aspirational?S McLay:Yeah. Just like you were saying, "Trust your gut," because especially if you're the founder of the brand, there's a reason why you founded a brand, right? There's a reason why you had an idea for this company, this product, this solution. So trust that, because like I was saying there were so many times in the branding process, or I have investors and you have employees, you have clients, you have a lot of people who have a lot of opinions about your business. At the end of the day, you really should trust your gut, because it led you there.So yeah, what you said looking back in hindsight we make our decisions, but they all just came from the gut of like, "No, this feels right." Don't let other people try to tell you what's right at the end of the day. It's your business.F Geyrhalter:Determination, right? Yeah.S McLay:Mm-hmm (affirmative).F Geyrhalter:Absolutely. So listeners who fell in love with the gym again, where could they start their financial work out?S McLay:Yeah, so financialgym.com, they can find out more about what we do and sign up for free, warm up call, we call it the work out warm up call. The first call is a free call with, it's actually our clients you talk to. They are not incented to sell you anything. They just want to hear about your journey, what your particular financial challenges or things you want to work on just like a regular gym. We've got clients who want to level up and make more money or invest more. We got clients who want to get out of debt. We have clients who want to learn how to budget. There's all different financial challenges that we work with.Then they pair you with the BFF and yeah, and they can find out more about that. Like you said, we have videos of all of our trainers, and lots of content, they can get to know us. It's really important because we know money is so taboo and personal. We really have probably the softest cell possible for a business, because we're like, "You get comfortable with us first. We're ready for you." Like we talked about that first session getting financially naked, because we know that that's an extremely vulnerable time for people. Most people are sharing their financial numbers for the first time ever to another person. So we understand it's vulnerable. So we're like, "Take your time. Get to know us. We're here. We're ready when you are."F Geyrhalter:That's awesome. Perfect. Well, Shannon, it was so nice having you in the show. I so appreciate your time.S McLay:Thank you. Glad to be here.F Geyrhalter:Absolutely.
Learn more about KidfreshSupport the show and even get on monthly mentorship calls with Fabian. Join here.Full Transcript:F Geyrhalter:Welcome to the show, Matt.M Cohen:Thank you. Nice to meet you.F Geyrhalter:Absolutely. So in your bio it states, "As someone who was interested in how brands connect with consumers, Matt was looking to develop a concept that would really connect to people's lives and be meaningful." Now, this statement alone got me so excited to have you on the show. You actually went from being a management consultant at Accenture to a COO at a consulting practice that got sold to Omnicom, which those in the industry know, that's the big one, and now you're hiding veggies in frozen meals for kids with your brand Kidfresh. Tell us a bit how and why you started this brand.M Cohen:Well, I'm still wondering every day. I don't know. I had a career, everything was fine, and then one morning I woke up and I'm like, "What kind of bad food..." excuse my French "... kids are being fed here in the US?" Basically what happened to put it simply is, I became a parent. I became a father. And as such, I started to experience what kids eat in this country, and I was absolutely horrified. So coming from France, I could not understand and even accept that kids were fed with such junk food. That's how it started.F Geyrhalter:And as far as I understand, Kidfresh started as a retail store in New York City, serving freshly prepared wholesome meals for kids, right?M Cohen:That's right. Our initial idea was to create a retail concept, a chain, a little bit like a Starbucks for kids, but with freshly prepared foods and other grocery items for kids, all natural and organic. That was the initial idea, so we created a store in Manhattan on the Upper East Side, initially.F Geyrhalter:And what happened? What happened to the store versus going with frozen food?M Cohen:So what happened basically is that... First of all, the store really established the brand, and it was really great because when I started the business with my partner I was being bombarded by requests for interviews from all over the world because the concept had really resonated everywhere. So, I mean, literally, I was on the phone doing interviews with the Radio Tokyo, and then being interviewed with Canadian newspapers and then Middle Eastern radio, these type of things. I was like, okay, well, maybe that's it. Maybe I made it in America, but more importantly what happened also from a business standpoint is that this attracted a lot of other retailers and other brands that were always coming to the store and exploring what we were doing, right? Essentially the most important one for us initially was Whole Foods.M Cohen:They came to the store, we had a great conversation, they were like, "Okay, hey, why don't we bring your products into our stores?"F Geyrhalter:Interesting.M Cohen:... and, "sure." And so we started doing that in New York City first. First in one store, then in all the stores in New York City, and then we had other states that were interested in carrying our line, and so we quickly realized that the opportunity was actually outside of the store much more than with the store, and that we would have a much greater impact and a much faster impact by going wholesale versus than going retail, one store at a time, brick and mortar and all that, all the capital expenses and resources that it required. Demand came from other retailers and we're like, "Okay, let's flip the switch and go wholesale."F Geyrhalter:And did Kidfresh... was that the brand name for the store that transitioned over to frozen?M Cohen:Yes, absolutely.F Geyrhalter:That's amazing.M Cohen:We kept the same... Yeah. Yeah.F Geyrhalter:And I have the feeling that given your very different background, the management consulting life, it must have shaped your first year running Kidfresh.M Cohen:Oh yeah. I mean, I thought everything happened on PowerPoint and Excel when I came in. [inaudible 00:04:52] consulting and then I realized that real life is somewhat different. So it was a big learning for me, for sure. But what did help me was to at least have some sort of framework of processes and organization and structure that needed to be put in place for any business. Right?F Geyrhalter:Right.M Cohen:... Rules and responsibilities, accountabilities, who reports to whom, systems, structures. So that really gave me a framework that I still carry with me today as I continue to grow the business.F Geyrhalter:And on top of that, it sounds like that your background always flirted with branding, right? I mean, you were always just a degree separated from branding, from marketing, and I'm sure that that influenced you too in finally launching your own brand.M Cohen:Oh, absolutely. I mean, particularly when the company that I worked with before was sold into Omnicom, I was completely immersed with other agencies, and being on the account side, managing accounts, and really looking at it from the branding and communication side of things. So, that brought me even more, a sense of what can make a brand succeed, basically.F Geyrhalter:And coming from that background and working with agencies and being surrounded by agencies, did you invest in branding immediately? When you started the first retail store, did you actually fully invest in, let's get this set up the right way? Or was that something that came a little bit later and you were winging it more in the beginning?M Cohen:It's the former. We really started with branding. We really started with finding the right name, first and foremost, and we did some surveys and we did some analysis and so on and so forth to really find a name that we felt resonated. Right? When you think about Kidfresh, it seems obvious, but it didn't exist. And so we explored lots of different names, and then we hired a branding agency from the get-go to really develop our brand positioning, our identity, and all our entire brand book from logo to colors to fonts and all the other attributes that make a brand as such.F Geyrhalter:That's music to my ears. How do you think that impacted you? How do you think it helped you versus taking it slow and bootstrapping the branding aspect?M Cohen:I think it really helped us get immediate credibility. We looked bigger than we were, and as such we conveyed more credibility and also more trust because it's a business where you provide foods to children, and it was important that we established trust with parents from day one. And so we went very much into branding with a sense of, this is a way for us to get our name and our idea out there in a way that will engage the consumers in a favorable way.F Geyrhalter:Absolutely. Absolutely. What does branding mean to you now that you've been with Kidfresh for a while and given your background, what does that term branding mean to you? Because it's such a misunderstood term. People just think it's a logo, but it's so much more, what does it mean to you?M Cohen:It is several things. It is first of all, an identity, and it's as much an identity for the consumers than it is also for yourself, your employees, your teams, your third party partners, right? You have a name, you have a look and feel, you stand for something. Right? So, that's very important. And then secondly, I think it's also an emotional connection with our consumers, right? We mean something, our name means something. When you buy a product Kidfresh, you know that's not going to be junk food, that it sounds and feels good for you. And that's what we stand for. Right? So it's not a lie. It's actually to the contrary, it's very much all promise. So, an identity and an emotional connection with a promise behind it. That's what branding stands for.F Geyrhalter:Very well put. One comes to think about like, when you started this brand of creating food, in the beginning, regular food and then frozen food once you went past retail into the actual retail stores, not your own store, how do you create food? Someone who doesn't have that background, did you have a co-founder that came from the food background?M Cohen:Yes.F Geyrhalter:Okay. Okay.M Cohen:Yeah. My co-founder had experience at Dannon for many years...F Geyrhalter:Perfect.M Cohen:... [inaudible 00:10:22] surrounded ourselves with experts. We started with a pediatric nutritionist from NYU. We visited childhood obesity pediatric units in hospitals in the Tri-state area in New York just to understand what was going on. We had retail experts. So I think building a team of experts that fill the gaps is also critical. Going back, maybe to your point about management consulting, is really creating an advisory board, helped us a lot initially.F Geyrhalter:That is really, really good to hear, and that's not always the case with today's startups. I absolutely, hundred percent agree with that. I surround myself with experts all the time, because that's why they're experts. And just a couple of minutes with an expert can save us hours and weeks of time, sometimes. So very much [crosstalk 00:11:17]. You're also very data driven. It sounds like you get a lot of input, you do a lot of questionnaires, you get a lot of answers. Was there ever a moment where you got a lot of ideas back and you get a lot of customer data and you felt like, "You know what, thank you for that, but I'm actually going to go a totally different way with this." May it be a certain product launch. Even at the beginning of Kidfresh, was there ever a time where you did a crazy brand move just based on your gut instinct, where you felt, "You know what, this is my brand, this is my baby. I want to go that route even though everyone says go to the other direction."M Cohen:So, it's very interesting because we've been bombarded with ideas and opportunities to go in so many different directions, which in a sense is a good thing because it shows the brand resonates and has legs beyond what we're doing. But one key area where we were really solicited very much by consumers and also retailers to go into snacks, dry snacks, right? So that we had more portability and the Kidfresh brand name could extend in portable, nutritious snacks for kids. And we started to play with it quite frankly, but then we realized that it would be so big and distract us so much from our core, right? Our core being food like meals, cooked meals, that even though there was a legitimate demand and certainly a potential in the business, if we were to go that route, it would be too risky for the overall company as a whole. And so [inaudible 00:13:09] said, "No, not for now, but it's certainly in the back of our mind, but not for now."F Geyrhalter:And I think it all comes back to your positioning and to your purpose, right? Because you can always point back to that and say, well, our purpose is not to have snacks, but our purpose is actually to have real meals that have the hidden veggies [crosstalk 00:13:28] Right. Exactly. So, that's one of those big advantages to have that purpose nailed down early on, and it's kind of like your guiding light that you can always use for a brand and you don't get sidetracked to saying yes to all these amazing opportunities, which they are all amazing opportunities. Right? So on the flip side, was there ever anything that you did with your brand, may it have been a campaign or may it have been a new launch or a change of colors or logos or anything where you felt like, "Oh, that totally went off the rails."M Cohen:I would say... You know what, going back to snacks and handheld products, when we were exploring the snack idea we were like, well, maybe there are some snacks that you can do in frozen. Right? And we tried that, we did some frozen burritos and things like that, but realized that this was too much of a departure for the consumers in terms of their habits and what they knew, and it didn't work out as we had planned. Yeah. That's a line of products that we felt, "Hey, let's try to do some frozen snacks." but were not... It's not what we expected.F Geyrhalter:And it's just a couple of degrees away from what you usually do and it already didn't resonate. Right? It's so interesting how consumers are so... Your brand means something so specific to them, and even if you just go a little bit the other way, it's already too much for them. To me, that's fascinating.M Cohen:It is. But it speaks also to the relationship and the connection we have with the consumers, and that's a great asset for us really. It's a unique element of our business, and we have the highest loyalty in the category. So, our consumers want us and want us to stay who we are.F Geyrhalter:Besides obvious sales, but how do you feel that loyalty? Do you feel it on social media or do people write to you? What are some of those messages you get as a brand that makes you feel like, "You know what, people really have our back. They absolutely love us."M Cohen:Well, we have actual data. We have access to data that shows that a consumer that did not buy Kidfresh before, and that tries it once, will repurchase it over, and over, and over again. We have the data, it's very clear. We have the highest loyalty rate in the industry, over 60%. And then that translates also into messages and things that are more sort of content, if you will. People share stories or they talk to their friends or they refer the brand, but the data is the data.F Geyrhalter:Oh, absolutely. Yeah.M Cohen:It's very clear.F Geyrhalter:Absolutely. So you started your retail store, you got all of this amazing press and suddenly Whole Foods came knocking. Was that the moment where you felt like, "You know what, we have something here." Or was there another big breakthrough moment for the brand where you were in a certain amount of stores, or did something happen where you felt like there was one day where Matt sat back with his glass of Bordeaux and said, "You know what, this is it. We have a brand." ?M Cohen:Well, I mean, certainly the initial conversation with Whole Foods, for sure. But then we started to branch out of the store in different ways. For instance, we had a little refrigerated kiosks to JFK airport at the JetBlue and American Airline terminal [crosstalk 00:17:25] where we were [inaudible 00:17:26] travel lunchboxes for kids. And that was sort of branching out of the store in the first way. Then we had the Whole Foods [inaudible 00:17:40], that was the second thing. And then we were also doing a lot of catering, but branded catering for the FAO Schwarz store in New York [crosstalk 00:17:49], Build-A-Bear store in New York. We were their catering operation.M Cohen:So, at the end of the day, there's a point where you do so much more business outside of the store than in the store that really you understand that that's where you need to go, right?F Geyrhalter:Yeah. Yeah.M Cohen:The store being such an operational sort of weight, if you will, to carry every day, at some point you cannot do both. You'll have to make a decision. Am I a wholesale operation or am I a retail business? Right? And I clearly remember that day. It was like one of these days that is like a total nightmare, you cannot even see the light, and you're like, "Okay, we just cannot do this anymore. We have to pick and decide who we are."F Geyrhalter:Yeah. So instead of this being a celebratory moment, it was actually a moment of anxiety because you had too much going on and too many opportunities, and you just had to create some clarity?M Cohen:In a way. In a way. But after that anxiety came also a relief.F Geyrhalter:Right. Right. Right. Right. Right. Absolutely. If you would look at the Kidfresh brand today, and if you would look at the positioning of the brand, of the values of the brand, of what you really stand for as a brand, you would put this down into one word, I call it your brand DNA. If you would be able to describe Kidfresh in one or two words, what would it be?M Cohen:Two words. You want two words, I'll give you two words. Kid and fresh.F Geyrhalter:That took some pondering.M Cohen:No, but really, I mean, it's really about kids' food. So it's really about children and making sure that they have foods that they like, but they also bring nutrition and taste and value. Right? And then fresh is really the freshness of our product, our ingredients. It's real chicken, it's real tomatoes. Everything is real and fresh. So yeah, kid and fresh.F Geyrhalter:Which I think is amazing after all those years, right? That it goes back right to that name, and that's why it's so crucial to get the name right in the beginning. Right? I mean, that is just so important.M Cohen:So crucial. Absolutely.F Geyrhalter:And something that was in the back of my mind entire time we were talking, and I think now is a good time to ask, obviously, what is so great about Kidfresh is that you're basically tricking these kids of eating mozzarella sticks with a dipping sauce but in reality, there's actually cauliflower in them as well. Right? You hide these vegetables in a smart way, so that kids actually eat healthy, but they feel like it's still fun, and it's still their kind of food. What happens at the time when the kids turn... I don't know, what age do they turn when they suddenly start realizing that they've been fooled all along?F Geyrhalter:And what happens? Is it a revolution?M Cohen:No, but we actually do not recommend to fool the kids. Right? We're sneaking vegetables, yes, but we want vegetables to be part of the conversation as opposed to not. So just to be able to say, "Hey, you like this chicken nugget? Well, hey, there's a little cauliflower that's mixed in. Let's have another one."F Geyrhalter:Yeah, yeah.M Cohen:We want to be honest and transparent. So, my hope is that when kids find out and realize that there's cauliflower or chickpea or butternut squash blended in the product, that they don't see it as a betrayal, but like as a [inaudible 00:22:05] why not actually, as an enhancement.F Geyrhalter:Right, right. And I mean, at that point, you already got them so hooked that they're fine with it anyways.M Cohen:Yeah, it's already too late. It's already too late.F Geyrhalter:It's too late. It's too late.M Cohen:They're going to try another chicken nugget and then they're going to come back to ours. F Geyrhalter:That's right. That's right. That's hilarious. Obviously you've made it as a founder of a very successful startup that's very purposeful. A lot of young founders are looking up to people like you who have achieved what you have achieved. Is there any brand advice that you want to give to kind of finish off our interview, just something that you've learned over the years where you would advise other founders as it relates to your brand, or even just regular entrepreneurial business advice where you say, "Look, here's something that I learned that I think I want to share with other entrepreneurs."?M Cohen:I would say, be patient and determined. It's a lot about being tenacious, fighting every day and believing into your product, into your brand, into your team and resources, being really steadfast into what you're doing. That would be my advice. Sometimes, slow and steady wins the race. We all want to go fast and be the next big thing overnight, well, in most cases it takes time, and that's okay.F Geyrhalter:I like that. I like that. Yeah, absolutely. So listeners who want to turn their kids into Kidfresh fanatics, where can they go? Where can they find your frozen treats?M Cohen:In most grocery stores throughout the nation from Vons in Southern California where you are to Walmart, Target, all the Kroger banners, Publix, Whole Foods, most retailers for the nation.F Geyrhalter:Can they order online too? Or are you in all retailers [crosstalk 00:24:25].M Cohen:Yes.F Geyrhalter:Okay. Okay.M Cohen:No, they can make an order at kidfresh.com or go to Amazon as well.F Geyrhalter:Perfect Matt. Well, listen, thank you for your time. I really appreciate it. This was really educational and appreciate all your insights.M Cohen:Thank you Fabian and take care.F Geyrhalter:Absolutely, you too.
Learn more about Nekter Juice BarSupport the show and even get on monthly mentorship calls with Fabian. Join here.Full Transcript:F Geyrhalter:Welcome to the show, Steve.S Schulze:Well, I appreciate it. Thanks for inviting me, and I'm happy to be here.F Geyrhalter:Oh, absolutely. Well, first things first, how has Nekter kept up during these unprecedented times?S Schulze:I think a lot of restaurant brands, everybody's had to pivot and everybody has had to adapt accordingly. I think that Nekter being in somewhat of a unique space, meaning the health, wellness, we're not fine dining, we're not sit down, but we've been able to adjust and modify accordingly. When the pandemic first hit, sales were off 75-80% for about the first 30 days. Since then, we've seen about double digit increases and today we're frankly comping even or positive, from a year ago. So, I think it's been interesting, obviously, I think it's been very difficult for a lot of people. It's been tough on the staff, but I think that we've been able to navigate through it and it's been important.F Geyrhalter:That's amazing. And we talked a little bit offline prior, you even had some franchises opened. Some people actually approached you and said, "Hey, we want to open our own spot now."S Schulze:Yeah. During this time, franchise interest has remained high. We've had discovery days, and most surprising to me is, starting in early May, we had locations starting to open about one a week. I think we've opened about three or four over the last month. And frankly, I didn't think it was the greatest idea in the world, but all four actually opened very strong. And I think health, wellness and things of that are top of mind. So I think that for Nekter, I think that provided some solace throughout this whole crisis that we've been through. And I think that people take comfort in going to someplace that they know they can get something fresh and healthy and that can sustain them now and going forward.F Geyrhalter:And it speaks volumes about the strength of your brands, that that can happen during doing this pandemic and the recession and all of that stuff. It's pretty amazing. And you're only 10 years old as a brand. I think your first store was down the street from us here in Long Beach, down in Costa Mesa, right?S Schulze:Yeah. It's was on Costa Mesa in October of 2010. So yeah, we'll be coming up on our 10 year anniversary here and just a... I was in the office, we had a meeting last week, basically surrounding what we're going to do during the anniversary month and signing off on our fall menu items. And it was good to have everybody all excited and engaged and looking at some terrific offerings and what we're going to do for the 10th anniversary. So it's an exciting time for us, really.F Geyrhalter:Oh, that's really good to hear. And 10 years ago, back in the day, so to speak, there was already a lot of competition in the fresh juice retail and franchise space in Southern California. All I remember was Jamba Juice and Juice It Up! and Robeks. But you came in and, in a way, you showed them the way. You created stylish shops with attention to design and music and a limited menu. It was very much a farm-to-table type of field, that today, obviously we're all very accustomed to, but how did it all start? How did you decide there is space for someone to come in?S Schulze:Well, I think like a lot of things, I think that what you do is, you look at not what's wrong in the space, but how it could be better. And I think that in society in general, starting in that time, you saw a seismic shift beginning, in the sense of, you saw the proliferation of Whole Foods and Trader Joe's and Mother's Market and [Fresh Fare 00:00:03:53] and things of that nature. And I think that the consumer is demanding more transparency, more freshness, more authenticity.And at the time, actually I was working out some and going to Jamba Juice afterwards, and one day it took a little bit longer than usual to get my drink and I happened to look at the nutritionals, and sure enough, I think 93 grams of sugar or something were in the smoothie that I had. In comparison, to a certain degree, after doing some due diligence, as it turned out, legacy brands, if you will, were at that particular time, to a great degree, a glorified version of a Dairy Queen type product.And I thought there was room for people to come in with fresh, authentic, natural ingredients. And we developed juices that were very simple, parsley, kale, spinach, apple, things of that nature. Smoothies that the only filler would be coconut water and a house made nut milk. And then we have acai bowls that were organic acai. And I think that that was a critical decision for us, is to make it very simple, make it not overwhelming, make it approachable, make it accessible and introduce it to the market in that particular fashion.F Geyrhalter:Well, and make it clean. And I think this is really important, because the way that I know the Nekter brand, it always feels clean. There's a lot of white, there's a lot of room and space around everything. And when you compare that just visually even, to a Jamba Juice or Robeks, there's a lot of color splashes and it does feel sugary. It does feel overly joyous rather than, no, this comes from earth and this is the minimal amount of ingredients that you need, in order to feel great and to put good stuff into your body. So it's interesting to actually see the official language.S Schulze:Yeah, it is. And you've talked about that a lot with branding and such. And I think that, at that time, when you walk into the stores, you see a very whimsical store, orange and pinks and all these frilly type colors, and ours was to bring it down to more of that modern, country farmhouse. Bring the authenticity to it and to a great degree, follow a Starbucks model in an attempt to become the Starbucks of juice.So rather than meeting for a coffee and sitting in a Starbucks, why wouldn't somebody want to sit in a Nekter and have a nice experience and enjoy the day, and be able to sit down in comfortable seats and nice lighting and nice environment. And so those were some of the principles from the branding perspective, when we set out with a design.F Geyrhalter:Now that you brought up Starbucks, I think four years ago, you guys launched an ordering and loyalty app. Which for me, is a key reason why I'm so loyal to Starbucks, besides liking a lot of local roasters coffee's much, much better, much better quality, I like the taste more. But you simply cannot beat that convenience with the app. And now you have, I heard, well over half a million people on your app. How important is that app to your brand now, looking back? How has it changed your brand?S Schulze:No, I think the app has been critical. And I think obviously during the last couple of months, it's been very, very important. We've got just about 700,000 people on the app. You've talked about convenience is important. We started out, obviously, with zero back in 2016, as far as the order ahead and the loyalty. And pre-pandemic, we were about 32% order in advance and app, and now we're at about 51 and a half percent.So it's a critical component, not only from an ordering and convenience standpoint, but also from a messaging standpoint. In the sense of, you can basically instantaneously push out your messages, depending on what it may be. Whether somebody's open or closed, or a sale, or items are running out, or there's something in the neighborhood. So from a communication standpoint, or if there's health information that we want to get to people, it makes it very accessible for us to touch our guests one-on-one and also get their feedback as well.F Geyrhalter:Right, right. Exactly. I was just about to say on the flip side, you have access to a huge amount of data that people willingly give you because they actually want to be catered to in a better way. So it's a win-win for sure.S Schulze:Oh yeah, no, it is. Yeah, exactly.F Geyrhalter:You also have a store inside a store concept with Whole Foods, which is absolutely amazing. And I'm actually lucky, because my local Whole Foods down here in Long Beach has you as part of it. How did you get into Whole Foods? What was that story like? I'm sure you're not the first one to knock on those doors.S Schulze:It's funny you say that because, and this is somewhat ironic in a sense of, it was an instance in which they knocked on our doors and we didn't really knock on theirs. I got a call frankly, about a year and a half ago, somewhat out of the blue and said, "We've been researching brands in Southern California, and we're looking to convert some of our Whole Food juice and coffee bars, from Whole Foods to a brand that represents what we represent. And in our due diligence, your name was brought to our attention a number of times. And as we look at these other brands, we want to see if you'd want to be considered to be one of the brands we look at." And obviously we said, "Sure." And one thing led to another.And so they, they chose us as their brand partner for Southern California and the Southwest and whatnot. And so we started a test, in which we began taking over locations, such as Long Beach, that we converted or retrofitted into Nekter locations. With some modifications, in the sense that we've added a coffee line to the product mix, that's almost exclusive for Whole Foods really, just because that they demand and need that coffee element. And we have limited the menu a little bit, but again, it's about a 100 to 200 square foot little kiosk. Our brands align very well together, and it's been a very good relationship for both of us.F Geyrhalter:And fantastic for brand recognition, it's basically a billboard to thousands of shoppers in just one location every day.S Schulze:Yeah. I think it's a billboard, I think there's certain validation in the sense of, we're about a 30% corporate brand, a 70% franchise, just because I believe we probably have 40 locations at least, that are corporate locations. I think that that is a key element in a sense of, we're in the trenches every day, so there's very little that we haven't been through. And I think that's important when you franchise and so I think that with the Whole Foods, I think that a potential franchisee is looking at the brand, to have the validation of Whole Foods to say, "Hey, Whole Foods chose them." I think that's a nice compliment.F Geyrhalter:Absolutely. And let's talk about branding a little bit more and consistency, because the two go hand in hand. And consistency is the most important ingredient of a franchise, I would say, especially a retail franchise. How did you go about that in the early days? You had to create a brand aura, so to speak, that felt so right to you, that it would easily and fruitfully, forgive the pun, scale into hundreds of locations. I noted you took your time and you mentioned just before, that you opened 40 or so corporate owned franchise locations before even opening it up to others. Was that a big way of just testing one at a time? But how did you know that what you felt for the brand was right? Did you do a lot of focus groups? How did that start?S Schulze:Now, we did not do focus groups, and to this day we still have not done focus groups. I think that in a general conversation, if you're talking about personal relationships, or you're talking about business, I think the key components that people have always said, and that becomes cliche after a while, is trying to listen. And I think that for us, I think the important part was listening to the guests, because I think oftentimes people misconstrue what a brand really is. And I think that if you, or I, or if anybody could just go ahead and start a brand and start Nike and whatever, that'd be one thing.But it's not myself, it's not my team that makes the brand, we have the concept, we'd have the idea. We then see how it resonates with the guest and then basically, as far as I'm concerned, we're stewards of the brand and we're listening to the guests. And that then shapes the perception and that shapes the brand, and then that eventually becomes the brand. So it's our responsibility really, to listen and to execute from that standpoint. Like I said, I think oftentimes people believe they can... If everybody could go out and do a swish and be a Nike, or do Lululemon, or be whomever-F Geyrhalter:Be a Nekter.S Schulze:It would be a different world we live in. Yeah, be a Nekter, whatever it is. So, I just don't think they understand branding the way that you do, or many others do. They've read too many books and listened to too many things that just don't make sense.F Geyrhalter:And I love the idea that you are totally adverse to the idea of having focus groups, because that's what customers are for. They come in every day, you just have to listen. Let's go really granular here for a second. Let's talk about the logo of Nekter, because it is very different. So the meaning behind the name makes a whole lot of sense, but you placed an accent on the first E, then you flipped the second E on its head. It seems to me that that's a lot to grasp and a lot to recall. It's super bold coming in. How did you come up with this? What was the story behind it? It definitely feels very different and bespoke, which is, I guess, one of the reasons.S Schulze:I would love to have a very elaborate and intricate and well thought out story behind it. But, obviously we know about the meaning of nectar and I think it's very appropriate for what it is. As far as the spelling was concerned, when I typed it in, ironically, I just went to Google typed in nectar and sure enough, that popped in the phonetic spelling of it. That's [crosstalk 00:14:36]. So, it wasn't any more complicated than that.F Geyrhalter:Well, that's pretty great, because most entrepreneurs, so let's say a lot of entrepreneurs that I know, they would most probably have freaked out saying, "Oh my God, we're going to spell it with an accent and then we're going to have an E upside down, how is that even going to work? How can we type that in all the time? And it's going to confuse people." But for you, it's like, "Nope, let's go for it. People should get used to it and see it as a mark rather than a name." Which, I think is really interesting.S Schulze:Yeah, I think that you're absolutely right. I think that the name is our mark, so to speak, we don't really have an icon that goes along with it and such. And I think that the design of it, the font, just resonated with us very well. So obviously I've always enjoyed the name and I think a lot of people have too. They like the way we spell it and stuff like that.F Geyrhalter:Yeah. And it comes back to the cleanliness. Because the name has a lot going on, you don't need much more. It's like black and white and it already tells that story. How do you police your brand, so to speak? With a franchise, it is just so important and it's key to the success, not only of the franchisee, but also the overall brand that you have that consistency. I know there are style guides, but usually style guides are not really looked at, they kind of live there.But for a franchise, you have a whole set of rules in the beginning for any franchisee to start using. Is there a certain trick? Or is there something that you learned, where you felt like that worked really well for people to actually start embodying the brand, visually, but also just the way that they act every day? There's a rule book, so to speak.S Schulze:Yeah, there is a rule book and quite often, in theory, the reason people buy a franchise is because it's a proven system and they resonate with the brand, and they want to go into business on their own, they're going to limit the risk by going with proven concept and such. And then when that happens, invariably, they don't want to paint the wall green, they want to paint the wall blue. They like this kind of floor and that kind of floor, they have different tastes and styles and such. And so, it's a very tricky thing. But I think it starts at the beginning. I think that people have to set up what their expectations are. What's going to be expected out of them, what the foundation is.And I think similar to anything in life, I think that there's structure and people understand the structure, they respect it and they follow it. I think that the few times we've had people go outside the realm, thinking they could out-think the mousetrap, so to speak, usually it has backfired to a certain degree, and we've had to come in and correct. And then on the other hand, quite often we get great feedback from franchisees as far as, cost efficiencies and what they're looking for and such.But, I think that you're right. You do have to get them really to buy into it. Meaning that when the relationship first starts, if they believe in the design, the layout, the concept, what we're doing, how the [LSM 00:18:04] program is going to work. And they're part of the concept, they're part of the idea, they're participating in it, then you have buy in from them. I think if you're just sitting there lecturing, "This is what you're going to do." Like a school teacher, I don't think you do. And I think too often when brands get too big, or they get too systematic, people get a little bit off put, so to speak, if they're treated in that fashion.And so I think there's a mutual respect that goes along the way and I think there's also proven results. We have franchisees that just absolutely crush it. And then every now and then, we have a franchisee that isn't necessarily following the rule book and they're doing so-so, we get them back on track and all sales go up and say, "Oh, I guess I should have listened to you at the beginning." And we're like, "Yeah, maybe you should have, but that's all right."F Geyrhalter:And it's a different type of entrepreneur. Because I think that a lot of franchisee owners, well owners, I guess that's not the right word, but people who buy into one of your franchises, they feel like they're entrepreneurial, because in a way they're starting up their own shop, even though it's part of a franchise. Yet, they know that they maybe can't do it by themselves, or they don't have the energy to do a new brand by themselves. So, I think that they actually like to be led, to a certain extent, to their success, that's why they even join.S Schulze:Yeah, you're right. This is a little of an aside, so to speak, but you see, whether it be Instagram, or all these other social platforms, you see a lot of these motivational sites of, get up and do this, and XYZ, and look in the mirror, and affirmations and such. But a lot of people don't have that impetus to take that first step. There's a hesitation and a concern, a worry, and whatever stops them from doing it.And so, I think that going into a franchise system, I think assists them to go through it, in the sense of, "Wait a minute, I'm not just starting my own business blind, not knowing anything." So I think what they're doing is, they're able to be entrepreneurs without taking the entire risk of starting a concept just blindly, and just saying, "Okay, I'm going to try it and see what happens." And I think too often, some of these motivation guys get people all excited, but they don't follow the execution aspect of it. And the practical aspect of it, which then, I think, doesn't help very much.F Geyrhalter:Yeah. They can walk the entrepreneurship plank with a huge safety net underneath them, which makes it a little bit easier.S Schulze:Exactly right, yeah. They go to Tony Robbins, be all excited Saturday, Sunday, "I'm going to do this." And then by Tuesday or Wednesday, they're back at the desk.F Geyrhalter:Right, totally. Well, I interviewed, besides yourself, quite a few amazing franchise leaders for this show. Like Brian Scudamore, of 1-800-GOT-JUNK?, I had Jeff Platt of Sky Zone on it, Shelly Sun of BrightStar Care. And there's always one question that I really, really like to ask; did branding effect your company culture at all? Because culture is such a tough thing to get right. And with a franchise, it is not only harder, but one might argue, as we were just talking about, it's even more important. And setting some very strong, foundational brand pillars in place early on, like, "This is what we stand for." Even emotionally, what is the soul of the company? I feel like it can either make or break a culture.S Schulze:And it can. And you can tell the soul of the culture and soul of the company very early on, who they are. I think that you're absolutely right. When the company was founded, it was viewed as us against the world, so to speak. In the sense of, we've got the big legacy brands, or the Jamba Juices and this, and here we are a mom and pop and husband and wife, trying to change the way people eat and be authentic and the look and the design.And our goal really was to offer authentic offerings, that are healthy and good for you and affordable and accessible, and not be an elitist about it and not serve these fancy $10 or $20 smoothies you might see in LA. And we wanted to make it affordable from the guy that drives a Range Rover, to the person that drives a Hyundai, to the person that works at Staples, the person that works at Microsoft. And I think that mentality of both the design, the elements, what we are trying to achieve in changing things, the kids bought into it, my wife at the time bought into it. And I think that set the tone for all steps moving forward.F Geyrhalter:What does branding mean to you, now that you went through those 10 years? What does the word mean to you? Because it gets misconstrued so often, and it has a bad rep, it needs a rebranding in my eyes. But what does branding mean to you?S Schulze:It's interesting you say that, often I get questions that are along these lines, but not as direct. And I think that you're on point with branding, because misinterpretation, as I sort of touched upon earlier. I think that what happens is, I think that you have your founding principles and idea that is deeper than the look and the feel of who you are.And then I think that you have a general concept of what you visualize that brand to be. Meaning, we visualize on our storyboard, so to speak, of health and wellness, and what we wanted to achieve, and what we wanted to offer, and putting the guests first, which again, sounds like a cliche, but it is true.What branding really means, if I were to put it as succinctly as I can, I think that branding really is listening to the guests and being a steward of your brand, and the guests will then shape the brand for you and will determine what the brand is, and it's your responsibility to follow that guide post. Oftentimes, I think people try and do it the other way around and shift the guest's mind to, "This is how our brand is, not this." And I think that's an incorrect position to take.F Geyrhalter:Really, really well said. It comes back to this overly used word of empathy, of a brand needs to be empathetic, but most are forcing it and I think you said it really, really well. Looking back, what was that one big breakthrough moment where you felt like, "You know what, we are moving from a one shop, a two shop place into an actual potential franchise. Or into an actual brand."? And this may or may not be directly linked to sales figures at all, but when did you feel like you actually cracked the code with Nekter?S Schulze:This is a very interesting question. If you look at us today, 10 years later, we've got a little over 170 locations open, about 150 or so in the pipeline under construction or development [inaudible 00:25:41] capacity. But if you rewind back to around 2012-2013, somewhere in there, I think we had about 20 locations open, and this is going back to your question specifically.And so we thought at that time, "Hey, we're getting to be kind of big boys, and if we really want to make this brand significant, we've got to bring in people who knows what's going on." Instead of sticking with that culture and the brand that I've talked about throughout, we said, "We're going to bring in people that have experience at Starbucks and these bigger brands that have been there 10-15 years, that really know how to do it."And so, sure enough, over a period of months, the executive staff, the district managers and such, all were now coming in from these big, large legacy brands. And what we found is that they were basically, sort of placeholders, they didn't have the passion, they didn't get the hands dirty. They were following protocol and "Okay. Hey, where are the books? And I just want to follow, check this, this, this." And there just wasn't the passion, they just looked at people as a more as a number.And so it was a critical mistake that we made, and took us about a year to recover, in the sense of, we really found that we're going to take people that, yes, they have a fundamental skillset, but overall they've got to be passionate. They've got to be curious. They've got to be willing to get their hands dirty. They've got to be willing to help others. And a lot of times, I think that when we brought in some of these folks from the legacy brands, it looked as though they wanted the job, and they wanted the 401(k) and this and this and this. They wanted job security, but it was just more of a job to them, not a mission and a passion.And so, we had to go back to the people that have a mission, a passion, and here we are 10 years later and, we've gone through COVID. We had to go through quite a few layoffs, as a lot of people did, but my team has just been more passionate than ever. They've stepped up like I've never seen them. They're working seven days a week, they don't complain. They want to work harder. They feel as though they're fighting through the pandemic and feel as though they're part of the brand, that they all have a voice. And so, I think that's very, very important, and that was critical that we made that shift back to that, as opposed to trying, okay well, we're going to be professionals now, if you will.F Geyrhalter:Yeah, yeah, yeah, And sometimes that's what it takes. You bring in the pros to learn how much you actually knew all along.S Schulze:Exactly.F Geyrhalter:And you know it in a more authentic manner. And I think that's what's important, because that authenticity, once that has been killed, it's really, really difficult for any company to keep going.S Schulze:Well, it's funny the way you said that was, that's the ideal. Our Director of Finance kept hiring these high priced consultants to do reviews and consulting and all this stuff, and we pay all this money and she said, "So what we're doing is, we're paying all these people to tell us what we already know and we're already doing, but we're doing better." So, we just paid them $50,000, to tell us... So, it is quite a bit when you do that.F Geyrhalter:Well, it's interesting because in my field, in branding, that's what happens a whole lot. You pay an agency and they work for six months to tell you what your brand needs to be, and that is the same kind of process that, I think it doesn't feel authentic. And what I do instead is, I just go in and I spend one day with the founders, really redefining and figuring things out. And then, I basically let them go, because I know that they're the best ones do actually implement it.S Schulze:With that said, I think that's where people such as yourself and others come in, because as the founder, one of the things to recognize though, is [inaudible 00:29:45] get your face too close to it and you can't see it. And that's when you and I would talk to bring in, because all of a sudden, one little thing switches to another little... An example, we shifted the color and one thing led to another, and now the stores were very gray walls, and it was still very pretty, but it was a gray and then a dark floor. And it got to be very industrial, got to be cold, it kind of [inaudible 00:30:12] away from who we initially were.But, it was that slippery slope, where one thing led to another, one thing led to another, led to another. And so, you need somebody every now and then with those outside eyes to look at it from a global perspective, and look at what the foundation of the brand really was, and also what you need to shift. Because a brand is always evolving, it's always changing. And sometimes the people that are closest to it, are the most blinded by it.And so I think that you've got to be willing and open, which we are, to bring people in and re-look at things. I think you also have to update the brand to make it engaging and interesting. You have to reshape your collateral. How are people going to look at it? How are you people going to listen? Is it through traditional collateral? Whether in store, is it more digital? Where's it going to live? And so there's a lot of elements where I think that branding and branding firms are absolutely critical in having that.So, while I talk about the guests shaping the brand, I do believe you need experts to execute on that mission of, okay, this is what they're saying, but how are we going to get that messaging out and be consistent, as we grow in a multi-platform business? We're in 17 states right now, so what people listen to in Dallas, as opposed to Los Angeles, as opposed to, Cleveland, are different. And so, while we have to be the same, we also have to look at those various idiosyncrasies and blend them together. And sometimes, and quite often, it takes an expert in that trade to help us integrate that.F Geyrhalter:Absolutely. And thank you for making my sales pitch much better than I could have ever done it. Absolutely, it's so true. As we're slowly coming to an end here, I do want to ask you if you would be able to, well, this could be a pun, but if you would put Nekter into a funnel, you would choose Nekter as a brand, and there would only be one or two words that describe the entire brand, what you stand for, why you exist. Coca-Cola always used to say "Coke is happiness", that was their whole thing. And Everlane, for instance, coming in now, is about radical transparency. Zappos is about customer service, et cetera, et cetera. What is a word, and this is a difficult one, what is a word that could describe Nekter in its essence?S Schulze:That is a very difficult one. What would be the word? [crosstalk 00:32:50]F Geyrhalter:I have to tell you, usually when I've worked with clients, I worked towards this words for hours and hours. So this is very much on the spot, but just the essence of the brand, if you will. What does it feel to you? Is it health? Is it nutrition? Is it something bigger?S Schulze:Let me give you a very, very quick story on this. So, over the first nine years, our tagline has been, "Live the Nekter life." And while it was a decent tagline, to me, it didn't quite resonate, it didn't really tell the story in my mind, in the simplest fashion. So during this time, obviously people are working from home, people are telecommuting, and people can really identify... We have people really focused on the marketing aspect, the operations, the day to day, things of that nature. During that time, it got us and got me just thinking of who we really are and what we want to be in essence. And so therefore what we've done is, we've shifted, which will be released in a relatively short order, an updated tagline, if you will. Like I said, it's an updated tagline, which we've deemed, "Live life to the freshest."And so the goal really is, if we can encourage people to eat one fresh thing a day, whether it be through Nekter or somebody else, then I think that's what our goal is. I think that you eat one fresh thing, you might eat another fresh thing and slowly live a cleaner, healthier life. I think that, kind of like going to the gym, the key is getting to the gym that first time, and then all of a sudden you realize how good you feel and you go a second and third.And I think for us, the goal for Nekter when we first started was, if we could have someone just have green juice once and that motivated them to maybe walk the dog that night, or maybe eat a little bit healthier, have a chicken or a fish that night, instead of a burger or something of that nature. And so I think we wanted to simplify things and the mantra for us is, let's just start small and if it's an apple when you wake up in the morning, terrific, let's just start there. So that's really the essence of what we are and who we are and what we're trying to do.F Geyrhalter:Well, it's a nice blend, again no pun, between your product, which is the freshest and living life to the fullest. Which is more of the emotional aspect of-S Schulze:Well, and it's not even live life to the fullest. I probably mumbled when I said it, but it's "Live life to the freshest."F Geyrhalter:Right, exactly. That's exactly what it means. So fresh is the part that is your brand. And then if you think about live life to the fullest, that's what comes to mind when you see the sentence, and that's really the overarching brand of live life and be healthy.S Schulze:See, and that's where the brand experts come in, because you have "Live life to the freshest" which resonates to the fullest, which resonates to the best potential, to living your best self. And so, I think that's what it's really all about, I think. So, if we can provide that, and I think that's one thing that makes Nekter attractive, in the sense of, for me, we're doing something that is healthy, that people enjoy, that people feel better about.As opposed to, nothing against selling office furniture, but if I came home each day and said, "Hey, honey, I sold 10 chairs today." What power does that have, or what sense of purpose does that give me? Maybe some people it does, but maybe for me, not as much. But if I know that we're making communities healthier, and more engaged and more conscientious of what they're putting in their bodies. Then, that makes me feel better as a person in what we're doing. And I think a lot of people, both our team members and franchisees likely feel the same way.F Geyrhalter:Absolutely. I'm going to end it right there. So let's talk about where listeners can find Nekter juice. Obviously your US only right now, but which states are you in?S Schulze:Yes only in the US. We're in 17 states. People always go to the website to figure out which states, but our largest presences are in California, Arizona, Texas, and now we're expanding to the Carolinas and to Tennessee, Florida. We'll be opening in the Midwest and Indiana and Illinois, not too distant future. So, we're starting to expand the brand beyond the footprint of a traditional juice bar space, in the sense of, in cold climates, we've been able to buck the trends and actually do very well in cold weather climates and we penetrated quite a bit of Colorado. We'll continue those fashions.As far as international, we have no real plans on the books right now. I think that with what we've been through, I think the goal is to tighten up who we are and our 10 year anniversary, we thought this would be a time to refresh what we're doing. And so I think we'll spend about the next year doing that and then growing the brand. And we'll always look at various different opportunities, whether it be international or partnerships, like with Whole Foods and such. But the goal is to try and stay focused on what you do and what you do best, and let things come to you that way, in my opinion.F Geyrhalter:That's great. Absolutely great. So for listeners, they can go to nekterjuicebar.com and use the locator to find your stores. Listen Steve, thank you so much for having been on the show. It was a real great pleasure to speak with you and to see your viewpoint, as you built your own brand to the success that it is today.S Schulze:It was an honor to be on your show and I really appreciate being invited and I've really enjoyed it. So, thank you for having me and I wish you all the best, and look forward to seeing you when I get back to California and talk about some more stuff.F Geyrhalter:Absolutely. We have to get juice and not coffee.S Schulze:Exactly right. As I sit here and drink my coffee this morning, while I talk to you.F Geyrhalter:There you go.S Schulze:I'll have a juice in a couple hours.F Geyrhalter:All right. Thank you, Steve.S Schulze:I appreciate it. Thank you very much.
Learn more about mmhmmLearn more about the reasoning behind the name, plus see the platform in actionSupport the show and even get on monthly mentorship calls with Fabian. Join here.Full Transcript:Fabian Geyrhalter:Welcome to the show, Phil,Phil Libin:Thank you. Nice to be here.Fabian Geyrhalter:Based on your new video communication tools, really neat demo in which you are actually the star. We now know that you have 123,195 unread emails back then when you filmed that. I'm thrilled you were able to take the time to be,Phil Libin:It's climbed a little bit since then.Fabian Geyrhalter:I had a feeling. I had a feeling. As a little intro, maybe it's not so little after all, but here's the story, how Fabian met Phil. We really only met twice, but a common acquaintance of ours in the Silicon Valley startup world contacted me to tell me about how the former CEO and confounder of Evernote has created this mind blowing new way of conducting and experiencing online meetings. He then told me that he would like to make an introduction, since he believes that I'm an amazing speaker. Those were his words, not mine. That he would like to have Phil give me VIP access to test drive his presentation tool in private beta. I was flattered obviously. Then he shared his secret agenda with me, which you most probably don't know, Phil. He wanted to make sure I could use my intro call with Phil to persuade him to change his mind on his company's name, because it was a very, very strange and crazy name.I got a slot on Phil's schedule a week from that call, but then on the very next day, I found myself mentoring a group of Founder Institute students. I think it was in Singapore or London, who knows, somewhere and as they introduced the two other mentors of the day to the group, there was Phil on the call, mentoring students on, and now hold your breath, naming, with me! How to create the perfect theme for your startup. Here I am my dreams of convincing a man to change his company name after mentoring a group of founders on naming had been shattered. His naming presentation was marvelous, and even the reasoning behind his new company's name started to make at least a little bit more sense. One sentence stuck with me. Phil, you said creating a great name is the down payment on your reputation. I have since tried out your presentation tool and it truly is game changing. While I have seen your new brand with that very name and all launched very, very successfully. Phil, why don't we start with the name? Mmhmm? Will you tell my audience or shall I reveal the name?Phil Libin:Please go for it.Fabian Geyrhalter:Oh, I think I just did.Phil Libin:MaybeFabian Geyrhalter:This is very confusing. Your platform's name is Mmhmm. M-M-H-M-M, correct? That is hilarious, like many things you say. It was important to have a name that you can see while you're eating. You can do that. I definitely checked off that goal. What are the goals did you have with the name when you said set off to create this name?Phil Libin:There's lots of jokey reasons about why we, when we named it that. In factI just put up a demo of Mmhmm. Users demo and some of our new features, talking about all of it, or at least some of the very jokey reasons for it, but really, I wanted something unique. I wanted an unusual name. In that mentoring session that you and I did at Founders Institute, I didn't talk about the name Mmhmm. It was still secret back then. I don't think I advise people to do anything like this. This is definitely not the conventional way of naming products, but we've been making and naming things for a few decades we wanted to do something different.Fabian Geyrhalter:What I found so intriguing about Mmhmm is that you told me that it might just be crazy enough that, in half a year from now or so, we may see all these legacy companies start struggling to come up with similar names as they will try to compete with Mmhmm. They're going to try to fit in, and they're going to have a really, really hard time fitting in with a name like Mmhmm. Now that your platform has launched it all looks really not crazy, but really ingenious because you created a talking point. Not only is the app, the platform, the experience something totally new, something totally different, but you matched it with a name that is so different that everyone grins. I've seen a couple of interviews or people talking about the platform and everyone who talks about it just has to mention the name and has to talk about it. It's really ingenious talking points, so how could we have ever questioned you, Phil?Phil Libin:I think people make fun of the name a lot, which obviously we knew it would happen and you can't be afraid of being made fun of. That is probably the fear that holds back the most creative people from doing things in life and it's okay. It's okay to have something that's funny. That's going to be the talking point. We were very much not convinced in the beginning, and I'm still not convinced, that Mmhmm isn't a really bad name. It might be. It might be a terrible name, or it might be a great name. Actually quite likely it's both, it's probably really good for some things and really bad for other things, but that's sort of typical.That's typical of things that are sharp. They are both great and terrible. It just comes down to optimizing. You don't net those out, the bad things don't take away from the good things or vice versa. You just have to decide what's more important. I think for most things, many things in life, but not all, but most things creatively, the positive is more important than the negative. You don't pick the name that's the least bad, or that averages out to the best. You pick the name that's the best, even if that name is also the worst, because then at least you're guaranteed not to have a name that's boring. T that's the worst case scenario, is just something that no one remembers.Fabian Geyrhalter:Especially for a brand like yours, where it's anything but boring, you actually want to shatter that idea of boring online meetings. It starts to have personality and you couldn't have a name that is not fun, or doesn't have personality, or it doesn't shake things up.Phil Libin:We could have.Fabian Geyrhalter:You could have, but it's smart that you didn't.Phil Libin:Our actual thinking was that the product that Mmhmm the product, the company, it's really for performing. We think about what is the verb that you do in our product. We decided pretty early on that we aren't trying to be a communication product. We're not trying to be a collaboration product. There's a lot of those, there's a lot of very good ones. We're not trying to replace where your team works together. We're not trying to be the new Slack or Figma. We're not a place to hang out and meet interesting people like Clubhouse. What you do in Mmhmm, the verb, is you perform. Mmhmm is for performing and it's for micro performances. Our theory is that everyone is a performer now. Everyone has multiple times every day where you say, attention on me, I'm going to do a bit. I'm doing something right now.Pay attention to me. You're on. Maybe only for a few seconds, or a few minutes, or maybe for a long time, some of these micro performances are pretty macro, but you're always performing. You're performing for your coworkers, for your kids, for your investors, for your social media followers, whatever. Mmhmm is the thing that elevates that performance, especially over video, since all of us are now living on video, it's more important than ever, because for most people performing over video is just dreary and ineffective. The product is for performing. I really liked the idea that the name Mmhmm is a name that is extremely easy to say accidentally. Everyone says that, just in this conversation. I think.Fabian Geyrhalter:Mm-hmm (affirmative).Phil Libin:We both said it just in agreement. Exactly. You just notice it all the time now. It's trivial. Everyone can say it without thinking about it, but if you want to say it intentionally, if you want to say it on purpose, like say it as the name of the product, even I have to like pause for half a second consider how I'm going to say it. Consider which syllable am I going to inflect? I have to take a half second pause, I have to breathe, and then I have to say it. Every single time you say the name intentionally, it's like a little performance. I thought it was really beautiful that the product that's meant to elevate your performance starts with a little mini performance every time even think or say the name.Fabian Geyrhalter:Performance that is so natural, like riding a bike, but then explaining how to ride a bike. That's the problem. Actually having to say, Mmhmm, it just takes an effort, which-Phil Libin:There's something really interesting about the mindfulness and the intentionality of it. Something very zen. I'd like the idea of know every other thing that I've ever named, every other company or product. In fact, every other product name, I think, that I've ever encountered in my life, you can say it thoughtlessly. You can say it. You just rattle it off, after you learn it after the first couple of times you learn it, you just say it and it doesn't mean anything. You can say it without thinking. I think it's really unique to have a name that you can't say thoughtlessly, at least I haven't been able to get, and I've been saying it for a couple of months now. You can't say thoughtlessly. It mindful. It's almost a zen thing, which I find really beautiful, but also completely realized that people are going to make fun of it and that's totally fine. We decided to lean into their making fun of it. We had all sorts of jokey reasons about.Fabian Geyrhalter:You really bring that home. You're not hiding that, because it's impossible to hide! I think it's also hilarious how even during this conversation Mmhmm keeps coming up and now I'm super self-aware, because now it's actually your brand. You have completely brainstormed us. Every time we say Mmhmm, we're like, oh, that's right. Which is definitely more effective than if you just casually say Zoom.Phil Libin:Yeah and I think Zoom is actually a really good name for that kind of product. It's good. It's great. I think we try to do something both a little bit better and a little bit worse, and we knew that it would be simultaneously better and worse. We were fine with that, because we really care about the better part. We discount the worst part.Fabian Geyrhalter:You leaned into it, celebrated it. On your LinkedIn, you have these hilarious one liners describing your roles. For your time at Evernote, you state, "Assembling a brilliant and hardworking group of people, then making sure you have enough coffee to change the world." and for Carrot Fertility, you write, "Help with strategy and product design, all my name ideas have been rejected." that is the description of you advising Carrot Fertility. Sometimes you're swimming against the stream with your naming ideas and people do question them, so-Phil Libin:Usually.Fabian Geyrhalter:That's hilarious, but back to the whole Mmhmm brand and how it came together. The logo, which by the way is really, really cool. It reminds me a bit of the flexibility of the iconic MTV mark and those of us who, you and I are close in age.We remember that iconic MTV mark. It's a three-dimensional cube made up of really fat letters. That's what yours is like, M-H-M, which lends itself to any color or image effect, hence perfectly showcasing what Mmhmm is all about. It's about versatility and presentation. Then that's what that entire cube is about and the way that you guys rolled it out, you guys and girls over the last couple of weeks, how did that logo get crafted? I know you were very hands-on with the name and the copy, since it is very much your style, but how much so with the visual aspects of the brand?Phil Libin:I love the way that the logo came out. It's actually the name, it's M-M-H-M-M, just the other two Ms are on the other side of the cube.Fabian Geyrhalter:Correct, correct.Phil Libin:You can't see them, but if it'll ever rotate it'll do that. I have no discernible talents. I had very little to do with actually like making or drawing it. I've worked closely with the designers. I'm just lucky enough, we have amazingly talented visual designers. The logo was a collaborative effort. It was made by Carlos [Rockford 00:00:12:57], and Allie [Packard 00:00:12:58], Gabe [Kapadoniko 00:13:00], Chris [Plobe 00:13:00], a bunch of us brainstormed on it, did iterations. We all live in Figma. I actually left off a few people who worked on it, because there was like a dozen people, but Carlos and Allie were the two main visual designers at All Turtles that worked on this. We all live in Figma, so we just spent, it was a couple of weeks of diving in and exploring lots of variations and talking about them and trying out many, many different things. I used to do this. I think I actually did that. I did a little presentation during our FI class together about the Evernote logo. We talked about the process we went through.Fabian Geyrhalter:You have, you have, and that's actually one of the topics I want to jump into, but yeah.Phil Libin:I think we will eventually do, it's a little bit presumptuous to do this for Mmhmm. Let's see if it's actually successful in a few more months, but I'll probably do a similar thing, but it was great, but the short answer is I'm a ridiculously talented designers and let them do what they do and try not to get in the way too much.Fabian Geyrhalter:I think it's overly smart to actually to actually hide the rest of the name behind the logo, because it is three dimensional, which also speaks so much about how your presentation tool is actually changing the experience, because everything suddenly becomes more dimensional and you add all of these layers. In a way, seeing that the name is different and is problematic. The logo is too, because now you're only showing half of the name, which already is problematic, but if you actually look at the big picture, it is really ingenious and it's absolutely cool. I would invite everyone to at least check out the Instagram handle and take a look at some of those variations of the Mmhmm logo, because it comes to life really nicely.Phil Libin:Almost daily we're posting different variations of it on Instagram. It's just beautiful. Clever and interesting, fine, but it's just beautiful. There are versions of it and some of the treatments that honestly make me want to cry when I see them. They're just so nice. I'm just overwhelmed by the talent of the team. A lot of times it's playful, you mentioned the old MTV logo and that was definitely an inspiration, like very much so in fact, really early in the process, I said, I love that the eighties MTV logo and the fact that I can remember versions of it, where it was furry, or had a leopard print, [crosstalk 00:15:25] around, it would go to the moon. I really loved that vibe. We very much wanted to capture some of that spirit, as an homage to that early burst of creativity around MTV.Fabian Geyrhalter:I'm glad my mind reading skills are still there. The beauty of that is that it can survive a decade without a problem, because you can just adjust it to whatever the next trend is in logo design and it's still the same logo and I think that's-Phil Libin:It's rarely the same twice in fact. In fact, we already have probably a hundred different treatments of it. The shape itself stays the same, but we specifically made it to, it contains multitudes. We can put things inside of it. We can put it on top of other things. It's meant to be constantly changing and adjusting its mood, just like the idea of that what the product does.The product is consistent hopefully, but what you can do with it is endless. We want it to get some of that spirit across.Fabian Geyrhalter:What has been the biggest success of the past weeks since launch? We talked before launch, I think you said you're going to launch on June. What was it June 43rd?Phil Libin:37th.Fabian Geyrhalter:37th. Did you launch on the 37th? You made it?Phil Libin:July 7th, also known as June 37th. Originally the joke it was, I told investors that was going to launch in June, that the beta was going to launch in June. Then we actually looked at the schedule and how much work we had to do. We're like, well, okay. June 30th. The last day in June. I wanted to make sure I was true to my word. We decided to launch it on June 30th, but then we realized that that was right before the 4th of July weekend, which in the US you don't want to launch right before then, because I want employees to be able to enjoy the weekend without the death march of saying, "Oh, we just launched and there's bugs and whatever." so we decided to just postpone it by a week, but at that point I already told investors sometime in June. It was easy to just say, well, June 37.Fabian Geyrhalter:Since then, what has been the biggest success? Or how do you or will you measure success with Mmhmm?Phil Libin:It's way too early. We're only a few weeks into this. We're only a month old or something, depending on when this airs. Way too early to declare any success, the way we measure, the way we're going to measure success is impact. What we care about is making the world a little bit better, because our product exists in it, than it would be if a product didn't exist in it. For Mmhmm specifically, that's about getting into the hands of people whose careers lives, jobs, art, whatever will be enhanced, will be improved, because they've got access to this product. It's really a community measure of success. We are starting to, very early days, but starting to work very carefully about getting this into schools, into the hands of teachers and students, but also to artists, and performers, and entrepreneurs. At least in the beta, we want use cases of people who can literally say, "Something important in my life, my job, my career, and my art, my studies, my teaching, something important to me was made better, because I used this product." once we have that, then we can think about, can we make that true for 10 people, for 10 million people, for a billion people, the scaling comes after the impact.Fabian Geyrhalter:I like that. This is only one of many products that share your vision of making entrepreneurship get the job done, as you call it, with your company All Turtles. How did the All Turtles name come about? It is definitely a very unusual name and I assume you're not all moving extremely slowly in your software development. Besides June 37th, but tell me the story behind the Turtles.Phil Libin:I think it was almost a dry run for Mmhmm, I wanted something unusual. What we're doing at All Turtles is I think a fairly unique model. It's very easy to compare us to other things that feel like they're similar to it. Various incubators, and accelerators, and labs. That's inevitable, of course, we're going to be compared to that and that's fine at the end of the day, everyone wants to compare things to everything else. It's okay, but we wanted an unusual enough name so that it added some friction. I wanted a name that was so unusual that it forced you to make a new box in your head to put it in, so that it wasn't natural to like, oh, okay, it's one of these.And stick it into the box next to other things. Obviously, that's asking a lot for a name. We don't expect the name to do quite that much heavy lifting, but that was the philosophy behind it. It comes from turtles all the way down, which is, I think it's a Bertrand Russell anecdote or reference, it's probably apocryphal, but the idea is Bertrand Russell was giving a lecture about the structure of the solar system. At the end, everyone claps, but except there's one old woman that gets up. In the story, it's always an old woman, because old stories are always misogynists. In fact, when I was telling the origin story originally, I was to say, and then this old person gets up. Then my confounder, Jessica, was going to be corrected and be like, "No, the story is old woman, because [crosstalk 00:21:06] misogynist. Don't mask that just say old woman." you're right. Whenever I disagree with Jessica, like 98% of the time, she's right. A good quality to have in cofounders.This old woman gets up and says, "Oh, everyone knows that this is totally wrong, what you said, because really the earth rests on the back of a giant turtle." and he says, "Well, that doesn't make any sense. If that's true, then what's the turtle resting on?" and she says, "Everyone knows that! It's turtles all the way down." it comes from that, it's turtles all the way down. Whatever we've built, we did it, because we stand on the shoulders of the people who came before us. We hopefully support the next generation of people who are going to build the stuff on top of what we make.Fabian Geyrhalter:It's a nice story. Of course, when you go to allturtles.com, all you see is All Turtles. Literally it is a site about turtlesPhil Libin:That is not our website, but yeah, that's true. Our website is all hyphen turtles.com. [crosstalk 00:22:06] turtles URLs.Fabian Geyrhalter:Which brings me to the ever-fascinating topic of mine. How important is having a dot com to a brand these days, in your opinion? Everyone knows my opinion, but in your opinion, how do you advise startups on this?Phil Libin:Look. I don't think it's that important. I know you think you do it is. I think, look, it's nice to have, but if you look at the list of 10,000 things that are nice to have, or even 20 things that are nice to have, I wouldn't rate this in the top five. I just don't think that most entrepreneurs have time to work on anything other than the top five most important things. Until they do, until you're much bigger and better resourced and whatever. I would say, I would try to get the dot com and if you can get a great, and if you can't, I wouldn't let that block you from doing something. Definitely don't fixate on that.Fabian Geyrhalter:It's not in your top three or five criteria for having a .com domain?Phil Libin:It's not in the most critical things. I would much rather have a great brand and not have the.dot com URL than a mediocre brand and have the dot com URL. That's clear to me, at least.Fabian Geyrhalter:Did you knock on the turtles website and ask if the domain might be available?Phil Libin:I think we tried to. I think we actually made some progress with the person. They disappeared or something and we had more important things to do, so I don't know. Some day. I'm not opposed to having it. I just don't think [crosstalk 00:23:45]Fabian Geyrhalter:I think it's always so fascinating, because as of late, and that might also talk a little bit about the trend in this and that I might be able to wrong fixating on the dot com very much with branding work, is I interviewed these founders and they have amazing brands, like yourself. Then I go to the website and it is horrible, horrible, horrible website work of someone that owns a domain name, but it's pathetic. It's something where you know, this is just someone who has a hobby and who hasn't attended to the website since the days of Netscape. Yet they don't even get back to your emails. They're not interested in making a quick buck for a website where no one goes to it! It's fascinating for me, but now that we have already entered the animal kingdom with All Turtles, why don't we talk about Evernote? How Evernote got an elephant as its logo, because I definitely want to check that off our today.Phil Libin:That was the other reason for All Turtles is that Bertrand Russell origin story refers to the Hindu, it was some version of Chinese and some version of Hindu origin, cosmology creation myth where the earth is actually standing in the back of a giant elephant and the elephant stands on the turtles. Then it's turtles all the way down from there. My previous company was an elephant and the next fundamental animal is the turtle, so it made sense. Then it's turtles all the way down, so it's going to be All Turtles from now on. That was the little bit more esoteric reason.Fabian Geyrhalter:The logo, that's the story behind the elephant and why the elephant was chosen for Evernote?Phil Libin:I didn't name it. I didn't pick the name, the name existed before and I wasn't that crazy about the name. I thought it was okay, but basically, at that point it wasn't worth changing. It was fine.Fabian Geyrhalter:A little too descriptive for Phil?Phil Libin:I think that's right. I think basically, the framework I like for naming, which we don't really follow ourselves, but it's fun to know about it. The thing I recommend that people read is the Igor Naming Guide, which talks about four different types of names. I think it's useful to read it, even if you don't follow it, which we don't really follow it, but it's useful to read it just to understand the vocabulary, so that you can have a discussion about names. You at least have the right words to use, because it's hard to do it. There's so much philosophy and theory behind it. It's hard to have a general discussion without the basic vocabulary.It's useful for that, but Evernote, to me, feels a little bit too functional, but obviously having said that the name worked out great, but the other lesson from that is the name is just one part of the brand. The name isn't necessarily the most part of the brand. It's one part of the brand. The logos is a big part of the brand, the whole identity, the fonts, the colors, the brand voice, how you talk about it. These are all brand. You assemble a brand out of all these things intentionally and very rarely do you have the luxury of choosing every element of a brand at the same time. We had that luxury at Mmhmm, but it's really rare, where we could say, we can control everything. We can control the name, the colors, the logo, everything. We set the voice, all of it. The vast majority of the time, you don't quite have that luxury. With Evernote, we did it so that the name was there, but we did everything else.Fabian Geyrhalter:The logo with the elephant, to a regular user, it seems pretty far fetched to understand what the Evernote has to do with the actual app. How was that story conveyed or did it even matter and it just became a symbol that was, quote, unquote symbolic from the get-go and it was so different?Phil Libin:We hired this amazing designer, Gabe [Combdako 00:27:55], in the early days of Evernote to help us think through the identity. Ex Apple person and he's currently the lead product designer for Mmhmm and All Turtles, actually.. Still working with him, what's it been now? 14 years later or something. The most important thing is once you find amazingly talented people, do everything possible to stay in their economic orbit. This is the main thing that I do, is I try to find every possible way to keep a group of hyper talented people together, because you can walk through walls with them. You just need to have an appropriately reasonable destination and you can get there.We hired Gabe and we went through a process. We had lots of different options. There's, I think, presentations of me online talking about it, but didn't start out as an elephant. There was lots of options we considered. In fact, he came back with a few different options, including a couple of elephant treatments, which we rejected, because the group that I set up to try to figure out the logo said the elephant is too dangerous to go with, because there's too many negative connotations, "Oh, it's slow and it's big, feels [inaudible 00:29:14], blah, blah, blah." I liked it, because elephants are very good memories, an elephant never forgets, I thought Evernote was about remembering things, that was the connection, but we rejected the elephant, because it was the most bad of the designs and we wind up going with something really boring.Then basically I woke up the next day after that decision was made and it didn't feel right to me. I think we picked the safe choice and I just didn't feel right, but we back and said, "Let's go with an elephant, but we need a few more iterations of the elephant." and the elephant itself, we had literally a hundred different versions of the elephant. There's pictures floating around of different elephant versions. We went through lots of different ones. For a while, it looked too much like the Republican party elephants. We panicked and said, "We got to make sure that it doesn't look like it's the Republican elephant. It's a totally different elephant." but eventually we came up on this one and it was great.It was a by far the best decision early on that we made this logo, this identity for Evernote probably got us literally a hundred, $200 million worth of free publicity and marketing by Apple, by Google, by Samsung, but all of these companies that were putting up app stores and platforms, and they all just featured us, because we had a pretty good product, but I think equally as importantly, because we had an amazing looking identity that they were just like, it looked better than the app icons and logos of other stuff that they would put up. We would get into every single poster, marketing campaign, whatever, because it was a good product, but also, because it looked really good. That was by far the best few thousand dollars that we spent. The ROI of that was pretty incredible.Fabian Geyrhalter:It's so difficult to show ROI with a brand identity, or with a brand name. It's really difficult. I love that you say that, because it is measurable. What I also really, really like is that you, throughout the entire episode today, you really talk about how a safe choice is most often not a great choice. As you know, with most of corporate America, that is absolutely the other way around with decision making when it comes to name, when it comes to brand, when it comes to all of those pretty intrinsic ideas that they come out and very often they end up being a little bit too meh.That is the lesson that just everyone has to hear over and over again. Coming from someone who sold their software development company for $26 million 20 years ago. Then you co-founded Evernote. Now you're kicking serious butt with All Turtles, and it looks like with Mmhmm. Obviously you did plenty of things in between. These days, you also mentor startups on a lot of topics, including branding. I want to circle back to that, you already started talking about it, but what does branding mean to you after everything that you have branded in your life and that you've been through what does branding as word, because it gets pretty bad rap, very often the idea of branding, especially with startups. It seems like it's a waste of time. It's a waste of money, but you and I both know if you actually do something that's really outstanding, it can be a huge game-changer for a startup.Phil Libin:This is the lesson that I keep learning again and again in life. Maybe I'm starting to demonstrate learning behavior and actually like internalize it, but I'm an engineer, by background. I'm a programmer, computer scientists, computer nerd. I had a very large amount of disrespect early on in my life and career for anything that had to do with marketing, with branding, with intellectual property. I didn't like any of that stuff. I had the typical nerd, programmer approach, like, hey the programming is the real work and everything else is marketing, blah, hate it. Then I started working with people who were much smarter than I was in these fields. At Evernote, the person that ran our marketing was Andrew [Sincove 00:33:17] he's a big, important person at Etsy right now. [inaudible 00:33:24] the lesson from him.He was like, "Look, yeah. When you say marketing is stupid, what you mean is bad marketing is stupid and it is, and the vast majority of companies have really bad marketing and it's really stupid. If your attitude is marketing stupid, you're going to get bad marketing. You're going to prove yourself to be right. Good marketing is actually amazingly important, just as important as anything else. Shut up and let's do some good marketing and you'll see." and I was like, wow, absolutely. That's totally right. The same is true as naming and the same is true with branding. If you do it badly, it's dumb, but if you go in with the expectation that it's going to be bad, then yeah. It's going to be bad and it's going to be dumb.I felt that bias, that engineering bias, but my eyes were opened repeatedly by various people that I work with about this. Same thing with intellectual property. Leonid [inaudible 00:34:18] has been working with us on IP for more than a decade now, since Evernote days. I would get into these big arguments with him about patents, like patents are stupid. Patents are bad for the world. The IP industry is terrible. He was like, "Bad patents are bad, good patents are good." patents that are written to be either poorly or specifically written to be bad for the world and not actually describe anything and try to do all this stuff. Yeah, those are really bad.Let's not do those. Let's do good ones. This philosophy, again, I'm not smart enough to understand that from the first time was explained to me, so it has to be explained to me over and over again, but it's fundamentally true. Definitely feels this way with brand, with everything else. Now I think that you're making a product, you're making a company, the brand is, at the end of the day, I don't know if it's the most important thing, but it's in that package of most important things. It's so important that it's hard to separate from anything else. It's hard to separate from the team, it's hard to separate from the product design. Those are all areas. The product design, the team design, the culture, the brand, they're all so amazingly central and important that, if you do them right, they're inseparable and you definitely need to have the appreciation of what all of them mean.Fabian Geyrhalter:Listen, I promised you I'm only going to take that much of your time. Most important. Listeners who want to learn more about Mmhmm or get an invite to be a beta user, where and how can they go about that?Phil Libin:You can just sign up at mmhmm.app, M-M-H-M-M dot app. I like palindromes. That's one of the names. I like names that are the same forward and backwards. Go there and sign up. We are inviting people, hopefully pretty rapidly. We're sending out invites every day. There's always a wait list, but we're sending out invites every day and we are planning on going live, full general availability release. It's Mac only for now, for this stage of the beta, but a Windows version is coming and we're planning on being live on Mac and Windows this fall. Not too long to wait until it's generally available for everyone.Fabian Geyrhalter:Especially in 2020, it seems to go by rather quickly, which is a really, really good thing. I would say. Phil, thank you so much for having taken the time. Really appreciate your insights. This was absolutely amazing.Phil Libin:Thank you. That was super fun to talk to you.
Learn more about LIVSupport the show and get on monthly mentorship calls with Fabian. Join here.Full Transcript:F Geyrhalter:Welcome to the show, Esti.E Chazanow:Hi. Thank you for having me.F Geyrhalter:Absolutely. Thank you for making it especially during these times right now. I was so intrigued when I first read about your company, LIV, a Miami-based brand that offers Swiss-made high-quality watches at a fraction of the price we all got used to seeing. We're talking a couple hundred dollars versus thousands or even tens of thousands of dollars. And for all of you listening, go to livwatches.com to get a visual of their impeccable design.So you and your husband are both co-founders but he is the official watch expert, I would say, the brand as a person as we call it, yet I chose to have you on the show because you're also the brand manager. And the big question, just to start this off, how does one set out to break this carefully crafted and, I can only assume, well-guarded system that is the Swiss watch monopoly? How did you get into that? Because you're the underdog coming in, and you're stirring it up quite a bit. How did this all start?E Chazanow:Well, that's a good question. Let me just gather my thoughts for a second. I would say, as you said, my husband is really the watch guy. My husband had been obsessed with watches as a young child and he turned his obsession into a passion slowly through the years. And then as he got older, he wanted to work within the watch industry and he got his first job in a packing room for a Swiss watch brand. And when ecommerce came along, he set up his own website to trade watches online. He was one of the first ecommerce websites for high-end watches. And then after we got married, there was a huge shift in advertising, how the consumer behaves. So we thought that it would be a good time to launch our own brand together, a direct to consumer, no store, online only, super high-quality watches at an accessible price with a focus on what we call the fan, not the customer, but the fan experience. And I can talk a bit more about that in detail later. But I think that because we started with that totally different mindset, we were playing by different rules than them ...F Geyrhalter:Right.E Chazanow:So that took us to an advantage.F Geyrhalter:And so playing by different rules is usually seen-E Chazanow:It's like David and Goliath.F Geyrhalter:Yeah. No, totally. And I just, really, the way that I see it as an outsider, and I lived close to Geneva for a couple of years and so I [inaudible 00:03:01] the entire Swiss watch monopoly, it feels like. It must be extremely difficult to come in with, in the beginning, your watches were a couple hundred dollars. Now you have some that are a little pricier, but to be A, taken seriously, and to even be invited in. I mean, would you or have you even shown up with LIV at one of those snooty international watch fairs to stand your ground? Do you choose not to go down that path at all?E Chazanow:That's a great question. First of all, the funny thing is that we started getting emails from Baselworld the past few years inviting us to come, but we were never interested in going there because that's not our model. It doesn't make sense for us. Besides the fact that I didn't even know where they're up to now. I know at one point ... Well, they obviously canceled for this year. They're having problems of their own and that's part of the huge shift of going down our route. Anyway ...F Geyrhalter:Absolutely. Yeah, you're definitely well-positioned for that right now.E Chazanow:But when you talk about respect, to us, that's really what branding is, because you're talking about how do you get respect? Forget about being in the watch industry, in any industry, to me, that's what branding is, it's about getting respect, being respected as a brand in the industry. Like think about what Apple did. Now, how do you get there is by having a very cohesive brand image. Visuals, communication, product, experience, people respecting the pricing that you set, people seeing the value in the product. Once you have all those pieces together, then you get the respect, and that respect will come within the industry itself as well. Over the years, we've spoken to major watch publications where in the past they would ... We were able to gain that respect because I think we did everything in a very authentic and real way that eventually we actually became a player, in a sense.F Geyrhalter:Right, right. An outlier, but a player in the game. And I really like the idea of respect, because especially for your brand, that was everything. If you didn't gain respect, your brand would have not flourished. So I totally can see that.E Chazanow:And that's actually why when we talk about branding internally, we always are thinking of everything in terms of relationships. just like in a relationship with a spouse, people need to respect each other, People are not going to invest in a brand that they don't respect. Mercedes, Rolex, whatever they did, they did in order to get respect and they did it successfully. We're doing it in a very different way, but that's really our goal.F Geyrhalter:Yeah. And we talked a little bit about the pandemic offline when we did our personal introduction and you talked about watch events and how it changed. Obviously, the pandemic changed so much of our daily routines. I, for instance, have not worn my beautiful TAG Heuer Chronograph ever since I came home from my last flight back from Europe where I was working on some workshops and when I entered the quarantine. So on the one hand, I would think that this unprecedented situation to be followed by a recession might hugely impact any retailer that flirts with anything that's aspirational, like a watch like yours. But on the other hand, LIV may be very well situated, as you hinted at, with being a lower price point, being ecommerce first. How is the brand being affected right now?E Chazanow:Okay. First of all, when you mentioned and we were talking about ... You just mentioned your TAG Heuer Chronograph, and we were talking before about coming up against the big boys. It's so funny, because the other day I was on one of our Amazon products, that's another whole story, Amazon, but we do have some product on Amazon. And I was just scrolling down the page and I noticed, and I immediately sent my husband a screenshot, I noticed that they had now the algorithm had somehow done, how does this product compare to other products, you know how they sometimes have that, that chart?F Geyrhalter:Yeah.E Chazanow:And they had the LIV Swiss watch compared to a TAG Heuer and a Tissot. And I'm like, "Wow."F Geyrhalter:That is amazing.E Chazanow:I'm like, "This is amazing. I cannot believe it."F Geyrhalter:That's your proof point, that's all you needed, right?E Chazanow:Exactly. And in that respect, I would trust Amazon because it's completely based on data that them putting that up there is based on data.F Geyrhalter:Right.E Chazanow:It's not some affiliate putting it up there, it's real. They put it up there because they know.F Geyrhalter:Right. That's pretty amazing.E Chazanow:Yeah. I just had to say that because I thought that was so cool. And to answer your question about the pandemic, we're trying to continue to have a positive outlook. We are situated in a good place in terms of where we are in our brand, in our brand timeline. Just forget about what's going on in the rest of the world. A few years ago, we didn't have so many product offerings. Over time, all the reviews have built up online, the press has built up online, we have a strong online presence. We've done everything online from the beginning, but I'm saying in terms of third-party websites and so on and so forth. So by third-party, I mean press, review websites, and so on. So we were perfectly situated within our brand timeline, we had everything set so that if people are home more, they have more time to do research, there's a lot of information out there about us. So in that respect, it's positive.Uncertainty isn't good for anybody, but at the same time, we are, as you said, much more affordably priced. Well, we like to say accessibly priced. So if someone, for example, wanted to buy a new watch and would normally spend $10,000 on a watch, maybe now they have time to do some research and realize that we might actually be a good investment for a $1500 watch. So there's a lot of different parts, I don't have any data on it, because I haven't done any surveys or anything like that. Some of this is my gut, some of it is talking to fans, and some of it is just knowing where we are as a company and connecting the dots.F Geyrhalter:No. And that's wonderful to hear. And talking about-E Chazanow:And sorry, one other thing is that we're very lucky. In a way, when we first started, I'm not going to lie, I had this dream of getting into Neiman Marcus just because, and still now people are like, now not so much because of what's going on in the world, but even up to right before the pandemic, it's like, "Oh, are you in the department stores?" People were still asking us that.F Geyrhalter:Right.E Chazanow:And I secretly dreamed that I could say yes and now I'm so happy that I can just say, "We're so [inaudible 00:11:39]." And at a certain point I was in touch with buyers at Nordstrom thinking about getting in there but at the time that I was trying to get our product in, we didn't have enough product offering so they weren't interested. And I never tried to go back once we had more product offering because at that point we realized that it made no sense for us.F Geyrhalter:Well, the price point obviously is one of the big differentiators. Of course, the design, too, and the brand story, everything. But every LIV watch is being touched by, I think, 55 hands in the process of being made. These are all Swiss watchmakers. So you are D2C and you forego a ton of advertising spend because of it, but there's still a lot of marketing you have to do, right? You have to create quality content ... You offer free shipping to any country in the world, which is amazing. You're talking on your site that you have fanatical service, et cetera. So how does that financial model work? I know this is all about branding, but I think everyone is intrigued, how can you offer a product of such quality, with kind of the same hands being involved in the process as there may be for a TAG Heuer or for a Rolex or for any other really large brand, how do you cut the fat out of the price for the consumer?E Chazanow:Well, maybe as many hands are touching in the construction and design process, but no hands are touching it once it gets to us, once we're ready to ship. So there's no distribution, no one needs to get a cut all the way down the line. By the time you get that Rolex, think about how many people needed to get a cut for that. So we don't have that. We're going direct to the consumer.F Geyrhalter:It's as simple as that, huh?E Chazanow:It's just direct, and we've cut out everything so we can focus all our resources on, A, making a beautiful product, and B, that relationship with the customer. Well, we don't call them customer, we call them fans. But that's really what we can do. So all that fat is stripped away, and [inaudible 00:14:00] down, and there's no distortion of the brand voice, image, nothing. It's real and authentic.F Geyrhalter:Exactly. It's a beautiful, authentic story, and by you cutting all of these middle man and these distributors and God knows what, all the fancy advertising in Vogue or all of those magazines, and by you not being in Neiman Marcus, those are also stories that real diehard watch collectors actually ache for, because they knew the entire time that they are being screwed over, in a way, so they come with open arms, I'm sure.Let's talk about Kickstarter for a second, because that's a big story for your brand. So you raised, the last time I checked, and I know those numbers must be off now, they must be much higher, but you raised $2.9 million via Kickstarter. Your latest watch on the platform, the P-51 Pilot Titanium Automatic Chronograph, will be at a much higher price point, it's actually a $2000 watch. The campaign had a $30,000 goal, and when I checked last week or so, I'm sure, again, the actual numbers you can correct me on, but it was four days away from ending the campaign, and it had over $1.6 million pledged.This is unheard of. I mean, this is unbelievable. Why is Kickstarter working so insanely well for your brand, and do you have any tips for other entrepreneurs listening on how to fully take advantage of the platform like you guys did?E Chazanow:Yeah, okay, so the platform that the P-51 on which it is currently is our own internal system, but it's the same concept as Kickstarter, and that's where we initially launch everything, that's correct.F Geyrhalter:I see.E Chazanow:So I think, just going back, why do we go to Kickstarter? So the first thing that's really important to understand is that we don't just go because of the funding. There's much more to it than just the funding. The funding is a really great piece, but that's not the only reason. So number one, it forces us to articulate and present this new brand concept and collection, Kickstarter forces you to define it. When you launch on Kickstarter, you have to actually sit down and say ... With our first Kickstarter we had to say, "Why does our brand even need to exist?" And then with every collection, why does this collection need to exist? It sounds so basic, but sometimes you get carried away and you don't stop and think, and Kickstarter forces you to do that as part of the steps in creating a project, so that's number one, which I think is incredible.F Geyrhalter:Absolutely.E Chazanow:Then, the second reason is because if you're able to prove your concept, it enables you to understand what people really want. You're presenting a concept and then you're getting the feedback, and then you're using the feedback to go into production, so you might have had an idea and said, "I'm going to produce this dial in five different colors," but then you go live on Kickstarter and you realize that people actually only like three of the colors, they don't want the other two, so you're not even going to bother producing.F Geyrhalter:It's a focus group, yeah.E Chazanow:Yeah, exactly. And by the way, connecting back to what we talked about with the big brands, think about it. They just go to production, they have no idea. There's no data, they just go to production, and then they might have a huge amount of inventory leftover from a certain production that they just need to get rid of and they need to discount it, so we never bump into those issues, we end up selling every single piece we create, because we go the Kickstarter route.Then, of course, the third reason, going back to why the Kickstarter piece, the third reason of course, I would put it as number three is the funding, and the fourth reason, which is really what we're all about is just being able to start a relationship with people. Many of the people that we started with in the very first Kickstarter continued on our journey, they buy every single watch we come out with. They're our fans, they continue to be a part of our journey. So it's an amazing relationship-builder. But you have to do it right.F Geyrhalter:Absolutely. So many things I want to comment on, but I'm going to restrict myself. So first off, the idea that Kickstarter makes a startup that is not even a brand at that point, that is just an idea, right? If someone goes to Kickstarter and start ... It actually makes you the all-important question to why does this product exist? I think that is so crucial. I mean, that's the work that I do with my client, and they pay me a lot of money and fly me around the world just to answer the question why does it exist and why would people care? Which is so hilarious, in a way, because everyone should know it if they put something out there.But it is, like you said, it is the most difficult question to answer, because this is when we're talking about purpose, this is when we go deeper, this is when we go into what do we really put out in the world? And especially when you have a watch company and you've got, I don't know, like 10, 20, 30, 50 SKUs, why does each one of those exist? I think it is tremendously important to create value in the eyes of the person purchasing it.And I also think it's extremely interesting that you went Kickstarter, because it seems to me that one of the big brand advantages of LIV is that you're really going for the limited edition runs, right? Is every single watch limited?E Chazanow:Now, yes. Well, we do not mass produce anything, that's just not our model. But everything is absolutely limited production, and everything is now, at the beginning we didn't, but now everything is also limited edition.F Geyrhalter:Which is so whip smart to do.E Chazanow:Yeah.F Geyrhalter:And that's why you have your super fans, which I can't believe that statement, that is so amazing, that people literally buy every single model that comes out, and the limited nature, that must be a huge component of why they would want to, because they're collectors. A lot of them must flirt with the idea of potentially reselling at some point.E Chazanow:Yeah, and we notice some of our watches on eBay, and to us, that's so ... And not heavily discounted or anything, like there's already a third market for it, which is awesome. Probably a collector reselling, but people see the value in it, absolutely.F Geyrhalter:That is amazing, right, and that was not something that you initially, most probably thought would happen, but it's a logical progression. And that also makes me wonder, is LIV, which again, for our listeners, it's the same type of watch with the same quality, it's just at a very different price point. But is a LIV, like a Rolex, a LIV, is it turning into a well-regarded status symbol, for many? Because for many, they want to say, "Oh, it's a Rolex," when someone asks. And of course, for your brand, that must have been a little bit of a brand pain point in the beginning, of figuring out, well, how do we not come across as, "Oh, it's a cheap or an inexpensive watch from the internet," right?But right now it is happening, with all of your stories that you're telling online and with really showing how much impeccable work goes into these pieces, and that it is really one to one as far as craftsmanship goes, is it now turning into kind of like a status symbol, are people excited about the outlier in their watch collection, and they actually like to show off, like, "No, this is actually a LIV."E Chazanow:So I think our brand focus, when you say, "You're wearing a LIV," right?F Geyrhalter:Yeah.E Chazanow:When I want someone to say ... What do you think of when you say Rolex? When I say Rolex to you, what do you think of?F Geyrhalter:Well, I mean, I think high quality-E Chazanow:One word.F Geyrhalter:... I think status, I think Swiss-made.E Chazanow:So yeah. I think most people would probably say status. Because you asked me about status, that's why I asked that back to you. But when we want people to think of LIV, we want them to think authentic. We want them to think, "This is authentic, this is real," and that is what we strive for. We're not striving for status, we're striving for authenticity. Because we think that today, in today's world, you can't fool anybody, everybody wants brands to be real with them. People want to invest their money and emotions into something that's authentic.F Geyrhalter:Yeah.E Chazanow:So rather than using the word status, I would use the word authentic. I would say we're not striving for status. If you are authentic, you can get there, and if you have a really beautiful product, that will be a byproduct, but that in itself is not what we're trying to achieve.F Geyrhalter:So maybe status turns into pride, right?it's pride of ownership, I think people have pride of ownership when they have a Rolex, but they can also have pride of ownership when they have a LIV, because they feel smarter. I mean, I think that must be a huge conversation, if you wear a LIV and someone next to you wears a TAG Heuer, like me, like the Austrian jerk who spent the money, and I'm sure it's an interesting conversation of like, "Well how much did you spend on this? Well did you know that my watch," and then they can rattle off all the details of how it is made and how precise it is, and I think it must be a really interesting conversation, and I'm sure that's happening online all the time now.E Chazanow:I really like how you said that, exactly. They're proud, they are. They're proud, and they're on a journey with us, and they're proud to be part of that journey. And again, it comes down to authenticity, because we really do have an authentic relationship, and they grew with us as a family. The brand grew, and as we grew our family as well. At ne point it was just my husband and myself working in the office, and we hd just done a Kickstarter, and I was due to have our third child, and the baby came three months early and we were not prepared, because I was doing all the responses to the fans, I was the one managing the whole fan experience, we didn't have anyone working for us at the time. So I actually had to write a message to all of them, and say, "I just want to let you know, I just had a preemie." Thank Gd, he's totally fine right now, and it was hard to write that email, because it's a very personal thing, but it felt natural, because these people were part of our lives, and they still are.And I cannot even tell you how many messages I got back and say, "Don't worry, my son is a preemie, I was a preemie," and it just helped ferment that relationship and it made it feel so real, and until this day I feel that relationship with our fans, even though maybe I'm not responding to every single message now, I'm still very involved, but obviously you have to scale and grow. But yeah, that's, I don't know how I got to that point [crosstalk 00:26:37].F Geyrhalter:Well, it's an important point, because I think we were talking a little bit about the brand's growth. But I think, to me, that is so crucial, because a lot of people that I interview, especially female founders and female co-founders, I talked to Jeni of Jeni's Ice Cream, I talked to Christina Stembel of Farmgirl Flowers, and all of them, it is, in the beginning, it is their determination, obviously, as a founder, because it takes a lot of that, and a lot of the grit and hustle, but a lot of it is just being 100% you, right? And sharing the journey and sharing not only the hits but also the misses, and I think that is such a huge change, and that's why a lot of people, when they ask me, "Oh, you're working with startups and corporations on branding and marketing, and isn't it all fake and stuff?" And I'm like, "Absolutely not."The way that corporations are being built now and brands are being built now is so much different than it used to be, and sending out this email talking about something that I don't believe anything can be much more personal than that. From the get-go it creates that sense of realness, something that every other big brand wants to be, right? Coca-Cola and all these big, kind of legacy brands, they all want to be your friend, they want to have a spot on your Instagram and Facebook, but we rarely allow them to because it doesn't feel authentic. But when a brand like yours pops up and people know the story and people know the founder's names, especially in the beginning, it's huge, money can't buy that. That just completely changed with D2C brands and with the startup movement of the last 10, 15 years, and I'm just so happy to hear that every time someone says that.E Chazanow:Yeah, it really is an incredible time for creativity, for quality, just for producing something real, I think it is an incredible time. There's a lot of fluff out there as well, but if you're real, then it's an incredible time. And then to the point of what some of the legacy brands are trying to do, I don't know, is it Alpina or Alpina, the watch company?F Geyrhalter:I do not know how you pronounce it either, but I saw it, I have the visual in front of me, yeah.E Chazanow:They went on Kickstarter after us.F Geyrhalter:Wow.E Chazanow:Yeah. When we saw them on Kickstarter, we were like, "What?" But I guess they saw the value in it. I'm not sure if it worked as ... It would be hard to integrate that model once you're already a legacy brand.F Geyrhalter:That's what I think, too. And talking about authenticity, that might not feel authentic at that point, because you've already gone a certain path.E Chazanow:Yeah, exactly. And people often ask us, "With your Kickstarter campaign, did you do it yourself or did you hire a company to do it?" And I always say, "Even if I would've had all the money in the world, I wouldn't pay someone to do that. You've got to do it on your own, you've got to be authentic." And especially when we first launched, the whole concept of fan experience, where the person's not just a customer doing a transaction but actually a fan, it was not very prevalent. People didn't even understand the language and concept, and as we grow we want to continue to be authentic, and so that's why we continue to do it on our own. We're not going to outsource that. We want to keep our watches affordable, agencies take a lot of money, so we'll continue to do that on our own, often people are asking us that.So I'm sure that the Alpina or Alpina, however you pronounce it, how could you ever be as authentic if it's just not like that? It's just ...F Geyrhalter:So how big is your micro brand now? You must've grown, how bit is the team?E Chazanow:It's very lean. We have a couple people in our office in Miami. I always thank them every year as we grow larger and larger, I say, "Thank God you guys are here, because if it was still my husband and I in that tiny office, one of us would have killed the other one." So yeah, thank God we've grown, for many reasons. And then we just very smart about everything. Often when you hear founders talking, especially some of the bigger companies, you listen to some of those podcasts, they talk about skill stack, and I think that my husband and I are really lucky to be working together, and we just have a really good combined ... As people alone, I don't know we would have enough of a skill stack to do this, but as a combined unit, we're really able to do a lot of things on our own and keep a really lean team, so we're able to continue to do the pricing that we're doing, because we're able to do a lot of things. He's always been really good at the production side of things, at the marketing piece, the messaging.And my background had nothing to do with watches, I came from an education nonprofit, organizational management background. Very, very different, but from the very beginning we've really made a focus on education, education, education. So we focus a lot on our stories, on our blog, and on our emails on just educating people. So I think together, and that's why we figured we'd be able to do this, is that together we were able to have the skill stack to keep a lean team and keep the pricing accessible, and just do things, we really try to do everything smartly and creatively.F Geyrhalter:Absolutely. And I do feel that with a brand like yours, branding, you and I can both agree because we're both in the field, but branding must've been extremely important, because you're a younger, bolder, version of some of those big brand alternatives, but yet you're the incumbent, so you first had to create a little bit of the same expected Swiss watch aura of precision and exploration with the detailed watch charts and the aspirational models wearing them, but then you kind of pivoted. How did you create the brand's look and feel and the tonality? I mean it seems like a lot of it was very, talking about authenticity in a small team, very much, must have been very organic and natural, but you also received a lot of feedback through Kickstarter, through your fans. How did you shape your brand's look? Was it all internal? How did you do that?E Chazanow:That's a good question. So the initial logo, we had a designer that we knew, and the initial logo we had, we kind of developed, my husband and myself and this one designer. But that was literally just a logo and a name, that was it. It was nothing. And then once we had the concept, as I said, we like to do things smartly and creatively, and I always say my husband has really ... He's very creative, he has really good ideas. And then I call myself the chief implementation officer, because I'm better on the implementation side. So he had this idea of, why not create something called the LIV Design Challenge, and invite designers to ... We created a design brief, we have this concept, but we want to create this brand and we want the brand to be bold, and some of the things that you just mentioned, and we want to create a watch, and our first watch we want to have this movement in it. We gave details, because my husband knew the production side, obviously, and then we went on these portfolio websites and just invited designers to participate.We handpicked hundreds of people who we saw had designed precision items, product designers, and we invited them to partake in a challenge, and that's how we got our watch designs.F Geyrhalter:Wow.E Chazanow:We rewarded them, obviously.F Geyrhalter:Yeah. That is amazing. So it's pretty crowdsourced. So the initial watch designs were crowdsourced.E Chazanow:And even ones that we launched a few years later, not just the initial ones, but they were also, basically any new watch design that we have that's not from the ... So so far we have the GX collection and the Rebel collection, those were both winning designs, and then we kind of created multiple versions of those original designs, and we work with, some of the time we work with the original designer who had won the contest to develop the collections.F Geyrhalter:That is unbelievable. I mean, try that with a traditional watch company, right?E Chazanow:Yeah. And that itself is a huge job. Again, you can have the concept, but then you've got to have the skill stack to be able to implement that.F Geyrhalter:Oh, absolutely. Yeah. How did the name come about, was it the same? Or was the name already always there and you thought about the idea of living your life and being bold and LIV, I assume that's where it would come from.E Chazanow:Yeah, we had a concept that we wanted to create this direct to fan experience, brand, we wanted to have direct relationships with people, we wanted it to be something built around the concept of living life to the fullest. So when I envision the brand, and when I had listened to ... I had read up a bit, because my background was not in branding, so I kind of had to self-learn it. I realized that if we were going to do this successfully, we needed to build it around a persona, and I wanted that persona to be my husband, because he's a very adventurous, he loves quality items, he really represents someone who would appreciate the watch. So we built it around his persona. A lot of the imagery is with him, actually. He also makes an okay model.F Geyrhalter:Good for you.E Chazanow:We can add that to his skillset, and that helps keep the costs down. Yeah, so we built it around his personality, really.F Geyrhalter:That makes it so much easier in the beginning, right?E Chazanow:Yeah, absolutely. It makes it easier, you're able to keep the concept very defined, and like I said, you can use him as a model as well, so that helped.F Geyrhalter:And it's family pride, right? So when I prepped for our interview, and I have to bring this up, I went through LIV's Instagram account to get a sense of the brand, because that's what you do today. These days, it's not going to the website. You first go to Instagram, you get a really good idea of what's now, what's happening. And I was just about to call the interview off when I saw your line of LIV wall clocks. Wall clocks, okay, which literally are the wristwatches hung on the wall, just the watch, not the strap, they looked horrendous. And sure enough, I realized it was posted on April Fool's, and I was so relieved. I looked at it and I'm like, "Oh my God, what are these people doing?" It was just so hilarious.E Chazanow:Oh, that's funny.F Geyrhalter:Yeah, that was so good. And Swatch was able to pull that off in the '80s, do you remember that? The big Swatch watches, they go like for $500 now online, which is pretty funny.E Chazanow:I need to tell that to my team.F Geyrhalter:I'm like, "I don't know if I want to have these people on my show." Well, but was there, even though you're pretty religious about data and customer feedback, and even crowdsourcing and letting people's voice be heard within your product and how you offer it, was there some brand fail that you went through where you felt like, "Oh my God, we just totally missed." It wasn't the wall clock, obviously, that was an April Fool's, but was there something that you did where afterwards you felt like, "You know what? That goes into a chapter where we failed forwards, for sure."E Chazanow:That's a really good question. We did make a lot of small mistakes, we corrected them. I think the key to any brand's success is to realize your mistakes early enough, obviously, to be able to make the changes. But I think a brand like ours can never afford to make an enormous mistake. If we would've made an enormous mistake, we would not exist now. So you have to get it right. You're not going to get it right every time, because then you're not going to take any risk, but you can't make an enormous mistake.Now, I've got to say, there is an element of luck involved. How would you know that the first design, we thought it was beautiful, but how would we know that $200,000 worth of funding would think it was beautiful? So I do think there's an element of luck in it, I really do. But the element of luck is built upon you having the right mindset, the right goals, the authenticity piece, all of that together, yep.F Geyrhalter:Well, and luck goes hand in hand with a lot of really, really hard work.This is the big question. What does branding mean to you?E Chazanow:It's really what I mentioned before, the cohesion of the brand image. It's a lot of different pieces being cohesive, and then ... So the brand image, the visuals, the communication, the product, the experience, the cohesion of all of that, and then people being able to just respect that, whatever messaging that is, that is cohesive and consistent.F Geyrhalter:And I love that you brought up the respect part again, because that is a very unusual way of seeing the role of branding, and I think it is really, really great that you crystallized it. This is a question that I ask every single founder on my show. If you take every single piece of communication and every single piece of your brand's purpose and your vision and your mission, and you would be able to just put it in a funnel and out comes one word or two words, what would that word be for your brand, if you would have to describe it in one word? I know we heard things like boldness and authenticity. Is that what it would be, authenticity, or is there something else?E Chazanow:Authentic, yeah.F Geyrhalter:See, I did my espionage.E Chazanow:Well done.F Geyrhalter:I knew that's what it would be.E Chazanow:Absolutely. Well, then we're doing a good job, if you could figure that out.F Geyrhalter:We are, right? We're making progress. Do you have any final piece of brand advice for founders? You've just been through an extremely amazing journey building a Swiss watch brand out of the US that is competing with a lot of the big names now and is striving, is there anything that you learned where you just figured, "That's one thing that I definitely need every entrepreneur to hear."E Chazanow:Okay, so I know this is going to sound extremely cliché, but when everyone tells you that you cannot do something, you know that you're doing the right thing.F Geyrhalter:I love that. I hear it over and over again, and it's so important.E Chazanow:[crosstalk 00:44:51] and it's true.F Geyrhalter:It is so important to hear it over again, right? That determination and that grit and that hustle, really, that's what makes a founder a founder, a succeeding founder, absolutely. So listeners who fell in love with your brand just now and they just found out about it here, where can they find LIV online?E Chazanow:Yep, they can go to livewatches.com, L-I-Vwatches.com. We're also, as you said, on I guess, Facebook, @livwatches. Yeah, come join our journey, check out what we're doing. We do find that a lot of people who follow us are small business owners, entrepreneurs, people who really appreciate the time and effort that's going into it, we see that so much. So if you're one of those people, I think you'll really appreciate what we have to offer.F Geyrhalter:Absolutely. I can start hearing that your kids are getting a little more antsy in the background, so we will let you go now. But thank you, Esti, for having been on the show. We so appreciate your time and your insights.E Chazanow:Thank you, thank you, thank you. It was really nice chatting. Thank you for the opportunity, it was really an interesting conversation for me as well. 
Learn more about RegrainedSupport the show and get on monthly mentorship calls with Fabian. Join here.Full Transcript:F Geyrhalter:Welcome to the show, Dan.D Kurzrock:Hey, thanks so much for having me here.F Geyrhalter:Yeah, absolutely. We talked about this a little bit before we hit record, but today's June 1st. We're still in a pandemic but as of this past weekend, the majority of cities in the US is taken over by rightful necessary protests, but also by looters and riots. And we see our cities on fire. I had a very late night monitoring downtown Long Beach, which is where my office is located which has been an epicenter of violence and looting last night. Jessie, our creative lead, is already out there helping the community in the clean up. You Dan are based in San Francisco and the company is in Berkeley and that is another hotspot up in San Francisco in Oakland. And I was even debating if given the circumstances, we should postpone our interview, but we both decided early this morning to power through despite the lack of sleep and the craziness unfolding in front of our eyes. How was your night North? Are the ReGrained plant and offices, is everything still intact?D Kurzrock:Yeah. I mean, like a lot of folks, time are troubling in general. Physically been in pretty insulated from this whole thing with shelter in place. And actually my grandma basically lives with us right now, so I've been really careful about going out, but it's very troubling. I don't have a lot of words for it, but still situation wasn't... This is kind of the culmination of a lot of complicated factors leading up to it, so I hope we are taking an opportunity to wake up. And I hope we can emerge from this in a better place than it feels like we are right now, but still glad to be here with you.It's good to have distractions and good to keep moving the positive things forward that we can in the world. I always try to focus on what I can control and even within this business that we're building, but it doesn't always feel like we can control everything within that even. So really looking forward to taking some time and chatting with you about brand and about purpose and take an action.F Geyrhalter:Absolutely and that's why I'm so glad to have you on today too because you crafted a brand that actually creates positive change in this world. And there's always time to talk about that. It's my personal passion and that's why I'm doing what I'm doing because I for one believe that business as a whole will change fundamentally over the next decades for the better. And you guys are part of that change in your own small ways as you said and they can become rather big in a snowball effect. So you guys used to brew your own beer, which is a strange beginning to someone who's changing the world. So you used to brew your own beer, even under age I heard, but we're not going to talk about that.D Kurzrock:Yeah. A lot of good ideas... A lot of good ideas start over a beer.In our case... Just for everyone listening, my name is Dan Kurzrock, I'm the co-founder, CEO of a food recycling company called ReGrained. What we do is we tackle food waste, so we identify overlooked, undervalued ingredients that are kind of hiding in plain sight. The food system closed the loop on those. So what we do is primarily right now, we take the grain from the beer brewing process. To make beer you use a lot of malt, just basically like sprouted barley and you take the sugars from that. You extract them as a liquid, that's what ferments and becomes beer. Can spoil [inaudible 00:05:06]. And there's another part of the process there.But as it relates to the barley itself, once the sugars have been extracted from it, there's still the physical grain. It's soaking wet, but it's got a lot of fiber, it's got a lot of protein, it's got prebiotics. There's a lot of really good stuff in there that currently goes to lower use. And so what we've done is built the business around applying this new processing technology. We actually have a patent on it and we can create a flour or a powder and be able to think about it that can be incorporated into new food product development. And so what we're doing is the solution that helps the food system do more with less.It reduces waste on one end and feeds people on the other end. And through R&D, we actually discovered that our process doesn't just work for the billions of pounds of grain from the beer industry, but can also be used to apply for other streams. Like think pressings from juice or the leftovers from milking of almonds or oats and there's a lot of opportunity that is being left off the table. And so we've built this business to be a platform to close that loop. And we have a consumer brand, which I imagine we'll spend some time speaking about here. And then there's also a B2B side of what we do, where we actually partner with other brands. We sell them the ingredients and we help educate and activate the world, the market to reduce waste, which is one of the most pressing solutions to climate change out there.F Geyrhalter:Absolutely and let's talk about the actual consumer brand for a second. So ReGrained you started coming up with this process and you applied it I assume to a lot of different foods to see... No pun intended, but what sticks? Where it actually works the best and you came up with these bars in the beginning. And how did this evolve? How did that start? How did it turn from two guys in a kitchen exploring how to utilize what you just realized, to actually being carried in stores?D Kurzrock:Yeah. It's how do you go from idea to product? So for us, actually the first thing that we ever made was bread. And so I was making beer every week as a college student and I'd have actually about a pound of grain for every six packs. So if you can visualize it, we were brewing five gallons of beer at a time, it's a third of a keg. We'd do 20 to 30 pounds of grain every time we made a batch of beer and then I would turn around and take that grain and use it to make loaves of bread and then sell those loaves of bread in order to buy more ingredients to brew more beer. That was really the origin of this that they got us asking the bigger questions.Then realized there's this huge opportunity here not just with our own brewing operation, but with all the other breweries that are out there. This is 2010, 2011 right when the craft beer boom was starting to happen. I think it was last year, more than two new breweries on average opened per day in the US and a lot of them were opening in cities. And so we thought what if we came up with a way to basically take the supply at scale and do something more with it. And the problem was when we knew we wanted to do ingredients, but we figured we couldn't get other companies probably to buy our ingredients before we proved that people would buy products that were made with them.And so the bread was great, but it takes a long time to make. And the shelf life is very short. And again remember we were 20 years old at the time working in a home kitchen and we had a lot of bars. And we figured we can make these by hand. We can cut them into pretty even rectangles, we can package them. The first packaging was literally Ziploc bags. I was like a [inaudible 00:09:09] dealer. The second packaging was hand sealed compostable packaging and it was just a way to commercialize the idea.I don't think of it as a Trojan horse for what we were actually trying to work towards. And it's funny because if I could go back, just want to clear on that. And I'll tell you about, I'd love to say about our other products that we just launched because it was the absolute opposite way of developing products that the bar was. We brought these to the market because we could do it pretty quickly and we could generate revenue in the short term. And it was something that enabled us to actually take action on our idea and the bars are great, but the bar category as we later learned is highly competitive and we didn't know.We've had some success in getting it to stores. We're in about 2000 stores now, but we've also now launched a new product which is this puff chip. It's a salty snack and that product, what we did is actually took a huge step back and applied everything that we knew about our ingredient, how it could be used and really tried to I guess bridge that gap between what can we do and what should we do. And developed a product for a need in the market, whereas the first line, these bars was really just the first commercialization of a concept if that makes sense.F Geyrhalter:It was a proof of concept. Totally. This is interesting, but it sounded to me like the bigger vision has always been to turn ReGrained into a platform to use your ReGrained super grain as an ingredient that can be used in all kinds of other products from all kinds of other brands. But now you're still pivoting your consumer brands as well. So you're doing both parallel right now.D Kurzrock:Yeah. So the consumer brand... That's correct about the big vision and part of that is if we were to do even like 100 million sales with our consumer brand, we'd still only work with a handful of breweries. There's just so much supply that's out there. So to make the impact that we want to make and to address the market opportunity in the most meaningful way possible, we have a very clear strategic vision for how this thing scales. And a lot of really active partnerships in development with leading in some cases, multinational food companies that are in development with us on different things.But the consumer brand is something that allows us to not only generate cash in the short term. Sales cycles for ingredients are very long, but also the test messaging, which gets to your point about the branding. So we continue to evolve our consumer brand because it helps us in real time better understand how the market responds to this new idea about recycling. Early on for example, we put the tagline, eat beer on everything.F Geyrhalter:Yeah. I think I remember that because I did some research on some of the past interviews with you and that was still a thing. And I think even naming wise, not only the tagline, but naming wise, I think you used beer type names for each one of the bars. Which was most probably confusing because it didn't taste like beer.D Kurzrock:Yeah. It actually ended up confusing, but we learned. It did a really good job though by getting attention. It created this cognitive dissonance that kind of made people go, "What? Eat beer?" And we then could earn the opportunity to explain what we're actually doing. We later learned through testing that while it was catchy and made for a great t-shirt, it confused people and we've obviously had a lot of opportunities like that to use our brand as a way to test different approaches that we can then pass on as learning to our platform partners.F Geyrhalter:So let's talk about this a little bit more because when we met, I thinks it's been... I believe it's been over a year ago, we tried our best to keep scheduling this and then we finally made it, but your brand was still in that specific weird zone where it was a little bit rough around the edges where you try to get attention to basically do an elevator pitch rather than do the big consumer push. When did you start actively investing in branding and would you do it earlier or later with your next start up?D Kurzrock:Well, we have always invested a lot of time at least in branding, although we were young and relatively inexperienced at first. I mean the first labels we made ourselves using PowerPoint or Publisher or something like that. And then we did engage a kind of a pretty common actually because of how young we were and we started. We had talented friends and so the first few versions of the product that I worked with a graphic designer friend who did it just for the portfolio and out of generosity. And then when we made the jump from eat beer to this super grand plus somewhat of a nutritional, the pluses by the way I know it's a mouthful, but it enables us on the nutrition facts panel to use the plus like you use an asterisk for organic, for up cycled.So we can say, "Hey, these ingredients are upcycled actually on the ingredient panel." So there's a layer of branding thought that went into that, but it was very iterative I guess and that each change for several years was incremental really. And what you're referring to now is if you go compared to when we met to what we look like now, I mean the whole brand got that was a revolution, not an evolution and that was definitely more of an investment in both time and financial capital to do. And we still I mean, we do everything super lean.I think really depending on the goals of the company, like what my next company is to your point, if there is a next company a lot depends on what the model and the goals are, but I do really believe that branding is something that's really important because it's the way that you are able to earn the opportunity to tell everybody about what you're doing. And so with our rebrand this revolution that we're discussing, we incorporated all of our learnings leading up to that.One of the big thematic ones is that while sustainability is arguably our biggest value proposition for what we're doing. It's one of the most important things to us at least from a values perspective. We don't believe that sustainability is necessarily a reason for purchase as much as a reason for loyalty. And so what we did is we nodded to it with our logo, it has an arrow which is for ReGrained inside and also for upcycling. The new tagline is eat up, which has a few layers and meaning including eat upcycled, but is a very vibrant, fun packaging that is really flavor forward and lifestyle forward. And we also developed a logo for upcycling.It is on the front of the pack and it's in the center of the package, but it's at the bottom. And so what we did here is try to create a brand that would be compelling on its own if there wasn't anything else there to talk about from a sustainability perspective. And then to use that as hook for the things that we really believe will make people loyal in a long term around upcycling and things like that. So we've put a lot of... We put a lot of thought into it and it's super fun. For those of you who are listening, please check us out, regrained.com would be a good place to see the branding. It's very different than what else is out there and we're proud of it and hope that it does harness enough that opportunity to have those meaningful conversations with consumers about impact and about the choices that we all make every day and what those can can net for society and the planet.F Geyrhalter:And it's really nice to have seen that change over the last year. I wonder as a consumer who might've been loyal to ReGrained the bars, and now they see this huge shift in what the company, how the company looks, how the brand voice has evolved, how the product is suddenly a very different product. Are you keeping tabs on your consumers that you had for a couple of years and are they evolving with you? What is your feedback? I'm always curious about that when a brand pivots so much like yours has.D Kurzrock:Yeah. I mean, we were still early enough in our journey that our loyal group of consumers they've definitely stayed with us. And if anything we've widened the tent and made what we're doing more appealing to more people. I also think it's worth talking about that. One of the reasons why we did such a... I always wanted to do this radical rebrand. Not always, but it had been something that I realized that every time we're doing packaging stuff, we were just kind of making incremental changes and it's scary to make a huge overhaul like we did. And in our case, it was triggered or catalyzed depending on how you look at it, by a need to reintroduce the product because we actually had a failure.We were commercializing a compostable package. So plastic packaging, let's say we can have a whole podcast episode about this. That's a huge issue, single use, it's petroleum based, landfill bounds, non-recyclable because of its multiple layers of multiple materials that can't be separated and if they could be, most of them aren't recyclable anyways. And so we were trying to do something from the beginning we were using planet friendly plastic packaging, which for flexible films, compostable is the best way to go. But our product was actually going stale in the distribution trucks before it even got to the store. And so we basically had to do its called a voluntary product fall. We don't use the R word recall because it wasn't a recall, but it was a huge challenge.And we believe that we needed to reintroduce the product as well because there were people that they didn't have an unsafe experience, but they had a bad experience essentially because obviously we were just trying to do the right thing. We made a values based choice to try and do that, but we also realized,... We ultimately realized we were trying to do too much at the same time. We kind of had to slow down the speed up. Again, it's not going to be its own podcast, but that's another. It's relevant to the branding discussion because there was this. It definitely helps us feel more comfortable making such a big jump because we also wanted to reintroduce the product.F Geyrhalter:Absolutely. And it's a huge part of a lot of rebrands and I actually prefer if a client comes to me for a rebrand when they have a huge change. May that be a huge change in direction of the company, a huge change in the product. It pivots and may there have been something negative happening and they want to change that rather than saying we want a new logo because we look stale. I'd rather have the product go stale and you pivot than only the visual change because I mean it needs to have, there needs to be a bigger message behind a rebrand so that the consumer feels like there is something changing and I can feel it, I can read it, I can sense it rather than just I'm confused why is it suddenly looking so different.I'm sure that your brand story and what you're doing as a company is affecting your company culture and if I may call it HR because I know there are people actually working. I mean this is not happening out of nowhere when you're actually producing a product. Does it make it easy to hire people if they understand how you would use waste? Is that a big magnet for you? Especially in San Francisco right where hiring is difficult even though you're not necessarily a tech company. So you're hiring very different kind of people, but does that become a big magnet for the company?D Kurzrock:Yeah. It always has been both for talent and also for press if I'm being honest. The fact that what we're doing is different in so many ways and it's got this cool hook that everyone can feel good about. And I think the most important thing of it is that our mission is very understandable and approachable. No one is in favor of food waste and also even just look at our beer angle. Beer is one of the world's oldest beverages, it's one of the most popular in the world. It's consumed in massive quantities everywhere and a lot of people don't think about the fact that beer is an agricultural product, but it uses a lot of grain to produce it. And it's something that's really, I guess quick and easy to educate someone.Like you know beer, do you know beer only has four ingredients? Do you know that the biggest ingredient used by volume is the grain and that only the sugars from that grain end up in the beer? Well, we take everything that's left and we put it the best use. We create really innovative ingredients and products and we're trying to do this thing that is really easy to get behind I think and that's part of what energizes me too. It's like I know that what we're working on is real. I know that it's good. Fundamentally it's just simple idea but it is pretty universally attractive I think. And I just of course hope that we can pull it off and bringing in the right people is the way to do that because that's...F Geyrhalter:Absolutely.D Kurzrock:Personal note.F Geyrhalter:And I guess the next question would be why are you located in San Francisco?D Kurzrock:I'm from here.F Geyrhalter:That's how easy it is?D Kurzrock:Yeah. It happens to be a great place for startups and innovation, but not so much for food [crosstalk 00:25:13]. Help you with very low margin business. It's a very expensive place to live. Now, it's not like I moved here to start this. This is my hometown. This is my community.F Geyrhalter:Makes a lot of sense.D Kurzrock:[crosstalk 00:25:25] my co-founder and that's why we're here.F Geyrhalter:And I'm super interested seeing how after this pandemic there has been this talk about Silicon Valley and San Francisco now that everyone can work from home, how does this going to change the city? Because people start to actually leave because they have amazingly paid salaries and they might just buy a ranch in Montana and happily worked for Google. So I'm super interested to see how that's going to change San Francisco and the whole landscape. It's totally off topic but it's very interesting.D Kurzrock:Maybe it'll make it... Maybe it'll make it affordable to possibly buy a home here someday. We'll see.F Geyrhalter:How about that. You stay behind and you should be the role model for that. You know what you just said before, we talked a little bit about your mission, which is deeply ingrained in your company and you don't have to write out your mission, you don't have to write out your vision, you don't need to say, "Here are our core values." Because everything is so deeply-D Kurzrock:Yeah. We do that anyways because its good exercise, but I get your point.F Geyrhalter:... good. And I'm glad to hear that you still do that, but it is fantastic because it so much part of what you're actually offering. There are two numbers that I want to voice to our listeners because I think it's so amazing. In your TEDx talk, you said that we humans waste 40% of all edible food and that to me is just mind blowing. And that only 60% of what we eat actually goes into the human body and 40% goes somewhere else. And the other step, if I want to call that is and I heard that somewhere else and I think it was you who said that too, that only 10% of the ingredients used in the beer making process actually end up in any pint of beer. I hope I didn't misquote you on both of those, but that is amazing.D Kurzrock:Yeah. And all these statistics they're obviously documented, but they're ultimate... I think they're most useful when they're seeing this as like here is sticks and as a way to think about the issue in a more macro sense. So with food waste, ReFED is one of the best resources to look this up. R-E-F-E-D. They did a massive economic and environmental quantification of the food waste problem and that's where that 40% statistic comes from. What's kind of crazy about that is not only the fact that it's like leaving the grocery store with five bags and dropping two in the parking lot on the way to your car. It's that measure actually underestimates the total opportunity as it relates to upcycle because just like with anything that is measured, there has to be a definition, parameters for what is being measured as food waste and food loss.And what upcycling is doing is we're challenging that very definition by saying so what if we're counting wheat that's grown in the field, why are we not counting barley just because it's already been used to brew beer? There's still nutrition that is there. It just requires some innovations and processing and also on the culinary product development side too. And so we actually co-founded an organization called the Upcycled Food Association. It's a nonprofit dedicated to the upcycling piece of the food waste, the food waste movement. And food waste I hinted at this earlier is...So there's another great report that has come out called Project Drawdown and it's a solution focused report that's basically takes a look at all the different potential solutions to achieve and dry down in the atmosphere and reduce just mitigate, but actually reverse the climate change and it's effects. And it ranks through solutions in terms of what's most effective in pressing and food waste is this is right at the top of the list along with... When you combine it with having a more plant based diet, it's not only one of the most impactful solutions against climate change, but it's also something that is in our direct control as consumers.Not all of it. Of course there's systemic issues that drive a lot of these things, but one thing that we all do universally as humans every day is we eat. And we make choices about what we eat and how we eat it and that's something that we really try to champion. ReGrained is bringing another level of consciousness to those choices and to the impact that we can make with them. And so that's part of what we're doing. And the thing is when you're trying to communicate, when you're trying to educate the world, not all of this stuff is going to sit on a package and it's also hard to visualize.So what does 40% of all food look like? What does that mean? 10% of the ingredients used to grow end up in beer? And we also worked at communicating this using other [inaudible 00:31:21] if you also felt like for example, to produce one six pack of beer, just the grain in it takes the equivalent of over 300 gallons of water, which is about... Which is about a two hour shower.F Geyrhalter:Yeah. Mind blowing.D Kurzrock:For one six pack and that grain is just being used today for its poured sugars. And so what we do by sharing things that as I was trying to say, well, isn't it common sense that we should try and rescue that what's left from going to lower uses and put it to its best use at the top of the food recovery hierarchy and feed people.F Geyrhalter:Absolutely and this brings me back to the idea of the platform. So how are... You're basically running two companies in parallel, plus a nonprofit, right?D Kurzrock:Well...F Geyrhalter:Unless that overwhelms you.D Kurzrock:I mean [inaudible 00:32:25] we co-founded a nonprofit. I'm on the board. There's a CEO for that, I'm not [crosstalk 00:32:32]. So the Upcycled Food association. And then ReGrained as platform I mean that you could argue that it's maybe three companies in one, but the strategy is so integrated that it doesn't feel that way. Everything that we're doing affects the whole platform, but I get what you're saying. I mean, it's hard enough to start a consumer packaged goods brand.It's hard enough to try and start an ingredient company or to develop processing technology and the way that we've been able to do a lot of those is also through strategic partnerships pretty early on. We've worked with the USDA to develop our technology for example. We've got a really cool group over there that's focused on healthy processed foods and there's an old story in there about how we met up with USDA and the work that we did together. And that's the reason why we have technology is because of the product of that relationship, not because we're PhDs because we worked with experts.And so we're really trying to do a lot, but it's all very both complicated and simple [crosstalk 00:33:45]. What we're trying to do is do more, we're trying to do more with less. We're trying to help run a system whose system does more with less. Our mission statement you brought that up earlier, is to better align the food we eat with the planet we love and everything really fits under that call to action.F Geyrhalter:And first of all, that's a great statement and it totally connects the brands. So the problem if you would run three different brands to do slightly different things, then it becomes problematic. But if all three brands are perfectly aligned around the same vision and maybe not the same vision, but well the overarching vision for sure, but the underlying mission then certainly everything is much more connected and easier to run because there's no confusion if anyone sees any of the other brands or companies that you're running.Looking back on ReGrained as a consumer product, what was the one big breakthrough moment where you felt like now we're actually a brand, now we actually did it. I don't know which store you would have been in the beginning, maybe whole foods or wherever it was. Was there a moment that you remember where you just sat back with your co-founder and you're like, "I think that's it. I think we're actually making it into a real brand right now."D Kurzrock:No, I can't pinpoint one moment like that. I mean it's has just been almost 10 years since this first entered my brain. We've been building a thing and a lot of times it feels like we've gone through periods where it feels like we're taking two steps forward, one step back. There's periods where it feels like we're taking one step forward, two steps back. You know those periods where it feels we're taking one step forward and one step back and just staying in the same place and that's a tough one. I think most recently though, with the launch of this last product because we actually launched it in March right when the pandemic was... Or at least the lockdown from the pandemic was starting to take hold, which affected retailers.We're still not on the shelves of any stores because they're all still focused on keeping up and not putting new products on the shelf. That'll come later in the year hopefully and so we had to pivot to direct consumer channel. I was super nervous we'd be sitting on a warehouse of product that we couldn't sell because our retail entries are going to go out. And instead we sold through two production runs in a very short amount of time. And I'm seeing really exciting growth on that and part of that experiences is, a huge part of that experience has been enormously stressful and a lot of fun, but it's also been great like we're doing something here, something's working. We're creating a product that people want and that feels good.F Geyrhalter:And if you can point to one thing that made that work, I mean, obviously that's a huge struggle. You thought you had your sales channel all figured out, you have the product ready to be basically shipped and suddenly you have to... Suddenly everything goes online, you're turning into an e-commerce brand. You need to unload this product quickly and make people aware of the product at the same time. What made it work? How did you do that?D Kurzrock:Well, I think it's about building for resiliency from the beginning. And so even though e-commerce wasn't our biggest channel, we had the infrastructure for e-commerce in place and not just e-commerce, but direct to consumer [inaudible 00:37:43]. One of our best partners is a company called Imperfect Foods. They do grocery delivery, also very mission aligned. Incredible company for anyone listening, Imperfect Foods, go look them up. They deliver nationally. We were able to just put more emphasis on these channels that were already, that already existed as opposed to having the world fall apart and saying, "Oh, crap, got to build a website that can take orders now. Got to find a marketing partner."So I think the choices actually has to happen really early on when you say how do I build a resilient business? And part of that, a big part of that is having diversified revenue streams. Another way that we thought about this relatively earlier on is the food service channel was something and especially being in the Bay Area, being able to sell products to tech companies that stock their break rooms with snacks. It's an incredible sales channel, a great way to diversify against retail.Guess what right now doesn't exist. May as well not exist. And so if we were over-indexed as a business towards those channels, that would be also very... So we tried to set up diversified revenue streams from the beginning and I think that is what enabled us to respond. I wouldn't say proactively because it was still catalyzed by this outside force, but we were able to respond with resilience. And not even head start and I don't know if we'll totally get into this, but our capital strategy as well has followed a similar philosophy.F Geyrhalter:Well, I think it's the age old wisdom that myself actually did not know when I started my company and I failed miserably because of that too, is not to put all eggs into a basket. I mean, we had one very large client and we moved very quickly forward with that client. I grew tremendously the company and then something happened and the client left. There was a dispute, there was someone that I fired that they hired and it was really ugly. And suddenly that client was gone and it's this lesson that I think all of us learn in the first years of our business. For me sadly, it was in my first decade of my business. To diversify, to make sure that what you offer, that you offered in very different ways, in different channels to make sure if anything happens, you can pivot to another channel, so it's a big-D Kurzrock:I'm sorry. I'm sorry to hear that you went through that, but I'm sure it helped [crosstalk 00:40:45] get to where you are.F Geyrhalter:... that's how it works. That's how it always works. In business, you have to like you said, it's the two steps back. There was definitely 10 steps back at some point which was really exciting in the pivot and I'm in such a good place now because of that. We're coming slowly to an end. A couple of more questions that I do have on my mind. The first one I always believe that it's important for a company to understand what their DNA is. And when I work with my clients, I try to define it more and more so that at the end of our session and that sometimes a full day session, that we can actually describe the entire brand in a single word.Like Everlane, for instance, is all about transparency, Zappos might all be about service, but if an entire company can just focus on this one word that they themselves feel like they can own within their own space, what would it be for ReGrained and the conglomerate of companies of ReGrained? What could be one word that could describe the brand?D Kurzrock:Well, kind of two words, but it's the same word twice. One thing that comes to mind is just win-win. What we're doing is creating solutions that solve for multiple things at the same time and create shared value. What I almost said was just upcycling, but that's a little too I think on the nose for the question and [inaudible 00:42:39] requires. I recognize that, but that's [inaudible 00:42:46] just off cuff [crosstalk 00:42:48] question.F Geyrhalter:I liked that especially because you know I've done this show for a while now. I'm up to 50 guests or so, and they are a lot of words that keep coming up. Rightfully so like empathy or things like that and win-win is at first. Even though a lot of companies do similar endeavors like yours where it is for the greater good and there's definitely more people winning than only one. Lastly, what is exciting you the most about the future of ReGrained? What are some things that you're doing right now that you can talk about that really get you excited?D Kurzrock:Yeah. There's a lot of really exciting things fortunately. One of the phrases that's been said a lot right now with everything that's going on, I think it has its roots in politics and I don't know who said it first. It's definitely overset right now, but there's this idea of never wasting a good crisis. And as a food system, this pandemic I think was about a wake up call in a lot of ways, and it's also created some fundamental shifts in buying behavior. And I really believe that it creates this opportunity for us to decide together how to emerge stronger from this whole thing.I think upcycling and food waste is really high on the list of concepts that should take off. I mean, there's could have been a lot of ways this whole thing it's been a super acute shock to the system. And it's also kind of a dress rehearsal for some of the impacts of climate change like disruptions in supply chain and so on. And so I'm really excited by some of the work that we're doing with our partners and the products that we're developing, one of them is going to hit the market later this year. That is kind of powered by ReGrained concept and we are very excited for those things now, for essentially the market.The other thing that I'm really excited about it as the Upcycled Food Association right now. We just released the first official definition of food upcycling or edible upcycling as we call it as ReGrained. And then the next step that I'm just so pumped about is a process for defining standards against which to certify products as Upcycled. And that type of well, the branding exercise too. And then as a way of communicating values to the market, I think that there's first to pull the thing off in the way that we wanted that this is a really important milestone. It's a [inaudible 00:45:58] thing that's going to happen this year too and I'm very much excited about that.F Geyrhalter:That is amazing. And that actually ties in nicely into my last question where people can go to regrained.com I assume. That's where they can find you, that's where they can look at your products with your story, learn more about upcycling etc. But what are some ways that you feel people could upcycle more in their own lives when it relates to food, but maybe overall. I think what you said was really poignant. I think it was really important and I do think that there's going to be a huge shift now. And you are kind of at the forefront of the all of this. Besides your product, what are other ways that people can easily start shifting their mindset?D Kurzrock:Yeah. And just be clear, we also really hope that our products are actually just a way to get people's attention, to get them to also start asking those questions themselves. The fact that you got there, with this questions is great. We actually on our website, we have a blog called the upcyclist and on it there's some recipes and things like that. One of the things that I've been saying a lot recently is that I really feel that this new environment for food consumption that we're in with shelter in place and with more people ordering online and eating in and things like that.It's actually a really good opportunity for people to waste less food at home. And to look at it because it's a pain to go to the grocery store right now and it's also a risk. And there's the perception of the risk versus the actual risks and ways to mitigate and things like that too, but the net is that you want to go to the store less right now. And so how do you stretch things longer? And it's a lot of ancient wisdom, these aren't new ideas. It's like if you kind of [inaudible 00:48:06] chicken and you roast it, you have roasted chicken one night and then maybe the next night you used the...F Geyrhalter:Chicken soup.D Kurzrock:The leftovers to make... Soup would be the third thing, the second thing could be like tacos or enchiladas or something and then soup. So how you do the most with what you have when you're trimming vegetables and things like that for stir fries whatever. Can you save the scraps and make something. You can make stock, or there's different way, lots of little tips and tricks that you can do at home. One of my favorite tips for wasting less food at home, it's just an extra simply just two organizational points. One is meal plan. Again, if you want to go to the store less, that's helpful anyways. Plan out your meals, you're less likely to waste when you have a plan. Have a plan and stick with it.For two [inaudible 00:49:01] and so in the fridge, if you could just have one drawer that is a use first drawer and for things that are starting to go bad, put them in that drawer, and then you know when you get there instead of saying what do I want for dinner? The question is what do I have for dinner? What can I make with what I have? And just kind of little shifts like that can have a really big impact in food waste. Put the half of the problem actually happens at home. So if we want to take action on food waste, it's not just about eating upcycle and facilitating food donations and things like that. Also let's be smarter and more efficient with our own purchasing and consumption. Let's get creative, it's fun, it's food, it [crosstalk 00:49:46] can be delicious.F Geyrhalter:And I mean what you just said, a lot of people right now I mean we're moving from the pandemic I guess via riots now into a depression. I mean, yay all us, but we're in a place right now where there is a ginormous amount of Americans at least that are deep in poverty or that they suddenly have to be extremely frugal. So on the one hand, that is definitely something that they are now forced to do and on the other hand, all of us should wake up to that. And I think what you said is exactly true.People are waking up now because they don't want to go out more and they start seeing, "Oh my God, how much do we actually waste?" And a lot of people hoard it. So they've got a full fridge for a family of 10, but they are only two people living in an apartment and they are [crosstalk 00:50:37].D Kurzrock:Yeah. And that's the other side of it. It's how do we also not waste more? And this and so now I've got all kinds of plastic concerns and things like that, but I just hope we do take the opportunity to emerge stronger from this and a lot of this is just common sense. Vegetables are also cheaper than meat and wasting less food, waste less money. And so that's just like there is alignment here between what's good for people and what's good for the planet and I hope that we really lean into that.F Geyrhalter:We're all slowly waking up. It takes a lot I guess for all of us to wake up, but here we are one step at a time. Dan, thank you so much for your time to talk about ReGrained, to talk about the platform that you're building, the nonprofit that you are building, about upcycling altogether and about your entrepreneurial journey. I think it was inspirational on many more levels than just the brand story. So we really appreciate you taking the time on a crazy Monday morning.D Kurzrock:Yeah. My pleasure man. Thanks for having me. Thanks for having me on. It was an energizing conversation.F Geyrhalter:Absolutely. Thanks for being here. I appreciate it. We talk soon then. 
Learn more about NikolaFollow Trevor on TwitterSupport the show and get on monthly mentorship calls with Fabian. Join here.Full Transcript:F Geyrhalter:Welcome to the show, Trevor. It's an incredible honor to have you on Hitting The Mark.Trevor:Thanks guys. It's going to be a lot of fun. A lot of stuff's happened, even over the last week. Wow.F Geyrhalter:I wanted to start off with that. I mean, it's been an interesting last week for you. You're officially trading on Nasdaq, which is amazing. And during this whole thing, during the quarantine, must've been a very strange kind of experience for you.Trevor:Yeah. Second biggest day of my life, I tell people, because the first day was when I got married, but the second day definitely was being listed on the Nasdaq. I mean, that's everyone's dream, to become listed on the Nasdaq and doing it through the coronavirus was actually incredible, because I'm a big believer in trying to find the good in all situations. And there was a lot of really difficult things going on around the world with the coronavirus, very sad. And so we turned Nikola into America's comeback story, and that was a company that the world could rally behind that, they'd be proud. America would be proud, the world would be proud. The first zero emission semi-truck manufacturer in the entire world, to be dedicated only to zero emissions. And the investors have heavily rewarded us for it. Today, we're at $53 a share or whatever, about $18 billion valuation in our company. And I mean, we're going to be overtaking the biggest brands in the world here, shortly. And what a wonderful experience that has been, on all levels.F Geyrhalter:And hence, I love having you on so much, especially now a couple days after this, it's amazing. I've been following your brand for quite a while. I'm a happy shareholder now too.Trevor:Oh, thanks.F Geyrhalter:I'm glad to hear the news today. That's good, it seems like we're going into the right direction. But just to read a couple of bullet points from your press release, you raised more than $700 million. Pre-orders represent more than $10 billion in potential revenue and your hydrogen network anticipates to cover all of North America and it sets to become the largest hydrogen network in the world. This is mind blowing, but it's especially remarkable since you founded the company in 2014 and you only officially launched in 2016 with a prototype and only a few engineers. Further, if I'm correct, you're only 37 now, right?Trevor:38.F Geyrhalter:38?Trevor:Yeah, 38.F Geyrhalter:So you started the company when you were 29, out of your basement. So how did you get from there in 2016, to where you are now? I mean, it is not easy to create a company like yours.Trevor:No.F Geyrhalter:Talk us through a little bit of the founding steps. You're kind of compared sometimes, a little bit to Apple, the way that you guys were all sitting in your basement, you know?Trevor:Yeah. I have some really cool articles on my LinkedIn that I would recommend everyone go read. And I put some serious thought into those very heartfelt discussions about what it took to get here. And I'm going to tell you what those are right now, but I want people to know if they want to read in detail, they can go there. I've told everybody that I've ever met, that if you want to create wealth, it will not happen in under 10 years, ever. There are maybe one or two examples in the world that ever did happen quicker than that, unless you just got lucky, like some oil on your property or whatever it may be.But ultimately if you're going to create real wealth, it is a 10 year program and most likely, you're going to fail, the odds are against you. So here's what I tell people, "Look, if you want to be an entrepreneur and you want to do this, it is the most rewarding and invigorating thing on the planet Earth, when you succeed. It's also the most difficult, emotional, draining venture you'll ever do, when you fail. It'll wreck you, it'll wreck your body, your health, everything about you. So the risks are high, the rewards are high and the odds are, you're going to fail." Now, where people succeed is when they've got multiple failures and multiple successes underneath their belt.So this is my fifth company. I'm 38, it's my fifth company. Three of them have been successes and two have been failures. And it's amazing, because you look online and some people are bashing me because they're like, "Ah, I would never want this guy, this fraud, who's failed twice in his life to touch my money." And I'm like, "Well, you should definitely never invest in me or my company then, because I don't know a single baseball player in the world that does not strike out when you're hitting home runs." The best baseball players in the world have a .400 batting average, right?F Geyrhalter:Yeah.Trevor:And so, 4 out of 10... I would never want anyone touching my money, if they haven't failed. Because if you don't know what it's like to lose everything, then you're going to make some really stupid decisions in your life. And so, these are just haters, just online haters that just hate you no matter what.F Geyrhalter:Yeah.Trevor:But to get here, that's the beauty of this. It started out of my basement, truly because we didn't know if we really had a product at that time. We worked out of there for a year. And here we are now, a $18 billion company, a couple days after the Nasdaq listing. So it's pretty incredible.F Geyrhalter:It's a story of determination, that's for sure. Especially going against this kind of industry and fitting in and standing out, it's not easy. Let me share Nikola's mission with the audience. It's to "Transform the transportation industry while improving our employees' lives and leaving the world a better place." Now you're very much a visionary, so mission and vision and values and all of this brand work that I usually do with my clients, that must come naturally to you. But I wonder, have you used outside help to create those brand pillars, like most companies do? Or was this Trevor sitting on his desk late at night, jotting them down?Trevor:It really was. It was a lot of, Trevor sitting down on his desk.F Geyrhalter:I'm not surprised.Trevor:And creating these things. I mean, look, here's the thing, I love communication. It's one of my favorite things in life. I value communication as one of my greatest talents and assets I have. And that's because you can communicate through all the craziness in the world. Like you said, there's so many brands out there, how do you create a brand that is so special to the world? Well, in order to do that, you have to solve problems that are special to the world. And you'll never stand out if you don't change the world.And in our mission statement, to leave this place a better place than we found it, I truly believe that. It's my life goal, to leave this place better than I found it. And Nikola, if we pull this off, which I believe we have a very good chance of doing. If we pull this off, with getting all of our trucks built, all over the world, then you're going to see the greatest reduction in emissions the world has ever seen, ever by any company on the planet. And so, that is why people are rewarding us. They're rewarding us because we're making a bigger change than anyone else is making.F Geyrhalter:Well, you are a purpose driven company and that's not just some brand statement, that is true, right? I mean, you're solving one of the biggest problems, that are out there right now.Trevor:Yeah, you're purpose driven and then you actually have to be profitable. I think that's why Nikola has done so well, is because our business model's huge, our margins are... We make five times more revenue than Daimler does. Now just imagine that, per truck sold. So the reason why we're successful is because we've vertically integrated the whole supply chain. So when you buy a diesel today, heaven forbid. You buy a diesel, you're going to spend 150 on the diesel, right? 150,000.F Geyrhalter:Yeah.Trevor:Then, you're going to spend a million dollars on the oil to power that diesel, over the life of it. So the oil companies are back there, just clapping their hands, loving every second that Peterbilt or Daimler sells a diesel truck. Because they make more revenue than Peterbilt or Daimler has ever dreamed of making.F Geyrhalter:Yeah.Trevor:So that's where I was like, "Dude, this is crazy. Why are we not sucking all that money out of the oil company's hands and putting it in our own pocket?" And that's what I did. I said, "Okay, we're going to sell the truck, but we're going to provide all the fuel at a fixed rate for seven years." And now, we've stabilized the cost of hydrogen, driven it down low, made it towards cheaper, that it can be cheaper than diesel. And we're taking that 750,000 to $1,000,000 in revenue, in oil and we're bringing it into our own pockets. Because we're not doing oil, we're doing hydrogen. And so we make five times more revenue, on every truck we sell, we get about a million dollars in revenue. So that's why Nikola has done so well.F Geyrhalter:So cool. Unbelievable. And you beat Daimler and Volvo and Tesla in bringing the world's first zero-emissions truck to market, right? I mean, that's one of their claims to fame. And you build your trucks in Ulm in Germany, where I was just visiting family a few months ago. So I'm wondering, the whole "Made in Germany" brand, so to speak, it had a lot of cachet. Was that a big reason to get German engineering or was it mainly logistics and a financial decision, with the first rollout? And of course, as a second part to the question, has the Volkswagen emissions scandal tainted this reputation within the market?Trevor:Oh man, the Volkswagen emissions scandal was like, I hate to ever take advantage of a bad situation, right? But I mean, it was the greatest thing for Nikola that's ever happened because the jackasses-F Geyrhalter:It was fuel to the fire.Trevor:... they lied to the whole world, they deceived everyone. People realized that they were cheaters and the world has now rewarded Tesla and Nikola for both pioneering zero emission around the world. But that's a whole different thing. Why is it built in Ulm? Well, let me break this out real quick. We have two factories. We have one going up in Coolidge Arizona, which is part of Phoenix Arizona. And we have one factory going up in Ulm Germany, right now. And Ulm is spelled U-L-M for all the Americans that don't know how to say Ulm.So the reason why we have Ulm Germany, is because our partner IVECO, we did a massive joint venture with IVECO and this joint venture is going to provide all the battery-electric and hydrogen-electric trucks to all of Europe. So right now, we were the first company to launch the zero-emission truck, we're the first company to do full production of a zero-emission truck. We were first and that's one of the greatest things out there. And it's a full production truck, over 300 miles. There are other people that have the little rinky-dink trucks that go like 150 miles, but I'm talking full 300 miles, pulling a real load.So we're the first company in the world to do it. They're coming out of Ulm Germany. In just a matter of, I would say less than a few months, we'll have the first ones coming out that are hand-built. And by middle to third quarter of next year, full production begins, out of that factory. So in the same time we're building our American factory for our American trucks, we're going to provide both the battery-electric and the hydrogen as well, but they're built to go longer distances, 500 plus miles. So that's kind of how everything's going right now is, yes, we did beat everybody. We beat Daimler, we beat Volvo, we beat Tesla, we beat everybody. And it's a wonderful feeling to be able to do that.F Geyrhalter:Oh, sure. Yeah, it's unbelievable. And even though you're known for your trucks, let's talk about that insanely cool Nikola Badger, which I believe you just made an announcement this morning, when we're recording that it is going to be available for pre-order starting June 29th. So this month, right?Trevor:It is. The Badger's this badass pickup truck. Well, let's just put it this way, the reason why people have not been a fan of electric pickup trucks is because they can't do what a gasoline can do, right? So even with the Cybertruck from Tesla or the Rivian truck, they're very small, they don't go very far. They can't pull a trailer up a 6% grade. They can't handle the continuous load that you can put on a gasoline vehicle. So that's always been the biggest hinderment to a electric truck, was people want a truck that can actually pull a trailer. They can take it to a construction site, they can drive around with their family, they can pull a boat with it or whatever.F Geyrhalter:Yeah, yeah.Trevor:And so we built that. We built the most gorgeous, badass electric, hydrogen pickup truck in the world. And what sets it apart from everything, is that you can order the Badger as a battery-electric truck, that'll give you 3 to 400 miles on its own. And you can also order the Badger as a battery-electric and hydrogen truck, which will give you 600 plus miles on a range.F Geyrhalter:That's insane.Trevor:So the customer can fully spec it, how they want it. And everyone else is like either, "Oh, you'll only get battery." Well, some people need the continuous horsepower or the additional range that hydrogen gives you. And so, you can order either way with a Badger and we're the only ones in the world that offer that.F Geyrhalter:Well, it's 980 torque, I read and 906 horsepower. I mean, that's pretty unreal, right?Trevor:Yeah. It's a very pissed off truck and you have to be careful because it'll come off the ground. So we're having a lot of fun with it. And the best part is here, just in a few days, on June 29th, we're going to start accepting reservations of that. And we're going to show the real truck off here, at the end of this year, at Nikola World 2020. And I'm not talking about some show truck, I'm talking about a metal stamped, beautiful, gorgeous, fully-functioning interior, exterior, power windows, power seats, HVAC, just awesome truck. Every other person out there building trucks, half the features don't even work, because they're just show trucks. This is the real thing.F Geyrhalter:Well, I think you just totally hit the nail on its head, with this entire philosophy around it looking like the next awesome, but a bit more classy and way smarter truck. The design is really, really cool. I went to ArtCenter College of Design, which is a school known for its Transportation Design Alumni, shaping a lot of the industry. There is a lot of talk about tech and engineering with Nikola, but design is also extremely crucial to your company. Can you tell us a little bit about the design philosophy behind the brand and by now, I guess you have what? Six, seven different vehicles in the line?Trevor:So design is everything. I mean, listen, the reason why Apple is Apple, is because they have the greatest designs known to man. Their packaging is incredible, their experience is incredible and their product is stunning. And people don't get this. I mean, it's unbelievable how the automakers make the most ugly-ass vehicles you've ever seen and they expect them to sell. Nikola is, if you were to ever compare it to anything, the gorgeousness of what Apple does with their design and their products is very similar to what Nikola does. Every one of our products, you should see the battles that go on here at Nikola, with the design team and me.If people had a... If they were a fly on the wall, just the stories told would be funny because I come into my design studio and I'll tell my guys, I'm like, "Guys, I won't buy that. That's hideous. And I'll never allow that to be sold. You're going to fix that. And it's got to be something, if it will not sell me, no one will buy it." And it's brutal. You get in, sometimes you have to throw a whole vehicle away because you're like, "It just doesn't work. Nothing works. It doesn't work." And so the Nikola Badger, is probably the most gorgeous truck that's ever been built, in history, in my opinion. And a lot of people agree with that. And that's how all of our product lines are, even our big semi-truck, the Nikola Tre and the Nikola Two, worldwide they're known as the most beautiful semi-trucks ever designed. And imagine that, an American trying to build a European cabover, that's gorgeous.F Geyrhalter:Yeah.Trevor:The Europeans can't even do that sometimes.F Geyrhalter:Yeah. And I think, one thing that is so important to point out is that a lot of these cars, they're like the future cars, right? You look at them and they don't really feel realistic. But what you guys are doing, you perfectly matched that idea of where people are today and what they expect the future to be, rather than these crazy idea cars that you can't even see them on the roads, right? So that's why I think what you guys did with the Badger is so perfect because it fits in today, yet it stands out. But it doesn't look like this awkward, I don't want to mention any of your competitors, but...Trevor:Well look, this is the thing about truck owners. I'll mention them, the people that are going to buy the Tesla Cybertruck are going to be Tesla fanatics. You're going to get a few people outside that are going to buy it, but it doesn't function as a real truck. It doesn't have the features of a real truck. Now, it's cool, when it comes to like, it's pushing the limits, but it's not a real truck. It doesn't have the visibility you get in a truck. It doesn't have the bed that you get in a truck. It doesn't have the ability to put a fifth wheel on it. A real truck needs to do what real trucks do. And so, we had to build a truck that was gorgeous, yet would function as a real truck. And we partnered up with, actually awesome, the Diesel Brothers. And it's really cool because the Diesel Brothers are known as building diesel trucks, right? They can break any truck ever built, they know how to modify every truck known to man and they know what parts fail.So it was interesting, because we got a lot of questions that said, "Why'd you partner up with Diesel Brothers? They do diesel, you guys are all about zero emission." And I'm like, "Yeah, but the Diesel Brothers, they don't stick their head in the sand and say, 'Oh, only diesel's ever going to function.' They came out and they said, 'Look, it is time now, the world's changing. And we want to be part of the greatest transformation of trucking engineering known to man. And it's going away from diesel right now, it's going to electric mobility.'" So we worked with the Diesel Brothers and they've really helped us build this pickup truck, to become a pickup truck that would never fail. And believe me, we're going to have failures, but we got the teams behind us to make sure that this truck is designed as a real truck.F Geyrhalter:And that's the power of partnerships, right? And understanding who to align yourself with, which is a huge, huge thing for entrepreneurs to learn.Trevor:Yes, this one really bothers me because I preach to people about how important it is to find people that are better than you, to work with. And to work with people that do things better than the things that you're not great at. And I went on this podcast and I got hammered by a lot of my competitors' fans. Because they're like, "Oh, Nikola doesn't do shit themselves. They outsource everything." No, that's not true. We do all the really important stuff, like intellectual property controls, software, hardware development, everything else, we do all that. But what we are not good at is building factories, right? And so these guys hammered us. I mean, all their followers, like tens of thousands are like, "Ah, Nikola's a total con job because they don't build their own factory. These guys are not Tesla."And I'm like, "Do you realize how many billions of dollars have been wasted by Tesla, because they didn't work with someone that knew how to build factories and do them..." I'm a big believer in working with people that are better than you. And so, I don't need to be so arrogant to say that I'm better than everyone at everything. I don't need to be better than everyone at everything. I need to be better than my competitors at one thing and I can beat them. And so, I think that's what we do is we're really good at partnerships. We're going to be signing a joint venture for the Nikola Badger with a big OEM and it's going to be sold, serviced, and warrantied through their dealership, all across America. And I get access to that, day one. I don't need to go out and spend $5 billion building our own service network.F Geyrhalter:Yeah.Trevor:So I'm a big believer in partnerships.F Geyrhalter:And that's what happens when you failed a couple of startups and when you sold a couple of companies, right? I mean, that is just that kind of information that you gather throughout the journey. And a lot of people wouldn't understand that immediately. But we talked about you obviously competing head-on with Elon Musk. Tell me, is the Nikola brand name really derived from Tesla's first name, the actual inventor Nikola Tesla? Was that a "Go bold or go home" move of yours, where you said, "If we go in, we go fully in?"Trevor:Yeah. I mean, look, so it was named after the Serbian-Croatian brilliant mastermind that probably had a greater impact on society than anyone else in the world. He created the alternative current, the generator, the turbine, all kinds of things. This guy was the most brilliant electrical engineer known to man. He could power vehicles wirelessly. He could power homes wirelessly from miles away. Even today, we still don't know how he did it all.It was named after the inventor, Nikola Tesla, and it had nothing to do with Elon or Tesla themselves. They didn't even enter my mind when I was making this decision because I was naming it after the inventor. And just like millions of other people that looked up to that inventor, it's to pay tribute to him. Has nothing to do with the Tesla car company at all. It's just cool that Tesla is making one of the biggest impacts in the world for electric mobility in cars. And Nikola is making one of the biggest impacts in the world for Electromobility in trucks. And so, it is kind of cool to think about that, the fact that Nikola and Tesla are both kicking ass and beating everyone around the world.F Geyrhalter:And I noticed that you don't own a nikola.com, which is a very sad website for what appears to be a small electronics design engineering firm. There must have been a conversation to acquire the .com. What is the juicy story behind that domain name and how Nikola doesn't have the .com?Trevor:The name was taken already and the guy had no interest in selling it. So he may sell it one day, it's becoming more and more valuable. I'm sure he'll sell it to someone, it'll probably be someone who hates us and trashes us.F Geyrhalter:But no more interest from your end, you moved on.Trevor:No. Yeah. I mean look, everyone knows it's Nikola Motor. And when they look us up, it's already well established that way. We can see how many people actually type in our name and the wrong name and we might get 1% more that actually go to the right name. I don't care about the domain, it all comes down to the fact that it's Nikola Motor. It's not Nikola, it's Nikola Motor. So I don't know, who knows? If he ever wants to sell it, we talked but he had no desire to, and I'm sure our competitors will probably offer him some stupid amount of money and buy it.F Geyrhalter:Yeah. Or he might ring you now that you're IPO.Trevor:I'll give him one of the first Badgers, one of the most valuable thing. He'll love that.F Geyrhalter:Oh, there you go. Done, you heard it here first. So let's talk about the brand a little bit more. I know we only have 10 more minutes or so, to go. But when my brother and I were kids and we were on those long road trips across Europe, in my parent's tiny little Renault, we played the game on who could identify passing cars by brand, based on their rims and logos. When was that N brand, the brand mark on the badge, the N. When was it crafted for Nikola? I feel like this is a more recent addition to the company's branding, right?Trevor:No, it was actually from day one. The N, it was from day one and it was made to be almost like a superhero logo. So if you were to look at Superman or you were at one of the other ones, you'll notice that it's one letter and usually circled by something. And that's why we went with the Nikola, that's why we designed that was, it's an N with a border around it. And what that does is, you can see it from a mile away and you'll know it's Nikola. It's so distinguishable that nothing ever will confuse it. And that was the idea is, it truly is a superhero. And that's what's cool about it. You'll see it from a mile away and everyone will know it's a Nikola, playing that game in their car, with all their children.F Geyrhalter:That's exactly it. You would have passed the test. What does branding mean to you? I mean, after going through a couple of startups and now having achieved what very few entrepreneurs will ever achieve with the IPO, what does branding mean to your company?Trevor:I'd say there's three or four main pillars of building a company that will last forever and actually make money. Branding and design is one of them. Your team is another one, your team. And then your ability to communicate is one of the four pillars. There's a ton of them, right? But the idea is, your ability to communicate, which is part of branding. Branding and design is everything. People, they want to touch your product, they want to be proud of it. And they're not going to go drop 60 to $100,000 on a pickup truck if they don't think it's the most gorgeous thing that they've ever seen. And people have got to learn, branding and design is everything.It's one reason why I love Audi. Look, there is no better design company, I think in the world than Audi itself. Their team has got their shit down so good, when it comes to branding and design. It's probably the only thing that saved Volkswagen. And that's why you got to be an expert at branding and design. It's everything, it speaks to someone's soul. People have to be proud of representing what you have and that's why the branding and design's so important.F Geyrhalter:Well, and the brand is the soul of your company too, so it touches everything. It touches your company culture, HR, it goes pretty deep. And since your company is based on a strong purpose, on actually changing the world, I'm sure that that had ripple effects from the get-go. I'm sure you don't have a hard time hiring people in your company.Trevor:No.F Geyrhalter:If we think about the DNA of your brand, right? That one word that could describe your brand. I always love to figure out, what can it be, if we just put everything into one concise word? So if you think about Coca Cola, they really try to push the word, happiness, right? If you think about Zappos, it's definitely customer service, right? They're all about service. What is one word that could potentially describe your brand? What could be the brand DNA of your company, if you would have to put it in a funnel and really figure out like, what could be one word? Totally on the spot here. But I know you can do it.Trevor:It would be hard to put it on one word, but I'd say it's something along the lines of emissions, game over.F Geyrhalter:Yeah.Trevor:Everything we stand for, is getting rid of emissions and diesel is dead. It's everything around transformation. I would say probably transformation is really our... Because it transforms everything. It transforms, design, style, the culture, emissions. So if it had to be one word, probably transformation.F Geyrhalter:I think you nailed it nicely. You talked yourself through this one well. Communication, right? That's what it is. What's a final piece of brand advice for founders, as a takeaway? You already dropped a lot of them, but if you have someone listening, who's like, "Man, I would love to get my company to IPO. How do I do it?" Do you want to point them back to the LinkedIn article? Or is there something that is on your mind where you feel like, "Look, this is one thing that entrepreneurs just always, always mess up?"Trevor:No, there's two articles they need to go read. They're more powerful than anything I can say today, because I laid out with written words and they can study it. There's two articles. One's called A random airport encounter. And the other one's called How to get back up when you've lost everything. These two articles are the most powerful articles you'll ever read, in my opinion, as an entrepreneur ever. They're coming from the most painful position I've ever felt in my life, losing everything. It comes from a position of love and happiness and hope and explaining to people what it means to not give up. Everyone fails and you're going to fail hard. And the key is to never, ever quit, no matter how hard or how long it is, you can never, ever give up.And those articles are incredible because they go into detail. The airport one's about a kid who I met in the airport asking me, how he was going to college and he was thinking about becoming an entrepreneur and what advice I had for him. And I gave him a quick five minute thing in the airport. He had no idea who I was either, by the way, he had no clue.F Geyrhalter:That's great.Trevor:I was just talking to this kid. And then later he found out who I was and he sent me an email. And I gave him this written letter back and I posted this letter I gave him. And it's me writing to this kid. And I'm telling you, it's one of the most powerful letters you'll ever read. And I hope it's taught in every business school in the world because it's not like any letter you'll ever read. It's not written by a professor, it's written by pain. It's written by absolute failure and everything I learned in these situations. And then it's also written by hope, about how to get out of it.And that's a real life experience, of this shit storm you're going to go through to build your own company and ever get listed, is you better be ready to have battle wounds and scars all over your body and you better be ready to dedicate 10 years, or you're going to fail. And you're probably going to fail anyways. But then these are ways you can actually get back up and keep going. And eventually, like Mark Cuban says, all you got to do is hit it once. All you got to do is hit a home run one time, that's it and they'll love you, just do it once. It doesn't matter if it takes you five times, all you got to do is do at once.F Geyrhalter:Yeah. What was the most ginormous brand fail that you went through, with Nikola?Trevor:Say that again, I'm sorry. What were you asking?F Geyrhalter:What was the biggest brand fail that you went through, with Nikola, with the actual current-Trevor:What do you mean by brand fail? I haven't used that terminology here. What do you mean by brand fail?F Geyrhalter:Where do you feel like your company did something, from a branding perspective, where it just bombed, like maybe it was a statement that you put out or maybe it was a name you gave a certain vehicle or maybe you just communicated something in a certain way where afterwards you were like, "Oh, Whoa, that totally went the wrong way?"Trevor:Well, luckily we haven't had too many of those moments, because of a lot of the experiences I've had, but I'll tell you the one that made the biggest difference. When we first started out, there was no technology and fuel cell or battery electric yet. It was very, very new. And so we started out as a turbine electric, natural gas, hybrid truck. And that was the only technology available at the time. And that was pushing the limits. And I went to my board and I said, "Guys, the technology fuel cell is now far enough along and batteries, we have to pivot from this low-emission turbine to a fuel cell." And my board shit a brick. Like, "There's no way, we're already far down this road. We can't just pivot." And I said, "You don't know me. I don't care what the repercussions are."And this is something I teach in that letter, when you have a conviction of something, you better listen to yourself. And I said, "It's time to change, and I change it." And they freaked out. I mean, it was almost relationship severing, right? And sure enough, it was the biggest, greatest, smartest move we ever did, going zero emission. Once that technology was far enough along, we could pioneer it. And man, what an impact it made. And it's a single reason why we're here today. So to all the entrepreneurs out there, you better believe in yourself, and if you do, stand by your convictions, no matter what anyone tells you. You're the only one qualified to make those decisions. Don't listen to the people around you, make your own decisions.F Geyrhalter:Amen. I need to let you go, I promised you. So listeners who want to see your line of trucks or get their hands on the most badass zero-emission truck, as you call it, the Nikola Badger, where can they find you?Trevor:They can go to nikolamotor.com, that's where all of our products are. And then, they can also follow me on Twitter, nikolatrevor. And our company Twitter's nikolamotor. I would definitely follow me on Twitter, because you get data way faster than you get it anywhere else. So make sure you follow me on Twitter, @nikolatrevor.F Geyrhalter:Twitter's the new homepage. Awesome. Well, thank you Trevor, for having been on the show, especially after the IPO, this is a crazy week for you. So thank you so much for sharing your wisdom with my audience. We all really appreciate it.Trevor:Thank you so much. All right. Take care. Bye bye.F Geyrhalter:Awesome. Thanks. Bye Trevor.
Learn more about Knife AidSupport the show and get on monthly mentorship calls with Fabian. Join here.Full Transcript:F Geyrhalter:Welcome to the show, Mikael.M Soderlindh:Thank you for welcoming me to the show.F Geyrhalter:Absolutely. So I thought you would be in Los Angeles because that's where you started your new brand but you are currently back in Sweden.M Soderlindh:Yeah. I got a little bit panicked when somebody tried to lock me up and hold me confined in a small space. So, I actually jumped on a plane back to Sweden, that is open. Everything is as normal but we practice social distancing here. And the way of the US opening going back to somewhat normality, I'm staying over here.F Geyrhalter:Perfect. And we'll be able to welcome you back soon, I have a feeling.M Soderlindh:Yes.F Geyrhalter:So, let's not beat around the bush. You are the co-founder of Happy Socks, the immensely iconic and much loved brand that has reached 90 countries and every single continent. You've got concept stores all over the world, LA to Tokyo, Happy Socks can be found in over 10,000 fashion apparel boutiques. But we won't talk about Happy Socks today, at least not a whole lot. Instead, we will talk about Knife Aid, your new one year old startup that is ... Drum rolls, please. In the business of shipping back super sharp knives to people with not so sharp knives. Correct, Michael is now sharpening your knives. I guess it's, happy knives for you after Happy Socks. How did this all come about? This is such a huge shift. Tell us a little bit about that story of this new brand.M Soderlindh:Having the track record in what we did with Happy Socks, where we really turned the everyday commodity into something fantastic, a piece of fashion that everybody could wear, that shows an emotion and an expression of a person. And it really was something super, super boring that we made into a happy item. And, being in that area, I personally felt that, I don't want to put another product to the market. I don't want to take another thing to the market that doesn't have any purpose, really. And I super enjoy cooking and I have sharp knives when I cook, I enjoy that. I'm always out in nature. And when you're in nature, you're fishing or you're camping, you always have a knife with you and you need a sharp knife. And in Sweden where I'm from, I was inspired by a business to business set up where restaurants could subscribe to sharp knives. Somebody sharpening their knives and they sent them back and they circulated the knives. And they just started doing this to the regular consumers. And I found them and I was like, "You know what? This is a business to business idea." But what if you would tweak it and do it to a business to consumer. Because we know that there's a lot of home chefs, the trends are going that people want to start cooking at home. You cook exclusive ingredients and everything. It's like home cooking is just exploding in the organics and everything. And we know that people enjoy a sharp knife. So I was like, "Wow, this is a great opportunity." And starting to look on this, I was like, "What is a market you want to do it on?" You don't want to do it in Sweden where you've got 10 million people. You want to do it on the world's biggest market that loves service and consumption. And said and did a partner with a neighbor in Sweden. And we said, "Let's move to Malibu and start this knife sharpening business." And when the waves are right, we surf and when the waves aren't right, let's sharpen knives, you know?F Geyrhalter:Just that simple. And you know, you had to twist his arm when you said, "Hey, let's move to Malibu and start this little company, right?M Soderlindh:Yeah. And luckily he was an entrepreneur, as well. And you know, two crazy entrepreneurs moving over to Malibu is relatively easy. But then you have the thing that you have wives, family, kids.F Geyrhalter:Right.M Soderlindh:Commitments. But all in all, we moved over to the US and my task was basically to put this business up, get it into branding, fix the branding and market it. And he was going to run it as a CEO.F Geyrhalter:And that's how it still works currently?M Soderlindh:Yes. That's how it works.F Geyrhalter:So, how has COVID-19 affected the brand? I mean, was it positive or negative for the brand? Because it seems like we are all turning into master chefs these days, right? We are confined, at least here in the US. You escaped on time but we are confined and we don't want to buy new stuff, either. So, it sure sounds like a pretty good opportunity for people to use your service.M Soderlindh:So what I noticed was once this hit us, we had to make sure that we were an essential business. Of course, we're an essential business because people might need sharp knives. Kitchens, restaurants, and such businesses needs to prepare food. So, luckily we were in the essential businesses and can maintain our operations. After that once it hit, we saw that traffic sales dropped tremendously, tremendously. It was like our ads on Facebook. You advertise a lot on Facebook and Instagram's, nobody was clicking on it, going further. But then after two, three weeks, once the news people had read up and you're tired of pressing on another link on COVID-19, you start to interest with what you're interested about. And everybody is stuck in their home, ordering their food, cooking their food, realizing that their knives are dull. So, our traffic and return on ad spend blew out of the roof.F Geyrhalter:Interesting. That's awesome.M Soderlindh:And we have been so busy the last three, four weeks with orders, which is an amazing accomplishment. So, it really shows that people are home ordering food, cooking and enjoying the spirit of it.F Geyrhalter:I had a feeling. And when you talked about how you're an essential business and how restaurants still need sharp knife, are you also going into the B2B component of this or is it still completely just directly to the consumer?M Soderlindh:No, absolutely. So I would say, we are completely branded towards a consumer. The consumer that has super expensive knives to a regular set of Amazon $50 set of knives. We go across the span. So, that's how we set up, super simple to order, one pricing, easy. But we have noticed that a lot of businesses, they don't have any options to sharpen their knives and it's very easy to order our service. So they have jumped on our service, as well. So, I would say 30% of our businesses, business to business, currently.F Geyrhalter:That's really cool because for them it's most probably a cost saver because they didn't have to subscribe to any B2B service that is most probably more cumbersome with contracts and whatnot.M Soderlindh:And I would say also, there is still a lot of people that comes with their truck to the restaurant and then you go out, leave your knives in the same day and they sharpen them, then drop it in the restaurant like an ice cream truck or a milk truck going to ... So, it exists still but in this way, they can get their knives sharpened anytime they want.F Geyrhalter:How crazy was that R&D component, which is really the mailing component of the brand launch. I had the fabulous Jeni of Jeni's Splendid Ice Creams, who you might or might not know. I had her on and she talked about how shipping ice cream was such a major breakthrough for her brand to actually do it the right way. How difficult was it to create the mailer concepts for Knife Aid?M Soderlindh:We started in January 2019. We started our business and I would say the first three, four months, we were really trying on how to ship their knives so that they would be safe, not go through the envelope. We had a really, really nice envelope, a mailer to put the knives in but it was the protective sleeves to keep the knives safe inside the envelope. That was the thing that we needed to tackle and get a good way of doing it without the knives ... Somebody sending us their sharp knives, they can't go through the mailer because then we would possibly hurt somebody in the Post Office.F Geyrhalter:True. Or the consumer. Yeah, anyone along the chain.M Soderlindh:And how do you find a solution so that the consumer can pop up their knife without themself getting cut?F Geyrhalter:Totally, totally.M Soderlindh:And then, a consumer when they get something, they do not read, they do not follow instructions. So, you can basically write and say whatever you want but they're not going to do it. They're going to do as they find appropriate themselves. So in the end, we came up with a really, really super simple idea and it's been working without any problems. We had one problem along the way, was that our envelope wasn't ... When it got wet, it, like cardboard box paper, it can get a little bit soggy and it can erode. So, we had to come up with weatherproof mailers to surround the envelopes. So we have three protection layers now around the knives, which is, now we're completely safe and good.F Geyrhalter:Right, right. No, I had a feeling this would be difficult. And there, you hinted at this a little bit in the beginning, there is actually a deeper layer that can be peeled away behind your knife sharpening business. Here's the abbreviated mission statement that I took from your website. Here it goes, "Our mission was to develop a sustainable business that does not contribute to more consumption but instead maintains and restores the value of what we already own while at the same time, bringing joy to the preparation of what we like the most." So here's my question. Do you see yourself as a mission driven brand?M Soderlindh:Absolutely. I think you can't put a brand to the market today without having a mission and purpose. The consumer is going to see through you because it's like, of course, everybody's out there. You want to make some money, you want to be profitable but you still want to contribute to something good. And I need to have a purpose when I do something. I can't just like, "Oh, I want to do some knife sharpening." And why would I want to do that, if it's not something in it that I like. And I like the fact that, why would you throw away a knife and get a new sharp knife when you can recycle it, it's sustainable.F Geyrhalter:Absolutely.M Soderlindh:It's an amazing, amazing idea. And I think that's really how knives and swords ... If you look back in centuries, you got your dad's sword. It was a nice sword and then you just maintained it. And that's how we should see a knife today, is rather buy a nice knife and maintain your knife. And it's a lifetime product that you can pass on for generations.F Geyrhalter:Totally, totally. So sword aid is next. But look, you're not selling sexy socks anymore, right? With this brand. So, knife sharpening does not fall into that aspirational line of business, even though I myself am quite keen on sharpening my knives just about every month, which is worse than my-M Soderlindh:Wow.F Geyrhalter:Yeah, yeah. It's much worse than my dad though, who sharpened them literally before every single meal preparation. So, it runs in the family.M Soderlindh:No. But that's honing, that's honing.F Geyrhalter:Oh, tell me more about that. What's the difference?M Soderlindh:No. So, what I would say this is. So you go to the dentist one time per year and then you brush your teeth every day, hopefully twice a day.F Geyrhalter:Yeah.M Soderlindh:So what I would say, is with your knives, you send them off to professional sharpening one time per year and then every day you maintain it with a honing steel or leather or whatever you have at home.F Geyrhalter:I see.M Soderlindh:But every year you need to straight the cutting angle and the blade, it needs to be straightened and done professionally.F Geyrhalter:I see.M Soderlindh:I compare it to going to the dentist and brushing your teeth. It's exactly the same thing.F Geyrhalter:So you just busted my myth of me sharpening my knives every day. I'm actually not sharpening my knives every day or once a month. I'm just maintaining them. That's all I do.M Soderlindh:Yeah, exactly. You're owning it. And some people, they have a honing steel, they have a honing leather. They might have a stone at home they can do it on. But most knives needs professional sharpening.F Geyrhalter:Cool, very good. Getting back to my question about it not being like sexy socks, right? How do consumers learn about your brand? Is it mainly social ads and be targeting? Or how do you advertise knife sharpening without falling into that infomercial cliché?M Soderlindh:So, I'm sorry. My job is to make something boring and sexy, make it aspirational. That is what I do, that's what I live on. That's what I make my money from. And I think the one person that wouldn't say, "If you go into knifeaid.com, it's not an unsexy page. It's a really cool dude with the twos, sharpening and knife. It's a craft. It's a craft doing somebody's knife. It's not something anybody can do. It's a trade, it's something you learn how to do. And so, a knife is a very sexy item, as well. So, I think it's how you compone it, how you put it together that makes it interesting. And so, no, I'm not agreeing that it's like very boring. When somebody comes into our workshop, they're like, "Wow, it's a moment ..." It's a little bit dangerous when you're sharpening knives. It's a machine and it moves and it's sharp. So, it has this little, I don't know, spice of curiosity, danger, craft men, women doing it. And we have super talented women that have been jewelry designers before doing it. They need to have something in it. So, I see it as a very sexy industry.F Geyrhalter:I see it. I see it as such, too. I am just wondering for the consumer, how do you change that perception? Because I mean, it's one of those skills that has been seen for years.M Soderlindh:All of us get stuck on Facebook and Instagram and we see these crazy videos with people doing things. How can they do that? How can they do this craft? Or how they can do this? And how can they build a tree house? We just get stuck on this when we follow with social media.F Geyrhalter:Totally.M Soderlindh:And that's a little bit how we have created our social media advertising is that, you see somebody holding a knife and how it actually works when you sharpen it. And people get a little bit stuck in that. And then we just add in there, "Okay, order your envelope, put your knife inside, get them back within three to six days sharp. It's like, get them stuck into the trade and then we show them how we can help them.F Geyrhalter:Cool, very cool. And do you do any celebrity campaigns, as well, or anything like that? Do you go into the Food Network and into that arena? Because I mean, obviously, that was a huge part with Happy Socks, doing brand collaborations.M Soderlindh:Yeah. We were just about to launch that before COVID-19.F Geyrhalter:Okay, okay.M Soderlindh:So, I would say we put it on hold until after this pandemic.F Geyrhalter:Okay. It was a logical next thing. And talking about this and we have to talk about Happy Socks for one quick second, you have to amuse me with this. What was your strangest brand collaboration with Happy Socks? I mean, you did everything from the depth, like Keith Haring and Andy Warhol to the very much a life like Steve Oakey and Snoop Dog. But was there any campaign that was just super strange and like a complete riot?M Soderlindh:Yeah. My favorite one was probably when we started really the big breakthrough globally and we got a little bit of profitability and could spend it on advertising when we worked with the world famous photographer, David LaChapelle.F Geyrhalter:Oh, wow. Yeah.M Soderlindh:And we were like, "Okay, we want a couple of pictures, so we could do some ..." We never did any advertising that we could PR with these pictures. And then we want you to do a crazy movie. And he came up with the most awkward, crazy movie. And when he presented this, he was like, "Guys, if I'm going to do it, it has to be like I want to do it, otherwise I'm not going to do it." And we're like, "But this is not very commercial." He's like, "I want to do it." And we're like, "Okay, let's do it." And it's the absolute weirdest movie that I ever imagined.F Geyrhalter:Is it available online? Can people YouTube it and find it?M Soderlindh:Yeah, yeah. Absolutely.M Soderlindh:It's David LaChapelle, Happy Socks movie. And it's a eight minute long movie about a girl going crazy and she dances her socks off. And it ends with blood, death and everything and it's awkward and she's a prostitute and it's so awkward.F Geyrhalter:Oh, it's hilarious.M Soderlindh:And he's so well-known and it was the first time we really got to work with a big name. And we heard all these stories about how crazy he was and how sometimes he didn't show up for work. And everybody has these myths around them that are famous and we're like, "Oh, we're going to work with him." And when we came to the site where we're going to do the recording and everything, he was first there. He was the most engaged person I've ever seen and so committed, so inspirational and everything. And he got everything done on time, just a perfectionist. He was such a great person to work with. So, that was probably my best and most awkward moments.F Geyrhalter:That's hilarious. I mean look, I think if you let an artist do what an artist wants to do, then they're very professional about it. I think you did the right thing. A follow up question relating to Happy Socks and it comes with my accent. How is the David Hasselhoff swimwear line going? I was laughing out loud when I first heard about it. I'm Austrian, right? Even though I live in LA for over 20 years and somehow in Austria and Germany, he can fill stadiums singing. Something the rest of the world does not even know could be possible. Both the stadiums and the half singing. So I went on happysocks.com to look for your Hoff inspired swimwear line. And all I found was a happy Hoff T-shirt in your store. Was it solely a campaign or did the Hoff actually design some sexy, tight European swimwear for you?M Soderlindh:No, no, no, no. He was another amazingly inspirational guy. And I think you're under exaggerating, when you say, he can fill a stadium. He can fill a country in Europe. He's so big.F Geyrhalter:It's amazing.M Soderlindh:This person in Germany and Austria, I don't think that anybody understands how big his name is and his legacy in these countries. It's amazing. No, he actually was very involved in the development of the campaign and it was an amazing moment to work with him where he takes off his red trunks and puts all these colorful Happy Socks Swimwear. And I know the swimwear line has been really interesting for us.F Geyrhalter:That's that's very good. Yeah. No, in the US it's funny. I mean, he lives in the US, I assume. And that's where everything started and here people kind of forgotten about him and once you fly for nine hours, suddenly life is totally different. It's so strange.M Soderlindh:I wouldn't say forgotten about him. The campaign that we did has a tremendous success, even in the US.F Geyrhalter:Oh, that's cool. That's great.M Soderlindh:The press and everything loved it. It was another of our most crazy campaigns. We've had so many crazy, fun campaigns and I'm dying to do the same ... That is really what my role is going to be in Knife Aid, as well. Now, once I set it up and I got the marketing and everything working with Knife, it is like, "Okay, how can we tweak it and get a bigger audience?" And the next step is, collaborations and what crazy chefs, things, people with knives, can we associate ourselves with and get a bigger reach?F Geyrhalter:Totally. I mean, and this is why this is so exciting to me to have you on because it's so early on in your new brands. I mean, I would love to have you on in four years from now or three years from now, again, because I have a feeling that Knife Aid is just really being born right now, even though it's existing and it's running. The opportunity with the brand, it's just skyrocketing. It's pretty amazing.M Soderlindh:It really is, it really is. And it's like, you know what? Yeah, of course you need to meet venture capitalists and get some finances into a business. And when you just put it in one of these keynotes and you're like, "Okay, the market is 128 million households in the US." It's literally, you have 128 million households who has dull knives because I don't know a single family out there who tells me when I tell them I sharpen knives. They're like, "Oh, I need to get my knives sharpened," because everybody has dull knives.F Geyrhalter:Yeah. No, totally. It just takes a little bit of convincing. So, talking about VC money, like a handful of my guests, you were also on Shark Tank and that ended up being quite the riot. I watched it last night, it was insane. What did it do for your new brand?M Soderlindh:We did the recording, I think five, six months after launch. And it was aired nine or 10 months after it launched. So three, four months after. It tripled our business, it gave recognition, a brand impact. It gave it the trust. I really think it changed the perception of what we were doing. Coming from a non US background to America and my mission was, how can I get something that is well recognized, has a broad reach through out the US population ... With, I think they reached six or eight million people in the US with this show. And I was like, "The only thing I want to do is be on Shark Tank." And I'm not the natural entrepreneur that really need to go on the show but I was like, "This is my favorite show, I want to do Shark Tank. I need to be on the Shark Tank Show." And I did everything to get on the show. I got on the show and we recorded it and five minutes before I was on the show, I was like, "Oh, why am I doing this? They will make a fool out of me." And remember, I don't need to be on this show. And I have no way to afterwards say, "Please don't show this or anything." I'm stuck, if they do a fool out of me.F Geyrhalter:I know. Yeah.M Soderlindh:I was so nervous and we did this show and it turned out tremendously good for us. And it's the best thing I've done and the most exciting thing I've done in my career.F Geyrhalter:Well, and just for the listeners, so they know. When you guys, the two of you, you and your cofounder stepped outside for a couple of minutes to make up your mind, if you're going to take the offer or not take the offer, which offer to take. You took a little longer than expected, so everyone started to, one after another, come out of the stage to that hallway where you guys were standing and they started to make you better offers, which I have never seen on Shark Tank. I think that was pretty new.M Soderlindh:No. And I can even say that this was a cut version of what happened because they went pretty ... There was actually some knives involved behind there. Where it was like, "You know what? I want to invest." And you can actually see it on the TV show if you run it by slow motion. You can see that some people are holding knives in their hands to make the investment.F Geyrhalter:So good.M Soderlindh:So, no, no, no. It was spectacular and they are so charismatic, these sharks. And it's a reason they're sitting on the show and this show is so big. And you really got the power of it.F Geyrhalter:And I think a lot of people and I'm not sure how much you can talk about this but a lot of people wonder afterwards, like how important, not only the effect of being on TV and being in Shark Tank and obviously, sales go through the roof for the couple of weeks afterwards and this suddenly a brand recognition. But how important is the mentorship and the leadership from the Shark that actually is part of your team at that point? Do you feel like that is extremely valuable as well, at this point?M Soderlindh:They wouldn't be sitting there without their background and their success.F Geyrhalter:Obviously, yeah.M Soderlindh:So, they have an echo system of how to handle their investments.F Geyrhalter:Yeah, yeah. And an amazing Rolodex. I don't even know if people still know what a Rolodex is but, "Hey, you know?"M Soderlindh:They have an amazing iPhone.F Geyrhalter:Thank you. That was a little bit embarrassing for me but I can always cut it out.M Soderlindh:Got it, got it.F Geyrhalter:No, I wouldn't. But after going through everything with Happy Socks, I mean, Happy Socks is such a brand. I mean, it's all about branding with Happy Socks. And you guys did such an insanely good, good thing with how you branded it over the years and how you kept expanding it. Now that you have Knife Aid, it's a totally different kind of business that you really like bootstrap and like a true startup. What does branding mean to you overall? Now that you experienced it from both sides?M Soderlindh:I don't know. Branding is for me ... I've fallen in love with something and then I dress it up. I get very passionate about it. And then I see it in a different way. And it's like I put pants on it, I put shoes on it, I put a sweater on it. And then, that didn't really work out. And then I put some makeup on it and I cut the hair and it's, I don't know. I just repackage things and branding is trying to see how you can package something so that it aspires for others. And it's a philosophical question.F Geyrhalter:It is, it is. I'm putting you on the spot. But it's an interesting thing to talk about, right? Because for a lot of people, brand just means logo and it means superficial and it's really so much more. I mean, it's so much more intrinsic. It's so much more emotional. It's so much more purpose driven. That's why I think it's such an interesting question.M Soderlindh:Yeah. And what is it people, they need to ... Why do you like something? And what is it you like with a brand and where does it come from? Is it the colors? Is it the background? Is it the mission? Or the people behind and had so many aspects today? And I think that the modern consumer today is more enlightened than ever and needs to know the full story.F Geyrhalter:Totally. Transparency is key, absolutely. When you look at Happy Socks, the brand DNA I'm sure can best be described as happiness. It's kind of like around the entire brand. What is one word that could encapsulate the Knife Aid brand? If you would have to distill it all down to one word, what would Knife Aid stand for?M Soderlindh:Quality.F Geyrhalter:Okay. Yep, yep. That's what you give to customers.M Soderlindh:So, no. Absolutely. So, it's service and quality. So, it's if you have really nice knives, you're not going to send away your nice knives if you don't feel that I'm going to get them back better than ever. And it's an easy, simple way. So easy, quality, simple.F Geyrhalter:Quality and convenience. Yeah, yeah.M Soderlindh:Yeah. Quality and convenience, that's what it's all about. And then I think that's the main top of it. It's like quality and convenience. And then underlying that is that it's something that is sustainable. It's like, it has a purpose. I recycle something. I resharpen, I renew my things instead of buying new.F Geyrhalter:Yeah, yeah.M Soderlindh:It makes sense for people. It makes sense, if you have a knife to resharpen it. It doesn't make sense to throw a knife out that you can resharpen but you buy a new one. It doesn't make sense.F Geyrhalter:Totally, totally.M Soderlindh:So, then you have what you call brand ladders and stuff like that. But you know what? I'm not so into all the terms of how to do a brand, anyway.F Geyrhalter:I love that you were saying this because even though that's what I do for a living, I'm not into the terms either. Because I think in the end, a lot of it is just marketing talk. But in the end, what really convinces people, what sells, what checks people's emotional marks are none of that, right? In the end, that is just something that is very often very, very intrinsic and all-M Soderlindh:But let's say with Knife Aid, our purpose when we started this brand was, of course, we want to do it on a big market as the US and be profitable. But we never, sorry. Hello?F Geyrhalter:Yeah, you're back. You're back. Sorry.M Soderlindh:With Knife Aid, we never had the ambition to do this huge big company. We'd rather focus on having happy consumers, do good quality and grow slowly. That has really been the purpose with us. And not like, bang it out and do it big and we need to do it. It's like grow slowly, be good and have happy customers. And in that way, make sense of it.F Geyrhalter:Well, and I'm sure you had no rush either, right? I mean, you have a successful company running, so you can do it right. You can do it the slow way. And I mean, the most important thing, and you know that better than anyone else, is having early brand advocates and having people who actually experience the service and love the service so much that they talk about it and you can absolutely do it that way. What is a piece of brand advice for young founders, for young entrepreneurs. Where you feel they look up to Happy Socks, they look up to your new brand and what you're doing with it. What is some advice that you would give them, as it relates to building their own brand?M Soderlindh:That you feel emotionally connected with what you do, that you understand it yourself. That is something that I connect to, that's something that I like. If you say with Happy Socks from the beginning when we started it ... I'm not involved anymore, but more than on the board. But when we started, it was like, "Okay, what makes sense for us is, we want the factories." When we go down to the factory and visit the factory floor, we want the workers to look happy. We want them to wave to us and say, "Oh, there's the owners of Happy Socks." And smile and not feel that we see that they're sad, feeling depressed when they're working with our socks. We have to have a natural feeling that they are happy with us. So that the origin of the product is happy and it starts happiness in the production, then it goes happy to the office, happy to the resellers, happy to the consumers. And the same with Knife Aid. If we're going to sharpen people's high quality knives, we need to deliver high quality. And we need to have high quality people working with us. And we need to have the best technology, the best machines to sharpen all types of knives. So, it's really what you stand for, what the brand stand for. It needs to go through every department section of what you do.F Geyrhalter:I absolutely love that. I think that is so extremely important for everyone to hear. Absolutely.M Soderlindh:So, you can't just say, "Oh, we're happy brand, we're high quality." We say we're high quality and then we have low quality machines in our workshop with Knife Aid. That's not going to work out.F Geyrhalter:Totally.M Soderlindh:And if the branding doesn't look high quality, then it's not going to work. The webpage doesn't look high quality, it's not going to work. It's all of that. Everything needs to be what we're trying to communicate.F Geyrhalter:And I can't wait to start seeing this more and more with the Knife Aid's brand. That's going to be a really, really exciting time. I'm going to make sure to follow you guys. And for listeners out there who feel that immediate urge to get their knives out and sharpened, which they should by now. Where do they begin to use your service? I assume at, knifeaid.com.M Soderlindh:Yes.F Geyrhalter:Perfect. And from then on it's as simple as a couple of steps and off they go.M Soderlindh:Three clicks and you're ready to go.F Geyrhalter:Love it, perfect. Well Michael, I told you this is not going to be too long. I know you're super busy. Thank you so much for having been on the show. We really appreciate your time. We appreciate your insights. Stay safe in Sweden. I know things are running differently over there but also very successfully. And we're looking forward to having you back in LA and hopefully we get to see each other in person at one point.M Soderlindh:Thank you very much for welcoming me to a show with amazing questions.F Geyrhalter:Thank you so much.M Soderlindh:Thank you.
Learn more about Verona CollectionSupport the show and get on monthly mentorship calls with Fabian. Join here.Full Transcript:F Geyrhalter:Welcome to the show, Lisa.L Vogl:Thank you for having me.F Geyrhalter:Absolutely. So it's Ramadan and that's a huge, huge deal for you and many others, so thank you especially for being here. This is a pretty big deal for you.L Vogl:Thank you. Yeah, even when I think we scheduled, I completely forgot it was going to be Ramadan. We fast from sunrise to sunset. It's considered the most blessed month in Islam, so it's a very special time.F Geyrhalter:I hope you're going to keep your energy throughout the next 20 or so minutes.L Vogl:Hopefully it will pass. You're getting used to it. The very first couple of days of fasting, it's caffeine withdrawal because I'm a coffee addict, then you get used to it, so just normal for me now.F Geyrhalter:Perfect. We also had to, we moved it around a couple of times and now we ended on a Friday afternoon when we record this out of my little home studio, as is the new norm now.L Vogl:Tell me about it. I mean like these major business meetings and then like kids in the background knocking on the door, so it's a new norm for everybody, unfortunately.F Geyrhalter:That's right. You're a mom of two, right? So that might happen throughout the podcast too that we have extra guest.L Vogl:They're not here at the moment so I got a moment of peace and quiet. We're very lucky, otherwise it would be very loud in the background, but yes, I'm a single mother of two boys.F Geyrhalter:Thank you for sharing the peace and quiet time with us. We do appreciate it. So Lisa, you were born in Michigan, with a German name though which is interesting, and you are an award winning international fashion photographer, yet today, you run your five year old fashion brand Verona Collection which is the first modest fashion brands to be launched, featured, and sold in an American department store, Macy's to be exact, but now you're also available in ASOS. What does modest mean, many people would ask, and so for one, I know that your brand is specialized in hijabs and is catering to the Muslims. Tell us, how did your transformation to Islam and this subsequent business come about? Because there's first, your personal transformation, and then you saw a need I'm pretty sure that you fulfilled.L Vogl:Yeah. That is like such a long answer and then kind of goes across of maybe 10 years of my life because you are correct, the idea of American German, of course, and most American Germans aren't born Muslim. Most, just like I was. I was born a Christian, so I grew up in a Christian family, but I found Islam and I discovered Islam, over the course of 10 years I should say because I lived in Morocco for a little bit when I was... I took some time off of college and traveled, but that's not when I discovered Islam. I discovered it later on, and when I converted to Islam, I found a need for modest clothing. It was just so difficult because I then changed my entire wardrobe to adhere to the hijab and when I went out to go shopping for new clothing, to cover down to my wrist, to cover down to my ankle, it was really difficult, and so I found a need for millions of Muslims in America and around the world. There were plenty smaller brands catering but nothing that was really this massive hijab brand that provided modest clothing. So myself and my partner, we discovered that this is a huge need, let's come together and let's launch Verona. We branded it towards marketing towards Muslim women, right? But it's also a need for many other people that want to dress modestly but not necessarily for a religious purpose.F Geyrhalter:I think it is so fascinating. I mean I don't know where I read about you because you had a pretty good press run the last couple of years, but I read about you and I was like, "I have to have her on the show because it is so smart," and for me, it's always so important to find a niche and to find something that caters to a really small audience, and that audience like in your case could be huge.L Vogl:It's really not a small audience, like the modest fashion industry. The great thing about this market is it's a niche and it's not this broad niche, right? But there's so much opportunity. The modest fashion market is expected to be worth $500 billion in just another year or two, so we're on the right path and there's a huge need for it.F Geyrhalter:How would you describe modest fashion?L Vogl:This question comes up a lot because modesty, even within the Muslim community, is a very broad term because everybody has a different definition of modesty and the last thing I want to do as a brand or even personally is try to dictate everybody else's modesty level, right? Because I think that that's a personal choice and that's something that we like to scream loud and proud that listen, we are not forcing the hijab, we are not forcing to take it off, we want this to be an option and a choice for our customers. So for me personally, I wear baggy clothes, I don't wear tight fitting clothes, but I still wear pants sometimes and a long top. I just prefer to wear like long dresses more because I feel more comfortable, but there's a lot of other women that modesty, maybe not even adhering to Islamic standards and show the arms but wearing necessary clothing. So everybody has a different definition of it and I certainly don't want to dictate what my definition is, if that makes sense.F Geyrhalter:It totally makes sense, and you have a pretty big product line now, right? How many products do you have?L Vogl:Right now, we're going through major transition, but in the good way, and just unfortunately, the COVID-19 kind of delayed the process a little bit more. We're in a massive relaunch where we're going to be launching a lot of new products because we took a step back and said, "Hey, we really have to focus on a few other things," and we were in the midst of doing a relaunch. It's just going to be pushed back about a month or two, but we do offer, as soon as the relaunch, it's going to be occurring, we offer so many products that's going to be mainly long dresses, because those are the most difficult products to find, long tops. You might find like a long sleeve top in the store but it goes to like three quarters of a length on the arm and that doesn't adhere to Islamic standards. So yes, there's modest clothing available, but then it doesn't fit a hijabi need. So then we'll offer long sleeve tops, we'll offer pants that are baggier, even swimwear we offer, but it's covered for a hijabi's need. You have your hijab and then from top to bottom, and then of course the most staple pieces to hijab. So we offered like three to 400 different products of hijab.F Geyrhalter:That's unbelievable. That's amazing. Let's go back a little bit to which must've been one of your pivotal moments. How did you get your foot into Macy's?L Vogl:When we first launched, I had a goal, myself and Alaa, and we have a third business partner, his name is Hassan the UK, when Alaa and I launched, we decided we really want to get to be the first hijab brand in American department stores, so I was researching, researching, and the biggest thing that I took away was we have to be successful on our own before we approach anybody, right? I read you had to sell 10,000 units before they even look at you. We did that. We did that within my first year. Then I started approaching department stores and it was very difficult to get in, so then I discovered the workshop at Macy's and I was thinking this is a really unique way of getting in the door but through a different route. In the workshop at Macy's is a women in minority workshop and there were, I'm not allowed to say the numbers, but the acceptance rate into the workshop at Macy's, it's harder than Harvard, and we got accepted as the top 20. So we had our interview with them and then from there, we were like one of 11 that got chosen, and we went to New York and we worked through the program. While we were in the middle of the program, we had an opportunity to sell right in Herald Square, their flagship store in front of all of the Macy's buyers, including the CEO, and we had one day to market that we were going to be there selling and it was like hijabi overload took over Macy's. So they thought firsthand really that this was not just us providing numbers on a piece of paper and that's telling them that this is a need. They saw firsthand how much of a need this was right here in America.F Geyrhalter:That is so cool. So talking about which, before my interviews, I always go on a major Google search about my guest, which is actually something I greatly enjoy. Nothing to worry about.L Vogl:No, it's okay. I'm pretty clean so there isn't going to be too much that...F Geyrhalter:But amongst the many interesting things, I found this one floating around about you and I so loved it. You were named one of 17 Muslim women who made America great again by the Huffington Post, and I mean the irony of using that copy line is just so great, but congratulations on that. One would assume that the current president of the United States would have had a major negative effect on your brand as hate crimes have been on the rise. Is it actually the opposite and your brand strives given its message of inclusion?L Vogl:I think that when you have this negative messaging out there piece, I believe most people are genuinely good people and they don't want to attach themselves to that type of hate, and so I believe when a message of love comes in front, people are going to attach them to that. I genuinely believe that most people don't want to hate and don't want to attach themselves to that type of thinking. That's why I believe like our messaging will trump anything... That's a little ironic.F Geyrhalter:I like it.L Vogl:Doing these at work, but I believe that the messaging of love and inclusion and inclusivity will always win.F Geyrhalter:I love that.L Vogl:I believe I have a lot of supporters.F Geyrhalter:Let's hope that is how life works.L Vogl:Unfortunately, the reality is there is people that think like that, and I've experienced myself personally and many people I know have experienced it as well, but it's not going to stop me from pushing out the message of inclusion.F Geyrhalter:Totally. How was the reaction in this store when your line was first, in a regular Macy's store and regular shoppers were suddenly exposed to something they're not used to?L Vogl:We launched online first and then we launched in store, the first install was in Dearborn. I'm not sure if you're familiar with Dearborn, Michigan, but it is the highest concentration of Muslims in America, so the community in Dearborn is already very used to the Muslim community, so we really didn't get much hate as far as that, but we did get a lot of backlash when it went public online because it went very public. Like we were on Fox News twice, and CNN covered us and we definitely did receive quite the bit of hate messages, unfortunately.F Geyrhalter:Once you get in Fox News, that's-L Vogl:Yeah.F Geyrhalter:Enough about politics.L Vogl:I'm not even speaking politics, I'm just telling you the network.F Geyrhalter:I am. So tell us a little bit about that the name Verona. Because authenticity and empowerment are both so important to you, Verona means origin and truth, right? Is that where it came from or is there a different story?L Vogl:It actually doesn't even go that deep. When I thought about it, one was that just from a business aspect, that I needed a name that was easy to read, easy to spell, easy to remember and very crisp and clean when you put out the logo. So that's on the business end of things, but on the other side, one, my favorite fashion originates from Italy, so it's an Italian name, and then another point of it was that we always attached Islamic things and Muslim attire to the Middle East, but being a Muslim is not an ethnicity, it's not a race, it's not a region, it's a religion that was most diverse religion in the entire world, and so a Muslim can be Italian, a Muslim can have western origins and we just don't think of it like that. So this brand is obviously for everybody, we want to be inclusive, but it is targeting the Muslim community within western countries, so the name just fit for us.F Geyrhalter:I like it because it's also your personal story in a way which it encompasses, which is great. Branding for many means the perfect logo and the stunning website, and while this is extremely helpful and very important for a lot of brands, for me, the foundation and the pinnacle of branding is that perfect positioning, and we talked about it a little bit because you carved out a wonderful niche for yourself that you can own and personally and empathetically and authentically nurture with your audience. What does branding mean to you now that you have half a decade of brand building experience?L Vogl:Branding is messaging. It is messaging. It's what are you standing for as a brand and what are you telling your customer, and these are conversations that we've had within our company more seriously, and we've had very strong conversations. We need to not be afraid to be loud and proud of being Muslim, and so it's the messaging that we're putting out there. That to me is the biggest strength in branding.F Geyrhalter:I love that because so many people forget that. I see a lot of brands where it's really not about the branding part of it, it's really about that boldness and the authenticity, and that alone is enough for a brand, for any company to turn into a brand, right? Meaning there are tons of followers, people love it, people start talking about it, word of mouth, et cetera, et cetera. That's really, really good.L Vogl:If a brand tries to play middle ground in everything, they're going to hit nobody. A brand needs to not be afraid to like be loud and outspoken about who they are and what they believe in, and that's what's going to speak to your customer base. That's my biggest point is that when you're trying to create your company, people just try to serve everybody and that doesn't work, and they try to market to everybody. That doesn't work. You have to really be specific with who you are, what you believe in, what your core values are and how you speak to your customers.F Geyrhalter:Absolutely agree. If you speak to everyone, no one will listen, right? Listening is so important for a brand. Talking about listening, how did you in the beginning do your product research? Did you have focus groups? Obviously, you're in a community, so you have them at your fingertips. How did you use any data in the beginning or how did you start the entire production of it?L Vogl:The great thing about when I launched Verona with Alaa is that I had already been working within the modest fashion industry for years and it was like an industry that barely existed in US, and so I was already learning from companies that I worked with. I had been flown to like Dubai to do photo shoots for companies over there. I worked with companies in Saudi Arabia, they would send us products, and then I also am very involved in the community here in the US, like very involved, and in organizations left, right, and center, and I had already known all of the modest fashion bloggers so I was up to date with a lot of the trends and still up to date with them. The biggest thing as far as when we launch, we were the customer, and still are, but we also are getting firsthand knowledge from fashion bloggers, from companies and what they're releasing and we just try to stay ahead of the game. So when we launched, we already had a very good handle as to what was needed and what would sell out, and we sold out. When we first launched, we sold out of our products in a week and a half.F Geyrhalter:That's amazing. It's not like you're the only one doing it, right? You do have actual competitors.L Vogl:We do, yeah, and I know many of them personally, and there's great brands out there.F Geyrhalter:Which is good. It's healthy to have competitors. It's a good thing.L Vogl:Yeah. From like a religious standpoint, being a Muslim, I believe that God has enough blessings to give to everybody, so I don't see competition as this negative thing with people too. I'm very competitive by nature, right? But I also get excited when other people win. I don't ever want to be a brand that's not supportive of other, especially women owned brands. I'm like crossing for them, so I'm somebody that wants to see them succeed as well.F Geyrhalter:I had more women on this podcast than guys so far, than male.L Vogl:Bravo to you.F Geyrhalter:It's pretty amazing because in the beginning, there were a lot of guy founders and I started to be very aware of that and I'm like, "I really need to seek out female founders," and now, it's totally not like that. I don't seek out anyone, I just seek out great brands and sometimes I don't even know who the founder is and if they're male or female or whatever, right? But it is so, so nice to talk to so many amazing female founders. Many of them are single mothers and have kids, and life is difficult as it is, right? But to have that strength to create these brands and to be able to still connect with your audience and to keep pushing forward with new product and new ideas, bravo. It's really amazing and I'm so thrilled to be able to have people like you on the show.L Vogl:Thank you. My pleasure.F Geyrhalter:It provides me with a lot of joy too, but let's flip this around from the positive to the negative. Was there any brand fail that you went through where in the beginning, you did something too fast or you did something and just suddenly you realized, and I asked not to put you on the spot but for others to learn. Was there anything that you felt like you just massively messed up from a brand perspective and you learned from it and you would want others to learn from it too?L Vogl:When we got our foot in the door with Macy's and then ASOS, there is an element of you can grow too fast, and so I think it's okay to say "I am not ready to take on this opportunity. We need to make sure that we have our rock solid base in place before we take on another major contract." That's the biggest learning and hiccup that we had as a company is that we grew too fast. Then we started, our online platform suffered because when we entered into Macy's and ASOS and we didn't have the financial capital to back everything so much because these orders are not cheap and you have to process the orders and then they pay 90 days later or whatever their terms are, so in dealing with these major department stores, you have to make sure that you have the financial resources to take on such a big contract. When we did that, our online platform suffered, and that's why we are in the midst of doing this massive relaunch. That's one, it's just an advice for anybody else. It's okay to say no to opportunities if you are not ready.F Geyrhalter:Absolutely. I hear that over and over too because saying yes is so exciting as a new brand, right?. I mean it's like that's all you want. Any opportunity is a great opportunity because you had no opportunity in the very beginning and then suddenly it's... I mean with you, it seems like things have been progressing very, very quickly from the get go, but for a lot of others, that's not the case. Talking about, you know net 90 orders and all of that, how does COVID-19 affect you as a brand right now?L Vogl:It affected us massively and I'm not going to beat around the bush because I'm not somebody that likes to just paint these rosy pictures when people are seven, I like to keep it real 100%. We have factories in Turkey that had to shut down for a moment and I had products ready to be shipped and then all of a sudden, this happened. I think the biggest thing as a business owner is you have to learn to roll with the punches and just get creative when problems occur, because if you think running a business is going to be rosy 24/7, then you are setting yourself up for failure. This is just something things that we had to learn how to navigate and that's what we're doing. Things are opening back up and we're going to be having some shipments coming soon and we're excited for what's to come.F Geyrhalter:That's great. I'm glad you're hanging in there. You mentioned that you have some of your product manufactured in Turkey. How important is it for you as a brand where you actually have your product manufactured? Because it seems like a very logical place for you to do that.L Vogl:We really like to make sure that we're working with ethical factories no matter where we're working, because obviously we're not going to be a brand that's out promoting, X, Y, and Z and then do the opposite behind closed doors. Ethics is very ingrained point to us, whether it's behind closed doors or whether it's the messaging that we're putting out there.F Geyrhalter:Does your messaging change? Do you change your messaging with ASOS for instance, which ASOS and Macy's are so different, right? Like the type of person that goes to those kinds of places and that supports those kinds of brands. Do you change it ever so slightly or do you really have your rule book and you just go with it?L Vogl:We feel like when we launched, we did tone it down a little bit and that's why we've been having some meetings just saying we can not run away from who we are, we need to be loud and proud being that we're in your face Muslim, and that's okay. That does not mean we're excluding everybody, it's just saying that we are proud to be who we are. In the next coming months, we're going to be more outspoken about that yes, we are a Muslim run brand by Muslim women, and so going back to our roots with our relaunch. I would say it got toned down a little bit, but we're reviving that.F Geyrhalter:More power to you. That's great. I love to hear that. That's definitely the direction to go. If you could describe your brand, and this is funny because I usually send my guests a couple of notes prior so that they can look at a couple of questions and familiarize themselves a little bit with it. I think that's something that everyone should know and everyone knows because that's just professional courtesy, but you immediately said "I'm not going to read those," and I think it says so much about your authenticity and just like, "No, I'm just going to either answer them well or not answer them or whatever." One of the questions is about your brand DNA, and I give my founder guests a little bit of a heads up because I really try to figure out, if you can describe your brand in one word, right? One word, what would it be?L Vogl:Now I'm regretting that I didn't think of this.F Geyrhalter:No, I'll give you a little bit of time to think. It's like you would think of Coca Cola and it might be happiness, you would think of Everlane and it might be transparency, and I mean there are so many words that have already been floating around.L Vogl:Then we'll talk about it in a sense of exactly how I said I don't want to know questions before an interview because I want to keep it real. That's the one thing I always say, so I would say genuine. That's going to be my answer. Because to me, whether it's being a person, whether I'm doing an interview, whether it's my business, whether it's the advocacy work that I do, I always want to be authentic and real. So genuine is the word I would go with.F Geyrhalter:There you go, you have it. That is Verona Collection's brand DNA from now on. This is what you would have to tell your employees in the next meeting.L Vogl:Exactly.F Geyrhalter:If you could do it all over again, what are some lessons that you learned or one lesson that you learned of brand advice that you could give other founders as a takeaway?L Vogl:A brand advise or just company advice? I think if we're going back to branding, I feel like you have to really know who you are and know your customer base. That's the most important and the most obvious answer. I feel like people jump into this because I have great business idea but then they don't truly know the customer, and so that's the most important thing because you have to learn how to speak to your customer, where they're shopping, what kind of advertising to go towards, so it's really about knowing your customer and who they are and what their needs are.F Geyrhalter:Absolutely. Listeners who fell in love with your brand, now that we're coming slowly to a close here, where can they find you on or offline?L Vogl:As far as Instagram and Facebook, it's just VeronaCollection, one word. Our website is the verona-collection.com, and then me personally, my Instagram is lisamvogl, V-O-G-L. No E. That's my personal Instagram.F Geyrhalter:Perfect. Listen Lisa, this was really, really delightful. I love the story, I love what you're doing, but most importantly, I love how you're doing it.L Vogl:Thank you.F Geyrhalter:Thank you for the time. Maybe we give you back a little bit more quiet time today, which I'm sure you-L Vogl:Back to emails and calls. Work never ends.F Geyrhalter:There you go. Hang in there. With COVID-19, stay safe and stay successful and stay in touch.L Vogl:Thank you so much.
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