WEBVTT - The Surprising Power Broker Backing E-Commerce Startups 0:00:07.560 --> 0:00:10.399 You know, it's always a really interesting dynamic when you 0:00:10.480 --> 0:00:17.479 meet a founder that's like that. Early in March, a 0:00:17.520 --> 0:00:20.239 woman named Abigail Stone walked into the New York offices 0:00:20.320 --> 0:00:23.239 of a company called red Antler. She wanted them to 0:00:23.320 --> 0:00:26.680 invest in her business. Only this wasn't a very traditional 0:00:26.720 --> 0:00:29.920 investor meeting. She literally just had an idea. She didn't 0:00:29.960 --> 0:00:32.479 really have a product, she hadn't raised any money, she 0:00:32.560 --> 0:00:36.120 didn't have a co founder. It was also different because 0:00:36.120 --> 0:00:39.839 red Antler isn't a traditional startup investor right. It's a 0:00:39.880 --> 0:00:43.479 branding agency that brags on its website quote, we've launched 0:00:43.479 --> 0:00:46.920 more businesses than anyone else. Red Antler owns shares in 0:00:47.000 --> 0:00:50.320 about eighties startups, and about half of red Antler's business 0:00:50.320 --> 0:00:53.920 comes from people like Abigail, founders who haven't officially launched 0:00:53.960 --> 0:00:57.440 their companies yet. Investing in startups is a famously risky 0:00:57.480 --> 0:01:00.560 business to get involved, but if you back the right companies, 0:01:00.680 --> 0:01:06.360 you can make a lot of money. And over the years, 0:01:06.440 --> 0:01:09.680 red Antler has done just that. Only it didn't give 0:01:09.760 --> 0:01:12.399 money to the startups it picked. It gave them man 0:01:12.400 --> 0:01:17.120 hours designing websites, developing marketing strategies, helping get their client's 0:01:17.200 --> 0:01:20.000 brand name on the radar of new customers. Some of 0:01:20.040 --> 0:01:23.280 them might be companies you've heard of Casper Mattresses, All 0:01:23.360 --> 0:01:27.200 Birds Running Shoes, and the wholesale retailer Boxed. But the 0:01:27.280 --> 0:01:30.200 chances aren't you haven't heard of red Antler, even though 0:01:30.240 --> 0:01:33.160 their work could be silently influencing some of the shopping 0:01:33.160 --> 0:01:50.320 decisions that you've recently made. Hi, I'm brad Stone and 0:01:50.360 --> 0:01:52.960 I'm jin Cow. And this week on Decryptive, we're taking 0:01:53.000 --> 0:01:55.200 an inside look at the way some new e commerce 0:01:55.200 --> 0:01:58.520 startups are preparing for launch. Silicon Valley lore is full 0:01:58.560 --> 0:02:00.880 of stories of startups that through out of some Palo 0:02:00.920 --> 0:02:05.360 Alto garage, But today a handful of branding agencies like 0:02:05.440 --> 0:02:08.400 red Antler command a lot of influence behind the scenes, 0:02:08.600 --> 0:02:11.440 shaping brand new companies before they make them for sale. 0:02:11.919 --> 0:02:14.440 And here in New York, new e commerce companies are 0:02:14.480 --> 0:02:16.960 appearing all the time, and it's getting harder to grab 0:02:17.000 --> 0:02:20.480 customer attention. It's part of the reason branding agencies are 0:02:20.520 --> 0:02:22.840 in such high demand, as well as the fact that 0:02:22.919 --> 0:02:25.280 many of these companies will collapse that they can't find 0:02:25.400 --> 0:02:28.760 enough customers quickly. So just how much power does a 0:02:28.840 --> 0:02:32.120 firm like red Antler, really Wheel and what's so special 0:02:32.160 --> 0:02:34.600 about being able to work with them? Stay with us? 0:02:39.680 --> 0:02:43.360 So jing tell us more about Abigail Stone. No relation 0:02:43.440 --> 0:02:45.840 to me. The start of founder we just heard about. 0:02:46.600 --> 0:02:49.560 Abigail is twenty nine. She got her start at Ralph 0:02:49.600 --> 0:02:53.080 Lauren by Ne Eclectic Objects to decorate their stores. She 0:02:53.160 --> 0:02:56.760 exudes a lot of grace, matching sleek outfits with big 0:02:56.840 --> 0:03:00.280 bold earrings. In early as she was finished ing up 0:03:00.320 --> 0:03:02.840 business school, she came up with the idea for startup 0:03:03.280 --> 0:03:10.120 selling luxury candles online. My friends from school set off 0:03:10.320 --> 0:03:16.840 their shiny, fancy new jobs, coushy salaries, bonuses. Um, you know, 0:03:17.160 --> 0:03:23.400 I set out to my kitchen standing table to start 0:03:23.440 --> 0:03:26.720 my company. I think it's fair to say Abigail is 0:03:26.760 --> 0:03:30.320 obsessed with candles. She was all in on her idea, 0:03:30.639 --> 0:03:34.720 but she had trouble convincing investors to back her. So 0:03:34.760 --> 0:03:38.640 I was like blugging around the suitcase of candles nine 0:03:39.120 --> 0:03:43.320 degrees and like I was a subway and listening and 0:03:43.480 --> 0:03:48.360 like nothing was happening, and you're like trying to start 0:03:48.400 --> 0:03:51.720 and you can't get any traction, and so that was 0:03:51.760 --> 0:03:58.560 really hard. Around that time, she approached right Antler. Abigail 0:03:58.640 --> 0:04:00.840 had once taken an online last top by one of 0:04:00.880 --> 0:04:04.760 the founders, Emily Hayward. Ever since then, Abigail had wanted 0:04:04.800 --> 0:04:08.560 to work with them. So I went to read Antler 0:04:08.680 --> 0:04:12.760 with this big tope bag of different candles from the market, 0:04:13.000 --> 0:04:15.680 and I spread them all out on the table and 0:04:15.840 --> 0:04:19.200 I couldn't really read j V um. I wasn't sure 0:04:19.480 --> 0:04:23.040 he was feeling it or not. JB Osborne is Emily's 0:04:23.080 --> 0:04:26.440 business partner. He and Emily started read Antler ten years ago. 0:04:26.839 --> 0:04:29.560 Now they have eighty employees in an office in a 0:04:29.640 --> 0:04:33.120 large industrial building in Brooklyn. And then the next day 0:04:33.200 --> 0:04:36.640 j V sent an email and he said, um, we're 0:04:37.120 --> 0:04:40.640 still thinking about candles, not totally sure. We would really 0:04:40.680 --> 0:04:42.440 like you, you want to get to know you better, 0:04:42.520 --> 0:04:46.240 and like Simsis is pretty early on, Like let's keep 0:04:46.279 --> 0:04:58.640 the conversation throwing. What was the initial sort of skepticism, right, 0:04:58.800 --> 0:05:03.360 she yeah, so I remember this part. This is Emily here. 0:05:03.440 --> 0:05:05.760 I remember j B said to me, I want you 0:05:05.800 --> 0:05:11.680 to meet this founder. I absolutely love her, but are 0:05:11.839 --> 0:05:17.080 candles enough to launch a business around? I mean, that's 0:05:17.080 --> 0:05:20.680 my initial reaction to our luxury candles really a thing? 0:05:21.279 --> 0:05:23.240 You know? I felt the same way at first two. 0:05:23.680 --> 0:05:26.839 But yeah, they're actually a thing. How much do they cost? 0:05:27.120 --> 0:05:29.080 At the high end, a candle can cost about a 0:05:29.160 --> 0:05:33.080 hundred Wow. The only candles I buy are those blue 0:05:33.120 --> 0:05:36.440 tinted Hanukah candles and they cost twelve dollars at Walgreen's. 0:05:36.600 --> 0:05:39.720 It's because they don't have the luxury sent Candles are 0:05:39.760 --> 0:05:43.839 actually about a three billion dollar business just in the US, 0:05:43.920 --> 0:05:46.800 and it's growing, and the high end candle category is 0:05:46.839 --> 0:05:49.880 growing the fastest. Abigail thought she could make candles that 0:05:50.040 --> 0:05:52.520 looked and smelled just as good as those, but sell 0:05:52.560 --> 0:05:58.040 them at a better price. JB and Emily might sound 0:05:58.240 --> 0:06:01.839 strangely critical for a brand the agency vetting a potential client. 0:06:02.320 --> 0:06:04.679 In most cases, it's the client who picks the agency, 0:06:04.760 --> 0:06:07.640 not the other way around. But red Antler is actually 0:06:07.640 --> 0:06:10.279 in such high demand j B and Emily can basically 0:06:10.360 --> 0:06:13.320 choose who they take on, and they're taking a big risk. 0:06:13.640 --> 0:06:15.839 While they do charge a fee to cover costs, and 0:06:15.880 --> 0:06:18.680 those fees can be pretty expensive. By the way, red 0:06:18.720 --> 0:06:21.479 Antler often gives a profit to take shares in the startup, 0:06:21.960 --> 0:06:24.560 just like a venture capitalist would, and a stake in 0:06:24.600 --> 0:06:26.840 your company is just about the most valuable thing a 0:06:26.880 --> 0:06:30.240 founder can give up. In Abigail's case, Emily and JB 0:06:30.400 --> 0:06:32.839 also needed to be convinced that there were enough candle 0:06:32.880 --> 0:06:38.920 fanatics out there to make the business idea viable. Hey, guys, 0:06:38.960 --> 0:06:42.960 welcome to another video. Let's talk candles. I'm borderline having 0:06:43.000 --> 0:06:47.200 a candle addiction. I am obsessed with candles. Hey guys, 0:06:47.240 --> 0:06:48.960 it's me Drew and I am here to do a 0:06:49.080 --> 0:06:52.640 Yankee candle hall and I picked up the World Journeys 0:06:52.839 --> 0:06:56.440 Sonoma Helly red Little. Today We're going to do a 0:06:56.480 --> 0:07:04.080 blindfolded candle challenge. I'm a candle over candles. Eventually they 0:07:04.120 --> 0:07:07.240 decided there was an opportunity, so Abigail and Red Antler 0:07:07.240 --> 0:07:11.600 started working together in October of That opened up resources 0:07:11.640 --> 0:07:14.200 for Abigail that most founders can only dream up. How 0:07:14.200 --> 0:07:16.760 many people on the red and art team or working 0:07:16.800 --> 0:07:22.400 on this U s okay, let's see, uh so Daniel 0:07:22.440 --> 0:07:27.920 and Grace on the creative side, Um, Jonah and Molly 0:07:28.000 --> 0:07:32.440 on strategy, there's Caroline, there's Debbie was there at one 0:07:32.480 --> 0:07:38.160 point on production? Um Scott chaps. It took Abigail another 0:07:38.360 --> 0:07:41.240 minute to finish listing everyone, but in total it was 0:07:41.280 --> 0:07:44.480 more than twenty people. Most startups can barely afford a 0:07:44.520 --> 0:07:47.520 branding agency, let alone getting access to so many people. 0:07:48.160 --> 0:07:52.480 Red Antler served as fragrance testers, package designers, cheerleaders. They 0:07:52.480 --> 0:07:55.720 helped create the brand, developed the strategy, build the website. 0:07:55.920 --> 0:07:58.840 They even came up with the name. Our team was 0:07:58.920 --> 0:08:01.680 really excited about other Land, but it definitely felt like 0:08:01.720 --> 0:08:05.000 the wild card in the bunch. Yeah. I always wondered 0:08:05.040 --> 0:08:10.000 about in strategy and we were like, wouldn't it be 0:08:10.080 --> 0:08:13.680 cool if Abigail shows other Land, but she's probably not going. 0:08:14.720 --> 0:08:19.360 And when she did, I remember our team being so 0:08:19.640 --> 0:08:22.200 excited and I'm trying to remember what the other names? 0:08:23.400 --> 0:08:30.480 Do you remember? Yes, please consider dedication. And then my 0:08:30.520 --> 0:08:41.120 other favorite was Mammal that Abigail also got to take 0:08:41.160 --> 0:08:44.440 advantage of red Antler's address book even before she had 0:08:44.480 --> 0:08:47.840 the money to officially hire them. So I introduced her 0:08:47.960 --> 0:08:53.360 to a bunch of um you know, angel entrepreneurs funds 0:08:53.520 --> 0:08:55.760 and said, like, hear all the people I think you 0:08:55.760 --> 0:08:59.240 should talk to. That's important because JB said earlier that 0:08:59.320 --> 0:09:02.360 when Abigail first approach red Antler, she had no funding. 0:09:02.800 --> 0:09:05.840 JB and Emily connected her with more than fifteen people, 0:09:06.440 --> 0:09:09.920 and once Abigail started name dropping red Antler, investors started 0:09:09.920 --> 0:09:13.600 paying a lot more attention to her candle company. It 0:09:13.640 --> 0:09:17.680 gives you a little bit more legitimacy. UM. The meetings 0:09:17.679 --> 0:09:21.559 available tomorrow instead of in a couple of weeks and 0:09:22.120 --> 0:09:27.240 doesn't get rescheduled. Still, Abigail got about fifty knows from 0:09:27.240 --> 0:09:31.040 investors who didn't want to commit, but several investors told 0:09:31.040 --> 0:09:34.839 me that red Antler's endorsement matters. Like Brian Nicholson, an 0:09:34.960 --> 0:09:37.200 l A based investor who has worked on deals with 0:09:37.280 --> 0:09:42.000 brands including Refinery twenty nine and Reformation, if if I 0:09:42.040 --> 0:09:47.200 know that JB and the team has invested in this 0:09:47.320 --> 0:09:52.000 business through through their work, UM, I think that says 0:09:52.040 --> 0:09:57.079 a lot about the chances of the company's success. Brian 0:09:57.160 --> 0:09:59.640 was one of the contacts on red Antler's list. He 0:09:59.720 --> 0:10:02.600 did a end up investing because of timing issues, but 0:10:02.600 --> 0:10:05.319 said red Antler was a big reason he looked seriously 0:10:05.440 --> 0:10:10.640 at Abigail. Had I met her without um knowing that 0:10:10.679 --> 0:10:13.600 red Antler was behind her, and secondly, not being able 0:10:13.679 --> 0:10:16.520 to see the kind of visuals that they helped her create, 0:10:17.440 --> 0:10:21.240 I would be skeptical on the ability to disrupt the 0:10:21.320 --> 0:10:25.199 candle category. After about six months, Abigail had backing from 0:10:25.200 --> 0:10:28.360 a Vemo co founder, founders of plus size brand Deah 0:10:28.440 --> 0:10:31.920 and Co. And all five founders of the mattress company, Casper, 0:10:32.280 --> 0:10:38.360 one of red Antler's existing clients regulars. Role here sounds 0:10:38.400 --> 0:10:41.040 a lot like an incubator, like a white combinator, more 0:10:41.080 --> 0:10:44.600 than a branding agency. Right. A program or startups apply 0:10:44.800 --> 0:10:47.640 for the chance to work with mentors and meet investors. 0:10:48.160 --> 0:10:50.959 Except you don't usually hear about branding agencies offering these 0:10:51.000 --> 0:10:55.319 kinds of services or getting this involved. Helping startups fundraise, 0:10:55.600 --> 0:10:59.839 preparing the slides for investor presentation, and brokeering intros in 0:11:00.120 --> 0:11:03.400 first place. That's becoming a key service red Antler offers. 0:11:03.640 --> 0:11:06.080 And not just read Antler. I mean there are other 0:11:06.120 --> 0:11:08.520 agencies I've heard of. There's one called gin Lane that 0:11:08.640 --> 0:11:12.240 launched the Razor brand Harry's for example. We've helped out 0:11:12.240 --> 0:11:15.680 with a lot of investor decks. In many ways, the 0:11:15.760 --> 0:11:19.160 investor deck is the perfect microcosm of the story of 0:11:19.160 --> 0:11:22.400 the brand. But redd Antler has gotten pushedback from startup 0:11:22.440 --> 0:11:25.760 investors who think the agency is overstepping its role. As 0:11:25.800 --> 0:11:29.200 we got to now more vcs. They were like, yeah, 0:11:29.280 --> 0:11:30.959 that's nice. Why don't you just stick to what you're 0:11:30.960 --> 0:11:33.920 good at. One investor told me he didn't think red 0:11:33.920 --> 0:11:36.520 Antler should be taking equity on top of charging for 0:11:36.600 --> 0:11:40.400 their services. I think their opinion was just there's no 0:11:40.440 --> 0:11:43.280 way that we could understand how to do it, or 0:11:43.320 --> 0:11:45.760 that our deal full would be good enough for whatever. 0:11:45.800 --> 0:11:49.240 They're like, their selection bias, if you name it. Others 0:11:49.240 --> 0:11:52.400 said the firm has a reputation for being expensive, so 0:11:52.400 --> 0:11:55.360 startups that ultimately fail end up with buyer's remorse after 0:11:55.400 --> 0:11:59.160 spending upwards of hundreds of thousands of dollars for the service. 0:11:59.760 --> 0:12:02.320 But several people conceded that red Antler gets to take 0:12:02.360 --> 0:12:05.520 shares because they just have that much leverage. They have 0:12:05.640 --> 0:12:08.360 their pick of new clients and limited slots to fill. 0:12:09.360 --> 0:12:11.560 Jing we're able to find out how much equity red 0:12:11.600 --> 0:12:14.480 Antler is able to negotiate it. Yeah, I asked JB 0:12:14.600 --> 0:12:19.480 about it. Can you share the range of equity that 0:12:19.520 --> 0:12:27.120 you would typically take? Jan I love it. Um, Yeah, 0:12:27.160 --> 0:12:31.200 I mean it really ranges depending on the station of business. 0:12:31.200 --> 0:12:34.440 How you know, how we're involved while we're delivering, But 0:12:35.000 --> 0:12:39.960 you know, generally we're taking positions anywhere from like one 0:12:40.080 --> 0:12:47.600 to five. Ticking equity is definitely unusual, but startups do 0:12:47.720 --> 0:12:50.760 sometimes give up shares in exchange for services like pr 0:12:50.880 --> 0:12:54.080 or legal help. And it's not like venture investors always 0:12:54.120 --> 0:12:57.480 get their bets right. E Commerce is a notoriously difficult 0:12:57.520 --> 0:13:01.199 sector to succeed it. Several er e commerce startup that 0:13:01.280 --> 0:13:03.160 got a lot of hype and raised a lot of 0:13:03.200 --> 0:13:07.440 money from experienced tech investors have collapsed. All that easy 0:13:07.520 --> 0:13:11.000 money fueled fast growth, creating a grow at whatever cost. 0:13:11.080 --> 0:13:14.360 Mentality in the startups couldn't keep up, like fab dot 0:13:14.400 --> 0:13:17.600 com once valued at a billion dollars but sold in 0:13:18.559 --> 0:13:21.960 for only fifteen million, or Guilt Group sold to Hudson's 0:13:22.000 --> 0:13:26.240 Bay in early two and fifty million dollars. That's just 0:13:26.280 --> 0:13:31.000 a quarter of what is once worth. I don't think 0:13:31.120 --> 0:13:36.120 vcs are trying to screw up those businesses intentionally, but 0:13:36.160 --> 0:13:39.319 the reality is if someone gives you a million dollars 0:13:39.440 --> 0:13:40.839 and says like, oh, like do you want it, and 0:13:40.840 --> 0:13:42.760 you spend it, you're like cool, but not not any 0:13:42.800 --> 0:13:45.400 two million. It's like a drug. And they learned to 0:13:45.480 --> 0:13:47.720 operate as a company that has the means to do 0:13:47.840 --> 0:13:51.560 things that they maybe shouldn't be doing red Antler's former client, 0:13:51.679 --> 0:13:55.200 One King's Lane and online furniture store. They went through 0:13:55.280 --> 0:13:58.560 just that kind of experience. One King's Lane is probably 0:13:58.600 --> 0:14:01.440 one of the biggest flops in right Antler's portfolio. I 0:14:01.440 --> 0:14:03.240 think it was the first thing we ever worked on 0:14:03.360 --> 0:14:07.319 that was a household name. One kings Lane raised on 0:14:07.800 --> 0:14:11.920 twelve million dollars from investors at evaluation of nine million dollars, 0:14:12.280 --> 0:14:14.600 but less than three years later, the company sold a bed, 0:14:14.640 --> 0:14:18.160 bath and beyond for only twelve million dollars. A whole 0:14:18.200 --> 0:14:21.440 bunch of money started pouring into these fast growing commerce businesses, 0:14:21.920 --> 0:14:25.800 but it was all based on off price merchandise and 0:14:26.680 --> 0:14:31.040 discounted pricing, which was great for the customer, but there 0:14:31.120 --> 0:14:34.280 wasn't much margin. Uh, there was no way to become 0:14:34.320 --> 0:14:37.480 the billion dollar business that you know, it was sort 0:14:37.520 --> 0:14:41.960 of promised. So venture capitalists have started to reevaluate their 0:14:42.000 --> 0:14:45.240 approach to e commerce investments. At the same time, other 0:14:45.320 --> 0:14:49.560 investor types, private equity firms, family offices have also started 0:14:49.560 --> 0:14:52.960 backing some of these emerging brands and flops like One 0:14:53.040 --> 0:14:55.800 kings Lane haven't deterred startups from wanting to work with 0:14:55.880 --> 0:14:58.920 Right Antler. J B says they advised companies to become 0:14:58.960 --> 0:15:02.400 profitable sooner and make sure the business has decent margins. 0:15:02.880 --> 0:15:05.520 The biggest challenges it's just getting harder to stand out. 0:15:05.920 --> 0:15:08.560 I mean, here in New York, we're seeing an explosion 0:15:08.720 --> 0:15:11.360 of tiny e commerce brands, and they're all competing with 0:15:11.400 --> 0:15:13.520 each other on price and for a piece of the 0:15:13.560 --> 0:15:17.560 customer's attention. So jing what about girl fashioned product differentiation 0:15:17.680 --> 0:15:21.520 or innovation. Randler told me that increasingly these companies are 0:15:21.520 --> 0:15:25.320 actually copying each other's business models. So it's your brand 0:15:25.560 --> 0:15:28.920 and your marketing strategy that helps you differentiate. I mean, 0:15:28.920 --> 0:15:31.560 think about how many mattresses in a box have popped 0:15:31.640 --> 0:15:36.080 up since Casper started up. This is you know, it's 0:15:36.960 --> 0:15:40.520 it's a candle We didn't reinvent the candle um were 0:15:40.640 --> 0:15:43.320 we made some choices along the way that became with 0:15:43.360 --> 0:15:45.920 a lot of thought and make it a little bit different, 0:15:46.200 --> 0:15:50.000 But it's it's a candle um. So really like differentiating 0:15:50.000 --> 0:15:53.680 it with this brand experience is kind of all we 0:15:53.720 --> 0:15:59.720 can do and in the category, but there's no guarantee 0:15:59.800 --> 0:16:02.600 a slit website and some cool images will be enough 0:16:02.640 --> 0:16:05.680 to make other land a success. Coming up next to 0:16:05.800 --> 0:16:09.480 the luxury candle seller other Land officially launches and we'll 0:16:09.480 --> 0:16:12.160 see whether the brand that red Antler built is enough 0:16:12.200 --> 0:16:27.400 to help Abigail's company cut through all the noise welcome back. 0:16:27.640 --> 0:16:30.080 So at this point, Abigail and red Antler have spent 0:16:30.120 --> 0:16:33.600 the year developing other Lands candles and brand. Last fall 0:16:33.800 --> 0:16:36.880 they set a launch date of December twelve, two weeks 0:16:36.920 --> 0:16:49.680 before Christmas. All right, we're ready to get a few more. Yes, 0:16:50.000 --> 0:16:58.040 it was crunch time. One of the last pieces was 0:16:58.080 --> 0:17:01.320 an elaborate four day photo shoot the stylish Brooklyn town 0:17:01.320 --> 0:17:05.359 house in November. Because it's the e commerce, you can't 0:17:05.359 --> 0:17:08.520 rely on the set, Like the scents are incredible and 0:17:08.520 --> 0:17:11.320 that's what's gonna get someone to come back, but we 0:17:11.359 --> 0:17:13.359 had to draw them in through something else, Like we 0:17:13.480 --> 0:17:15.719 needed the candle itself to be an object of desire 0:17:15.960 --> 0:17:24.560 without ever having smellment. Just before lunch, boxes and boxes 0:17:24.600 --> 0:17:27.399 of candles were stacked up against the wall of Abigail's 0:17:27.440 --> 0:17:30.680 new office in preparation since other Land was doing its 0:17:30.680 --> 0:17:35.320 own fulfillment to control for quality, make sure. So this 0:17:35.600 --> 0:17:38.520 was like, well, imperfection in the wax, I'm gonna pull 0:17:38.640 --> 0:17:43.639 up aside. There were last minute crises to deal with, 0:17:44.240 --> 0:17:47.159 like the adhesive for the box wasn't sticky enough, And 0:17:47.280 --> 0:17:48.840 it might seem like a small thing, but if you're 0:17:48.880 --> 0:17:50.959 going to ship out product and there's any chance that 0:17:50.960 --> 0:17:53.800 that box is going to open while it's getting shipped, 0:17:54.960 --> 0:17:58.280 that's like a that's like catastrophic failure. And then they 0:17:58.359 --> 0:18:00.720 found out that some of the candles of one cent 0:18:00.920 --> 0:18:04.400 were wrongly labeled and had to reopen dozens of packages 0:18:04.440 --> 0:18:07.520 to figure out how many were affected. So you sort 0:18:07.560 --> 0:18:11.800 of give yourself ten seconds to totally freak out, especially 0:18:11.840 --> 0:18:14.960 being like sleep deprived, and then you figure out how 0:18:14.960 --> 0:18:18.359 to fix it with just days to go before launch. 0:18:18.520 --> 0:18:21.000 Abigail fixed the box issue with extra tape and a 0:18:21.080 --> 0:18:28.919 drywall scraper to increase the fold in the cardboard. Abigail's 0:18:28.960 --> 0:18:32.360 new company faces competition on two fronts. There the actual 0:18:32.440 --> 0:18:35.880 candle sellers like Nest, Diptique, and La Labo, and she's 0:18:35.880 --> 0:18:39.040 hoping to beat those players in part on price. There's 0:18:39.040 --> 0:18:41.480 also the influx of e commerce brands in general that 0:18:41.520 --> 0:18:44.560 she's up against. There's some irony here because in a way, 0:18:44.720 --> 0:18:47.000 Red Antler seems like a victim of its own success. 0:18:47.400 --> 0:18:51.359 JB and Emily had some blockbuster launches early on, like Casper, 0:18:51.480 --> 0:18:54.000 the mattress company, which red Antler took on before they 0:18:54.080 --> 0:18:57.600 launched j B. And Emily told me they've had more 0:18:57.600 --> 0:19:00.560 than thirty requests from aspiring mattress. I was hoping to 0:19:00.600 --> 0:19:08.879 replicate what they did with Casper. I checked in with 0:19:08.920 --> 0:19:12.960 Abigail the day before launch. Right now, I'm tired. I'm 0:19:13.080 --> 0:19:16.720 so excited. Um definitely like running on fumes. We were 0:19:16.800 --> 0:19:21.479 here till four am last night. Abigail set herself a 0:19:21.480 --> 0:19:26.920 few milestones, how do we acquire our first hundred customers? 0:19:27.000 --> 0:19:29.440 And so I'd say, sort of first one hundred customers, 0:19:29.440 --> 0:19:32.760 and then like first one thousand orders are are what 0:19:32.880 --> 0:19:44.320 we are really really focused on. Finally, on December twelve, 0:19:44.840 --> 0:19:48.200 Other Land went live. I was excited, after all these 0:19:48.200 --> 0:19:51.960 weeks of following Abigail attending the photo shoot, a planning meeting, 0:19:52.359 --> 0:19:55.040 to finally see what the website was like, I'm looking 0:19:55.040 --> 0:19:57.520 at it now. There's a big photo from the Brooklyn 0:19:57.560 --> 0:20:00.840 Townhouse with a very handsome, sharp pay feed drinking prominently 0:20:00.880 --> 0:20:03.840 in front of an old marble fireplace. Once other Land 0:20:03.920 --> 0:20:08.080 went live, marketing became all important. Abigail needed to start 0:20:08.080 --> 0:20:11.320 reaching potential customers, but ideally without having to pay for 0:20:11.400 --> 0:20:14.359 promoted post or search ats. That's why I read Antler 0:20:14.400 --> 0:20:17.879 and Abigail worked for months just on the box. It 0:20:18.080 --> 0:20:23.720 is your customer's introduction to the brand. Um ideally it's 0:20:23.720 --> 0:20:27.760 something that's so fabulous and exciting and engaging that it 0:20:27.840 --> 0:20:31.560 might be filmed on a camera and ideally not just 0:20:31.640 --> 0:20:34.760 filmed on camera, but posted to social media, posted to 0:20:34.800 --> 0:20:37.080 the Internet. I have to say, Jing, I was sort 0:20:37.119 --> 0:20:40.280 of ready to be a little cynical about red Antler's 0:20:40.359 --> 0:20:42.960 kind of impact on an e commerce company like other land, 0:20:43.000 --> 0:20:45.240 but it's it's clear to me, like how much work 0:20:45.600 --> 0:20:48.639 had to go into launching a brand and how little 0:20:48.640 --> 0:20:51.560 Abigail came with when she had this idea. I think 0:20:51.640 --> 0:20:54.840 it's an evolution of what is required for e commerce. Right, 0:20:55.040 --> 0:20:57.080 Like you know, five years ago, you can have a 0:20:57.160 --> 0:21:00.439 simple looking website with not very much content and you 0:21:00.440 --> 0:21:03.120 can still make good business out of it. But consumer 0:21:03.200 --> 0:21:06.600 expectations have totally changed. And the other thing that's changes, 0:21:06.720 --> 0:21:09.840 like all the basics are are already done, right. You 0:21:09.880 --> 0:21:13.920 can get cloud storage with Amazon, you can have Amazon's 0:21:13.920 --> 0:21:17.800 fulfillment centers run your business, and so like the differentiator 0:21:17.880 --> 0:21:20.679 piece is really this branding, like how do you stand 0:21:20.680 --> 0:21:23.480 out amid the crowd. It's it's no longer going to 0:21:23.560 --> 0:21:26.720 be like the technical technical stuff or the supply chain stuff. 0:21:26.720 --> 0:21:29.879 So so maybe it is sort of red Andler's time exactly. 0:21:29.920 --> 0:21:32.120 I mean, anyone can do it. How do you think 0:21:32.160 --> 0:21:34.680 they do when it comes to like product number two 0:21:34.960 --> 0:21:39.000 or taking a company like other Land from this launch 0:21:39.080 --> 0:21:42.080 experience into the next phase of its business. Well, so 0:21:42.119 --> 0:21:44.600 what they told me is that they're really really good 0:21:44.720 --> 0:21:48.760 at the launch, you know, figuring out the initial brand, strategy, 0:21:49.119 --> 0:21:51.800 the operations. As the company grows, they get less and 0:21:51.840 --> 0:21:54.280 less involved. The other thing is, you know they they 0:21:54.560 --> 0:21:56.719 obviously were very involved in the launch of a company 0:21:56.720 --> 0:21:59.640 like Casper the the online mattress maker, but like so 0:21:59.720 --> 0:22:02.560 much success in the space after you get past the 0:22:02.640 --> 0:22:06.360 launch is like this, this sort of grisly battle over 0:22:06.400 --> 0:22:10.120 search ads, you know, paying for people to view your content, 0:22:10.680 --> 0:22:13.879 um outbidding your rivals. Like if other Land is successful, 0:22:13.880 --> 0:22:17.040 there might be more luxury candle sellers online, and so 0:22:17.359 --> 0:22:19.760 you know, these businesses tend to mature, and red Antler, 0:22:20.040 --> 0:22:25.720 you know, might have to get its hands dirty switching. 0:22:25.840 --> 0:22:28.760 We're not recording this in late January. Other Land launched 0:22:28.760 --> 0:22:32.800 about six weeks ago. How's Abigail doing. We've seen some 0:22:32.840 --> 0:22:36.359 great press coverage. People are excited about the brand, the 0:22:36.359 --> 0:22:38.960 products for all the reasons that we're excited about it. 0:22:40.200 --> 0:22:42.960 A lot of engagement on social stuff that I think 0:22:43.080 --> 0:22:45.720 is really critical at the stage of the business is 0:22:46.320 --> 0:22:51.640 orders that are exceeding your expectations, which is happening. When 0:22:51.640 --> 0:22:54.080 I spoke to Abigail before she launched, she told me 0:22:54.160 --> 0:22:56.200 she was watching for how quickly she could acquire a 0:22:56.320 --> 0:22:59.760 hundred customers. Now she says she's almost at a thousand 0:22:59.760 --> 0:23:02.760 cost timers, and she sold more than a thousand candles. 0:23:03.800 --> 0:23:05.960 But we saw that was really exciting that people who 0:23:06.040 --> 0:23:08.600 bought the first couple of days, then a lot of 0:23:08.640 --> 0:23:12.520 them then came back and purchased gifts or um. If 0:23:12.560 --> 0:23:15.120 they had gotten one cent, they would get another cent 0:23:15.240 --> 0:23:18.760 or a three pack to try more. Abigail said return 0:23:18.840 --> 0:23:23.200 customers is actually the metric she's most focused on. So 0:23:23.680 --> 0:23:26.600 how many of our customers have come back and placed 0:23:26.640 --> 0:23:30.240 a second order, a third order, a fourth order, a 0:23:30.800 --> 0:23:34.040 fifth order. We've had a couple of those, So it 0:23:34.040 --> 0:23:37.000 sounds like these first critical weeks have gone relatively well, 0:23:37.240 --> 0:23:39.800 it seems so, but the Other Land is still at 0:23:39.840 --> 0:23:42.919 the very beginning of its life as a company. You know, 0:23:42.960 --> 0:23:46.480 success ultimately is getting to a place where you start 0:23:46.480 --> 0:23:49.920 seeing Other Land and your friend's apartments, your friend's home, 0:23:50.119 --> 0:23:53.560 or in a restaurant, in a hotel. And to get there, 0:23:53.880 --> 0:23:56.560 Abigail will need to keep winning over new customers and 0:23:56.640 --> 0:23:59.560 keep the old ones coming back. It usually takes years 0:23:59.600 --> 0:24:11.880 for company needs to start making a profit. And that's 0:24:11.920 --> 0:24:15.240 it for this week's Decrypted. Thanks for listening. We always 0:24:15.240 --> 0:24:16.919 want to know what you think of the show. You 0:24:16.920 --> 0:24:19.320 can write to us at Decrypted at Bloomberg dot net 0:24:19.600 --> 0:24:22.679 or I'm on Twitter at brad Stone, and please consider 0:24:22.720 --> 0:24:25.280 leaving us a rating and review on Apple Podcasts or 0:24:25.320 --> 0:24:27.920 wherever you like to listen. It really helps us find 0:24:27.920 --> 0:24:31.399 new listeners. This episode was produced by Pia gut Kari, 0:24:31.760 --> 0:24:35.680 Liz Smith, Magnus Hendrickson, and Christie Westguard. A big thank 0:24:35.720 --> 0:24:37.639 you to jen Ca, who recently moved on to the 0:24:37.640 --> 0:24:41.359 startup world herself. We miss you Chanting. Francesca Levi has 0:24:41.359 --> 0:24:43.800 had a Bloomberg podcast. We'll see you next week.