April 4, 2022

Michele Romanow (Clearco) - The Three Critical Marketing Metrics for DTC Brands, When VC Money Makes Sense and When It doesn't and The Insight That Led to Founding Clearco

Michele Romanow (Clearco) - The Three Critical Marketing Metrics for DTC Brands, When VC Money Makes Sense and When It doesn't and The Insight That Led to Founding Clearco

Thank you Radha Kapoor for the introduction to Michele Romanow, co-founder and CEO of Clearco. Clearco offers fast affordable funding for ecommerce companies to fund your inventory or marketing needs. Michele is a serial entrepreneur and also one of the dragon’s on Canada’s Dragon’s Den. We discuss what’s misunderstood about scaling ecommerce companies, when venture capital makes sense vs. revenue based financing, her aha moment on Dragon’s Den that led to founding ClearCo and much more. Without further ado, here’s Michele.

  1. You’ve been an entrepreneur your whole career. What was the origin story behind Clearco? How did you and Andrew start Clearco?
  2. What was your first test if this new finance model could work?
  3. How did you think about scale for and what was the early diligence process like when trying to work out if you’re going to finance these companies?
    1. What are the requirements?
    2. How have those requirements evolved?
  4. What were some of your learnings as you were growing Clearco that was most surprising?
  5. How did you approach raising capital from VCs? What was their initial response?
    1. Did you have any VCs that thought what you were doing was a conflict to venture capital?
  6. How do you work together with venture capital?
  7. There are no more Facebook arbitrage opportunities, some consumer VCs have shifted to investing in eCommerce infrastructure where the customer are brands, What’s your assessment of the current landscape within DNVBs when it comes to growth and financing options?
    1. We say on the podcast a lot - it’s easy than ever to build a company, harder than ever to build a brand. What’s key for brands to be able to get past the noise and become large sustainable companies? What makes a brand compelling to you to invest in (either with Clearco or as an angel/investor on Dragon’s Den)?
  8. ClearCo probably sees a lot of DTC metrics from 1000s of companies.
    1. Which are the best measures of success?
    2. Which metrics are most misunderstood?
    3. If she could only pick 3 metrics to understand health/growth of a brand — which 3 would she pick?
  9. How do you also think about the competitive landscape now for the alternative capital financing that you pioneered?
  10. What are some of the other products you offer founders?
  11. I know the focus is eCommerce businesses, but do you also think about helping DNVBs as they head into retail?
    1. How do you think about launching new products at Clearco?
    2. Tell you where you can improve in your business?
    3. If you build a killer product people will come
  12. Recently, Andrew stepped back and became Executive Chairman, you became the CEO from President. What was the reason for the change?
  13. How do you think about launching new products at Clearco?
  14. What’s one thing you would change about venture capital?
  15. What’s one book that inspired you personally and one book that inspired you professionally?
  16. What’s the best piece of advice that you’ve received?
  17. What’s one piece of advice that you have for founders?
Transcript
WEBVTT 1 00:00:12.400 --> 00:00:17.039 Hello and welcome to the consumer VC. I am your host, Michael but 2 00:00:17.120 --> 00:00:20.719 and. On this show we talked about the world of venture capital and innovation 3 00:00:20.839 --> 00:00:25.280 in both consumer technology and consumer products. If you're enjoying this content, you 4 00:00:25.280 --> 00:00:30.480 could subscribe to my newsletter, the consumer VC DOT substackcom, to get each 5 00:00:30.519 --> 00:00:34.119 new episode and more consumer news delivered straight to your inbox. Thank you, 6 00:00:34.200 --> 00:00:38.000 rout hoat Kapoor, for the introduction to our guests today, Michelle Romano, 7 00:00:38.159 --> 00:00:42.719 Co founder and CEO of clear COO. CLEARCO offers fast, affordable funding for 8 00:00:42.759 --> 00:00:47.600 ECOMMERCE companies to fund your inventory or your marketing needs. Michelle is a serial 9 00:00:47.719 --> 00:00:52.119 entrepreneur and also one of the dragons on Canada's dragons den. We discuss what's 10 00:00:52.399 --> 00:00:57.600 understood about scaling ecommerce companies when that your capital makes sense first for revenue, 11 00:00:57.600 --> 00:01:03.759 base financing marketing metrics that she pays attention to in her Aha moment on dragons 12 00:01:03.799 --> 00:01:07.599 den that led to the founding of clear COO. Without further ADO, here's 13 00:01:07.599 --> 00:01:15.680 Michelle. Michelle, thank you so much for joining me here today. How 14 00:01:15.719 --> 00:01:19.560 are you? I'm great. How are you? I'm great. I'm great. 15 00:01:19.599 --> 00:01:23.159 Thanks, gretally great. Thanks again for for being part of the show. 16 00:01:23.920 --> 00:01:26.239 So I know you've been an entrepreneur, a very successful entrepreneur, throughout 17 00:01:26.280 --> 00:01:32.560 your entire career, but what was the origin story or the insight that led 18 00:01:32.680 --> 00:01:37.079 you to found clear bank? At the time and now it's clear co I'm 19 00:01:37.079 --> 00:01:38.359 a serial Octur, which means that's the only thing I know how to do. 20 00:01:38.400 --> 00:01:42.599 Star Company puts it was an engineer at a school, said no to 21 00:01:42.640 --> 00:01:47.680 all of my job offers, decided or figured out that worldwide supply of caviar 22 00:01:47.799 --> 00:01:51.680 was down by ninety five percent and moved to the east coast to build a 23 00:01:51.680 --> 00:01:55.040 fishery from scratches. My first business couldn't even make the supper. I tried 24 00:01:55.599 --> 00:01:59.079 my hands knee deep in like surgeon, literally, and that was actually a 25 00:01:59.079 --> 00:02:01.599 pretty good business until we had a giant recession in two thousand and eight and 26 00:02:01.640 --> 00:02:06.719 I found myself, being twenty two years old, selling the world's most unnecessary 27 00:02:06.840 --> 00:02:09.960 luxury product. So I learned very quickly that the world owes you absolutely nothing 28 00:02:10.000 --> 00:02:14.800 as an entrepreneur. From there built an ECOMMERCE company in Canada. This is 29 00:02:14.840 --> 00:02:16.879 a lot of the inspiration behind Clark, because no one would fund me in 30 00:02:16.919 --> 00:02:20.759 the Early Day. I mean the best offer I got was half a million 31 00:02:20.759 --> 00:02:23.560 bucks for half the company or something, and that didn't make sense because we 32 00:02:23.599 --> 00:02:27.520 are ready doing like, I don't know, two hundred K and revenue at 33 00:02:27.560 --> 00:02:30.599 the time. But I learned really quickly if you could spend a buck on 34 00:02:30.639 --> 00:02:32.919 facebook and make three dollars more, you can keep going. And as results 35 00:02:32.919 --> 00:02:36.840 of that we rolled up a bunch of different ECOMMERCE companies. It's now a 36 00:02:36.879 --> 00:02:39.560 small publicly traded company called to merge. That's a bunch of ECOMMERCE brands in 37 00:02:39.639 --> 00:02:43.919 Canada. From there built another APP called snap saves that I sold a group 38 00:02:43.919 --> 00:02:47.680 on in two thousand and fourteen. And after that something really interesting happens. 39 00:02:47.719 --> 00:02:51.560 I get this phone call Mike and it's like do you want to join the 40 00:02:51.599 --> 00:02:53.680 cast of the Canadian version of Shark tank, and I was like, I 41 00:02:53.680 --> 00:02:57.439 think you have the wrong girl, but like, I'm gonna just say yes 42 00:02:57.520 --> 00:03:00.400 to show up to the audition. So I show up to the audition, 43 00:03:00.439 --> 00:03:02.400 I get the roll and I'm like, oh my gosh, I must be 44 00:03:02.439 --> 00:03:06.280 the I'm the youngest person on this panel for sure, twenty eight years old, 45 00:03:06.319 --> 00:03:08.759 and I got to be the poorest person here on a relative pieces and 46 00:03:08.879 --> 00:03:14.439 I think I saw the pitches way differently than anyone else. And in a 47 00:03:14.479 --> 00:03:17.520 single season we see two hundred and fifty pitches in seventeen days, like even 48 00:03:17.560 --> 00:03:20.719 if you're a VC. I mean this is true level back to back. 49 00:03:20.800 --> 00:03:24.280 These are almost all D Toca commerce pitches, because television doesn't really work well 50 00:03:24.319 --> 00:03:29.120 for like B Tob SASS software. Right. So I'm watching all these founders 51 00:03:29.120 --> 00:03:30.479 are coming on the show. They're like look, willing to give ten percent 52 00:03:30.520 --> 00:03:34.759 of my business for my first two hundred grand. And you ask those founders 53 00:03:34.759 --> 00:03:37.919 what they needed the money for and it's the same two things always. I 54 00:03:37.919 --> 00:03:39.919 need money for facebook ads, which is customer requisition and Growth, and I 55 00:03:39.960 --> 00:03:44.159 need adds, any money for inventory. And so I, you know, 56 00:03:44.280 --> 00:03:46.439 trying to Andrew and I was like, why are founders using the most expensive 57 00:03:46.439 --> 00:03:50.919 capital in the world to do something with a fixed return? Make a mistake. 58 00:03:50.960 --> 00:03:53.240 I wish we could have used clear go to build Clerko and I loved 59 00:03:53.280 --> 00:03:57.719 our seat investors, but we have now paid our seat investors three hundred and 60 00:03:57.759 --> 00:04:01.400 eighty four times their money and there's they just keep riding the curve as we 61 00:04:01.400 --> 00:04:04.199 grow. So it's very, very extensive capital. When you give up a 62 00:04:04.240 --> 00:04:06.680 PC your company because you there's just no way to get a bath. So 63 00:04:06.719 --> 00:04:10.479 I came back the next day dreamed of this new deal type with the Andrew 64 00:04:10.520 --> 00:04:13.000 and I said look to the founder, I'll give you that hund thousand dollars 65 00:04:13.000 --> 00:04:15.800 you were looking for. Instead of taking ten percent of your business that I'm 66 00:04:15.800 --> 00:04:18.720 going to own forever, I want ten percent of your revenue every day. 67 00:04:18.759 --> 00:04:21.879 So like I paid my capital back plus six percent. So for a hundred 68 00:04:21.920 --> 00:04:25.759 grand, I wanted a hundred six thousand dollars back, as I use money 69 00:04:25.759 --> 00:04:28.439 on ads. For the hundred granted ADS Beend, you're probably four hundred thousand 70 00:04:28.480 --> 00:04:30.439 dollars in sales. For six hundred six thousand dollars is a great deal for 71 00:04:30.480 --> 00:04:32.680 you and founderies like this is a loane and I was like, no, 72 00:04:32.800 --> 00:04:35.560 this isn't alone, because alane would have a personal guarantee. So if you 73 00:04:35.560 --> 00:04:38.839 did pay me back and take your house and it would be down on your 74 00:04:38.839 --> 00:04:41.199 business. If you didn't pay it back at also take your business, which 75 00:04:41.240 --> 00:04:45.120 is super punative. And I don't have a fixed payment timeline, I don't 76 00:04:45.120 --> 00:04:47.040 have compounding contristas that. This is just a ref share and he's a. 77 00:04:47.120 --> 00:04:50.279 The only hitch of my deal is that I have to see your facebook data 78 00:04:50.360 --> 00:04:55.279 and your payment processing data so I can understand if your business is really performing. 79 00:04:55.319 --> 00:04:58.439 So that was the beginning of Clerko, if you could believe it or 80 00:04:58.480 --> 00:05:01.800 not. From there, Mike, we have now, you know, invested 81 00:05:01.839 --> 00:05:06.720 more than three point two billion dollars and more than sevenzero different founders, so 82 00:05:06.800 --> 00:05:11.439 we're definitely the largest commerce investor in the world. The other thing that puts 83 00:05:11.560 --> 00:05:15.199 in a sense of scale is the entire US venture capital industry put out twenty 84 00:05:15.199 --> 00:05:17.759 three billion dollars last year. So the fact that we are even a piece 85 00:05:17.839 --> 00:05:23.079 on that pie is, like, pretty incredible for a company that was started 86 00:05:23.439 --> 00:05:27.279 out of my apartment with Andrew six years ago. We think that we're giving 87 00:05:27.279 --> 00:05:30.600 founders a really cool option in terms of another way to grow up their business 88 00:05:30.639 --> 00:05:33.680 where they don't have to take dilucian but they can get the capital to grow. 89 00:05:33.720 --> 00:05:36.680 Certainly that's awesome. It's so the inspiration behind it was on actually a 90 00:05:36.759 --> 00:05:41.800 dragon dens episode, right, yeah, believe it or not. What was 91 00:05:41.839 --> 00:05:46.439 the reaction? Just because obviously was very different. Hadn't seen before anything like 92 00:05:46.480 --> 00:05:49.240 this on Dragon's end. What was the action reaction from other investadors where they 93 00:05:49.279 --> 00:05:51.519 kind of like you're out of your mind, Michelle, for just making his 94 00:05:51.639 --> 00:05:55.480 offer. Oh my gosh they were. They thought I was Vance. First 95 00:05:55.600 --> 00:05:59.040 I didn't think I close the deal because they were like, you know, 96 00:05:59.079 --> 00:06:02.639 a royalty deal on chartanger dragons den is usually like I wanted ten percent royalty 97 00:06:02.759 --> 00:06:05.800 forever or till I get five times by money back, where they're very, 98 00:06:05.920 --> 00:06:10.079 very aggressive. I mean this was till I got my money back plus six 99 00:06:10.079 --> 00:06:12.920 percent. I mean it was it was almost nothing. So the first thing 100 00:06:13.000 --> 00:06:15.199 they said is she's never going to close that deal and I was like you 101 00:06:15.199 --> 00:06:17.959 watch me, I'm going closest to you. But the second round of questioning 102 00:06:17.959 --> 00:06:23.199 that is even more fascinating. Is that the only way we could put out, 103 00:06:23.240 --> 00:06:26.240 you know, billions of dollars is big going to Wall Street and I 104 00:06:26.279 --> 00:06:29.759 had two hundred people that told Andrew and I onwill street that we were out 105 00:06:29.800 --> 00:06:30.920 of our minds. I think the rudest one said, may I don't think 106 00:06:30.920 --> 00:06:35.040 you understand credit and I was like no, I think I understand e commerce. 107 00:06:35.120 --> 00:06:39.480 Is what I understand, and I understand the data sources. I'm looking 108 00:06:39.519 --> 00:06:44.879 for to indicate if these businesses will be good investments, and that was hard. 109 00:06:44.920 --> 00:06:47.240 The first guy that backed us was a guy named Ali from covent sure, 110 00:06:47.279 --> 00:06:50.079 he's been on the show. He's great. He's great, he's he's 111 00:06:50.199 --> 00:06:55.160 amazing, he's like. I mean Ali has a tattoo of a formula on 112 00:06:55.240 --> 00:06:57.800 his arm, like I just I can I can tell you that like him 113 00:06:57.839 --> 00:07:00.399 and I get along really, really well. But he took it. He 114 00:07:00.439 --> 00:07:01.839 took a big risk on us in the early days and he said look, 115 00:07:02.000 --> 00:07:08.079 I believe in this model and it got really big. So I am, 116 00:07:08.199 --> 00:07:11.360 I've always been super grateful to him, for sure. Yeah, all he's 117 00:07:11.399 --> 00:07:15.120 awesome, really great episode a few months ago. So, as you said, 118 00:07:15.120 --> 00:07:18.959 well, you trusted, was you understood. You know the metrics when 119 00:07:18.959 --> 00:07:21.800 it comes to facebook ads. Obviously, when you first talked that entrepreneur on 120 00:07:21.879 --> 00:07:25.319 the show, you said, okay, this is the deal I want to 121 00:07:25.360 --> 00:07:28.360 do, or these my terms, but I need to see, obviously, 122 00:07:28.399 --> 00:07:30.519 your facebook ads and kind of get been to the metrics. And obviously now 123 00:07:30.600 --> 00:07:33.319 you've seen, you know, thousands of, not tens of thousands, of 124 00:07:33.319 --> 00:07:38.240 companies with clearco what do you think? What metrics do you think are most 125 00:07:38.560 --> 00:07:44.600 misunderstood for ECOMMERCE brands and one of the best measures of success. What we 126 00:07:44.639 --> 00:07:47.240 are looking for is your unit economics. We are looking for, you know, 127 00:07:47.319 --> 00:07:50.759 can you sell a basket size of a hundred dollars of stuff with thirty 128 00:07:50.759 --> 00:07:57.480 dollars of cogs and twenty bucks of customer acquisition cost and you have that margin 129 00:07:57.519 --> 00:08:01.839 of you know, whatever it is to make money every time you sell unit? 130 00:08:01.920 --> 00:08:03.600 You really want to be breaking even, if not more, on your 131 00:08:03.639 --> 00:08:07.279 first customer and then you really want to be looking at your retention stats. 132 00:08:07.279 --> 00:08:13.399 I think everyone is sometimes looking for a magic formula of what works for tension 133 00:08:13.439 --> 00:08:16.680 is the metric in every single business, whatever your business, you're running into 134 00:08:16.720 --> 00:08:20.759 the world. That indicates the health of Your Business, because I fundamentally believe 135 00:08:20.839 --> 00:08:24.399 you can trick anyone into doing anything once any time. Right is like, 136 00:08:24.439 --> 00:08:26.199 Oh my God, that looks too good to be true. I'm gonna buy 137 00:08:26.199 --> 00:08:30.920 that. These shoes are really comfortable, although there's six is Solato's. Yeah, 138 00:08:30.920 --> 00:08:33.360 okay, we'll all do something once, and we should do something once 139 00:08:33.360 --> 00:08:37.080 because that creates great animation of trial. But when people do things twice, 140 00:08:37.120 --> 00:08:39.600 they like something or they need something or they want something, and that is 141 00:08:39.639 --> 00:08:43.279 really the health that you should be using. We have models that I couldn't 142 00:08:43.320 --> 00:08:45.679 even tell you it's in them because we have so much data that we've looked 143 00:08:45.720 --> 00:08:48.600 at over now such a long period of time, and so I don't think 144 00:08:48.639 --> 00:08:50.679 that's the value using AIS. I don't even know every metric, but fundamentally 145 00:08:50.720 --> 00:08:54.639 I know that what we care about is younit economics, that we care about 146 00:08:54.679 --> 00:08:58.320 the retention of your customers, and that is timeless. Whether the AD platforms 147 00:08:58.399 --> 00:09:01.279 change, that's time knows. Whether your products change as timeless, whether the 148 00:09:01.320 --> 00:09:05.759 inventory suppliers change. Those are the fundamentals of will build a great brand. 149 00:09:05.039 --> 00:09:09.600 Where does it make sense right now? Is Well, when it comes because 150 00:09:09.600 --> 00:09:11.960 we're brands, because your brands are not really very attractive to VC's overall in 151 00:09:11.960 --> 00:09:16.720 the grand scheme of things. Currently there's quite a few consumer investors who are 152 00:09:16.720 --> 00:09:20.960 now shifting to enter to investing in more ECOMMERCE infrastructure type companies instead of consumer 153 00:09:22.000 --> 00:09:26.600 companies. But when does it make sense for for consumer brands to take to 154 00:09:26.679 --> 00:09:28.600 go to fort to partner with a clear co instead of like a traditional VC? 155 00:09:30.039 --> 00:09:33.080 Let's actually take a step back and it's like when should equity be used? 156 00:09:33.159 --> 00:09:37.399 Period Equita should be used when you're taking zero to one risk and you 157 00:09:37.440 --> 00:09:41.360 have no idea of the outcome. So a classic example of this is like 158 00:09:41.440 --> 00:09:43.679 we want to launch your rocket and we need two hundred fifty engineers to do 159 00:09:43.720 --> 00:09:48.000 something before anything's going to happen. That's true zero to one risk. We 160 00:09:48.000 --> 00:09:50.200 actually have no idea we're going to be successful in building our rocket or not. 161 00:09:50.399 --> 00:09:56.480 So that's the level of risk that an equity investor should take. And 162 00:09:56.600 --> 00:09:58.559 the way you figure this out is what you're going to use your capital for. 163 00:09:58.720 --> 00:10:03.080 If you were going to raise a bunch of venture capital or equity dollars 164 00:10:03.080 --> 00:10:05.519 and use it to buy ads, that doesn't really makes sense because you know, 165 00:10:05.840 --> 00:10:09.679 you actually know that really well. You're actually giving the VC a really 166 00:10:09.759 --> 00:10:11.720 free ride on that. You know that you're investing a dollar and you're making 167 00:10:11.720 --> 00:10:15.399 three dollars out of that. So why are you paying for that with the 168 00:10:15.399 --> 00:10:18.679 most expensive capital? You know, investing in humans and Pay Roll is a 169 00:10:18.679 --> 00:10:20.519 little bit different. You have to see if like these have have strong enough 170 00:10:20.519 --> 00:10:24.039 break even periods investing an inventory. You should not be using equity capital for 171 00:10:24.200 --> 00:10:31.440 that. And so when I think about building extraordinary products that are true zero 172 00:10:31.559 --> 00:10:35.159 to one that take a lot of product development costs. I can see that 173 00:10:35.200 --> 00:10:37.559 being in the equity level bucket. But for the most part, when I 174 00:10:37.559 --> 00:10:43.919 look at the balance sheets of thousands of ECOMMERCE brands, I mean eighty to 175 00:10:43.000 --> 00:10:46.000 ninety percent of their money goes between ads and inventory and and a couple of 176 00:10:46.120 --> 00:10:48.879 humans on their team, and so that you should be able to fund that 177 00:10:48.919 --> 00:10:52.039 with far super capital than equity. And then you need to like look, 178 00:10:52.159 --> 00:10:54.960 the other thing about an equity investor is like this is a marriage with no 179 00:10:56.039 --> 00:10:58.799 sex. You don't get out of this relationship anytime soon, and so you 180 00:10:58.840 --> 00:11:03.720 have to really, really like the investor that you are working with and understand 181 00:11:03.720 --> 00:11:07.519 that you were signing up for a really long term commitment with them and that 182 00:11:07.679 --> 00:11:11.720 that partnerships becomes you really important, or you can become very, very painful. 183 00:11:11.799 --> 00:11:16.120 I know obviously your focus is ecommerce business, but how do you also 184 00:11:16.240 --> 00:11:18.919 think about helping, you know, Disney, your brands may be head into 185 00:11:18.960 --> 00:11:22.200 retail, for example, and like and actually go more more. I'MI channel 186 00:11:22.279 --> 00:11:26.279 the cool goal of our platform is to be way more than capital. When 187 00:11:26.320 --> 00:11:28.279 we launched, like capital was like the first piece of coming in, but 188 00:11:28.320 --> 00:11:31.480 I mean every business of ours. After you're doing, you know, more 189 00:11:31.480 --> 00:11:35.399 than a hundred thousand dollars a monthly revenue, gets your own coach, and 190 00:11:35.440 --> 00:11:37.559 so we help you connect with our other products, whether that's like the partners 191 00:11:37.559 --> 00:11:41.600 you should be working with at this stage in the company. You know your 192 00:11:41.639 --> 00:11:45.759 insights tools that you should be like. We can show you how your benchmarking 193 00:11:45.840 --> 00:11:50.440 relative to your competitors. We also have our whole clear x platform, which 194 00:11:50.480 --> 00:11:54.039 is we had so many people come to us being like we're looking to buy 195 00:11:54.080 --> 00:11:56.039 commerce companies and we're like, we have a lot of e comference companies. 196 00:11:56.080 --> 00:11:58.679 So it's like a B cell market place where if you're interested in selling your 197 00:11:58.679 --> 00:12:01.919 business at one point we can connect you with the veted buyer. We've actually 198 00:12:01.960 --> 00:12:07.720 sold twelve companies through our our team so far, which is really, really 199 00:12:07.759 --> 00:12:11.200 cool and a huge added benefit to being part of our portfolio. What actually 200 00:12:11.240 --> 00:12:16.799 goes into maybe launching like new products for founders, for for obviously, companies 201 00:12:16.799 --> 00:12:18.480 and commerce companies, maybe partners to like one of the things that you and 202 00:12:18.480 --> 00:12:22.039 your team thinking about where you believe that clearhood can be helpful. What we 203 00:12:22.080 --> 00:12:26.559 can do is we can tell you where you can improve in your business, 204 00:12:26.600 --> 00:12:31.480 because we're seeing, you know, I can see so many stats across how 205 00:12:31.480 --> 00:12:33.879 adds are performing on facebook, so many steps. We can be like hey, 206 00:12:33.919 --> 00:12:37.200 you should spend your money here right now. This is actually going in 207 00:12:37.200 --> 00:12:39.320 a better direction. We can your last question. We can give you advice 208 00:12:39.440 --> 00:12:43.879 on being like your business is probably the size and scale where you can start 209 00:12:43.919 --> 00:12:46.399 looking at offline sources of revenue and you know, if you're looking for a 210 00:12:46.440 --> 00:12:48.879 way to do your first pop up shop, we can connect you with another 211 00:12:48.879 --> 00:12:54.159 founder that really grew very strongly starting with either wholesale or offline pieces of revenue, 212 00:12:54.159 --> 00:12:58.360 and so that's like one of the benefits of being in our community is 213 00:12:58.360 --> 00:13:01.159 that there's no perfect playbook on how to build these things, but we definitely 214 00:13:01.240 --> 00:13:05.600 have some some best practices. Our team is spending a lot of time coaching 215 00:13:05.639 --> 00:13:09.399 our founders how to get through two major changes right now, number one, 216 00:13:09.440 --> 00:13:11.360 the supply chain issues that we're seeing in the market and number two, the 217 00:13:11.399 --> 00:13:16.559 big changes on IOS fourteen and the ad platforms. And there's lots of companies 218 00:13:16.600 --> 00:13:18.799 that are figuring out how to make it through and drive during this environment. 219 00:13:18.840 --> 00:13:22.679 It's just about, you know, figuring out the right things on the marketing 220 00:13:22.759 --> 00:13:26.879 piece and obviously with the IOS update and as well, as you know, 221 00:13:28.159 --> 00:13:30.960 when we talked as a lot on the show about how there was no longer 222 00:13:31.080 --> 00:13:33.320 really clear like facebook, Arbi charge opportunities that you have in their early two 223 00:13:33.320 --> 00:13:37.879 thousand and ten. How do you think about building a brand today? We 224 00:13:37.279 --> 00:13:41.039 say this all the time on the podcast about how it's easier than ever to 225 00:13:41.039 --> 00:13:43.879 build like any commerce company, but harder than every than build a brand. 226 00:13:43.919 --> 00:13:48.360 When you're thinking about, you know, providing capital and part room with brands. 227 00:13:48.360 --> 00:13:50.519 How do you think about this question? I think it's a trap when 228 00:13:50.519 --> 00:13:54.840 you say something is over and I'll give you the best example of this. 229 00:13:56.159 --> 00:14:01.720 So it's two thousand and ten and I'm running effectively a group on competitor in 230 00:14:01.759 --> 00:14:05.039 Canada and if you everyone, I think, remembers this era. But Group 231 00:14:05.039 --> 00:14:11.039 on got big because we didn't just start sending weekly or, you know, 232 00:14:11.120 --> 00:14:15.799 biweekly or monthly emails, we started sending daily emails for like the deal of 233 00:14:15.840 --> 00:14:18.279 the day. Are Rids in your inbox at eight in the morning and everyone 234 00:14:18.360 --> 00:14:22.200 was super excited because it was like twenty dollars for forty of Thai food and 235 00:14:22.200 --> 00:14:26.200 everyone was so excited and for the first year and a half. That was 236 00:14:26.240 --> 00:14:31.440 like absolute gang busters. I would say most daily deal sites were making eighty 237 00:14:31.759 --> 00:14:35.679 eighty percent of their revenue off their email subscriber list. And then at some 238 00:14:35.759 --> 00:14:41.080 point a combination of you know, Google didn't really like that, so they 239 00:14:41.159 --> 00:14:45.840 moved you know, promotional emails from Your inbox into a tab called updates. 240 00:14:45.919 --> 00:14:48.200 That was a big or promotions. That was a big blow. Consumer stuff 241 00:14:48.240 --> 00:14:52.360 liking it, because now every single company was increasing their email frequency, and 242 00:14:52.639 --> 00:14:58.840 I actually remember seeing this chart. We were seeing something like ten percent optos 243 00:14:58.919 --> 00:15:03.000 month over month, and so this is what it felt like like. It 244 00:15:03.080 --> 00:15:05.320 just felt like email was dying, like no one was ever going to use 245 00:15:05.360 --> 00:15:07.679 email again. It was going to be a disaster. And this is, 246 00:15:07.720 --> 00:15:11.679 I think, the same thing that people are feeling about facebook working. facebook 247 00:15:11.720 --> 00:15:15.120 marketing is not going away, but instead of being able to use a sniper 248 00:15:15.159 --> 00:15:18.360 to find exactly who you're looking for, you're now getting something that's probably closer 249 00:15:18.399 --> 00:15:20.600 to a billboard, and so that just means we're going to need more creativity 250 00:15:20.639 --> 00:15:24.840 and more different platforms. I would look at something like Tick Tock. That 251 00:15:24.960 --> 00:15:28.879 has a ton of organic traction. Still the people are still seeing you know, 252 00:15:28.919 --> 00:15:31.919 a massive amount of free eyeballs on as like coming upstream. I would 253 00:15:31.960 --> 00:15:37.960 see social selling. We've just start at the period where people are going live. 254 00:15:37.039 --> 00:15:39.879 I downloaded this great Chinese APP that was showing me how they were like 255 00:15:39.960 --> 00:15:43.919 selling products and there was literally fruit venders on the website and there was a 256 00:15:43.919 --> 00:15:48.080 guy showing me a hundred different ways to chop his radishes and I watch this 257 00:15:48.080 --> 00:15:52.279 because it was fascinating for like six minutes. Right that that trend has barely 258 00:15:52.399 --> 00:15:58.159 even started in North America on social selling and life selling. So I think 259 00:15:58.200 --> 00:16:02.320 it's always a trap when you're like, well, what happens to these companies 260 00:16:02.320 --> 00:16:06.279 when email disappears? Well, what had to happen is facebook marketing started to 261 00:16:06.320 --> 00:16:10.080 happen when emails disappeared, and then we had to figure out the next iteration. 262 00:16:10.279 --> 00:16:14.120 And so this will always be a combination of figuring out where the arbitrage 263 00:16:14.120 --> 00:16:17.200 has we are definitely going to see the decline of some of these platforms in 264 00:16:17.240 --> 00:16:21.759 a lot more creativity around using them, and then remember at the end of 265 00:16:21.759 --> 00:16:26.320 the day, the way you build brand ultimately is community. Brand is not 266 00:16:26.360 --> 00:16:30.039 what you say about yourself, it's what other people say about you. That 267 00:16:30.159 --> 00:16:33.799 is what build a brand, and so by reinforcing your community, by building 268 00:16:33.799 --> 00:16:38.960 referrals, by building strong repea customers, that's what builds extraordinary brands of people 269 00:16:40.000 --> 00:16:41.919 come back to time and time again. I mean you'll get a brand like 270 00:16:42.039 --> 00:16:47.399 next where, I mean these are really high percentages of referrals and people just 271 00:16:47.440 --> 00:16:51.080 post their content all the time because they built something that a lot of women 272 00:16:51.159 --> 00:16:55.440 stand for. After you've got the investment from a coventure and Ali like, 273 00:16:55.519 --> 00:16:57.639 what was kind of next in terms of the actual growth of clear code? 274 00:16:57.679 --> 00:17:02.879 How did you think about partnering with entrepreneurs or kind of getting entreprenurs on board 275 00:17:02.919 --> 00:17:06.400 that even this was like a new option, because this is obviously a very 276 00:17:06.440 --> 00:17:10.359 new type of capital that that you're offering? We had to explain it to 277 00:17:10.400 --> 00:17:14.160 them. I don't think anyone understood. People understood what a bank loan was 278 00:17:14.240 --> 00:17:18.279 and people understood what an equity investment was. No one understood what revenue capital 279 00:17:18.519 --> 00:17:22.680 was. It largely didn't exist. So we went out there with the sales 280 00:17:22.680 --> 00:17:26.720 team and started explaining what we said and we contacted e commerce standards and we 281 00:17:26.759 --> 00:17:32.119 got in front of them, whether it was through instagram or Linkedin or whatever 282 00:17:32.160 --> 00:17:34.759 and started explaining our product and I think in a decade from now absolutely every 283 00:17:34.880 --> 00:17:37.880 entrepreneur will know that this is an option that exists. We are still just 284 00:17:37.960 --> 00:17:42.119 scratching the surface of how many entrepreneurs could use this as an option, because 285 00:17:42.519 --> 00:17:45.440 the reality is is we don't at this point. We don't just fundy commerce 286 00:17:45.480 --> 00:17:48.440 companies. We can fund SAS businesses. We can find mobile APPS and games. 287 00:17:48.440 --> 00:17:53.160 We funded, you know, anyone that's effectively using capital for customer acquisition. 288 00:17:53.200 --> 00:17:56.880 We can really fund. And then we've expanded that into, you know, 289 00:17:56.920 --> 00:17:59.839 three different continents, and so we've been able to grow. But the 290 00:18:00.880 --> 00:18:03.799 you should not feel bad about having to explain your product in the early days. 291 00:18:03.799 --> 00:18:07.319 That's when you know you're on to something and you should take all that 292 00:18:07.319 --> 00:18:10.720 feedback. But I can tell you, I mean if we had just run 293 00:18:10.720 --> 00:18:12.440 facebook ads hoping that people understood what we were doing, I mean it wouldn't 294 00:18:12.440 --> 00:18:18.160 have worked. What were some of the learnings? Is obviously you've grown extremely 295 00:18:18.240 --> 00:18:21.720 rapidly over the past few years. What were some of the learnings that you 296 00:18:21.720 --> 00:18:25.039 thought maybe were like most surprising on your journey? I think one of the 297 00:18:25.039 --> 00:18:29.720 things that's really interesting about our story is that we had been you know, 298 00:18:29.720 --> 00:18:32.519 I had seen this deal on dragons and we were running this experiment in the 299 00:18:32.519 --> 00:18:36.680 background. But the original company started by funding freelancers. So we were funding 300 00:18:36.720 --> 00:18:41.039 Uber Drivers and we were funding airbnb hosts and I remember actually saying like look, 301 00:18:41.039 --> 00:18:44.839 it was ninety percent of our business at one point was airbnb host and 302 00:18:44.880 --> 00:18:48.039 we were running the SEC commerce thing in the background and everyone said to us 303 00:18:48.039 --> 00:18:52.440 like you shouldn't pivot the whole company around this. But when you actually see 304 00:18:52.480 --> 00:18:56.200 your own data and when you're not lying to yourself, it's really important the 305 00:18:56.200 --> 00:19:00.319 founders truss they're got. You can always make data look really polished and when 306 00:19:00.319 --> 00:19:02.599 you put it out to market, but you know, you can lie to 307 00:19:02.640 --> 00:19:04.480 a lot of people. You should be lying to yourself. And so we 308 00:19:04.599 --> 00:19:08.519 looked at how well the commerce book was doing, we looked at how fast 309 00:19:08.559 --> 00:19:12.680 the market was growing and we decided to make that bet, I think, 310 00:19:12.799 --> 00:19:17.240 very, very early on, when that wasn't always clear, and so I 311 00:19:17.240 --> 00:19:21.680 think most people would be surprised at at how scary that was. I mean 312 00:19:21.720 --> 00:19:25.240 we had deployed thirty million dollars in the AIRBNB space. This was not like 313 00:19:25.240 --> 00:19:26.599 a small business. I mean we had raised a whole series a on that 314 00:19:26.640 --> 00:19:30.759 business. It was not like a this was not like a small pivot that 315 00:19:30.799 --> 00:19:33.000 we did, you know, day two of the business. This was. 316 00:19:33.279 --> 00:19:36.440 This was a lot different. What do you think for any entrepreneur that's building 317 00:19:36.440 --> 00:19:40.799 a brand from bill an ecommerce band, what do you think is still maybe 318 00:19:40.880 --> 00:19:45.160 misunderstood when it comes to brand building today, or maybe something that they should 319 00:19:45.160 --> 00:19:48.880 be thinking about more carefully in the beginning? If you build a killer product, 320 00:19:48.960 --> 00:19:53.880 people will come and I think sometimes any commerce are's still too much around. 321 00:19:53.920 --> 00:19:56.559 You know, did you build good marketing? Did you put it together? 322 00:19:56.680 --> 00:20:03.039 I think that this still the companies that get really big are fundamentally things 323 00:20:03.119 --> 00:20:06.279 that you know, do you have a product that when someone left their home 324 00:20:06.279 --> 00:20:07.920 and they went on a trip, they would be really pissed off if they 325 00:20:07.960 --> 00:20:11.839 forgot to bring with them? Like that's really your litmus test and it doesn't 326 00:20:11.880 --> 00:20:15.799 have to be good, it has to be great. And you know, 327 00:20:15.839 --> 00:20:19.079 we can talk a lot about creative marketing and all that, but fundamentally, 328 00:20:19.119 --> 00:20:22.400 companies that make it fifty or hundred million dollars from revenue have just products that 329 00:20:22.440 --> 00:20:27.119 are so much better and whether that's like the newest type of flip flop that 330 00:20:27.160 --> 00:20:30.079 doesn't hurt your feet, that's organomical. We just funded a company in that 331 00:20:30.160 --> 00:20:34.440 space to clothing that just fits so much better than the standard or made with 332 00:20:34.440 --> 00:20:38.359 better materials, like constantly that. That makes a big difference. And then 333 00:20:38.359 --> 00:20:42.279 I think it's being honest and authentic with who your audiences. That's like. 334 00:20:42.319 --> 00:20:47.319 The other part is like, can you not be afraid to be a little 335 00:20:47.359 --> 00:20:52.200 bit controversial in your marketing? Often and it's not just about building a pretty 336 00:20:52.240 --> 00:20:56.319 brand. I think those are the ones that don't have that lasting power. 337 00:20:56.359 --> 00:20:59.039 It's about, you know, building something that stands up for the for the 338 00:20:59.079 --> 00:21:00.799 crowd. Yeah, isn't it is, because we've had this discussion a few 339 00:21:00.799 --> 00:21:07.640 times on the show of do you need prior differentiation in order to build like 340 00:21:07.680 --> 00:21:11.519 a big business within good summer brand? And so I think your first point, 341 00:21:11.640 --> 00:21:14.480 you do need probably differentiation if you do want to build like a very, 342 00:21:14.559 --> 00:21:18.440 very large business. I always think about like the protein powder business, 343 00:21:18.480 --> 00:21:22.200 like how many people have tried to like brand and do that and like there's 344 00:21:22.240 --> 00:21:25.319 a couple of them that had become Bigas I think fundamentally they do have better 345 00:21:25.319 --> 00:21:29.680 products. Some of them are probably mostly, mostly branding and creativity with influencers, 346 00:21:29.680 --> 00:21:33.119 but I just don't think they have the repeat race. But they're looking 347 00:21:33.200 --> 00:21:37.519 for. Do you also add clearco also look when you're evaluating whether you should 348 00:21:37.519 --> 00:21:40.319 partner brands? You also know, obviously you look at, as you say, 349 00:21:40.440 --> 00:21:45.240 like retentions, number one, break even and UN economics. Do you 350 00:21:45.279 --> 00:21:48.880 also pay attention to the actual category itself? We don't. Actually, for 351 00:21:48.920 --> 00:21:52.920 the most part we look at your growth numbers, because I think that leads 352 00:21:52.960 --> 00:21:56.160 you astray. I have a great story in our early days where I had 353 00:21:56.160 --> 00:21:57.400 a VC COM me and they're like, Michelle, have a referral for you. 354 00:21:57.440 --> 00:22:00.559 I was like, Oh great, what is company do? And the 355 00:22:00.559 --> 00:22:03.240 guy goes they make shoelaces. He goes there really ugly shoelaces and I was 356 00:22:03.240 --> 00:22:07.039 like how much they sell in shoelaces? He goes they said they make eighteen 357 00:22:07.079 --> 00:22:11.279 million dollars a year selling shoelaces. I'm like, who the heck are you 358 00:22:11.759 --> 00:22:17.519 to be like eighteen million dollars of purchasers did not think these were ugly shoelaces, 359 00:22:17.519 --> 00:22:22.079 and I think that is the perpetual bias that happens in VC. Is 360 00:22:22.119 --> 00:22:25.960 like people talk about the gender bias for the geographical bias. The real bias 361 00:22:26.079 --> 00:22:29.119 is that if you are not going to use the product, it is very, 362 00:22:29.240 --> 00:22:32.240 very difficult for you to invest it, and so that's why I wasn't 363 00:22:32.319 --> 00:22:36.440 hard when Peloton was running around Silicon Valley being like okay, a two thousand 364 00:22:36.440 --> 00:22:38.519 dollar stationary bike with a giant ipad taped to it, of course I'd buy 365 00:22:38.519 --> 00:22:44.279 that, whereas I think the average person is like no, that's actually kind 366 00:22:44.319 --> 00:22:47.319 of a bit crazy. And I think we've seen this time and time again. 367 00:22:47.559 --> 00:22:52.480 There is so many great businesses that work for what people think are niches, 368 00:22:52.640 --> 00:22:55.640 you know, small groups, but they end up being massive because the 369 00:22:55.640 --> 00:22:59.279 founder really understands how large these groups are. Yeah, I mean it's interesting 370 00:22:59.319 --> 00:23:03.759 because I've had on VC's where some of them say it's tough to know, 371 00:23:04.400 --> 00:23:08.559 to really understand a category if you are not the consumer right to actually invest 372 00:23:08.559 --> 00:23:11.759 in it yourself. But then I've had others who say that actually they much 373 00:23:11.799 --> 00:23:17.000 prefer investing in categories where they're not the customer because then there's no actual bias 374 00:23:17.079 --> 00:23:19.200 towards them that they would if they would actually purchase the product or not. 375 00:23:19.319 --> 00:23:22.400 So I think that part of it is pretty fascinating. I feel like, 376 00:23:22.440 --> 00:23:26.240 even if they say that, there's still a bias, like it's like marketing, 377 00:23:26.319 --> 00:23:30.720 right. You have to show a human something three times for something to 378 00:23:30.720 --> 00:23:33.759 feel familiar. Right. So you see one billboard and then you see one 379 00:23:33.799 --> 00:23:37.000 retargeting at and then you know, someone mentions to you like, Oh, 380 00:23:37.079 --> 00:23:41.279 yeah, I have to buy this thing and your brain, like there's lots 381 00:23:41.319 --> 00:23:45.079 of psychology on your brain, produces this familiarity concept. was something that now 382 00:23:45.079 --> 00:23:48.480 seems normal or the thing to do, and so I think it's great that 383 00:23:48.519 --> 00:23:52.720 people are saying that. I have a harder time believing that. I think 384 00:23:52.880 --> 00:23:56.799 generally it is very, very difficult for us to make personal equity investments. 385 00:23:56.839 --> 00:24:00.279 That are things that we that we don't, you a fundamentally understand, and 386 00:24:00.319 --> 00:24:03.279 it's it's the reason when we look at our portfolio it looks so much different 387 00:24:03.279 --> 00:24:07.720 than a BC's. Right, we've backed twenty five times more women than the 388 00:24:07.799 --> 00:24:11.079 venture capital in street reader folly. Like that's mind blowing to me that that 389 00:24:11.119 --> 00:24:15.240 didn't happen because we were like specifically targeting women. That happened because we said, 390 00:24:15.279 --> 00:24:18.279 look, if we just use data to make the decisions, if we 391 00:24:18.279 --> 00:24:19.960 don't care about category, if we don't care about where the founder went to 392 00:24:21.000 --> 00:24:22.960 school, we would do so much better at this. A third of our 393 00:24:22.960 --> 00:24:26.160 founders are BYPAC we funded a founder in every state in America. Like it's 394 00:24:26.200 --> 00:24:30.279 just it's a huge group of people that I think for the most part, 395 00:24:30.279 --> 00:24:32.559 we're overlooked just because they didn't know, if you see in their network. 396 00:24:32.640 --> 00:24:34.480 And also, I mean that makes sense on the wind front since obviously, 397 00:24:34.519 --> 00:24:37.799 like in consumer the women are the majority when it comes to making the actual 398 00:24:37.799 --> 00:24:41.880 purdacy decision right. So it makes sense that you that actually, if you 399 00:24:41.880 --> 00:24:45.200 have a representation of who actually buys, you would think they'd be a lot 400 00:24:45.200 --> 00:24:47.839 more products for women right and make a lot of saids. So what is 401 00:24:47.839 --> 00:24:52.559 one thing that you would change about either investing consumer brands or just overall investing 402 00:24:52.640 --> 00:24:56.759 or or financing consumer brands landscape? I don't know if this is something I've 403 00:24:56.839 --> 00:24:59.960 changed, but this is just something I'm observing. I think we're going to 404 00:25:00.000 --> 00:25:03.839 head into a period of a lot of consolidation in the space. I think 405 00:25:03.920 --> 00:25:07.200 this is we've gone through ten years of a lot of digital first brands being 406 00:25:07.240 --> 00:25:11.079 built and now we are seeing, you know, starting with the Razzio and 407 00:25:11.119 --> 00:25:15.079 in the Amazon space. But we are seeing increasingly amount of these companies being 408 00:25:15.119 --> 00:25:18.680 bought. I think a good thing. It's giving founders, I think, 409 00:25:18.720 --> 00:25:22.519 sometimes the exit they're definitely looking for. I think at the same time we're 410 00:25:22.519 --> 00:25:26.519 also seeing the top of the funnel just start with recreated all over again. 411 00:25:26.640 --> 00:25:30.480 During covid we saw double the amount of new business is being created in the 412 00:25:30.559 --> 00:25:33.559 US than any other year in the last eight years. So when people talk 413 00:25:33.599 --> 00:25:36.519 about the great resignation, I mean people truly sad at home and they're like, 414 00:25:36.519 --> 00:25:37.480 man, if there's going to be a virus, I'm going to build 415 00:25:37.519 --> 00:25:41.680 my dreams, I'm not going to go work for something else. And you 416 00:25:41.720 --> 00:25:44.240 know, most people talk about this in the media as well. People are 417 00:25:44.279 --> 00:25:47.119 leaving their jobs. What are people leaving their jobs to do? They're leaving 418 00:25:47.119 --> 00:25:49.759 their jobs to start companies. And so I actually think we're going to see, 419 00:25:49.759 --> 00:25:56.240 and are starting to witness this in incredible surgeons of the next wave of 420 00:25:56.319 --> 00:25:57.480 these commerce companies. So I think at the top, when you're a lot 421 00:25:57.559 --> 00:26:00.079 larger, I think we're going to see a lot of consolidation and I think 422 00:26:00.119 --> 00:26:03.720 in the top of the funnel where people are just starting. We're going to 423 00:26:03.720 --> 00:26:07.480 see a huge amount of creativity come as a result of people leaving their jobs 424 00:26:07.480 --> 00:26:10.079 to build their businesses. That's a great point. That's a great point. 425 00:26:10.079 --> 00:26:12.720 So we shall tell us a little bit about your Vegean Kepeal Scout Program Yeah, 426 00:26:12.880 --> 00:26:15.880 so it's not a venture capital fund, but it is a scout program. 427 00:26:15.880 --> 00:26:19.359 So there has always been this elite thing that's happened in Silicon Valley where 428 00:26:19.359 --> 00:26:22.039 you could be a scout for a venture fund. So if you brought them 429 00:26:22.039 --> 00:26:25.960 a deal, you've got a portion of carry in that deal or a little 430 00:26:25.960 --> 00:26:27.640 bit of the upside of that deal, and it was a great way, 431 00:26:27.720 --> 00:26:30.680 if you were thinking about getting into vc, if you were a founder yourself, 432 00:26:30.759 --> 00:26:33.640 or if you are part of the startup community, to be able to, 433 00:26:33.680 --> 00:26:36.960 first of all, help the people in your network get funded and, 434 00:26:37.000 --> 00:26:38.880 second of all, you know, share a little bit of the upside on 435 00:26:38.920 --> 00:26:42.680 that. And so that's actually what we were able to launch, is our 436 00:26:42.680 --> 00:26:48.359 founders fund, which effectively allows people to become the scouts in the clear couttetwork, 437 00:26:48.440 --> 00:26:53.319 where we pay a portion of how we fund our founders, but also 438 00:26:53.359 --> 00:26:57.079 allows you to effectively build that VC portfolio where you're getting to know founders, 439 00:26:57.119 --> 00:27:00.559 you're figuring out how to get them funded in your understand any part of their 440 00:27:00.640 --> 00:27:03.880 journey so that they'll our launch partners, like conclude, the founder of Andy 441 00:27:03.960 --> 00:27:08.000 Swim and Jada Cedar, like we have clemnetic, like we have a lot 442 00:27:08.039 --> 00:27:11.920 of Brat e commerce founders that have agreed to be our venture scouts and we're 443 00:27:11.920 --> 00:27:15.160 pretty excited about it. That's awesome. So, instead of being a venture 444 00:27:15.200 --> 00:27:18.759 scout in terms of, you know, Investine for equity, it's actually becoming 445 00:27:18.799 --> 00:27:22.880 a partner of clear coome. Is that right? Exactly. So Venture Scout 446 00:27:22.960 --> 00:27:26.200 for getting your company's Rep sure deals is the best way to think about it. 447 00:27:26.440 --> 00:27:30.519 What is one book that inspired you personally, one book that is aspired 448 00:27:30.519 --> 00:27:33.400 you professionally? I think they kind of all blend for me. Look, 449 00:27:33.440 --> 00:27:37.920 I love reading books of other entrepreneurs and I love the less varnish they are 450 00:27:37.079 --> 00:27:41.079 the better, because I remember that it doesn't matter what company you built, 451 00:27:41.079 --> 00:27:45.079 there was so many times of that company was close to death. And so 452 00:27:45.480 --> 00:27:48.599 I loved the story of Hallulahm and it's built, that it was called little 453 00:27:48.640 --> 00:27:51.359 black stretchy pants. You know, I love the story of how Apple was 454 00:27:51.400 --> 00:27:55.160 built at the end or the story was written at the end. I think 455 00:27:55.200 --> 00:27:59.519 one of the best books that every entrepreneur should read is influenced by robot Shelgini. 456 00:27:59.599 --> 00:28:03.880 That goes through really the six big psychological selling techniques that we all use. 457 00:28:03.960 --> 00:28:06.960 It is a classic. I try and reread it all the time and 458 00:28:07.000 --> 00:28:08.759 then I think never split the difference. Is the best book I've read a 459 00:28:08.759 --> 00:28:12.640 negotiation. That's a really important read for most unders. Very original. I 460 00:28:12.680 --> 00:28:18.079 don't think we've had anyone mentioned Lulemon story or or how apple was built or 461 00:28:18.160 --> 00:28:22.880 influence. Mostly when people talk about entrepreneurial books they all point to shoot dogs 462 00:28:22.880 --> 00:28:25.880 as I'm a book up that that's been mentioned the show so so I'm glad 463 00:28:25.920 --> 00:28:27.960 that you gave us some new ones there, Michelle. Yeah, it's great. 464 00:28:29.000 --> 00:28:30.799 What's the best piece of advice that you've received? You think? My 465 00:28:30.920 --> 00:28:34.839 best piece of advice is always just to start now. I think it's simple, 466 00:28:34.839 --> 00:28:38.000 but it is something that most people don't do. Most people are fully 467 00:28:38.079 --> 00:28:42.480 analysis by paralysis. Most people are thinking way too much. Compare this is 468 00:28:42.519 --> 00:28:45.880 this is a swimming pool and you're going to have to jump in and the 469 00:28:45.880 --> 00:28:48.519 water is going to be cooled. There is no way you're jumping into that 470 00:28:48.519 --> 00:28:51.519 swimming pool and it's not going to be pleasant. And so the longer you 471 00:28:51.519 --> 00:28:56.039 wait, the more scared you get. And Businesses Start and get built not 472 00:28:56.119 --> 00:29:00.039 on great early ideas. This is another huge myth is that these every idea 473 00:29:00.119 --> 00:29:03.759 that was massive started as a massive, huge idea that come on. Even 474 00:29:03.880 --> 00:29:07.880 Ubert did not start, as you know, inventing peer to peer ride sharing. 475 00:29:07.960 --> 00:29:12.599 It was a autodialer to a black card company and could you put a 476 00:29:12.720 --> 00:29:17.599 hopefully a location coordinate. It was so much iteration to get them to the 477 00:29:17.640 --> 00:29:21.279 point that they got to and I think if you're not willing to start as 478 00:29:21.279 --> 00:29:25.400 a founder, that that is what you have to I would be constantly going 479 00:29:25.440 --> 00:29:29.720 in and then I have to dig deep and be extremely resilient. Right, 480 00:29:29.759 --> 00:29:33.440 like everyone has a plan until they get punched in the face, and this 481 00:29:33.519 --> 00:29:37.000 is a job where you're constantly in that ring, you're constantly having things go 482 00:29:37.119 --> 00:29:41.519 wrong and you constantly need to show a lot of encouragement from your team even 483 00:29:41.519 --> 00:29:44.960 when things are not going well. My final question to you is, what's 484 00:29:44.960 --> 00:29:49.079 what piece of advice, particularly that you have for founders of brands? Never 485 00:29:49.079 --> 00:29:52.759 forget that you are number one a product company and your product needs to keep 486 00:29:52.799 --> 00:29:57.079 getting better and better as of everything you can do working with your manufacture is 487 00:29:57.119 --> 00:30:03.400 so, so, so important and and instead of thinking about creative being, 488 00:30:03.480 --> 00:30:07.559 you know, coin, operate a machine or I can buy this many ads, 489 00:30:07.640 --> 00:30:11.519 think about how you build creative that people will want to share when they're 490 00:30:11.559 --> 00:30:15.960 not being paid. And that is ultimately what creates organic growth, create strong 491 00:30:17.079 --> 00:30:21.519 retention and create strong community and is always excelled off these companies. Michelle, 492 00:30:21.519 --> 00:30:22.119 thank you, guys, so much for your time. It's been a lot 493 00:30:22.119 --> 00:30:25.839 of fun. It's been great. It's awesome to be here, Mike. 494 00:30:26.119 --> 00:30:27.640 And there you have it. It was such a pleasure chatting with Michelle. 495 00:30:27.680 --> 00:30:32.680 I highly recommend following her on twitter at Michelle Romano. If you enjoyed this 496 00:30:32.720 --> 00:30:34.519 episode, I love it if you'd read a review in the apple podcast. 497 00:30:34.759 --> 00:30:38.039 You're also welcome to follow me, your host, Mike, on twitter at 498 00:30:38.079 --> 00:30:42.359 Mike Guelb, and also follow for episode announcements at Consumer VC. Thanks for 499 00:30:42.400 --> 00:31:03.240 listening, everyone,