The Exchanges

Q Tell me specifically what you were, what, what you were thinking of. I mean, you would give kids clay or, you know, glue and construction paper, but, but the, that wasn't what the box would be. I have to assume the box would have instructions on Creating a specific project, right? That was the idea.

A Right. So we would provide materials and we would provide the instructions. So the very first crate that we sent out was centered around color. And so what we included in this crate was first kind of a, a frame or a mat for a picture along with contact paper and a Squares of tissue paper. And so they're able to make creations, um, and then put that up against the light and see how the tissue paper squares actually interacted with each other in terms of color mixing. Another project that we had was a little tote bag. So a canvas tote bag, you would take the tissue paper squares and actually wet them and dye your tote bag. And again, what you would do is you'd have this amazing creation. As well as a lesson in color mixing, too, because we knew the consumer, the parent, would not necessarily buy into the idea of, here's a pot of yellow paint, and here's a pot of red paint, and then you mix those to make orange, because that was a typical way of learning color mixing. We had to go at it at, with a unique angle.

AI assessment note: “we would provide materials and we would provide the instructions. So the very first crate”

Q And, and you met your husband in college?

A I met my husband at Case, and yeah, he matched for his residency in the Bay Area, and so we ended up moving to the West Coast, and it was the first time that I had been to the West Coast, and it was, uh, An interesting experience going from Procter & Gamble then to the Bay Area, where is the height of the first dot-com boom. So lots going on, lots of small companies starting. And so I ended up securing a job at a small startup. So going from Procter & Gamble to the small startup was a very, very, very different experience. I remember asking, um, I was going to a conference and I was asking, How do I get business cards? They basically gave me some card stock and a printer, right? And pointed to it. And they're like, there you go. You get to design your business cards and print them out. Uh, so pretty different from, from being at P&G. And by the way, what did they do? They did online content management.

AI assessment note: “I met my husband at Case, and yeah”

Q All right. So you get some funding by, you know, by the sort of fall of 20 11. And, um, and when were you planning to, to launch?

A We launched in October of 2011. It started right off the bat as a subscription product. We were launching, um, essentially saying that you get a new experience and new box every month. And we were gearing, um, it for kids ages kind of three to seven initially. So we had kind of a lineup of boxes ready to go. Um, but at the time, The way that our model actually worked is that everybody was getting the same box in a given month, so it was important for us to kind of order up, try to deplete that inventory in that month, and then order up again, because we needed to have a certain amount of scale and volume in order to make the economics of the box actually work, and obviously we were trying to make sure that we were getting rid of inventory as well.

AI assessment note: “We launched in October of 2011.”

Q So you had people doing all the fulfillment on site?

A Yeah. And so we were learning a lot as we were going. And so we would source domestically. We would Kit internally. And then we would take those kind of components and then put them into bigger boxes in order to ship out. So imagine if we had a set of pipe cleaners, those pipe cleaner cleaners would have to go into a package. And then that package of pipe cleaners would be combined with a set of beads and some glue or whatever else, and then be put into a bigger crate. So all of that happened internally at first. And then as we started to scale, we were able to source the Individual materials and components increasingly overseas. And then we got to a point where we're able to source everything overseas and then also kit everything overseas. So what ended up getting voted over was the crate itself. So the box is what ended up getting voted over. So you can also imagine kind of the evolution of our warehouse to a lot of bits and pieces to something that looked a lot more organized.

AI assessment note: “Yeah. And so we were learning a lot as we were going.”

Q like, here's a toy, or here's, here's cereal, or whatever it might be. But I think with a product like this, there has to be an implied Add it like sort of value add. It's not just like, buy this thing and you have a cool shirt. It's like, buy this thing and your kid will be smarter. Was that kind of the underlying message in, in the marketing campaigns?

A I think we tested a lot of different types of marketing messages. Um, but most of what we were trying to get across is this idea of a new discovery or a new adventure, um, a new experience. And I think, you know, as parents, we're trying to make sure that our kids are kind of ready for the future. So let's say that they were playing with a rocket in a crate about space. Um, so they're launching this rocket. And then what we would do is we would overlay an illustration of kind of an astronaut on top of it. Right. Or we would have a crate where a kid would be creating a xylophone and learning about sound and how is it that sound waves are traveling and that type of thing. And so we would showcase the kid kind of playing the xylophone, but then around them, we would create kind of an illustration of them being a sound engineer. Right. Um, and so kind of like really conveying the idea of You know, this is opening up your kids imagination and possibilities and who knows what they can do down the road.

AI assessment note: “most of what we were trying to get across is this idea of a new discovery”

Q Which I love. And tell me, I know that you launched this in 20 11, and at the time I guess you were like, you were in charge of the fashion portfolio for eBay. How did the idea come to you?

A So it was born mainly out of personal needs. So my, my career has spanned consumer products and technology, mostly e-commerce. So I'd started my career And R and D at Procter and Gamble, and then had been at PayPal and at eBay. But when we started the company, so. My kids, my oldest two kids were almost three and almost five. And I really wanted to give them exposure to hands-on activities. It was a way for them to really see themselves as producers and not just kind of passive consumers as kids who could actually kind of problem solve and make something. And so I started to pull together different materials and inspiration, and I was like, oh my gosh, this is taking a long time. Like, I need to amortize my, my effort, and so I would invite my friends and their kids, and one of the moms actually said, you should start a business around this, and it was one of those things where I think, long story short, is that we found that there are a lot of Parents who are well-intentioned, very busy. They want enriching activities for their kids. And if it can come to them in a convenient format from a trusted brand, then that's something that actually really resonates. And then if you think about it from a business perspective, if you can get a subscription service to work, it works really well, right? And so if you consider all the elements of a subscription service, or you're considerin…

AI assessment note: “So it was born mainly out of personal needs.”

Q Let's go to some questions we're getting in from folks watching. This is from Kyle Zimmer. He asks by Twitter, how do you develop your kits, and how do you test them with kits?

A Yeah, so we have, interestingly, kind of two product design and development teams. So we have a physical product design and development team, and then we have a digital product. So the digital is creating the e-commerce platform or content platform. So the software, and then our physical product design team is really comprised of folks with mechanical engineering backgrounds, industrial design. We have someone who actually worked on space satellite systems. And so these are the folks who are concepting the different projects that get sent out to the kids, prototyping, testing, et cetera. And a big part of what we've done at KiwiCo, even since We started it in my garage, actually, is that we are always testing with children. So in every office that we've had, we have a sizable room, and four to eight times a week kids are coming in to test the products at various stages. And that is something that is absolutely critical for us. We may assume that a project may be engaging. It may not. We may assume that a material is something that is malleable enough for preschoolers hands, but it may not be. And so it's just a critical step. And so as we've actually been working remotely, that was a big challenge to figure out. And so it's been pretty amazing. We quickly decided to actually purchase three D printers, laser cutters, et cetera, that we then distributed To different product desig…

AI assessment note: “four to eight times a week kids are coming in to test the products”

Q So, a strong team, but we're definitely working on something, you know, uh, I, I mean, counter, not counterintuitive, but certainly different, right? Especially where you were, because you were based in Silicon Valley, where everybody was starting apps and social media networks, and here you were. Trying to create a consumer products company that was like a hard good.

A I think we were pretty fortunate at the time that e-commerce companies were getting funded. And to your point, there were subscription e-commerce companies that were getting funded, um, at the time. So we were able to get our foot in the door. I think we also had a network too. Um, I think the experience that we collectively had at PayPal, at eBay, um, one of the co-founders had been at Yahoo before, um, Uh, we had a network, so we were really, really lucky in that we were able to at least secure meetings with potential investors, and we knew that it was important to get some capital because it was a pretty capital-intensive business because we were dealing with a physical product, and we knew we had to buy the inventory up front and then ship out to customers. Um, but it was not Easy. It was, we had a lot of meetings, and we were not your typical kind of founders. I do think, especially for early stage investing, there is an element of pattern matching for investors, and there is a little bit of a lens where I was a, you know, um, a mompreneur. And what's funny, though, is that being a mom actually made me Uniquely qualified to, to run and to, to start this business. But I would say my vehicle, a minivan, was the only minivan in the parking lots of, of Sand Hill Road. And so it was hard. I mean, I think we did, I don't know, somewhere between 30 to 40 different meetings with D…

AI assessment note: “my vehicle, a minivan, was the only minivan in the parking lots of, of Sand Hill Road.”

Q onboarding onto their platform. It's a math platform for elementary school kids. I spoke to Sal Khan a few days ago, the founder of the Khan Academy. I mean, they're seeing record numbers of students on their platform. I mean, as you have seen this kind of surge in demand, how have you been able to meet that demand? I mean, for example, Have you had any challenges sourcing supplies?

A Yeah. So we've definitely had different challenges associated with, with meeting the demand. I think the great thing is that our team has been incredibly responsive and making sure that we were shoring up our supply chain. Putting in the appropriate orders to make sure that we had the inventory available. And I think when it's kind of regular times, um, to a certain extent, it's almost like your utilities or, you know, you expect the water to be there and the electricity work. And similarly, you expect that you're going to have product to ship. And so we had to be very proactive about making sure that some of these things that we maybe have taken for granted in the past were there and available to us so that we could actually serve the community. Fulfillment was definitely another area that we had to, um, really shore up and make sure that we had the capacity. And then customer care. I mean, obviously we want to do an excellent job of serving the customer and making sure that their questions are answered, et cetera. And so there was a certain amount of capacity that we were planning for in March, April, et cetera, May, June. And so we had to actually scale that up pretty significantly.

AI assessment note: “we've definitely had different challenges associated with, with meeting the demand.”

Q She's the founder of KiwiCo. The company sends out subscription boxes to kids with all kinds of arts and science projects. We're getting some questions about diversity and encouraging diversity in STEM. Rachel Crack asks, um, what role did the growth of women in STEM impact the creation of KiwiCo? Another question about how do you make sure that That the crates are culturally relevant to encourage diversity in STEM?

A Yeah, absolutely. So when we create our crates, we believe that it's really important that they're universal and that they are not gender specific or racially specific. We're very, very intentional about that. And even when we talk about testing with children, we make sure that we're testing with a whole lot of different children, different ages, different genders, et cetera, to different capabilities. In addition to that, I think for sure, I think these days, one thing that is on many people's minds are just the socioeconomic divides. And the fact that as we were coming out of the last school year, and when you look at children who are disadvantaged, they were maybe something like seven to 10 months behind. And so as we're going into this school year, and we continue to see this divide really widen, I think there is this good question of what is it that we can do as KiwiCo? What role can we help play? And we're trying to figure that out. And so we have started to try to partner with certain organizations to be able to provide these experiences for disadvantaged youth, children of color, but there's definitely a lot more to do there. But knowing that some of these kids don't have access to the internet, don't have access to some of the platforms that they need to continue to learn. Having something that is hands-on can be helpful to them, so we are still figuring that out.

AI assessment note: “when we create our crates, we believe that it's really important that they're universal”

Q Yeah. Given the fact that most kids are doing school from home, what are some of the things that parents should kind of keep in mind, um, when it comes to supporting their kids? Not only this sort of the interface with the computer, but, you know, non-computer activity. What, what are some suggestions that you have?

A Yeah. I think that when it comes to STEM and STEAM, if you think about it, it is the foundation for things. It's how the world actually works. And what's kind of awesome is that you Now have an opportunity to engage with your child in the world, in your home, around your home. And I think there are so many topics that are relevant today that can help a child think through Learn things, but also kind of help them in terms of critical thinking or problem solving. So whether it is, as I mentioned, just talking about the pandemic and how viruses spread or what people are doing, you know, these days in terms of medicines and things like that, or even talking about things like civics or how do elections work? I think there are so many opportunities with things that are going on in the real world today to be able to engage your child, engage in conversation, and again, hopefully help pique their curiosity. So as they grow, They are able to build the creative confidence to be able to engage in those topics.

AI assessment note: “whether it is, as I mentioned, just talking about the pandemic and how viruses spread”

Q So what, what happened in, you know, when you launched those, how did you launch those products? What was the way that you reached people where, you know, you actually, you Started to sell these boxes out.

A Yeah. I mean, at that point, again, we were lucky in that we had a community of, of folks who knew about KiwiCrate at the time. Um, what was interesting about that particular launch is that it really paved the path for us to get to a place of being profitable. So if you look at that launch at the end of 2014, and you look at our first month of profit The ability in 2016, there's kind of this direct line from that. So that happened. And then come to find out, right, that we were able to make our unit economics work better. So the majority of U.S. households have more than one child. And because now we had an expanded offering, we saw a number of shipments going out with more than one crate. And we positioned shipping as free for the consumer, but obviously shipping is not Free to us. And so the fact that we were able to then amortize shipping by sending out multiple crates to a given household was really important and ended up really helping us out from a profitability standpoint too.

AI assessment note: “what was interesting about that particular launch is that it really paved the path”