How new parents shop for their babies is unlike how anyone shops for anything else. I know, I’ve been there. You’re anxious, you’re thinking about all the things your baby will need, but you’re also thinking in stages of what you’ll need three months from now when your baby is in a completely different stage of development. It’s overwhelming and the brands in the baby market are mostly just selling products, and not selling how to have a better experience as a parent. Lalo is one of the unique brands that is putting the parent’s experience first, and that strategy has helped the company quickly grow into a favorite brand among moms and dads everywhere.
On this episode of Up Next in Commerce, I chatted with Michael Wieder, the co-founder of Lalo, about what it was like to create a new kind of shopping experience for parents, and how a little bit of light stalking went a long way to help Lalo figure out exactly what parents want and need. We talked about what it takes to bring a product to market with organic and authentic connections with influencers and consumers alike, and we got deep in the weeds of what strategies Lalo used to communicate with current and potential customers in order to improve not just the products, but the entire experience of buying products for your kids. Plus, we talked a bit about how Lalo has approached fundraising, which is a little bit controversial these days.
Enjoy the episode!
Main Takeaways:
- Influencers Are People, Not A Marketing Channel: You have to tap into an influencer’s psychology and why they would actually love a brand, rather than paying them to market your product just because they are popular. Reach out to people who you know you can connect with, and ship them product to help them fall in love with the product first, then partner with you later. Not only does that form more authentic relationships, it saves you from wasting product and time on potential influencer relationships that won’t work.
- Keep it 100: How you communicate with customers should be all about keeping it real. Think about how you would want to be communicated with, and treat your customers in that same way. And in order to deliver the right messages that also lead to actual sales, you have to focus on a few key pillars: technical, functional and emotional benefit.
- Get on My Level: Hiring the right people is the biggest challenge to growth. Not everyone will care as much as a founder, but you need to find people who do truly care and buy into the mission of the company and will fight to help it become better. You can also tap into the people who love your brand most to bring them on as advisors.
For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.
Key Quotes:
“I think you of course learn a lot from your failures and that first business that I shut down. I learned a lot about hustle, about scrappiness, about getting the job done and ultimately about the learning curve entrepreneurs and founders have.”
“The first step was to survey parents because neither of us were at the time, we’re both now dads. And at that time we really sunk our teeth into the customer and what they want, what they needed, what their desires were, how they shop today, how they should shop in the future. And that led us to creating Lalo. So it was definitely a couple month exploration process of the market and the consumer before diving into, what are we going to make and what are we going to sell?”
“The big white space, the big opportunity really revolved around, how were customers being treated, consumers being treated by the brands they were buying every day for their kids. And what we uncovered through parents is that so many brands in the space make a single product that they market to parents. And it’s so product focused and it’s product, product, product, product. We’re going to tell you about this thing that’s going to be really terrible in your life if you don’t buy our product. Instead of this super exciting moment in your life, you’re a parent, your kid is growing every day. There’s milestones so often the only constant has changed and those are moments to celebrate. So what if we flip that on its head and said, Lalo’s here to celebrate with you to be there along every milestone, instead of telling you that you’re never going to sleep. If you don’t buy our product.”
“What Greg and I knew, and really spent a lot of time on, was consumer psychology. What were parents really going to want? And how are we going to build trust and validation as a new brand in this space? So every moment we spent planning for the launch was about, does this build trust?Does this build validation?”
“Influencers are people they’re not a marketing channel. And I think my time working with talent as a music manager and a sports agent helped me understand their psychology. What would make them tick and want to represent a brand basically free of charge? Go out there in the world and tell someone that I’m using this or I love for this product. So that started with really just creating one on one connection. So I would get on the phone. I would talk to them as a founder. I’d make myself vulnerable to the conversation. But what we’d also do is we’d allow them to essentially shop our website. So instead of just blasting people and sending them free product, we made sure people really wanted the product.”
“In terms of voice and how we talk to our customer, the number one thing we think about is realness. Is this how I would want to be spoken to if I was a consumer, is this how I’d want to hear from a friend or a brand?”
“In terms of communicating value to a customer, to make sure that we’re increasing conversion rate and getting people to buy our products, we break it down into benefits. So we work through a framework that one of our advisors introduced us to that focuses on technical, functional and emotional benefit. The technical benefits of how is this thing made? What is it made of? The functional benefits? How does it work? What function does it give me in my life? And then the emotional benefits of how does it make me feel? So by breaking it down like that, that ends up being really, really clear messaging, pillars and value that you can communicate to your customer.”
“It’s impossible for any employee to care as much as a founder. They can care one degree less, but you have to find people that are motivated to get as close to your level as possible and care about the growth of business.”
“The number one thing we say within our marketing team is we write playbooks, we don’t follow them. So we’re always thinking about… Even if we see another brand doing something we think it’s really cool we always ask ourselves, is this right for us? Or how can we change it to be better for our business and our customer, because we have such a nuanced business and customer.
Mentions:
Checklist Manifesto by Atul Gawande
Bio
Michael Wieder is the co-founder, president, and CMO of Lalo. He previously served as Head Of Brand Marketing for WayUp and he was the founder of Founder. Michael also has experience in the sports and entertainment industries and hosted a podcast at Lalo called Dad Pod.
Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce
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Transcript:
Stephanie:
Hello and welcome back to up next in commerce. I’m your host, Stephanie Postles, CEO of Mission.org. Today on the show, we have Michael Wieder who serves as a co-founder president and CMO at Lalo. Michael. Welcome.
Michael:
Thank you so much for having me.
Stephanie:
I’m very excited to have you. So I want to go through your background a bit because I saw that you’ve been a two time former founder interested in business building companies and want to kind of start there around where did that interest come from back in the day?
Michael:
Yeah, I don’t know. My entrepreneurial spirit, I think was always there. I started my first business in college and the intention for starting my first business was not to be an entrepreneur and start a company. It was really to take my career path into my own hands and I had this dream to become a sports agent and I thought the best way to get experience was just to start managing talent. And I started managing musicians while I was in college, producing events, buying talent for Skype for south by Southwest. I really got myself immersed into the entertainment world. That way ultimately did my job as a sports agent, but at the end of the day, that entrepreneurial itch, it wasn’t the reason I started my first company but it was something that kept bubbling up as I got away from it.
Michael:
And that’s what brought me back to entrepreneurship in general. Left being a sports agent and started my first company in the tech and startup world. After that it was a fitness tech startup that I bootstrapped and did that for a little bit before shutting it down. And that led me to my next role, which was an early stage employee at a high grade tech startup. And that’s where I met my co-founder for Lalo, Greg. He was the fourth employee there and I was the fifth employee. And our CEO at that company said to Greg, when she hired me, I just hired your best friend. What she didn’t know is that she hired his future co-founder and then that led us. I left that job and he left, he had moved on to be a VP of sales at artsy, and we relined back up and started Lalo and got right back to our entrepreneurial roots again.
Stephanie:
I love that story because you had to shut down a previous company and then went and worked full time somewhere else. And then you were like, “okay, I’m going to try it again.” Was there any resistance that kind of popped up? Because to me I’m thinking about, okay, if I had actually shut down one of my babies to then get back into that world again and take another risk. I mean, that’s pretty impressive.
Michael:
I think you of course learn a lot from your failures and that first business that I shut down. I learned a lot about hustle, about scrappiness, about getting the job done and ultimately about the learning curve entrepreneurs and founders have. Going into that next company as the fifth employee, I treated every day like I was the founder and CEO of that company maybe to a fault but that’s just who I am. Right? So getting back to it, it was never a question of if it was always a question of when, and that’s even when I gave my notice to our CEO, Liz at that time, that’s exactly what she said. She knew exactly this was a when out not an if I was going to go start my own thing. So I never had a hesitation about doing it again.
Stephanie:
Yeah. Once you know what you can do and can get and what that’s like, it’s hard to go and work for someone else. So tell me a bit about what is Lalo and what was the inspiration behind that you’ve got your new bestie, you guys become co-founders did you already have the idea or what did that look?
Michael:
Yeah, it started Greg and I were just catching up as old coworkers and friends, and he said to me, “I’m seeing all my friends and family they’re having kids and this is crazy. The amount of things they’re buying, they don’t know what they’re spending, what they’re doing, what they need when they need it.” He’s like, “Are you seeing this with your friends? And are you and your wife trying, are you having babies soon?” And I was like, “Actually we are trying, thanks for asking. And yes, I do think this is absolutely crazy. You don’t shop for anything this. Let’s do it.” And I don’t even know if he had said, “I think there’s a business opportunity here.” He was kind of alluding to it. And I knew he was getting at, we just jumped in from there.
Michael:
And the first step was to survey parents because neither of us were at the time, we’re both now dads. And at that time we really sunk our teeth into the customer and what they want, what they needed, what their desires were, how they shop today, how they should shop in the future. And that led us to creating Lalo. So it was definitely a couple month exploration process of the market and the consumer before diving into, what are we going to make and what are we going to sell? But that led us to Lalo. And what Lalo is, is we make baby products that parents are proud to own. And if the baby industry and baby products in general got so known for ugly neon green things and there’s no reason for that. But more importantly, parents deserve a brand that actually cares. And that’s what we build with Lalo.
Stephanie:
I love that. Yeah. I was looking at your website and I definitely have been in the camp of I three boys under the age of four and looking at the products that you can get for toddlers. It’s like everything is so colorful. You have to essentially just have a kid room that you can close up. And what I loved about your guys products is, oh, that’s actually cute. And that would match my living room. It wouldn’t look some rainbow bursts coming out of nowhere. I mean, is that the feedback that you got in the surveys when you were trying to figure out like, okay, how do parents want to shop and what’s going wrong here? Or is that something that you discovered maybe after launching the company?
Michael:
We definitely saw that as white space in the market, the ability to make things look better at a better price. However, the big white space, the big opportunity really revolved around, how were customers being treated, consumers being treated by the brands they were buying every day for their kids. And what we uncovered through parents is that so many brands in the space make a single product that they market to parents. And it’s so product focused and it’s product, product, product, product. We’re going to tell you about this thing that’s going to be really terrible in your life if you don’t buy our product. Instead of this super exciting moment in your life, you’re a parent, your kid is growing every day. There’s milestones so often the only constant has changed and those are moments to celebrate. So what if we flip that on its head and said, Lalo’s here to celebrate with you to be there along every milestone, instead of telling you that you’re never going to sleep. If you don’t buy our product.
Stephanie:
Yes. We can. I’m thinking about the DACA talk things where they’re like, “Your baby can’t sleep, unless you have this.” I’m like, I did just fine. This is the old whole method.
Michael:
Yeah. And look, it’s an extremely anxiety provoking time in your life. You’re doing something brand new for first time parents and you have no expectation. And the no expectations definitely spills over into the shopping experience. Right. If you’re going out and buying a mattress, you’ve probably hopefully slept on a mattress before. And you have an expectation of, do you firm or soft or queen or king or twin or whatever you want to sleep in. Right. When you go out and buy a highchair, you have no idea. You don’t remember being a baby sitting in a high chair. And the technology and the designs and everything are totally different. So the question now becomes, what do I need? And the brands of yesterday, weren’t set up to really support customers in that journey.
Stephanie:
I love that. So when you were starting to roll out products in the very early days, I mean, what did that look like? Because right now, what I’m seeing is you guys building up crazy, wait lists, people want your products seems you have a lot of inbound, but I want to hear kind of before you got here, what did it look when you’re like, here’s our first product? How did you drum up customers in those early days?
Michael:
Oh yeah. I mean, we worked really hard to build our first products and our first product was a stroller that we no longer sell. But our focus right now is really building the best products in the home. And our second product was our highchair, but we were developing those products at the exact same time. And it really started with finding great people that knew the world of building products and designing and engineering products compliance folks, everybody that would make sure we can have the highest quality safest products for our customer, but what Greg and I knew, and really spent a lot of time on was the consumer psychology. What were parents really going to want? And how are we going to build trust and validation as a new brand in this space? So every moment we spent planning for the launch was about, does this build trust?
Michael:
Does this build validation? Which put an extreme pressure on press and PR. Put a pressure on influencer and puts pressure on referral, right? Getting people to spread the word. So we spent a lot of time in the early days doing that. And we launched on March 13th, 2019. And I’m probably the only person that remembers this because it was extremely scarring, but Instagram crashed that day for the entire world and it was completely down. So we get to our launch day, press hitting and Instagram wasn’t working. So all of our influencer had to wait all everything that we had planned for, but it was all organic. We didn’t pay any influencers. We just found people that we knew would love the brand and introduce them to what we were doing. And they fell in love and then helped us spread the word.
Stephanie:
Wow. So what were some, maybe tips and tricks back then that you were kind of leaning into around organic influencers and things that, that you’re maybe still utilizing today that you’re still finding success with?
Michael:
My line on influencer because I do think this is a competitive advantage for Lalo is that influencers are people they’re not a marketing channel. And I think my time working with talent as a music manager and a sports agent helped me understand their psychology. What would make them tick and want to represent a brand basically free of charge, right? Go out there in the world and tell someone that I’m using this or I love for this product. So that started with really just creating one on one connection. So I would get on the phone. I would talk to them as a founder I’d make myself vulnerable to the conversation. But what we’d also do is we’d allow them to essentially shop our website. So instead of just blasting people and sending them free product, we made sure people really wanted the product.
Michael:
Because as an early stage company, especially our products. They’re not cheap to me. They’re not cheap to ship. And we believe in sustainability and we didn’t want to just ship wasteful product. So we would often… If we were unsure a celebrity or an influencer would actually use the product, we would send them a shipping label that said, if you don’t want this product or you decide you don’t need it, here’s the shipping label and you can donate it to this organization.
Stephanie:
Oh, that’s cool.
Michael:
Called Good Plus foundation. So they can immediately ship it to be donated if they weren’t going to use it. Yeah. and if they did use it, we would donate one in their name. So that was really, really helpful early on because there was no risk. There was no risk and we got people to just organically love what we were doing at Lola.
Stephanie:
That’s great. And how do you go about finding good talent? I mean, to me, it’s in your blood to find good talent because that was your background and you know what to look for, but for a new brand, trying to find some good organic influencers out there. How would you advise them to go and find their people who are going to do a really good job, spreading the word and have a pretty good impact. And it’s not a crazy huge influencer, someone who’s perfect for what they’re trying to do. How do you spot that talent?
Michael:
So first starts with really understanding your core user persona, your core consumer persona, and then thinking about that person as a person and understanding what their lifestyle looks like. Now find, break those lifestyles down into a pillar. So whether that’s wellness or music or whatever it may be, what these different pillars that influencers live within celebrity and find those people that really, really speak to your audience. So that you find that one as close to a one to one match as possible because you might have someone that has millions and millions of followers, but those millions of followers might be a bunch of 12 year old boys. so find that mom that’s really speaking to moms or speak, find that dad that’s really speaking to dads instead of just find that person who’s a parent, that’s what our focus was or find that person that’s going to build the most trust and validation for your brand.
Stephanie:
And are you looking through hashtags, looking through… I’m trying to think, because a lot of times you’re not going to easily find someone who has maybe 20,000 followers or something. They won’t be the first that comes up and I’m looking around. Feel there’s a bit of digging that I don’t really know how you know how to do it efficiently.
Michael:
So you want me to spill my secrets here?
Stephanie:
Yes, please. That’s why you’re here, Michael.
Michael:
I think there certainly are hacks that look through those posts. And a lot of people follow each other. So look at people’s followers, but what happens when you find really good people, the other good people see it. And we end up with dozens of inbound requests from influencers.
Stephanie:
Got it.
Michael:
And want to be influencers that want our product. And our product adds value in life because people need these things. This isn’t just another t-shirt that someone could wear. This is a product they need for their kid. So, we get a ton of inbound from, we get inbound from a list of celebrities wanting the product all the way down to your non influencers. So that’s been really helpful and that honestly cuts out a lot of the work for our team.
Stephanie:
Got it. Okay. So once you find your core people in the beginning, then it will start working for you.
Michael:
Yeah. If you create something people love it’s going to come, right. People are going to want to seek you out, but if it’s not, you need to go out there and find the few people that are going to help you burst through the door.
Stephanie:
Got it. So I know you have a lot of marketing in your background and I want to hear how you think about messaging this product that showcases the value and the sustainability and how good the products actually are. How did you think about putting that on your website and putting it on Instagram in a way that instantly connected like, yeah. It might be maybe slightly higher price than what you’re going to get on Amazon or whatever it might be, but here’s why it’s actually worth what you’re about to pay. How did you think about messaging?
Michael:
Yeah. So number one, in terms of voice and how we talk to our customer, the number one thing we think about is realness. Is this how I would want to be spoken to if I was a consumer, is this how I’d want to hear from a friend or a brand? So that’s kind of the baseline check we do, but in terms of communicating value to a customer, to make sure that we’re increasing conversion rate and getting people to buy our products, we break it down into benefits. So we work through a framework that one of our advisors introduced us to that focuses on technical functional and emotional benefit. Right? The technical benefits of how is this thing made? What is it made of? The functional benefits? How does it work? What function does it give me in my life? And then the emotional benefits of how does it make me feel? So by breaking it down like that, that ends up being really, really clear messaging, pillars and value that you can communicate to your customer.
Stephanie:
Got it. I love that. Okay. And what about retention for a higher value product after someone buys a high chair, it’s probably the only thing they maybe want to buy for that year or something they don’t have out. I don’t think many parents, at least, not myself. Think in stages of, okay, next I’ll need this, this, this, and this. You kind of have to it buy it when you want it. How do you kind of retain a customer and keep that order value high enough and bring them back in a way that makes sense for them and the stage that they’re in which you would already probably know based off what they’re buying, they’re buying this thing is probably in zero to six months. If they’re here, it’s 6 to 12, how do you think about staying in touch with them throughout that entire process?
Michael:
Yeah. So for us, there’s a complicating factor in our buying experiences that the end user is not always the purchaser because there’s a lot of gifting in our space. Baby showers and registries and things that. So it all obviously starts with data, right? Making your data more powerful. And I think my time spent in tech kind of opened my eyes a lot to the power of data and how to leverage data and build good systems around it because the hardest part about data is getting the data. Once you have it, you can manipulate it and use it for your benefit. So for us segmenting our customers as strongly possible is really important that realness and communication with the customer pays dividends. Right? So for us if there’s ever an issue or complaint, the way we treat our customers, that’s your best retention tool, right? If you make people feel special from the onset that makes, that goes a long way and ultimately that leads to referral too, right?
Michael:
We think of referral as part of retention because in our space word of mouth is such a driver of growth. It’s obviously important to every business, but in the baby space given that you’re starting from nothing. When we talk to our customers, usually the place they start is with a friend or family member. What do I need? Who’s the person the stage ahead. So we know how important that is and doing little things that are not scalable, go a long way. Another advisor, a guy named Will Guidara who is the owner of 11 Madison Park. So he’s hospitality guy, ran the number one restaurant in the world. We were chatting with him early and he said, “You have to make every one of your initial customers feel really special. And that doesn’t start by sending them a piece of branded swag. Because telling someone to be your walking billboard is not special.”
Michael:
So what we would do, we’d actually like almost stalk our customers online to learn about them and what they loved. And if there was a high value customer, someone early on that we wanted to treat really well, we would research. And there’s one that comes to mind of a woman who bought all our products early on and we found out that she volunteered at dog shelter. She owns a few dogs. And we sent her a bunch of awesome accessories from a friend brand of ours, Wild One, for her dogs, we sent her a trial subscription to the Farmer’s Dog, another friend brand of ours and made a donation to a dog shelter and going out of our way to give her something really personal. We know for sure that she would tell people about that. So we replayed that kind of surprise and delight over and over again with a lot of our initial customers.
Stephanie:
Wow. One, how did you know who to stalk? Because I’m thinking if you’ve got a Deborah Walker, there’s probably millions of them. So how did you go about actually finding them to then find those details? Because I’m even thinking about, we try and tag guests on LinkedIn and we can barely even find them sometimes. There’s so many names. How did you find the right people?
Michael:
So we always have people shipping addresses, so that’s helpful. So we know they live in California, we have a few other piece of information. We also know that they are expecting a child or have a child, right? And obviously there’s ways to tell that in a lot of cases, so if we can find their Instagram and it’s public, we could do something. Of course there were people that were private and we couldn’t find, and a lot of times that would mean we couldn’t do as something as personal and special. But there are also really simple ways, if someone interacts with our customer experience team instead of just saying, how can I help you? If you’re on the phone with them, you can ask them questions about their life.
Michael:
Just get into a normal conversation, treat everybody like a human. So acting in that way, we would get a lot of information about how old is their kid or when are they due and what do they like, where do they live? And we had a showroom at the early days too. So even our customers that would come into the showroom in the early days, it was super easy to have that kind of conversation because it was just friendly.
Stephanie:
That’s cool. So do you still do this today and if so, how many customers are you trying to make these extra delightful experiences too?
Michael:
We do have a surprise and delight program. We’ve been reworking it recently. So, to our customers out there, maybe you’ll get something again soon. But we try to as many people as possible and for the most part, it’s high value customers, repeat customers, people that are extremely loyal or people that we have a great interaction with that we know something about them feels like they’re going to be a brand evangelist.
Stephanie:
I love it. That’s a really cool way to think about it. I haven’t heard of many brands treating customers like that or finding very, very unique moments to kind of celebrate about that customer. And I can see probably a lot of social media spreads from that and then really wanted to share, not only with their friends, but also just tagging you guys. How much UGC content were you getting when you were doing stuff like that?
Michael:
Oh my God. We get so much UGC content because… You said you have kids?
Stephanie:
Yeah.
Michael:
Your kid is eating a meal and your phone is out because you want to capture that kid.
Stephanie:
You’re so cute. Like if you eating your corn.
Michael:
Right. And that’s happening in our highchair, right? So that’s getting shared nonstop. And I think there was a thought early on with our stroller, like, “Oh, it’s out in the wild, people are going to see it.” But I think that the highchair has so many more public moments than expected because of Instagram. People want to capture and share these moments.
Stephanie:
I think I can only think of one stroller that everyone talked about because of the price tag, that upper baby stroller. It’s like, you saw it, you knew it, you’re like, that things like $1,500. And people talked about just because the absorbent price tag on it. Other than that I don’t think too much about strollers. So when thinking about how you guys have been scaling and growing, I saw stuff that in July, 2021, you matched your entire Q3 2020 revenue and you surpassed all the sales you made in 2019. And so it seems like you guys are growing really well, doing really well. What do you think is some of the biggest contributors to that right now? What are you doing and seeing the biggest impact on?
Michael:
So I think it really starts with finding great people to be on your team.
Stephanie:
The hardest problem.
Michael:
That’s the hardest part of being a founder, everything else is easy, but really figuring out the right people to hire and help build your business alongside you. Because it’s impossible for any employee to care as much as a founder. They can care one degree less, but you have to find people that are motivated to get as close to your level as possible and care about the growth of business. And that all starts with finding really good people and I think that’s been a theme throughout this conversation is our human approach at Lalo. So that’s the number one thing we look for, are you a good person? Because if you’re a good person, the rest will follow, the skills will follow. So that’s number one. Number two is really, really listening to our customer.
Michael:
So whether that’s about product change is or content that they’d like to see that would help them understand the product better. Whatever it might be or ways that we can create more community around the brand, listening to our customer drives everything that we do and that leads to growth. And then I think we have a lot of grit and humility at our company. When you start coming, there’s a lot of ups and downs and at the start of the pandemic no one knew what was going to happen. And we bared down and we were like, is our business going to fail because the pandemic?
Michael:
Is it going to take off? We realized very quickly when the pandemic started, that we were really well positioned to compete in a digital economy, digitally driven commerce economy. Because we didn’t have to pivot, we just had to keep doing the things that we were already doing. We were already doing video chat calls to explore our product and see what our product was about. We were already doing all those things, so we didn’t have to change. We just had to keep on operating. We of course need to get inventory to help scale but we really just bared down and trusted our gut more than anything.
Stephanie:
That’s great. Are there any new things that you’re doing right now that you feel like are a little bit ahead of other commerce brands in the market right now? Because I’m thinking about like you said, the video chat to be able to explore products, that’s pretty new, the fact that you guys were doing that when you were. So what kind of things are you ahead on the game of now?
Michael:
So we had a showroom from launch. So the way we think about physical retail is definitely different. And I think we’re thinking through a lot of what that means for us in the future and there will be a lot of newness over the next year, for sure on that side. And then the number one thing we say within our marketing team is we write playbooks, we don’t follow them. So we’re always thinking about… Even if we see another brand doing something we think it’s really cool we always ask ourselves, is this right for us? Or how can we change it to be better for our business and our customer, because we have such a nuanced business and customer. There’s a very specific buying window and a specific way to talk to our customer, goes back to that mattress conversation before. It’s not every day you can buy a highchair.
Stephanie:
So what other brands are you watching where you’re like, “Oh, is this playbook similar?” Who are some inspirational folks that maybe we should be following as well?
Michael:
We have a lot of great friends in the space that we talk to and share insights with. I think Caraway is definitely one that-
Stephanie:
They were on the show.
Michael:
Greg and I are both close with Jordan over there and talked to him quite a bit. We talk a lot with Nick Sharma, anybody on Twitter knows Nick’s name. I think Alii Pop is another one that I think for also anybody on Twitter, Eli Weis is the way he thinks about out CX is very in line with how we do from a human centric approach. And what they’re doing there from a marketing and creative perspective is also really, really interesting. I think another cookware brand Our Place, does a really good job from a creative lens and I think they’re doing a really, really awesome. House is another one that we look to.
Stephanie:
I love that you’re naming all brands that have either been on the show like House, Nick’s been on the show, Alii Pop’s coming on the show next week.
Michael:
Awesome.
Stephanie:
House was one of our first, I think 10 episodes. It’s awesome. So we like the same people. Maybe we can be friends too.
Michael:
Awesome. Love that.
Stephanie:
So I want to talk a little bit about partnerships too, having these limited edition products and forming partnerships. I think you did a humidifier set that you did a partnership on, and I want to hear how you go about exploring those and knowing which ones are a good fit and maybe which ones aren’t.
Michael:
So it goes to knowing your customer. We talk a lot about partnerships and it really comes down to energy, effort and return.. So with Canopy, with the humidifier, it was such a clear partnership. We knew the team over there, we’ve known them for a long time. Humidifiers are one of the top things registered for on a baby registry. And almost every parent puts one in a nursery because it helps for better sleep, better breathing. Keeps your-
Stephanie:
When they’re sick, it’s like the only thing you know what to do.
Michael:
Keeps them from getting sick. So it helps you breathe better, makes their skin better, everything. So it was such a natural collaboration. Greg and I had been using the product since it launched in our baby’s nurseries so we knew there was something to do there. And we developed our aroma kit with them to have these natural essential oils that you can use on the diffusing to encourage better sleep and better breathing. And there’s definitely other partnerships that we look to, but ultimately, what do we think our customer want to see from us? What does their audience have? And Really, can you tap into a new audience with a partner? Or can you deliver more value to your current audience through your partnership?
Stephanie:
So what kind of uplift did you see for the humidifier partnership? Did you really get access to a bunch of basically look alike customers who would for sure probably be your customers as well, and then how long do you keep that partnership going? Because I think I saw this is maybe like a limited time product or how do you think about the length? If it’s working so well, why not keep it forever?
Michael:
We’re going to keep it for a while with them because it is going well. I think it will definitely last through the end of this year and we’ll see what happens with it, we’re definitely having those conversations. We saw a ton of lift, the press really ate it up, influencers aided up. They loved our two brands coming together because ultimately both of us are focused on creating better performing products that look better in your home. So that was just a natural fit.
Stephanie:
Yes.
Michael:
I think we’ll find other brands that like that to continue to partner with, but we’ve been thrilled about that partnership.
Stephanie:
That’s great. So I want to shift the conversation a bit to something I don’t normally talk about, but because you were on Twitter talking about this, I want to dive into it. You were talking about closing your lead round of funding and how that it was beneficial to have a big cap table for you guys. And I wanted you to dive into that a bit because when I think about the funding environment right now, it feels like there was kind of a pullback in at least the DTC market for a little while there because it’s like, “Okay, can this company really return my fund? If not maybe I should be betting in some other tech company instead.” So what are your thoughts behind raising money for a brand right now and why to have a big cap table?
Michael:
So there are definitely reasons not to have a big cap table too, which I should have it caveat added in my tweet.
Stephanie:
I think he said it was beneficial to you guys. So that was a good enough caveat. Yes.
Michael:
So it’s been beneficial to us because first of all, a lot of our initial investors were either parents or soon to be grandparents and people that could help us spread the word. And when you have a large cap table, you have more cheerleaders, you have more people out in the world starting that groundswell of energy around the brand. Especially if they sit within your core demographic. So that’s been really helpful to us. And I have to give a big shout out to my co-founder Greg, because he leads all fundraising for us. We’re both heavily involved in it, but he leads those conversations and relationships. And have a big cap table, you need to have a lot of conversations. And usually that means a lot of Nos so you need to have really thick skin. And our our first Tran of funding came from a lot of different people and then as things have gone on in the businesses, you have seen some great success to this date. We’ve been able to add more targeted strategic partners as well, which brings a whole different value to the business.
Stephanie:
I’ve always thought about raising money. I’d rather have people who have a vested interest because they really care about the company, but they also have like, “Well let me tap into something that I can’t get otherwise.” Because anyone can just go get a loan or money, maybe not anyone, but there’s always money around, but finding someone who can actually like push your business forward and give you access to things you couldn’t have before is way more beneficial. But it’s always a trade off, I guess, between how many people are there asking to for things from you after the fact.
Michael:
Yeah. Also the other trade off is the more investor conversations you have in early stages, you have limited time and resources. For a long time we were a team of three doing what we were doing and that’s time taken away from operating the business too, right? So you want to be able to just run your BI business and grow your business and the more time you’re spending fundraising, the less time you have to do that or you’re stretching yourself, you’re working all hours of the day and night.
Stephanie:
So what are some of the biggest bets you’re making right now, maybe around marketing, because I’ll keep going back to that since that’s more of your background. What are some big campaigns or bets or platforms you’re going on right now that you don’t really know if it’ll pay off, but you’re putting some money there.
Michael:
So the biggest bet will always continue to make is on Creative. I think especially with the data privacy updates with iOS, Creative will play a bigger and bigger role with less and less data for targeting. So you have to let your creative do the work. And we think of our creative spend as a function of our paid media spend, for that reason. We think the ultimate lever is how good is your Creative? So we do it down to testing there and we invest a lot there.
Michael:
Other than that, we’re investing a lot in product development to expand our catalog because it’s very clear that our customers want more from us. So we have a lot of new things in the works and definitely keep your eyes out at the top of the new year for some exciting new things. And we’re investing in our team, that goes back to what I said before. Those are the biggest investments. We’re still somewhat of a lean small team doing a lot with a little and to hit the goals that we have for 22 and 23, we definitely need to grow our team with some more great team members.
Stephanie:
So from a product standpoint, how many new products are you guys planning on rolling out? And what does that look like when you’re thinking about developing new products? I’m sure you get a lot of customer feedback, like you were saying earlier. I’m sure some of it can maybe be all over the place because as a new parent people will probably feel like they need everything until you become a parent and then you’re like, “Oh maybe I only need these like five things to be really good.” So how do you think about using customer feedback, but maybe not letting it take you down the wrong path?
Michael:
We opened up something called the Lalo fam advisory council and that was an application process that we opened up to our customers to apply to be on this council to be selected, to be on this advisory council. And within 24 hours we got almost a thousand applications for that council.
Stephanie:
Wow.
Michael:
And the application was, what do you love about Lalo? What would you like to see Lalo improve and what are the products that you’d like to see us make? And on that survey, those people answered over 95 individual baby products.
Stephanie:
What was the craziest one where you were like, “That’s just weird. We’re not doing that.”
Michael:
Everybody wants us to make a car seat, it’s not going to happen.
Stephanie:
So many car seats out there already.
Michael:
We’re good. And we don’t need to do crash testing. We’re good on that. So that counts. First of all, those survey results were extremely, extremely helpful in understanding what does our customer want to see from us? And that’s where it became really clear they want to see more from us in the home. And from there we also whittled it down. We were originally going to accept 10 people into the council. We ended up accepting 15 because we had so many good applications. It was even hard to get to 15. And that council is really, really helpful to us in bouncing ideas and thoughts around and getting different perspectives because it’s made up of a diverse group of parents, both moms and dads all over the country. So we get people in different settings with from different socioeconomic statuses, from different home setups, apartments and houses and everything in between.
Michael:
So that gives us a lot to work with, just from those people. And then we also have an expert advisory council. So these are pediatric experts. So pediatricians, occupational therapists, dieticians, educators, developmental psychologists that we talk to as we’re developing product. So in the early stages of think days of thinking we’re going to make something we’ll often ask them about, what’s should we consider? What are dos and don’ts? What do parents often ask pediatricians? What are the questions you get about this stage, this milestone stage. And how can we solve it? And then we also think about how can we make product extend from one stage to the next because there’s so many products that you use for a finite period of time and then it’s in the trash or tucked in your garage or worse-
Stephanie:
Worse, looking around being like that was a good two month long stint for that product. Great.
Michael:
So for us, if we can extend your life, like our highchair becomes a little play chair after.. If you buy a cheaper highchair and then you amortize that cost over its use, it’s actually more expensive than our maybe more expensive highchair. If our highchair might be 30% more expensive than that other one, but you’re actually getting… On a daily basis, you may pay 9 cents a day for ours versus 30 cents a day for theirs.
Stephanie:
I’m going to look at my high chair, so much differently now. I know how much I’m paying for you a day, but then yeah, you’re moving up to maybe a little chair that attaches to the table and a little booster seat and-
Michael:
Exactly.
Stephanie:
A lot of steps in between. It seems like your advisory councils could be your recruiting funnel. All your people are there.
Michael:
It does help. We do put our open rolls out on there and actually our customer experience team, we’ve had a lot of success. Our customer experience team is led by an incredible woman who leads that team, but is also mostly powered by part-time folks all around the country. Mostly part-time parents and multiple of them are customers that became our employees.
Stephanie:
Let’s shift over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I ask you a question and you have 30 seconds or less to answer. Are you ready?
Michael:
No, but yes.
Stephanie:
You’re so ready. What’s one thing you don’t understand today that you wish you did?
Michael:
Chinese.
Stephanie:
It’s a very difficult thing to understand.
Michael:
I just downloaded Duolingo to start learning. But I wish I spoke Chinese.
Stephanie:
Wow. That’d be a good challenge. If you were to have another podcast outside of the one that you’re already doing, what would that be about? And then what is your current podcast about as well?
Michael:
I think it would be about Michigan sports, University of Michigan sports, diehard fan alum. And our current one is called the Dad Pod and we recorded season one and had some great gas ranging from a super bowl champion to incredible founders, like the founders of Farmer’s Dog and A Kids Book About, and just a great group of people that joined us on that podcast.
Stephanie:
Oh, that’s fun. What was maybe the most surprising thing that came from having that podcast?
Michael:
Oh, I think just like good relationships and friendships out of it. Like Michael Perry, the founder Maple just met some great, great people.
Stephanie:
Yes. I love that. What’s your favorite business book that you think about or refer back to from time to time?
Michael:
Checklist manifesto by Atul Gawande. So I buy that book for my team. Every team member talks about the power of checklists and how checklists are used to avoid the most catastrophic incidents like in surgery or planes. And how they can be extrapolated out to business to avoid catastrophic mistakes in business and life.
Stephanie:
That’s good. I’ll have to check that one out because I love a good checklist. Right. And then the last one, what’s the best piece of business advice you’ve ever been given?
Michael:
I don’t know if I have an exact piece of advice, but both of my parents are accountants. And I think there’s been a lot of companies in the news about profitability and running a sustainable business and I think growing up with two accountant parents has us dead set on profitable and running a really good sustainable business. And I can always trust my dad to hold my feet to the fire on my business decisions.
Stephanie:
Yeah. I think it’s funny you say that and it sounds like something that’s so obvious, but when you look at like all the tech companies over the past, decade, it’s like many of them maybe are just now making a profit or still probably won’t for another 10 years. So I like your style. I’m focused on profit as well.
Michael:
Well, it’s now valued less than the amount of money they’ve raised. So, it’s case in point.
Stephanie:
Don’t want to be that kind of company. So take Michael’s parents advice.
Michael:
That’s right.
Stephanie:
Profitability all the way. Well, Michael, thanks for coming on the show and sharing behind the scenes at Lalo. Really cool to hear what you guys are up to. Where can our listeners find out more about you and Lalo?
Michael:
So to find more about Lalo, you can head to Instagram at Lalo, L-A-L-O or our website meetlalo.com. And you can always find me on Twitter @mwieder, M-W-I-E-D-E-R.
Stephanie:
Cool. Thanks so much.
Michael:
All right. Thanks for having me.
