The Exchanges

Q So tell me a little bit about some of the ideas that you, you started to think. I mean, you're doing consulting, but at what point did you start to think about, maybe I should look into starting my own thing?

A Yeah. You know, I was, I was working with a company called Alton Lane, um, which was doing made to measure menswear. And I started to realize, you know, that, that brought me like eye to eye with brands like Bonobos that were just starting at the time and looking at how they found one thing. And in their case, it was khaki, khaki pants that they did really well. And I bought them. I'm like, wow, they're delivering on it too. And I started to realize, wow, Warby Parker, Bonobos. Yes, they're making a product, but they're playing customer acquisition arbitrage. They are just trying to acquire a customer for a little bit less than they're making and scale that profitability. And they're playing in categories where they're competing with really, really big folks, but those folks are not nimble and they're probably not playing with a current deck of cards when it comes to the sort of digital media landscape. So I felt that, okay, I just need a product. That I can go compete with, with in a fragmented market with big players and win on customer acquisition arbitrage.

AI assessment note: “I felt that, okay, I just need a product. That I can go compete with”

Q Um, I'm sorry to, I'm sorry, I mean, I know we're, this happened over 25 years ago, but it must have been really hard. Was your, was your father ill, Scott?

A No, um, he was born with a heart defect, um, and he just happened to be at dinner with my mom and, and like massive heart attack out of, out of nowhere. Um, and, and so, none of us were prepared. You know, I mean, the whole period of time is such a blur, and I was so close to my dad, and certainly idolized my dad in so many regards, um, that I was made to become an adult really fast over that month-long period, because coming back and getting into that space of, okay, you know, I've got to figure out how to close down my dad's business, and find a job myself out of college, and find a place to live, and help my mom get back on her feet, and There's no question that my mom wouldn't, and I would not have gotten through that summer with, were it not for Missy because she basically lived with us. And so from that point on, we, we were, we transitioned from being kind of college boyfriend, girlfriend to like really a couple.

AI assessment note: “No, um, he was born with a heart defect”

Q Looking at some, you know, and thinking, hey, you haven't paid your dues. I started out in the factory sweeping the floors, and now I'm running the company, and who are you guys?

A Exactly. I mean, who are we? And, and, well, probably a fair question. So, so I found it was really hard to get Clear information. Like, there was nobody out there that I can remember that validated what we were doing. And I'll tell you a funny story, Guy. The first time I went to our factory, uh, Rajat's factory in Calcutta, his dad, who had started the business, was, um, in his late seventies at the time, and he took me to lunch, and after I had spent a week there, and he said, Scott, I think what you're doing is a very bad idea. I'd already ordered. I already spent, you know, my entire life savings on sheets through him, and he's telling me, I think this is a bad idea because I just don't know that there's a market for what you're trying to do. And when I look back, that was the, some of the, the biggest dose of bravery that Missy and I had to have was that we just couldn't find anybody that would sort of say, yeah, I get what you're doing. This is gonna be awesome.

AI assessment note: “there was nobody out there that I can remember that validated what we were doing.”

Q in sales, and you were profitable by year, by the end of that first full year, and, and presumably you want to increase sales, right? And so, at this point, I guess the options are do more social media ads, try and figure out, maybe get some more earned, you know, earned media, etc., What, what were you thinking about? How are you thinking about ways to acquire new customers?

A Well, my, my goal for 2015 was to turn on customer acquisition, and my initial thought was to do exactly what I had perceived Warby Parker and everybody else to be doing, and I had set out to do, which was to turn on the, you know, digital customer acquisition engine through primarily Google and Meta. Um, and it was not working at all. At the end of the day, I was, I was paying a lot in media and not seeing a lot for it, and, and, and I, I thought about, like, my own media consumption behaviors, and, um, audio was really interesting to me. There weren't a lot of brands playing in audio, but when you looked at their CPMs, and you look at the, the total audience, really, really big, and so we, we started doing a couple very small tests, um, on SiriusXM, and when you think specifically about SiriusXM, Radio is free for everybody. So you're a certain subset of person if you're actually willing to pay for it, which to me was a, was an indicator of a luxury customer, a customer that might be open to a more luxury experience or more premium experience. Um, and it gives you a national footprint. Buying radio media, especially when you're small, is really, really hard because it's so fragmented. Um, and so we started advertising in, in Sirius XM. We saw, even though it was a very small spend, we saw some kind of immediate elasticity there. Like this, this, Thesis was working. And, and I…

AI assessment note: “digital customer acquisition engine through primarily Google and Meta”

Q like in your mind you started, you were already thinking about the next thing. I mean, you had to because, uh, right. And, and the next thing was the next thing in your mind going to be, I don't know, going to work for somebody else, maybe join in, you know, a VC firm. Was it start my own thing? Did you, did you have an idea in your head?

A You know, the easy thing was consulting. And I just didn't love it. Um, and I didn't love it because I'm a hands dirty guy. And it's like, you're playing with someone else's toys and you have to put them away at the end of the day. And, and I think it was that process that made me realize that, you know, I'd always say I'm not an entrepreneur because I always thought I was too conservative and, and too afraid of risk and kids and that sort of thing. And I realized at that point that like, I've got to give it a shot to go start something myself. I just wasn't sure in what, but I also really missed Tangible products.

AI assessment note: “I realized at that point that like, I've got to give it a shot”

Q You want to make an app on the iPhone that you can connect with a binocular, and there you go. Scott, any thoughts?

A Yeah, I mean, I, I, I was going to say something maybe friendlier than Jamie put it, but, um, but I, I tend to agree with it. I, I think that there's, I don't know, there is something like I have college age girls and what I'm noticing when I go visit them at school and tailgates, people have regular digital cameras now. And I'm like, what the hell? I have the iPhone seven pro. Isn't that, isn't that better? But there's something about detaching from the phone that, that maybe is existing. And I think, um, I don't know why people carry these digital cameras. I've never gotten a clear answer on that. However, if you can figure out why and attach this to sort of that idea, then, then, you know, maybe there's 20 people guy that.

AI assessment note: “there is something about detaching from the phone that, that maybe is existing”