Citizen Commerce: Growing Big While Staying Small

Brian: [00:00:00] Hello and welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Brian.‍

Phillip: [00:00:05] And I'm Phillip. And today we have with us the co-founder of The Grommet, Jules Pieri. Say hello, Jules.‍

Jules: [00:00:14] Hey. Glad to be here.‍

Phillip: [00:00:16] Glad to have you here. We have we met a few months ago when I was at the Adobe's Magento Imagine conference. And you spoke. And I was just so, I was rapt by your story and your founders story of The Grommet. And I just felt like you connected so well at that show. I said I had to meet you.‍

Jules: [00:00:42] Aw, that's so nice. ‍

Phillip: [00:00:42] You've been so gracious over the last few months as we've worked out the details here. But, you know, I have to confess, up until that show, I had never heard of The Grommet, but I had definitely seen products that were launched through The Grommet. So maybe you could tell us a little bit about yourself and what is The Grommet?‍

Jules: [00:01:02] Yeah, sure. I'll start with The Grommet, I guess. I started the company eleven years ago, and we launch one consumer product a day. These are innovative products through small businesses. So the ones that you might be referencing, Phil, that people know we've launched, or that came from us, are SodaStream, Fitbit, IdeaPaint, Bananagrams, OtterBox, Mrs. Myers... A lot of products that we launched many, many years ago have become household names. And I started the business because I saw the opportunity essentially as technology made it easier for individuals to create products, i.e. small businesses. I mean, the Internet, 3D printing, all kinds of things made it easier. The larger companies were less and less innovative and more and more kind of defending their legacy products because they were under a lot of pressure at retail, and still are. As retail became more consolidated, retailers got more power to squeeze suppliers. Everybody kind of tried to be their version of Walmart with discounting. So innovation for big companies was really threatened, and the little guys stepped into the breach, and I thought they needed a friend. That's all great if they have a wonderful product, but it's really hard to take something to market and find an audience. So that's what we did. We have almost 4 million people who pay attention to what we launch every day.‍

Phillip: [00:02:34] Wow.‍

Jules: [00:02:34] And that's really powerful.‍

Brian: [00:02:36] Really powerful.‍

Phillip: [00:02:38] And not a short lived story. Eleven years you said?‍

Jules: [00:02:42] Yeah. The first four years were a walk in the wilderness though. We were like laying down tracks for who we were and quality of product and quality of storytelling. The business was anemic. We had no resources. And it was the economic crisis. So while I would never want to relive that time period again, it did have the benefit of doing things the old fashioned, hard way of like knowing what made us distinctive and investing really heavily in that. Great products, great stories, great companies...‍

Brian: [00:03:16] Yeah, no, I think looking back at that period, it was just you had to be good. You had to like focus on what was what set you apart in a way that maybe you don't have to today. So it's no surprise. No surprise that you became what you became. The businesses that made it out of that period had to do a really good job. So congratulations.‍

Jules: [00:03:42] Really battle hardened. I was looking at a list of questions that I'm going to address tomorrow and a team meeting. We have an "Ask me anything," and the questions are submitted ahead of time, and one of them was about, "Hey, there's some concern of a pending recession," and not that I would welcome that, but I was like, oh, my God, do you think that scares me? Come on.‍

Brian: [00:04:06] {laughter} Been through that before. Well, it sounds like you've got a lot of grit. What's your backstory? How did you end up founding The Grommet and have that ability to pull on through like you did?‍

Jules: [00:04:20] Well, I guess the grit part of my story is probably the part that mattered the most. You kind of have a lot of perspective there to recognize that. And I grew up kind of the wrong side of the tracks in Detroit. First person in my family to go to college. And the most entrepreneurial like starter thing I did was when I was 14, I snuck behind my parents backs and applied to boarding school. Not because I wanted to get away from them. I just was tired of the chairs flying over my head in the Detroit Public Schools. Detroit was really suffering in the Education Department. So I just kind of very early started developing kind of a playbook for doing things that were scary and uncomfortable for myself. And I learned to like it. Like now I don't like it when I am comfortable. So that's a really good kind of platform for being an entrepreneur. My career itself spanned, I'd say, three different things. Early career, I was an industrial designer, so that's still my first love. I think that's business has become kind of my craft, if you will, but design is my passion or my love. The second thing I did was work for two other startups before I started The Grommet. I was the only person... Well I was the first designer to go to Harvard Business School, but the only person in my class to join a startup. And that company is still thriving. It's called Continuum, an innovation consultancy. And then I did a bunch of big company stuff and mainly working for Meg Whitman. She was a great boss. I worked for her directly at Keds, Stride Rite, and Playskool. And at Playskool is where I really thought of the idea, or that I identified, the need for The Grommet. I didn't do anything about it for years because this was actually in the late 90s. But that's when that retail squeeze on innovation started happening. And at Playskool, our best new product ideas never made it to market. And that made no sense to me. And Meg told me, "Look, we're losing all the little guys, the independents who take risks on new products. So today, (at that time, back then) if Kmart, Target, Toys R US or Walmart don't want it, you can't make it." So that was like a little pissed off flame in my brain. You know, [00:06:42] that's just wrong that even a big company can't get things to market, much less little guys. [00:06:46] But then my second startup was a social network, a professional one that competed with LinkedIn. It didn't win. We were sold to Reputation.com. But you've never heard of Ziggs. But I learned a lot. It was a pioneer in social media. And that's when the two things collided, after Ziggs. I realized I understand the power of community, I know how to build them, I can figure out this media thing, which I didn't know anything about. We make a video every day. And [00:07:14] if I could just jump over those four toy buyers and go straight to the people that might be interested with a very short sort of introduction to this product, we could actually move markets. We could be a launch platform for products. So that's what we did. [00:07:31]

‍Phillip: [00:07:33] I find it very interesting that this is second time Meg Whitman's come up on the show in the last month. We recently had Jeremy King, who formerly worked with Meg at eBay, and he referenced her dedication to actually knowing who the customer is and forming relationships. Such as her tasking folks with 10 customers to have to discuss and have real life conversations with them in a quarter. That sounds really interesting.‍

Jules: [00:08:07] I like to think that I helped her get there because we did a lot of that when I worked for her Keds, Stride Rite, and Playskool. And that was one of my disciplines, as a designer that's what you do in order to design. So I was really comfortable in both doing that work directly and drawing conclusions from it. And also in a big company, you tend to commission a lot of that work. But I was the person who, when there was a one on one interview or focus group, I was always behind that mirror. I was always reading the transcripts because that was my super power of knowing what to do with all that information. So she gave me a lot of credit for that at the time. She was way better trained than I was. She came from consulting early in her career. So she taught me a lot about how to structure projects, and how to allocate resources, and how to ask the right questions within a company to get the right solutions. But that kind of straight to the customer part was where I was adding a lot, I think.‍

Phillip: [00:09:17] You talked a bit about sort of this idea that you put a lot of effort into something that doesn't make it to market. I heard recently a podcast with Malcolm Gladwell, who talked similarly with Rick Rubin, a famous musician producer, about a similar challenge and that like there's artistry and there's a lot left on the cutting room floor, as a musician. The things that get released are only the best of the best of the best. And but as a writer, you know, as a journalist, everything you do has to make it to market or it's a failure. And I find there is a really interesting place to be. I was wondering if maybe you could talk about how that artistry or curation or your background and influence and having had that experience helped shape what you do with other entrepreneurs nowadays?‍

Jules: [00:10:05] Well, I do think larger entities do have the option to play a little closer to the musician end of the spectrum, where a lot ends up on the cutting floor. Their survival is threatened over the long haul, but not in the short haul if they kill a lot of projects. But [00:10:20] the little guys we work but don't have that luxury. They're closer to your journalist spectrum in that they generally have a lot of advantages in terms of innovating products, but they tend to be really capital constrained, so they can't go out with a lot of failure products. And they pretty much have to get close to the target early on in their company lifecycle or they won't make it unless they're deeply capitalized, which is pretty rare. [00:10:47]‍

Brian: [00:10:47] I think it's really interesting. You talked about what your experienced back at Playskool. And I think this is still a big problem, a big trend today. There's a lot of really great stuff that's not getting to market. And I love that The Grommet is here as an option for people to launch products. And there are more and more ways to launch products. But I was just thinking back to an interview we did with Sucharita Kodali, from Forrester. She described her experience at Toys R Us. And it's just exactly what you described in terms of how the purchasing cycle worked. Why those better, more desirable, more innovative products never made it to the floor of Toys R Us? It's still happening today. It's still a big problem. And so it's really exciting to see places like The Grommet grow. One thing that I saw, you know, that you kind of coined recently is a term called "citizen commerce." Can you tell us a little bit about that?‍

Jules: [00:11:57] Yes. So what that means to us is [00:12:03] every act that a person takes to vote with either their time or their money to support businesses, and usually businesses have products, and we control as consumers 66% of the economy. And we don't walk around really sort of realizing that, or feeling the power of that. But it's absolutely true, especially today, right now. Consumers are completely driving the growth and the positive economic environment we're in right now. And what I like to think a citizen commerce as is the call to action, to sort of recognize, well, OK, if we have this power, let's use it well and direct all that time and money to companies that we want to see shape the world. That have the values that... Every individual has different values, so let me make this precise. If you really care about the environment, or you really care about products made in the USA, or you really care about products that have lifetime guarantees, or products that come from, say, a veteran or underrepresented minority, you have the opportunity to make that happen in the world, that those values get supported. So easily by just being a little bit more intentional about where you spend your time and money. [00:13:24] And I like to boil it down even to like just think about it for 10% of your budget, because it's not realistic to take 100% of your budget, and very carefully evaluate your values against what you're doing. You're going to buy a car from a big company that may not represent a lot of the values you would otherwise like to uphold. So 10%.  Take 10%. And there are other companies, not just The Grommet, that help you do this, and other entities. I think the crowdfunding platforms are a great way of expressing that kind of thing. I think how you share and what you share on social media within your own world is a great way of acting on those things, too. So it's not all about like going to a company and buying something. It's about saying, here are my values and here's how I'm backing them up.‍

Brian: [00:14:10] Making those choices, sort of consistently, in small ways.‍

Jules: [00:14:15] Yes.‍

Phillip: [00:14:16] It really resonates with something that seems to be a current unintentional but welcome narrative that is playing out on our show, which is that consumers' demands, like consumers' expectations of brands, have become heightened, and they can wield power to sort of create winners and losers in the marketplace based on the values that you espouse as a brand. And the way that consumers can direct the future of our world could be by determining that they just don't want to engage with brands that don't have the values that they possess anymore. And I think what you're saying is that you've done with The Grommet is you're enabling consumers to use their voice to choose which brands and which products make it to the marketplace to begin with.‍

Jules: [00:15:06] Yes, we meet these companies really early and quite often the first big event in the company's history, in terms of exposure. And we give them a lot of credibility, and they're borrowing our reputation when we do launch products. Because we are careful about who they are. We only launch 3% of what we see. We see two to three hundred products a week. And we launch six, so they get a huge leg up from us. But we're also trying to make it really easy for our community because, as much as many people aspire to the things we just said, it takes a lot of time to figure all this stuff, and figure who's telling you the truth, and what companies really stand for. And we just cut to the chase. We do all that work. We do it. We have ninety two people. So we're helping people out with that activity. We don't want this to become like your second job to figure all this stuff out. We do that job for people.‍

Phillip: [00:16:05] How do you help a company? What is your role in actually making products reality, launching it on the platform? And then is there a role that you have in helping them transcend from a product or a single product company into a brand?‍

Jules: [00:16:22] Great question. So we engage deeply when a company is in production or about to be in production. So they typically are already in production. They've been selling their first product at some level. So we're not deeply involved in the company formation or, you know, the pre product stages of the company. But once they're about to go into market we can be super helpful about helping them craft their story. Sometimes pricing is something we can assist with very easily if it's not been established yet. But [00:16:58] let's just assume the product's in market. The hardest thing is getting an audience. It's just super hard to break through in a crowded world, and quite often these companies only have one product. So retailers aren't very interested quite yet in a single product company and it's expensive to crack through on social media. [00:17:17] It's a very sophisticated activity.‍

Phillip: [00:17:19] Oh yeah. ‍

Jules: [00:17:20] So they're kind of like, what do I do? Basically, maybe they finish a crowdfunding campaign where it was super exciting, and they did get a lot of attention. And then it's crickets, and we quite often meet a company in the crickets phase. And we're trying to basically cut a couple of years of pain and suffering out of their lives of trying to find an audience, because we can take them right to a big audience quickly, and if it goes well or if they're interested in scaling, we also introduced a wholesale side of our business a few years ago. So we have six thousand retailers who are customers. So we solved that problem of retailers not liking to engage with a single product company. It's just administratively, legally, operationally difficult for them. And they can have access to, say 1500 different companies with a single account, with The Grommet. So we make things safer and more efficient for retailers, both on is this product any good? Because if it comes from The Grommet, it is. And secondly, the order processing and supply chain side, we make a lot easier for retailers.‍

Brian: [00:18:31] On that note, I mean, there's a lot of chatter in the marketplace, or in the investment world I should say, and sort of among the retailers about marketplaces, you're in an early marketplace. You've been around for eleven years. You've been through a lot. I feel like you've got an interesting twist to your marketplace, and that it's almost beyond curation. Like you've definitely got the curation aspect. You're looking at hundreds of products and only going to market with six. But it also kind of feels like you're a bit of an incubator for those brands, to some degree. Maybe talk to us a little bit about how you're differentiating yourself, but also challenges that marketplaces face today, especially given just the hype. There's so much hype around marketplaces right now.‍

Jules: [00:19:24] Well, there's hype around marketplaces as a business model. It's that what you're referring to, Brian?‍

Brian: [00:19:28] Exactly. Exactly. Yep.‍

Jules: [00:19:30] Yeah. And they are magical business models that are super hard to get started because of the chicken and egg thing. Right? But I do see, and I believe there is a trend in retail to move increasingly to marketplaces, but they'll be increasingly more niche. You know, let me just sort of paint a picture of how I see marketplaces playing out. If you think I'm sort of ease of shopping, and quality and originality of product, Etsy would be at the kind of low end of ease of shopping, but really high on originality of products, special quite often custom. And then at that polar opposite would be Amazon as another large marketplace for no originality product. That's not you go there for. You go there when you know what you want. You're not browsing and discovering. It's commodity for the most part. So low on originality, but very high in ease of shopping. Well, there's a whole world of consumer life in between there. Etsy just bought Reverb, the musical instrument marketplace. So that's what I mean by niche marketplace. We see that with StockX and sneakers. We see that with The RealReal with resale of designer merchandise. So there are a lot of interesting, scalable, I don't mean small and I say niche, I just mean more focused than either Etsy or Amazon could be. And I see The Grommet as playing in that space, as well. And honestly, this is a little more future talk, but [00:21:04] I feel an imperative to broaden our footprint to address the volume of products we're not getting to right now because we're rejecting, you know, a lot of awfully good products every week because we don't have a classic marketplace presentation. [00:21:20] So we'll be doing some work on that actually to help, say, the twenty five a week that we can't get to that we can get to them. So that's kind of a newsflash, our future flash for The Grommet. But I think marketplaces are a really, really powerful and really special. [00:21:37] But for us, and for the ones that I think we'll succeed in what I call that niche space, they have to know who they are, and they have to preserve quality in whatever it is they're doing. You know, The RealReal it would be verifying the quality of the products. Reverb, you know, isn't probably selling counterfeit products, which would be on Amazon. They're saying, no, you come here, you can trust us for your interest here the products that we sell that serve your interests. And The Grommet has that same kind of at the extreme reputation and reality of assuring quality. So the trick is to not lose who you are. The first funder of eBay actually told me that I would have this challenge right before we started the business. Bob Cagle at Benchmark was their venture capitalist, and he said "Jules, you're gonna have the challenge of growing big while staying small." And the staying small part to me means always being able to meet these small companies where they are. They don't have warehouses full of product that you can just pound them with volume. But also it means being willing to take the risk on those products and deal with them in the early days. And it means small... This word doesn't really translate perfectly for what I want to say, but keeping our eye on the ball of who brought us to the party and why they're here. [00:23:11] People do want to be able to trust our products for the quality and the fair, the truth of what their promises are. [00:23:17] So even as we expand some of how we present products or access products, we can't lose sight of that because that's why people are here. [00:23:29] To quantify that, our return rate when people buy a product here is under 3 percent. You will not hear that number from any e-commerce site that I'm aware of. Teens to 20s are typical.‍

Brian: [00:23:44] Wow.‍

Jules: [00:23:44] And the reason ours is so low, like confoundingly low is, for one, video actually helps a lot to head off returns. Like we don't want you to buy something if it's not what you expected. And photos can be more difficult to navigate. Videos kind of cut to the chase and create product understanding, so that you won't buy things that you need to return. But the bigger reason is we just don't present things that aren't worth your money. You know, it's so weird to win on quality and trust because you would think that would be something everyone wants to do. But marketplaces are usually antithetical to that. They might be good at, like [00:24:22] Amazon's great on the operational trust. But product trust? There's zero trust. They don't represent that these products are safe, or authentic, that's not their promise. [00:24:32]‍

Brian: [00:24:32] Oh, my gosh, it's so true. I think you nailed it actually that all the marketplaces that I shop on, I shouldn't say all, but a lot of the marketplaces that I shop on... I don't trust the quality on most of these marketplaces that I go to. And that should be the reason you're there. That's amazing.‍

Jules: [00:25:00] Well, you're banking on like all right I'm taking some product risk here, but I'm going to go for the convenience and a fair price. But [00:25:10] I would say that that mix is rapidly changing right now and there is a big exposé in The Wall Street Journal two weeks ago about the... This is just about Amazon, but there's no vetting of, say a product that you ingest, or product that you plug into your wall, or use on your pet, or with your child... They're all the same to Amazon. And so there is a huge quantity of listings that are at, you know, think substances that are banned by the FDA in the US, lead paint in toys. And it's whack a mole for Amazon to try to do anything about that, mainly because 40% of the listings on Amazon now come straight from Chinese factories. So those factories are really the bad players there. Amazon doesn't have the same vetting that even a Target or a WalMart would have. [00:26:04]‍

Phillip: [00:26:05] It's interesting. You mentioned a a litany of marketplaces earlier. I happened to shop at all of those marketplaces, which I don't know if you're just looking at my phone and seeing all the apps I have installed. {laughter} I find it interesting... You know, it's funny. I have this theory that everybody has a superpower, and that I think yours you've sort of gone into a little bit. The Grommet seems to sort of thrive on the superpower of an entrepreneur. And the wealth of entrepreneurs that we have in the United States, despite what some people might put out on Twitter with a graph that shows it going down into the right. And I love your take on that, too. But [00:26:53] entrepreneurship is what's driving your business. I had this thought recently that there's sort of this, in reading this book called 'How to Do Nothing," by Jenny Odell. It talks about resisting the attention economy and how labor unions in the 20s...it was a right to be a worker. And that being an entrepreneur was an incredible amount of risk that nobody in their right mind would take. And but now we sort of romanticize entrepreneurship. And, you know, companies like yours seem to exist on the fact that we have a fascination around American entrepreneurship. [00:27:34] Do you think that that's a truth? Do you think that that's something that exists in the world right now, or at least in the American consumer mindset, that they're supporting entrepreneurship by supporting The Grommet?‍

Jules: [00:27:48] That's such a great question. So statistically, there's absolute truth to what you're saying outside of The Grommet. [00:27:55] Sixty six percent of millennials say they want to start their own business, and 75% of high school students say that. So and especially at the high school level, that's like pure romanticism, right? These kids don't know anything yet, but they're saying that instead of playing baseball or being a rock star, they want to be an entrepreneur. So that is definitely proof of romanticism to me. But I do believe there is, at least in our neck of the woods, this really healthy ecosystem forming around the type of entrepreneurs we work with because once they get the product to market, they have to be good at a whole lot of things. And a lot of the things that used to be locked up inside of a big company are now available to these companies. So, you know, the Internet's their biggest friend. [00:28:45] They can use YouTube to figure out most anything. But like, say, to find a factory, to find a designer, find an engineer, figure out how to do packaging, how to do market research, how to ship effectively at Amazon levels of service, but at very low volumes. There are businesses standing around them. Shopify to put up a good website and payment system. So I think what's interesting is that it's not just that there is an explosion of it. Again, I'm a hammer... I look a lot at product innovation and product entrepreneurship. But it's not just an explosion of those companies because they couldn't make it unless there was a concurrent explosion of services and platforms standing up to actually help them. So it's happening on so many different levels where the ones that you might think of is more like obviously heroic, or the type that would like sell a product you can relate to. [00:29:46] But somebody who stands up, you know, a great customer service platform for these companies is just as valuable in the economy. [00:29:54]‍

Phillip: [00:29:54] Yes, emphatically. Yes. You know, you look back, there's an aphorism that is escaping me at the moment. In the gold rush, you want to be in the pickaxe business. Right? And that's really what it is.‍

Jules: [00:30:10] Yes.‍

Phillip: [00:30:11] Because even people that never find gold still need the tool. And and that's gosh, that's such an astute point.‍

Jules: [00:30:19] But here's the thing that's happening, too. Entrepreneurs need to be inspired by seeing a market opportunity. And all of us, in our social feeds are seeing, I call them the Instagram brands or the upstart brands, are seeing like, whoa, these companies must need help. They've got really cool products, but maybe I can do something in this ecosystem. And I would definitely give tons of props to Kickstarter and Indiegogo for the same thing that the crowdfunding platforms also sort of woke up a lot of late night entrepreneurs. Like maybe I don't want to make a new set of headphones, but I would like to help that companies ship those headphones.

‍Phillip: [00:30:58] Yeah. I also see those platforms as sort of testing out the theory that a product has a right to exist in the marketplace, sort of the is smart luggage category that deserves to exist or is the cachet actually wrapped up in the brand of Away? Right? Is a battery built into a suitcase, you know, a category that consumers need? Or is it the brand that resonates? And I find that crowdfunding tends to suss out those things better than just, you know, watching winners and losers in the marketplace. But that's my own...‍

Jules: [00:31:39] Yeah. It's super helpful for a like a proportionate read, I would say that there is a much broader customer set for those products beyond what you would find on the crowdfunding platforms. They tend to be older males with high disposable income. And the powerhouse consumer in the economy is similar, but female. So they don't attract the full panoply of consumers. But I still think we find them to be a useful indicator. It's not an entire read, but they're a useful indicator. But then there's a whole world of opportunity beyond those. [00:32:15] But when you mentioned a company like Away, then my mind goes to something else, which is it's not actually necessarily... My experience is that these products in direct to consumer realm tend to be just good enough. I wouldn't claim from my experience of them that they are head and shoulders better than the competition, but their experience of buying them and interacting with the company is head and shoulders above whatever alternative they're competing with. You know, the big ones are mattresses and, you know, shaving and eyeglasses... But these are really brilliant entrepreneurs for understanding everything that goes into a purchase decision and an experience with a brand. [00:33:06] So I get a little annoyed with them when they claim... This is my little axe I'm going to tell you. [00:33:12] I don't like their messages around, "Cut out the middle man. You'll get a better product if you don't go to a retailer." That is such a lie because digital rent is Google and Facebook. How did these companies find you? You don't find them. They find you on your platforms. And they're paying the same amount of margin to Facebook that they would pay to Macy's. No different. [00:33:38]‍

Phillip: [00:33:40] Well, that's... I love that. That's not a take you hear. That's a great hot take. You get into a little bit of an echo chamber in certain circles and there seems to be a lot of back patting. I love that perspective. Tell me, do you have any other any other hot takes in your new book, "How We Make Stuff Now?" Tell us a little bit about the book and what inspired you to write it.‍

Jules: [00:34:07] So it is probably the slowest book ever written because it took 10 years of running the business to have the right to write it and to have the knowledge to write it, because frankly, I wrote it for three reasons. One, I feel like these entrepreneurs tend to operate in isolation. In our experience, only 10% of our makers have any experience in creating a product. They're dentists or teachers. And so they're operating in a kind of, you know, isolated or even a little bit lonely space. So I wanted to put all the things that I learned from them in one place and give them both a roadmap for creating a product in the future, like the new person who shows up, but also for the existing makers we work with. It's a very snackable book. There are 16 different competencies I describe for successfully building a consumer product business. And it's a book that for existing makers, not just the new ones, they could just dive in and out of the chapters where they have a current issue, they don't have to read the book cover to cover. And the third reason I wrote it is I just love to write. And it was kind of like a low priority bucket list item for me. It wasn't top of my list, but when I realized I almost had like an economic or social responsibility to get this information out because there isn't a book like this. This is why the book was picked up by McGraw-Hill. Like there's no competition, essentially. And if there had been, I wouldn't have written it, if I thought there was a credible book out there. I don't like doing me too things. My business is original. My life is original. If we got into personal stuff, you would hear I don't make decisions like other people around my own life sometimes. So I wouldn't have written a copycat book.‍

Phillip: [00:35:57] You said it's distilled down into sort of 16 bite sized pieces. Could you give us a little bit of an overview of what each of those might be?‍

Jules: [00:36:04] Yeah. So like, how do I know if my idea is a good one? And how do I get educated and build a network to succeed in my business? Because that becomes the number one business skill for these folks, and they don't see that coming when they start the business. But it's a big differentiator for successful entrepreneurs. I would say tenacity and the ability to create a network are going to be two of the biggest, biggest success points for them. How do I design a product, engineer product? How do I think about having an e-commerce website and payments? How do we think about packaging logistics? How do we think about marketing? So essentially, I contend that these folks are by hook or by crook in our world, it's table stakes that they have a better product. Like they probably will go nowhere if they don't have a better product. But once they're into the market, then they are competing on these 16 competencies, or many of these competencies with big guys who do have an advantage. And I want to kind of remove some of that advantage and tell them the inside scoop about, well, here's how it works. ‍

Phillip: [00:37:19] I haven't read the book. I'll just be honest. But I'm gonna have to now because this is something that's really top of mind for me. You know, as we build out Future Commerce is, we're one of the very few sort of be bootstrapped media startups in at least in North America and specifically focusing on an area of retail reporting. So, you know, one of the things that we hear a lot right now is this access to capital. Is there anything in the book around how founders are accessing capital now that you can help them stand toe to toe with large organizations? Or what kind of advice do you give to founders who feel the pressure around just obtaining capital for their company?‍

Jules: [00:38:06] Yeah, I would say [00:38:07] the two areas of the book or this maker journey that are hardest are creating and protecting your intellectual property. So that's separate than capital. But it's a big hot button area. And then financing their businesses. Frankly, when we started, crowdfunding didn't exist, so it was infinitely harder before. They are the gift that keeps on giving. So I'm not saying something that you haven't thought of and your listeners haven't thought of, but I can't emphasize enough how important this source of capital is. [00:38:44] And it's now a situation we see our makers running dual campaigns on Kickstarter and Indiegogo. And Indiegogo has a feature where you can kind of basically just keep your company alive almost as like a shop, your campaign alive. So they're getting more nuance, too, in how those platforms operate. Beyond that, one of the advantages these companies have is that you can finance inventory in a different way from equity. You know, you're probably equity financing generally, and when you have defined purchase orders, you can actually get those purchase orders. There is a company I mentioned in the book called NOW Account. And so let's say... [00:39:33] Success can almost kill you. You get a big order from Whole Foods or even from The Grommet. And then suddenly you're responsible on the hook for tens of thousands of units. You can take that purchase order and get it bought by NOW Account for 3%, which is a very different proposition than 10 or 20 years ago, where the only option for these companies was factoring, which had very usurious... The same sort of thing you would go sell a purchase order would cost you double digits and now it's only 3%. So that probably is the second biggest change in financing these companies. [00:40:10]‍

Phillip: [00:40:11] So it's beyond just trading equity for capital. It's taking your established proof of being able to actually sell and make products and use that as... That sounds more like a long term sort of traditional sustainable way of running a profitable business.‍

Jules: [00:40:33] Yes, it is. And it's healthier. And frankly, it is partly a response to the fact that it is hard to get equity capital for these companies. You know, when you look at sort of the angel of a funding, that's not impossible. But, you know, the exits for these companies and the scalability of these companies are not always obvious. It depends. I will say that in consumer packaged goods, so health and beauty and food, the exits are very plentiful. This is the heyday of small company exits to large brands. You know, people are saying M and A is a new R and D, but it's less common, say in tech, gadgets, tools, kitchen... Those paths are usually not as obvious to people that literally those transactions tend to happen a little more under the radar where our companies, say a toy company, will get bought by a medium size or bigger toy company, but it doesn't really make the news. And so the angel investor base isn't as aware of the possible exits and bases sees. And VCs are dabbling in this area, I would say, but it's not their bread and butter because they don't know how to evaluate these companies. They are way more open than they used to be because, you know, when Amazon bought Ring and Google bought Nest, there are some pretty cool things happening even in products. But it's still a hard area for venture capitalists. One other source I should mention, though, this is more for primarily the consumer packaged goods [00:42:15] companies, but CircleUp is a good financing source for those folks. They do some products that are not CPG as well, a number of Grommets have gotten financing through CircleUp. It's a platform that basically aggregates angel investors. And it is equity funding. But they prove out some of these companies before they introduce them to their network. So it's a vetted and kind of curated offering to the network. So that's been a very good source of funding for some of our companies. [00:42:50]‍

Phillip: [00:42:50] That is super interesting. I spent some time with... I don't know if he's infamous. I'll say infamous. I spent some time with Jason Calacanis earlier this year, and he's really invested in his syndicate and sort of the way that they're approaching ideas and founding entrepreneurship and yeah, just that sort of world of syndicates and angels and people sort of doing more passive entrepreneurship investment seems like a really interesting new way for companies to be able to bring businesses to market that otherwise, you know, probably were at the mercy of whatever their local bank was willing to to fund. [00:43:44] And it just seems like you now is such a magical time as an entrepreneur to try to build a business because there are so many options available to you. [00:43:55]‍

Jules: [00:43:56] Yes, it definitely is. In fact I've kind of jumped on that bandwagon and became an investing partner at X Factor Ventures. And their particular focus is diverse founding teams in particular. There needs to be somebody who's female on the founding team. So we're trying to correct some of the imbalance. So yeah, I see a huge competitive advantage in going after these diverse teams that, well, women CEOs get less than 3% of venture capital funding. So, you know, to me, it's a social good, but it's more so a business decision. You know, like this is great business to do this.‍

Phillip: [00:44:43] How awesome is that? This has been so good and so rewarding. I'm bummed out that we were a little bit out of time here. Any closing thoughts? We usually ask our guests to sort of predict the future. I feel like that's de passé now. We're getting copied everywhere. If you had to give some of our listeners clear advice, what's in your head right now? What's something that you're thinking about and resonating with you that you might be able to deliver succinctly to someone who might be listening that's, you know, facing some challenges right now?‍

Jules: [00:45:21]  [00:45:21]Well, one of the things when we started this business, people worried we'd ran out of good ideas. And I was pretty confident we wouldn't. We were betting on human creativity. But what people probably wouldn't have any way to know is every single week the top of my head's blown off by some innovation that comes through our doors, and usually more than once a week this happens. I mean, truly just astonishes me. And what I would like people to know is if you have an idea and you sort of look around and you see absolutely nobody working on it, it might feel discouraging. But I would just press pause for a minute and say my experience has been sometimes the world just waiting for you to work on that idea. So press pause and think about it that way, as opposed to getting discouraged because there's no proof that this is an interesting area. [00:46:18]‍

Brian: [00:46:18] What great advice. I wish we heard that from more people. It's such a bleak world out there at times. And so having having encouragement like that... I think it's exactly what everyone needs to hear right now.‍

Phillip: [00:46:33] Yeah.‍

Brian: [00:46:34] Well, thank you so much for coming on the show, Jules. It's been great to have you, to learn from all of your experiences, and gain a little bit of wisdom. I love it. Well, and thank you to our audience for listening. We love that you're tuning in every week, and we would love to hear your feedback on today's show. Tell us more about your experiences building brands or marketplaces or launching products. And you can leave us feedback on our site, FutureCommerce.fm or anywhere that you can engage with us... Social media, and Twitter, LinkedIn, all of the above... And of course, we always love to get a five star from you on iTunes. So hop on over there, and leave us a five star if you enjoyed the show. Thank you for listening. No longer are we just focused on technology. We are focused on so much more. Phillip, do you want to take us home?‍

Phillip: [00:47:30] Yeah, I would if I had remembered what our new closing is. {laughter} This is very embarrassing for me right now. Thanks for listening. This is why we edit the show, Brian. Thank you so much, Jules.‍

Jules: [00:47:42] Thank you for having me. Really great to be here.‍

Phillip: [00:47:44] Thanks.

‍