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Hitting The Mark

Author: Fabian Geyrhalter

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Conversations with founders and investors about the intersection of brand clarity and startup success with your host, brand strategist and author Fabian Geyrhalter.
49 Episodes
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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.
Learn more about ButterclothDue to COVID-19 we are no longer asking for financial support for the show, instead you can now join free mentorship group calls with Fabian to get through this together. Join here.Full Transcript:F Geyrhalter:Welcome to the show, Dan and Bob.B Stevens:Good morning, Fabian.F Geyrhalter:It's always great to have two people on, especially right now doing this crazy quarantine that we're all in. I know that everyone is in a different house, in a different spot. I had founder and co-founder pairs on Hitting the Mark in the past, but this is the first founder and COO, so chief operating officer combo. How long have you guys been working together?B Stevens:I met Dan, Fabian, almost 20 years ago or thereabouts. At that time I had a manufacturing company in the footwear business and Dan actually helped me out in the design areas, back when he was in school, he started. So we've known each other for many years. I've been able to watch him evolve and grow and blossom over the years, and so I had sold the company in 2016 and right about the time that Dan had decided to jump from his current head designer post into having his own company. He called me up one day and he said, "I quit my job today," and I go, "Oh my gosh." "I want to start this company. Would you help me?" Of course, there was no question. Dan had helped me for many years and I was all in to help him.F Geyrhalter:That's amazing. Let's go into that story a little bit. Dan you worked in a small tailor shop in Vietnam with your parents and then you came to the US where you took fashion classes at a local college and you actually landed a job at Mattel, designing clothes for Barbie, which is just so crazy cool, and then you saved enough money to study at Otis, which is also where my wife graduated from and it's up the street, and afterwards, you worked for various fashion companies including 7 For All Mankind. When and how did you decide to say "This is the time and now I want to start my own company"? How did that happen and what was the drive?D Tran:I've been in the fashion industry for probably around 20 years and then been head designer for 10 years at a big brand in LA, and then one day I just wake up and thinking I had to have my own brand because I'm getting old. I don't want to regret later, this is something I really want to do, and then I have this idea to create a brand, Buttercloth, and then that's how the drive kind of kicked in and then I just walk in my boss's office and just quit my job and then started.F Geyrhalter:Just that easy, right? I hear that from a lot of entrepreneurs on my show that they're doing well, they're up in their career, they do what they like doing, but they don't do what they love doing, like they know that there's something else and they take this huge leap of faith because they know looking back, even if they would fail, they would not regret having done it because it's something that they just needed to do and it's always so inspiring to hear that.D Tran:I only called my best friend that I talked to, and I asked him, I tell him like there's something wrong with me because I go to work, I'm not happy, and I have something in me to start my own business, but I don't know what it is and I'm also scared and afraid to quit my comfortable job and I have to quit all the income coming in and comfortable life and all that, and then it just bother me and that's why I decided to quit my job and go for it.B Stevens:I'll tell you a quick story. During that time, Dan was battling with himself about giving up that comfortable six figure income and so forth. He would talk to me about it weekly, and then I was watching television one morning and I saw Steve Harvey on there talking about his new book called Jump, and it's a story of him jumping off and doing his own thing to encourage other people, and so I said, "Wow, this is the book for Dan," so I bought it and I sent it to him. I think Dan read that book in three days and on the fourth day, he went in and quit his job.F Geyrhalter:I hope that is a review that you wrote on Amazon for the book because it really should be. That is fantastic.D Tran:That book has helped me a lot and it seemed like that book is talking about my life and guided me to where I'm at right now.F Geyrhalter:That is so great.D Tran:That is the inspiration book. I end up like buy few books and give to all my entrepreneur friends.F Geyrhalter:That is fantastic, and you guys branded your company to make the world's most comfortable shirt, and I'm always suspicious of these claims, right? Because they feel, to be honest, a little bit cheesy and not believable, but, and this is important and that's why you're on this show, you come from the fashion background. Knowledge of fabrics is deeply ingrained in you and you would not be launching a brand with that claim if you could not justify it first to yourself, but also to the world. So the question is what makes it the most comfortable shirt? As part two of that question, are you able to protect that claim? Is it very ownable for you?D Tran:Yeah. The fabric that we come up with is finished on both side of the fabric. That's why it touching the skin is very comfortable. Most of the fabric, they finish it only one side which is the outside, so when you touch it, it's smooth, but what we did, we finish it on the inside as well because I'm thinking, the inside is as important because it's touching your skin. So that's what we did, the double face finished fabric. That's why when our customer receive the short and they put it on, and then they're like "Oh my God, this is like the most comfortable I ever worn." I get that, a lot of that email and I had a lot those comments.F Geyrhalter:You used the words of your clients to create the positioning of the company in a way, right? You reuse what the clients say, which in my eyes is extremely, extremely smart and I have been doing that even for my own company when I just interviewed my past clients and I say "What have I really done for you?" and then they tell me things that I would have never thought I actually did for them, right? I would describe them very differently.D Tran:That's true. We have some of the customer say like "Oh my God, you guys," what's that they say? Under promise but over delivery. Whatever we're advertising out there, when they receive it, actually it's even better. They say like not only like the fabric is comfortable, also the design, the little detail they love, they liked it, all the hidden detail on the short. That's the reason they come back and bought again.B Stevens:Fabian, to bring it back to branding for a minute, one of the things that from the beginning, we had this claim, we really believed it was the softest, the most comfortable shirt in the world, and I believe in branding, you have to be bold. It's not enough to say that you have good pizza. You have to say it's Long Beach's best pizza, right? The best pizza in Long Beach, and of course you have to live up to that, but you have to make that claim and then you have to be able to prove it, and we had early... This is also I think very important in branding is to be careful who you're listening to. I've come to realize that there really are no experts, you, me or anyone else. We all have an opinion and we all have experience that we bring to the table, but there's really no experts, and if we would have listened to all of the experts that we talked to, Buttercloth wouldn't even exist. Because we had people tell us, "Oh no, you can't make that claim. Don't make that claim. You're going to get sued," we had one expert us. We had another expert tell us, "Oh, Buttercloth, horrible name." If we're going to listen to those people, we wouldn't have the brand that we have, so be careful who you're listening to, trust your instincts, make bold claims and stand behind them.F Geyrhalter:Very interesting. This is a brand expert interviewing you so I'm totally on the spot now. I think it's really interesting because that's the next wave of direct to consumer brands that have less of that fear of... A large corporation would never make a claim like that because they know they could get sued, right? But for you, you don't, you don't try to trademark it, you make a claim because you believe in it and your customers repeat it after you and you just say "Well, what could possibly go wrong?" There's a lot of truth in acting on that gut instinct, as we can tell by your success, right? Immediately after you guys appeared on Shark Tank where you got a quarter million dollar deal with investor Robert Herjavec, you have done three million dollars in sales and you sold over 30,000 shirts in seven months. That is a Testament to the idea of how you talked about your brand intrinsically, right? And how someone like Robert Herjavec believed your story, they believed the product, they believed the positioning and he said "Look, we can make a lot of money off of this brand. We can do this together," so you really didn't invest in branding much in the beginning. Everything was pretty much bootstrapped, right?B Stevens:That's right. We think we had some core pieces in place for branding, that is the name, the tagline, the logo, but we didn't have a lot of money, and so we had to bootstrap it, of course.F Geyrhalter:Everything literally started out of a garage? Is it the typical story where you just had a couple of shirts and you started?B Stevens:Literally. I have to stop and realize, I tell people to see, this is April, so literally 16 months ago, we were in a garage in Long Beach, a double car garage shipping and there were just three of us, four of us.F Geyrhalter:Unbelievable. You might've been right next to me in Long Beach. Who knows? We might be neighbors. I could have just picked up a shirt from you. How did you go about defining your audience? Because I always liked doing that. I go to a podcast guest's Instagram account and I just slowly scroll through to the very, very end of it, right? Because that kind of shows the truth of our brand actually changed, and with your Instagram account, it feels like you pretty much targeted every man alive. I mean it started with a very young, super macho kind of guy and then it moved to a very aspirational man, kind of like the Most Interesting Man in the World by Dos Equis, it has a little bit of that feel, and then now it's very much like realistic guys like myself and maybe yourself, Bob, like 40, 50 somethings that want a stylish, easy to maintain shirt. Who is your audience and how do you define it or how do you go about that? Do you use data from the sales or how do you kind of like go in between these different audiences?B Stevens:I'll talk a little bit about that and then let Dan expand on it because Dan is the guy that really knows the customer, I mean he really is, but in the beginning, of course you have some thoughts about who your customer is but you really don't know and we didn't know. When we launched, we were advertising to every man, right? But very, very quickly, we picked a pretty good time to launcj I guess that was to our favor. We launched Black Friday week of 2017, so that was a pretty good time to launch a brand and we immediately, thanks to our digital people. We had, you know, a great launch and we had some good data in there, but the data showed us immediately that our core audience really was in that 35 to 55 group. We were getting some between the 25 and 35 but we're selling $120 shirt. So you have to be realistic. Not that many millennials were buying from us in the beginning. We've been able to stretch to the younger side. I think in part, as the brand has grown and people have been more willing to realize that it was worth the investment, that they're getting more value out of our shirt because they can wear it to work and wear it on the weekends and out at night and so forth, so they're getting more value out of it, but I would say still, our core audience is that 35 to 55 year old guy.F Geyrhalter:Which makes a lot of sense to me that. Dan, do you want to add anything to that or did Bob pretty much take care of it?D Tran:I think he pretty much take care of it, but yeah, quickly after, I think few months, we recognized that our audience focus is 35 to 55, so we will design and create inspiration around that, and then that's how Buttercloth hit really spiked up.F Geyrhalter:How do you guys feel like you're currently branding Buttercloth? How do you feel like people get to know your brand? How do you market, how do you speak to people? Is it mainly at this point word of mouth and because of reviews? How is the brand being fueled? I think it's so fascinating with especially D to C brands like yourself that are very much based on a product that they claim is just superior and you just push product and hope that you get a lot of great reactions, which it seems like that's how you're growing right now, but tell me, I'm super interested in this.B Stevens:At the end of the day, it's all social, of course. It's all social media. Some of it's organic and some of it's paid, with a mix of publicity in there. We've had our fair share of publicity, starting with Shark Tank. You would consider that publicity I suppose, and being able to get our message out by talking with you, Fabian.F Geyrhalter:That's it. Hundreds of thousands of shirts will be sold after this. Forget Shark Tank.B Stevens:We'll have to turn up the bandwidth on the site after this. We started out with one channel, which was Facebook. That was our beginning channel and we got some legs built under us with that and the next thing, we started doing Google and YouTube display ads and search ads, and then affiliates, we betted on affiliates. We just grow these channels channel by channel and get more bandwidth out there, if you will.D Tran:I would say that means very loyalty to the brand whatever the brand they stick with, and our brand was very consistent and comfort, so that's why we have a high number of repeat customer and that's how we was lucky to, in order to expand, those customer and then word of mouth from those customer to their friend, families, and that helped us a lot.B Stevens:That's right, and right now, we have I think approaching 50,000 Buttercloth customers out there, and a lot of them take advantage of our referral program we offer which is a great way to see organic social growth just from those customers referring their friends to Buttercloth, so it's been another great channel for us.F Geyrhalter:How does the referral program work?B Stevens:We give a 20% discount, isn't it, Dan, 20?D Tran:Yeah.B Stevens:20% discount. If you're a Buttercloth customer and you send it to your friend and he buys something, he gets 20 off and then you get 20 off of your next order, so both of you get 20 off.F Geyrhalter:It's very smart. Back to what you were saying, Dan, you really have a fantastic customer. That customer, a guy in his 30s, 40s, 50s, when it comes to shirts, is so loyal. I know that because I am your guy, right? I'm 45. I'm smack in the middle. I'm a professional, I wear shirts every day, dress shirts to work even if I don't have a client meeting, and usually it's only one brand and one cut. Very often even one color, right? Because once you have something that you really like that works for you, we're guys. For us, it's just like "Let's reorder as many of those as possible," right? Because that's all I'm going to wear from now because I feel good in it, so you have a really great customer cut out for yourself.D Tran:Yes. Exact-F Geyrhalter:Too bad... Sorry, go ahead, Dan.D Tran:Exactly. Our customer is when they buy one already, they come back and buy 10 more. We see that trends almost like every day. We look at the history of orders almost every day and then we see this guy buy and then as soon as we ship them to him and then they receive it, and then the next few days, and then they come back and bought again right away.F Geyrhalter:That's really, really great.B Stevens:Just to point out, as Dan said before, we try to and I think we're known to under promise and over deliver, and it's that experience, it's that unboxing experience and that person opening up that shirt that is a wow factor. Because they're buying the shirt based on the the promise of this comfort, right? But when they get the shirt, they open up the package and they go, "Wow, this is nicer than I thought it was going to be" before they even put it on because of the weight of the fabric and the way it feels and the design, the unique detail that Dan built into the design and the buttons and the trim and all those things just... They may not even be able to put their finger on what it is about the shirt that they like, but they realize they like it, and then they put it on and wear it to the office and then right away, somebody says to them, "Where did you get that?" Then they're a customer for life.F Geyrhalter:How is that unpacking experience, because for so many D to C brands, it became this big thing, right? Because you show it on YouTube of how to unbox something. Did you do anything special with the box? Is there something in there that kind of creates some delight or is it literally the shirt that is just so exciting or did you do something around it as well to engage in that experience?B Stevens:All of the above, right, Dan?D Tran:Yeah. Beside the nice tissue and the logo and the colors in a nice box, but we have one insert card in there that when they first open it, they will see like "Far into the world of comfort," a guy were falling and on top of the cloud and stuff like that and then we get a lot of reaction on those customers filming the video and they say, "Wow, far in the world of comfort. Let's check it out and see how comfort they are," something like that.F Geyrhalter:It's also exciting because you are at a price point that is slightly aspirational so people do like to share it. It is a little bit of gift to themselves as well. It's a very fine line. Very interesting. Now we talked about social, we talked about packaging. Let's talk about retail for a second. I know that you had a pop up shop at the Beverly Center. Is retail dead? I mean now, after the virus even more so, or do you see a future in brick and mortar for Buttercloth?B Stevens:We have diverging opinions on that, so I'll let Dan talk first.F Geyrhalter:I love it, this is great.D Tran:Bob and I kind of have different opinions. I tell him that everything is go to e-commerce, everything bought online. Nowadays too, they don't go shopping. It's perfect for the online, but Bob have a different opinion.B Stevens:I believe that it's a big world and retail's never going to be "Dead", right? It's changing, it's going to evolve for sure. You've seen the Bonobos model, the popup models. Retail is turning more into showrooms without inventory where people can go, but at the end of the day, humans are social. We'd like to get out, we'd like to do things, so retail is never going to die. It's just going to evolve and change. I was at an event about a year ago where a lot of experts were showing the growth of e-commerce against retail and showing a lot of people think that e-commerce is bigger than retail today. It's not. It might be exactly today because of COVID, but I mean in the whole perspective, it's not, but the growth line was showing that it was going to catch up and exceed brick and mortar within 10 years globally. About 10 to 12 years. I think COVID is going to make that happen maybe in three or four years. It's going to change very rapidly now, but will it ever be dead? No, there's always going to work. At the end of the day, we're social people, we're always going to be out, and so finding a way to get outside our little e-commerce world into the social, real world out there, we just have to find the best way. Whether that's our own stores or whether it's popups or whether it's a leasing space in some of the big brands or the big box stores that are going to survive, wherever it is, we're going to be in other marketplaces and we're going to be out in the real world somewhere.D Tran:That's what we're going to compromise is popups store or have our own store as a showroom.F Geyrhalter:Totally, which I think is very much where Bob is heading with that and we're at Bonobos and a lot of them were also going. I'm an expert so I'm not going to have an opinion. How has the COVID-19 pandemic, since we touched on it, how has that impacted your business as well as its plans for this year? I mean you must feel an impact especially with a dress shirt that a lot of people are using for work and it's a little higher price point, how are you guys doing right now? How are you getting through this pandemic?D Tran:We are very lucky that we are on the e-commerce side. Our sale drop but it's not dropped very much, and I would say probably around 40% because we were lucky we didn't have any pop up store or have our own store or retail. Our focus is on e-commerce.F Geyrhalter:That's true. See Bob, how Dan got us back?B Stevens:Yeah. Conversion rates have obviously come down. Your point, a $120 shirt is not something that everybody is focused on today, but as Dan said, sales are still, maybe they're down 40% or so, but we're still shipping, our logistics people are working and shipping every day, our team, our office team, all of our designers and marketing and other people are working from home and we're making it work for us. We'll certainly get through. Fortunately, we had a very, very strong foundation. Dan is extremely conservative, so we had a good foundation and we'll weather the storm.F Geyrhalter:That's great.D Tran:We were very lucky that our company is all about comfort, so even people work from home, they still have to wear a dress shirt when they do the Zoom call or video call, so it is probably just perfect for them even they work from home, and on top of that, we have loyalty customers. They always come back and bought it.F Geyrhalter:Your shirts are iron free, right? You don't need to iron them, they're wrinkle free so this is even better for the time like today where no one goes to dry cleaners. That's a big benefit. You guys are obviously known for your shirts, right? But I read on CNBC last night that a while back, they wrote that you were thinking about diversifying your product portfolio and that you were planning to move into polos and sweaters last year. Is that still the case? Are you guys still having plans like that or are you going to stick to shirts?D Tran:Yes, we did launch a polo and sweater the last year, and this year, in May, we're going to launch T-shirts, and then this fall, we're going to launch jackets as well. We build little by little. It's going to be a complete lifestyle of four categories.F Geyrhalter:Since your brand was known for comfort, with all of the polos and the diversifying product portfolio, is it all still about comfort or what is kind of like that North Star of the brand? Is it still comfort even though you expand into all these other things?D Tran:That's a good question, because our mission is all about comfort. That's how we started from the beginning because when I started this company, thinking like the whole world going to be, go for comfort. So you see, the comfort shoes, everything is comfort, so that's why we start this Buttercloth, and then our mission is when we do any category, it's going to be comfort, it's going to be double face fabric, it's going to be stretching, six way stretch, so that even polo jackets, we're going to find a way to make it comfortable for our customers. Comfort is the key for our brand.F Geyrhalter:I'm really glad to hear that, and it all goes back to your name which I by the way think is a really good name because it's so memorable and it's so descriptive and it has longevity, right? Now in your fourth year or third year, expanding the brand, they can still go back to that idea of how a shirt actually feels. Now that you've bootstrapped branding for the last couple of years, what does branding mean to you guys as a term?B Stevens:For me, it represents the connection between you and your customer. How they see and remember you, how they feel about you, and I think it's fair to say that we want them to see us for what our mission is, to redefine what comfort is for men's apparel, and also the personality. Every person has a personality and so does a brand and we feel like our personality is one that we try not to take things too seriously so you'll see a little bit of humor, what we think is a little bit classy humor in our advertising. It's the way that we connect. It's our connection to the customer and how they see and remember us.F Geyrhalter:Absolutely. Now that we're slowly coming towards the end here, I wanted to ask both of you, what is a piece of brand advice for founders as a takeaway? Say there's an entrepreneur with a big dream just like you were, Dan, years ago. What is the most important aspect to keep in mind about launching a brand? If you don't have that background, like you guys, you didn't have that launch experience, there was a lot of different product and operations experience, but what is advice of what not to do or what to do?D Tran:I think I would say trust your instinct and know your customer inside and out, and then make sure that create a product that could be commercial so it go to mainstream, because sometimes you create a product and then it couldn't be made in production. That's not going to be fun because what if you launch it and most people liked it and then you can't produce mass market, and then also take risks and don't be afraid. Don't worry to... Afraid to fail. If you fail, it's okay. Take risks but recognize that when it doesn't work, quickly change it.F Geyrhalter:Absolutely, but Bob, anything to add from your end?B Stevens:I would say just be careful who you listen to. Again, like Dan said, you have to trust your instinct. You want to talk to a lot of experts but you've got to have your filter turned up very high to filter out what doesn't go with your instinct and then stay with it. If you believe and it's strong enough, you're going to make it happen, so just be careful. Keep that filter turned up.F Geyrhalter:I so agree. There's a service called Clarity, it's clarity.fm, and there's a lot of experts there and so what I do, I'm on there too but what I do, when I seek an expert for anything, I just have a call, like a paid call, right? But with like five people for 15 minutes just to get the best out of all of them and then make up my own mind instead of hiring one expert for like a month, right? I totally agree with that idea. Not to diss experts but I think that you want to get the most out of an expert, and even to find out who you actually like and who you look eye to eye with. It's not easy to find that person. But now to my most important question, when will you have a simple black shirt back in stock? I'm waiting. Where is it? Where is the simple black shirt?D Tran:We couldn't get it on the shelf.F Geyrhalter:What?D Tran:We ordered a lot of those black shirts every month and it just sell like crazy.F Geyrhalter:Dan, I think I expect an email from you personally when it's back in stock.D Tran:For sure.F Geyrhalter:Listeners who are intrigued by your brand, where can they find the shirts that you say, and I quote you, "Make you feel like a Friday night but feel like a Sunday morning," which by the way I love. Where can they find Buttercloth? It's all buttercloth.com?B Stevens:You can find your look at buttercloth.com.F Geyrhalter:Nice. Even rehearsed. Thank you both Dan and Bob. It was great to have locals on the show without even knowing that you guys are local here. Totally appreciate your time, totally appreciate your insights and great luck with Buttercloth and I'm so glad that you guys are weathering the storm nicely now. It says a lot about how lean you were launching and how well you were positioned, so best of luck and thank you.B Stevens:Thank you, Fabian.D Tran:Thank you very much for having us too.F Geyrhalter:Absolutely. My pleasure. 
Learn more about Sweet FlowerDue to COVID-19 we are no longer asking for financial support for the show, instead you can now join free mentorship group calls with Fabian to get through this together. Join here.Full Transcript:F Geyrhalter:Welcome to the show, Tim.T. Dodd:Thanks so much. Thanks for having me. I really appreciate it.F Geyrhalter:Absolutely. First off, I hope you're safe during what is being seen as the peak week of the coronavirus here in LA, I guess. Thank you for taking time-T. Dodd:Yeah.F Geyrhalter:Yeah. It's crazy right now. It's crazy.T. Dodd:It's frightening. It's alarming for us all. We are safe. Thank you. As an essential business, we remain open, which has been great. We've done a lot of things in the store to make sure that people... In all of our stores that people are safe, and our customers and our team. We've gone through lots of different training. We've done lots of different things in terms of providing people with safe access to supplies, and gloves, and masks, and of course we were I think the first actually in Los Angeles, or even in southern California to instigate curbside pickup and contactless delivery.T. Dodd:We've been rolling that out, and it's been going very well. There's a strong demand for people. People are at home. They're stressed out. They're scared, et cetera, and they feel the need for the products that we offer, for cannabis, and so we're really trying to provide that in the safest and most responsible way that we can here until the social distancing guidelines, et cetera as well. It's been I'd say a pretty challenging few weeks, but I look at the good side here.T. Dodd:We are still open, which is great. We're still providing jobs for our team, and we're still providing an essential service to our customers. How crazy is it that this is now an essential service?F Geyrhalter:Yeah, yeah. Just think about that two years ago.T. Dodd:I've always thought that, but it's pretty cool that that's now part of this. It's interesting. It's been a really fast evolution in our customer behavior and our store behavior. We've pivoted really quickly, so my hat is off to our wonderful team of Sweet Florists in all the stores.F Geyrhalter:Yeah, absolutely. How difficult was it to fully embrace the home delivery system? Was that something that you already worked on prior? Being in LA, I'm pretty sure you're pretty tech forward.T. Dodd:Yeah, luckily we had. We had started delivery several months ago. It was not a core focus of our brand. Our brand is really about providing the high-touch service in-store, but we had decided luckily to move into delivery Q3 of last year, and really to have that as an expansion of our brand footprint beyond the stores to people's homes. It's asking the ultimate permission. You're coming to someone's house to provide them a service.T. Dodd:You're coming to their front door, and they're giving you their gate code, and all that stuff. Particularly in Los Angeles, we have all that stuff. We have a lot of things that are... There's a lot of permissions involved in that, social permission that's unusual. You're basically bringing drugs to someone's home. Obviously when you think about that, you're like, "Okay, we do really want to do with our best foot forward." We started that last year, at the back part of last year.F Geyrhalter:That's very forward thinking.T. Dodd:Yeah, and we had the tech tools in place. Most of us have got some tech backgrounds, either from the business side or from actually on the dev side. We worked with [inaudible 00:03:52]. Someone actually put a company called Onfleet in the middle of all that. Onfleet allowed us to... Which is an app that's used by lots of different delivery services, but it allowed us to provide a much higher touch.T. Dodd:Customers can text the driver anonymously, "Hey, I'm here. How far away are you?" Et cetera. The driver can text back or call back, even. Or people at home base can do that. We put that all together. It's a very good system. It's worked really well. Frankly, we were, I want to say prepared, but we obviously had a leg up as this all started to unfold the way it did. We quickly took everything that we had in place, and we simply amplified it. We brought on more drivers. Investing in the human capital here is really important.T. Dodd:We brought on more drivers. We made sure that the drivers were safe, first and foremost that they felt secure in what they were doing, provided them with gloves and masks and hand sanitizer inside the car. Hand sanitizer is still a really hard thing to get, so that was difficult.F Geyrhalter:Yeah, absolutely.T. Dodd:Just give me one second. Just [inaudible 00:05:09], okay? Matthew, I'm on a call, okay? Please. Thanks. Sorry. My son was [inaudible 00:05:20].F Geyrhalter:That's okay.T. Dodd:Those things are still difficult to get, so we did all those things. Then since then, we've seen a marked increase in delivery. We've probably seen a 500% increase during the surge of coronavirus panic buying that we saw. We accommodated those orders, and then since then it's fallen back somewhat, which is understandable, and I think frankly reflects people are now staying at home a lot more, but they're not panic buying or surge buying. They're thinking, "Okay, I've got a few days or weeks of supply left, and I'll go and get some more soon."T. Dodd:We see large basket sizes for delivery, and we also see the need to expand our zone, so we've done that. We've expanded our delivery zone from... Initially it was around a five-mile radius per store, but if you think of Los Angeles, we're well spread out. We've got Studio City, Melrose, and the arts district locations working right now. We were also about to open up the Westwood location. Obviously with COVID, we're going to push that back. It's very hard to launch a store in a pandemic, and very hard to know how that looks.T. Dodd:I think optically it also has some problems. I don't think s appropriate right now to do that, so we're looking at how to do that just as soon as it's safe, and we think we can market and launch the store correctly. Even with the current footprint, the five-mile radiuses that we had worked really well. We expanded those very quickly to ten-mile radius from each of the stores, and then we're now delivering basically to all of Los Angeles, so from the Palisades on the west side all the way to Pasadena, deep into the valley, and then deep into south LA.T. Dodd:We're looking at further expansion of that, as well. If there's a silver lining on this horrible situation, it is the fact that traffic has died down so we can now reliably service all of these large areas with more staff, obviously, and more drivers quickly. We can get around the freeways pretty quickly. We're averaging about 50-minute delivery times right now, despite wherever they are. At certain peak times, we might get up to about 80 minutes if we have to do a lot of deliveries around the same time.T. Dodd:We're able to now service a very large part of, almost all of Los Angeles from the stores that are open, all the stores in that time frame. That's been I think a benefit of this horrible situation.F Geyrhalter:Right, right. If one can say it that way, but it's true. People are creatures of habit, so I'm sure people will also get used to getting delivers from Sweet Flower now, and then once-T. Dodd:[inaudible 00:08:14].F Geyrhalter:Yep. Say again?T. Dodd:Okay. All right, I dropped you for a second there. I'm sorry.F Geyrhalter:Okay, okay. What I was saying is that people are creatures of habit, so I'm sure that they get used to during the pandemic to start ordering from Sweet Flower, and then later on they might just keep it up because it's already in the system, it's easy for them to get used to it. Some positive things are coming out of this, as well.T. Dodd:Yeah. I think we're seeing, it's always as I think someone else smarter than I said, necessity is the mother of invention. We're seeing that. We're really now, we're making sure that all the staff is safe. Business continuity, which is really staff and customer safety, has got to be first and foremost right now.F Geyrhalter:Absolutely.T. Dodd:These are really challenging times.F Geyrhalter:Absolutely.T. Dodd:Secondly, just remembering who we are as a company. One of our values is community engagement. Last week, after I made sure that... We made sure as a team that all their staff and team had gloves and masks and sanitizer. We had a number of supplies left over. We approached some of the teams that we work with, particularly in Culver City, where we're based. We went out to the local charities that are in need and donated masks and gloves to them.T. Dodd:We also made some charitable donations to local food banks. That's really important, because we're also moving into a... Right after this crisis, there's going to be, or there already is an economic crisis, and we need to be reflective of that, and thinking about how we fit our company in this emerging new new. This new, not normal situation that we're going to be in.F Geyrhalter:Right. Absolutely.T. Dodd:If food banks are getting hurt, everyone is getting hurt. We're trying to help out, and we're doing that with money, and also with some time. I was driving around on Friday afternoon basically seeing some people that we know around our neighborhoods who are elderly and vulnerable, and making sure that they were safe. Then as I said, we dropped off a bunch of different supplies to some of our local charities, as well, to help them out. We're trying to do our small bit as a local business.F Geyrhalter:Right, right. I think it's everyone's responsibility as a business to just start with community. Even the community is at the heart of your brand. Let's take a step back a little bit.T. Dodd:Sure, of course. Yeah.F Geyrhalter:You have a successful track record as a VC, as well. You're investing from C to series C stages, and you had acquisitions from the $100 to $600 million range. I could have actually had you on as a VC guest, because I only have founders and VCs. Today you're wearing your founder hat.T. Dodd:I am, yes.F Geyrhalter:When I first read about Sweet Flower, I was immediately attracted to it because there is one and a million cannabis shops that actually differentiate, and that create a brand atmosphere, as I like to call it, around them that is specific, that actually stands out, and that sets them apart. For Sweet Flower, it's about being curated by and for Los Angeles. Heritage and community is really your brand story. You were quoted in Forbes saying, and I quote you here, "Souther California brands are some of the most recognized in the world."F Geyrhalter:We're talking about obviously the Googles and the Apples. "Within cannabis, I believe that we can build a best in class retail experience and brand." Tell us a little bit about how you have no background in the cannabis business. How did this came about? How did you set out and say, "We're going to create this LA-first brand?"T. Dodd:While I don't sound like it, I call LA home. I'm from New Zealand, but I moved to the States 26 years ago. Now I've spent over half my life here, and most of that has been in LA. I've been lucky enough to live here for the last couple of decades. I'm really focused in this amazing part of the world that I've grown to love and call home. Beyond that, we take a very non-mythical approach to cannabis. We think it's an industry, it's a business. It's a highly-regulated business. My cofounder and I have got a lot of experience in dealing in high-regulated business environments.T. Dodd:We're both actually recovering attorneys. I haven't practiced for many, many years, since 2003, I believe. That training is still part of it, and we take compliance very seriously. We also are both from relatively humble backgrounds, and so we do believe in giving back. That's, as I mentioned, part of what we are about in terms of the company, and that's part of that our ethos. Beyond that, in terms of California, we believe that California is still the largest legal market in the world. Potential legal market.T. Dodd:There are lots of issues in California which I'm sure everyone's familiar about with respect to illegal operations, and over-taxation, and the complexity of the regulatory environment. I won't agree or disagree on those, but they are definitely things that people talk about. We looked at this and said, "Okay, is there a space here for us to participate in this market?" We looked at that as really taking a classic, I want to say McKenzie approach, because I don't have that background, but just looking as a straightforward business approach, strategy, et cetera.T. Dodd:What is the market size? What is our potential entry point? We decided there is a huge... There is a large amount of people going after a core demographic, the stereotypical cannabis user. A young male in a certain demographic in Los Angeles. There were very few brands, and there were really no retail brands other than potentially one that was out there that was focused anywhere else. In fact, that brand was really focused in lots of places.T. Dodd:We were like, "Okay, let's see what we can do in terms of focusing a brand on a customer that is cannabis curious, has not maybe got into cannabis, but is definitely leaning into trying to understand this." My own experience with this was I ride bikes. I cycled for charity. I had a really bad bike accident cycling, broke my pelvis in many places, and my head pretty well, and walked up... I was medevaced off the top of a mountain in a chopper, woke up in hospital, was released a few days later with a big jar of Oxycontin.T. Dodd:Didn't want to do that, decided to go down to get some cannabis, went to a store. I'm on crutches hobbling around with my head wrapped up. I look like a real mess. It was like, "Well, do you know the difference between Indica and Sativa?" I was like, "Well, sure, I do, but what is the point of that question?" Then I thought about the customer journey that I was having, which is a really bad experience. I was hoping for a wellness experience. What I received was basically a transaction.T. Dodd:Sweet Flower was based on the premise that we can provide a wellness experience to all of our customers, not just a transaction. We want our customers to come to be loyal, to enjoy the experience they're having in the store, to receiving very high service component, and to receive education and engagement. I think we're getting the feedback that I was hoping for. We're receiving extraordinarily high reviews, anecdotal and data-driven reviews that are saying, "Hey, we really enjoyed the experience we had at Sweet Flower."T. Dodd:"We really enjoyed the peace, the experience we had. The products were really good. The service was great. We will come back." Really moving away from deal-driven behavior, we are saying, "Hey, we still do deals." Moving away from people who are trying to sell product cheaply, whatever, and deal-driven behavior. Transactional-driven behavior to loyalty-driven behavior and service-driven behavior. That's really what we're doing.T. Dodd:I view our product, what we're offering is not cannabis. We're offering a wellness experience. I think what we're seeing today is actually some vindication of that. People are selecting us because they want to spend time with us, either on a website, or if they come into the store even today, they're coming into the store because they want to understand the effect they can get. Not just, "I want THC, whatever component percentage flower." What I'm looking for really is, "I can't sleep, or I'm really stressed, or I'm in pain, or I'm anxious, or I want to be social with either, given the constraints of the current environment. I want to enjoy myself."T. Dodd:That's important to people, and that's what we're providing. I've always viewed Sweet Flower as providing a wellness experience. That's what I was hoping for when I hobbled into the store on crutches. That's what I didn't get, and that was a big part of me and my partner in Sweet Flower deciding that we would build this company. In terms of LA, I just believe southern California has a certain creative spirit. I've been lucky enough to work in large, creative organizations in California most of my career.T. Dodd:Warner Brothers, and then Technicolor, and at both places I found a tremendous amount of people who had incredibly engaging careers that were driven from their creative spirit, their creativity. That's a big part of Sweet Flower. We celebrate where we're from. The Sweet Flower love mark, our logo is the California state golden poppy. We have the sun in our logo. People move to LA partly because of the weather. That's part of who we are. It drives our activities and drives all of our engagements with each other, because it's such a great place to live.T. Dodd:We wanted to celebrate that. Then last, the name. We deliberately didn't call it anything too heavy, too dank, too cush, too 420. We didn't really want to have really obvious callouts to cannabis. The flower is not a flower, it's a poppy. It's a golden poppy, but the name itself is Sweet. We're not saying this is a brand for women, but certainly I think a lot of our customer base are female, and enjoy that, and certainly I do think part of marketing is to...T. Dodd:You can put out your brand, you can put out your marketing material. It's how people receive that, and then feed it back to you that's important. You know if you've missed the mark if what you intend to do, your intended audience is not actually what you get.F Geyrhalter:Absolutely. Yep.T. Dodd:Yeah. I think in most cases, we've been very successful in terms of defining who we think our audience is, and having our audience say, "Yeah, this fits. This fits us." I think the biggest learning experience I had so far is the cannabis curious. People I think assume that they have a lot of knowledge, and it's been interesting. We've had a lot of people coming in with knowledge about some things, and actually we've educated them. We do have some extraordinarily experienced Sweet Florists, sales associates, in the stores.T. Dodd:That's been a very good experience for us. We're trying to just engage people as they are. When they walk in, they can have a lot of experience with cannabis or not. Initially we did call out the cannabis curious notion a bit more than we do now. We're I think... It doesn't really matter. People are super experienced with cannabis or not at all. There's always something to learn, and there's always new products in the market, particularly in California. Rather than talking about cannabis curious, we're really now talking about cannabis curated.T. Dodd:We have a fantastic buyer, Michelle Mendoza, who has been involved in cannabis here in Los Angeles for I think for two decades, and has ran the original California dispensary in West Hollywood way before any of these other stores came in. She has a tremendous background and a fantastic reputation in cannabis circles here in Los Angeles in particular. With Michelle's help, and then working with Kiana [inaudible 00:21:50] joined us as our CMO. Kiana also has a long history of engagement in cannabis, and before that in fashion.T. Dodd:Kiana and Michelle have really helpful us curate I think a fantastic selection of brands in-store, and then working with those brands, we've been able to curate... Sorry, to create a number of fantastic events and activations. Obviously now in this new engagement we have where we're socially distancing, a lot of it is influencer events that are happening online and on Instagram rather than elsewhere, but we're really doing that at the moment as a reaction to COVID.T. Dodd:With Michelle and Kiana, we're really now focusing on this cannabis curated moment. That, though, is congruent with the brand. It fits the brand. The notion of calling your customers cannabis curious, we backed off that a little bit. I think that that is... I don't really want to call our customers anything. I think all of my customers are fantastic. We're honored to have them in our store. We respect where they're all coming from, whether they have a lot of knowledge of cannabis or zero. Doesn't matter. We want to provide them with that same level of engagement and service.F Geyrhalter:Yeah, you meet them where they're at, right?T. Dodd:Yeah.F Geyrhalter:And people come in with different backgrounds, as you nicely stated. Talking about the community again, and you talked about these events, because to me it's super interesting to think about how you actually activate a community. Do you currently, or will you in the future when things go a little back to normal, or maybe like you said virally, how do you collaborate with other brands? Do you collaborate with other brands? What's in store for your community growth?T. Dodd:Yeah, so we've actually I think been at the forefront of brand retailer partnerships. I just think it's very interesting to have walked into the cannabis industry when we did. A lot of the foundational structure of the industry was getting set up, and some of it was antagonistic. There was a lot of, "You're going to have to pay for shelf space to be on my stores," and all this kind of stuff. We never did that. We never did that. We didn't think it was the right thing to do.T. Dodd:It might have provided us with some extra revenue, but the [foreign 00:24:23] of that is that we're now just leasing shelf space to brands. Instead, I think we actually got a lot more value, realizable value, not just soft dollars, but actually revenue from customers because we decided to partner with our brands. We see our brands, our core brands are partners. Obviously COVID versus pre-COVID, it's a hard cut, almost, because we have not had any events in the store, in any of the stores since this even became a potential threat.T. Dodd:Before that, before COVID, we were working very closely with brands big and small to do activations in the store. We launched a number of products in the store, particularly on our Melrose store, which is a great location, across the street for the Improv, and there's bars and restaurants all around there. We hope that neighborhood comes back quickly once this horrible situation is over. That said, at has always been a core part of our base. Frankly, that allows us to tag our brand's customers as our customers, or as our brands tag our customers as theirs.T. Dodd:It's collaborative, and that's the key here. I don't think anyone gets ahead of this by trying to get around each other. Post-CO, or now that I guess we're in COVID, we're not post-COVID, but in the current situation we are, we launched a very strong influencer engagement campaign with our brands to push delivery just last week. The week before, we had somewhere in the range of 45 to 50 different influencers all based here in Los Angeles that we worked with. All of them got a Sweet Flower branded bag that contained products from our core brands, our core brand partners.T. Dodd:Our brands and us worked together to do that. We worked with the influencers to do that. This is not a paid campaign. This was organic and really came from a similar point of entry, which is, "Let's make sure we do something responsible for push delivery as the new way of receiving and getting cannabis products." That was great. Through that campaign, 50 influencers with a total reach of around 20 million followers-F Geyrhalter:Wow. That's impressive.T. Dodd:A lot of whom... Yeah, obviously some of them around outside of our geographic reach. They're not here in southern California, but a lot of those people are. The ones that aren't are still now seeing Sweet Flower as a brand. They're seeing Sweet Flower as something that's enabling people to be safe at home, and it's also enabling their favorite brands to work with a delivery service like Sweet Flower to drive traffic and engagement, and frankly sales, which is fantastic.T. Dodd:We're now pivoting from being a dispensary that offers delivery to being both, to being just a chain of dispensaries, a chain of retail stores, and also a very robust delivery service. That campaign we did really was all about delivering, and it was all about working with these brands. That was great. That I think will continue. We see a lot of demand for that. On our delivery service, we currently offer everything. Everything in the store is available for delivery. That's really important, so people can get the same products they could-F Geyrhalter:Totally. Yeah.T. Dodd:If they walk in and they can get that to their home, and that's super important. I think going forward, we want to expand that. We want to expand the reach of the delivery. We want to expand obviously its robustness in terms of the tech underneath it. Then if we have more brands to work with, because I worry a little bit about what's going to happen in the brand space given COVID, and given California overall, even before COVID. We want our brands, our core brand partners to have a good foundational business.T. Dodd:We believe that we remain the best channel for them to do that. We're really looking forward to working with some brands on some exclusive launches, some more exclusive promotions, et cetera, yeah, in the coming months.F Geyrhalter:We talked about expansion for a second with the potential... Well, with the Westwood location when the time is right. What are the plans, and how would a brand that is positioned so uniquely for LA ever expand outside greater Los Angeles without losing its authenticity? Would it be online? How do you see that? Or would you ever go outside of LA?T. Dodd:We've already announced we've got Westwood coming, Culver City next, and then we also were a successful applicant... We're one of the top six applicants in Pasadena. That's the current forefront. Beyond that, obviously we are looking at new opportunities outside Los Angeles, but probably staying in southern California for the moment. That's probably not a brand decision. It's more a decision around capital allocation. Where is it smart to allocate capital? I think that those are more at the moment, more about capital allocation and brand fit.T. Dodd:I think California brands play really well everywhere. I look at Vans, Levi's. I look at some of the really strong retail brands that we have here, and frankly the California lifestyle-F Geyrhalter:Absolutely. Absolutely.T. Dodd:Seems somewhat universal, so I think our brand plays well in northern California. I think our brand could play well in neighboring states. I don't have an aspiration at the moment to go beyond or out of state too much. I think when we started this journey, what seems like a long time ago, it was all about being a multi-state operator. That time has changed in the industry. Investors were asking, "When are you guys going to go out of state? You need to be in different states." My pushback was always, "Why?"T. Dodd:LA county is 26% of the population of California, and by far away the most cannabis-leaning and attending population of California. Los Angeles County, if it were to be a state, is the eighth largest state in the country.F Geyrhalter:Plenty of opportunity within, yeah.T. Dodd:It's like saying, "Well, I can see that if I was starting someplace else, you'd be asking that questions, but I'm not. I'm starting here." What's the rationale for that? Is that just a canned question? Lots of people are asking these kinds of... Investors and et cetera.F Geyrhalter:It's a typical question, right?T. Dodd:Yeah, sure.F Geyrhalter:The reason why I ask it was because Sweet Flower, the entire tagline is it's curated by and for Los Angeles. It seems to me like it is so positioned to be not only an LA brand, but also only for LA, right?T. Dodd:Sure.F Geyrhalter:Which obviously you can pivot the brand whenever you start reaching outside of LA and more into southern California, but that's where I was heading with that question, because it has LA at its heart, and right now it is catering specifically to LA. Which I think a lot of people in LA love that, because quite frankly, there is not much in LA that is born in LA for LA, because everything is very global, and everyone in LA is an immigrant. You're from New Zealand, I'm from Australia.F Geyrhalter:We both lived here for half of our lives or however long. I think that there is something really special about a brand that is positioned from a brand positioning point of view just for Los Angeles.T. Dodd:Yeah. I lost you there for a second, so I apologize. I'm not sure what happened. [inaudible 00:32:54] came back on. It's an interesting challenge I think for us to think about it. I do think that there's a great New York City surf wear brand called Saturdays.F Geyrhalter:Yeah, yeah, yeah, I know them. Yeah.T. Dodd:It opened up in New York, and now LA, and now everywhere. Still very much a New York City brand.F Geyrhalter:True.T. Dodd:That's the kind of stuff where I think we're not a clothing brand. We're a retailer. I think New York City, where I lived for quite some time before I moved to LA, same thing. Wide acceptance of core brands from other places. I think we're a core brand. You can define a core lots of different ways, but I think we fit. I think we play well in different parts of the states. I don't know where this goes, if we're ever going to be in a shopping mall in the midwest. I don't know.T. Dodd:I think the idea, it would really be that this brand is for now, at the moment, for the next foreseeable, the near future, and frankly prognosticating about the near future is probably really silly given what's going on. The idea is we are a really strong fit for what our vision is for a cannabis retail here in California. I think we fit well elsewhere, but we'll be selective. We'll have to make decisions about... Just I've been very selective, we as a team have been very selective about our locations.T. Dodd:Where we are set up in Los Angeles. I spent a little bit of time in commercial real estate when I was at Warner Brothers, looking at at the time the Warner Brothers real estate portfolio. We looked at 100 locations for these stores. There are six stores currently, and we passed on most of them. Some of them would have been cheaper, and some of them would have been different. Obviously different. A different vibe, a different location. We weren't just going, doing it based on scarcity or density.T. Dodd:We were also doing it based on what we felt was the right building to have, the right province for the brand. Some of these buildings that we've got required a lot of TI, tenent improvement, but they're also really good branding opportunities. They're big with big locations, good locations. We can put the flower on the front of the store, and it's cool. That was really part of it. We've been very selective about these things.F Geyrhalter:Design is super important for you guys, right? The store layout, how it feels, how people enter it, entire customer journey.T. Dodd:Yeah.F Geyrhalter:Overall, your brand design and language, it feels very authentic, down to Earth. It's balanced. It's also gender neutral, even though you hinted at the idea that it's female forward, in a way, but it feels very neutral. You've got this highly curated custom photography, you've got these pastel colors, and that's all key to a very specific visual language for Sweet Flower. All of that is underlining your mission to set a new standard for modern cannabis retail that is inclusive, diversive, and approachable by all.F Geyrhalter:I know branding was super important for you guys from the get-go, but how early on did you invest in branding? How was that journey when you said, "Okay, we got to start thinking about the visual and verbal aspect of our brand at this point?"T. Dodd:That's a very straightforward question to answer. It was immediate. The first thing we did was, "Okay, so who are we? What do we stand for? What's our brand? What does our brand... ?" Once we decided to do this, and then decided roughly, a rough sketch of what Sweet Flower could become, and before we really had the name, and it locked in our heads, I sat down with a design team that I had worked with previously a little bit in a prior career, and came up with who is our customer?T. Dodd:We started with that. Who is our customer? Then what do we offer that customer? Then why does that customer want to come to see us? Simple, basic questions. That helped us frame the central question, who are we? I think we did that, if we started on a Sunday, we did that on a Monday. It was basically the next thing that we did. We invested in the brand, and we invested in the logo, the water marking, the brand ethos, the design, the look and feel of the stores. It's all congruent. The door has to be congruent.T. Dodd:We did not want to do anything that was going to turn off, because we're also in a really interesting situation because we were applying for different licenses in different cities. Some of those cities didn't really, like Culver City for instance, which has been fantastic. That is a forward leaning, thorough application process run by I think a very sophisticated group of people. Again, you're applying for the permission to basically sell a drug in someone's neighborhood. You have to be thinking about that.T. Dodd:You don't want to come in and say, "Okay, this is a right. California has adopted this, and you guys have to do it." That isn't the case. Anyway, it's always the local municipality gets to decide. We've always been focused on who we are, where we're from, and where we fit in that community.F Geyrhalter:That's part of your audience, right? You have to cater to all your different customers, and you wouldn't have the customers if you wouldn't get licensed within a certain city. That is important.T. Dodd:Yeah. You want to have your customers feel comfortable going to see you. If I think of the over... If I could sum up Sweet Flower in one word, it's trust. We want to grant people the right to trust us. We want to have people feel that they feel... To feel good about going to see us, that we're going to provide them with a good experience. They're not going to pay some crazy ripoff prices to staff. They're going to feel good about leaving the store, and going home, and trying these products.T. Dodd:If they don't like them, they can come back, and we can... Obviously, there's certain regs about returns, but we can always work with people about other things. We want to provide them with their trust, and extend that trust to delivery, extend that trust to our community, extend that trust to our drivers, and our delivery people, and our staff in the store, and our store managers. That's really important. I think that's where we want to come to. It's a trusted environment. Safe.T. Dodd:Beyond just being safe, it is an element of trust. That's hard to do. It's really hard to get people to trust you.F Geyrhalter:Absolutely. Especially in that space, yeah.T. Dodd:Yeah. You start frankly in cannabis with three or four feet back from anywhere else, right?F Geyrhalter:Yeah.T. Dodd:It's a stigmatized business still, and probably rightly so. We just to have decide that it's not a right, it's a privilege to operate a store in these communities, and you've got to build that trust. If we've messed up, we want to fix things up quickly. I'm not aware of anywhere we have, but people often... These people just stigmatized bad cannabis operators, so they all think we've got green hair and piercings, and we get high all day. That's not who we are. A lot of that is just being visible.T. Dodd:Frankly, when we went to Culver City, the first thing we did was put our corporate office in Culver City. I work out of Culver City, at least I did until just recently.F Geyrhalter:Yeah.T. Dodd:Yeah, every day. We're around. You go, "Okay, there's the... " I'd go to the Starbucks and meet the, you run into the cops. They'd say, "Oh, are you the weed guy?" I'm like, "Yeah, I'm your friendly neighborhood drug dealer," and they're all going to crack up. If you do that 100 times over the course of a few months, I guess, people are like, "Okay." It becomes a little bit more normalized, and you're approachable, and not from some... What they think of as a cannabis person is not who you reflect, and that's important, too.T. Dodd:I think it comes down to trust. That's, like I said, you don't get that overnight. You don't get that over a year. You need to just work at that all the time, and it's super easy to lose, too. We just want to make sure we're that we're always trying [inaudible 00:42:09] as best we can.F Geyrhalter:Absolutely. No, and that is the number one thing that people seek for these days in cannabis stores, anyways, is trust. If you amplify it the way that you do it as a brand, it makes a whole lot of sense. Usually as an investor, when you had your investor hat on, let's switch your hat for a second, how early on did you ask startups to invest in branding? Because usually for startups, it's all product, product, product, right?T. Dodd:Yeah.F Geyrhalter:For you, because you're a knowledgeable industry veteran, you understand what it takes. You started with asking all these right questions. Most cannabis businesses never do that, they don't even know what they're about. They just want to sell product.T. Dodd:For a second there. Can you hear me?F Geyrhalter:Okay. Yeah, I can hear you. Shall I repeat this?T. Dodd:Yeah. Sorry. It just dropped for a second. Not sure why.F Geyrhalter:Yeah, yeah. No worry. Look, the Internet, there's...T. Dodd:Yeah. There's ten million more people using it.F Geyrhalter:Yeah, exactly. Exactly.T. Dodd:It's probably not built for this, yeah.F Geyrhalter:Let's put on your investor hat for a second. When you as an investor, how early on did you tell your startups to invest in branding? Because most startup founders think it's a ginormous waste of time, because for them it's all product, product, product. Most investors, for them it's a ginormous waste of money because for them it's all about speed to market, and let's keep the money for the product for later on, and for marketing. How did you advise your startups?T. Dodd:Most of the startups I was working with were tech, and so it was product oriented. There wasn't a significant amount of focus on branding. Some of the companies I was working with or looking at were creative services companies that was more of a B2B player than a B2C player like Sweet Flower. The B2B players did require branding. A lot of that was built around talent. It was their own talent, and so they did invest early in branding.T. Dodd:Particularly when you're dealing with creative services, creative people, you can't stop them. They're very focused on that. I think for us, we had to invest in branding early, because one, we wanted to differentiate ourselves from the pack, and I think we've done that very well. Secondly, we were also in the middle of... We quickly started to apply for licenses in competitive license markets. Having a branding pack, having a design pack, having the look and feel that distinguished us from everyone else is, in those markets, in those races super important.T. Dodd:Now we've gotten not just the branding. We also now have a very strong operational backbone. We feel good about that decision. I think branding is critical for a retail outlet. A lot of people say, "Why do you guys have to brand these stores at all? Why don't you just take whatever name they had originally, and when you move them, just reopen them as that?" My philosophy here was really simple. You follow what works. What works for people is a very, again, building trust.T. Dodd:You have to have a common backbone. You have to have a standard look and feel. When you go to a Starbucks, or an Alfred Coffee, or a Sephora, or a Lay Labo, those are the brands that we were looking at. Analog brands in different sectors. It's very important to say, "Those brands have a common look and feel." We felt the same way about cannabis retail. No different. That was a core part of it, so we invested in branding early. I would not change that decision. I think it was the right thing to do.F Geyrhalter:What does branding mean to you now, now that you've gone through this process yourself? What does branding mean to you, Tim? It's a big question. Big loaded question to finish things off.T. Dodd:Yeah. I'll try and give the simplest answer. I think we're all... I'm not a Jungian psychologist, but we're all kind of powered by iconography. We're all powered by things we see that basically make us reflect on who we are and the situation that we're in. Branding to me is assembling those icons, color, logos. A flower, the sun. Simple things, and assembling those in a way that makes you think, "Okay, that's reflective of something that I like, that I want to engage with." It's possibly just that simple.T. Dodd:We're all basically fairly limbic. You can take away a lot of the cerebral cortex, but really at the end of the day, we're fairly basic animals. I think we reflect and response to things that are appealing to us different ways, right? For us, it was like, "Let's have a very simple brand. Let's use a cool gray palette. Let's apply a little bit of navy for bold." Nothing too shocking. We didn't want to be some super-dynamic motif. We wanted to be very straightforward. Let's use powerful iconography, powerful typography, good fonts, big fonts, and just keep it simple.T. Dodd:That allows people to apply their own feelings to the brand, I think. The brand icons are important, and the love mark that we have with the flower and the poppy... Sorry, the sun and the poppy are really important. I love that. I like seeing it. Every time I see that in a different way, that people are thinking about it, to me, it feels good. There's just something I like about it.F Geyrhalter:Yeah, it's so simple, but yet it tells a story, right? It also tells the story of what you actually want to feel, and that relief, and that kind of a space.T. Dodd:Yeah. Just selling wellness. Yeah. We're selling wellness. We're selling something. It has to stand out a little bit because it's a commercial brand. We're obviously, as you drive down the street, we want to make sure that you see Sweet Flower's logo, and our bold icons on the side of the stores. Yeah. I think it really just comes down to that trust, and that this is about wellness. Beyond that, I think people apply whatever they want to the brand. That's the cool part.T. Dodd:It's like, having people tell you what it means to them when they come into Sweet Flower. We've had some really amazing feedback and testimonials from people. That's really nice to see.F Geyrhalter:Absolutely. Where can listeners get to know your brand? Mainly online, because there's a small, small, small part of our listeners from LA, but a lot of international listeners. Where can they get to know you?T. Dodd:SweetFlower.com is the website. We're constantly retooling the website. It also has a transactional component, ecommerce platform on the back of it. The website itself tells a story. I think the best way to think about us, though, for people who are outside of our community is on Sweet Flower Shops on Instagram. Sweet Flower Shops is really a nice component of that. That's non-transactional, obviously, and that really is much more about our brand story.F Geyrhalter:Totally agreed. Yeah.T. Dodd:And our partnerships and other things. That's where we see [inaudible 00:50:25]. I think Sweet Flower Shops is a really nice way for us to get our brand messaging and story out there, as well.F Geyrhalter:Awesome, Tim. Listen, I'm looking forward to following the journey. It's really-T. Dodd:Thank you, Fabian.F Geyrhalter:It's crazy times right now, but it's amazing how you guys are dealing with it, and how you're pushing forward, and how it is all about your community first, your employees, and then the people that you can currently help. Really, really appreciate you taking the time in these busy times. Stay safe out there-T. Dodd:Of course, yeah.F Geyrhalter:For most, be healthy, right?T. Dodd:Yeah, you, too. Stay safe, be well, and we'll see you soon, I'm sure. I much appreciate the time today. It's been great. Thank you so much.F Geyrhalter:Absolutely. Thanks, Tim.
Learn more about ArgentDue to COVID-19 we are no longer asking for financial support for the show, instead you can now join free mentorship group calls with Fabian to get through this together. Join here.Full Transcript:F Geyrhalter:Welcome to the show, Sali.S Christeson:Thanks for having me.F Geyrhalter:Absolutely. Well, first off, we are recording this on April 3rd, I'm working out of my converted garage, which now has further been converted into a podcast "studio". We live fairly close to the airport, and I have alley behind me, so no idea how this first podcasting from home session will go, but things are not as perfect as we all like them to be, and yet I'm fortunate to be living through this pandemic in a healthy, safe, and in a loving environment. I'm even more fortunate currently, as I can be classified as a DINK, which stands for double income no kids, something I just learned last night when listening to an interview with you, Sali. So, thank you for that knowledge. I'm a DINK.S Christeson:I'm no longer a DINK.F Geyrhalter:Oh, I'm sorry, or congratulations, depending on how you look at it under the current situation.S Christeson:Yeah, it's definitely been made crazy by this situation. We have a two-year-old toddler, and then we have our second on the way in three weeks.F Geyrhalter:Oh, my, oh, my. Well, that is wonderful, but in three weeks, that is nerve-racking for you right now.S Christeson:Frightening.F Geyrhalter:It must be really frightening going to the hospital, and doing all of that. I know a lot of friends who are in similar situations, and it's not easy. But look, this is the beginning of a new norm here for me doing these interviews, so I want to share with my audience that things are getting a little more real, so just imagine Sali and I sitting outside in a nice little café in a city of your choosing, just chatting it up, which should make you feel more at ease with any potential background sounds that sneak in, and perhaps it will make you escape your quarantine a little bit.F Geyrhalter:That being said, Sali, you are in the business of dressing women for the workplace, a place many women who wear your outfits don't go to currently. So, let's get this out of the way, because I'm sure a lot of people will have the same questions, how has this pandemic impacted your company, and you personally as you already mentioned, I mean, you're homeschooling, you're expecting another child, what is going on?S Christeson:I like to say that I'm prepared for everything. I have to say that this was a bigger curveball than I've ever gotten, or ever expected to get, especially as I was planning maternity leave. I mean, I'm just doing such different things than I anticipated doing going into that. So, in terms of how it's affected the business, a couple of things, so one, we immediately shut all of our locations. So, starting early March, I think it was March 12th maybe was when our first store closed, and I think it was shortly thereafter that we closed all of them. We closed San Francisco, New York, L.A., and D.C.S Christeson:So, as you can imagine that has an immediate impact on revenue, and then the fact that women are working from home, and I think just everyone's just trying to figure out what's happening, and trying to get their arms around childcare, and their own situation, we've definitely seen a decrease in consumption, but we're already starting to see a rebound, which is refreshing-F Geyrhalter:Yeah, yeah.S Christeson:... a lot of women are coming to us, because they are still working, they're just working from home and they're on a lot of video calls, so we're doing a lot of waist up dressing, but-F Geyrhalter:Right, just like you and I are right now, right? I assume.S Christeson:Exactly. I'm in a full suit, I don't know what you're talking about.F Geyrhalter:Yeah, of course, me too. I've got a tie. I've got a tie, everything, everything.S Christeson:And then I think the other piece is just this is our biggest year we've ever had. We had the biggest January and biggest February we've ever had, March was on track to be the biggest month of the year. This certainly prevented us from hitting our target, so we've had to change our projections a little bit, it's been a lot of handholding with our team, and we have spring product that's sitting at the factory, a manufacturer in Manhattan. It's done, and it's ready, and it's just unable to be moved, because New York is on lockdown. I mean, there's so many changes, it's really intense, and everyone's going through it, so I think for us I'm cautiously optimistic. I actually think we're really well-positioned. Some of our customers are still going to work, and it's a really stressful time, and they're looking to us as an outlet for themselves.F Geyrhalter:Yeah.S Christeson:And we seek to serve as a resource in whatever way people need. Some are starting to think about going back. I mean, it's not going to last forever, so I think for us it was quickly hunkering down, and making some really big choices, and some really hard choices, and doing those quickly, and staying informed in terms of what sort of government relief is in place, and at the end of the day just trying to be available to our customers. We cut back on all of our marketing, because it feels kind of insensitive right now, to be honest.F Geyrhalter:Yeah, yeah.S Christeson:So, that's current state of affairs. It's intense, and my husband and I actually are ... he works at the company as well, too, so we're both working and managing a child as well. So, we're sort of in the same situation as everyone else, you know?F Geyrhalter:Yeah, yeah, which makes it easier to have empathy for what's going on with your tribe, with your customers, and I mean, so many of them are like you, and they're homeschooling, and all of a sudden, or maybe they even have been laid off, right?S Christeson:Yep.F Geyrhalter:I'm sure there's a percentage of that. I know you stopped marketing, but are there any kind of ways that you react publicly to this with your brand? How can you help these women that are suddenly in such a different space? Do you do anything as a brand, or is it really more like, "Look ..." Is it more the idea of, "Hey, we give you that little bit of joy in your life right now.", right?S Christeson:Mm-hmm (affirmative).F Geyrhalter:That splash of color, and that idea that there is something around the corner, and ... because I'm I am sure that a lot of women would appreciate getting, ordering something from you now feeling like they look great on a Zoom call, or that they're ready to go back into the workforce when the time comes?S Christeson:Yeah, I think our approach has been more pull and less push, if that makes sense?F Geyrhalter:Yeah.S Christeson:So, making things available to our customers, but not sending out emails, not pushing things down their throat, not being aggressive. We didn't send an email in terms of what our position is on COVID-19, I don't really think people are interesting in hearing about every single brands thoughts on what's happening, and I think there's sort of ... We're seeing a divide in terms of how our customers splits. I think for some they have absolutely no interest in engaging right now, and for others it's, "I just got your electric pink blazer, and I'm so happy working from home, and it's been the bright spot of my day."F Geyrhalter:Right.S Christeson:So, it's almost like we set up reminders that we're here, so maybe like an Instagram post, but less frequent. Maybe it's one on one outreach in a way that we wouldn't have done before, but I think from a brand perspective we've cut back a lot, because it just feels insensitive in a lot of ways.F Geyrhalter:Yeah.S Christeson:I just feel like there's a lot more to lose than to gain, and I want to make sure whatever we do is adding value to our community. So, a lot of that has been more customized, and individualized, and way ... and about longer term thinking. So, we're thinking about marketing campaigns coming out of this, or how we come back and add value. But I think right now, we're not really focused on our revenue goals, our conversion, or whatever. We're focused on, "What do you need right now to survive.", you know?F Geyrhalter:Yeah. Yeah, yeah, yeah, no, totally, and it's very much about keeping your employees and it's a lot of-S Christeson:Yes.F Geyrhalter:... that, rather than adding more noise to the channels that all kind of say the same thing, you know?S Christeson:100%F Geyrhalter:I totally agree with you. So, Argent, your brand, is only four years young, and you're on the forefront of really finding women's workwear. Your brand states that it is "Bridging the workwear joy gap." How did you get there? I mean, you worked in tech for 10 years at Cisco, now you're knee-deep in fashion, an industry you had no prior experience in, what was the moment where you realized that you had to get serious about turning this idea into a company?S Christeson:Yeah, this has been a personal pain point of mine across every industry, every city that I've lived in, they've all called for different dress codes. It's been such a headache and hassle to try and find something that I actually enjoy wearing, which I know sounds so simple, but it really has been an underserved and ignored category. I mean, my mom will even speak to how I was frustrated at like the age of 20 or 21 shopping for my first suit, but it just was constant. So, I worked at companies that called for anything from a suit, and then to tech which was much more casual, but recognize that what I wore was still important it communicates who I am, et cetera. It just took so much more time than it should have from a really time constrained person, and my peer group, I felt like it was just a shared pain point.S Christeson:But the catalyst for actually pursuing the idea was I read a study while I was working at Cisco, it was in 2014, that showed that women are judged based on appearance, and they quantified the impact of what you wear on your bottom line over your lifetime, and for me that was really all I needed. That was it, I quit my job without having done anything, I just knew that there was a huge opportunity, and I had a vision for making basically, one, solving the product side, but two, really leveraging the brand to visually inspire women, and working women specifically in a way that no one else was doing, no one was connecting with them, no one was owning that audience, and I saw an opportunity to leverage our brand to inspire boldness, and confidence, and kind of an F it attitude, and just go for it.F Geyrhalter:Yeah, yeah.S Christeson:Yeah, so I quit and the rest is history, I guess?F Geyrhalter:But I mean, you're a D-to-C brand, first and foremost, but you're now also turning to more traditional retail. So, I mean, brand strategy must've been crucial for you from the get-go, because you're at a fairly, and I put fairly under parenthesis, high price point. So, in reality, you're kind of in the middle, right?S Christeson:Mm-hmm (affirmative).F Geyrhalter:But you're crushing it on catering to the modern office employee just as much to powerful women in all kinds of public roles. I mean, we're talking about Hilary Clinton, Kamala Harris, Amy Poehler, Awkwafina, Jill Martin, Ginger Zee, people we all very much love, or some of us, or I hope we all do, and the list goes on, and on, and on. How did you create that extremely aspirational niche in the marketplace where you don't get stamped as either cheap workwear, which is so easy to fall into that, or too aspirational, too luxurious of workwear? I mean, it is such a perfect niche that you covered. How did you create this? I mean, there must have been a lot of strategy behind how to get there, besides the price point?S Christeson:Yeah, I think extensive market research upfront, so understanding the competitive landscape, and that's where the pricing really came in. We backed in to our price point, because there were ... one, there was no one single place that was solely focused on workwear, and so I knew right away that was a huge opportunity to start with the customer and make sure that we were solving based on customer needs, bringing in our level of expertise, and marrying it, and matching it with what we're hearing from the customer side. But there were, obviously, workwear options, they were all just not really meeting the needs of the customer, in my opinion, or that's where the opportunity lied.S Christeson:So, in terms of competitive landscape we looked at low-end brands and price point, we looked at higher end brands and price point, and there is actually a gap exactly where we fall. There's no accessible price point, so that was a starting point for us. We also conducted a 400 ... or sorry, a 54 question survey to a sample size of 400 people to just glean more insight from the customer base that we were going after. I combed through census data to identify our go-to market plan, and I think the most important thing really was about the brand, and the underlying product, and having a lot of exercises around that prior to launch.S Christeson:So, what are our unique differentiators, what is our tone? What makes our product special? For us, it's functional, quality, stylish, accessible workwear, and that hasn't existed in the past. I think, for me, understanding and recognizing that my background isn't in fashion, and immediately starting to hire based on that gap, and looking at surrounding myself with people with the right level of experience, so hired a designer that was based in New York, and had built a team of designers since then that have backgrounds in luxury design, and it's been exciting for them, I think, because they've really been designing more through like a fashion lens, and we really have a purpose.F Geyrhalter:Right.S Christeson:So yeah, there were a lot of exercises, I think, that led us to land where we did prior to even launching.F Geyrhalter:Which is still easier said, and easy to look at data than actually pulling it off. So, you make it sound so easy, but it's not. As part of your market survey I heard that you said that in a prior interview that you learned that women's workwear is a 34.9 billion annual market spend in the U.S. alone.S Christeson:Yes, yes.F Geyrhalter:It's insane, and then you also found out that women rate the experience of shopping for work clothes a 3.9 out of 10, which is unbelievable thinking about how women, and not only women, love to shop for clothes, and it's usually a very satisfying experience. 3.9 out of 10 is horrifying, I-S Christeson:Yes, and I could so relate to it. I mean, I remember so many times like very last minute, "I have a presentation tomorrow, I have nothing to wear. Let me just run to wherever, and buy something that I feel meh about, wear it once, and it kind of sits in the bottom of my laundry hamper, and I didn't feel great in it anyway." That is honestly the experience that every woman has had in the past.F Geyrhalter:And that's a pretty big deal. I mean, I can attest to that from a guy's perspective, which of course, only counts 10% of a women's perspective on this issue, but as a public speaker, the idea of feeling confident on stage, or in front of any kind of presentation is so important. You don't even want to think about your clothes, you don't even want to think what you're wearing, you just want to feel great about yourself. So, the way I solved it is a typical guy's way, I have 10 of the same shirt. It's the exact same shirt, and so every single ... but the problem is if you put together a speaker reel, every single speech looks like I'm at exactly the same ... because I don't change my clothes. I do change my clothes, but you know what I mean, I'm wearing the exact same thing.F Geyrhalter:On that topic of niche fashion brand, I'm currently working with a founder on the launch of a fashion brand called Model Canvas, and he's launching a line of jeans for big guys. So, it's oversized jeans, and it is very much about body positivity while solving for an unseen and undervalued problem. He's in midst of the fundraising game, and this is where the question goes, when you went out to get funding you ended up, over time of course, raising $6 million. What do you feel of the many, many things that you said and that you did during your presentations won investors over the most?F Geyrhalter:If you have to rerun all the pitches, and wins in your head right now, what was that argument where you saw most of them click, because I'm sure you can see it in their eyes the second they are convinced. What was one single or convincing point, which may have well been the one I just pointed out about the 34.9 billion market spend, and the rating of the experience, but is there one point where you feel like that was the one that every time you brought up that point investors were just like, "Okay, this sounds ..." or is it not that easy?S Christeson:I don't think it's that straightforward unfortunately, I wish it was-F Geyrhalter:Bummer.S Christeson:... I wish there was a silver bullet, but I do think having your story really, really polished, and thought through, and just showing that you are the expert is really important. What I've learned is that every investor looks for something different, and every investor cares about something different. So, the aha moment comes at different times for different investors, and even I can just look at that gender specific to simplify it. For women, they understand the pain point and the problem, and the opportunity intuitively, because they've lived it for so long, and I think for male investors I had to spend more time upfront just talking through market size, pain point, what makes us different and unique.S Christeson:Some investors are more analytical, and so they wanted to dive into the numbers and understand, "Okay it's a huge opportunity, but how much of that can you actually capture, and is your plan believable, and let me look at your projections, and let's dive in." Some want to look at the unit economics from a customer perspective, and understand what's your average order value, what's your lifetime value, what's your customer acquisition costs? And is also depends on different stages of the business, too. Prior to launching we obviously didn't have some of those metrics, so that, I think, really boils down to having the ability to paint a clear picture in terms of what you're building, to support it with your advisor team, with your immediate team, with a fully baked plan as much as possible. So, I think it slightly depends on person and investor, it depends on your ability to tell the story, and then your ability to go deep wherever that person's interested in going deep.F Geyrhalter:How much did you research the personality of different investors? I mean, did you do some networking prior of people that got funding, or had presentations with these people, or did you not go that deep?S Christeson:Not usually. I think I've done it long enough now that I ... Early on I spent so much more time fundraising, and you learn over time how to be more efficient with it, and so now I'll definitely research the individuals that I'm talking to, and I'll get an idea for how they tick. So, sometimes I'll look at if there're videos available of them I'll just quickly listen to it and get an idea of who they are.F Geyrhalter:Yeah.S Christeson:But I would say that's probably my biggest skill is networking and reading people, so I've been able to lean on that heavily.F Geyrhalter:See, and I thought it was because you knew how to dress for success, but nope.S Christeson:No, I think because I wasn't sure how to dress for success I had to start this company.F Geyrhalter:Exactly, it was prelaunch. Let's talk about your brand launch. You knew that you would be a D-to-C brand, first and foremost, but I'm paraphrasing you here, you had a pretty crappy website, right?S Christeson:YesF Geyrhalter:Even at the time of official launch, which is just insane thinking you come from 10 years of tech in Silicon Valley, but of course your success was not based on insanity, but very calculated decisions. You launched your fashion brand at a conference. Tell us more about that launch day strategy, and the aftermath, because it's absolutely mesmerizing.S Christeson:So, I think a couple of things. One, we were and always have been, we still are, resource constrained, and that's intentional, because I think that right now we are in a ... well, not literally right now, but I think over the last like five or so years it's been ... D-to-C has been so attractive to investors, and a lot of founders have just taken so much money, and have been overfunded, and I think that really dilutes your ability to build a genuine brand. So, we are always thinking about how we allocate our money in a way that allows us to learn as much as possible, connect with a customer as much as possible, add value as much as possible, and really accelerate our path to what our ultimate goal is, which is to be the go-to workwear brand and the workwear authority.S Christeson:So, I think all that customer research I talked about, and all the brand building exercises that we did allowed us to lay out a go-to market strategy that made a lot of sense for us that wouldn't make a lot of sense for other retail brands, and I think that's what makes us special is our customer is a very specific customer. It's the professional woman, and we were thinking through like for launch, "How do we find her?", and inherent in our model, we've always had a website, granted very crappy early on, we've always had a website, but we also always believed in activating physical locations, and interacting with the customer as much as possible as a way to learn and as a way to grow.S Christeson:So, we launched at a women's conference in San Jose, California, which these conferences are you huge, they range in size from like 5,000 to like 20,000 women. This was one that I had participated in while I was at Cisco, and historically they'd only had booths of huge companies that were sponsors. So, Google would be there, Pfizer, or Cisco, J.P. Morgan are handing out stress balls, and they're offering you a couch to sit on, or a granola bar.S Christeson:Women have carved out this day on their calendar, they're not taking meetings, and it's a long day, and at some point they kind of want to take a break. So, I just thought it would be cool to go there and create this really elevated, beautiful, carved out retail experience, and just sell there and see what happened. It was such an awesome day. We were literally unpacking product from the factory, it was our first day ever in business. We threw up a website because we felt obligated to, which was, I mean, functional at best.F Geyrhalter:But not ecommerce at that time, right? It was just a splash page.S Christeson:No, it was ecommerce, you could-F Geyrhalter:Oh, good. Yeah.S Christeson:Yeah, yeah, yeah, it was on Shopify, it was functional enough.F Geyrhalter:Yeah.S Christeson:But we sold in like one day somewhere in the range of 25 to $30,000 worth of product, and the-F Geyrhalter:Unbelievable.S Christeson:It was ... I mean, the validation, and just the ... women were physically reacting to the functional aspects of our products, so things like interiors pockets, or a jumpsuit that has a back tuck, so you don't have to take the whole thing off to use the restroom. So, it definitely was the right move, and I think it was a great validating first step, and to our-F Geyrhalter:Unbelievably smart, and I think that that to me, that is so important, the not like, "How did other companies launch? Let's do it the same way. How did other fashion brands do it?", right?S Christeson:Mm-hmm (affirmative).F Geyrhalter:But the idea of like, "Who is our customer? Where are they, and where can we meet them when they really want to be distracted by a brand like us?" I think it's just brand poetry, that launch, so I just love that. And then I guess you rushed ... I think your husband at the time was running back and forth to get more clothes out of the U-Haul van outside the conference, or something like that, right?S Christeson:It was crazy-F Geyrhalter:It's okay-S Christeson:... it was very far away, and he's a runner, and he was exhausted by the end of the day. It was insane.F Geyrhalter:That is so good. That is so good. It's nice to look back at days like that during a month like this one. But that's really, really cool. I looked at your Instagram a little bit more the last couple of days, and the hashtag is currently ambition suits you, so storytelling is obviously key with any brand, but Argent is doing a very good job with it. Let's talk about the bigger why behind the brand. On your side you tease with a line that states, "Radical equality from pockets to paychecks." How does your brand see its social mission, and how does it work it out?S Christeson:Yeah so, prior to launch I mentioned this, but I ... and this certainly, again, stems from my experience, I saw an opportunity to build a brand that helped women through their careers no matter what their goal is, we want to be here and we want to be a resource to you. During my time in tech I worked on a team that was 95% male, 5% female, and I was one of the more senior females. I saw a lot, and I saw a lot of initiatives around helping women, and helping support women, helping get more women into the workforce, but a lot of them felt a little bit directionless.S Christeson:So, our goal really is to serve as a resource. So, the way that we've brought that to life are through events that we host, and we see now an opportunity to scale, which we'll be doing over the next year or two beyond just physical interactions, but we ... One, I think it lives in the brand. I think that the clothes are a physical reminder of who we are. They're intended to give you confidence, they're intended for you not to have to think about what you're wearing when you show up, and they're intended to be a reminder that there's a small army behind you, even if we're not physically there when you're asking for the raise, or making the biggest presentation of your life, or interviewing for your dream job.F Geyrhalter:Right.S Christeson:I think in terms of events though, we offer events, and the goal is to, one, bring together men and women. So, we include ... our brand is fairly, and intentionally androgynous, we really-F Geyrhalter:So glad to hear that. I'm so glad to hear that.S Christeson:We really believe that we can impact gender equality, and the way that we see ourselves doing that is by involving men in the conversation. So, we host events, we invite men and women from our network, we sell, we have drinks, we have fun. It's a really lively and exciting environment, which I think aligns with the brand that we're building, but we also always have an activity that is actionable on an individual level. So, we hosted a speed negotiating event where we brought in six executives that you would never get face time with, we had a facilitator, and then individuals would sit down, you would get a negotiating planning document, and you'd sit for four minutes with each coach, and you'd learn how to use the document. You'd learn to manage a salary negotiation, you'd learn how to manage a vendor negotiation, and you'd walk away with that document to used in every negotiation going forward, and you could cater those conversations to your own individual career.S Christeson:We hosted a financial literacy planning training event, and some as simple as like a headshot event. So, those are the ways that we are really bringing our values and our mission to life, I would say, and then I think that things as simple as having a website, and shooting real women. We shoot women from our community that you wouldn't necessarily know by face, but you know their work, and we just want you to see yourself when you open up our website. So, things as simple as that are different, and are special, because we haven't had that for-F Geyrhalter:Right.S Christeson:... you know, a long time. So yeah, I think are just some examples of what we're doing to really help change the status of women and gender.F Geyrhalter:Absolutely, and I mean, let's not forget, you're a very young company, so you spent the first years really focusing on getting the product right, getting the market fit right, making sure there is a tribe, and now this really can be a springboard to so much more. I mean, it's amazing what kind of opportunities a brand like yours, the way that you're positioned, that you have now, right?S Christeson:Yeah.F Geyrhalter:I think that the future is bright-S Christeson:Thank you.F Geyrhalter:... there's a lot that can happen with that. Let's go all the way back to the very beginning of the brand, the actual name, Argent. Where did the name come from? I can't put the two together.S Christeson:My great-grandfather started a company in the early 1900s, Argent Lumber, actually-F Geyrhalter:Oh.S Christeson:... Yeah, and he was a huge inspiration of mine. I've obviously never met him, our lives unfortunately did not overlap, but he was an entrepreneur through and through, and it was just something that I've had since I was born. It was not the obvious first choice. We spent weeks and weeks of brainstorming names, but we kept coming back to Argent, because it was simple, and it was strong, and it meant something to me, but it didn't mean something to everyone. So, that's it, that's the name.F Geyrhalter:Well, after this podcast airs it will mean lumber to everyone. I am sorry.S Christeson:I hope not. I hope it means accessible, functional, versatile work clothes.F Geyrhalter:And I mean, this is nitty gritty, and it's totally pointless to even talk about it, but I'm personally interested, so since he owned the brand Argent, was there still a trademark? I mean, this is a long time ago, and how about the dot com? Was it something that was already in other people's hands?S Christeson:We're argentwork.com, so there are ... His company is way too old for there still to be an issue, and we're in a different category, but there are a couple of companies that are named Argent, but they're all in different categories.F Geyrhalter:Okay, yeah, yeah.S Christeson:Yeah.F Geyrhalter:Let's just for one quick second entertain me, let's talk about your logo. This is a branding podcast, and even though the logo is only a small part of your brand, I am going there. You have a typographic treatment, but then you also have the uppercase letter A, which is kind of like an icon now, with what could be seen as an exclamation mark, but on the left. So, fill us in a little bit of what the thought process are, where the logo came from.S Christeson:Yeah so, we did I think way more than most startups in terms of brand exercise, developing our logo, our font, our ... everything was started in 2015, and then it's been an evolution. The logo was something that we worked with a branding agency on, and I love it for so many reasons. So, it's a dot dash. It represents ... one, you can type it on your keyboard, which I think is really fun, and quirky, and funny given that we're going after the office. Two, it's bold, it's elevated, and it's also a conversation starter. So, the backslash is a conversation starter. It's like an opener versus doing it the other way and having a period and just ending it. So, it's inviting, and in some ways it's just kind of quirky, which is what we are. I just ... It's strong, and it works for us. I don't know.F Geyrhalter:Yeah, no, totally. Now we zoomed in to the logo, now let's take a huge step back and think about branding. Obviously, you're a D-to-C, you're a retail brand, branding is super important to you, you mentioned that branding was very important to you from the very get-go, and you did a lot of exercises early on where other startups failed to do that. Shame on them, by the way, but that's very selfish of me to say.S Christeson:Agreed.F Geyrhalter:What does branding mean to you, Sali, I mean, especially after your journey from a very corporate job doing a lot of ... thinking about operations, doing a lot of financial jobs in your background, and now suddenly going into retail, which is like the brand, you know, like-S Christeson:Mm-hmm (affirmative).F Geyrhalter:... the biggest point of brands, really, where you can go. What does branding mean to you overall?S Christeson:I am a huge believer in brand and brand building, and I think you can see that with what we've built. I think that it is an undervalued area of the company for a lot of startups, and if overlooked, it's not something that you can correct. You can't grow a team, and then get your arms around brand, it doesn't work like that. So, to me, brand is just the ... it's almost like the visual manifestation of who you are at your core, and what values you want to portray, and at every touchpoint that a customer has, or an individual has with your brand, it should be consistent, it should convey exactly what we want it to.S Christeson:So, it's anything from tone and voice, values, what we stand for, what we don't stand for. It's colors, it can be as simple as color, it can be logo and fonts. But I think what it all boils down is like you are ... I almost see the brand as like an individual, and I think for us we from day one we have not deviated from, one, who we are, and two, where we're going, and the brand is a way for us to communicate that. We've put guardrails around it every step of the way, and as I mentioned, we refined it, and I think that it's gone from a bigger funnel to a much tighter funnel in a great way. I think that's natural, and I think that's healthy, but it hasn't changed what we stand for.S Christeson:I think the value in that is that customers are drawn to that, they recognize that it's authentic, and that it's us, and you can see what we stand for, and I think in some ways we've taken risks with it, because we're willing to dress someone that's "controversial" like Hillary Clinton, which is crazy to me, but we're willing to put our name on things that are potentially perceived as political, which somehow the women's conversations become politicized. So, we are really clear about who we are and what we stand for, and maybe some of the decisions we make alienate people, but it doesn't matter to me, because we have such a loyal following, and that following only becomes more loyal by us being true to who we are.S Christeson:It has been interesting, since we've launched we've seen some brands try and copy what we're doing, and it just doesn't work like that. Customers can sniff out inauthenticity like in two seconds, and just to try and take pieces of a brand and apply it to what you're building, it comes off as really disjointed and broken. So yeah, brand in my opinion is invaluable. I think that we have so much brand equity now from really having invested in it, and really having spent time on cultivating it, and bringing it to life. I think more companies that overlook branding, brand exercises, and don't do it, sort of ignore it, than there are ones that actually spend time and resources on it. I don't think we've seen a ton of great, strong brands come out in the last five, 10 years, but the ones that have are just excellent, you know?F Geyrhalter:I totally agree. I totally agree with every single thing that you're saying, which is not shocking at all. But no, absolutely, absolutely, there were so many things in there. I could actually have follow-up questions to every single sentence you just put out there, but I know we're running out of time so we can't do that, but what is one single word in which you could describe your brand? So, I'm thinking about Everlane being transparency, and Coca-Cola standing for happiness, I call if your brand DNA. What would be one word that Argent would stand for?S Christeson:Confidence.F Geyrhalter:Love it. Yes, confidence and joy, right? Confidence first.S Christeson:Yeah.F Geyrhalter:That's absolutely great.S Christeson:That, to me, is our ultimate filter. It's literally why we exist. We want to give you confidence through our product, we're going to give you confidence through our brand, we want to give you confidence through literally every single thing that we put in front of you.F Geyrhalter:And just the way that you said this now, this is why this is so important to be able to know your brand so much that you can actually funnel it into one singular word, because everything you do, may it be a blog post, an Instagram post, if it doesn't go back to that word, then it shouldn't be out there, right?S Christeson:Yes.F Geyrhalter:And I think that's why your brand is a little bit on the quiet side throughout this crisis now, because you don't have something that can go right, right against that pain point, or your brand's true north. I absolutely think that this is so, so crucial for anyone. All right, we're running out of time. I would love to hear from you, if there's any piece of brand advice that you might have for founders as a takeaway, you already gave us a lot of them, but is there anything that as you worked on your brand for the last four or five years, was there anything where you say, "You know what? That's something that I learned that I would just love for founders not to make that mistake.", perhaps even brand related?S Christeson:Yeah so, oh man, I have so many different answers for that. I think investing early in brand, which I obviously said before, but recognizing how important that is, and stepping up and making the investment, because it can be perceived as expensive early on in a startup, and I just find it to be so invaluable. For us, we've always had a brand book since before launch that we share with every individual that starts working at the company, we share with every agency partner that we bring on, and it's a way to stay really tight in terms of messaging, and visuals assets, et cetera.S Christeson:So, I think that having that filter in place is really important, and it inspires excitement, passion from the inside. I think the other piece is just to follow your gut. So, early on for all of our imagery, all of our campaign imagery, all of our ecomm imagery, we were using models, and it just didn't feel quite right to me, because they were not like a visual representation of the working woman. I didn't identify with them, but it was kind of what was done. So, I think that I've gone against the norm every single step of the journey, but here was one area where I was like, "Okay, we have to use models, we just have to.", you know?F Geyrhalter:Yeah.S Christeson:We changed that a couple of years ago, and I've never been more relieved and happier in my life. I've always wanted it, but I've always succumbed to the pressure of not doing it, and so that was a mistake that we made along the way. Everyone's going to make mistakes, but I think if you just are constantly focused on evolving, and improving your brand, and tightening it up, and iterating on it based on what you're hearing from feedback from your community, that you can't go wrong. Sorry, I know this is a long answer. The last piece is-F Geyrhalter:Oh, keep going.S Christeson:... we've definitely sacrificed revenue due to some brand decisions, so we've been approached by a number of brands to do partnerships. We have not done those for the most part. This year we're actually just starting to launch a couple of partnerships that are so perfect for our brand, but it took me like a few years to be comfortable with identifying who was right for us, and saying no to partnerships that definitely would've driven top line results. I think the other is just ... and more broadly it's just being comfortable saying no to things that compromise your brand in any regard. I am very much a purist when it comes to brand, but I think the second that you concede on anything that there's no going back. The last piece is we don't discount as a brand, so that's something that I won't budge on, and I think that it's different for every company, but for me that just shows that you don't value your brand and your product. So, long answer-F Geyrhalter:We see eye to eye with so many of these things. Saying no was my biggest thing that I didn't do throughout my entire agency life. Like for 12 years I just said yes to everything, because it was all so exciting, and after that first decade in business I started to say no to everything, besides a couple of things, and opportunities just opened up, right-S Christeson:Yes.F Geyrhalter:... because you say yes to the right things. I think it is so important.S Christeson:Yes.F Geyrhalter:You said, "Yes."S Christeson:I agree.F Geyrhalter:Female listeners, or those who identify as such, who fell in love with your brand, where can they get dressed for success currently? Where can they find you? I know obviously your retail stores are, at the time where this is airing, which is going to be in two weeks from now, they will all most probably still be closed, but for now they can go online?S Christeson:Yes, so argentwork.com, and then on Instagram we're Argent, or Twitter, or Facebook, Argent across all social media platforms.F Geyrhalter:Awesome, very good. Well, Sali, thank you so much for having taken the time to share your story, and amazing, amazing, amazing branding insights with us, especially under your less than ideal circumstances right now, we really, really appreciate your time.S Christeson:Thank you for having me on, this has been refreshing in light of everything that's happening, so I very much appreciate it.F Geyrhalter:Oh, I'm glad, thank you.
Learn more about Vice Ventures by following their Instagram accountDue to COVID-19 we are no longer asking for financial support for the show, instead you can now join free mentorship group calls with Fabian to get through this together. Join here.Full Transcript:F Geyrhalter:Welcome to the show, Catharine.Catharine:Thank you so much for having me. This is awesome.F Geyrhalter:Oh absolutely. So you're in your late 20s, you did your time on the M&A team at Walmart, as well as worked for the founder of Bonobos. And you now run a VC firm that invests in all the things normal VCs not only not invest in, but are usually advised to never ever invest in. Your firm is called Vice Ventures, and vice meaning immoral or wicked behavior. This includes anything from alcohol to drugs, gambling, sex, you name it. All the things that VCs stay away from.F Geyrhalter:And they actually even have a vice clause in many VC firms which inhibits the majority of them to invest in otherwise highly lucrative industries like edibles and e-sports, which is kind of crazy. And it's a crazy good market if someone is smart and bold enough to step into it, and that is exactly what you have done. On your website, your one liner, and that's pretty much all there is on the website, it reads, "Vice Ventures is a seed stage venture capital fund conquering stigmas and striving towards superior returns by investing in good companies operating in bad industries." I absolutely love that. How did Vice Ventures start out, and how difficult was it to get the initial fund for Vice Ventures established?Catharine:Yeah, so about two and a half years ago now, I guess, I invested in a canned wine business with the last of my Wall Street bonus, when I was working for Andy. Then flash forward, I followed Andy to Walmart after the acquisition on the digitally native vertical brands. I'm an 18 there. Some people absolutely love working at Walmart in M&A, and I was not one of those people, so early on I told Andy that I wanted to leave and I wanted to work in venture. He was extremely supportive of it. I interviewed at a ton of super venture firms just because I knew all these [inaudible 00:02:08] managing Andy's portfolio. And they all asked me to pitch a business. So I pitched Bev, which is the direct to consumer, now Omni Channel, canned wine business that I invested in early on that Founders Fund recently came in for.Catharine:And at the time all of these fund managers were like, you know Catharine, we love the founder, we love the brand, we love our strategy. We just can't get involved because we just can't invest in alcohol. And that to me, it was just unbelievably shocking that this whole category of investment people just couldn't touch to you even though spirits have exits every few months. Beer have a great run of high multi revenue exits. And I just couldn't believe that they weren't allowed to invest in it. And then upon further investigation I learned about the vice clause, which exists in most, I would argue, of a seed stage series A consumer funds. Meaning that they can't invest in alcohol, cannabis, nicotine, sex tech, online gambling, psilocybin and ketamine, you name it. They're barred from those investments.Catharine:So that's basically how I came up with the idea for the fund. The thesis proved true when I met the founder of Recess, which is a CBD sparkling water. I was one of the first people to invest in him. We had one meeting. I thought the brand was brilliant. I thought Ben Witte, the founder, had really something special about him. So I committed on the spot. I raised a pretty big SPV, begging people to invest in me. I had some people who were like, we're only investing because we believe in you, not because we believe in Recess. I was like whatever, like that's totally fine with me.F Geyrhalter:Take your money. Take it.Catharine:Yeah. Like whatever. So then that took off and that proved the thesis true because a lot of big funds loved the branding as well, and loved the founder but couldn't get involved because they had this vice clause. Because full spectrum hemp has 0.3% THC.F Geyrhalter:And you got Marc Andreessen, one of the biggest names in Silicon Valley, to invest fairly early on in your fund. Right? How did you pull that off? How does a conversation like that go about? Especially in the beginning where you weren't in the press and people didn't quite know. How did you, A, approach him? How did you even get a meeting with him? And what did he say after you told him what's going on?Catharine:That's so funny. Yeah. So I have a pretty incredible lawyer, meaning that he's more of a partner for Vice Ventures than he is just legal advice. And he was like look out there, you don't have the money to pay for this if you don't soft circle cash beforehand for the docs. He's like, you need to find people who want to invest before we spend, I don't know, 60 to $100,000 incorporating a fund. So I was like, okay fine. So he goes off in a hurry and leave and I'm thinking of who invest in funds. I have absolutely no idea. I don't come from money.Catharine:And then I was like, who is the richest person I have the email of? And that was Marc Andreessen. So I just cold emailed Marc Andreessen with this deck that three other people had seen before. And I was like, he's probably not going to respond, whatever. At least I tried.F Geyrhalter:Right.Catharine:And then I woke up in the middle of the night, like at two in the morning, just bolt upright awake. Which is really rare for me. I'm a very good sleeper. And I checked my email and he responded. And I screamed. I started crying, I could not believe it. My husband was like, what is going on? It's two in the morning.Catharine:It was just such a pivotal balloon for me. And he was like, I love what you're doing. Is January too late? Because this was December. And I was like, absolutely not. So I flew out to San Francisco, I had no money. I slept in the shittiest Airbnb of all time. That was bunk beds and a ton of engineers that wanted maybe one day to start a business. It was so gross. And I went to his office, I got there 45 minutes early because I was terrified of being late. And I had nowhere to go because I didn't want to go in. So I just waited in this park area.F Geyrhalter:Oh this is awesome.Catharine:On the phone with my lawyer who was in shock that anybody was paying attention to me. Yeah. And then the meeting went really well. Marc is, I mean he lives up to the hype. He's a complete genius. He asked me highly intelligent questions. He got the concept very quickly. And he committed. It was awesome.F Geyrhalter:Wow. That's-Catharine:And very lucky.F Geyrhalter:That is pretty amazing. And so to date, I mean, this is how long ago? Like a year and a half, two years? Not that long ago, right?Catharine:Yeah. So it was 2019, January.F Geyrhalter:Okay. Yeah. Good. So you're a year plus in. What are some of the big investments? And what type of companies are there? Would we know any of them? Any background that some of the companies you invested in would be awesome.Catharine:Yeah. So we recently announced a sizeable investment in a company called Lucy. And Lucy is founded by some of the Soylent founders. It's a nicotine gum and lozenger business. And the thesis is basically that e-cigarettes has helped create a whole new generation of smokers or vapers, and 90% of people who tried to stop smoking or vaping failed to do so. So basically Lucy is coming in and reducing the harm of vaping and smoking by having very flavorful gums and lozengers.F Geyrhalter:That super cool.Catharine:It's brilliant. I'm obsessed with the founders. I'm obsessed with the idea. I talk to them weekly. I love them very, very much.F Geyrhalter:Right.Catharine:So that's one. Yeah, sorry.F Geyrhalter:Yeah, no, sorry to interrupt. But I was actually on the Lucy site last night to prep for the podcast. And I mean, what a cool... I mean, not only a great idea, right? But what a really, really well executed brand. And one of the things that they state on the site, "Come for the nicotine, stay for the breath of fresh air." I mean, branding must've been such a crucial element, they way they decide to structure the brand. So now add the interest, overall it's really smart and right on the money. How far along were they with the messaging and branding when you invested in them?Catharine:I met them about three years ago before I had the [inaudible 00:09:10]. I was still working for Andy. I loved the founder, or the CEO. There's three founders. We hopped on the call, we just spoke probably for over an hour. It was scheduled to be 30 minutes. We just got along so well, it was wild. And I just immediately understood what he was doing and why he was doing it. And he was raising a seed round at the time, but I didn't have a fund and I didn't really have any money because I'd invested in Bev already. So then he came to New York with one of their designer, Julio, and we ended up having a two and a half hour breakfast. It was an absolute blast. I immediately recognized and saw how intelligent this team was. And I stayed really, really close with them because I knew that I wanted to be involved in the series A, in a big way.F Geyrhalter:And at that point the brand was already pretty developed, right? Or did it change a lot? And how hands-on are you with that? I mean, I heard in one of your interviews that you like to have that advisor and mentor role as well.Catharine:Yeah. I mean, I definitely end up being that role for a lot of my founders. One of my founders recently went through a breakup and called me every day for three and a half weeks. Like two in the morning. Which is fine. My husband's the same, he's so patient.Catharine:But I mean, I take those calls because I've built something. I'm like, I know how difficult and how stressful it is to build something from scratch and just to have somebody who both invested in you and believes in you. I have one LP like that who, I'm so incredibly lucky that he invested in me because he hosted my portfolio company. He will give me a second eye on businesses. He helps with the operations of the fund. And just because he loves the thesis and loves the movement that we're trying to start. [crosstalk 00:11:13] So it's based on choices. It's a really strong community.F Geyrhalter:What are some other startups? I interrupted you before because I got too excited about Lucy.Catharine:Lucy is definitely one to be excited about.F Geyrhalter:Right, right. Any other ones? You did invest in Mod recently, right?Catharine:Yes. Another founder that is very dear to my heart. I invested in her because I thought the brand was extremely strong in the sense that it was very clean and it wasn't very kitschy or really girly. It was very gender neutral intimacy business. And they sell vibrators, condoms, lubricants, bath salts, candles. They're actually in J. Crew right now, which is awesome.F Geyrhalter:Oh wow.Catharine:Yeah, they're in a ton of stores, mom and pop stores and all throughout the Northeast. Yeah. And they're doing very, very well.F Geyrhalter:Well, and with Mod, I mean, Mod looks more like [inaudible 00:12:15] on steroids then having anything to do with sex. Right? I mean, it's-Catharine:Yeah. It's beautiful.F Geyrhalter:And you discussed, I think it was in the podcast with Chase, and you discussed how obviously, pretty obviously, companies that are in the business of sex cannot advertise on Google, Facebook, et cetera. Right? But Mod was so smart that they created ads in the beginning for the beautiful looking massage candle, which is just a beautiful looking candle, and that's how they lured people through these ads onto their site. And I just think that's so whip smart. I guess, no pun intended. But with the startups you advise and invest in, do most of these advertising, marketing, those branding ideas come from the founders themselves, or through the help of external agencies or consultants?Catharine:It really depends on the business. I have an advisor for Vice Ventures, Costa Damaskos who runs an agency called Virtually Real. So they did a lot of work with Recess, which is how I met him. So he also works with a lot of my founders and helps them think about branding, helps them think about messaging, packaging, website. We're about to get a new website. He did our website and it looks amazing. Yeah. So a lot of the companies in the portfolio they use Costa.F Geyrhalter:So when you work with startups, when do you advise them to invest in branding? Does it vary by focus? Because you mentioned your Vice Ventures website, but it is pretty anti-brand though, your website, right? It's literally a splash page. It's a beautiful splash page with the perfect messaging. Right? Or did it change? Have I been on the wrong site?Catharine:It's about to be a lot more robust.F Geyrhalter:Ah, okay.Catharine:But when you run a one person fund and you have separate portfolio companies, you have a priorities list and the website for me does the job, so I haven't really bothered to change it. But for a lot of my portfolio companies, I mean, super important because it's Vice, because a lot of them can't advertise through traditional channels. It's really important they have strong branding and really good PR. I would argue.F Geyrhalter:So you advise them pretty early on to invest in branding and get their story right. Then ensure that they understand the customer and the messaging, et cetera, et cetera.Catharine:Yeah. But what's funny about a lot of these Vice products is that, like take Recess, for example, it's the first time in the history of the world there's been the CB sparkling water. And it's rapidly growing, they have huge orders online in the Midwest. And it's really interesting to think who that customer is and how that customer is consistently changing as the brand gets bigger and bigger.F Geyrhalter:Right, because in the beginning it's not a customer that exists yet. Right? And that's what's so interesting is defining someone out of nowhere and just... I mean, you must be doing, I mean not you, right? But the founders of a company like that must be doing tons of AB tests, and data must be super important. Right? Even though in the beginning it's most probably a lot of gut instinct.Catharine:Totally. [inaudible 00:15:39].F Geyrhalter:Have you... Oh go ahead.Catharine:No, no, go.F Geyrhalter:How have you invested in any psychedelic startups? The reason why I ask, there is a mesmerizing article in the March edition of Forbes magazine. And I couldn't even believe it. I think it's 12 pages in Forbes that goes deep into that subject. And it discusses how many bet on psilocybin being the next big thing to cure PTSD. And psilocybin of course being the psychoactive component of magic mushrooms. It's a fascinating space that is currently being quite the hype. And from what I have read, rightfully so. Have you touched any of that?Catharine:No, I haven't, just because the horizon of my fund is 10 years. And I think a lot of these companies are going through FDA process to be approved. I think their return portfolio is probably a little more than 10 years. So I think it's a bit early for venture funds, unless you're a family office and you can of course wait 20 years for a return.F Geyrhalter:I see. Yeah, yeah, yeah. But are you interested in that kind of company? How do you see that? Did you read up about it at all? Is that something that's on your horizon?Catharine:Yeah, I mean I see anywhere between 80 and 200 businesses a week internationally.F Geyrhalter:Oh wow.Catharine:So I've seen a ton, a ton of psilocybin businesses, whether they're in the US, or their in Amsterdam, Canada. I just think it's too early for Vice Ventures to be involved in that yet. I mean, I'm not a doctor, I don't have the background being a doctor. I can't understand the FDA. I can understand the research papers that have been done on it. But at the end of the day I can't make the best call on whether a psychedelic business is better than a different psychedelic business. Like for branding at least I feel like I have that background. I worked for a founder who invested in incredible brands and created an incredible brand. So I kind of know what building that business looks like. But when it comes to, like for example [inaudible 00:17:49], which is an incredible psilocybin business, they just passed to be process of the FDA and that is meaningless to me. I can research it again, but I'm not the best person to make a judgment call on that.F Geyrhalter:Yeah, no, no, totally. So out of those 100 plus companies that come across your desk, I guess your email, on a weekly basis, how do you judge which ones you read, which ones you open, which ones you actually have a meeting with? How is your process? I mean, you get inundated with that.Catharine:Yeah, I do. The first thing I look for is brands. So we don't invest in extraction businesses and growth facilities and tanning companies, like packaging companies. We are strictly pretty much brand investors. Unless, I mean the one exception I guess would be Player's Lounge, which is a platform for e-sports. But even then, they have a very strong brand for what they're doing. Yeah, so brand first. Then I'll take a screening call. I never meet with founders in person until I've had a screen. And then the third one is meet me in person and [inaudible 00:19:04] vetting who they are as a human. Like we try to invest only in super intellectually honest people, just because investing advice, the regulations change constantly. The compliance changes. You really need somebody that has the intellectual honesty to know when they need help. So that's something, that's a character trait that I definitely look for.F Geyrhalter:Makes a lot of sense. And to make sure that they don't misspell your name.Catharine:Yeah. [crosstalk 00:19:32] That is the first thing. I'm like, do you have attention to detail?F Geyrhalter:It's Catharine with an A, that's why we have this little joke here. For those listeners who might not know. What does branding mean to you? I mean, you only invest in brands. You invest in brands that go totally against the grain. Often they create an entire niche that doesn't exist anymore. They create a customer. They have to tell stories in ways that have never really been told before. And very often these startup brands actually have to completely reinvent themselves before they even launch because they need to be so different. What does that nasty word branding, which so often gets a bad rep, what does branding mean to you on a day-to-day basis as you work with these founders?Catharine:I'll give a great example of a brand that I fell in love with from day one. Recess. Just in the first... We had an hour conversation. He showed me the deck. He didn't have a can yet. He didn't have beverage or the product on hand. But the idea of Recess and taking a Recess and understanding that almost every American has that nostalgic feeling of being a child and running around the playground. I was in immediately. I was like, this makes 100% sense. And another example is I invested in a CBD health and wellness business called Plant People. And a plant person, could you have a stronger brand for your CBD health and wellness? Like it's absolutely genius. And people are now buying hats from them. They're buying totes. And it's like, that's just proving that the brand is strong when you're buying the apparel as well as the actual products for sale.F Geyrhalter:Totally. I had Michael Lastoria of &Pizza. It's the ampersand pizza brand. I had him on the podcast and it was so fascinating to hear when he suddenly realized that some of his employees literally, you know the guys that are at the cashier's desk and flipping the pizzas and putting the pies together. They started to actually tattoo the ampersand logo onto their skin. And not temporarily. Like literally he suddenly saw employees of his with his brand mark literally marked on them. And he started to realize that the ampersand means so much to his employees because they feel like they get a second chance. And for the first time they have a real job where it's really exciting and they have great benefits, and it's a team. And the ampersand stands for this is the beginning of something much bigger.F Geyrhalter:And I thought it was such a wonderful story because how a brand name, like in the two cases that you just gave, or a brand mark can actually really stand for so much for so many people. And it goes way outside what a brand thought it would do with it, which is super cool. If you would give, I would say D to C companies, because that's a lot of the companies, it seems, that you're in the space of investing. What is brand advice that you give them? It sounds like with names you really are drawn to brands that are smart, that have very intelligent intellectual forward thinking founders. And so the name is a representation of that.F Geyrhalter:And it sounds like you put a lot of weight to that, at least subliminally when you see it. And you're like, well this is really, really smart. But what is some advice that you would have for... I mean, I know you have tons of advice because you give advice 24/7, I guess, at two in the morning when a founder calls. But what are some of the big brand lessons that you feel like you learned or issues that you've seen that you would love to have other startup founders overcome easier?Catharine:Yes. The first thing that I would say, I mean, I've sat down with two of my founders and gone through this process. But it's to really understand who is buying or wagering on your site or platform. Because then you can change the branding ad to cater to your biggest customers. And I think that's a way to lock down your customers, attract their friends and become more of like a super sticky business just by changing the way that you're talking to the people who are using it. I think that's really important. [crosstalk 00:24:11] If that made any sense at all.F Geyrhalter:It makes lots of sense. How do they go about it? Right? I mean, especially if you have very early stage startups and you say, hey, you really got to figure out how your customer is. How do they then go about it? I mean, is it an email outreach to their client? Is it literally picking up the phone? How do you get to know them and then to understand them?Catharine:So I think it's a combination of all those things. The first step is always just go to through the data and start Googling people's names and see exactly who they are and what they do. And if there's a common thread between the top 100 people who use your product. And then it's also just getting on the phone with people and just being like, hey, I'm calling from XX, I would love to know how you like using our platform. We've seen you've used it for the past six months and recently you started using it less, why is that? Can I offer you 10% off or something? For your time. And I think talking to customers is really the best way to get feedback on what you're doing.F Geyrhalter:Right. So you have to establish the data in the beginning when you don't really have it yet, you just have to do it manually with a spreadsheet. Which is-Catharine:Yep, exactly.F Geyrhalter:Yeah, which is kind of nice, liberating to hear that that's how it's still done. What's next for Vice Ventures? What is exciting you in the next couple of months? Because I didn't want to look years because that's way too far ahead. In the next couple of [crosstalk 00:25:37] months.Catharine:Impossible. I mean, we're still heavily focused on harm reduction nicotine as a category, that honestly I'm trying to coin. But as I said, 90% of people fail to stop smoking or vaping, and I think Lucy is definitely going to be a clear winner. But I think there's also clear winners that just haven't been created yet. Or that I just haven't seen. And I think I'm very excited about that space. I'm also excited about cannabis brands in the longer term because I think that a lot of cannabis companies in California and throughout the country are raising absurd valuations. But I think a lot of them are going to run out of money and not going to be bailed out by a lot of their investors. So I think it will great deals to scoop up, if I may say that myself there. And then I'm also still fundraising. So I'm meeting super interesting people. I love fundraising. I think it's such a privilege to be able to do it.F Geyrhalter:Wow, that's shocking actually to hear. Because [crosstalk 00:26:42] most people hate it. Yeah.Catharine:I know. I don't know why, I think people just have the wrong attitude about it. You literally going to interview people to see if they want to invest in the fund. You get to decide if they can invest in the fund or not. And you get to learn all about them, because usually these people are wildly successful and most of the times [inaudible 00:27:03].F Geyrhalter:You know-Catharine:It's like the cool opportunity.F Geyrhalter:Yeah, no, I totally agree. I mean, it sounds like... And I mean, look, that's why someone like Marc Andreessen takes your calls. Because you have the [inaudible 00:27:18] you're actually excited about it. So listen, this is interesting about the CBD brands. I run a consultancy, we work with startups. We create clarity and focus with them early on, very much like what do you do in an advisory role. And during this entire hype with CBD companies I had so many inquiries of companies that wanted to work with me, and not a single one of them came through. They all end up being so stereotypically, sadly, like slackers or something comes up, things don't go right. It's just like, the contract never comes together. There's this whole stigma that I really didn't think would still exist. But do you see any of that too? Or do you have such a strict Catharine filter that those would never even make it up to your email list?Catharine:Like stigma for?F Geyrhalter:Just for [crosstalk 00:28:15]. Yeah, for the CBD industry. I have a really, really hard time finding CBD company founders that are super smart, that are on it, that are actually... I mean, there's maybe one out of 10 that contact me where I feel like, okay, they would actually be able to do this.Catharine:Yeah. I mean I also kind of have a thesis that the CBD companies that are going to win are the ones that already exist, just because it's getting so crowded. So I tend to not take meetings with CBD founders, to be honest, just because I think the fund is overexposed to CBD. But then also I think Plant People and Recess are the winners. Like pretty clearly. But I mean I'm clearly really biased.F Geyrhalter:Yeah, no, totally [crosstalk 00:29:06].Catharine:Yeah, I don't know. I've seen CBD subscription boxes, which I think are ridiculous. I've seen tons of CBD. But I agree that a lot of these operators aren't intellectually honest or just intelligent in general.F Geyrhalter:What are some of the most ridiculous Vice idea that came into your inbox in the last weeks?Catharine:Oh my God.F Geyrhalter:You're like, oh my God this is never going [crosstalk 00:29:37] to happen.Catharine:This is the craziest story. Sex dolls are being sold in Japan that self lubricate, and the hair grows. They need haircuts.F Geyrhalter:Oh my God. Oh my God.Catharine:And I was like-F Geyrhalter:I didn't just hear that. Crazy.Catharine:[crosstalk 00:29:56] And of course I took the phone call because I was like, I'm so curious. I have so many questions. I need to know. And it ended up being over an hour, which is very rare for me. Usually I always cut my calls off at 30 minutes. And I'm like, this is truly wild. Like so wild.F Geyrhalter:Wow. And clearly, clearly you invested.Catharine:Oh my God, I did not invest. I did not see an exit for it. But absolutely captivated.F Geyrhalter:Yeah, no, totally. And I mean, isn't that part of the job that's so exciting. That you just see what could be next and what people are thinking about. And I mean, yeah, I mean you must have such a good insight into the current zeitgeist just by getting all this stuff into your inbox.Catharine:Yeah. I mean, I was actually, I went out to dinner with my incredible lawyers last night. Who took me on as client at 25 years old. They're amazing. And we were talking about how some of my idols, I don't want to say names, but some of my idols in VC that I looked up to when I was working for Andy. Now, you know me, and they're like, hey Catharine, what do you think about this cannabis company? Or, what do you think about this audio porn business? And it just so surreal. And I always screenshot it and I sent it to my lawyer and I'm like, oh my God. So crazy.F Geyrhalter:That is so awesome. So awesome. Wait, I'm going to wait a little, there's an airplane coming by. We're in the temp store and sometimes that happens. You said that you're finally making the Vice Ventures brand a little bit more mature because so far you didn't have to do any of that. It's a one woman business. People know you. I mean you, it's not like you need to advertise, you get plenty of emails. How do you go about that new brand? And are you going to add people to your team? What is the future of your own brand?Catharine:Yeah, so my dream is to turn Vice Ventures into a multi-generational asset class. And I think for fund one, I would love to add somebody to it. I think that'll probably come in the next few weeks. I've already interviewed, I'd say probably 20 plus people. But that first hire, as any founder knows, is extremely important and incredibly difficult to do. Especially for a fund like Vice Ventures where, I mean, we get a lot of attention. Which is great. I mean, it's awesome. But it's that first hire has to be a true rock star.F Geyrhalter:Absolutely. Very cool.Catharine:Yeah.F Geyrhalter:How can people get in touch with you if they want to pitch you?Catharine:info@ViceVentures is the best way for sure.F Geyrhalter:Boom. Done. Easy does it.Catharine:Yeah, I check that. I am pretty religious about checking my emails. Yeah.F Geyrhalter:That's awesome. Yeah. If you take a one hour call with a sex doll manufacturer, potentially there's no risk for you not reading any emails. So that is super, super cool. Catharine, I love talking with you. I absolutely love where you're going with all of this. And I'm looking forward to following you on Instagram. Actually, what is your Instagram handle for everyone listening?Catharine:Catharine Dockery. C-A-T-H-A-R-I-N-E  D-O-C-K-E-R-Y.F Geyrhalter:Perfect Awesome. Yeah, because that's where people can get a good idea of who you are into and who you're investing in. And I think there's a lot of knowledge for people to gain from this. Catharine, thank you for your time. I know it's like we're going past half an hour and you just said you're not taking calls over half an hour. So here we go. I got to immediately finish this up. Thank you so much for your time and for your insights. We super appreciate it. It was great having you on.Catharine:Yeah. Perfect. Thank you so much for having me. I had a blast.F Geyrhalter:Absolutely.
Learn more about Sky ZoneDue to COVID-19 we are no longer asking for financial support for the show, instead you can now join free mentorship group calls with Fabian to get through this together. Join here.Full Transcript:F Geyrhalter:Welcome to the show, Jeff.J Platt:Thanks for having me.F Geyrhalter:Absolutely. Look, I usually only have founders and cofounders on Hitting The Mark and your company Sky Zone which a lot of people listening know very well, it was technically founded by your dad, but it was you who actually came in and pivoted it. You are now considered a cofounder at this point because you really made the company what it is today. Tell us a little bit about that pivotal moment of what actually happened when you came in or what you realized.J Platt:I definitely got to get my dad credit. He is the visionary behind it. He was the one who founded the business. I was lucky enough for him to bring me involved and get me involved in a way listened to directionally where I wanted to take the business, but he, by all means, is the real founder, if you will. When we first started the business as a professional sport, which was a crazy idea at the time, we decided to pivot the business into what it is today. It's nothing that he should take credit for or I should take credit for. It really came from listening to our customer at the time which were some neighborhood kids who wanted to just come in and play.J Platt:They saw our R&D center that we had in Las Vegas. They peeked their head in the door because there was an indoor skatepark next door to us. These kids were constantly coming to the center and they'd look through the windows. They used to bang on the doors and just ask my dad, "Can we come in here and jump around?" He'd let them. Then one day, instead of training athletes to launch the sport that was going to be played on trampolines, the decision was made to start charging them money to just jump around and play. We did and then the business took off from there. We opened a couple locations. I approached him one day and said, "Let's start franchising our business." In 2009-2010, we began to franchise. That's when the growth really started to take off.F Geyrhalter:Have there been any companies at that point that did something similar when you guys decided, "Hey, let's have these kids come in and let's just start charging for it"?J Platt:Yeah, it was that simple. I think in business in general, it's super important to listen to your customers. In our world, we call them guests. We've learned a lot from them over the years. When I think back at really how this whole thing started, it was, it was listening to these neighborhood kids.F Geyrhalter:That's so great. I'm a brand consultant and the beauty of my job is that I come into companies as the outsider looking in which makes it so much easier to see what is actually going on and what brand wisdoms and values deserve to be uncovered. You were the Undercover Boss in the season finale of the show by the same name. Now, I have a good amount of former Shark Tank contestants on Hitting The Mark, but you are only the second Undercover Boss. I had Shelly Sun of Brightstar which is also an amazing franchise on the show prior and she was an Undercover Boss as well. How was that experience and what did it teach you about your brand that you did not know before?J Platt:It's a pretty incredible experience. I'd like to say it's probably the most exhausting 10 days of work I've ever had between traveling every day and you're up early and you're working late and that wasn't the issue. The issue is that there's a camera in your face 24 hours a day pretty much. And so you really have to watch what you're saying because you have no editing rights and they're going to put on that show what they want to put on. You're also lying all day long about who you are. You're pretending to be someone you're not.F Geyrhalter:Tell me more.J Platt:That is exhausting. You really have to watch everything you say. Those were grueling days. I think one of the thing, and it's interesting because it doesn't get talked about a lot around that show, one of the things that was so interesting for me is when you have a title as president or CEO or cofounder, whatever it may be, when you have a big title, you don't get to talk to people the same way as if you were just a friend of theirs or maybe just a director level or manager level, but when you have that title people, they look at you differently and they talk at you differently.J Platt:It's unfortunate, but it's just people can sometimes be intimidated by the role. I try and go out of my way to be very approachable, but you don't get to share the stories that you do with someone when you're the CEO or the president. That show, because I'm just a contestant on the show, a made-up show that, of course, they don't know it's made up, but I was able to engage and talk with our frontline team in a way that I would not have been able to if I wasn't this fake character.F Geyrhalter:RightJ Platt:I was able to learn from them, engage with them and frankly just get to know some people that I would have never gotten to know if it wasn't for that experience. I think one of the things that made me realize is really the incredible diverse team that we have around the country and these stories of these team members and what they've been through and the role that Sky Zone has played in their life, mainly good thankfully in helping them and setting their careers off and learning and development for them.J Platt:That was the most, and I guess in a selfish way, it gave me a lot of pride and a lot of enthusiasm and really a lot of energy around continuing to grow the brand to say, "How can we create more stories like these individuals?" It was really a humbling and rewarding experience all around.F Geyrhalter:That is really, really great to hear because very often with those shows it's all about drama, and like you said, you have to be at your very, very, very best behavior, but that idea where a founder, a president, the CEO, it's easier for you to suddenly take over a customer service line and listen to what people actually have to say on the other line, but it's really hard to do that internally, especially if you have franchises. I don't know how many locations you have. I think the last I checked it's like 210 or so locations. I'm sure it's been growing, right?J Platt:Yup.F Geyrhalter:It's really, really difficult to tap into that. I totally get it. That must have been an amazing experience and just high fiving with those people that usually would stare at you when you walk into the room.J Platt:Exactly, not want to speak to you. It's interesting because it doesn't get talked about enough around that show, just that you can engage in a totally different way because you're just seen as another person to them. Unfortunately, again, when you put a title on yourself, you automatically have some stigma attached to you or stereotype if you will because you're the "boss."F Geyrhalter:Totally. Absolutely. A typical Sky Zone location hosts about a thousand guests a day according to Wikipedia. You have expanded through the franchising model. I had 1-800-GOT-JUNK founder, Brian Scudamore, on the show which sadly only resulted in a transcribed interview due to technical difficulties that day. That was one of my first episodes and he was kind enough to be on it. He's obviously a very well-respected entrepreneur in the franchising world. It was interesting to hear him answer this question. I'll ask you the very same question because you are deep inside the franchising world.F Geyrhalter:What were some of the key steps that you had to go through to create a platform of brand rules and guidelines to empower franchise owners rather than solely restrict them? It's still true to the brand and they have rules to follow, but it still feels like they've got to say in their own location and then shape something and be a cocreator.J Platt:It's a good question and it's always a tough balance in franchising.F Geyrhalter:Oh, I'm sure.J Platt:We tend to use this saying a lot that we want to give freedom within a framework because I firmly believe and it's my leadership style that you've got to give your team or people you work with freedom. If you give them enough freedom, then that's where real creativity and innovation can happen. Allow them to try things and allow them to fail. It's talked about a lot in business and I wholeheartedly believe it. I think it's the same with franchise owners. You've got to give them a certain amount of freedom because some of the best innovation comes from them, but it's got to be within a framework.F Geyrhalter:Right.J Platt:You got to some guardrails around it, the magic of enough freedom but a framework that is wide enough to truly let them try things but not so wide that they go outside the boundaries. I think like anything the key is making sure they're involved in the process. From the time we did our first real branding exercise, hired the third-party consultant, brought them in, really gave ourselves a look, a feel, talk about what our brand is. We did those exercises. God, this is dating back I think the first time, maybe six or seven ... Well, the first time we did it was 10 or 11 years ago, but I'd say the first time we did it in a real methodical way with a professional was seven years ago.J Platt:We had franchise owners sitting in that room with us and the senior leadership of the team. They were sitting in there with us going through the exercises and doing all of it, A to Z with us. Every time that we've done some form of refresh, they've been along the journey with us. Not all of them because you can't have 120 franchise owner sitting in the room with you, but you find a couple who are passionate about branding and know it and you invite them and you make them part of the process. Make them part of a process so they feel like it's theirs and then define that framework, make sure it's got enough freedom within it for them to make it their own, but also make sure it's still us, those guys.F Geyrhalter:Consistency because that's the lifeline of any brand, especially with the franchise. Very, very cool the way that you do that. I think that's very smart. How do you deal with core values? Because core values are so important to any company, but you're across continents, right? Sky zone is not only in the US. You're global at this point. How do those core values translate? How do you deal with that?J Platt:Fortunately for us, we kept ours pretty simple, so they do translate across countries. They're not overly complex. Actually for the first time, this has been going on for about a year or so, we're actually looking at making some updates to those. Core values are not things that should be a flavor of the year, that you change often at all, but we're actually looking at doing a bit of a refresh on them because we recently, as you pointed out before we started talking, you saw that we've done a little creative refresh on the brand and so we're looking across all aspects of our business, core values being a part of it and looking to do a refresh there too.J Platt:I think what's key with ... Brands get into a lot of these concepts and mission statements and vision statements and purpose statements and core values and brand tenets. They all want to define them. You have so many things that you can't remember, "Is that a mission statement or a purpose statement? Is that my vision? Wait, what are my core?" I think the key with all this is keep it super, super simple. I think brands tend to, and you probably know this better than I do, overcomplicate all this stuff.F Geyrhalter:Thank you. Hallelujah. I'm so happy to hear this from a founder's viewpoint because for me it's all about simplifying, simplifying. I even simplify it so much that at the end of my branding sessions with clients, we have one word, right? It all comes down to that one word. You and I talked about that a little bit in the prep that that's a question that's coming up. I didn't even do mission and vision statements with my clients because I felt that, a, it's two extra statements and, b, aren't you on a mission to fulfill your vision? Isn't it one statement? Now that too many of them asked me after workshop, they're like, "But Fabian, we didn't do a mission statement and a vision statement." I'm like, "All right." Now, I'm doing a mission/vision statement which is a combo plate between the two and that just makes it simpler. I agree. The more statements, the more stuff around your brand, the harder it is to remember and follow any of it. Isn't that the core purpose of all of that? I believe you've got some pretty cool little pieces of brand communications like small gestures of brand delight that turned into customer favorites. I think when you enter a location, you get a sticker, which I haven't because no one invited me to check it out prior to this interview, but whatever, anyway ; ) so I haven't but I heard that these orange stickers, they turn into a recognizable brand element for you, right?J Platt:Yeah, the orange stickers and actually even more so than the orange stickers is our socks.F Geyrhalter:That's right. How has it always been around the socks? Is that a common-J Platt:The socks we introduced maybe six years ago or so now. Sometimes, I lose track. Sometimes, I still think it's 2018, but the socks, we introduced six or seven years ago. For a very long time, and it might still be the case actually, it was the most Instagrammed thing part of our brand. If people would post images of themselves at our parks, usually it's them and the sock is the hero of the shot because it's like a badge. It says, "I am at Sky Zone," or, "I love Sky Zone because I've got my socks."F Geyrhalter:That's super cool. You did the socks obviously for hygienic reasons, I suppose, and for people, to make sure that they have socks on because a lot of them might just walk in with their sandals. Hold on second. There's a lot of ambulance action out there or something. Super cool. By the way, the whole socks thing. I just thought it Ion the site now when I looked at it. I didn't even pick that up when I prepped for the interview the last time, so it's pretty neat. All right. I guess the ambulance is dying down over there. No pun intended. That was horrible. It didn't mean it though.F Geyrhalter:Cool. Perfect. Let's talk about the socks for a second little bit more. Was it intentional that you thought the socks would actually become a brand element or did you just need the socks for a reason and afterwards you just said, "Well, let's color it in our brand color"?J Platt:Originally, the socks started for two reasons, one, hygiene and the second one is they have a grip on the bottom of them. It's easier for you to grip the trampoline and you're jumping on it. We didn't decide to do the socks. It was, "Oh, this would be an amazing brand element." As we started introducing them into our operations and then we made them orange because that was a main color for us and they really popped and we noticed people really like them, we thought, "Okay, this is a great opportunity that becomes a badge of honor that you love our brand if you have our socks." It's one of the things that I always say to ... People say to me, "Oh, what do I do?" I say, "Have you ever heard of Sky Zone?" Eight out of 10 times, the first thing someone says to me is, "Yeah, I have six pairs of your socks."F Geyrhalter:That was my next question. Do people steal the socks or do you actually own them afterwards? How does that work?J Platt:No, they own them. They own them. They're all-F Geyrhalter:Which makes it so much easier for you because what are you going to do with them?J Platt:Yeah, much easier. We're not going to get into machine washing business. That's what we do. We branded them. Now interestingly enough, people bring their socks back because they own them. We said, "Okay, people really love these. Now, we need to make them different and let's expand the design and the color of them." We've now introduced, God, maybe a dozen different design socks, ankle socks, high socks, camo color, different funky designs. We even post our new designs on our Facebook page, asked people to vote on which ones they want us to roll out. It's become a big part of our brand now, socks.F Geyrhalter:That is so smart. That's super, super smart. I mean that can grow into all kinds of different directions, but it's so cool because it's a merchandise you don't have to buy. You just get and the idea of anything that's being limited edition or anything that changes, that's what people want to post. That's what people want to own. Super, super cool. How do you talk to your different customer segments? You've got toddlers and their parents and then you've got amateurs, like you said, just kids that want to jump around and I mean kids of any age really, but all the way to professional dodgeball players, which yes, that's definitely a thing. Do you segment your channels such as Instagram and YouTube by those groups?J Platt:Segmentation has become ... As we've gotten bigger and a little bit more sophisticated, at least I'd like to think, we've started to do a lot more segmented marketing. It's just like just as you nail one platform, the next one pops up that you've got to learn like TikTok, but we do a lot of segmentation and it's not necessarily by age always. We've recently launched memberships. We're gaining a pretty big membership base across all of our parks. We have very targeted communication that goes just to our members.J Platt:We obviously know a lot about those members and who they are, who's buying these memberships and what's important to them and why they're buying memberships and what offers they want to see as being a member that's going to entice them to want to continue to come back. We're not just segmenting based on a teenager or a toddler. One thing is for sure is we're talking to mom a lot. Mom is a big decisionmaker. We're definitely talking to mom in a lot of our communication, but we want to be cool, we want to be relevant, we want to be, to a degree, edgy and up with the latest trends.J Platt:One of the things we just did from a branding perspective is we just refreshed our creative. We talked about this a little bit earlier. We brought in a lot of pattern and some softer colors. At first when I saw it, it felt kitty to me, but if you go out and look in the world today, especially fashion, this is what is on trend right now. I'm not talking about fashion for six, seven, eight, nine, 10-year-olds. I'm talking about fashion for teenagers, people in the early 20s. It is what is considered cool, if you will. We're constantly talking to different audiences and figuring out a way to target messaging, but at the end of the day, mom is one of our biggest customers.F Geyrhalter:Totally. Then, the kids need to find that their experience with the brand is hip as well and then they grow out of mom being a decision maker and you feel like readying yourself for the entire customer journey which is very smart. The big question is do members get special member socks?J Platt:It's funny you said that because it's something we're actually working on.F Geyrhalter:There you go.J Platt:We have a concept of potentially giving them different socks and those socks based on visit history and such, like belts in karate ...F Geyrhalter:Badge of honor.J Platt:... that you would earn. Yeah, exactly.F Geyrhalter:Super cool. We talked about dodgeball for a second, I just mentioned it, but let's talk about the Sky Zone Ultimate Dodge Ball Championship because it's easy to poke fun at sport because most know it as a kid's game, but you did something quite amazing by creating this league and having it air on ESPN2. I think it earned something ridiculous like over 200 million media impressions. How did that brand extension of sorts come about?J Platt:Oh, you know what? I've got to give my father credit really there. He was always very passionate about doing something involving sports with our brand. Originally, as I mentioned, that the whole concept started out as it was going to be a sport played on trampolines and that game was actually called Sky Zone and it was a crazy game, but that never really took off. What people did love to do was play dodgeball on trampolines. He really wanted to legitimize that. So many, many years ago, he had this dream and wish to just make a real concerted effort to try and make dodgeball something big.J Platt:We started out doing tournaments at all of our locations and tournaments were popular. Then we said, "Wow, what if we make those tournaments regionally based and then the regional base tournament, there's a winner. Then what if the regional tournament winner gets to play into a national tournament? Then everybody flies to Vegas, but then how are we going to convince people to fly to Vegas to play for this national tournament?" We actually used to do it in Torrance many, many years ago. We started doing in Vegas recently.J Platt:Then, we threw cash prizes on it and people then really wanted to come because there was a big cash prize and it gained a huge following. Somebody here internally in our team ran the whole thing and did a great job with it and started getting sponsors involved. The next thing you know, ESPN2, they want to show a profile of it. It's a really fun content, so it started getting a lot of hits on YouTube. It just organically happened. It was sort of this total ... Talking about segments, it was this total subsegment of our business that that really was never about how much revenue can we generate from this.J Platt:It was more fun and a different angle on our brand. It was about sport and competition and a super, super passionate group of players that help grow this sport organically. It was fascinating the way it all happened.F Geyrhalter:It's so great because it reminds you of the roots of the company, right? As you start spreading into all these different directions, there's still this core which is really neat. You use the word organically a lot. In a way, I'm sure a lot of it spread organically, but I think it's also because you're most probably humble about it. I think you've got a pretty good idea of how to grow a brand. What is an advice that you would have for a young company that maybe has one or two locations and they want to turn into a franchise? How would you spread the word and find brand growth to follow your lead?F Geyrhalter:What are some of the things that you feel like made you successful in the beginning that might be something that people might be able to replicate in a totally different industry?J Platt:Well, I think one thing that's really important, if I was starting from scratch today, something I would do from day one that I think it wasn't until we were maybe four years in or so that we did this, but it's hire a brand consultant and create what many people in the industry refer to as a brand book. What truly is your brand? What is the identity? What are your core values? Do you have a vision statement, which I don't think you need to have a mission statement, but if you do define it? You don't have to have a mission or purpose statement, but if you do define it.J Platt:What does it look like? What does it feel like? What does it not that's important? Who's the customer? What's important to that customer? How is your brand speaking to that customer, but really define what your brand is? We did that for the very first time. I want to say maybe it's five years after we launched. It might've been five, it might've been six, I don't know. It was not at first. I can tell you that. I think that there's no question that I would do that from day one now because what that does is it aligns people around an idea.J Platt:Your brand is your identity and it's how the world will perceive you. It's important that people that are running the business if you will or will be getting involved in the business, understand what that idea is and make sure that they're communicating the same thing because brand is not just about the colors on your website or the way your brick and mortar location looks, your tone of voice, but brand is also the people that work for you and how they represent themselves. I think having that book is that unifying document that says, "Here's who we are. Here's what we're about. Here's what we're trying to achieve. Here's what's important to us. Here's the customers that we're trying to attract."J Platt:You got to be aligned around that from day one. You don't have to be, but I'd recommend you be.F Geyrhalter:Absolutely. I'm so glad that you say that. That's literally what I do for a living is coming with early stage startup founders. Usually, they have funding, one way or the other. Some of them already did the beta product for a year or so and then I come in and I do exactly what you're talking about. I refuse to work with them if I don't get an entire day with the core team with the founder, cofounder, any VP level, maximum eight people, but minimum the founders because if it is being derived from within and if everyone is working on it together, like you said, so much happens, right? It builds internal culture. It builds that, whatever, North star, whatever it is, like that big idea.F Geyrhalter:You said, "Well, there's colors and there's all of that stuff too," and you're right. It is secondary when you build a brand, but also after that, you call it a book, we actually do it in one long page. It's actually like a six-foot poster of like, "Here is the brand," which we like because one page is easier as a PDF for people to quickly scan through in the book, but that idea that it's written down and it's in front of you, if you then work on the brand, you can always go back to it and say, "Look, it doesn't matter if orange or you like blue. Would our customer like orange and blue? Does it go back to who we want to be and how we want to be seen?"F Geyrhalter:Not needing to repeat anything that you already said, but I'm glad to hear it from you. I'm glad that you'd say that now looking back, actually you would do it early on and that you recommend people to do it early on because a lot of startup founders who don't understand the idea of branding that it's something much bigger, they feel like branding is the last thing they should focus on, right? It's product, product, product. That's how people feel. You can add 10 more features to your product, speaking tech talk, whatever it is, additions to your service. If no one cares about it and if no one sees it as being attractive, then you have nothing, right?F Geyrhalter:I could go off on tangents about that, but since we already talk about it, after everything you've been through with Sky Zone, creating this conglomerate of locations and being a leader in that industry, what does branding mean to you today?J Platt:Fortunately, I think the same thing it did before which is to me, it's how a customer feels when they hear or see or interact with your brand, what is the emotion, the response that, that you get from them. I don't think our brand is about what I say it is. I think it's about what is somebody else because I might have a perception of what it is, but it doesn't mean that we're articulating that well as a brand or communicating that well as brand. I think it's about what is your customer see, feel, believe, what comes to mind when they experience or interact with your brand.J Platt:I think brands, they do it really well. I think we do this well, but we can definitely always improve, is that experience or feeling is consistent across, they use that term omnichannel, but it's just a cross platform. Whether you're interacting on social, whether you're interacting on the web, whether you're interacting by picking up the phone and you're calling and you're talking about booking a party or you're trying to get information or when you're actually physically inside the location itself. I think that's the hardest thing for brands is consistency across channels.J Platt:You might do social media really well, but then when someone comes in store, it's a terrible experience or the way your online presence looks is very different than the way the physical store looks or you might have this brand that's super fun and engaging and exciting, but the team inside the park is not that way at all and ruins it. How do you have consistency across all those channels to me, that's brand.F Geyrhalter:Absolutely. It's already so difficult to have consistency across locations, just that people feel the same thing and agree to the same way and it's the same vibe, but then across channels is a totally different story. I always feel like it's fascinating to me how restaurant chains or hotels, how they either nail it or they totally can't get it together. That is such a multinational experience there. There's one restaurant chain, you might know them, they're called The Hillstone Group. They've got Houstons and all of that.J Platt:I ate at R+D last night. I went to the Hillstone Restaurant.F Geyrhalter:Well, there you go. Perfect. The one in Brentwood, Santa Monica up there, right?J Platt:Yup.F Geyrhalter:I am obsessed with that brand because they give you a fairly upscale experience, not really upscale prices. Regardless of where you go, it is so consistent, the service and the way that you're treated and the way that you feel especially when you go to the Hillstone's and Houston's Steak, the way you fall into this brand and it's dark, it's quiet, it's super professional, you're attended to. To me, it is so fascinating and people think it's silly because it's Houston's. It's a steak, whatever, kind of chain, just an American restaurant. That to me is always fascinating because I know how difficult it is to pull that off.F Geyrhalter:Talking about difficulties, brand difficulties, I know we talked a lot about what Sky Zone is doing right and has been doing right, but you're doing your entire history of growing that brand. Was there enormous brand feel that you went through where something totally went the wrong way, where you thought your customers would act a certain way and then they acted totally differently or where you chomped onto some hip bandwagon and then afterwards you realized it's just a fad and you should have never done that? Anything negative that you want to share, so people can learn from it?J Platt:Nothing I would say overly negative. I will say that at one point we started pivoting our creative a little bit to go a bit edgier, a bit sportier. We used some darker images and coloring, not a skater feel, but almost like that in a way. I think we took it a bit far frankly. This didn't really come from research or anything, but I think we took it a bit far and we had to tone it down a little bit because what I think we became was a little less inviting to the masses. It's almost as if you saw our marketing or creative, you would have said, "It feels like sport to me and not entertainment."J Platt:There's still some elements of our brand that feel that way, but we've started to tone that down a little bit, and after you've seen some of the creative refresh on our website for example, we're now being a little more colorful, a little more pattern oriented. Really what's at the core of all of that is being playful. That's what we want to be about. We want to be playful as a brand in the way we communicate, in the way we look and feel. We are all about play and our brand should be playful. It's not really serious.F Geyrhalter:Exactly and it makes so much sense because in the end, if you're on the height of your game and you're actually in the league, it's still playful. You're still enjoying it. It's still a game, right? For everyone else, it's aspirational if there's a little bit of that competitive tone to the brand or a little bit of that athletic tone to the brand, but you must probably went into the athletic tonality so much that the other customers were left a little bit behind. Now with your refresh and looking at the way that you look at the segmentation's obviously, it's a much bigger exercise to find that perfect in between and having that guiding word, that guiding idea behind it. That's actually my next question. What is one word that can describe your brand overall, which I call your brand DNA? Is it actually playful?J Platt:Yeah, I think so. We are all about promoting play. We want to be playful in everything we do. You can use a lot of different words and you can say it's about fun and freedom and activity and adventure, but at the end of the day, who does not like to play? If we could just be playful all day long, I don't care if you're young or old, you're going to be happy. I've got a 16-month-old now, my first and all day long this kid just runs around and he just wants to play and he's so happy. I just think like, "What if I could live like that?" How much happier would the world be if we could all just be like a 16-year-old, totally present, in the moment, only caring about what's right in front of them? I realize it's not realistic, but how nice would it be?F Geyrhalter:I think your brand is going to change a lot in the future.J Platt:I just want to play.F Geyrhalter:Look, when you mentioned it could be a lot of words, I think that actually defining that one word. It is very peculiar, right? It's particular. It's like there's nothing else that can say playful the way playful can see it, right? I mean freedom and all these other words, they come through different images. I think playful, having that as the guiding light, it's different. I think it's important to have that down because I think everyone internally needs to feel like, "Yeah, that's our brand." Then, everyone externally will sooner or later feel that. What's next for Sky Zone? What's in the future? What can you talk about that is not to secretive?J Platt:More growth, more toys, more attractions. I think the one that we're really super excited about right now that we're just starting to roll out is we're incorporating a lot of slides into our locations. These aren't just normal slides. These are a new spin on slides. Everyone hears slides and you think, "Oh, that sounds really fun. I'll do them at the park, but what's so great about a slide? These are going to be totally different and really big. I'm talking 15, 20, 25 feet and they've got a surface on them that puts you at a totally different speed than if you were just going down a normal slide and you're going to fly off them, of course.J Platt:You're not going to just drop down, but you actually get launched off these slides and a have to land into an airbag. That's an attraction that we're really excited about pumping out here very soon. There's a lot we're doing in the tech space. I think that a year from now you'll see our parks team pretty tech enabled that will be an enhancement to the guest experience and then a lot of international growth getting into new countries and seeing further expansion that way.F Geyrhalter:Very exciting, very exciting. Talking about expansions, I have listeners from all across the world. I think there are a few countries where I don't have listeners, but it's a very international podcast. The majority is still in the US, I think about 48% and then it's all across the world. Listeners who want to get into the Sky Zone, where can they find you?J Platt:skyzone.com, easy as that, our website. It's got all of our locations listed and that's the best place.F Geyrhalter:How many countries are you in right now?J Platt:Oh, we are in 12 countries.F Geyrhalter:Wow.J Platt:Total countries and hopefully expanding. We're very focused on Japan hopefully being the next country we launch.F Geyrhalter:Great. Very cool. Well, listen, Jeff, I hope that the craziness with the coronavirus is not going to affect you too much in what you do and how you expand. It's affecting everyone right now, but I really, really wish you the best. We got some amazing insights out of here today. I love your story. Thank you for taking the time in your busy schedule to share this with myself and my listeners.J Platt:Appreciate it having me on and hope to chat soon.F Geyrhalter:Absolutely. Thanks Jeff.J Platt:Thanks so much.
Learn more about BeBOLD Bars and use the special code 'HTM' for 25% off your first order!Support the show – and get on monthly advisory calls with Fabian (in groups for both creatives as well as entrepreneurs)Full Transcript:F Geyrhalter:Welcome to the show, Stacy.S Madison:Thank you so much for having me on.F Geyrhalter:Oh, absolutely. So, first off, you have no idea how thrilled I was when you accepted the invitation to be on my show. We met briefly at a summit last year, but while reading your Wikipedia page to prep for this podcast, I realized that our paths have already almost crossed in the past. Back when I ran my design studio in Santa Monica we shared our office with a company called Evolution Fresh before they moved-S Madison:Oh my God.F Geyrhalter:... to their factory. While at the same time, my small studio go into a larger agency, so I took over that whole space, and for a good 10 or so years I actually worked alongside Jimmy, Evolution's founder, on all of the designs of the brand up to the acquisition of Starbucks. So, you actually sat on the board of Evolution during that time, so we were already part of the same company and we didn't even know it.S Madison:That is so funny. You were like, "I was down in Santa Monica," and I'm like, oh my God, I hope I remember what he's talking about. But no, Evolution, yeah, definitely. Evolution, wonderful company. I was on the board. It sold to Starbucks, and that was really my first exposure to the whole juicing world, and as you know, I own a juice bar in Needham, Massachusetts, so that was just great experience, and I kind of fell in love with juicing. It was great, because I was kind of at a point in my life where I wasn't sure what I was going to do, and my juice bar here in Needham... It's not just a juice bar. We have lots of sandwiches and other things, but I kind of really found my passion project. So, it really kind of completed my life, and that's how I was introduced to it.F Geyrhalter:Oh, that's so good.S Madison:A great company.F Geyrhalter:Yeah, it's a great company, wonderful founder. We had a really, really good time.S Madison:Yep.F Geyrhalter:You are a celebrated entrepreneur. I know you don't want to say that about yourself, but I can say it about you, so here you go. Your first brand, which you have since sold, is now known by everyone, at least here in the US, Stacy's Pita Chips. They're a healthy and, may I say, addictive chips brand, which is loved by so many. Even though we will focus on your shiny, new brand, BeBOLD Bars, on today's show, please do entertain me and my audience with a quick story about that accidental brand creation that is Stacy's. I mean, it all started with day-old pita bread, correct?S Madison:Sort of yes and no. It was back in the 1990s, and it was my boyfriend at the time. He and I were... We had lived out of state, and then we moved back to Massachusetts. We didn't have jobs yet, or money, or anything. We ended up buying a food car, and we converted it into a sandwich cart, and we sold sandwiches made on pita bread. When you're running a sandwich place you can run out of tomatoes, you can run out of alfalfa, sprouts. You can run out of cucumbers, but if you run out of bread and that's all you're serving your sandwiches on, then you're closed. So, we always had to over-purchase. We had to have an excess inventory of all of this bread. So, at the end of the day we baked the bread into pita chips that we flavored, and we handed them out the next day for free, kind of as a thank-you to our customers for waiting in line.S Madison:That was kind of our first... Where they first started. Ultimately, we had to make a decision along our path whether we were going to have an indoor location... It was called Stacy's Delights, the sandwich place, so whether we were going to save enough money and try to get an indoor spot, or whether we were going to follow the path of the pita chips. Ultimately, we chose the pita chip pathway, and we kind of hoped it would have grown into a modest regional business, but with the expansion of the natural food business, everybody was like, "Oh, to be a natural food you have to have cane sugar and not regular sugar," and this, that. There were all these guidelines, and we were like, those guidelines? We're like, that's how we always made them. We just obviously fell into that category, and with a combination of a great product and two people that were overachievers with a lot of perseverance, that's kind of how the pita chip company was born.F Geyrhalter:That's so great. Stacy's is one of a few brands that is synonymous with the founder's first name, which I believe is tough to pull off at scale. I mean, how weird was it to sell Stacy's, a brand that carries your name, to Pepsi? I mean, it's a huge achievement, right, but from a naming perspective, did you feel like you were losing a little piece of you and you should have just named the chips, I don't know, BeBOLD Pitas?S Madison:You know, it's really... I love the fact that my name is on the bag, because when you're building a brand, trust is such a big factor, and it really kept me connected with the brand. So, it was important that people trusted it, and I think that as we did trade shows and as we got out in the industry that people understood what we were all about.F Geyrhalter:Yeah, no, absolutely. I heard you say on another podcast... I don't know which one it was, but you talked about that one day you saw a woman putting all of these Stacy's chip bags into her cart in the market, and then you approached her and you're like, "Hey, these are mine," and she's like, "No, those are mine."S Madison:Yeah. I'm like, "These are my chips," and she goes, "No, those are my chips," and she kind of gave me this weird look, like get away from my cart, you weirdo. Then, after that, I was like, oh, I got to be more careful. But you know what's funny... So, I'll tell you another funny story. Not to get sidetracked, but I'll tell you another funny story. We were doing the breast cancer walk, and it's something that we did in Boston, we've done in Boston. I mean, I've done it for more than 30 years. We were out by the Charles, it was five miles long, and we had just started the pita chip company, and as a company we brought everybody down there, and everybody did the walk together, and when we were walking along the Charles we saw, on the ground, an empty bag of pita chips.S Madison:Mark, my business partner, he and I looked at it and we stood over it, and it wasn't a bag of Frito, and it wasn't a bag of something else, it was actually a bag of Stacy's. We were like, wow, this is our first piece of litter. Then, we stood there, and Mark's like, "Well, we should pick it up," and I'm like, "Oh, I don't know. There's 30,000 people walking through here. This could be really good branding." So, we kind of went back and forth and we joked about it, and we're like, "Do we leave it here? Do we pick it up?" We ended up picking it up and framing it and putting it in the factory as our first piece of litter.F Geyrhalter:That is so great. That's really great.S Madison:It was funny.F Geyrhalter:Yeah, absolutely. I had another founder on this show whose food product is named after herself, Jeni, of Jeni's Ice Cream, who I believe-S Madison:Yes, I've met her too.F Geyrhalter:Of course, naturally.S Madison:She's beautiful.F Geyrhalter:Naturally, right? But let's talk about a different ice cream brand for a second, Hakuna Brands. Now, that is the brand that won Stacy's Rise Project. Tell us about how Rise came up and how Stacy's turned into a brand that empowers women entrepreneurs, or if this is solely Pepsi carrying on your legacy. I don't know how much you actually had to do with that, but it seems like it has your personal footprint all over it.S Madison:So, yes and yes. It is Pepsi carrying on the legacy, and although I'm not involved with the brand anymore, I still... They called me up last year... Or, two years ago, actually, and said, "Do you want to be involved in this?" And they told me about it, and I was like, "Oh my God, this is so on par with what the brand is about, and if I were there, the kind of thing that I would be doing." I just loved the program, so yeah, anytime they have that Stacy's Rise going on and I can help, I am 100% there. People are like, oh, they might think, oh, she's getting paid for that, or this, that, and that is like, no way. It's just such a great program that I'm in it wholeheartedly just for the benefit of all that that program can do to help women entrepreneurs get ahead.F Geyrhalter:Right, and that's what it does. It supports women entrepreneurs, food entrepreneurs to become the next big brand, and I think it's so interesting because you... When suddenly everyone wanted to buy Stacy's Chips, not customers, but actual brands taking over Stacy's, they were literally... Suddenly, you got a lot of calls of companies being interested to acquire your company, and I believe you didn't even take the highest bidder. You actually went with Pepsi, which wasn't the highest bidder, but it was the one where, surprising to, I'm sure, a lot of people listening, because Pepsi seems like such a conglomerate and Frito-Lay seems so different from Stacy's, because you felt like they would actually carry on the legacy the best. It seems like that actually really seems to work out with projects like the Rise Project. So, that's really amazing.S Madison:You really did your homework, didn't you?F Geyrhalter:Well, thank you.S Madison:You even read Wikipedia. I don't think I've done. I'm going to hang up and I'm going to go do that.F Geyrhalter:No, Stacy, I'm actually outside your house.S Madison:I know, where are you? You did your homework.F Geyrhalter:It's so funny. I think this is one of the episodes that I had the least amount of time to prep for, so I guess I absorbed the right amount, so thank you.S Madison:Well, you and me both.F Geyrhalter:Great, great. It really shows, right, and that is really... It's nice to see how the brand now, after that many years, is carrying on your legacy; it's really beautiful. This is a selfish question coming up, as I will be on the panel discussion next week at the Social Enterprise Conference in Boston, which is your hometown. I will be at Harvard, and it's going to be a panel about the politics of corporate citizenship, and I saw that Hillary Clinton endorsed the Rise Project. Not only you, but also Hillary, right, and boy, did Facebook explode with messages of support, as well as backlash.F Geyrhalter:So, when Stacy's Pita Chips, the company, put Hillary Clinton's endorsement on their Facebook, which you may or may not be aware of, but people just went crazy. People said, "I thought I liked Stacy's. Why would they want Hillary Clinton's endorsement? She's a disgrace to women." All the way to rather hilarious statements by a Trump supporter, who wrote, "Trump has done a lot more to empower women around the world than just writing a letter in support. Actions speak louder than words."F Geyrhalter:Wow, that's crazy stuff, right? Happens when you start getting into politics, even though it was just an endorsement letter by an important female leader for a project that helps female entrepreneurs. But I want to know... Now that I understand you are not involved with Stacy's on a day to day level, but how do you see the fine line, you yourself, with politics and brands taking a stance in 2020? Does BeBOLD take a stance? I mean, it is kind of in the brand, the idea of being bold, right? How do you go about politics and your brand?S Madison:Oh my God, I love this question. So, number one, I did not know that Hillary supported or endorsed or whatever, or gave us a nice mention about the Stacy's Rise program, and as far as I'm concerned, that is not a political thing, that is a... Listen, she went to Wellesley College. She is an extremely smart woman, and whether you liked her in politics or not, she has really risen just as a female just in general. I don't know her as a person, I've never met her, but I just assume that she's smart. Whether or not I voted for her, whether or not somebody else did has absolutely no effect on the quality of what I will say is my product or what I'll say is Pepsi's program for helping women.S Madison:What I say to the people who had something negative to say about that is that they're kind of missing the point, that we are just all women and we are all in the same bucket. We are all trying to help women rise, so we got to kind of get past that political point of it. That's number one. I am flattered that she did say something. Number two, the political environment right now is one of... I think of my kids, okay. Let me back up. I think of my children, and forget politics; forget the political environment. Just the environment that they are growing up in, some of the things that they have said... They're now 16 years old, two girls. Some of the things that they've said, even as far as, "Well, why would I have kids and bring them into this world? Do you know what environment, environment-environment, is going to be like by the time I have children?" And asking me questions like that, and I'm like, oh my God, and it's just heartbreaking.S Madison:Another comment that one of them said once was about school shootings, and, "Well, nobody cares that people go into a school and kids get shot." I'm like, oh my God. They're like, "Well, there's nothing we can do about it," and I'm like, oh. Comments like that, these are... This is what they're growing up in, and at their school they recently had a lockdown, just because some kid said something in the hallway, and it scared the piss out of the kids, out of the parents, out of the... As a parent raising children in this environment, you have... For me, I was... I am and I was dysfunctionally upset. I never pictured myself going back into the industry. I have always, over the years, for 10 years, just stayed on the periphery of the natural food business, I go to a trade show once a year, I'd sit on a board. That was just it. I never pictured this quote unquote serial entrepreneur going back into the business, because that's not...S Madison:I said, "You know what, I took all my risk in life and I don't need to do this again," and with this atmosphere that my kids are growing up in, and with myself, I look at myself and I say, "Well, you know what? I have a skill and I know what I'm doing, and I feel like I kind of have to step up so that not only do my girls see that yes, there's something that we can do, but to help the whole female entrepreneur environment." So, you know what? This is me, this is what I know how to do. I can do this, and I'm going back into it, and I am going balls to the walls, if I can say that, to get this product out there and kind of do it again, just because I can, and that's kind of my way to get a grip on the whole situation of this atmosphere, where the kids and where people are growing up. I'm sorry, I'll get off my soapbox now.F Geyrhalter:I love having you on the soapbox. Thank you for stepping up. I appreciate it.S Madison:Oh, it's just so frustrated, and I am... It's not a political thing, it's just... Look, everybody just take a fucking step back and look at your children, and you can believe that, whatever. But you know what I'm saying.F Geyrhalter:No, totally, totally, and I'm so there with you, and I can't wait to be on my soapbox at Harvard to talk about this too, because I'm very much of your opinion, and that idea of what is politics, what is common sense, and what is just the best for the next generation? I mean, there should be no politics involved. It's not about politics. A school shooting is not about politics, right? A brand taking a stance to support a good cause is not politics, and I think that's a huge, huge problem that we, as people, and even more so as brands, have to really figure out, because I think that it is, in a way, a responsibility of brands to speak up, because a brand has a huge influence. It's a fascinating topic. I still have a-S Madison:Yeah, and you know what? It is about inclusion, it's about being humanistic. Just the reality of that situation, and everybody needs to take a step back, and we with BeBOLD are... What's behind that, other than a great bar and blah, blah, blah, blah, blah, is that just sharing the optimism. There are so many people out there that just are positive people and are... If we all just kind of get together and make ourselves stronger and louder and embrace others, that kind of, "Hey, look, that looks like fun, let's come along," then I think that that's going to just be more than the negativity. That's my hope and that's kind of some of the bold part of what we're doing.F Geyrhalter:That's exactly something that I wanted to ask, is how did the BeBOLD name come about, and how is BeBOLD bold?S Madison:How is BeBOLD bold? So, you will find out as we start to get it more into the market, but initially, we went through so many different names to try to name the bar, but one day I was looking at not just my kids, but just in general, they were just starting high school at the time, and one of my girls decided to join a ski team, and they're really... She had just started the school and she had just started, and she didn't know how good the other skiers were. It was 90% boys that she didn't know, and some of the girls that were on the team were upperclassmen and they were probably better skiers than her, and I'm just like, "You know what? Listen, you go for one week and you give it a try, and see how it goes first before you decide yes or no that you're going to do this."S Madison:And she did. She walked into the room, she went on the trips, and sure enough, she did a whole semester of ski team and she did great and she loved it. But then I asked myself... Same thing with my niece. My niece started the high school from a private school, didn't know anybody. Moves like that that we forget as adults, to have that courage and to do that, and so when I'm asked about the word bold, I was thinking if you be yourself outside of your comfort zone, little by little, and do it again. We challenge ourselves the exact same way as kids in any grade challenge themselves. They do it, and we just assume they should do it. As adults, we don't do that anymore. So, I though, you know what? This works. So, [crosstalk 00:21:47].F Geyrhalter:It's super interesting, Stacy, because in a way, it seems to me... Also, besides your amazing successes, you had a lot of hardships in your life, right? I mean, there was a divorce, there was a fire at the plant. You overcame breast cancer and an autoimmune disease. And it seems to me that BeBOLD is synonymous with that powering through attitude, with that fist in the air, I can do this attitude, which now you're talking about your daughters and how you're trying to instill that into them. It seems like BeBOLD is a really personal brand now, even though it does not wear your name on its sleeves.S Madison:Right. Listen, with my other daughter, she's been doing cheerleading, she wanted to do cheerleading. She worked a year and learned how to do a roundoff back handspring. She doesn't have a gymnastic background. She's taller than I am, which puts her taller than 5'8". It was not an easy thing to learn, but she did it, and being bold isn't necessarily jumping out of an airplane. It could be something like, hey, you set a goal for yourself and you did it. Or, it could be you've set a goal to do something with your kids and you made that happen. Or, maybe your New Year's resolution is you're going to put away your laptop at seven o'clock p.m. every single night, and you did that. Stuff like that, that's all part of being bold, and we have a hashtag #whatsyourbold kind of campaign coming out, and we want to recognize those things, that everybody has their bold.F Geyrhalter:How far are you into the BeBOLD brand launch? Is it out there? Can people buy the bars at this point? Are you just wrapping up to it?S Madison:Yeah, so we are in Publix down in the southeast. We're in the Midwest in Myers. We are soon to be... Within the next couple months we're going to be in Shaw's and Stop & Shop up in the northeast. Of course, I have them at my juice bar, and I'm happy to sell them to any other juice bars or coffee shops, or things like that, because we love the independent accounts as well. But that is where our start has come from, so...F Geyrhalter:Yeah. No, totally, so this is a... It's much more grassroots, it's much more... It's really startup, right? It's interesting for you, coming from Stacy's and seeing it grow to a brand that was worth $65 million when you sold it, to be back in the startup world. It is a startup, in a way.S Madison:It's a total startup, and you know what's funny? People are like, well, you've already done it once and you know how to do it, and I'm kind of feeling... I don't know what the... So, I do a little bit know what I'm doing, but in some areas I just don't know. Look, in 1997 there was no such thing as a podcast.F Geyrhalter:Yeah, crazy, right? Yeah.S Madison:Right? And Instagram. I have my personal Instagram and I have the BeBOLD Instagram, and I have to get other people to show me how to maneuver it. It's almost like you... It's like the nature of the beast, and you have to have this, and you have to have that, and I'm like, why? We didn't have that. But now I'm kind of starting to see the value in all of that, and I'm just like, oh my God. I'm learning all over again.F Geyrhalter:Right, right, but there must have been a lot of brand mishaps that you went through with Stacy's, I mean, naturally, through the whole time.S Madison:Oh, yeah.F Geyrhalter:That I'm sure are extremely important for people not to step into... I mean, from naming to packaging to design to positioning, I mean, there must have been an immense amount of knowledge that you gained throughout raising your first brand to be that crazy, $65 million brand. Were there any brand mishaps that-S Madison:Oh my God.F Geyrhalter:... were just totally crazy, and now you're like, okay, this is something that we're definitely going to do differently this time?S Madison:Oh my God, that's so funny, because... So, we designed this bag, where kind of the words had angles, the chips had angles, and it was kind of chippy, the whole bag. So, we designed this bag and it said Stacy's Pita Chips. Big, Pita Chips, right on the front, because people didn't know who Stacy's was, and they didn't know what a pita chip was, so we felt first and foremost we had to write pita chips large so that people knew what was in this bag, because nobody would know if it was just Stacy's.S Madison:So, until we had a brand identity, then we kind of made pita chips smaller, and Stacy's larger, and that's kind of how the brand grew from a branding standpoint. But when we first started we had that pita chips really large, and on our first bag we put the P a little too close to the I, and it looked like... It you stepped back three feet from the shelf, it looked like Rita Chips, and I'm like... People would call up, "I love your Rita Chips," and I'm like, oh my God, what did I do, and so I guess my lesson learned, you can't just design a bag looking at it on the table. You have to take a step back and pretend it's on the shelf.F Geyrhalter:I mean, that's so important. When we worked with Evolution that's what we did all the time. We actually created all of these labels, and we created those shelf talkers, as they call them, and all of these things, and we literally just went to Whole Foods over lunch break, and we just exchanged a bottle with that bottle, took a step back, walked around the aisle, and there was nothing in there; there was no juice. So, we just hoped no one else would see it, and we kind of took a picture, and I mean, it's so important to try things out.S Madison:I'm doing that with my bars now too.F Geyrhalter:Yeah, no, I know.S Madison:Trust me, I did that. I would never make that mistake again.F Geyrhalter:Were there any moments with Stacy's where you had data, where you had early customer data, and it said, well, you should, I don't know, have a new flavor, or the chips should be bigger, or they should be crunchier, or the packages should be larger, smaller? Did you just totally neglect it and say, "Oh, well, great. Thank you for the data, but I'm going to go completely with my instinct."S Madison:Okay, so we never had any data. We never purchased data.F Geyrhalter:We're talking '90s.S Madison:Yeah, we never did that, and even if we did we couldn't afford it. So, our data was our connection to our customers. We had the pita chip hotline. If somebody called us, we would record... I mean, I guess it is data, but we would write down everything, just even on post-it notes, where somebody called and said, "Oh, I got your chips. I mean, they taste really good, but they're so crumbled, they're all broken." Then, all of a sudden, we would get all of these... We would see that when customers would call up that we would be getting all these broken chip complaints. Granted, now that they're owned by Pepsi, you don't get broken chips, because they have engineers that are really good, and it was the first thing that they were able to solve for.S Madison:But our customer service was always great. People would call up, we got some broken chips, we're like, "Well, you know what? Let me mail you some more. Thank you so much for loving them enough that you cared enough to call, and that means so much to us." Then, we wouldn't send them a coupon, we wouldn't send them... We would send them chips, and we would then follow up and say, "Well, how is this bag? Is it better? It went through the regular postal service. We just wanted to check in." Eventually, we put a recipe for stuffing or...F Geyrhalter:How to fix your broken chips.S Madison:How to fix your broken chips. We talked about launching a stuffing, because we're like, maybe we could take all the broken pieces and make stuffing, or...F Geyrhalter:That's really smart, yeah.S Madison:We had some recipes for Pesto Parmesan-Encrusted Chicken, which I must say came out really delicious when you use all the stuff at the bottom of the bag, but-F Geyrhalter:Oh, I'm sure. Yeah, it's really smart.S Madison:But we had to solve for that, and it wasn't that we went out and we bought data, we just really listened to our customers. Another one was we... Someone would call and say, "I love these chips, my grandmother loves these chips, but I bring them over to my grandmother's house and she cannot get the bag open." Then, the guy says, "But she really loves them, so I went out and I bought her a new scissors just for her pita chip bags," and I was like, okay, we have to figure out how not to seal them so tight. So, that's a lot of the times how we would solve for things.F Geyrhalter:That's so great, and a lot of people would just not listen to all of that feedback. They would be like, ah, it's granny, whatever, right?S Madison:Yeah, it was a fluke, it was one bag.F Geyrhalter:Exactly.S Madison:But we were running so fast and so hard, and we took every comment very seriously, because look, if you have chips coming off the line, hundreds at a time, if one person called, you have to keep in your mind that that's probably at least 100 or hundreds of people that might have had the same problem before you realized it.F Geyrhalter:Totally, totally. Yeah, I published my first book, I think, eight years ago or something like that. I don't know what it is, maybe eight years, and I literally... Just on Instagram three days ago, someone pointed out that there's a word twice on the list of words. It's like a brand personality thing, and there's all these words that your brands can be. It's freaking 50 words, right, but there's... Confident is in the beginning, and confident is, again, on column three, and I'm like, this book has been out for eight years or so.S Madison:Eight years?F Geyrhalter:I mean, it's been selling really well, and this is the first person that actually mentions it, and to me, it's still mind-blowing, and back to what you just said, I guess maybe people don't care enough about my book to actually write me.S Madison:Oh, my gosh.F Geyrhalter:That's what I learned. But it is amazing.S Madison:You know what's funny? Another screw-up we had on our bag is that we wrote on the back that the pita chips were great with hummus, and apparently we spelled it with one M, not two Ms, and it's humus, H-U-M-U-S, which actually means dirt. It means dirt you get from the ground, and some woman called up. I mean, nobody noticed. It was out there forever.F Geyrhalter:That's amazing.S Madison:And nobody kind of realized, well, do you spell hummus with one M or two Ms, until some woman, it was a teacher or something, said, "Do you know that your pita chips are great with dirt?" And we're like, "What are you talking about?" She's like, "You spelled it wrong on the bag," and we were like, "Oh dear God."F Geyrhalter:That is so good, so good, and I mean, to your team's defense, I mean, back in the day hummus wasn't as big as it is now, so [crosstalk 00:33:16].S Madison:We looked it up and everything. We thought, technically, it was spelled either way, but I don't know, apparently in this country you can't.F Geyrhalter:Well, I guess you can spell it with one M. That's funny. So, now with BeBOLD, when did you start actively investing in branding? I mean, with the name, the packing, et cetera, do you now work with a consultant or with an agency, or is it all very, very bootstrap?S Madison:Nope. Well, yes and no. So, we worked with one of the design companies, that branding and design that we worked with the pita chip company more toward the end. So, after we sold and Ike was kind of there for a little while, there was a great company, Culver Brand Design, and the guys are great there, and they're very down-to-earth. We all just related very well, and so when I launched this company I ended up using them again, and they kind of get it. So, yeah, I mean, that...S Madison:But other than that, we really didn't have any other agencies that we started with. We didn't have a team of people that we hired on, and when it first started it was just my brother and I, and then my brother came to me and he said, "Look, do you really want to do this again and do it the same way as we started the pita chip company?" He's like, "Do you really want to be out and packing boxes and doing this, this?" He's like, "Let's do it different. Let's fund the company. If we were to fund the company, who would you have running it?" Not doing your job, but running it, being in charge of all of... Getting this out and contacting this one, and answering the emails, and doing this, and all those thousand things that somebody does all day long.S Madison:We both hands-down agreed that that was a woman that was at the pita chip company. Her name is Maren, she lives out in Chicago, and I said, "I'd pick Maren." He said, "I'd pick Maren." So, then we called up Maren, who's now working for a large company. I mean, she originally worked for Quaker, then she left that big company because she wanted to come to a small company. She came to Stacy's, then we sold to Pepsi. Pepsi owns Quaker. Then she ended up back at Quaker. She's gone through a number of large jobs, and she was recently at a different one, and we called her up, and we're like, "You want to come run a company for us?"S Madison:She's like, "Oh, God. Let me get back to you." We said, "Give it a week or two, talk to Brett, your husband, let's see what... " We get a call a week later, and she's like, "I've made my decision," and we're like, "What?" She said, "I'm going for it. Brett and I agreed. You know what? We're going to do it." So, when she quit her job to run BeBOLD, we were like, okay, that was for us, our first enlightening moment, like wow, this is now real.F Geyrhalter:Totally.S Madison:Then, we had a staff... Still, we only have a staff of... We have some interns and just a couple of people, one of which is my cousin, so it's like... But it becomes real when people start leaving their other jobs, and there's a sense of responsibility. There's an energy there when you surround yourself with people who have the same goal. There's a real energy, and it just kind of keeps you moving forward and gets you excited about it.F Geyrhalter:Yeah, and accountability and payroll and things like that, and that's very, very important. What does branding mean to you, Stacy?S Madison:So, like I said with... Initially having my name on the bag is a tremendous responsibility, because people are going to hold you personally accountable. So, I learned that at the inception of what became a very large company, and I feel like getting that same trust to be associated with your brand is what branding is all about. So, it's the same thing. Our mission with BeBOLD is really for... It's an amazing product and it's just clean, and for people to understand, well, when they buy BeBOLD, right now we have two places on the shelf.S Madison:We don't have a whole line of products or anything like that, but we just have two bars, an almond butter and a peanut butter, but you know what?When you eat one people will understand what we're all about, and just... We don't bake the bars or anything like that. They're in the refrigerated section of... The refrigerated yogurt section, and when people eat a bar they're going to see it's just a handful of ingredients, and all we do is mix, press, package, and chill. There's no boiled syrups, there's no adhesives, there is no backing, there's no... Nothing is processed about the bar.S Madison:We take the almond butter or the peanut butter and we mix it with oats and chia and nuts, and we even use Brazil nuts, and people are like, "Brazil nuts? Aren't those really expensive?" And I'm like, "Yeah, but you know what? Brazil nuts are delicious." For me, eating a bar and getting a bite of one of those big chunks of Brazil nuts is... That's kind of like a gustatorial surprise. So, people will get it, and I think that that will come across, and for me, that's kind of what the branding is all about.F Geyrhalter:No, absolutely, and trust is so important, trust and experience. I think that kind of sums it up. As we slowly come to the top of your hour, and I know you've got a call to catch, do you have any brand advice for founders as a takeaway? You've been going through so much. You're obviously, with the Rise Project, helping female entrepreneurs that want to follow your footsteps. Do you have any thoughts of what you can tell these women to actually create a brand?S Madison:God, I've worked with so many companies that I have seen that have great products, and they don't make it. On the flip side, I've seen so many products that are out there that have made it big, and you're like, oh God, how do people choke these things down? So, I think if you have a great product and you stick true to your product and integrity of that product, and then, at the same time, you have to figure out how am I going to commercialize this in a way that I can make enough money and not go out of business, and build that brand. I think that that brand comes from...S Madison:To grow that brand, it comes from making those everyday decisions, because when you're a small business you have to make every decision like it's your last, or like you're drowning. You can't just assume... Even if you have some private equity money come in, or venture money, or whatever, you have to be so careful the way that you spend that money, and you can act like a big company, but you can't spend like a big company. Even when we're launching BeBOLD, we're in a position where we could... We've properly financed the company, but it doesn't mean that we can participate in each and every promotion and advertisement and all of that, because we're just going to blow through money and not have anything left.S Madison:That is not how you're going to grow your company. You can't look at what do these big companies do and say, "Okay, well, I'm just going to do that, and if I just spend that money, my brand is going to be successful," because that's not the way it happens. You really have to... When it comes to those day to day decisions, those little ones are really, really important. So, when you build your brand, you have to kind of be careful of those day to day decisions, because those are the ones that could put you out of business. Getting involved in the wrong programs or programs that aren't equivalent to the level of the company that you're at and don't... You got to remember, you have to...S Madison:When you don't have money you have to get creative with how are you going to grow the business? How are you going to get people to try it? Not just to try it and feed the masses, but while you're feeding them, if they love it, how are you going to get them to remember it? That's the branding piece of it. So, if you're going out and you're sampling, think of am I sampling in front of a store that sells the product so people can go in and buy it, as compared to oh, there's an opportunity to sample here, and people will taste it. That was good. They throw the wrapper away, and then that's it.S Madison:So, even with Stacy's, when we went on... We sampled at a ski resort, and we gave away chips, people would eat it on the chairlift, they go, "Oh, those were so good." They'd get to the top, and they would throw the bag away. And I'd think to myself, well, now what are we going to do? How are they going to remember the name? How are they going to get them again? We branded from the time they get on to the time they get off the chairlift, and then it's gone. So, with every bag of chips we got a sticker.S Madison:You could put it on your pole, you could put it on your jacket, and it says Ski Simply Naked, and it had the website on it. Again, before socials and all this. So, everybody was skiing around with these Ski Simply Naked stickers on them, but that's the kind of thing. So, thinking beyond the I'm just going to sample as people get on the lift and get off the lift, and so the most important piece of branding is you got to think of branding as remembering, and how is whatever action you're taking going to get the people to remember your product?F Geyrhalter:Absolutely love that. It's such a great actionable example too. Wise words, wise words. Stacy, we're coming to an end. Listeners who fell in love with your brand, where can they find BeBOLD bars online right now to dive a little bit deeper?S Madison:So, you can go to... Our Instagram is, I guess, if I'm saying it right, it's @beboldbars, B-E-B-O-L-D-B-A-R-S. My personal one is stacybebold, which you won't see anything nearly as interesting, probably, as the other one. Our website is there, it's beboldbars.com, and even if we're not in stores, there's a place there where you can tell us what store you'd like to see them in, and then we will go ahead and we'll try to get into those stores. You can also order online, and we can give you a code too. We can do HTM, Hitting The Mark, or whatever you want your code to be. What do you want your code... Give me a code and we'll give it for your listeners.F Geyrhalter:The code is HTM.S Madison:Okay. So, you can go online and you can use code HTM and place an order, and you'll get a discount off of your first order, compliments of yourself.F Geyrhalter:Awesome. That's great. Thank you, Stacy. This was so, so informational. It was so much fun. There were so many insights. We're so appreciative of your time. Thank you for being here. Really appreciate you.S Madison:No, I'm flattered that you had me, and thank you so much for having me on.
Learn more about Lewis & LlewellynSupport the show – and get on monthly advisory calls with Fabian (in groups for both creatives as well as entrepreneurs) Full Transcript:F Geyrhalter:Welcome to the show, Mark.M Lewis:Thanks for having me, Fabian, I appreciate it.F Geyrhalter:Oh absolutely. I'm glad you could make it. You're a civil trial lawyer and have been ranked as one of the top 100 Attorneys in California. Several members of the Fortune 100 I read on your site, hire you to resolve a wide variety of complex, high stakes business disputes. In fact, there's one Fortune 100 tech client that has hired you to resolve over 200 separate matters, which is rather impressive. For the past eight years, you have been running Lewis and Llewellyn in San Francisco. It's a San Francisco based law firm and interestingly enough, a few episodes ago on Episode 14, I featured another lawyer with his firm on the show. He's a young entrepreneur. He runs a law office in San Diego that he built into a brand that really totally goes against the norm. So his firm's brand is built on boldness in an industry that is pretty much known for sameness, right? And blandness.And the firm calls their client portal, Lawyers Shit, which I kid you not. It's completely crazy. It's hilarious and quite amazed at the same time, right? But he took very bold move and he can do this since it's a very young firm that caters mainly to creatives and he would likely never be hired for litigation's given his branding, right? So there's a positive and a negative, but it's literally on the opposite spectrum of where Louis and Llewellyn would come in. And that's why I love having you here. And I know that branding is very important to you. We had the opportunity to chat when you and I met in person a few months ago and branding clearly shows on your firm's representation online that it is important to you. What role does branding play in your area of practice or for you personally, as you've been growing your brand?M Lewis:It's a good question and yet we can't really get away with this type of branding that you mentioned before. That's not our brand. And our core brand at Lewis and Llewellyn is a sophisticated high stakes trial counsel for key business disputes. And our brand is critical to our success because it's how we stand out amongst a very crowded field of attorneys that provide that same service. And so really what our core brand is with our business litigation is offering the same type of aggressive, talented, zealous advocacy that you'd find at really the leading law firms of the world. Just on a smaller scale, which allows us to be more responsive and more nimble and usually almost always delivering it at a lower price point. And so, those are really the key parts of our brand and it's critical to get that across.F Geyrhalter:And I'm sure it's built on a lot of personal trust, right? And then that to me is something that I always find fascinating because law firms traditionally, and also with your firm, very often use the name of the partners, the founders of the firm. And there's this fine line between personal brand and yet the actual firm as a brand. How do you walk the line? Or how do you encompass that on your daily journey with your clients? You versus the firm.M Lewis:Yeah, yeah. There's no distinction, it is one and the same. You're absolutely right. And I think it's the reason why most law firms bear the names of their founders. And it's especially salient for us because Paul Llewellyn and I are the faces of the firm and we are the brand. And we are the lawyers here leading the charge at the firm. And so we really believe, and this is from Paul and I all the way down the chain, that the brand of our firm is really the identities of our individual lawyers and our entire team, in fact. And you'll see, if you visit our main website. You'll see each and every one of our 14 people with a full description of who they are and what role they play on our team.Because we're proud to stand behind our brand of our incredibly talented team. That's one of the ways that Paul and I have been so fortunate over the years is to have just a terrific team of people. And that's what we're selling is our team and so we really think it's important from a branding perspective and a marketing perspective to put those people out in front and right in the center of the bullseye to show potential clients and even occasionally opposing counsel, who we are. And why they should either hire us or be afraid of us.F Geyrhalter:And obviously your personal values of you and your partner in the firm, very much designed the core values of the firm, I'm sure. And during the hiring process, who really fits into the firm, it all must come back down to your own very strong personal values of what you believe is right and wrong and what you want to fight for.M Lewis:Yeah. I think that's absolutely right. I mean a bit more detail on us is that when Paul and I founded the firm a little over eight years ago, it was just the two of us to begin with. And you mentioned how important personal identity is. Well the first four or five people that we hired at the firm were individuals that we had previously known and we were very, very close with preexisting the firm's inception. And so precisely because of that, we decided that we absolutely wanted to promote our brand as a brand of individual lawyers and what we have to offer, in general. And because of that, we are very involved and monitor closely what our brand looks like and then how we can manage that. And because it's difficult, right? Because we both want to hit a mark of being a top notch civil litigation boutique and that has certain hallmarks to it.You have to be traditional in some respect. Everybody on the website is wearing a suit and there are certain things that people expect to see when they see a law firm website. But part of our brand is that we're trying to do something different, which is, be a more nimble firm, a leaner firm, trying to be more strategic and offering just a slightly different model than what the big firms offer. So that's what we try to really reflect with our core brand, which is a little bit of the same and then a little bit different. And giving clients the trust that we offer a product that's worth purchasing.F Geyrhalter:Well in talking about personal values and also talking about how you are different. In addition to your fairly complex commercial litigation practice, you are a passionate advocate for victims of sexual abuse. And you have created a spinoff brand that can be found at the highly descriptive URL sexualabuselawfirm.com. Now that brand spinoff, so to speak, has a very distinct, a very emotional, very convincing tone of voice.And just to quote from the site, which I have in front of me, it says, "As parents of young children, we find the statistics regarding the prevalence of sexual abuse to be profoundly upsetting. As lawyers, we are compelled to devote our professional expertise and resources to ending the epidemic of senseless abuse. We seek to effect real change in the lives of those impacted by abuse, as well as society as a whole. By strategically bringing lawsuits that shine a spotlight on the individuals and entities that condone cover up or turn a blind eye to sexual abuse." Now this is well crafted, very consumer facing, very emotional brand voice and also design throughout the entire site. It must've been a very different journey from when you created the law practice brand. How was that process like?M Lewis:Yeah. And that's a great question. And before I get to the branding question, just a bit of a backstory on that.F Geyrhalter:Please, yeah.M Lewis:You know, so we opened the firm, like I said, about eight years ago. Both of us, Paul and I, having a very extensive background in complex civil litigation, mostly for businesses. Occasionally, high net worth individuals. And so we opened the firm, it was a smashing success from the beginning and we were far busier than we could have hoped for, even in our first couple of years. During that startup phase, we were also approached by a potential client who was very close to the firm on a personal level. She had been the victim of a horrific pattern of sexual abuse when she had been a middle school and then high school student here in the Bay area.She came to us to help her find a lawyer to help her pursue a claim against the school district that failed her so tragically. We looked high and low for a law firm to take her case. We approached the best plaintiff's personal injury firms in the country and none of them wanted to help her. They were all worried that the claims were too old, that too much time had passed, that the statute of limitations had run. But in understanding her story, we thought, this woman deserves our help and there was nothing better that we can do with our talent and our degree's then to help her fight for justice. So we brought her on as a client. We filed the lawsuit in Contra Costa County, here in the Bay area and it was a groundbreaking lawsuit. The school district claimed that, yes, the statute of limitations had run. But we defeated that argument by saying that she only became on notice of the claim during the course of a very recent police investigation, which revealed the negligence of the school district.The case then settled and it was at the time, the highest award for a case of its type in California. And so that spawned publicity and we were approached by several individuals in similar situations. And we decided as the firm, that we could do both. Most commercial civil litigators wouldn't say, "I'm going to stay in my lane." And we decided, you know what, we're going to start something new. We've already started one new thing, but that doesn't mean we can't start two new things. So we decided to continue working on these cases. We're very selective about the cases that we take and our paramount goal is to help people that need our help. And we know what we've learned over the years, to circle back to the branding point, is that the target demographic or the target market for our sexual abuse practice is totally different from the target market for our core business practice.For example, our core business practice. Usually we're getting referrals from other civil litigators or in house counsel, folks that have lived with litigation for their lives. They know the ins and outs of litigation. On the other hand, our sexual abuse target demographic are just people and it's victims, it's families victims, and it's much more of a lay person audience. And a lot of times these individuals are encountering the tragedy of sexual abuse for the first time.So we found it very important to put front and center on our abuse website. What is the process? When can we help? What are some resources? How can we help you cope with this, even if you don't ever even hire us? Right? So it's an initial touchpoint for people who are very often in the worst thing we'll ever encounter in their entire lives. And what we want is to put our potential abuse clients in a position where they feel comfortable talking to us about this. That their [inaudible 00:13:41], if they tell us what happened to them, which is an incredibly difficult process to go through, that we'll listen and that we can help them get to a place that they need to get to.F Geyrhalter:And the way that you basically educate your audience that it's never too late and here are the ways that we've done it in the past. I think that hope that you provide them with in that educational experience on your site, that is something that they really need at this point because they haven't really heard anything like that in the past, most probably. Because they didn't even know that they could still speak up. Because a lot of the cases that I read on your site, not all of them but some of them, are obviously from the past, right? I mean, that is like 10 years ago, 20 years ago, plus.M Lewis:Yes. That's our core specialty for our abuse practice is cases in which significant amount of time has passed. That's the niche we've really carved out and it's one in which we feel incredibly passionate about because we know from our work on these cases, just like you said, how difficult it is for a victim to have hope. How difficult it is for a victim to know that he or she can have a voice. And that's again what we are trying to encompass in the website there. And the brand is that to say, "Look, we'll help you, we'll do your voice. You can come talk to us and we'll make sure that you have a voice." And if you read anything in the literature about some of the systemic problems stemming from a abuse, is precisely what you said, is that they don't have hope, they don't have a voice.They're worried that nobody will believe them. They're worried that nobody's going to listen to them because so much time has passed. They're worried that they're going to get blamed for what happened to them. You name the effect of abuse and I can guarantee you that we've encountered that. And again, that's something that we try to convey through our materials, which is, we've done this, we know how to help you and we know how to talk to you. Because that's something that we had to learn. And it's a different skill than knowing how to talk to the head of litigation at a Fortune 100 firm who, like I said, has probably practiced at the apex of civil litigation for three or four decades. And so to be able to communicate differently to either of those audiences is something that we have really tried to master. And we tried it. And the starting point of both of those conversations are the two different brands.F Geyrhalter:Well, and that begs the question though with keeping these two brands separated clearly but you also align them, right? I mean the call outs on both sides that educate the audience of the synergy between the two practices. How does that secondary brand, the sexual assault law firm we just talked about, how does that affect relations with new and current clients from the main firm? I am sure that there is in my eyes, I hope to be a positive effect on the way that they see your main brand.M Lewis:Yeah. I would say that that has been the biggest struggle that we've dealt with in terms of a brand identity. We wondered initially and this is going back about six years, how do we tell or communicate to our business clients that we also do the sexual abuse work? Because you would imagine that a lot of business clients would be slightly put off by the abuse work. Not because they have a problem with the cause, I think everybody can get behind the cause. But in the sense that you only want a heart surgeon when you go in for heart surgery. You don't want somebody who also may do some ears, nose and throat, even though it's slightly related. So we frankly had numerous heart to heart conversations with some of our most trusted business clients. And we talk to them about what we intended to do and the support for it was overwhelming.And I think it's for a few reasons. One, was like I said, "It's a cause everybody can get behind, which is fairly non controversial." But then two, we are different and there is a recognition that we're not like every single firm on Wall Street or in the Valley or what have you. And then third, this isn't really a branding issue, but our business clients like that in our abuse practices, we're able to get many more opportunities for some of our younger lawyers to do new and interesting and different work that may not exist in the business litigation context without going too deep into the rabbit hole of litigation. There's a different dynamic in the abuse cases where a lot more of them have more depositions, more court appearances, they may be more likely to go to trial for a number of different reasons.So, the abuse practice helps our lawyers keep their pencils very sharp in a way that is unique to that industry or that vertical and it doesn't necessarily exist on the business side. And our business clients like that we play on both sides of the field, both the plaintiff's side and the defendant side. Because it really helps us keep, like I said, "Our skills and our pencils sharp when it comes time to litigate."F Geyrhalter:It makes perfect sense. And I'm almost certain that it positively affects your company culture as well, right? I mean, does it perhaps even help recruit new hires when they learn about that side of the company?M Lewis:Yes, absolutely. It's something we talk about from the very first interview we have with any potential lawyer or any potential staff member that joins our team. We have to make sure that our clients feel comfortable with this type of work. In a way we wouldn't want, for example, to inadvertently hire someone who has been so closely touched by this issue that it would be a trigger for them to work in our environment, right? So we get that out front and center and it's wonderful for the company culture because everybody is passionate about it. Like I said, it says on the website, most of us are parents of young children and we get our firm family together multiple times per year and it is absolutely something that we can all agree on and we can all put our backs into.F Geyrhalter:I think it's interesting that before when we were going into one of the biggest brand pain points that you had in the last eight years really, was figuring out from a brand architecture point of view, how do you divide these two brands or do you not? And what is the synergy? And you actually came to a conclusion to create this [dissymmetry 00:21:29], you'd have them separated by talking to your clients. So you literally, you just interviewed them and said, "Look, here's something that we're thinking of doing. How do you feel about that?" Right? So the internal discussion only got you that far and then you actually reached out to your clients to get the answer for your brand pain point.M Lewis:Yeah. And as far as that goes since then, the response from the business clients has been even more positive as we've gotten more accolades and more press coverage for the work we've done on behalf of victims. We'll now get approached by business clients leading with, "Oh, congratulations on this verdict." Or, "We read about one of your wins in this other space and we really are proud of you and we're proud to be affiliated with you." If you put the shoe on the other foot, what do we talk about with our abuse clients about our business practice? That's a separate question because a lot of our abuse clients, if they're talking to several lawyers in the interview phase, many of the other firms that offer this service only represent victims, right? They may only do sexual abuse cases, they may only do personal injury cases.And so part of our brand on the abuse side is to say, we've carved out a specific niche of winning in very difficult abuse cases where there's some hurdle to overcome, like the Statute of Limitations, if a lot of time has passed. And we're all extremely well trained and highly educated business lawyers that have developed this additional expertise. And what we'll bring to you is a level of sophistication in lawyering that you won't find at a more classic plaintiff's firm that rely typically more on volume. They bring in a lot of cases, try to settle them quickly. This is, of course, a stereotype or a generalization. But that's how we try to stand out that we have a niche product that we market just to a specific type of victim. And we really focus on that as our core on the abuse side.F Geyrhalter:And I think it's so interesting when you first think about it. You immediately think, "Oh my God, these are so separate, this will be a conflict." And the more you actually practice it, then the more you let these two brands work together, the more you realize that it really works well together and it actually benefits each other. And I love those stories when people do something that is very different that other people would be afraid to do and then they learn that it actually is a very, very beneficial brand move to do that.And I'm sure that like you said, "On the one side you deal with large corporations like Oracle, Yelp, Tesla, and then you deal with sexual abuse victims who on the flip side love the fact that you can work in this Fortune 100 space." And if you can do that, of course, you can help them, right? It's it's really great how this all came about. Now back to focusing on Lewis and Llewellyn, what is a word that can describe your brand? So if you think about all the law firms and then you think about your particular brand essence, how would you describe the brand essence, in one or two words?M Lewis:That's such a difficult question. Always asking a lawyer to do something in one or two words is a really challenging task. I would really say trust. And I really think because it operates both directions. Over my career, I've really come to the realization that the foundation of a good attorney client relationship is trust. And it really does go both ways. And so I want to make sure that I can be shown and displayed as a trustworthy person in the very first communication. And that similarly, the rest of my team can make that same impact from the moment of first impression. And to communicate that first and foremost then, I want to make it very clear to the client that trust is a two way street and that I've got to be in a position where I can trust my client, as well. And so I think that's really where we start and it is hopefully where we finish.F Geyrhalter:No. That's a really, really important point, that the two way street, that most people don't think about when they think about a law firm brand. But trust going both ways is crucial for any litigation to work in favor. Now look, we talked for a little bit about two very different brands that you build. One is more of a brand than the other, right? One is more of a practice. The other one is turning into its own consumer facing brand. You've been at this for eight years. I think you started as an intern in the White House. Is that correct? I saw that on your LinkedIn.M Lewis:Yes. After college, I went straight to DC and was an intern in the Speech Writing Office for President Clinton. Ended up staying on there as a staffer and was all set to go to join the Gore Administration and then Florida happened. Life got in the way and the law came calling. But yeah, that was absolutely my first career. My first passion really was working as a speech writer in the Clinton White House.F Geyrhalter:That's amazing. And I'm sure some of that speech writing talent now is being infused into your brand copy. But from back then, when you were at the White House to today, having built these two brands, what are some pieces of brand advice maybe, as it even surrounds the idea of building trust with a brand. Or any brand advice that you have for founders? And I know you work with a lot of tech start ups, as well. Any thoughts, any last pieces of advice that you can share based on your impressive journey?M Lewis:Thank you. I appreciate the compliment. I think the key to our success has just been trying to be everywhere all at once. And you know, the key to our success, I think from a branding perspective, has been to really be top of mind when a client needs our help. And it doesn't matter whether that's a high stakes business dispute or a sexual abuse case. You really have to use a bludgeon to hit people over the head and make sure they know what you're doing and that you're out there and ready to help them. You have a lot of people that the service they're offering is a product, right? We're a service provider. And so we need to be top of mind for any potential client at the very moment when the issue arises for them. And so our branding philosophy is to have a very clear brand for both the abuse practice and the business practice. And then to try to get that brand out in front of as many eyeballs as we can, so that we're top of mind when when something comes up.F Geyrhalter:I mean, being top of mind and having clarity in your offering, it is actually very similar to consumer products, as well as service offerings because that is what it's all about. People need to know that they can find you, how they can find you and what you stand for. What you're all about, made it be an organization or made it be a nonfat yogurt. It's a very similar path and I even think that with B2B services, as you provide them, there is a lot that one can actually borrow from how consumer product advertise and brand themselves.M Lewis:Well and that's precisely, I mean, you and I met at the NPR event for how I built this. And you're precisely right. And that's why I got so much out of that as a founder and an entrepreneur, is to really learn the lesson that the principles of marketing ... And we call it in the law, we call it business development, right? That's what we really talk about. And the main principles are really the same. And it's super helpful to hear the stories of everybody's struggles as they try to succeed on this road of entrepreneurship. And you know, that's just something that we continue to hammer on every day.F Geyrhalter:Yeah, absolutely. I totally agree. And as you know, we have many entrepreneurs and many founders who listen to this Podcast, as well. And for those who are interested in finding out more about your firm or about the sexual assault law firm practice, which by the way, I would invite everyone to find out more about. Because it is just, it is a story well told and it is a very inviting and well designed site. Where can they find both of your practices?M Lewis:Yeah. So the firm name is Lewis and Llewellyn. There's a lot of L's.F Geyrhalter:Yes. Please spell that.M Lewis:It's Lewis, L-E-W-I-S. Llewellyn, L-L-E-W-E-L-L-Y-N. Or you just Google Lewis Llewellyn Attorneys and you'll find us there. And then our abuse website is sexualabuselawfirm.com and either of those cross link to each other as you mentioned. But yeah, it's Marc Lewis, M-A-R-C, L-E-W-I-S. And that's usually if you do a little Googling, we're told that we can be found quite easily, especially now. So thank you for asking and that's how you find us.F Geyrhalter:Oh absolutely. And that was a good strategy with the very descriptive domain name for search engine optimization, as well. It seems to work for you, which is really, really great.M Lewis:Thank you.F Geyrhalter:Thank you, Marc, for having been on the show. I know when we met, you were a law firm in midst of tech companies and consumer product entrepreneurs. And you stood out in a very great way. And then when we started to talking about your own brand architecture, hurdles and what you went through. And especially with your sexual assault law firm practice, I knew I had to have you on and I'm so glad I did. It was a really nice conversation. Thank you for taking the time out of your busy day and for being on the show.M Lewis:Thank you Fabian. I really enjoyed meeting you back in San Francisco and I look forward to keeping tabs on you as you continue to succeed.F Geyrhalter:Thank you. I appreciate it.
Learn more about BrightStarSupport the show – and get on monthly advisory calls with Fabian (in groups for both creatives as well as entrepreneurs) Full Transcript:F Geyrhalter:                 Thank you so much for being on the show, Shelly.S Sun:                           Oh thanks for having me.F Geyrhalter:                 I know your time is very, very valuable and I appreciate you taking the time talking about something that I'm sure you usually don't get asked to talk too much about. So first off, congrats on your amazing success with the BrightStar brand, which you grew to over $300 million in system wide sales in under 10 years since launching the franchise in early 2006, which today of course must be a much higher number. And the brand has over 340 locations throughout the US. The obvious question, how does one get into running a home nursing empire?S Sun:                           Yeah, thank you for that. Yeah, so right now we're a little over $500 million in revenue.F Geyrhalter:                 Oh wow.S Sun:                           So across a great franchise network. So we've continued to grow and I think it was really firsthand experience. You know, I was looking for care for my grandmother back in late 2001 and she needed services that were both nonmedical in terms of making sure she was okay and eating well and getting bathing and help going to the bathroom, things like that. But she also had late stage cancer by the time that it was diagnosed. And so she needed pain management as well. And so therefore, nursing services. And so after talking to advisors and those within the industry recognized that we were not the only ones that had that type of need. And so we started the business in late 2002, about a year after looking for home care for ourselves. And it really resonated with a lot of families having one brand that they could trust that they knew were going to have great caregivers each and every day, and we've continued to grow from there.F Geyrhalter:                 And you know that's how great brands are being started, so I learned over and over with guests on this show, there has to be this huge emotional tie in and there has to be a problem that someone just sees themselves. Otherwise, just starting a franchise for anything, usually, is more difficult and you can tell if someone does it with heart. And building a brand is one thing, but building a brand strong enough to be franchisable but also still flexible enough to give the franchise owners a sense of belonging and creativity is always something I greatly admire. Can you share a bit about how you crafted the brand and then how you ensured you actually set it up for franchise success?S Sun:                           Yeah. I think it was a really about understanding what the customer needed and really understanding that customer journey and making sure what our customers needed, that we were providing that base of differentiation compared to what was in the marketplace. And then making sure we were developing the support systems for our franchisees to make sure that they were able to deliver to their customers and their marketplace that differentiated service. So we invested early in our journey to make sure first we could replicate the model. I didn't just have one company owned location when I chose to franchise, I had replicated it to a second and third to make sure everything was well documented before we rolled out and expanded. I invested a lot of money in technology so that all of our franchisees were on the same network, the same platform. So there was consistency in how we scheduled, how we paid our caregivers, how we billed our clients, how we looked at the metrics for the business from the very beginning of our franchise. We opened our first franchise in early 2006. I developed the technology in 2004, so every bit of data on every customer has been able to be benchmarked and every single locations performance has been able to be benchmarked. So I think it allows people like franchising is in business for yourself, but not by yourself. We have both the data and the support system to be able to help our franchisees know what good looks like and be able to help coach them to make sure they're delivering on that experience. Many of our franchisees, like myself, don't come from a healthcare background, but 85% of our franchisees had a family experience with home care before they became a franchisee. So they want to do it the right way. We need to give them a path to be able to follow that in a way that honors what our customer is looking for. So we went for Joint Commission accreditation and started that process in 2008 and started to roll it out across our brand in 2010, so that all of our franchisees were following a clinical and quality and safety protocol that's recognized by the health care industry in terms of hospitals and nursing homes. We were one of the first to bring it to a private duty home care, but we wanted to be able to operate and hold ourselves accountable to the highest standard of home care, which is really what the brand has been about from the very beginning.F Geyrhalter:                 Yeah, you talked a lot about systems and standards that need to be in place. I'm sure that once you were at that important point of the third location where you knew, "Okay, this is the time where we might go set this franchise free because we tested enough." How did this affect the brand from a branding perspective. And I'm talking in the nitty gritty, I'm talking about you know, logos and style guides and all of this has to be consistent once you go on a national level. But I also noted you said in another show that I listened to actually on my drive in today, and it was so funny because here I am about to interview you on your brand and you said on the show you're not a natural marketing mind. So you brought some people on the board that had that mindset. But how important early on was the idea of branding and the idea of brand thinking to the success of those first three locations?S Sun:                           Yeah, great question. And I am, I'm a finance and accounting person by background, so the opposite side of the brain from brand and creativity. And so we really focused on in 2002 to 2004 making sure that we had differentiated service for our customers. As I knew that I was onto something after successfully growing the business from one to three company owned locations and was thinking about franchising, my original brand, which was cheap to execute healthcare solutions, was very generic and would not stand apart and be a brand that I could build off of at a national scale. So I brought in a branding expert who is actually from Australia, who is the branding expert for Robert Kiyosaki. So James Burgin was the individual that I worked with. I said, "James, I loved what you have done with Robert Kiyosaki to make it so approachable for how do you make sure that you're capturing a way to grow and scale, thinking about being an entrepreneur versus being an employee. And it just really made it user-friendly." And I wanted to do the same thing with our brand where it was approachable, easily understood, but stood out from all of the brands that had comfort in it or home in it. And so if you went through 10 of the brands in home care, and when we started franchising, they all sounded the same. And I wanted us to sound different. And it came to working with James of, "Okay well let's go through the experience of care." And it's so much about really making sure people are well taken care of, in some ways roles reverse at the very end stages of life in terms of the children then arranging for care for their parents. And our parents that had done such a great job arranging for our care growing up and in some ways roles somewhat reverse at that very end stage. And so we started looking in nursery rhymes, "Star light, star bright." "Twinkle, twinkle little star." which is how BrightStar the brand came to be. And something that we thought would have legs, actually had nothing to do with my last name being Sun. I've gotten asked that question many times over the years and I have no ego. So I'm like, "It had nothing to do with my name." It was really kind of going back and thinking about that full circle of life and looking at nursery rhymes and something that really would stand apart in the marketplace as unique, because we believe what we offer to our customer is very, very unique and so how did we make sure we didn't sound like everyone else knowing we were executing the model and the trust that our customers could have and the services we delivered was very unique. And so that's how the BrightStar brand came about and we worked to make sure that, you know, how was that logo going to show up and all the trademarks were filed in 2004 for the brand, for the logo mark, designing it, style guides, making sure that it was consistently applied and was part of our operations manuals for our franchisees from the very beginning about how it needed to be used. That's obviously evolved with time as I've had more experts, either internally to the company and I've gotten an amazing head of marketing now, Theresa Selmer joined us about six months ago and is doing a great job for the brand. But I also, to your point, have had advisors on my board that brought me that expertise in their thinking. I've tried to fill out my board to be a nice compliment to my skillset so that I make sure that I'm continuing to grow as a CEO and not leaving any important function behind. And marketing and branding would be a critical one for us to be able to grow and evolve at a national scale, but it is not the way that I would normally think. I really focus on the service delivery, but how do we make sure there's a brand there that is recognized and differentiated both in its name and how it appears and where it shows up from an advertising perspective, while we focus very heavily on the operational execution as well.F Geyrhalter:                 There was so much that you just said that was so important. And I mean first off, I absolutely love the story behind the name, which I would have never guessed in a million years. But I love that narrative. I think it's so natural and it's so poetic in a way to actually think about it on such a deep and emotional level. Last night I watched a few of your brand's videos and I stumbled across one that celebrated a caregiver by the name of Heather Bailey and her client, Brian. And I was literally moved tears. And then I saw a Facebook comment, it was on Facebook so I saw a comment, below the video and let me read it to you and our listeners really quick. It said, "This is my sister. I cannot put into words how proud we, her family, are of her. We've always known about Heather's heart and her giving ways. Now the world knows. Thank you BrightStar for giving Heather the platform she needed to shine her brightest." And that is the family, that's a sister of the actual caregiver. It's not even about the client, right? So Shelly, franchises are all about people. And you as a brand celebrate them very obviously. So when you are in the business of people helping people, what are the different ways that BrightStar puts it's, oh my gosh, like 100,000 plus employees and clients and hundreds of owners on pedestal daily. Because I know culture and people is very, very dear to your heart.S Sun:                           Yeah. It's absolutely all about the people. And so creating a mechanism, our Caregiver of the Year program is very special. We have a Nurse of the Year program as well. We have franchisee awards and celebrations at their annual gala, which is where we first and foremost are celebrating our caregivers. Because without our amazing caregivers delivering such compassionate care each and every day, none of us have the honor to serve and be a part of this brand. It starts with our caregivers first. So the celebration at our awards gala always starts with celebrating our caregivers and celebrates them throughout the evening. We have hundreds if not thousands of nominations that come in. It's the most rewarding and yet the hardest part of the job is trying to find only four that we're going to recognize as the regional caregivers of the year because there are thousands of amazing stories. We hand out the nominations and boxes of Kleenex across our corporate office and across a group of our franchisees to narrow those down and choose the most remarkable stories. But they each are remarkable and we don't lose sight of, at the end of the day, our job, our mission is about helping take care of others, moms and dads and grandmas and grandpas and their children. And that's a complete honor and huge sense of responsibility to serve and hold up those that are providing our care. So we have a deep culture of recognition, gratitude and celebration that does to your point carry through I think first and foremost our caregivers because that's where it all starts. But making sure that we're recognizing our franchisees amazing office teams as well, have a branch leader of the year that gets recognized as part of our gala celebration. And then we're recognizing our top franchisees that are delivering great and the highest customer service and care to the families that they serve in growing their businesses. So it's easy to take the time and make sure we're focusing on operational things, but we have to take the time and celebrate that amazing execution and heart that really is at the heart of what BrightStar is all about.F Geyrhalter:                 Absolutely. And you're doing such a fantastic job as a brand to not only celebrate these individuals but to actually tell their stories. And storytelling is so important to branding obviously, but a lot of companies try to craft these stories and create these stories. And for you it seems like it is such a logical and very organic and very, I would say "easy" thing to do. But it takes a lot of strategy to actually craft the right stories and share the right stories. And I wondered with your brand usually when I interview amazing entrepreneurs like yourself, a couple of days before showtime I just start digging into their website and more into the social media handles and I mean you are a brand that that is in the business of elderly care franchise and I would have thought there would be no social media channel at all. But on Facebook there are over 15,000 people that actually that actually like an elderly care brand. And to me that was absolutely amazing to see it. And once I started digging into the stories and into the videos, I very much started to understand why people actually are so attached to your brands. And nine years ago you went undercover with BrightStar caregivers on the CBS Undercover Boss. Now I had some Shark Tank contestants on this show, but Undercover Boss is quite a different league. How did that go? And how did it affect your brand and perhaps even your company culture at the time? Tell us a little bit about that experience.S Sun:                           It was an amazing experience. We had the honor of getting selected after CBS went to International Franchise Association asking for a recommendation of franchisors that they should talk to after great experience in season one with another franchisor. And we had just won Entrepreneur of the Year from the International Franchise Association so we were on that list. We had a great day with the producer of the show and asking some questions and what different storylines we might be able to provide as part of the breadth of our brand. And then they realized that our brand was only $50 million at the time and kind of had an internal threshold of $100 million. So they were going out to speak to others that were larger than me in the industry. And that seemed unfair in terms of the exposure I wanted for our brand and for our franchisees. So I found all of the people who had anything to do with the show on CBS's a website and since an overnight letter, two pages, of all of the reasons why they should select BrightStar. We were founder led and entrepreneurial American dream in terms of starting with my own capital and risking it all, all the different settings that they could have with us doing pediatric care, staffing and elderly care. And they came back. And so we had the honor of being on the show and exposing people to our brand. We had 9.1 million people get to learn about the BrightStar Care story and how amazing our caregivers are. It was a very heartwarming experience to have a chance to interact with our caregivers on the front line, but also to see some opportunities in terms of things we can continue to learn from and be better. And continuous improvement as part of our core values and it was a great opportunity to have an opportunity to see that firsthand. And we got to work and made some of those improvements operationally right away. But having an opportunity to interact with some of our customers and our caregivers on the front line was a very rewarding experience and really became the impetus for us establishing the Caregiver of the Year program that you asked me about earlier is an opportunity to not wait for CBS and national TV to get an opportunity to have our own award show and gala to highlight and celebrate our amazing caregivers that are on the frontline every day. And so we fly them and a guest in for a few days at our annual conference, spa time, we make sure that their salary is still covered so they're not having their personal budget impacted by not being able to work those few days and really just take an opportunity to celebrate and highlight and recognize with gratitude the caregivers on the front line, which was so much about what the show was about.F Geyrhalter:                 Yeah, what an amazing outcome. Because we were invited I think like eight years ago to be... There was a show, I think on ABC, that was about inventors and then they work with a branding firm but it was more of a reality show and I was so scared. I'm like, "I'm not going to do that. There's too much... I know how reality shows work and they will most probably tried to find a way to create the entertainment and drama is part of that." So I was actually very afraid to, so we didn't do it. But I love how you really hustled to get on there and you knew it would be a great story. And even if you would discover something "undercover", that you could learn something from it and you could create something better out of what has been highlighted. And so you did, I love that. And I mean obviously you are one of the great entrepreneurs that just keeps learning and keeps pushing. And that is such a good example of that. And I really thought that this would be a story of a potential brand fail for you, but it's not. Did you ever have a ginormous brand fail where you went through something and this might not even be sales related, this is maybe something brand related or just a big key decision where you felt like, "Okay, this was absolutely going into the wrong direction."S Sun:                           I don't know if brand fail, but just challenges of an entrepreneur in those early stages.F Geyrhalter:                 Sure, yeah.S Sun:                           I mean some of the biggest successes became some of the biggest challenges. We grew really quickly. I had the honor two months after starting my business to have a quadriplegic take a chance on me and have us provide his home care, wound up taking care of Tim from 2002 until 2019. He just passed away on Labor Day of this past year. And the family act actually asked me to come deliver part of the eulogy, which is how much intertwined our lives had become during that care journey. I became part of a family and Tim and his lovely wife Ann became a part of my family. But getting that large of a client with 24/7 nursing care two months after starting a business, knowing that you need to pay the nurses weeks before the payer pays us, I wound up having to put payroll on credit cards and having to pray that the bills got paid while my credit lines extended on a credit card. At the time I was married, looking at my wedding ring a couple of times wondering whether I was going to have to hock it to continue to do the right thing by my nurses and my client to keep the business going. My greatest success in revenue wound up be my scariest part operationally because our caregivers and our nurses are oftentimes paid weeks before we wound up getting paid by the payer source or from the family. And that's the great news about growing quickly, but sometimes that can be the scariest part of the entrepreneurial journey as well.F Geyrhalter:                 Absolutely. Yeah. And I wouldn't even see that as a fail. I think that is just a growing pain that I think any entrepreneur, I mean even myself, we all have been at some point in that position, where suddenly stars don't align or you restart the company like I did once, and those are things that happen and then you just have to do the right thing and power through which is so important. And going from the negative back to the positive, which is where we usually want to be on this podcast, looking back, and I know I'm asking you to look back a good 18 or so years, but looking back, what was the one big breakthrough where you figured, "Okay, so this is actually going to turn into maybe an amazing business opportunity." Or even, "Now we know this is actually franchisable." Was there a moment? And it could be directly linked to sales figures or maybe it was a PR event or was there a moment where you just knew this is it?S Sun:                           Well, I mean Undercover Boss certainly was, but since we talked about that, I'd say the biggest one for me was being able to sell our franchisees on the vision and be able to execute around Joint Commission for our entire brand. We are the only brand in the home care space out of over 25,000 agencies that was able to have our brand qualify for Enterprise Champion for Quality designation. And that means that 95% of all of our eligible franchise locations are accredited. And we got that for the first time in 2013 so it was from the time of the thought of Joint Commission that was five years later. From the time we first got our first location accredited, which was 2010, it took us three years to get the entire brand accredited. But we have maintained that every single year. We've never had that lapse. So we've always maintained greater than 95% of our locations Joint Commission accredited. And being able to have that standard at that highest level in place in 2010 through 2013 was really for me when I knew we had a sustainable brand that would deliver the kind of care a thousand miles away from the headquarters that would make my grandma proud and would be the kind of care that she deserved, that all parents and grandparents and children deserve at the highest quality standard that our franchisees embraced. Setting themselves apart, operating at that highest level and making that investment initially and ongoing to be Joint Commission accredited. That's when, for me, it was really our high point of when I felt like we had a breakthrough moment. I'd always believed that we were the highest quality brand and we've always been nurse led as part of our brand. But to be able to do it at such a level that we could be recognized by such a great third party like the Joint Commission really said we had something that would endure for the next several decades and beyond.F Geyrhalter:                 And that is so easy to say now in hindsight, but for our listeners actually getting that accreditation level is extremely cost and time intensive I would think, right? Because it is a very, very huge undertaking.S Sun:                           It was a huge undertaking. We paid for all of the franchisees in two states to go through it initially so we could demonstrate the value to the rest of our network. You know, as a relatively small business that was just borderline profitable at that point in time to make a $400,000 investment because it was the right thing to do for our customers to make sure we were operating at the highest quality level and setting ourselves to be accountable to those standards was a big financial undertaking. And it was probably the equivalent of three or four full time people working on that initiative in 2010 through 2013 to get the brand ready for, and through, that process.F Geyrhalter:                 And putting this in context of brand positioning, I mean when we think about a business that takes care of people that need home care, not necessarily elderly, but the majority, it could be seen as a commodity, right? I mean in a way you could be in a commodity business where there's a lot of companies like yours in the beginning, not now, right, in the beginning that do a similar service. But by you taking this initiative to become accredited and to tell that story, it just pushes the entire brand into such a different league of people actually wanting to have that care, that level care and what an amazing way for a brand to stand out from a sea of sameness in the beginning and to actually be able to do that. So kudos. Pretty amazing, pretty amazing. And also gutsy move to do that and to keep doing it every year. I mean that is a huge commitment. There's a question that I like to ask everyone on the show and you're well aware of that. I always like when I go through brand workshops with my clients, I always at the end of it, after we talk about the brand for like seven hours and everyone is drained, but we all think about just that one brand. At the very end of the day I try to bring it down to one word. Like if you would take everything you do as a brand, everything, and you would be able to just summarize it in that one word that would be the guiding star, for you the BrightStar, what is one word that could describe your brand?S Sun:                           For me, it's trust. We really want to be the brand that families can trust with the loved ones that they want to receive the highest quality of care and earning and being worthy of that trust is something that drives what we do and how we do it each and every day.F Geyrhalter:                 And it's nice because trust works on every level. Totally 360 within your entire people network. Everyone that is involved on one hand is reaching for the other and one is feeding the other. It's a fantastic, fantastic word. What does branding mean to you, Shelly? Now that you've done this for what, 18 years?S Sun:                           Yeah. I think it's getting to know our client and what they need and then making sure we're delivering upon that. It's really standing out, to your point, from the sea of sameness, really differentiating ourself from our competition and what those points of differentiation are is making sure that we are doubling down on those things each and every day. That's the quality, the nurse led, the breadth of service that gives a full [inaudible 00:30:37] of care to our families and the willingness to stand behind that with accreditation. I think it's really knowing who you are as a brand and we won't be the cheapest, but we will be the best and we are the brand that families can trust their loved ones to.F Geyrhalter:                 And on that note, as we're slowly wrapping up here, any final advice or any brand advice, anything that you learned? Which you learned I'm sure a book worth of lessons in your time doing this, but anything for founders as a takeaway that you think would be important for you to share?S Sun:                           I think it's believing in the good of what you're doing. Because without that, I think success is difficult to achieve and certainly to sustain. And I think BrightStar Care is where it is today because I believed that we were providing the best service to the consumers we have the honor to serve and knowing that we are having to earn their trust each and every day and deliver upon that. I think as entrepreneurs and those that are entrusted with protecting that brand and that brand vision, you've got to really believe in what you're doing to be able to do it each and every day. You spoke to the story telling of our caregivers, I wish I could say that that was a strategy or that was intentional, those stories create themselves because that is the beauty of what hiring the best caregivers and giving them nurse oversight and mentoring does each and every day. Those stories are because the brand was there. We didn't have to make up stories. Those stories were there each and every day. They are there each and every day, even if we're not getting them submitted to us. It's a beautiful thing when you believe in what you're doing and you know you're making a difference. There's always going to be tough days as an entrepreneur, those days where you don't know if you're to make payroll or there's an employment situation going on. But knowing that we're in business to make a difference for families, I think as long as entrepreneurs are starting a business and growing a business based upon something that they're passionate about, that has really been what has invigorated me as a founder to continue to still be very active in my business each and every day, nearly 20 years after I started it.F Geyrhalter:                 You said that very beautifully and I hear similar versions of this from a lot of the very successful founders on this podcast because it is that drive and it is knowing that you make a difference when you get up in the morning that is so crucial. Listeners who want to learn more about the brand or actually have a need for a caretaker for their own family, which happens more often than not, where should they start exploring the BrightStar brand?S Sun:                           Thank you. I think our website is the best place to start, so BrightStarCare.com and we'd love to have the honor to see if we could be of service to families. I think it's never too late to start talking to our parents about what their wishes will be when they will need care to be able to still live independently, but live independently at home. So never too early to start asking those questions and allow our parents to be in control of the life that they want as they gracefully age and let us be a part of that.F Geyrhalter:                 So true. So true. It can never be too early. A lot of us had that experience and whoever hasn't had the experience will have that experience, so thank you for the reminder. Thank you for sharing the link. Anyone who is interested in brand storytelling and brand differentiation, I would urge everyone to check out the brand as well because it is not a brand that usually people would immediately flock to when they think about branding and those are the type of entrepreneurs that I like to have on the show where you actually dig deep and suddenly you realize that there's a lot of heart and soul that went into what is going on and why you are so successful today, Shelly. So thank you so much for your time today and for sharing your thoughts with us.S Sun:                           Thank you. Thank you for the opportunity to tell our story.F Geyrhalter:                 Absolutely. You know, sometimes I pinch myself when I get off these interview calls because I feel so fortunate to be able to leisurely chat with these extremely busy entrepreneurs who would charge thousands of dollars for their mentorship and yet here we are able to poke their brains on a topic many have not been actively involved in for years. This is a true gift to me and hopefully to you as well. If that is the case for you and you listen to Hitting the Mark every two weeks, I would like to invite you to show your support by going to patreon.com/hittingthemark. The Hitting the Mark theme music was written and produced by Happiness Won. I will see you next time when we, once again, will be hitting the mark. 
Learn more about Milk StorkSupport the show – and get on monthly advisory calls with Fabian (in groups for both creatives as well as entrepreneurs) Full Transcript:F Geyrhalter: Welcome to the show, Kate.K Torgersen: Thank you. I'm excited to be here.F Geyrhalter: Oh, absolutely. It's so great to have you. The way I actually got to know you and Milk Stork, and we talked about this a little bit prior to hitting record, was at an NPR event where I was actually a mentor and in between my sessions, I saw you on stage interviewing the unbelievably charming founders of Clif Bar. I was so taken by that heartfelt and insightful conversation, since you were a Clif Bar employee. And then you split off with your own venture and they were very supportive of that journey. Right?K Torgersen: Absolutely. Yeah. I actually started Milk Stork on a Clif Bar business trip.F Geyrhalter: That makes so much sense.K Torgersen: Yeah. So I worked at Clif Bar since 1998. And after having my twins, I was, my twins are my second and third babies, but I also have an older baby, so I have three kids altogether and I-F Geyrhalter: And Milk Stork.K Torgersen: Yeah, and Milk Stork, my fourth baby. But I had to go on a business trip and with the twins, I was really committed to breastfeeding. I had breastfed my first child for 18 months and I wanted to give the twins everything that my first kid had. But with breastfeeding twins it's really hard. I mean, it's tandem nursing. We had a bunch of issues with getting one of the twins to latch and weight gain issues. So by the time this business trip came up, it really felt like the stakes were high because the twins had never had formula at that point. They were exclusively on breast milk and I just didn't know how I was going to do the business trip and deal with this breastfeeding situation. So yeah, it was started on a Clif Bar business trip. Obviously Clif Bar, Gary and Kit, the owners of Clif Bar, that culture is so accepting of parenthood and supportive of parenthood. I could have easily said that I wasn't going to take the trip or I would rather not take the trip. But for me it was important to take the trip and not miss out on opportunities that I cared about professionally. So I went on that trip. I lugged two gallons of breast milk home.F Geyrhalter: Oh, my God.K Torgersen: Pumped throughout the trip. And I came back from that trip and I was like, "I've got to figure out a way to fix this." That really was a page out of Gary's, Gary Erickson, the founder Clif Bar, a page out of his book. It's literally probably a page out of his book, that if you have an idea, you just need to chase it down relentlessly and not let go of it, not leave it in the dust.F Geyrhalter: And they were super supportive when you said, "Look, I have to do this."K Torgersen: Yeah. Yeah. I continued for many, many years? A couple years I would say. I was working full time at Clif Bar. My kids were three years old and under for a good part of that, five years old and under. And I was working on Milk Stork at night after they went to bed.F Geyrhalter: May that be a good lesson for all the listeners who say, "Ah, I've got a day job. I can't start a startup. It's too difficult."K Torgersen: Yeah, I mean-F Geyrhalter: Add a pair of twins to that.K Torgersen: Yeah, I have to say, I mean there was a couple of years where there was really no sleep. I was going to bed at probably, if I was lucky, the kids would go to bed at eight, if they actually stayed in their beds and then I would work till one or two. But it's funny looking back, I was so fueled by the idea and solving the idea that... And so absent of sleep already in my life, thanks to the kids, that I don't remember that as that push on the sleepless nights. But it's definitely not something that you can do forever. But in the beginning, I think you have that kind of gas and that gas in your tank that's just propelling you to do it. And that part was really exciting.F Geyrhalter: And, I mean it seems to me like it's a natural, it's somehow a natural gift from above that when you are a mom or any parent, right? You can survive these first sleepless years.K Torgersen: Yeah.F Geyrhalter: It's just something that suddenly you're on the, like you said, you've got that extra gas. And you used that gas tank fully for everything.K Torgersen: Yeah, I didn't have any free time and I was so captured by inspiration and so, I already had the endurance and grit that they came with motherhood. So it was kind of the opportune time. I don't know if I would've had that same kind of depth of grit if the idea had come a few years later or certainly not earlier.F Geyrhalter: And so for those of us who are not as familiar with the entire breastfeeding process and what goes into it and why it is actually so important to feed babies breast milk versus those hundreds of formulas that are out there or whatever. Right? And the idea of how difficult it is actually to travel with breast milk. Can you kind of give us an idea of how this is a real important niche that you are filling?K Torgersen: Yeah, so I think, the pain point of breastfeeding is that it's relentless. Moms who are breastfeeding or pumping every three hours, many of them are trying to make it to one year of having their kids on breast milk. And that's in the US that's the American Academy of Pediatrics recommendation is six months of exclusive breastfeeding and 12 months with breast milk as their primary source of nutrition, in addition to the introduction of solids. But what's interesting and amazing about breastfeeding and the reason you have to do it every three hours is that it's a supply and demand relationship. So the baby sets the supply for the mom. And if you miss a nursing session or you miss a pumping session, the woman's body responds to that dip in demand by producing less milk. And once you kind of disrupt that and your milk supply can start going down. And it's very hard to get it back. For me, breastfeeding was important, not just for the nutritional element, but for the attachment of it. And I didn't want to lose that connection with my kids. And I think, moms breastfeed for a lot of different reasons. Some moms are doing it for nutrition, some monitoring it for attachment. But I think ultimately the thing that was, that's been important to me in starting Milk Stork is that it should be up to the mom and the decision to breastfeed or not breastfeed shouldn't have anything to do with her career. It should be exclusively a relationship with her and her baby. And weaning, I just, it breaks my heart when women are weaning before they're ready or before they kind of want to end that relationship. I just, it should be on their terms.F Geyrhalter: And that was part of a Milk Stork, you also turned into an advocate for breastfeeding friendly policies overall, right? At the workplace.K Torgersen: Yeah. I think with breastfeeding, it's something that's invisible to the kind of the larger community, especially in the workplace. You're usually do it, you're doing it every three hours. You're stepping away to do it. You're stepping sometimes into a bathroom. If you're lucky, you're stepping into a conference room or a lactation room that has a lock and it's set up for you. But it's outside kind of the gaze of the workplace culture. And for a lot of women that kind of, that invisibility of it makes it hard to advocate for because you kind of have to explain this relationship, there's a lot of education that goes into explaining why you need a private room, what you're going to be doing. But I think at the same time, 50% of the workforce is female. Actually, I just saw an article that women are now, it's like tipping over 50%, women in the workforce.F Geyrhalter: Wow.K Torgersen: So, and most women, most moms are working moms. So this is a real pain point for a large part of the employee population.F Geyrhalter: Absolutely. And for the listeners who know me by now, I'm such a big proponent of niche brands that actually wholeheartedly connect with a very overlooked segment. And I'm, on the other hand, I'm also super obsessed with startups that create their own category, which are very, very few to many who say they do. But most of them don't disrupt the category or start a category to just barely fit in. But you actually, you're both, I mean, you're on the one hand, you're a big... You're, this is perfect. There's actually an ambulance in the back. I'm going to cut this up. Okay. I'm going to start this over.K Torgersen: Perfect.F Geyrhalter: Oh, perfect. And for those of you who listen to me a lot, they actually noted I'm a big proponent of niche brands that wholeheartedly connected with an overlooked segment. And I'm also obsessed with startups that create their own category. And they're very few of those. But you, Kate, are actually both. I mean, you launched a company that specializes in the facilitation of overnight shipping of breast milk for business traveling moms. I mean, that's just about as niche as it gets. Right?K Torgersen: Yeah.F Geyrhalter: I absolutely, I love that. And I mean, you had the epiphany out of a need and I heard you talk about this on another show. You basically when the airplane touchdown, you said, "You know what, I'm never going to do that again. And things need to change." And you literally got to work right after. But what is even more interesting to me is that when you officially, and I don't know what that word really means when you launch a company, because there are so many phases, but when you actually decided to push, right? And have the company be publicly out there and you start emailing and you start putting it out there and at that time it didn't take very long for it to actually catch on. Right? I mean it was pretty instant that people said, "Oh, I needed this." Or even employers saying, "You know what? I want this to become a benefit."K Torgersen: Right. It was instant. It was, we launched in August of 2015. My co-founder is actually my father and we essentially kind of flipped the switch on the website. We had spent a good nine or 10 months building out the kind of eCommerce platform and all the logistics of how this would work. So we flipped the switch on the website and we kind of just sat there and then an order came in. And then another order came in. And we're just like, "Oh my God, now we have to fulfill these orders."F Geyrhalter: Now what?K Torgersen: Now what? How are we going to do this?F Geyrhalter: Tell me, this is fascinating. So, you didn't do any push besides literally launching the site or did you already-K Torgersen: I did a press release.F Geyrhalter: Okay.K Torgersen: That was it. So we launched the site and my background was in PR and communications and we put out a press release. I did send that that release out into my own media relations and sent it out to a bunch of reporters. We did get an article with, I think it was within two weeks with Fortune Magazine.F Geyrhalter: Wow.K Torgersen: And so that got-F Geyrhalter: Then you know.K Torgersen: [crosstalk 00:12:09] Then within, also within two weeks after that article went, we got a call from one of the largest consulting firms in the world saying that they wanted to bring us on as an employee benefit for their North American employees.F Geyrhalter: Unbelievable.K Torgersen: And I took that call in my minivan in the childcare parking lot at Clif Bar and I just said, "Okay, yeah, we'll figure it out." And they wanted to launch in 30 days. And we did not have an enterprise kind of set up. I really thought it was going to be hard to explain breast milk shipping to companies and employers and advocate for that. So I knew that going direct to moms was the first place that we were going to go and we're like, "Okay, we'll figure out enterprise later." But that happened way faster than we ever, ever expected. And by the end of that year, we had five enterprise clients and that included two of the largest pharmaceutical companies in the world.F Geyrhalter: Yeah. I mean just to visualize that idea of, "Oh good, you've got three or four clients that are enterprises instead of moms." I mean the amount of orders that you get because of that, it's just mind blowing. Right?K Torgersen: Yes.F Geyrhalter: I mean, you're going directly to the source. You don't have to advocate, you don't have to get one mom at a time. And I mean, to be honest, it's not cheap either, right?K Torgersen: No.F Geyrhalter: I mean, shipping breast milk is not cheap. I guess it's like somewhere at 170 or something like that. I don't know. I heard that number, but it's pretty, it's not inexpensive. So for moms to say, "Oh yeah, that's not a problem. I'm going to spend, I don't know, 200, 400 depending on how long the trip is, dollars on my baby's health." That is a really, really big expense. But for employers it is kind of a no brainer because what happens in the background is, those are individuals that have been with the company, some of them for a pretty long time, very loyal and then suddenly this life event happens. A very positive life event. That weirdly enough when it comes to work is actually not so much of a positive life event. Right? And so you're struggling with that and then you want to be loyal, but the more that companies can give moms, new moms a reason to stick with the company and to be loyal. I mean it's a huge benefit. Those 170 bucks or whatever it is, that's nothing.K Torgersen: Yeah. It's what happened almost immediately, which I don't think I could've ever, it didn't occur to me that this was going to happen, but I'm so glad that it did. And I think it's, I guess I had underestimated employers in the beginning and their desire to support working women. But what ended up happening, which is amazing, is that women started using Milk Stork and then rightfully asking their employers to reimburse them. And feeling empowered to do that. And I think there's a couple of things that were happening. One, it was a millennial workforce that was asking for it. And these are women and parents who are incredibly informed, probably the most informed generation of parents to walk the face of the earth.F Geyrhalter: Right. Right, because of all the resources that they have at their fingertips today.K Torgersen: Yeah, so and they have very high expectations for work life balance. It's also, it was on the, Me Too was happening and so women were speaking up about the realities of the workplace for them. And there was just a strong collective voice of women. And I think the other incredible thing was that women who needed Milk Stork were going to HR, which has a very high, as a profession, very high population of women. Going to somebody in HR who had experienced this pain point themselves, most likely or knew the challenges of returning to work and breastfeeding. And that HR person then became a firebrand within their company to help onboard the benefit.F Geyrhalter: That's all they look for is more benefits that are crystal clear for people to understand why it would make sense to have them for leadership. And it makes so much sense. And I love that now on your website you are actually having these letters, like at conferences when you're an employee and you want to go to a conference and there's letters on the conference website of like, "Hey, this is why I need to go. This is why you need to sponsor it." You have actual letters for HR, which it is a little bit different than when you go to a conference because when the whole idea of breastfeeding at a workplace is actually, it's very uncomfortable. It's a strange situation for someone to be in. And then to ask for a reimbursement around that in that entire, it can be awkward for people to have to go to, I mean in smaller companies to their boss and just explain everything. Right?K Torgersen: Yeah, I think to go to someone who's never lactated themselves and ask.F Geyrhalter: Like any male CEO.K Torgersen: Yeah. Or even women who have not experienced breastfeeding. Breastfeeding is so weird because you don't really know what goes into it until you've done it. Or you've seen a spouse or partner do it.F Geyrhalter: And I say right, not as in affirmative, but I don't know. I'm on that side. Right? But, I am an employer and I did have those instances and it is extremely strange to work around it and trying to find solutions that feel like they're comfortable for everyone. Right? It's not easy, especially when you're a two, three, four or five people shop. Right? It's not like you can create an entire infrastructure around it. Let's talk a little bit more about the Milk Stork brand. Like actually many of the successful brand founders that I have on Hitting The Mark. You mentioned you come from a marketing background too, I think at Clif Bar, the last position that you held was that of an executive communications and speechwriter. So I am wondering how much of Milk Stork's tone of voice and copy actually comes from you? Or did you have an agency or writer who's who's in charge of the brand voice at this point?K Torgersen: When one of the first things, it was funny when you were, earlier we were talking about what is starting a company even mean? What does that process look like?F Geyrhalter: Right.K Torgersen: One of the first things that I did was come up with the name because I think for me too, once you have that idea, putting a name makes you accountable to it. So it made it real and it made the idea not disappear into dust. It made it concrete. So coming up with a name that continued to inspire me as I was going to build the company was critical. So it was literally the first thing that we did. When I said, when my dad and I got going, I was, I kept texting him. I'm like, "What do you think of this name? What do you think of this name?" And then just, I think it was maybe two days after I had even had the idea, I came up with Milk Stork. And then-F Geyrhalter: Which by the way is brilliant, not to interrupt you, but it's a brilliant name.K Torgersen: It was important for it to be visual to me. I'm a very visual person and I wanted it to be kind of visual, but I also want it to be, so that when I knew that this category didn't exist and so it had to kind of explain also what the service was. And then we immediately got to work on the branding. And we did hire, I mean we didn't have a ton of money, I think we each put in like 25... No, we each put in $12,000 in the beginning. Something like that. And probably 3,000 of that went to hire somebody to help us come up with the branding, like the logo, the logo type, all of that. So it was-F Geyrhalter: And tone of voice and all of that was that still you writing at the beginning and-K Torgersen: Yeah.F Geyrhalter: Okay, okay.K Torgersen: I mean it is, it was a direct extension of me. And a lot of that came from my experience at Clif Bar. I mean, Clif Bar is a direct, it's a direct link to Gary and Kit and their values and that's a company where your brand is really about your integrity. And so that's kind of the lens that I was coming at Milk Stork with.F Geyrhalter: Absolutely. And I would love for anyone to actually look a little bit deeper into the Clif Bar brand because most people don't, right? Most people have a Clif Bar. They didn't look too deep into the brand. But it is really, really fascinating. And just to touch on something that you said before, because it happens so rarely, but I really, but I think it is so important. When you said that you came up with the name first and it was the driver because it made it real and it made it feel like, "Okay, now did I have that I'm almost there." It's like this naive idea of your brain where it's like, "Oh my God, it's now, it's real. It can be real. I can see it in front of me." To create something that's very descriptive, a very descriptive name. Usually for a lot of founders, startup founders that are listening, that are in the very, very early stages of their startup. It is a dangerous route unless you're in Kate's position because you knew exactly your offering. You knew you wouldn't expand like this is it, right? It is about shipping breast milk. That's it, right? There's nothing more, nothing less. I work with a lot of founders that say, "Yeah, you know, we're in the business of X." But then really two months later they're in the business of Y, right? But they already created a name and they didn't fall in love with the name. But then, after a year they have to change it because it is too descriptive. But you are one of those instances where it actually works so well. And it can fuel the entire journey. And Milk Stork is a very direct, a very bold brand which is quite apparent as you agree that by a large image of if very hip models slash mom breastfeeding on milkstork.com. So, I invite all listeners to check it out on milkstork.com since it is really making a very clear brand statement by solely using a photo and the header for moms on a mission. So in that particular very prominent image there is more attitude and self confidence than there's joy or relief. And I feel this did not happen by accident, since there was a certain attitude that breastfeeding moms need in order to ask the employer for reimbursement or to stand their ground publicly. Right? Then in my humble opinion, it perfectly caters to driven, career oriented moms. So, how did that art direction of that photo shoot and did this overall brand that we have today, not the brand that it was a couple of years ago, but today, how did that shape up and how did it change over the years?K Torgersen: Yeah, so when we first launched we actually went through, we have since gone through a rebrand. But when we first launched we, I wanted it to be something that moms could be proud of. I wanted Milk Stork to be something that they, something that wasn't, especially with a lot of branding in the mom space, you get a lot of cursive, you get a lot of pastels. And we did have kind of a pastel color in the beginning. But as the brand kind of evolved, we saw that moms were posting on social media and using the Milk Stork box as a badge of honor. Like, "Went to a conference." They were so proud to have been able to keep breastfeeding. That was a really clear signal to us that Milk Stork, we needed it to be the badge of honor that moms deserve. And so that's played a big role in the branding. I think the other big role that's that we've, the other big direction with branding is that I want to show real images of moms. Moms are not this kind of cookie cutter, cardigan image that we've seen for so long. We want to show diverse representations of motherhood, of families, of breastfeeding. And for us it's all about real moms. So all of our models are real moms. That woman really is breastfeeding her child and we don't want moms to have to apologize for breastfeeding. They are, moms are badass and they should be treated as such.F Geyrhalter: Totally. And it's a very empowering brand I think overall and that comes through. And I did not want my statement to be misleading about the model slash mom on the homepage because as you go deeper into the brand, it gets extremely diverse and I loved that very photorealistic and life realistic and Zeitgeist, on par with to the Zeitgeist photography, because I think it is really leading your brand in a certain way. But now that you went, so first of all, you work with Clif Bar, you must've gained a lot of amazing brand insights while working there and now having started very successfully, Milk Stork over the last couple of years and seeing it grow and going through that rebranding effort. What does branding mean to you today?K Torgersen: Even today, branding is, it's a reflection of my promise. My promise, my accountability to our moms and our clients. I think it's a reflection of our commitment and integrity. And I also think we are not the only ones that own the Milk Stork brand. Our moms and our companies own it. Branding is fueled by love and connection and it's when moms are posting boxes, their boxes of Milk Stork, they own the brand as much as I do. And for them it is a reflection of their commitment to their family and to their ambition. So it's a community, the branding becomes like the hub of our community. It's the heart and soul of our company.F Geyrhalter: And that is exactly what I always preach. Just as you said it really, really well and in a different way, but the heart and soul, that's what a brand is. That's what it comes down to. But I love the idea that it's fueled by love. That's when you know you have a brand when it keeps giving back at all times and you put something out and it keeps giving back. Was there a time early on where, you did surveys, or you asked moms or you kind of like an early customer data and you said, "You know what I'm going to do, I'm going to totally go against what I just heard." If a staff would have said moms and employers are not willing to spend $170 on shipping breast milk ever, that's not going to happen. Or was there anything like that where you heard some, resentment or you got some data and you're like, "You know what? I hear you, but I'm going the totally opposite direction." You were successful doing so.K Torgersen: In the early days I got a lot of sideways looks when I was trying to find vendors or getting corporate insurance and they're like, "Oh, making a company that ships breast milk. Why would you want to ship breast milk?" So, I did not do a lot of customer research because at that point I really was the consumer myself. I was a working mom who had to travel and I was trying to breast feed my twins. And I was living and breathing it with all of my friends who were also having kids and trying to maintain their commitment to their careers. So I wasn't lacking for data. I think it was all qualitative coming from the people that I, that were in my work, my circle. But I can't tell you how many times I got the look. When I'm saying, "Oh, I'm going to start a breast milk shipping company." And getting that look of like, "What the hell are you talking about?" It still happens. If I meet somebody and they're like, "Oh, what do you do?" "Oh, I started my own company. We ship breast milk." You just get that look of like, "That's absurd." I get it all the time. I still get it.F Geyrhalter: Yeah, no, I know. I'm sure. I'm sure. What is... I think this is directly linked to the brand conversation we had a minute ago and I think I might have an idea of what it could be and you know this coming up because I forewarned you, but I love that idea of when you create a brand, and for me personally, when I create print strategies with my clients. To kind of at the end of the day to really sit together and think about, "If there's only one word that we could use to describe our brand or maybe two, right? What would it be?" It's kind of like, in a way, people say the North star, they call it brand DNA, but really it's like that singular word that would encompass everything. Like the philosophy, the design, what do you call the heart and soul, that the love of a brand. What would be that one word for Milk Stork?K Torgersen: Yeah. It's really, it's a made up word. It's mom badassery. Yeah, I don't know how else, it's almost more of a feeling than it is a word.F Geyrhalter: It is a lot like mom empowerment, but just much more badass.K Torgersen: Yeah. Yeah. I always say that working breastfeeding moms are like star athletes. They have this incredible physical commitment that they have made, this incredible kind of mental commitment that they've made, they have this kind of deep well of grit. I mean, if you think of how many times if you're breastfeeding five to eight times a day and doing it for a year, it's a huge venture of endurance. So I think they're complete warriors.F Geyrhalter: Absolutely. Absolutely. No, I absolutely agree with you. And it's really, really great to see a company like yours make it and make it so quickly and be... I mean, you are, at this point, it's not only moms who come with open arms, it's Fast Company named you one of the most innovative companies for last year. And the press as much as employers are running towards the brand with open arms. So yes, on the one hand you hit the Zeitgeist perfectly for a lot of reasons. But even if you wouldn't have, even if this would have happened 10 years ago, it would have still taken off, it would've just taken longer. But I'm really grateful for what you're doing and even more so from a brand perspective, how you do it. It takes a lot to understand and with your rebranding, I'm sure a lot of that happened, to understand what the actual essence is of a brand like yours. And the mom badassery is exactly that. I heard you say this and I'm not sure where but, you said, and I'm solely paraphrasing, and you can correct me, "When you become a mom, you figure out what you do on the go, yet you're expected to be an expert on everything from the get go that has to do with that child."K Torgersen: Yeah.F Geyrhalter: And I think entrepreneurship is a lot like that. And I love that idea that, and everyone says, "Well yeah, if you have a company it's like it's like your new baby." But, really that, how you actually explained that, and that is always the strange thing becoming a parent and it's like suddenly you have to be the expert on every single thing about bringing up a kid and what a kid needs. And I mean, there are so many multifaceted elements to it and it is very much like entrepreneurship. Now that you went through this and you had to become an expert at everything or be smart about it and outsource as much as you can before you grow.K Torgersen: I like that.F Geyrhalter: It's kind of like that's the toddler stage, right? At that point you can actually, all right now we have a real human being we can do something with and we can outsource certain elements. It's very much with a startup. It's really hilarious to actually think about that parallel, year after year. Do you have one piece of brand advice for founders, perhaps even female founders, as a takeaway from everything that you've learned in the last years? I mean, it must be a massive amount, but is there something where you just feel like, "You know what, this is something that I learned and I would love to share that with people."K Torgersen: Well, one is kind of just a, I think if you, to those who are setting forth to start something or have an idea for something, it sounds so incredibly silly, but get your logo. Get a logo that you... Get, make it so you can see it. So you can see this thing that you're going to create. You can hold it. And I, one of the first things we did was we made business cards and it sounds, but it, it sounds so silly, but it was such a kind of talisman almost for making it, for kind of holding that and holding the inspiration in my pocket. Kind of my secret side hustle that I was working on. So that's one thing. And that I think the other thing is that you just have to make your brand contagious. The branding has to be, you have to love it, it has to move you, it has to make you feel really proud about what you're doing. And if it's not doing that, then I don't think it's hitting the mark. It should be a reflection of your pride in your endeavor.F Geyrhalter: I love everything you said, including the pun at the end with Hitting The Mark. So thank you for that. That is, no, that is absolutely correct. And I did hear you say somewhere else too that you advised founders to first do what they really love. So meaning, you're going to have, like with a baby, right? There are 40,000 things you can be doing, right? What is the thing that you actually really enjoy, master that. So if you actually come from marketing and if you actually enjoy that, and I'm sure that's why you're so driven behind the idea of first they came up with the name, then I created the logo, then I put it in the business card. And like all of this kind of like fueled you to keep going. Some others might really enjoy the idea of solving operations, which I know for a company like yours must've been a huge thing, right?K Torgersen: Yeah.F Geyrhalter: But, but everyone has their thing and whatever their thing is just to not get sidetracked but all the other 20,000 puzzle pieces that they need to put together. But just focus on one thing you really enjoy and do it first for your company because it's going to fuel you to keep going. And I think that's really wise and it's really important. And I love that you said that on another show. Listeners, many of whom will not happen to be in the stage of breastfeeding at this point or will ever get there. But many actually own their own businesses and I'm sure many fell in love with what you do. What would you like for them to be doing right this minute to support or benefit from your venture?K Torgersen: I just think, let's all together work to normalize breastfeeding. So if you see a woman breastfeeding in public... I think there's so much imposed shame with breastfeeding, unfortunately. And I think we all have to kind of check ourselves on that. So I just, my hope is that, that there's an understanding of how challenging that first year of parenthood is, especially from others. It's hard for dads too, for sure and partners as well. But for moms in particular, give that mom a high five because she is, if she's just had a baby and she's in the trenches and she's doing an incredibly important job. So I just think give credit where credit is due.F Geyrhalter: That's great. Yep, absolutely. And go to milkstork.comK Torgersen: I think the other thing is, yeah, if you are still working in a company and they are not offering family friendly benefits or they are looking to, every company should offer Milk Stork if they have traveling employees. Moms should never pay for Milk Stork when they're traveling for work. Never ever, ever. Their company should.F Geyrhalter: Kate, thank you so much for having been on the show. I think every listener and myself, we now know how busy obviously, your life is with numerous babies including Milk Stork. Thanks for having been on the show. I'm so lucky right now that I have had only female entrepreneurs and founders on the show for as long as I can think of. I think for the last like 10 or 15 episodes, it's so great. But we appreciate your time and your insights and I'm really excited to, no pun intended to see Milk Stork takeoff even more in the future.K Torgersen: Thank you so much. It's been a complete joy to be on.F Geyrhalter: Thank you. I appreciate it.
Learn more about Pit LiquorSupport the show – and get on monthly advisory calls with Fabian (in groups for both creatives as well as entrepreneurs) Full Transcript: E Feucht:                      For us, our brand reflects exactly who we are and that's really interesting because it feels a little bit vulnerable sometimes as we look at it and we're like, "Oh my gosh, this is us," but we're taking us and putting it out in the world and it's returning. And, it's pretty cool to watch that happen, and I guess I would encourage people to be present with their brand and to allow themselves to sit with their brand and let it reflect them, because I think our world has a lot of very polished things and I think people are inundated with it. F Geyrhalter:                 This was Erica Feucht, who in November of 2017 while pregnant with her first child, started in natural deodorant line, which is vodka- and whiskey-based, together with her husband Jason. The company's named Pit Liquor and I fell in love with the quirkiness of the founders and their soon to be brand. This is one of the few episodes of a company that is so young that it is hard to call them a brand yet, but I can bet you that I will have them back in a few years and that based on the brand philosophy, they're amazingly cool brand name, and their innovative product that they will turn into known and beloved brand within the year. And before we dive into the show, a quick thank you to my new creative brand mentorship circle members, Pierre Paolo Valletto from Turin, Italy, Donald Walker from Vancouver, I believe, and Carol Summers who I do not know where she is from. Join them and support this show by going to patrion.com/hittingthemark and we get to hang out on a monthly call. Here is my conversation with Erica and J Feucht. You guys are one of the few guests who I actually met in person prior to having them on the show. You were showcasing your unique product at a summit in San Francisco and I loved the name and on the spot, I actually invited you to be on Hitting the Mark. So welcome. E Feucht:                      Thank you. J Feucht:                       Thank you very much. E Feucht:                      It was very fun meeting you. F Geyrhalter:                 Thank you. Yeah, like likewise. You actually also gave me a sample of your natural deodorant, and since then I actually reordered it and am having my daily morning shot of whiskey and I'm loving it. E Feucht:                      Good, good. F Geyrhalter:                 How did you realize that you wanted to spend your life selling deodorant? How did this all come about? E Feucht:                      When we actually decided this, our families both laughed at us because it was so not in our wheelhouse, or not a natural fit for I guess the kind of people we are, because we're kind of, I don't know, whatever. Anyway. F Geyrhalter:                 Tell us, tell us. E Feucht:                      Do you want to tell? J Feucht:                       Yeah. So, Erica was pregnant with our daughter and she was using a regular traditional deodorant and would get cysts in her armpits and she would end up always unhappy with it, but natural deodorants didn't work. And so- E Feucht:                      And, they gave me rashes I have really sensitive armpits, which is an annoying but true. I have very strange armpits. F Geyrhalter:                 And you have the perfect armpits for this company. Right? You are the perfect test. E Feucht:                      I sure do. I sure am. J Feucht:                       So while that was going on, I asked her to stop using traditional deodorants- E Feucht:                      For the baby. J Feucht:                       For the baby. And she asked, she asked or challenged me to come up with something that worked that was natural. And so, I read medical textbooks on deodorant and underarms- E Feucht:                      Like any normal human would do. J Feucht:                       Right. And came up with a formulation that works. E Feucht:                      I ended up spraying hand sanitizer in my armpits one day, because I was just at the end of my rope and he kept pushing me. And, I was in the bathroom and hand sanitizer was physically in reach. So, I grabbed it and threw it on my pits and I was like, "There you happy?" And he goes, "Well, no, because that alcohol ..." he's a materials engineer. So he goes, "Well no, that alcohol is made from a petroleum base and it's not actually good for your body." And I was like, "I'm out, I don't care. You go ahead and read your books and find me something that's good." And then, he did. F Geyrhalter:                 And that's how it started. So, you had to invented it. When did the liquor become part of that, or have you already been so frustrated that there was always liquor next to you? E Feucht:                      There was always liquor next to us, but I was pregnant, so I was not imbibing and I asked J Feucht not to. F Geyrhalter:                 But well, that's why J Feucht did the research on the parenthesis. Right? E Feucht:                      Exactly. It's like I just can't handle being away from it, but no, he realized at the end of the day with the hand sanitizer, my armpits didn't stink and he was like, "Well, if that works, then we need to look it up for alcohol options." And it was seriously about the time that he said, "What about whiskey," that I just lost it. I was like, "I can't anymore with you." But then he stuck with it. He spent about a year literally reading every available medical textbook about it and doing all this research, and he was ordering weird herbs from all over the world, and teas and all this stuff. And then, he created this product and said ... and he used it on himself every day and he would ask me to smell one armpit and then the other, and which one smells better. And, I was pregnant so my nose works really well. And yeah, by the end, we had something really effective. And then, we mentioned it to friends just casually, because people talk about products that are not to their liking or whatever. And we were like, "Yeah, we came up with our own deodorant." And they would say, "No, let's try it." So we did. And then, they would tell their friends and then they would tell their friends, and we started giving away so much it got expensive and we thought, "Well either our friends are just really nice or it's a really good idea." So, we started a Facebook group and started giving it away and asking people for feedback, and they would respond that they liked it and change this one thing or this one thing happened. And so, we made changes based on feedback and then launched a Kickstarter, figuring it's a low risk way to figure out if there's a market for a product. I have no marketing experience, neither does J Feucht and I had a new baby at the time, so my brain was halfway gone anyway. And, I thought if we can do this then it's a good sign. And we ended up getting more than almost twice, I guess, almost twice of what we were looking for in funding, which we had absurd goals. So we at first thought, "Oh we failed." And then we were like, "Oh no, we got more money than we were looking for, which means there's ... and we don't know what we're doing. So that means there's a market and we just need to start working on this beast," and that was how we started a company. F Geyrhalter:                 And, you had the product pretty much finished at the time that you did the Kickstarter, right? Because you tested so much with friends. E Feucht:                      Yeah, yeah. And, we'd been giving it out online and asking people for feedback on the packaging. And also, you throw a glass bottle in the mail and ship it and see if it arrives. And if it doesn't, then you get a different one, and wrap it differently. F Geyrhalter:                 Those are obstacles as well. E Feucht:                      Yeah, and you don't know unless you try it. So, we would just throw it in the mail and be like, "Oh that didn't work or this did." F Geyrhalter:                 That's amazing. Are there any issues with alcohol being contained in the product. I guess not, right, because it's such a minimal amount of alcohol. Right? J Feucht:                       Well- E Feucht:                      No, it's actually quite a lot of alcohol percentage-wise and we just have to understand the rules around it, and make sure we're operating within them. Since there's no product like ours, we follow laws around three different products. So, there's the vanilla extract lobby that changed all the laws back in the 1920s. And during prohibition time, they lobbied to make sure that they could keep selling vanilla extract. And in order to do that, they had to make their product taste "bad" according to a panel of people's arbitrary opinions. So, we put bitter teas and roots in it and it tastes pretty bad. J Feucht:                       And salt. E Feucht:                      And salt, so it tastes pretty bad. So, it's legal for us to sell it to minors as a non-alcohol product on store shelves and things like that, in grocery stores. So, we overcome that hurdle and then we comply with shipping regulations in terms of zoning and all that kind of stuff. And, it helps a lot that that that first step is crossed. We are a denatured alcohol product, so it's not considered whiskey anymore. And then, what's the other one? There's another rule we follow. J Feucht:                       Well, there were shipping, which you already mentioned, but shipping alcohol can be a little bit complicated, and it's extremely expensive to ship outside of the United States, which has mostly to do with tax, because all of the other countries are worried that you're somehow going to not pay the alcohol taxes and yet drink alcohol anyway. And so, it just gets very complicated to ship anywhere other outside of the country. E Feucht:                      At this time. I'm sure as we grow, we'll get to the place where we're willing to take on those legal tasks. But at this point, we mostly ship in the US we also do Canada and Great Britain. But again, yeah, shipping there is crazy because they do view it as a liquor product. F Geyrhalter:                 And, that's pretty amazing because a lot of the startups that I work with, they all feel like they are disrupting a category. They're creating a category. And I'm like, no, you're not. You fit into a category and then see what you can do. Right. But, you actually really created a category. There has been no, especially the way that you market it with whiskey and vodka and it's not just containing alcohol. It's actually part of your brand. Is that, this must be easy to market to people once they understand the idea of, when we met, you very quickly told me that, "No Fabian, you're not going to smell like you just came from a rager. You're actually going to ..." You're not even going to smell it, right, because it quickly dissipates. But, how difficult is that? If you're on a store shelf, right, so, how is that journey to Whole Foods or Sprouts because of your product? E Feucht:                      So, it's an interesting one and we've been finding that, as the world of natural products has begun to evolve more and more, it has become easier for us to reach customers. So, even just during the time of running this company, the barriers to entry with customers has grown smaller because people are beginning to recognize that basically, anything that doesn't come from our natural environment isn't actually made for humans to work with physically. What natural actually means is from nature, so actually, things that were, that have grown in the environment that humans have been in for all the time that we've been here. So, if you think about that and you think about the comparison of a petroleum based product that is made, it's manufactured and manipulated to become something, versus a natural process like distillation that occurs with things that grow out of the ground, it resonates with people. People are reading the backs of packages and they're becoming intelligent. So, I feel like we've had a big uphill climb to educate our consumer, but we're also finding that they are educating themselves as well. And, the world is looking for things like this right now. So, it's equal parts. We still get the same old jokes, the, oh, the cops are going to pull me over. And you're sitting there thinking, how are they ever going to know you have whiskey in your car unless you're driving stupid, and why did you drink your deodorant? I don't know. So, we get that and that's probably the most common thing people say. And, it is one of the drawbacks of our branding. But, it's also totally unique. And, when people sit and think about it, they laugh. They have a little fun, sometimes at our expense and we're okay with that. And, they enjoy that and it sticks with them. F Geyrhalter:                 Well, and it's the drawback, but it's also what draws people in, right? It is what makes you special and interesting. But, it is most probably a little bit of a roadblock to go completely mainstream. But, that's just one day at a time. Your name is so great on so many levels. Let's talk about that name because when I first met you guys A, it was hilarious because literally I was, like I have been every five years or so, I go on this journey of, you know what? I think it's time again for me to find a natural deodorant that actually works. And, I started this journey literally I think three, four days before I met you guys up North. And, there were only a couple of stands of startups that were showcasing the products. And, I was just running toward you with open arms. I'm like, "Oh my God, I need something that works. Is yours going to work?" And then, and then I saw Pit Liquor, and I'm like, "Oh my God, this is hilarious." You've got to be on my show. And ever since then, I actually use your deodorant, which is such a crazy, crazy way of finding a natural deodorant that works for me, which doesn't mean it's going to work for everyone, but, it does work for me. And, I know it's a very personal journey and I'm not endorsing you as if you paid for it because you have not. But, going back to the name. So, when I first met you guys, I saw Pit Liquor and I just thought it was so great on so many levels. What went into the creation of that name? How did you guys come up with it? Was it a huge brainstorm or did it just happen overnight or how did that work? E Feucht:                      Well, yeah, it was a long process. J Feucht:                       The ultimate name was something that Erica came up with and we made a list of names that we liked, and we just kept adding to the list every time we thought of anything. And- E Feucht:                      Because we were like, "We're not going to say Pit Liquor." It came up pretty early and we were like, "That's so gross." There's so many problems with it. So, we kept trying to come up with something better and we would just keep coming back to it. So then we trialed it with other people, and we were like, "Hey, we're thinking of these five names or whatever." I can't even remember all of them, and Pit Liquor was one of them. And people were like, "I really don't like that one." And then, they'd write us back later and be like, "I really like that one." F Geyrhalter:                 Oh, that's fun. E Feucht:                      And, that's been our ongoing feedback, because people are like, "Oh I really ..." Some people laugh and they get it and they just laugh. And that's what we figured, is we're like, "Well we have a place in this world and we get to have an impact on people and we can be markety, or we can just make people laugh." If they laugh at us then they walk away. Laughter is good for your body. So, at least we did something good for them even if they didn't buy our product. And, just kept coming back to it and we're like, "We've got to just do this. It's the only thing that really fits. It's punchy. It's strange," and it we're really strange. So, we were like, "It works." The product is really strange. It's good. Nothing describes it better than Pit Liquor. F Geyrhalter:                 And, strange works, right? Because people are excited when they see something that's different. I had the founder of Liquid Death, which is water. It's actually literally water in a can, Liquid Death. I had him on my podcast and I just saw on his Instagram that they actually had a huge, police and fire drill because somewhere in Colorado someone received a six-pack or 12 pack of Liquid Death and they literally didn't, they thought this is explosive or this is a death threat. And so, they had all of these firetrucks come out the street to look at the package, but he's got his story. It's the idea that you have a name and you have something that is different from everyone else in the industry. But, on the flip side, with, with Pit Liquor, you also, when you go to Pitliquor.com, I believe it actually throws you over to your company website, which is Distilled Bath and Body. Now to me, distilled bath and body is that very neutral conservative kind of name that says it all versus the product name, which is Pit Liquor. How did the two of them relate? What is going on with these two brands? E Feucht:                      So basically, Pit Liquor, it's a little edgy. It's funny. It's meant to make people laugh, but we wanted to make sure that we had some flexibility, that if in the future we wanted to do something that was a little more comfortable, a little more mainstream, we didn't have to have something like Pit Liquor on the front of the bottle still. F Geyrhalter:                 And, that makes a lot of sense. E Feucht:                      Yeah. So, just for variety and I guess for a future opportunity. F Geyrhalter:                 But, just to dig into this a little more, you also offer olive oil soaps too. So, is that expansion away from the liquor focus? Is that a little dangerous because you've got distilled bath and body and everything is about, it's about that alcohol content. E Feucht:                      Yeah. See, we thought about that a lot and the soap is actually made by a local artisan. It's not made by us and it's the only thing we do that's not made by us, but we thought about it and thought the whole point of our product and our brand is that we will not ... I guess one of the main lines that we have is we will not deviate from using organic food grade ingredients. And, that's a very solid line for us in the sand. So, we believe that what goes on your body should be able to go in it. I don't know. J Feucht and I, we've listened to several of your episodes and have also looked at the branding for some really smart brands out there, and I've got to say we're not branding genius. We didn't come into this with a ton of branding experience and if I was to name our company again, I honestly might name it something different. I don't know. I don't know if that's okay to say. F Geyrhalter:                 No, of course. E Feucht:                      But, that's just very honest. F Geyrhalter:                 No of course. E Feucht:                      I might name it something different because I've wondered, we really like having alcohol in our deodorant and it makes it different. It makes it funny, but I've wondered if to really get down to the essence, to distill it, to be funny, if we could focus more on the food grade nature of our product is really what sets us apart in our market. Everything we do is something that, every ingredient is food grade and we think hard about the sourcing and we're really committed to being organic. So, I don't know, we've even thought most people don't recognize the company name and we may change it at some point just because that may fit better. I don't know. F Geyrhalter:                 Yeah. Looking into the mirror ball, you have a seed round coming up, I think. We chatted about in the beginning a little bit offline, and you're still a very, very young company. I saw you guys and I saw Pit Liquor and I thought this was the most fun thing ever. Now I use the product. I got to have these people on the show. I think it is fantastic that you're still in this interim stage where you could easily change distilled bath and body. You could change the name to something that is more, that has more longevity for the company and Pit Liquor is one of your key products and it's really fun and it works for that product. But, you can have all kinds of other products. So there's still a lot of brand thoughts that can happen over the years, which is great. Then hopefully, you will get your seed round quickly and you can make that happen. But, on the flip side, I think it is so extremely important that founders have their own voice. And I think, with all these names and with your tagline, quench your stench, which is also so hilarious, it really comes out that this is personal and the copy overall is very fun and engaging. There was an insta post about your history, which of course I was drawn to in preparation for the podcast and you wrote in it, so we started researching the steps we'd need to take to turn this into something more than a couple of people mixing pit drinks at home. And, I just think mixing pit drinks is just, is this all spur of the moment or does it involve team brainstorms when you come up with pieces like that? Is it really just you guys just writing? E Feucht:                      It's just us writing. So, my previous life I was an editor and a writer so I've got this quirky side to myself where I like to, I don't know, word riff. We have two employees as well and they're like that too, especially the girl who runs our social, because I'm not a gifted photographer, not by any stretch. F Geyrhalter:                 So that's interesting, because that would've been my ... given the small nature of your company right now or brand as I would like to call it, because I really think it is turning into a brand at this point. I was looking over your company profile and who's working there and I did see someone being in charge of social media and I was wondering, well how does this work if there's this copy that, if it's only Erica writing, how is it possible that ... but you just really tried to find these verbal soulmates I guess to make this happen. E Feucht:                      Yeah. F Geyrhalter:                 You don't have standards yet, right? I mean, you don't have a big brand book or any standards. It's just like, look, this is who we are. This is how we feel. Do you feel like it? Well let's do this. Right? E Feucht:                      Yeah, we do that and I have some experience with creating linguistics standards because of my experience in editing. That's probably one of my strongest areas in terms of creating continuity is verbal because of my past. So, we do sit down and talk about, we're going to talk about things with this language and we're not going to talk about it with this language. This is funny, but every time we hire someone, which we've hired more than two people, we've just had people leave and come and go. It's been great, but yeah, two people's right where we're at right now. When we hire, we ask people, "Hey, do you like puns?" We like to ask a lot of questions that throw people off. And that's one of our questions is do you like puns. And, it's a no win question because J Feucht loves puns and I do not. And so, either way you're fine. And either way, one of us is going to be like, "Oh bummer." So one of our employees loves puns and the other one doesn't. And so, you can tell, if you get to know who we are, you can tell who's writing what. But, we are fairly similar and when I send out emails, we do get together and talk about our content that we're going to try to focus on weekly. And when I send emails then, my employees tend to pull language from my emails and from the communication I do and put it into what they say. So, we do have some continuity but it's mostly because our employees are just ragingly awesome and they work hard to try to keep things streamlined. F Geyrhalter:                 That's great. I know I also read that you gave away tons of free product in the beginning in exchange for honest feedback or for reviews, which is such a smart move in the consumer product space to do as a bootstrap company. Did you ever go against your early customer insights or comments, and did it totally get to move solely based on the instinct where you thought, "Okay well they say, A, but we're going to give you B?" E Feucht:                      Yes. When we did our review of our name actually of Pit Liquor, it was one of those things where a lot of people ... it was pretty split and people were like, "I don't like it." And, other people really liked it and we just went with our gut on it. I'm trying to think of other things. F Geyrhalter:                 Yeah, because you could have gotten rounds and rounds of naming after that and said, "Well since they're split split, you know we're not going to get to go with the name." Yeah. E Feucht:                      Right. And, I was like, no, it rings. One of the things that led us to our name interestingly was we like to listen to people who are a lot smarter than us. So, we listened to things that Sarah Blakely has to say, Sarah Blakely of Spanx. And one of the things she said is, she has that K sound in her name because people respond to it and they find it ... it's little edgy and it's funny and people tend to really like names that have a K sound. So, we thought Pit Liquor. It's good. And then also, quench your stench starts with a K sound, even though it's a Q. So, we just went with it and we were like, "Yep, this seems good." So, we actually went against our friends' and fans' advice on that, which was interesting. And then also, we had a lot of people who were like, "You should be more subtle with the alcohol." And we didn't. We were just like, "No, it's part of what makes us who we are." And, we had a lot of people who said we shouldn't package in glass because it's going to break, but we have very strong feelings about plastic. And, we figured out how to ship glass and it does just fine. So honestly, the breakage rates on the glass aren't any different than they would be with plastic, though people really worry about it. F Geyrhalter:                 Interesting. E Feucht:                      So I guess, yeah, we've gone against a fair bit of the feedback, but generally, only when people, when it comes up against something that we feel like we know better. We tried out, oh, what was it? Absinthe. When we first did deodorant, it was one of the things because it smelled so cool and we had one of our testers, only one, but one person who had ... she couldn't determine if it was the deodorant or what, but gave her a pretty good adverse reaction. And we were like, "If there's any risk of it causing this, we're just not going to do it." So we did not do absinthe. So, there've been a lot of things that we have really changed based on people's feedback, but a couple things that we thought, "We know this and we're going to stick with our gut." F Geyrhalter:                 But, do you know, that's something that I learned from all of my guests, is that the ones that don't look at data or feedback they lose, and the ones that's solely focused on data and feedback, they lose as well. Right. You have to really, you have to pick and choose and data can be wrong too, because data is just inputs by people, right? It's whoever created the algorithm, so no, I- E Feucht:                      You can read data so many ways and you've got to know what your brand is and know what you're trying to do in order to go forward. F Geyrhalter:                 Right. And for you, it makes it a lot of sense that you, once there is a rash or there's a negative skin reaction, like with the absinthe, then of course you say no, because that was the whole reason you started the company. Even for you to find a work around was not worth it. You're like, "No, this is one of our fundamental reasons why we exist." Right. E Feucht:                      Yeah, exactly. There's a no compromise zone and so you just don't compromise on it. F Geyrhalter:                 Totally. Totally. And, even though you're early in your company, you're up and running, you're shipping, you're having super fans, everything is growing. What does branding mean to you at this point? Because everything that you've done branding wise, it sounds like has been very much friends and family and bootstrapped yourself and just getting it out there. But, what does it mean for you or what will it mean for you in the future? How would you describe branding? E Feucht:                      So we're actually, this is a really good time to be talking to you, because we're digging deep into our branding right now and looking at what are we and what are we not? And, we're trying to break it down because I feel, like you said, we've bootstrapped everything. We've worked with people we know for our design and with all that work. And that's been good. It's been really good. But going forward, I feel like we need something that we don't have and that's that person who sees branding in a light that goes beyond what we can understand because we're not branding X t-shirts. So, we're in a place of examining our branding right now and trying to figure out where exactly it's going. Because we're currently towing two lines. We've got this natural, holistic really earth friendly, body friendly vibe and then we've got this I'm going to slap you in the face with Pit Liquor. Yeah, exactly. And, it's very hard to stand out with that as I've heard you talk to other people about, because everyone's doing it. And so, we're trying to figure that exact leap out right now. F Geyrhalter:                 Well, exciting. E Feucht:                      Branding is an evolving state for us right now and we're looking at it and figuring out what our strong points are and what our weak points are and being pretty critical with ourselves, which is a fun thing. F Geyrhalter:                 Yeah, no, it's absolutely fun. And, I guess that that takes me to a question which will be very difficult for you to answer, but maybe it will also help you define your brand a little bit more. I don't know if you have time to give this a little bit of thought, but you know what's coming. The one word that can describe your brand. E Feucht:                      I have been thinking about it. F Geyrhalter:                 I think sometimes it really helps my founders on the podcast to actually really have to do that exercise because it is the only thing that's more of an exercise that I give up front. But what is your brand DNA? E Feucht:                      And it's a really good question. I think that we're quirky and we're okay with it. F Geyrhalter:                 That's great. E Feucht:                      We don't need to make sense. We don't need people to feel like ... it's okay when people come up to us and go, "Liquor? Isn't that abrasive?" We're okay with sitting here and being like, this is two opposing things that are sitting in the same room as each other and they work. And you customer, are going to have to jump through those hoops in order to work with it. And, people want to because they look at it and they enjoy the playful tone. They enjoy that it doesn't all make sense to them and they enjoy the work, I guess, that we put them through as we go Pit Liquor and natural, healthy and also weird. And so we're quirky. I think that's probably- F Geyrhalter:                 Quirkiness, I really like that for a lot of reasons because A, it's very ownable because no one really thinks like that as a company. And, that's always the big danger when you start to go more into real branding, right, that it should never ever lose that. It can't get corporate. It can't become like everyone else. Right. That's the important thing that you never ... and Steve Jobs said that very famously, that idea that you got to stay, you say I've got to stay foolish. So, you got to keep that idea of the quirkiness going. And it's true, even the idea of putting whiskey into a deodorant, it's quirky. It's weird. It's different. It's fun, but yet it is totally scientific and it took a year or plus, and lots of tests and it's something that is actually very serious because it does create skin reactions. We all know about deodorants and the stuff that's in there. And, that's why I think everyone is seeking a solution to that. So, on the one hand, the quirkiness can take away from the seriousness of the actual product. But, you're a couple, your startup is still relatively young, but what would it be one piece of brand advice for founders? Kind of as a little takeaway from this. Have you ... you learned most probably 4,798 or so lessons along the last two plus years. But, is there something that you feel like that you would like to share where you think this would be with any brands, don't do this or do this. E Feucht:                      I guess, and I guess I'm new in terms of, this is all ... I'm not a branding expert, so I'm going to throw that out there. I know I've said it a few times, but- F Geyrhalter:                 Are you self-conscious on my podcast? E Feucht:                      No, maybe. I think the thing that's risen to the top for us a lot, is that we look at ourselves and we continue to realize how much for us, our brand reflects exactly who we are. And, that's a really interesting thing because it feels a little bit vulnerable sometimes as we look at it and we're like, "Oh my gosh, this is us," but we're taking us and putting it out in the world and it's returning. And it's pretty cool to watch that happen. And, I guess I would encourage people to be present with their brand and to allow themselves to sit with their brand and let it reflect them, because I think our world has a lot of very polished things and I think people are inundated with it. And, I think people are tired of looking at really polished things. And, I think something that hiccups or does something strange or looks a little human or looks a little more, I don't know, it makes people stop. That's a human element and I think being yourself within your branding is a really big deal because you're not going to sit there and go, "I don't know, did we depart from our branding? Did we not?" If you're doing something that really is you, it's to resonate. I don't know. That's what I would say to people, and it's the thing that surprised me. F Geyrhalter:                 No, it is so true and that's why I don't have branding experts on my podcast. I have founders, and founders are in different stages and they have different backgrounds. Some of them are very, very brand centric and they bring lots of experience onto the job. Some of them have been with the company for 10 plus years and they know, or some have pivoted and learned a hard time, but all of them, literally all of them say exactly what you just said, which I hear from everyone, the idea of being true to yourself and that if you really enjoy what you do, people are going to feel that. And that's true. It's true from an intern who enters a Fortune 500 company, and that's true from a product that you buy for the first time and you read the copy and you start understanding the brand. Then, you go to the Instagram page, and I think the idea of polished that you talked about this a little bit. Polished very often feels fake and really the best brands are as far from fake as possible. Real true brands that people fall in love with. E Feucht:                      That's clunky. F Geyrhalter:                 Exactly. They're personable and if you're too polished, it's not very personable. It takes a long time to become personable with something that's polished. So, I hope that you will keep this along your branding journey and you're not being pushed too much into a corner when you expand because that is the big problem. As you expand the brand, and you start suddenly having a hundred people work for you and your product is in every single Whole Foods and Sprouts and God knows where, then at some point, keeping that culture alive ... and Tony Hsiegh of Zappos did such a good job with that, keeping that awkwardness and that fun alive is, I think, going to turn more and more into your number one goal over the next year, far away from product development. E Feucht:                      I think you're right. Even just with the growth we've had, we've had to be very conscious about trying to continue to keep real people present in what's going on. And, it does get harder when you get bigger. Yeah, I think you're right. F Geyrhalter:                 And so, the final question, spray on or roll on deodorant. Is it a personal preference or rather different benefits? E Feucht:                      Well, how gross are you willing to be on your podcast? All right. F Geyrhalter:                 You know what? Let's go for it. Let's go for it. This is going to be rated differently, this one episode. E Feucht:                      Excellent. Because we're going to talk about armpits and armpits make people really uncomfortable. It's funny, but they really do. F Geyrhalter:                 I feel like I'm starting to sweat currently. E Feucht:                      We found that people don't like [crosstalk] armpits. Okay, good. Yay. Okay, so this is personal about me. If you want to talk about real, we'll get real. So, I have really strange armpits and I have this amazing ability to make the deodorant bottle, the roll-on bottle smell like my armpit. I don't have really, really foul armpits, but they're just really strong I guess. And so, I prefer the spray because it's hygienic and you're not touching your armpit with the same thing every day. And so, when I get to the end of the bottle, it doesn't stink. And then I also, I have this other fun quirk with my armpits and I'm unusual. We get this feedback from customers very rarely. We tested it on a bunch of people and we couldn't even find people who could replicate what happens to me. So, they didn't make the deodorant bottle stink. And then, I also put lint into the bottle and I don't know how I do it because I shower and then I put on my deodorant. But by the end of the bottle, I've got the ball of lint in there and it looks really gross. So, I know this is super gross, but I really prefer the spray. But, we have people who really prefer a roll on application because they're much more used to that feeling of putting their deodorant on physically with an application. So, I'd say it's up to you. Do you have long- F Geyrhalter:                 Yeah. It's more about the stimulation, right? Yeah. E Feucht:                      Yeah, it's personal preference. Yes. So, if you have strange armpits like me and they make [inaudible] and you get your bottle and you get to the end and it stinks, let us know. We'll give you a refund and you guys can use spray from then on. F Geyrhalter:                 And, that is the part of Hitting the Mark that is the TMI part. No, I was just interested, because you have both products and they're exactly the identical product. And, I'm just wondering, is there something that actually is ... are there real different benefits, but I think to different people, there are different benefits, just by the way that they waited to use them, but otherwise it stays on the same way. It has the same duration. It's the same thing. And that's what's important. So- E Feucht:                      Exactly. We put it in gyms and at yoga studios and we give them the spray because you don't want to use somebody else's roller bottles. So there's, yeah. F Geyrhalter:                 That's an easy decision to be made. E Feucht:                      It just varies depending on the customer. F Geyrhalter:                 Yes, exactly. E Feucht:                      Yes. We're no longer in the TMI zone. F Geyrhalter:                 Exactly. We have exited. So, listeners who fell in love with Pit Liquor, and quite frankly, how could you not? I did so, for sure. Where can they get their pits drunk, I guess? Where- E Feucht:                      So, get your stanch quenched at, you can go to distilledbathandbody.com or pitliquor.com. Just spell liquor with a Q U, not a C K. You don't actually have to lick your pits, and if you are local to us in Colorado you can also buy it at Lucky's Market in Fort Collins or at the food co op and we are working on expanding, Oh, since this podcast goes live this Friday, we're going to be on Nordstrom's HauteLook and that's a big discount channel that Nordstrom runs. F Geyrhalter:                 Oh cool. E Feucht:                      So, if they're wanting to buy that over the weekend, we've got a big sale going on with Nordstrom. So, head to their HauteLook section and buy us there. F Geyrhalter:                 Perfect, perfect plug that people will definitely appreciate. And from my end, I wish you so much fun with your branding moving into the next 12 months or so. I think things will adjust, things will mature and I would love to have you be a guest that comes back in maybe a year, year and a half when maybe the brand is mature and it's very different and we look back of what happened in between. E Feucht:                      Yeah, I think that'd be really cool. I think there's going to be a lot of change in the next year. F Geyrhalter:                 Awesome. This is really exciting. Well, thank you, Erica, and say thank you to Jason who I know had to drop off because your little one needed some TLCs? E Feucht:                      She did. Yeah. I will say that to him as well. Thank you, Fabian. This is so awesome. F Geyrhalter:                 Absolutely. I loved having you on and we are talking at some point in the future. E Feucht:                      All right, sounds good. Talk to you then. F Geyrhalter:                 Perfect. Thank you. This was Erica and a few minutes of her husband Jason Feucht. It is this diversity in founders and venture capitalists on my show that gets me so excited to record a new episode every two weeks. If you share my enthusiasm, and if you gain valuable entrepreneurial skills and brand strategy knowledge out of my show, please consider becoming a patron with a monthly support of as low as $5.95 just to keep this show going. The Hitting the Mark theme music was written and produced by the one and only, the amazing the producer duo that I can luckily call myself one half of, Happiness Won. I will see you next time when we once again will be Hitting the Mark.
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