1 00:00:07,560 --> 00:00:10,399 Speaker 1: You know, it's always a really interesting dynamic when you 2 00:00:10,480 --> 00:00:17,479 Speaker 1: meet a founder that's like that. Early in March, a 3 00:00:17,520 --> 00:00:20,239 Speaker 1: woman named Abigail Stone walked into the New York offices 4 00:00:20,320 --> 00:00:23,239 Speaker 1: of a company called red Antler. She wanted them to 5 00:00:23,320 --> 00:00:26,680 Speaker 1: invest in her business. Only this wasn't a very traditional 6 00:00:26,720 --> 00:00:29,920 Speaker 1: investor meeting. She literally just had an idea. She didn't 7 00:00:29,960 --> 00:00:32,479 Speaker 1: really have a product, she hadn't raised any money, she 8 00:00:32,560 --> 00:00:36,120 Speaker 1: didn't have a co founder. It was also different because 9 00:00:36,120 --> 00:00:39,839 Speaker 1: red Antler isn't a traditional startup investor right. It's a 10 00:00:39,880 --> 00:00:43,479 Speaker 1: branding agency that brags on its website quote, we've launched 11 00:00:43,479 --> 00:00:46,920 Speaker 1: more businesses than anyone else. Red Antler owns shares in 12 00:00:47,000 --> 00:00:50,320 Speaker 1: about eighties startups, and about half of red Antler's business 13 00:00:50,320 --> 00:00:53,920 Speaker 1: comes from people like Abigail, founders who haven't officially launched 14 00:00:53,960 --> 00:00:57,440 Speaker 1: their companies yet. Investing in startups is a famously risky 15 00:00:57,480 --> 00:01:00,560 Speaker 1: business to get involved, but if you back the right companies, 16 00:01:00,680 --> 00:01:06,360 Speaker 1: you can make a lot of money. And over the years, 17 00:01:06,440 --> 00:01:09,680 Speaker 1: red Antler has done just that. Only it didn't give 18 00:01:09,760 --> 00:01:12,399 Speaker 1: money to the startups it picked. It gave them man 19 00:01:12,400 --> 00:01:17,120 Speaker 1: hours designing websites, developing marketing strategies, helping get their client's 20 00:01:17,200 --> 00:01:20,000 Speaker 1: brand name on the radar of new customers. Some of 21 00:01:20,040 --> 00:01:23,280 Speaker 1: them might be companies you've heard of Casper Mattresses, All 22 00:01:23,360 --> 00:01:27,200 Speaker 1: Birds Running Shoes, and the wholesale retailer Boxed. But the 23 00:01:27,280 --> 00:01:30,200 Speaker 1: chances aren't you haven't heard of red Antler, even though 24 00:01:30,240 --> 00:01:33,160 Speaker 1: their work could be silently influencing some of the shopping 25 00:01:33,160 --> 00:01:50,320 Speaker 1: decisions that you've recently made. Hi, I'm brad Stone and 26 00:01:50,360 --> 00:01:52,960 Speaker 1: I'm jin Cow. And this week on Decryptive, we're taking 27 00:01:53,000 --> 00:01:55,200 Speaker 1: an inside look at the way some new e commerce 28 00:01:55,200 --> 00:01:58,520 Speaker 1: startups are preparing for launch. Silicon Valley lore is full 29 00:01:58,560 --> 00:02:00,880 Speaker 1: of stories of startups that through out of some Palo 30 00:02:00,920 --> 00:02:05,360 Speaker 1: Alto garage, But today a handful of branding agencies like 31 00:02:05,440 --> 00:02:08,400 Speaker 1: red Antler command a lot of influence behind the scenes, 32 00:02:08,600 --> 00:02:11,440 Speaker 1: shaping brand new companies before they make them for sale. 33 00:02:11,919 --> 00:02:14,440 Speaker 1: And here in New York, new e commerce companies are 34 00:02:14,480 --> 00:02:16,960 Speaker 1: appearing all the time, and it's getting harder to grab 35 00:02:17,000 --> 00:02:20,480 Speaker 1: customer attention. It's part of the reason branding agencies are 36 00:02:20,520 --> 00:02:22,840 Speaker 1: in such high demand, as well as the fact that 37 00:02:22,919 --> 00:02:25,280 Speaker 1: many of these companies will collapse that they can't find 38 00:02:25,400 --> 00:02:28,760 Speaker 1: enough customers quickly. So just how much power does a 39 00:02:28,840 --> 00:02:32,120 Speaker 1: firm like red Antler, really Wheel and what's so special 40 00:02:32,160 --> 00:02:34,600 Speaker 1: about being able to work with them? Stay with us? 41 00:02:39,680 --> 00:02:43,360 Speaker 1: So jing tell us more about Abigail Stone. No relation 42 00:02:43,440 --> 00:02:45,840 Speaker 1: to me. The start of founder we just heard about. 43 00:02:46,600 --> 00:02:49,560 Speaker 1: Abigail is twenty nine. She got her start at Ralph 44 00:02:49,600 --> 00:02:53,080 Speaker 1: Lauren by Ne Eclectic Objects to decorate their stores. She 45 00:02:53,160 --> 00:02:56,760 Speaker 1: exudes a lot of grace, matching sleek outfits with big 46 00:02:56,840 --> 00:03:00,280 Speaker 1: bold earrings. In early as she was finished ing up 47 00:03:00,320 --> 00:03:02,840 Speaker 1: business school, she came up with the idea for startup 48 00:03:03,280 --> 00:03:10,120 Speaker 1: selling luxury candles online. My friends from school set off 49 00:03:10,320 --> 00:03:16,840 Speaker 1: their shiny, fancy new jobs, coushy salaries, bonuses. Um, you know, 50 00:03:17,160 --> 00:03:23,400 Speaker 1: I set out to my kitchen standing table to start 51 00:03:23,440 --> 00:03:26,720 Speaker 1: my company. I think it's fair to say Abigail is 52 00:03:26,760 --> 00:03:30,320 Speaker 1: obsessed with candles. She was all in on her idea, 53 00:03:30,639 --> 00:03:34,720 Speaker 1: but she had trouble convincing investors to back her. So 54 00:03:34,760 --> 00:03:38,640 Speaker 1: I was like blugging around the suitcase of candles nine 55 00:03:39,120 --> 00:03:43,320 Speaker 1: degrees and like I was a subway and listening and 56 00:03:43,480 --> 00:03:48,360 Speaker 1: like nothing was happening, and you're like trying to start 57 00:03:48,400 --> 00:03:51,720 Speaker 1: and you can't get any traction, and so that was 58 00:03:51,760 --> 00:03:58,560 Speaker 1: really hard. Around that time, she approached right Antler. Abigail 59 00:03:58,640 --> 00:04:00,840 Speaker 1: had once taken an online last top by one of 60 00:04:00,880 --> 00:04:04,760 Speaker 1: the founders, Emily Hayward. Ever since then, Abigail had wanted 61 00:04:04,800 --> 00:04:08,560 Speaker 1: to work with them. So I went to read Antler 62 00:04:08,680 --> 00:04:12,760 Speaker 1: with this big tope bag of different candles from the market, 63 00:04:13,000 --> 00:04:15,680 Speaker 1: and I spread them all out on the table and 64 00:04:15,840 --> 00:04:19,200 Speaker 1: I couldn't really read j V um. I wasn't sure 65 00:04:19,480 --> 00:04:23,040 Speaker 1: he was feeling it or not. JB Osborne is Emily's 66 00:04:23,080 --> 00:04:26,440 Speaker 1: business partner. He and Emily started read Antler ten years ago. 67 00:04:26,839 --> 00:04:29,560 Speaker 1: Now they have eighty employees in an office in a 68 00:04:29,640 --> 00:04:33,120 Speaker 1: large industrial building in Brooklyn. And then the next day 69 00:04:33,200 --> 00:04:36,640 Speaker 1: j V sent an email and he said, um, we're 70 00:04:37,120 --> 00:04:40,640 Speaker 1: still thinking about candles, not totally sure. We would really 71 00:04:40,680 --> 00:04:42,440 Speaker 1: like you, you want to get to know you better, 72 00:04:42,520 --> 00:04:46,240 Speaker 1: and like Simsis is pretty early on, Like let's keep 73 00:04:46,279 --> 00:04:58,640 Speaker 1: the conversation throwing. What was the initial sort of skepticism, right, 74 00:04:58,800 --> 00:05:03,360 Speaker 1: she yeah, so I remember this part. This is Emily here. 75 00:05:03,440 --> 00:05:05,760 Speaker 1: I remember j B said to me, I want you 76 00:05:05,800 --> 00:05:11,680 Speaker 1: to meet this founder. I absolutely love her, but are 77 00:05:11,839 --> 00:05:17,080 Speaker 1: candles enough to launch a business around? I mean, that's 78 00:05:17,080 --> 00:05:20,680 Speaker 1: my initial reaction to our luxury candles really a thing? 79 00:05:21,279 --> 00:05:23,240 Speaker 1: You know? I felt the same way at first two. 80 00:05:23,680 --> 00:05:26,839 Speaker 1: But yeah, they're actually a thing. How much do they cost? 81 00:05:27,120 --> 00:05:29,080 Speaker 1: At the high end, a candle can cost about a 82 00:05:29,160 --> 00:05:33,080 Speaker 1: hundred Wow. The only candles I buy are those blue 83 00:05:33,120 --> 00:05:36,440 Speaker 1: tinted Hanukah candles and they cost twelve dollars at Walgreen's. 84 00:05:36,600 --> 00:05:39,720 Speaker 1: It's because they don't have the luxury sent Candles are 85 00:05:39,760 --> 00:05:43,839 Speaker 1: actually about a three billion dollar business just in the US, 86 00:05:43,920 --> 00:05:46,800 Speaker 1: and it's growing, and the high end candle category is 87 00:05:46,839 --> 00:05:49,880 Speaker 1: growing the fastest. Abigail thought she could make candles that 88 00:05:50,040 --> 00:05:52,520 Speaker 1: looked and smelled just as good as those, but sell 89 00:05:52,560 --> 00:05:58,040 Speaker 1: them at a better price. JB and Emily might sound 90 00:05:58,240 --> 00:06:01,839 Speaker 1: strangely critical for a brand the agency vetting a potential client. 91 00:06:02,320 --> 00:06:04,679 Speaker 1: In most cases, it's the client who picks the agency, 92 00:06:04,760 --> 00:06:07,640 Speaker 1: not the other way around. But red Antler is actually 93 00:06:07,640 --> 00:06:10,279 Speaker 1: in such high demand j B and Emily can basically 94 00:06:10,360 --> 00:06:13,320 Speaker 1: choose who they take on, and they're taking a big risk. 95 00:06:13,640 --> 00:06:15,839 Speaker 1: While they do charge a fee to cover costs, and 96 00:06:15,880 --> 00:06:18,680 Speaker 1: those fees can be pretty expensive. By the way, red 97 00:06:18,720 --> 00:06:21,479 Speaker 1: Antler often gives a profit to take shares in the startup, 98 00:06:21,960 --> 00:06:24,560 Speaker 1: just like a venture capitalist would, and a stake in 99 00:06:24,600 --> 00:06:26,840 Speaker 1: your company is just about the most valuable thing a 100 00:06:26,880 --> 00:06:30,240 Speaker 1: founder can give up. In Abigail's case, Emily and JB 101 00:06:30,400 --> 00:06:32,839 Speaker 1: also needed to be convinced that there were enough candle 102 00:06:32,880 --> 00:06:38,920 Speaker 1: fanatics out there to make the business idea viable. Hey, guys, 103 00:06:38,960 --> 00:06:42,960 Speaker 1: welcome to another video. Let's talk candles. I'm borderline having 104 00:06:43,000 --> 00:06:47,200 Speaker 1: a candle addiction. I am obsessed with candles. Hey guys, 105 00:06:47,240 --> 00:06:48,960 Speaker 1: it's me Drew and I am here to do a 106 00:06:49,080 --> 00:06:52,640 Speaker 1: Yankee candle hall and I picked up the World Journeys 107 00:06:52,839 --> 00:06:56,440 Speaker 1: Sonoma Helly red Little. Today We're going to do a 108 00:06:56,480 --> 00:07:04,080 Speaker 1: blindfolded candle challenge. I'm a candle over candles. Eventually they 109 00:07:04,120 --> 00:07:07,240 Speaker 1: decided there was an opportunity, so Abigail and Red Antler 110 00:07:07,240 --> 00:07:11,600 Speaker 1: started working together in October of That opened up resources 111 00:07:11,640 --> 00:07:14,200 Speaker 1: for Abigail that most founders can only dream up. How 112 00:07:14,200 --> 00:07:16,760 Speaker 1: many people on the red and art team or working 113 00:07:16,800 --> 00:07:22,400 Speaker 1: on this U s okay, let's see, uh so Daniel 114 00:07:22,440 --> 00:07:27,920 Speaker 1: and Grace on the creative side, Um, Jonah and Molly 115 00:07:28,000 --> 00:07:32,440 Speaker 1: on strategy, there's Caroline, there's Debbie was there at one 116 00:07:32,480 --> 00:07:38,160 Speaker 1: point on production? Um Scott chaps. It took Abigail another 117 00:07:38,360 --> 00:07:41,240 Speaker 1: minute to finish listing everyone, but in total it was 118 00:07:41,280 --> 00:07:44,480 Speaker 1: more than twenty people. Most startups can barely afford a 119 00:07:44,520 --> 00:07:47,520 Speaker 1: branding agency, let alone getting access to so many people. 120 00:07:48,160 --> 00:07:52,480 Speaker 1: Red Antler served as fragrance testers, package designers, cheerleaders. They 121 00:07:52,480 --> 00:07:55,720 Speaker 1: helped create the brand, developed the strategy, build the website. 122 00:07:55,920 --> 00:07:58,840 Speaker 1: They even came up with the name. Our team was 123 00:07:58,920 --> 00:08:01,680 Speaker 1: really excited about other Land, but it definitely felt like 124 00:08:01,720 --> 00:08:05,000 Speaker 1: the wild card in the bunch. Yeah. I always wondered 125 00:08:05,040 --> 00:08:10,000 Speaker 1: about in strategy and we were like, wouldn't it be 126 00:08:10,080 --> 00:08:13,680 Speaker 1: cool if Abigail shows other Land, but she's probably not going. 127 00:08:14,720 --> 00:08:19,360 Speaker 1: And when she did, I remember our team being so 128 00:08:19,640 --> 00:08:22,200 Speaker 1: excited and I'm trying to remember what the other names? 129 00:08:23,400 --> 00:08:30,480 Speaker 1: Do you remember? Yes, please consider dedication. And then my 130 00:08:30,520 --> 00:08:41,120 Speaker 1: other favorite was Mammal that Abigail also got to take 131 00:08:41,160 --> 00:08:44,440 Speaker 1: advantage of red Antler's address book even before she had 132 00:08:44,480 --> 00:08:47,840 Speaker 1: the money to officially hire them. So I introduced her 133 00:08:47,960 --> 00:08:53,360 Speaker 1: to a bunch of um you know, angel entrepreneurs funds 134 00:08:53,520 --> 00:08:55,760 Speaker 1: and said, like, hear all the people I think you 135 00:08:55,760 --> 00:08:59,240 Speaker 1: should talk to. That's important because JB said earlier that 136 00:08:59,320 --> 00:09:02,360 Speaker 1: when Abigail first approach red Antler, she had no funding. 137 00:09:02,800 --> 00:09:05,840 Speaker 1: JB and Emily connected her with more than fifteen people, 138 00:09:06,440 --> 00:09:09,920 Speaker 1: and once Abigail started name dropping red Antler, investors started 139 00:09:09,920 --> 00:09:13,600 Speaker 1: paying a lot more attention to her candle company. It 140 00:09:13,640 --> 00:09:17,680 Speaker 1: gives you a little bit more legitimacy. UM. The meetings 141 00:09:17,679 --> 00:09:21,559 Speaker 1: available tomorrow instead of in a couple of weeks and 142 00:09:22,120 --> 00:09:27,240 Speaker 1: doesn't get rescheduled. Still, Abigail got about fifty knows from 143 00:09:27,240 --> 00:09:31,040 Speaker 1: investors who didn't want to commit, but several investors told 144 00:09:31,040 --> 00:09:34,839 Speaker 1: me that red Antler's endorsement matters. Like Brian Nicholson, an 145 00:09:34,960 --> 00:09:37,200 Speaker 1: l A based investor who has worked on deals with 146 00:09:37,280 --> 00:09:42,000 Speaker 1: brands including Refinery twenty nine and Reformation, if if I 147 00:09:42,040 --> 00:09:47,200 Speaker 1: know that JB and the team has invested in this 148 00:09:47,320 --> 00:09:52,000 Speaker 1: business through through their work, UM, I think that says 149 00:09:52,040 --> 00:09:57,079 Speaker 1: a lot about the chances of the company's success. Brian 150 00:09:57,160 --> 00:09:59,640 Speaker 1: was one of the contacts on red Antler's list. He 151 00:09:59,720 --> 00:10:02,600 Speaker 1: did a end up investing because of timing issues, but 152 00:10:02,600 --> 00:10:05,319 Speaker 1: said red Antler was a big reason he looked seriously 153 00:10:05,440 --> 00:10:10,640 Speaker 1: at Abigail. Had I met her without um knowing that 154 00:10:10,679 --> 00:10:13,600 Speaker 1: red Antler was behind her, and secondly, not being able 155 00:10:13,679 --> 00:10:16,520 Speaker 1: to see the kind of visuals that they helped her create, 156 00:10:17,440 --> 00:10:21,240 Speaker 1: I would be skeptical on the ability to disrupt the 157 00:10:21,320 --> 00:10:25,199 Speaker 1: candle category. After about six months, Abigail had backing from 158 00:10:25,200 --> 00:10:28,360 Speaker 1: a Vemo co founder, founders of plus size brand Deah 159 00:10:28,440 --> 00:10:31,920 Speaker 1: and Co. And all five founders of the mattress company, Casper, 160 00:10:32,280 --> 00:10:38,360 Speaker 1: one of red Antler's existing clients regulars. Role here sounds 161 00:10:38,400 --> 00:10:41,040 Speaker 1: a lot like an incubator, like a white combinator, more 162 00:10:41,080 --> 00:10:44,600 Speaker 1: than a branding agency. Right. A program or startups apply 163 00:10:44,800 --> 00:10:47,640 Speaker 1: for the chance to work with mentors and meet investors. 164 00:10:48,160 --> 00:10:50,959 Speaker 1: Except you don't usually hear about branding agencies offering these 165 00:10:51,000 --> 00:10:55,319 Speaker 1: kinds of services or getting this involved. Helping startups fundraise, 166 00:10:55,600 --> 00:10:59,839 Speaker 1: preparing the slides for investor presentation, and brokeering intros in 167 00:11:00,120 --> 00:11:03,400 Speaker 1: first place. That's becoming a key service red Antler offers. 168 00:11:03,640 --> 00:11:06,080 Speaker 1: And not just read Antler. I mean there are other 169 00:11:06,120 --> 00:11:08,520 Speaker 1: agencies I've heard of. There's one called gin Lane that 170 00:11:08,640 --> 00:11:12,240 Speaker 1: launched the Razor brand Harry's for example. We've helped out 171 00:11:12,240 --> 00:11:15,680 Speaker 1: with a lot of investor decks. In many ways, the 172 00:11:15,760 --> 00:11:19,160 Speaker 1: investor deck is the perfect microcosm of the story of 173 00:11:19,160 --> 00:11:22,400 Speaker 1: the brand. But redd Antler has gotten pushedback from startup 174 00:11:22,440 --> 00:11:25,760 Speaker 1: investors who think the agency is overstepping its role. As 175 00:11:25,800 --> 00:11:29,200 Speaker 1: we got to now more vcs. They were like, yeah, 176 00:11:29,280 --> 00:11:30,959 Speaker 1: that's nice. Why don't you just stick to what you're 177 00:11:30,960 --> 00:11:33,920 Speaker 1: good at. One investor told me he didn't think red 178 00:11:33,920 --> 00:11:36,520 Speaker 1: Antler should be taking equity on top of charging for 179 00:11:36,600 --> 00:11:40,400 Speaker 1: their services. I think their opinion was just there's no 180 00:11:40,440 --> 00:11:43,280 Speaker 1: way that we could understand how to do it, or 181 00:11:43,320 --> 00:11:45,760 Speaker 1: that our deal full would be good enough for whatever. 182 00:11:45,800 --> 00:11:49,240 Speaker 1: They're like, their selection bias, if you name it. Others 183 00:11:49,240 --> 00:11:52,400 Speaker 1: said the firm has a reputation for being expensive, so 184 00:11:52,400 --> 00:11:55,360 Speaker 1: startups that ultimately fail end up with buyer's remorse after 185 00:11:55,400 --> 00:11:59,160 Speaker 1: spending upwards of hundreds of thousands of dollars for the service. 186 00:11:59,760 --> 00:12:02,320 Speaker 1: But several people conceded that red Antler gets to take 187 00:12:02,360 --> 00:12:05,520 Speaker 1: shares because they just have that much leverage. They have 188 00:12:05,640 --> 00:12:08,360 Speaker 1: their pick of new clients and limited slots to fill. 189 00:12:09,360 --> 00:12:11,560 Speaker 1: Jing we're able to find out how much equity red 190 00:12:11,600 --> 00:12:14,480 Speaker 1: Antler is able to negotiate it. Yeah, I asked JB 191 00:12:14,600 --> 00:12:19,480 Speaker 1: about it. Can you share the range of equity that 192 00:12:19,520 --> 00:12:27,120 Speaker 1: you would typically take? Jan I love it. Um, Yeah, 193 00:12:27,160 --> 00:12:31,200 Speaker 1: I mean it really ranges depending on the station of business. 194 00:12:31,200 --> 00:12:34,440 Speaker 1: How you know, how we're involved while we're delivering, But 195 00:12:35,000 --> 00:12:39,960 Speaker 1: you know, generally we're taking positions anywhere from like one 196 00:12:40,080 --> 00:12:47,600 Speaker 1: to five. Ticking equity is definitely unusual, but startups do 197 00:12:47,720 --> 00:12:50,760 Speaker 1: sometimes give up shares in exchange for services like pr 198 00:12:50,880 --> 00:12:54,080 Speaker 1: or legal help. And it's not like venture investors always 199 00:12:54,120 --> 00:12:57,480 Speaker 1: get their bets right. E Commerce is a notoriously difficult 200 00:12:57,520 --> 00:13:01,199 Speaker 1: sector to succeed it. Several er e commerce startup that 201 00:13:01,280 --> 00:13:03,160 Speaker 1: got a lot of hype and raised a lot of 202 00:13:03,200 --> 00:13:07,440 Speaker 1: money from experienced tech investors have collapsed. All that easy 203 00:13:07,520 --> 00:13:11,000 Speaker 1: money fueled fast growth, creating a grow at whatever cost. 204 00:13:11,080 --> 00:13:14,360 Speaker 1: Mentality in the startups couldn't keep up, like fab dot 205 00:13:14,400 --> 00:13:17,600 Speaker 1: com once valued at a billion dollars but sold in 206 00:13:18,559 --> 00:13:21,960 Speaker 1: for only fifteen million, or Guilt Group sold to Hudson's 207 00:13:22,000 --> 00:13:26,240 Speaker 1: Bay in early two and fifty million dollars. That's just 208 00:13:26,280 --> 00:13:31,000 Speaker 1: a quarter of what is once worth. I don't think 209 00:13:31,120 --> 00:13:36,120 Speaker 1: vcs are trying to screw up those businesses intentionally, but 210 00:13:36,160 --> 00:13:39,319 Speaker 1: the reality is if someone gives you a million dollars 211 00:13:39,440 --> 00:13:40,839 Speaker 1: and says like, oh, like do you want it, and 212 00:13:40,840 --> 00:13:42,760 Speaker 1: you spend it, you're like cool, but not not any 213 00:13:42,800 --> 00:13:45,400 Speaker 1: two million. It's like a drug. And they learned to 214 00:13:45,480 --> 00:13:47,720 Speaker 1: operate as a company that has the means to do 215 00:13:47,840 --> 00:13:51,560 Speaker 1: things that they maybe shouldn't be doing red Antler's former client, 216 00:13:51,679 --> 00:13:55,200 Speaker 1: One King's Lane and online furniture store. They went through 217 00:13:55,280 --> 00:13:58,560 Speaker 1: just that kind of experience. One King's Lane is probably 218 00:13:58,600 --> 00:14:01,440 Speaker 1: one of the biggest flops in right Antler's portfolio. I 219 00:14:01,440 --> 00:14:03,240 Speaker 1: think it was the first thing we ever worked on 220 00:14:03,360 --> 00:14:07,319 Speaker 1: that was a household name. One kings Lane raised on 221 00:14:07,800 --> 00:14:11,920 Speaker 1: twelve million dollars from investors at evaluation of nine million dollars, 222 00:14:12,280 --> 00:14:14,600 Speaker 1: but less than three years later, the company sold a bed, 223 00:14:14,640 --> 00:14:18,160 Speaker 1: bath and beyond for only twelve million dollars. A whole 224 00:14:18,200 --> 00:14:21,440 Speaker 1: bunch of money started pouring into these fast growing commerce businesses, 225 00:14:21,920 --> 00:14:25,800 Speaker 1: but it was all based on off price merchandise and 226 00:14:26,680 --> 00:14:31,040 Speaker 1: discounted pricing, which was great for the customer, but there 227 00:14:31,120 --> 00:14:34,280 Speaker 1: wasn't much margin. Uh, there was no way to become 228 00:14:34,320 --> 00:14:37,480 Speaker 1: the billion dollar business that you know, it was sort 229 00:14:37,520 --> 00:14:41,960 Speaker 1: of promised. So venture capitalists have started to reevaluate their 230 00:14:42,000 --> 00:14:45,240 Speaker 1: approach to e commerce investments. At the same time, other 231 00:14:45,320 --> 00:14:49,560 Speaker 1: investor types, private equity firms, family offices have also started 232 00:14:49,560 --> 00:14:52,960 Speaker 1: backing some of these emerging brands and flops like One 233 00:14:53,040 --> 00:14:55,800 Speaker 1: kings Lane haven't deterred startups from wanting to work with 234 00:14:55,880 --> 00:14:58,920 Speaker 1: Right Antler. J B says they advised companies to become 235 00:14:58,960 --> 00:15:02,400 Speaker 1: profitable sooner and make sure the business has decent margins. 236 00:15:02,880 --> 00:15:05,520 Speaker 1: The biggest challenges it's just getting harder to stand out. 237 00:15:05,920 --> 00:15:08,560 Speaker 1: I mean, here in New York, we're seeing an explosion 238 00:15:08,720 --> 00:15:11,360 Speaker 1: of tiny e commerce brands, and they're all competing with 239 00:15:11,400 --> 00:15:13,520 Speaker 1: each other on price and for a piece of the 240 00:15:13,560 --> 00:15:17,560 Speaker 1: customer's attention. So jing what about girl fashioned product differentiation 241 00:15:17,680 --> 00:15:21,520 Speaker 1: or innovation. Randler told me that increasingly these companies are 242 00:15:21,520 --> 00:15:25,320 Speaker 1: actually copying each other's business models. So it's your brand 243 00:15:25,560 --> 00:15:28,920 Speaker 1: and your marketing strategy that helps you differentiate. I mean, 244 00:15:28,920 --> 00:15:31,560 Speaker 1: think about how many mattresses in a box have popped 245 00:15:31,640 --> 00:15:36,080 Speaker 1: up since Casper started up. This is you know, it's 246 00:15:36,960 --> 00:15:40,520 Speaker 1: it's a candle We didn't reinvent the candle um were 247 00:15:40,640 --> 00:15:43,320 Speaker 1: we made some choices along the way that became with 248 00:15:43,360 --> 00:15:45,920 Speaker 1: a lot of thought and make it a little bit different, 249 00:15:46,200 --> 00:15:50,000 Speaker 1: But it's it's a candle um. So really like differentiating 250 00:15:50,000 --> 00:15:53,680 Speaker 1: it with this brand experience is kind of all we 251 00:15:53,720 --> 00:15:59,720 Speaker 1: can do and in the category, but there's no guarantee 252 00:15:59,800 --> 00:16:02,600 Speaker 1: a slit website and some cool images will be enough 253 00:16:02,640 --> 00:16:05,680 Speaker 1: to make other land a success. Coming up next to 254 00:16:05,800 --> 00:16:09,480 Speaker 1: the luxury candle seller other Land officially launches and we'll 255 00:16:09,480 --> 00:16:12,160 Speaker 1: see whether the brand that red Antler built is enough 256 00:16:12,200 --> 00:16:27,400 Speaker 1: to help Abigail's company cut through all the noise welcome back. 257 00:16:27,640 --> 00:16:30,080 Speaker 1: So at this point, Abigail and red Antler have spent 258 00:16:30,120 --> 00:16:33,600 Speaker 1: the year developing other Lands candles and brand. Last fall 259 00:16:33,800 --> 00:16:36,880 Speaker 1: they set a launch date of December twelve, two weeks 260 00:16:36,920 --> 00:16:49,680 Speaker 1: before Christmas. All right, we're ready to get a few more. Yes, 261 00:16:50,000 --> 00:16:58,040 Speaker 1: it was crunch time. One of the last pieces was 262 00:16:58,080 --> 00:17:01,320 Speaker 1: an elaborate four day photo shoot the stylish Brooklyn town 263 00:17:01,320 --> 00:17:05,359 Speaker 1: house in November. Because it's the e commerce, you can't 264 00:17:05,359 --> 00:17:08,520 Speaker 1: rely on the set, Like the scents are incredible and 265 00:17:08,520 --> 00:17:11,320 Speaker 1: that's what's gonna get someone to come back, but we 266 00:17:11,359 --> 00:17:13,359 Speaker 1: had to draw them in through something else, Like we 267 00:17:13,480 --> 00:17:15,719 Speaker 1: needed the candle itself to be an object of desire 268 00:17:15,960 --> 00:17:24,560 Speaker 1: without ever having smellment. Just before lunch, boxes and boxes 269 00:17:24,600 --> 00:17:27,399 Speaker 1: of candles were stacked up against the wall of Abigail's 270 00:17:27,440 --> 00:17:30,680 Speaker 1: new office in preparation since other Land was doing its 271 00:17:30,680 --> 00:17:35,320 Speaker 1: own fulfillment to control for quality, make sure. So this 272 00:17:35,600 --> 00:17:38,520 Speaker 1: was like, well, imperfection in the wax, I'm gonna pull 273 00:17:38,640 --> 00:17:43,639 Speaker 1: up aside. There were last minute crises to deal with, 274 00:17:44,240 --> 00:17:47,159 Speaker 1: like the adhesive for the box wasn't sticky enough, And 275 00:17:47,280 --> 00:17:48,840 Speaker 1: it might seem like a small thing, but if you're 276 00:17:48,880 --> 00:17:50,959 Speaker 1: going to ship out product and there's any chance that 277 00:17:50,960 --> 00:17:53,800 Speaker 1: that box is going to open while it's getting shipped, 278 00:17:54,960 --> 00:17:58,280 Speaker 1: that's like a that's like catastrophic failure. And then they 279 00:17:58,359 --> 00:18:00,720 Speaker 1: found out that some of the candles of one cent 280 00:18:00,920 --> 00:18:04,400 Speaker 1: were wrongly labeled and had to reopen dozens of packages 281 00:18:04,440 --> 00:18:07,520 Speaker 1: to figure out how many were affected. So you sort 282 00:18:07,560 --> 00:18:11,800 Speaker 1: of give yourself ten seconds to totally freak out, especially 283 00:18:11,840 --> 00:18:14,960 Speaker 1: being like sleep deprived, and then you figure out how 284 00:18:14,960 --> 00:18:18,359 Speaker 1: to fix it with just days to go before launch. 285 00:18:18,520 --> 00:18:21,000 Speaker 1: Abigail fixed the box issue with extra tape and a 286 00:18:21,080 --> 00:18:28,919 Speaker 1: drywall scraper to increase the fold in the cardboard. Abigail's 287 00:18:28,960 --> 00:18:32,360 Speaker 1: new company faces competition on two fronts. There the actual 288 00:18:32,440 --> 00:18:35,880 Speaker 1: candle sellers like Nest, Diptique, and La Labo, and she's 289 00:18:35,880 --> 00:18:39,040 Speaker 1: hoping to beat those players in part on price. There's 290 00:18:39,040 --> 00:18:41,480 Speaker 1: also the influx of e commerce brands in general that 291 00:18:41,520 --> 00:18:44,560 Speaker 1: she's up against. There's some irony here because in a way, 292 00:18:44,720 --> 00:18:47,000 Speaker 1: Red Antler seems like a victim of its own success. 293 00:18:47,400 --> 00:18:51,359 Speaker 1: JB and Emily had some blockbuster launches early on, like Casper, 294 00:18:51,480 --> 00:18:54,000 Speaker 1: the mattress company, which red Antler took on before they 295 00:18:54,080 --> 00:18:57,600 Speaker 1: launched j B. And Emily told me they've had more 296 00:18:57,600 --> 00:19:00,560 Speaker 1: than thirty requests from aspiring mattress. I was hoping to 297 00:19:00,600 --> 00:19:08,879 Speaker 1: replicate what they did with Casper. I checked in with 298 00:19:08,920 --> 00:19:12,960 Speaker 1: Abigail the day before launch. Right now, I'm tired. I'm 299 00:19:13,080 --> 00:19:16,720 Speaker 1: so excited. Um definitely like running on fumes. We were 300 00:19:16,800 --> 00:19:21,479 Speaker 1: here till four am last night. Abigail set herself a 301 00:19:21,480 --> 00:19:26,920 Speaker 1: few milestones, how do we acquire our first hundred customers? 302 00:19:27,000 --> 00:19:29,440 Speaker 1: And so I'd say, sort of first one hundred customers, 303 00:19:29,440 --> 00:19:32,760 Speaker 1: and then like first one thousand orders are are what 304 00:19:32,880 --> 00:19:44,320 Speaker 1: we are really really focused on. Finally, on December twelve, 305 00:19:44,840 --> 00:19:48,200 Speaker 1: Other Land went live. I was excited, after all these 306 00:19:48,200 --> 00:19:51,960 Speaker 1: weeks of following Abigail attending the photo shoot, a planning meeting, 307 00:19:52,359 --> 00:19:55,040 Speaker 1: to finally see what the website was like, I'm looking 308 00:19:55,040 --> 00:19:57,520 Speaker 1: at it now. There's a big photo from the Brooklyn 309 00:19:57,560 --> 00:20:00,840 Speaker 1: Townhouse with a very handsome, sharp pay feed drinking prominently 310 00:20:00,880 --> 00:20:03,840 Speaker 1: in front of an old marble fireplace. Once other Land 311 00:20:03,920 --> 00:20:08,080 Speaker 1: went live, marketing became all important. Abigail needed to start 312 00:20:08,080 --> 00:20:11,320 Speaker 1: reaching potential customers, but ideally without having to pay for 313 00:20:11,400 --> 00:20:14,359 Speaker 1: promoted post or search ats. That's why I read Antler 314 00:20:14,400 --> 00:20:17,879 Speaker 1: and Abigail worked for months just on the box. It 315 00:20:18,080 --> 00:20:23,720 Speaker 1: is your customer's introduction to the brand. Um ideally it's 316 00:20:23,720 --> 00:20:27,760 Speaker 1: something that's so fabulous and exciting and engaging that it 317 00:20:27,840 --> 00:20:31,560 Speaker 1: might be filmed on a camera and ideally not just 318 00:20:31,640 --> 00:20:34,760 Speaker 1: filmed on camera, but posted to social media, posted to 319 00:20:34,800 --> 00:20:37,080 Speaker 1: the Internet. I have to say, Jing, I was sort 320 00:20:37,119 --> 00:20:40,280 Speaker 1: of ready to be a little cynical about red Antler's 321 00:20:40,359 --> 00:20:42,960 Speaker 1: kind of impact on an e commerce company like other land, 322 00:20:43,000 --> 00:20:45,240 Speaker 1: but it's it's clear to me, like how much work 323 00:20:45,600 --> 00:20:48,639 Speaker 1: had to go into launching a brand and how little 324 00:20:48,640 --> 00:20:51,560 Speaker 1: Abigail came with when she had this idea. I think 325 00:20:51,640 --> 00:20:54,840 Speaker 1: it's an evolution of what is required for e commerce. Right, 326 00:20:55,040 --> 00:20:57,080 Speaker 1: Like you know, five years ago, you can have a 327 00:20:57,160 --> 00:21:00,439 Speaker 1: simple looking website with not very much content and you 328 00:21:00,440 --> 00:21:03,120 Speaker 1: can still make good business out of it. But consumer 329 00:21:03,200 --> 00:21:06,600 Speaker 1: expectations have totally changed. And the other thing that's changes, 330 00:21:06,720 --> 00:21:09,840 Speaker 1: like all the basics are are already done, right. You 331 00:21:09,880 --> 00:21:13,920 Speaker 1: can get cloud storage with Amazon, you can have Amazon's 332 00:21:13,920 --> 00:21:17,800 Speaker 1: fulfillment centers run your business, and so like the differentiator 333 00:21:17,880 --> 00:21:20,679 Speaker 1: piece is really this branding, like how do you stand 334 00:21:20,680 --> 00:21:23,480 Speaker 1: out amid the crowd. It's it's no longer going to 335 00:21:23,560 --> 00:21:26,720 Speaker 1: be like the technical technical stuff or the supply chain stuff. 336 00:21:26,720 --> 00:21:29,879 Speaker 1: So so maybe it is sort of red Andler's time exactly. 337 00:21:29,920 --> 00:21:32,120 Speaker 1: I mean, anyone can do it. How do you think 338 00:21:32,160 --> 00:21:34,680 Speaker 1: they do when it comes to like product number two 339 00:21:34,960 --> 00:21:39,000 Speaker 1: or taking a company like other Land from this launch 340 00:21:39,080 --> 00:21:42,080 Speaker 1: experience into the next phase of its business. Well, so 341 00:21:42,119 --> 00:21:44,600 Speaker 1: what they told me is that they're really really good 342 00:21:44,720 --> 00:21:48,760 Speaker 1: at the launch, you know, figuring out the initial brand, strategy, 343 00:21:49,119 --> 00:21:51,800 Speaker 1: the operations. As the company grows, they get less and 344 00:21:51,840 --> 00:21:54,280 Speaker 1: less involved. The other thing is, you know they they 345 00:21:54,560 --> 00:21:56,719 Speaker 1: obviously were very involved in the launch of a company 346 00:21:56,720 --> 00:21:59,640 Speaker 1: like Casper the the online mattress maker, but like so 347 00:21:59,720 --> 00:22:02,560 Speaker 1: much success in the space after you get past the 348 00:22:02,640 --> 00:22:06,360 Speaker 1: launch is like this, this sort of grisly battle over 349 00:22:06,400 --> 00:22:10,120 Speaker 1: search ads, you know, paying for people to view your content, 350 00:22:10,680 --> 00:22:13,879 Speaker 1: um outbidding your rivals. Like if other Land is successful, 351 00:22:13,880 --> 00:22:17,040 Speaker 1: there might be more luxury candle sellers online, and so 352 00:22:17,359 --> 00:22:19,760 Speaker 1: you know, these businesses tend to mature, and red Antler, 353 00:22:20,040 --> 00:22:25,720 Speaker 1: you know, might have to get its hands dirty switching. 354 00:22:25,840 --> 00:22:28,760 Speaker 1: We're not recording this in late January. Other Land launched 355 00:22:28,760 --> 00:22:32,800 Speaker 1: about six weeks ago. How's Abigail doing. We've seen some 356 00:22:32,840 --> 00:22:36,359 Speaker 1: great press coverage. People are excited about the brand, the 357 00:22:36,359 --> 00:22:38,960 Speaker 1: products for all the reasons that we're excited about it. 358 00:22:40,200 --> 00:22:42,960 Speaker 1: A lot of engagement on social stuff that I think 359 00:22:43,080 --> 00:22:45,720 Speaker 1: is really critical at the stage of the business is 360 00:22:46,320 --> 00:22:51,640 Speaker 1: orders that are exceeding your expectations, which is happening. When 361 00:22:51,640 --> 00:22:54,080 Speaker 1: I spoke to Abigail before she launched, she told me 362 00:22:54,160 --> 00:22:56,200 Speaker 1: she was watching for how quickly she could acquire a 363 00:22:56,320 --> 00:22:59,760 Speaker 1: hundred customers. Now she says she's almost at a thousand 364 00:22:59,760 --> 00:23:02,760 Speaker 1: cost timers, and she sold more than a thousand candles. 365 00:23:03,800 --> 00:23:05,960 Speaker 1: But we saw that was really exciting that people who 366 00:23:06,040 --> 00:23:08,600 Speaker 1: bought the first couple of days, then a lot of 367 00:23:08,640 --> 00:23:12,520 Speaker 1: them then came back and purchased gifts or um. If 368 00:23:12,560 --> 00:23:15,120 Speaker 1: they had gotten one cent, they would get another cent 369 00:23:15,240 --> 00:23:18,760 Speaker 1: or a three pack to try more. Abigail said return 370 00:23:18,840 --> 00:23:23,200 Speaker 1: customers is actually the metric she's most focused on. So 371 00:23:23,680 --> 00:23:26,600 Speaker 1: how many of our customers have come back and placed 372 00:23:26,640 --> 00:23:30,240 Speaker 1: a second order, a third order, a fourth order, a 373 00:23:30,800 --> 00:23:34,040 Speaker 1: fifth order. We've had a couple of those, So it 374 00:23:34,040 --> 00:23:37,000 Speaker 1: sounds like these first critical weeks have gone relatively well, 375 00:23:37,240 --> 00:23:39,800 Speaker 1: it seems so, but the Other Land is still at 376 00:23:39,840 --> 00:23:42,919 Speaker 1: the very beginning of its life as a company. You know, 377 00:23:42,960 --> 00:23:46,480 Speaker 1: success ultimately is getting to a place where you start 378 00:23:46,480 --> 00:23:49,920 Speaker 1: seeing Other Land and your friend's apartments, your friend's home, 379 00:23:50,119 --> 00:23:53,560 Speaker 1: or in a restaurant, in a hotel. And to get there, 380 00:23:53,880 --> 00:23:56,560 Speaker 1: Abigail will need to keep winning over new customers and 381 00:23:56,640 --> 00:23:59,560 Speaker 1: keep the old ones coming back. It usually takes years 382 00:23:59,600 --> 00:24:11,880 Speaker 1: for company needs to start making a profit. And that's 383 00:24:11,920 --> 00:24:15,240 Speaker 1: it for this week's Decrypted. Thanks for listening. We always 384 00:24:15,240 --> 00:24:16,919 Speaker 1: want to know what you think of the show. You 385 00:24:16,920 --> 00:24:19,320 Speaker 1: can write to us at Decrypted at Bloomberg dot net 386 00:24:19,600 --> 00:24:22,679 Speaker 1: or I'm on Twitter at brad Stone, and please consider 387 00:24:22,720 --> 00:24:25,280 Speaker 1: leaving us a rating and review on Apple Podcasts or 388 00:24:25,320 --> 00:24:27,920 Speaker 1: wherever you like to listen. It really helps us find 389 00:24:27,920 --> 00:24:31,399 Speaker 1: new listeners. This episode was produced by Pia gut Kari, 390 00:24:31,760 --> 00:24:35,680 Speaker 1: Liz Smith, Magnus Hendrickson, and Christie Westguard. A big thank 391 00:24:35,720 --> 00:24:37,639 Speaker 1: you to jen Ca, who recently moved on to the 392 00:24:37,640 --> 00:24:41,359 Speaker 1: startup world herself. We miss you Chanting. Francesca Levi has 393 00:24:41,359 --> 00:24:43,800 Speaker 1: had a Bloomberg podcast. We'll see you next week.