The Exchanges

Q Speaking of that sustainability, though, I do want to speak about, first, kind of capital efficiency, because I spoke to many of your investors, including the wonderful Woody at TCV, and he told me about your ability to achieve profitability early and really grow in a profitable way, so I'd love to start on that, and how did you think about capital efficiency in the very early days of Minted?

A Yeah. And actually that is another thing we took away from the eve.com days was just how to basically create a profitable business. And because that was, Eve was not profitable when we sold it. So with minted, the inherent model I was looking for was actually not to raise very much cash. I was hesitant to work with venture cap again after the Eve experience. And I thought perhaps I wanted to start a business that would just be angel funded. So the whole model was engineered around very low cash usage. We got a cash flow by being paid by customers. As we began printing their cards, Because we began to commit resources, so you, we actually ended up with a cash float. The unit economics that we designed, I chose stationary because I knew that the average transaction value was high, I knew the margins were very good, and I thought there would be a lot of virality inherent in the stationary model, where if you'd like a card, you might turn it over and see who, who made the card, if you receive one from a friend. So the whole model was engineered around, ultimately, cash efficiency, because I didn't think I could get any cash, and by the way, I started Minted in 2007, and right when I was Finishing the first year of building Lehman Brothers failed, and I raised institutional money right before that, but we thought we'd never see a dollar of institutional money again. Nobody was inter…

AI assessment note: “So the whole model was engineered around very low cash usage.”

Q Speaking of that sustainability, though, I do want to speak about, first, kind of capital efficiency, because I spoke to many of your investors, including the wonderful Woody at TCV, and he told me about your ability to achieve profitability early and really grow in a profitable way, so I'd love to start on that, and how did you think about capital efficiency in the very early days of Minted?

A Yeah. And actually that is another thing we took away from the eve.com days was just how to basically create a profitable business. And because that was, Eve was not profitable when we sold it. So with minted, the inherent model I was looking for was actually not to raise very much cash. I was hesitant to work with venture cap again after the Eve experience. And I thought perhaps I wanted to start a business that would just be angel funded. So the whole model was engineered around very low cash usage. We got a cash flow by being paid by customers. As we began printing their cards, Because we began to commit resources, so you, we actually ended up with a cash float. The unit economics that we designed, I chose stationary because I knew that the average transaction value was high, I knew the margins were very good, and I thought there would be a lot of virality inherent in the stationary model, where if you'd like a card, you might turn it over and see who, who made the card, if you receive one from a friend. So the whole model was engineered around, ultimately, cash efficiency, because I didn't think I could get any cash, and by the way, I started Minted in 2007, and right when I was Finishing the first year of building Lehman Brothers failed, and I raised institutional money right before that, but we thought we'd never see a dollar of institutional money again. Nobody was inter…

AI assessment note: “the whole model was engineered around, ultimately, cash efficiency”

Q Can I ask if you were to kind of put your starting of minted to stay in the very well-funded ecosystem that we do inhabit, would you have approached the capital efficiency element different given the kind of land grab situations that we often have in lots of segments today?

A I think that it's a real trade-off. I mean, I've retained a much larger ownership stake in the company, which is what I wanted to do. Then I think I would have had I taken money early, bigger money earlier. And so I think that trade-off on one hand, that's very positive. On the other hand, I think that we could have perhaps taken more money earlier and actually gone and marketed more heavily potentially. But then I think what would have happened is that if you build your paid marketing acquisition channels too fast and you don't let your free channels and your brand go Grow so that they can hold their own and be a huge part of your acquisition mix. You end up in order to continue feeling growth rates, having to spend more and more and more. So my conclusion really right now is that there's this organic pace of growth that makes sense. And that sometimes if you try to inject capital too early to try to accelerate that pace through marketing, you end up with a marketing mix, which is so heavily weighted towards paid acquisition versus the sort of free and cheap channels that you end up with an unsustainable growth rate, which is probably why Some of the retail concepts online, you see they hit a point where they start to see massively declining growth rates or increasing marketing spend as a percentage of revenue.

AI assessment note: “my conclusion really right now is that there's this organic pace of growth”

Q Can I jump in and ask about the ratio between free to paid and what you feel comfortable with now running minted and what you think is maybe a sustainable and healthy ratio?

A Yeah, that's a great question. We are vastly free and brand driven in terms of our acquisition mix. And we find it hard actually to find paid opportunities that actually both are reasonable and scale when you want them to scale, that you can actually pull a lever and say, we want to grow. Those are very hard to come by because generally the market is efficient, and if there's a great opportunity, everyone finds it. So I think a healthy ratio for us, we have a very high bar, I would say, would be under 30% paid as a percentage of our acquisition mix. Different businesses are different. I mean, we have a Some of them come in when they're getting married, some of them come in later when they're moms, but they tend to have a predictable life cycle and interaction with us, so it really depends on what kind of business you're in, but I, for us, it's under 30%.

AI assessment note: “healthy ratio for us, we have a very high bar... under 30% paid”

Q Can I ask if you were to kind of put your starting of minted to stay in the very well-funded ecosystem that we do inhabit, would you have approached the capital efficiency element different given the kind of land grab situations that we often have in lots of segments today?

A I think that it's a real trade-off. I mean, I've retained a much larger ownership stake in the company, which is what I wanted to do. Then I think I would have had I taken money early, bigger money earlier. And so I think that trade-off on one hand, that's very positive. On the other hand, I think that we could have perhaps taken more money earlier and actually gone and marketed more heavily potentially. But then I think what would have happened is that if you build your paid marketing acquisition channels too fast and you don't let your free channels and your brand go Grow so that they can hold their own and be a huge part of your acquisition mix. You end up in order to continue feeling growth rates, having to spend more and more and more. So my conclusion really right now is that there's this organic pace of growth that makes sense. And that sometimes if you try to inject capital too early to try to accelerate that pace through marketing, you end up with a marketing mix, which is so heavily weighted towards paid acquisition versus the sort of free and cheap channels that you end up with an unsustainable growth rate, which is probably why Some of the retail concepts online, you see they hit a point where they start to see massively declining growth rates or increasing marketing spend as a percentage of revenue.

AI assessment note: “So my conclusion really right now is that there's this organic pace of growth”

Q It's a winning, it's a winning quote. What about the biggest learning from being on the Yelp board?

A I think what I admire about the Yelp organization is how they've built a very strong culture. And they've got a lot of stability in the management team, which really makes the CEO's job, I think, easier. So I think that's one thing I really admire and what I've learned. I think I've also learned from watching what the interplay is with the public market, and I've learned a lot about communication with public investors and just the care that goes into and that has to go into explaining your strategies, explaining your forecasts, etc. I think it's clear that communication is A huge part of the success there in managing a public company, and you've got to invest in it.

AI assessment note: “I've learned a lot about communication with public investors and just the care”

Q Can I jump in and ask about the ratio between free to paid and what you feel comfortable with now running minted and what you think is maybe a sustainable and healthy ratio?

A Yeah, that's a great question. We are vastly free and brand driven in terms of our acquisition mix. And we find it hard actually to find paid opportunities that actually both are reasonable and scale when you want them to scale, that you can actually pull a lever and say, we want to grow. Those are very hard to come by because generally the market is efficient, and if there's a great opportunity, everyone finds it. So I think a healthy ratio for us, we have a very high bar, I would say, would be under 30% paid as a percentage of our acquisition mix. Different businesses are different. I mean, we have a Some of them come in when they're getting married, some of them come in later when they're moms, but they tend to have a predictable life cycle and interaction with us, so it really depends on what kind of business you're in, but I, for us, it's under 30%.

AI assessment note: “would be under 30% paid as a percentage of our acquisition mix”

Q Flip side of the table. What's the self-criticism?

A Yeah, the self-criticism is probably that, well, for example, from an aesthetic perspective, can see too readily imperfection, and so I think the controlling side of my nature comes out when it comes to our brand, you know, and our, and our sort of how we present ourselves aesthetically and visually, so that's something I have to, I always have to manage myself back on. I also have a very, very high bar, and I'm very curious to explore lots of things, And so I think I run the risk of getting unfocused if I get too, because I get excited and passionate about things. And, and if there are too many shiny objects around me, I have to be a little bit careful not to pick all of them up.

AI assessment note: “the self-criticism is probably that, well, for example, from an aesthetic perspective”

Q Not at all, but I want to start today a little at the beginning because you've weathered the tech booms and busts and had success in web one point oh with eve.com. So I'd love to hear how did you get into the wonderful world of startups and what was that first aha moment for you?

A I was working for an entrepreneur before business school. And I, I decided that I, I thought it was pretty intriguing, and I was excited about the American consumer marketplace as this gigantic test bed, and I think at the back of my mind, I'd been in investment banking and in management consulting, and I think at the back of my mind, I was thinking, am I ever really going to have, be given the responsibility that I, at that young age, thought I deserved, and I thought that it was unlikely, it would take a long time, and if I worked my way up through the corporate Setting. And on the other hand, I felt that the consumer marketplace in the U.S. was this, again, huge Petri dish that was very meritocratic, meaning they didn't really care what you looked like, who you were, or anything really much about you. If they liked your product, they would buy it. And so I felt that it would be a great place to get ahead quickly or sort of make my mark quickly and be accepted if I could create a great product.

AI assessment note: “I was working for an entrepreneur before business school. And I, I decided”

Q No, absolutely. It makes sense. You spoke about the incumbents there. I literally just chatted to Kirsten Green about the presence of Amazon. I'm intrigued to hear your thoughts on whether it's, and Kirsten's very much in the belief that it actually makes the market. Where do you sit on the presence of Amazon, and kind of the fear, or actually potential bright side of Amazon?

A Well, I think it definitely keeps everybody on their toes and keeps us everybody innovating. So that's really good. I think there are viable strategies to circumvent Amazon or to have a, have a differentiated offering than Amazon. And there are areas that they may or may not want to play in. I think their presence obviously causes difficulties for certain sizes of companies, probably at the small end of it. And if you're a brand, let's say you're a brand more than you are a retailer. I think that It's a partnership potentially with Amazon, meaning that Amazon wants to carry brands. They want to carry a huge selection of products and they want to have everything. And so if you're a brand, I would invest in a brand now. I'm not sure I would invest in any type of online retailer, but I would invest in brands because I think there's a cooperative relationship that can be formed with Amazon. And I do think, uh, they're constantly innovating so that that does help everyone think in a different way, which is great.

AI assessment note: “I think it definitely keeps everybody on their toes and keeps us everybody innovating.”

Q Flip side of the table. What's the self-criticism?

A Yeah, the self-criticism is probably that, well, for example, from an aesthetic perspective, can see too readily imperfection, and so I think the controlling side of my nature comes out when it comes to our brand, you know, and our, and our sort of how we present ourselves aesthetically and visually, so that's something I have to, I always have to manage myself back on. I also have a very, very high bar, and I'm very curious to explore lots of things, And so I think I run the risk of getting unfocused if I get too, because I get excited and passionate about things. And, and if there are too many shiny objects around me, I have to be a little bit careful not to pick all of them up.

AI assessment note: “the self-criticism is probably that, well, for example, from an aesthetic perspective”

Q I love that. I mean, my next question was actually from Josh Hanna, one of your investors, who asked, your greatest strengths and weaknesses as a founder and CEO? I'm intrigued. Would you say assessing human potential now is your greatest strength?

A I actually think it is. Assessing people, I think it might have been there from the beginning, but I didn't realize it, and I didn't actually even Think of it as a thing. So now, but now I realize that you build a company by building a team of great people. So the better you are at assessment, the better things are going to go. And yes, I do think I try to stay really open-minded when it comes to evaluating anybody and listen to their content instead of listening to how they deliver the content or what they look like. Anything that's surface level, what I call surface level UI about the person. I really am trying to listen to the content of what they're saying. And I think that open-mindedness is a strength.

AI assessment note: “I actually think it is. Assessing people, I think it might have been there”

Q And speaking of kind of what you became obsessed with, in those early days, it was Eve.com and the idea around that and a successful journey. And so I've got a question from one of your investors in Minted, Josh Hanna. Who asks, what was the biggest lesson that you learned from that journey with Eve and how have you maybe implemented that with, with minted today?

A Right. So Eve, I started with a co-founder and I raised twenty six million dollars in the first year. So it was a very different startup than minted where I founded it and then raised very little capital. I think with Eve, actually what happened was we ended up selling the business within one year of launching the business in April, 2000, right before the market imploded. And we sold it for about a hundred million dollars in cash after operating it for one year. And I think that I learned more from the end of Eve than actually the beginning or running Eve, which was that it's good to take a long view. So here I was, I sold the company when I was 29 and everything around me was folding. So I sold it, then the market dropped and then everything started, many, many businesses started being shut down, going under. And I thought that my whole world was shutting down and honestly that the internet was over, which is pretty funny to think about now. Uh, and so I think taking the long view was something I really took away from the ending of Eve that, for example, I probably had the opportunity to buy back the company after I had sold it. I was hesitant because I really wasn't sure if I should get back in and if I really wanted to continue working on the consumer internet, and I think that experience and learning from that, what I consider a mistake, has stuck with me for the long while…

AI assessment note: “taking the long view was something I really took away from the ending of Eve”

Q And speaking of kind of what you became obsessed with, in those early days, it was Eve.com and the idea around that and a successful journey. And so I've got a question from one of your investors in Minted, Josh Hanna. Who asks, what was the biggest lesson that you learned from that journey with Eve and how have you maybe implemented that with, with minted today?

A Right. So Eve, I started with a co-founder and I raised twenty six million dollars in the first year. So it was a very different startup than minted where I founded it and then raised very little capital. I think with Eve, actually what happened was we ended up selling the business within one year of launching the business in April, 2000, right before the market imploded. And we sold it for about a hundred million dollars in cash after operating it for one year. And I think that I learned more from the end of Eve than actually the beginning or running Eve, which was that it's good to take a long view. So here I was, I sold the company when I was 29 and everything around me was folding. So I sold it, then the market dropped and then everything started, many, many businesses started being shut down, going under. And I thought that my whole world was shutting down and honestly that the internet was over, which is pretty funny to think about now. Uh, and so I think taking the long view was something I really took away from the ending of Eve that, for example, I probably had the opportunity to buy back the company after I had sold it. I was hesitant because I really wasn't sure if I should get back in and if I really wanted to continue working on the consumer internet, and I think that experience and learning from that, what I consider a mistake, has stuck with me for the long while…

AI assessment note: “taking the long view was something I really took away from the ending of Eve”

Q I love that. I mean, my next question was actually from Josh Hanna, one of your investors, who asked, your greatest strengths and weaknesses as a founder and CEO? I'm intrigued. Would you say assessing human potential now is your greatest strength?

A I actually think it is. Assessing people, I think it might have been there from the beginning, but I didn't realize it, and I didn't actually even Think of it as a thing. So now, but now I realize that you build a company by building a team of great people. So the better you are at assessment, the better things are going to go. And yes, I do think I try to stay really open-minded when it comes to evaluating anybody and listen to their content instead of listening to how they deliver the content or what they look like. Anything that's surface level, what I call surface level UI about the person. I really am trying to listen to the content of what they're saying. And I think that open-mindedness is a strength.

AI assessment note: “I actually think it is. Assessing people, I think it might have been there”

Q Not at all, but I want to start today a little at the beginning because you've weathered the tech booms and busts and had success in web one point oh with eve.com. So I'd love to hear how did you get into the wonderful world of startups and what was that first aha moment for you?

A I was working for an entrepreneur before business school. And I, I decided that I, I thought it was pretty intriguing, and I was excited about the American consumer marketplace as this gigantic test bed, and I think at the back of my mind, I'd been in investment banking and in management consulting, and I think at the back of my mind, I was thinking, am I ever really going to have, be given the responsibility that I, at that young age, thought I deserved, and I thought that it was unlikely, it would take a long time, and if I worked my way up through the corporate Setting. And on the other hand, I felt that the consumer marketplace in the U.S. was this, again, huge Petri dish that was very meritocratic, meaning they didn't really care what you looked like, who you were, or anything really much about you. If they liked your product, they would buy it. And so I felt that it would be a great place to get ahead quickly or sort of make my mark quickly and be accepted if I could create a great product.

AI assessment note: “I was working for an entrepreneur before business school. And I, I decided that”

Q No, absolutely. It makes sense. You spoke about the incumbents there. I literally just chatted to Kirsten Green about the presence of Amazon. I'm intrigued to hear your thoughts on whether it's, and Kirsten's very much in the belief that it actually makes the market. Where do you sit on the presence of Amazon, and kind of the fear, or actually potential bright side of Amazon?

A Well, I think it definitely keeps everybody on their toes and keeps us everybody innovating. So that's really good. I think there are viable strategies to circumvent Amazon or to have a, have a differentiated offering than Amazon. And there are areas that they may or may not want to play in. I think their presence obviously causes difficulties for certain sizes of companies, probably at the small end of it. And if you're a brand, let's say you're a brand more than you are a retailer. I think that It's a partnership potentially with Amazon, meaning that Amazon wants to carry brands. They want to carry a huge selection of products and they want to have everything. And so if you're a brand, I would invest in a brand now. I'm not sure I would invest in any type of online retailer, but I would invest in brands because I think there's a cooperative relationship that can be formed with Amazon. And I do think, uh, they're constantly innovating so that that does help everyone think in a different way, which is great.

AI assessment note: “I think there's a cooperative relationship that can be formed with Amazon.”

Q Love the reasoning. Can I ask, how did that kind of focus on capital efficiency change with a sudden injection of capital like institutional money?

A Yeah, that's a great question, because I think, essentially, you end up spending the money, so it's really hard to resist the temptation to To actually become defocused when you take that much money. In 2013 and 20 14, we did two rounds, and the reason we did it was we, we actually wanted to unlock the power of the creative community across all of the different businesses. We were, had been in stationary, and what we did was we realized as we went around the world to meet with the designers participating in our community that we had a much broader creative community than just stationary designers. The people participating were often self-taught, They were packaging designers, painters, illustrators. There was a huge array. In fact, many of them had nine to five jobs that had nothing to do with creative pursuits at all. They were lawyers and accountants and other people who were cheating on the side. They had a five to nine job. We call it nine to five, five to nine. And there was this big movement happening. And we realized, my God, what we have here is not a stationary company. We have a creative marketplace that's basically helping emerging talent be seen and discovered. And that's the bigger vision is why we took the money, but it did change. It complicates matters A lot. Once you go into different verticals and it requires a bigger planning infrastructure, you know, you hav…

AI assessment note: “you end up spending the money, so it's really hard to resist the temptation”

Q Can I dive in there and ask what do you do? What do you do to create a culture of this continuous internal upscaling? And what's the secret source to really let that permeate throughout the organization?

A Yeah. So one of the key things we do is as a management team, Is that we talk about moving people around. So we rotate people a lot and hiring on talent on raw capabilities allows us. That's another thing it allows us to do is move people around to different jobs. And it's amazing when they've come out of maybe two or three different functions, how much they've grown. So I guess I would say that what I was trying to answer with the previous question to your previous question was one of the things I've learned over the years is how to develop people and what my philosophies of what I believe in as my philosophies of management of people when I didn't really have that. At Eve. So that was a, it's a huge journey over 20 years in understanding the potential for people to develop. And frankly, my community, the art community at Minted, the artist community, our external community, teaches us that every day because we can see them evolving as they begin to get peer critiques and feedback from other artists. They transform within 18 months of continuous feedback and critique from their peers, and they become unrecognizable from where they started. So the biggest change for me has been seeing human potential when put into the right settings. And for us, The theory is that you might have a very talented person. They might enter the company in the wrong job, and you need to, before you t…

AI assessment note: “one of the key things we do is as a management team, Is that we talk about moving people around.”

Q with the positivity and the kind of enabling power of their distribution elements. I do want to, before we move into a quick fire around there, move slightly to a theme of self-reflection, and a two-time successful entrepreneur now with twenty-plus years of experience. I'd love to hear, how have you seen your style of operating change and develop with the years and experience gained over EVE and now Minted?

A Well, one of the biggest places of self-doubt and questioning for An entrepreneur and an entrepreneurial CEO is who should I hire? Where should I hire? Should I be hiring from the outside? Should I be promoting from within? And gosh, I just spent a huge amount of time on this executive search run process, and I'm not sure if I made the right decision. There's just a lot of hand-wringing around how you build your executive team. I really think that if, when it comes down to the capital question we discussed earlier, that the one thing I've learned is if you are too cheap about how you fund your company, such that you cannot build enough Bench at the company to grow people from within. You've probably made too strict of a decision to not fund. That is something I think is absolutely critical to keep alive is hiring at all levels and then building your bench from within because you've got to have, in my opinion, a portfolio of some people who've been built from within and some from outside. And generally speaking, we have found the most success from a hiring on raw talent and then having and being able to have People change directions when needed, change direction as the competitive market changes, be able to be very nimble and adaptive and flexible, be people who are very curious and are constantly learning. There's no cap to their learning potential. That's really critical.

AI assessment note: “the one thing I've learned is if you are too cheap about how you fund”

Q Love the reasoning. Can I ask, how did that kind of focus on capital efficiency change with a sudden injection of capital like institutional money?

A Yeah, that's a great question, because I think, essentially, you end up spending the money, so it's really hard to resist the temptation to To actually become defocused when you take that much money. In 2013 and 20 14, we did two rounds, and the reason we did it was we, we actually wanted to unlock the power of the creative community across all of the different businesses. We were, had been in stationary, and what we did was we realized as we went around the world to meet with the designers participating in our community that we had a much broader creative community than just stationary designers. The people participating were often self-taught, They were packaging designers, painters, illustrators. There was a huge array. In fact, many of them had nine to five jobs that had nothing to do with creative pursuits at all. They were lawyers and accountants and other people who were cheating on the side. They had a five to nine job. We call it nine to five, five to nine. And there was this big movement happening. And we realized, my God, what we have here is not a stationary company. We have a creative marketplace that's basically helping emerging talent be seen and discovered. And that's the bigger vision is why we took the money, but it did change. It complicates matters A lot. Once you go into different verticals and it requires a bigger planning infrastructure, you know, you hav…

AI assessment note: “it's really hard to resist the temptation to To actually become defocused”

Q Can I dive in there and ask what do you do? What do you do to create a culture of this continuous internal upscaling? And what's the secret source to really let that permeate throughout the organization?

A Yeah. So one of the key things we do is as a management team, Is that we talk about moving people around. So we rotate people a lot and hiring on talent on raw capabilities allows us. That's another thing it allows us to do is move people around to different jobs. And it's amazing when they've come out of maybe two or three different functions, how much they've grown. So I guess I would say that what I was trying to answer with the previous question to your previous question was one of the things I've learned over the years is how to develop people and what my philosophies of what I believe in as my philosophies of management of people when I didn't really have that. At Eve. So that was a, it's a huge journey over 20 years in understanding the potential for people to develop. And frankly, my community, the art community at Minted, the artist community, our external community, teaches us that every day because we can see them evolving as they begin to get peer critiques and feedback from other artists. They transform within 18 months of continuous feedback and critique from their peers, and they become unrecognizable from where they started. So the biggest change for me has been seeing human potential when put into the right settings. And for us, The theory is that you might have a very talented person. They might enter the company in the wrong job, and you need to, before you t…

AI assessment note: “one of the key things we do is... we rotate people a lot”

Q with the positivity and the kind of enabling power of their distribution elements. I do want to, before we move into a quick fire around there, move slightly to a theme of self-reflection, and a two-time successful entrepreneur now with twenty-plus years of experience. I'd love to hear, how have you seen your style of operating change and develop with the years and experience gained over EVE and now Minted?

A Well, one of the biggest places of self-doubt and questioning for An entrepreneur and an entrepreneurial CEO is who should I hire? Where should I hire? Should I be hiring from the outside? Should I be promoting from within? And gosh, I just spent a huge amount of time on this executive search run process, and I'm not sure if I made the right decision. There's just a lot of hand-wringing around how you build your executive team. I really think that if, when it comes down to the capital question we discussed earlier, that the one thing I've learned is if you are too cheap about how you fund your company, such that you cannot build enough Bench at the company to grow people from within. You've probably made too strict of a decision to not fund. That is something I think is absolutely critical to keep alive is hiring at all levels and then building your bench from within because you've got to have, in my opinion, a portfolio of some people who've been built from within and some from outside. And generally speaking, we have found the most success from a hiring on raw talent and then having and being able to have People change directions when needed, change direction as the competitive market changes, be able to be very nimble and adaptive and flexible, be people who are very curious and are constantly learning. There's no cap to their learning potential. That's really critical.

AI assessment note: “the one thing I've learned is if you are too cheap about how you fund”