The Exchanges

Q And, and what did your parents do, uh, when you were a kid? What did they do for a living?

A I remember when we first came to the States, because the language barrier was a very real thing for my parents, we had a really rough start to our stay in this country. Meaning that my dad didn't have steady employment in the beginning, and then my mom worked as a register clerk, or cashier at a Chinese takeout place, right next to Johns Hopkins University Hospital there. And my dad sold odds and ends on the weekend at local flea markets in and around Baltimore. And then my mom found her first white collar job as an admin up in New Jersey. And so we lived apart for one or two years, I believe, where my mom lived up in Jersey, and every weekend she would come down here or we would go up there.

AI assessment note: “my mom worked as a register clerk, or cashier... my dad sold odds and ends”

Q So you knew you could maybe, maybe do that. Okay. And when you told, like, people who didn't quite know what you were doing, which was, which would have been most people in 2010, hey, we're, you know, we're making mobile games. What, how would you describe what, what you guys were doing?

A It's so hard, because no one really even had a iPhone back then, you know, and so it was like telling them that they should buy a 900 dollar phone just to be able to play a game you guys were trying to make. It was like, it was just so weird, you know, people just, you know, didn't really get it. I think the closest thing that would resonate with folks was that, you know, hey, there's all these games on Facebook, but, you know, these phones that we have are going to get more and more powerful, so you can probably play those similar connected games on your mobile phone one day, and we think that day is now.

AI assessment note: “closest thing that would resonate with folks was that, you know, hey, there's all these games on Facebook”

Q By the way, named after the streets in New York?

A Yeah, we had, one of our first offices was on the corner of Prince and Green and Soho, and as we filed the trademark, The attorneys didn't even file it. They said, we're going to save you the thousand dollars an hour we charge and reject us for you, and we're like, what? You don't even want our money? Like, just file it. What's wrong with you? And they were like, yeah, pretty sure there's already a PNG out there. And so we're like, I was like, oh, fine, fine. And so the real sharp New Yorkers are like, Prince and Spring are parallel. They never intersect. And I was like, that's right. But it was the closest coordinates to our office at that time.

AI assessment note: “Yeah, we had, one of our first offices was on the corner”

Q Right. You graduate in, in, in 2003 with a, an economics degree from Johns Hopkins, really great degree in school, and, and so, uh, what did you decide to do to pursue?

A So I was at the Career Center Which at that time was a little shack on, on, uh, on campus. I remember walking in and looking for the room where there was some consulting firm that was holding a, an info session. And then there was a few, there was one lady that was standing at the door of this thing called the jet program. And I was like, what is a jet program? And she said, um, you basically move out into Japan. It's a cultural exchange and you get paid for it. And you, Learn the language if you want, but we put you in Japan in a public school and, uh, you really kind of teach them the language and the culture. You know, want to learn more. And I was like, that sounds not so bad. And I remember sitting in on that info session instead and ended up applying.

AI assessment note: “sitting in on that info session instead and ended up applying”

Q But I wonder, did, were people still asking you, hey, you know, Che, how are you going to offer better prices than Costco or Sam's Club. Was that, I mean, when people asked you that, were you saying, well, that's not what, what, it's not just about better prices, it's about convenience, or were you saying, well, here's how we're going to offer better prices?

A It was a little bit of both, and so we had to be sharp on prices, so we knew we couldn't be, like, wildly priced compared to similar items online, but at the same time, we wanted to target customers that valued that convenience and also valued the fact that they didn't have to pay a membership fee to get into the door. And so initially, very coastal. Folks just like us who didn't have a car anymore to get to a warehouse club. But now increasingly, what you find is a big part of our audience is now suburban and rural. If you're in the city, you might not have a car. If you're in the suburbs, you might not have the time. Or if you're out in the middle of the country, you might not have the patience to drive 90 minutes to your local warehouse club just to save 10 bucks. Because you, you might burn a good amount of that in gas, and you have to stand on line. And pay a membership fee. So, so those three things are really what we hit upon.

AI assessment note: “It was a little bit of both, and so we had to be sharp on prices”

Q Wow. Che, how about you? When do you, when did you begin to form your understanding of what it means to be a leader, and how do you define that?

A Uh, when I was first year at a law firm, you know, we had just pulled an all-nighter for, uh, some transaction we were working on. So here I was, twenty-something years old, hadn't slept in like, you know, 27, 30 hours, and so, sitting there trying to stare at documents, and the lead partner, uh, that was on that transaction came down to where the lowly first year sat, and kind of put his hand on our shoulders and said, you know, how are you guys holding up? You know, you guys look like you could use some coffee and hot chocolate and breakfast, and, uh, And went downstairs, took our order, and went down to the coffee shop and, and brought it back to us, and, and I just, at that moment, maybe it was me being delirious because I was awake for so long, but, um, I just remember, wow, like such a small thing, that empathy, uh, that someone showed as a leader meant so much.

AI assessment note: “when I was first year at a law firm... such a small thing, that empathy”

Q you were packing the boxes. You were taping them shut. It was physical work. It was Hard work, but you, I remember you telling me how much you loved it, but of course, as the company grew, and now you're a much bigger company, you had to start to manage the people who were doing that work that you had been doing. How did you move from worker to leader?

A It was really difficult, uh, for years, even after we had raised a lot of money, and we had, like, a corporate office environment, I was still, uh, you could find me in my spare time just packing boxes on the floor, and even today, people joke whenever I walk the floor, they're like, you know, you can't pack a box anymore, and, and I'm always warning them, like, don't let me get on the line, I'll show you guys, but the reality is, I'd probably be the slowest packer out there today. Uh, I remember an investor had, uh, called me and, and said, hey, some of the other folks said, you're still packing Boxes. And I was like, yeah, I thought it was a positive. I was like, I like to be with the troops. I'm still on the front line. I'm doing this every single day. But at that moment, the investor basically told me that you need to stop that because for every moment you are there packing a box, you're actually doing the company a disservice because you've graduated past that. You now have hundreds of people in your charge, and you need to do the things that they can't do themselves and that they, that you're in the best position to do, and that's lead the company. So Whether it's setting strategy, whether it's raising more money, whether it's, uh, working on marketing, those are the things that you need to focus on for you to really benefit those, uh, on the front lines, and, and that re…

AI assessment note: “at that moment, I felt like I graduated out of, kind of, the physical world”

Q What was your plan when you got to college? Like, what did you want to study, and what did you think you would do with that?

A I didn't have a plan. My plan was to kind of realize this dream that my parents had a generation before they thought we could realize it. So my plan was to get into Hopkins. And once I got in, I had no plan after that. And, and I'm sorry for the people listening to this from Hopkins, like all the folks at Hopkins who don't have a plan, you end up, uh, majoring in economics. Uh, and that's, and that's what I, that's what I did. And you know, at Hopkins, at least when I was there, You had the School of Engineering and the School of Arts and Sciences, but then everyone from the engineering school would call it the School of Arts and Crafts, and so I was an econ major in the School of Arts and Crafts at Hopkins.

AI assessment note: “I didn't have a plan... you end up, uh, majoring in economics.”

Q margins are really, to be competitive, the margins on the products have to be really thin. Like you, you can't, you can't increase the price that you're buying things for by too much, right? Because otherwise you're going to lose business. Plus you're dealing with shipping. So it's very, very hard. And from what I understand, You guys are not yet profitable, but do you see a path to profitability?

A Yeah, definitely. We're not that far off, and it really is one of the stories of, ah, you know, everyone jokes about it in the industry. It's like, we'll make it up with scale. Yeah. And with us, we're doing it every day, so you're starting to see it because, again, it's just like, the more items you buy from Box or any e-commerce company, the more effectively you can price the items, because all those different, different items in that box, quote unquote, share that shipping cost, which is the biggest cost in e-commerce. And so, if you ship one item, of course, it's pretty hurtful, but if you're shipping 10 items per order, man, suddenly, like, you can make money selling Oreo cookies online.

AI assessment note: “Yeah, definitely. We're not that far off, and it really is”

Q not the right pick. And maybe they have to let that person go. And that happens. It happens very, it happens in the earliest phases of a startup. It can happen well in Into the startup. It can happen years into the business growing and scaling. I have to imagine all three of you have been through that. Um, Che, how do you, what's your advice about letting people go?

A You know, I, I, I'd have to say I've learned the hard way. You know, it's probably a skill set that, uh, at least for me and, and, um, some of the folks I've talked to, it's not, it's not innate in me to be ruthless. And the minute I hear something I don't like, it's, um, you know, that I have a button under my table where that person falls through the floor and Well, you know, uh, we're, we're gonna replace the VP of whatever, you know. Um, I've learned the hard way that, that it's unhealthy, uh, keeping folks too long, and, and thinking that, oh, you know, just another month, or just another quarter, and, and I, I really feel like they're gonna be able to turn the corner. More often than not, that, that just never happens, and I think what I've learned is that keeping folks too long is really bad, not only for the company, but also for that employee.

AI assessment note: “keeping folks too long is really bad, not only for the company”

Q How does that work? I mean, if somebody's like, yeah, my kid's college is 48,000 dollars a year, you guys pay that?

A We, we make you file a FAFSA, and so depending on your need, you're going to get it subsidized already, uh, and it's tuition only, and so it becomes a lot more palatable, uh, once you kind of narrow down the actual cost, but it's certainly helpful for the parents that are sending them to college, and that and the other programs run in the fulfillment centers, it's solely born to tie it all together back to my family's Kind of evolution in the early days when we were rather poor, and so luckily we don't pay anyone minimum wage here, but certainly, you know, working and having hourly kind of salaried folks, it makes for sometimes not the easiest of livelihoods, so education was my way, or was our family's way out of that, and I hope we can help a few folks here along that path.

AI assessment note: “We make you file a FAFSA... and it's tuition only”

Q some companies that, you know, aren't around anymore. It happens. You know, there are a variety of reasons. I mean, in your case, there were probably macroeconomic Uh, you know, challenges and competition from Sam's Club and Costco and other big box retailers. Um, what, I mean, ultimately, in your view, was there anything that you could have done or could have been done differently to have prevented, uh, bankruptcy?

A For sure. First and foremost, any decision, especially business decision, uh, in life is, could I have done better? And we probably need 10 hours of tape in order to go through all the things that I feel like I personally could have done better. But hindsight's twenty-twenty. With that said, the, um, the macro factors were really tough. So we were coming out of COVID. We were a new issuance of public stock in the New York Stock Exchange. We were unprofitable. Small-ish cap , so we were a little bit above a billion in terms of market cap. Yep. And all in e-commerce COVID story. Um, and so that was really tough. And as your stock price starts to go down, people get spooked, your vendors get spooked, uh, and everyone gets spooked. And so we still had, what, almost twenty million dollars cash left in the bank, but collectively we decided the best kind of path forward was boxed, was to sell our software business. So BlackRock ended up buying that and owning that. Uh, and then the e-commerce business, uh, unfortunately was shut down, but Has since been resurrected, but I have nothing to do with the, the box, uh, that has been resurrected today.

AI assessment note: “we probably need 10 hours of tape in order to go through all the things”

Q But this is after you, like, pitched what you'd been doing. And, and at this point, do you remember, like, what kind of numbers were you showing? Like, were you able to say, hey, look, we're, we're, we're banking, like, half a million dollars in revenue.

A Yeah, so hundreds of thousands of people playing it, and probably our, just how naive we were, uh, was probably showing that we truly were first-time entrepreneurs. Had no idea, quote unquote, how the game is played, and just had, like, dumb luck of making this game at the right time, and, and that was the hard advice that we got, and I remember it was silent in the cab ride back, and I remember telling everyone in the cab, like, well, I don't think that went well, and, uh, and, you know, now I laugh about it, but at that time, people were like, yeah, this ain't, isn't gonna be easy, but we eventually raised money because, uh, And this is connecting the dots all together. So we, uh, got a message, ironically, on Facebook from one of the largest gaming, social gaming companies in Japan where social gaming had already taken off on mobile. They said their CEO was in town. They wanted to grow their U.S. presence. Could you meet her next week?

AI assessment note: “hundreds of thousands of people playing it, and probably our, just how naive we were”