Does the world really need another subscription box? Do parents really need to buy more things for their kids? Well, when we’re talking about Lovevery, the answer is yes and yes. In the crowded spaces of DTC subscription services and childrens products, Lovevery is making its presence known. On this episode of Up Next in Commerce, I talk to Rod Morris, the co-founder and president of Lovevery, who told me all about the development of the company’s amazing products, and, more importantly, how he and his team went about making them stand out among the rest. It takes a lot of hard work — but it all starts with a complete obsession with creating a brand that you believe in and products that fill a gap in the market. Rod took me behind the scenes of getting press and testimonials for Lovevery, he told me how they create social content that sees engagement that blows the competition out of the water, and we also dug into his tips for fundraising and what the upside is to going public. Enjoy this episode!
Main Takeaways:
- Winning with Connected TV: If you can break format and do something divergent, you will be able to find success in the world of connected TV. People are engaged by unique content, so you should constantly be looking for ways to take wha’s working and flip it on its head.
- Understanding the International Market: When you take your company abroad, there is a steep learning curve to understand how to win customers and take a part of the marketshare. Even if your product works the same wherever you sell it, the process of marketing it and adhering to regulations varies. These are important things to consider and prepare yourself for if/when you are seeking to expand overseas.
- It Takes Heart, Soul and Obsession: The way to keep LTV high and keep growing you need a mix of ingredients. First, you have to truly be obsessed with your product, love it, and constantly strive to improve it. Second, invest in content and reaching the audience you care about with useful and engaging content. Finally, you have to stay connected and work with customers so that they feel invested in the product and the company rather than being on-off shoppers.
For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.
Key Quotes:
“We ask ourselves, ‘Well, what can Lovevery do? What are we uniquely positioned to do to serve this need that we’re seeing in the research themes?’ And so we’ll take that view and we’ll invent net new products.”
“Even after we winnowed down to whatever we’re going to launch with, that doesn’t mean that we’re done iterating. After we launch our products, we’re also rigorously looking at NPS feedback on every single product and every single kit. And then also talking to customers on a daily basis to understand like, okay, did we get this right? Do you love every single thing in the box or not? And there’s always an opportunity to do it better.”
“Before we had made any final product design decisions, we invested a lot of time energy and a lot of our funds into defining the brand. We sought out the best partners that we could find to help us with branding and tone of voice to really establish, okay, what is this, what is this experience going to be for parents? And so we started with that and then we invested a great deal into the products themselves. So our working philosophy was if we get the brand right, we’re going to get the products, right. And if we get the products, right, marketing’s not going to take care of itself, but you don’t have nearly as good a company if you lean into marketing first and you don’t nail it with a branded product.”
“Wery early on, we did our best to take advantage of other people’s testimonials posts and articles about us. And, I was making, making our ads on apps on my iPhone.”
[On how to succeed on connected TV]: “One thing that’s consistent is if you can break format, if you can do something that’s divergent, that’s not what people are seeing over and over again, that’s going to be successful. The other thing that’s different is a 30-second spot is the sweet spot for connected TV while on paid social, with 15 second spot, you can often do what you need to do and need to get that done faster. So I would say a little bit longer and, but continue to break the format.”
“We have a pretty large business at this point in the U.S. and we have tons of inbound demand coming from international markets, so we’re starting to move into international markets. So then [the consideration] was, ‘Okay, well, which international market offers us the most opportunity with the best ease of execution?”
“[With] Asian markets, the jury is out on figuring out what we’re going to do for each of those, but what we found in Europe and the UK, which I think will, in some ways be the case in Asian markets, is basically babies are babies everywhere. And the way in which humans develop is fairly universal.”
“We try to make really great individual products that we can sell in different places. So for example, when we launched the business, we didn’t have enough money to design and manufacturer all these different SKUs for subscription, because we design everything ourselves. We’re not curating other people’s stuff. So we launched a play gym. It was the most registered for item for parents of babies and it had a lot of developmental aspects and that product continues today to be a meaningful contributor to our business financially. But perhaps even more important, it’s a product that makes people aware of the brand. And that’s really how we try to think about it, whether we’re talking about the play gym, or we’re talking about our recent exclusive launch with Target… what we’re trying to do is create a quality experience in that individual product and, and do it in a way that onboards people to the brand where they want to like learn more.”
“The most important thing that we did was invest in creative capacity to create more and different kinds of ad creative…[we believed in] the importance of not only creating really great creative, but doing it at a high velocity and making sure that we’re divergent in that we are creating lots of different kinds of concepts and then leaving our channels as wide open as possible to take that creative in and determine what’s going to be successful. I think before we started doing that, we probably had a little too much structure in our campaigns and we were relying too heavily on a handful of concepts that had been successful over and over again for us instead of really getting creative.”
“One thing that I would say has been important for us is we have a pretty robust influencer marketing team that is reaching out to influencers on Instagram, YouTube, TikTok, et cetera, and making sure that they get Lovevery products that they can experience so that if they want to, because we don’t pay for posts or stories, but if they want to, they can share about their experience. And what happens when we do that is we get a tremendous amount of UGC that we can use in ads.”
Bio
“Roderick Morris is Cofounder and President of Lovevery. Rod’s areas of focus at Lovevery are revenue growth, digital products, and finance. Lovevery’s stage-based information and play products are designed by child development experts, and have won awards from TIME Magazine, Fast Company, Red Dot, and Parents’ Choice. The company isbacked by Maveron, Google Ventures, Reach Capital, the Chan Zuckerberg Initiative, Collaborative Fund, and Founder Collective.”
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Stephanie:
Hey, everyone. And welcome back to Up Next in Commerce. I’m your host, Stephanie Postles, CEO of mission.org. Today, on the show, we have Rod Morris, who’s a co-founder and president of Lovevery. Rod, welcome to the show.
Rod:
Thanks. Great to be here.
Stephanie:
Glad to have you. I’m so used to always just saying, “Oh yeah, CEO [crosstalk].”
Rod:
I know.
Stephanie:
I’m glad-
Rod:
Well, my co-founder and I were like super careful about it always. We’re 50/50 partners in the business, but she’s definitely CEO and the face of the business and all consumer context. And so, it’s important that we always make that clear.
Stephanie:
Good. Well, thankfully, we have awesome audio engineer who can make this sound great afterwards so, cool.
Rod:
I’m sure.
Stephanie:
So, okay. You guys sent me some amazing boxes. To be honest, I’ve not heard of you before this. And I feel like I should have having three kids under the age of four. I’m always kind of out searching for actually good play kits and things that are not just plastic toys that are going to lay around and get jumbled. And so, you sent me these beautiful four boxes that are age based. And honestly, it’s the best thing I’ve received in the past three years.
Rod:
Oh thank you.
Stephanie:
So with that, I want to hear, how did you come up with the idea of Lovevery and what is it?
Rod:
Yeah. Sure. Well, that’s first off, I’m really glad you like everything and just congratulations for holding it down with multiple children while you’re running this whole thing. So-
Stephanie:
Thank you.
Rod:
… Lovevery, we think of ourselves as an early learning program for children and their parents, right? And so, our flagship offering is a subscription that we call the play kits. And if you have a baby, you get a play kit every two months. If you’ve got a one year old or older, you get one every three months. It’s a little bit bigger, a few more things. But it includes toys and books and other learning tools for your child. And then, it’s got a guidebook for the parent. That’s all tied into how your child is developing at that given moment and what they’re hungry to learn.
Rod:
We also have a mobile app for parents that’s got even more information if they want to dig in even deeper or connect with experts. And so, that’s the core of the program. We also have some individual products that we sell, mainly as an exercise to make people more aware of the brand. And the idea was one that my co-founder, Jessica, had when she was busy, kind of in the midst of running her last startup, which was a baby food company called Happy Baby.
Stephanie:
Oh yeah.
Rod:
Heard of that? She co-founded that business and was in the process of getting it ready for sale, and had had her first child and was just having trouble sort of connecting with her child using just the toys that had been gifted to her. And didn’t really understand fully what was going on with his developing brain. She knew what to feed him, but not what he needed for learning. And a friend gave her a PhD thesis, believe it or not, that had a survey of all the published child development research with suggestions around things you could do that would be age appropriate for your child to help their development.
Rod:
And when she dug into that, she realized it was, A, like really it worked. It was something that made everything click for her. And then, B, it was very different from what was available in stores. And so, she and her husband started making products and sourcing stuff from Montessori schools and things like that.
Rod:
Now, I’ve known my co-founder for more than 20 years. I’ve known her basically a week less that I’ve known wife, because she and my wife were best friends from high school and they were roommates after college, working in the same city. And so, Jess and I have known each other for a long time. I, at the time was busy taking a company public. I was running half of a business called Opower. It was a software business that helped consumers save energy.
Rod:
And so, we had been kind of using software and messaging to compel people to save enough energy, to take a couple cities off the grid. And I was getting that business ready for IPO. And I had just gone through the early phases of parenthood with my twins. One of whom is dyslexic. So I was super tuned into kind of the ways in which children learn, kind of the impact I can have as an involved parent. So when Jessica told me that, “Hey, this stuff that I’ve been kind of learning. I’m thinking about turning this into a business and maybe a subscription business.”
Rod:
I was like, “Well, I love subscription businesses. I love being part of something submission driven, why don’t we do this together?” And that was kind of, I guess about seven years ago when we had that conversation. And then, fast forward a few years and we had kind of launched our first product. And then, we had launched subscription. And today, the business employs over 200 people.
Stephanie:
Wow.
Rod:
We’ve got a run rate north of 150 million and we’re selling subscription around the world. So it’s come a long way in a short time. And I’m-
Stephanie:
Yeah. I say so.
Rod:
Yeah.
Stephanie:
Wow. Okay. So when you’re talking to your wife about hopping in with her best friend in business, what’s kind of the thought around that? Was your wife kind of like, “Whoa, don’t take my best friend and pull her into something that I’m not going to be able to have time with her?” What were some conversations?
Rod:
Yeah.
Stephanie:
I haven’t heard that happening too often.
Rod:
Yeah. It’s funny because I think when I went into it, I thought this is going to be great, because I’m going to set it up so that my wife and her best friend can be in the same city, and I’ll have more control over my life because I’ll be a founder that are working for somebody else. But I think my wife was smarter than I was about thinking about all the complications and kind of talking through those.
Rod:
So what I would say is all the benefits that we expected, those definitely have been true, but it’s also not been without its challenges. Meaning work can kind of take over and it becomes more complicated if I’m working with my wife’s best friend, I would say. So I wouldn’t say it’s perfect. On the other hand, I don’t know, trust is really important to a partnership, and because Jessica and I have known each other for such a long time and because we have these other dependencies, I think there’s a high, high degree of trust and alignment.
Stephanie:
Yeah. So what I loved about Lovevery too was it also made me realize I was kind of lumping all the toys together. I mean I’ve got a three and a half year old, and I’ve got twins that are 19 months, and they were all just playing with the same toys. And what was so interesting was I got your puzzle out, which it actually is quite hard when I was thinking about like trying to figure out like, “Oh, there’s many ways that you’re supposed to be matching this puzzle piece together.”
Stephanie:
And seeing my three and a half year old do that, it was kind of this aha moment of like, “Wow, I’ve been keeping him at the same level as my twins. They all just play together.” Which can be nice, but I wasn’t challenging him enough, which was just great now that I have this new set of toys. I mean tell me about how you come up with the stage based learning or I’m guessing your co-founder does a lot of that too, but how do you know when to release new products and grouping them in ages? It just seems so interesting.
Rod:
Thanks. Yeah. And it really is. We find that it’s… What’s interesting is, and maybe you saw this with your oldest is when you give them something that is tied into what they’re wired to be wanting to learn right at that moment, it just becomes like what they’re really, really into, and they get obsessed with it if it’s like tuning into what they really want to do at that time.
Rod:
So I guess there’s like three phases to how we think about this. So the first is we always start with the research. And so, there’s a whole range of research around child development from scientists, neuroscientists, practitioners in the field around like at any given age, what is a child trying to learn? So for a three year old, it’s really all about sort of independence and figuring out kind of like who they are and what they want to get for themselves.
Rod:
And it changes with every given year. It changes kind of across a given year as well. And so, we take all that research and we build it into themes. And then, the second thing that we ask ourselves is, well, what can Lovevery do? What are we uniquely positioned to do to serve this need that we’re seeing in the research themes? And so, we’ll take that view and we’ll invent net new products. We have a ton of really talented designers and engineers on staff who come up with different products.
Rod:
And we’ll also look at products that are out there, either being used by specialists like folks who work with learning differences or occupational therapists or other practitioners who maybe aren’t mainstream to everybody, but they’re doing something that’s actually pretty cool and interesting to any kid, if they get their hands on it. And then, we kind of take a survey of anything else that’s working out there, maybe things that are DIY that we could make safe, baby safe and make ourselves.
Rod:
And so, we build a thesis around, okay, we have the themes and we think through, “Okay, these are the products that we think would be relevant that we could make.” And it’s always more products than we actually are planning on launching with. And then, we go through a very iterative process of home studies of prototypes. So we have a full prototyping capability in our offices in Boise, Idaho. Lots of different kinds of machines and 3D printers and things like that.
Rod:
And so, we’ll construct different prototypes. We’ll do home studies with families from all different walks of life, and we’re going to be studying in any situation for an extended period of time, so the child has enough opportunity to really kind of notice the toy and spend time with it. And also so that the parents have enough information where they could say, “Yeah. This was great or this didn’t quite work.”
Rod:
The other thing I would say is even after we then winnow down to whatever we’re going to launch, that doesn’t mean that we’re done iterating. So after we launch our products, we’re also rigorously looking at NPS feedback on every single product and every single kit. And then, also talking to customers on a daily basis to understand like, “Okay, so did we get this right? Do you love every single thing in the box or not?” And there’s always, an opportunity to do it better. And so, we’ll do refreshes from time to time to tune up every box and try to get it as perfect as we can.
Stephanie:
Wow. Okay. So when thinking about launching in the very beginning, I mean every new company is trying to figure out ways to get found. So how did you go about acquiring new customers, having them pay attention to a new subscription box, which a few years ago there were so many, it was very, very competitive. Even now, I feel like it still kind of is, while also keeping your standards and quality very high? Which at least today when I got this, I’m like, “Wow. All wood things and very nice materials.”
Stephanie:
Like I said, I was very blown away by the quality level as well. How did you kind of balance all of those when launching the company and growing it?
Rod:
That’s a great question. So I think when we started, before we had made kind of any final product design decisions, we invested a lot of time, energy, and for us, a lot of our funds into defining the brand. So we sought out the best sort of partners that we could find to help us with branding and tone of voice to really establish like, “Okay. What is this experience going to be for parents?”
Rod:
And so, we started with that. And then, we invested a great deal into the products themselves. So our working philosophy was if we get the brand right, we’re going to get the products right. And if we get the products right, marketing’s not going to take care of itself, but kind of like you don’t have nearly as good a company if you like lean into marketing first and you don’t nail the brand and products. So we spent, including myself, just a tremendous amount of time on those early products and on the brand.
Rod:
When it came to marketing and awareness, what that meant was we had limited funds. And we didn’t have nearly as built out a marketing capability as we did a product capability. And so, a couple of things that we did. So one was, as you would expect, it’s kind of a standard story. A lot of emphasis on PR and connecting with influencers, but on a budget that’s kind of interesting, right? I mean we weren’t paying any influencers. We still don’t pay influencers today, but we hired a publicist who was well connected to celebrity stylist and kind of other influential people who helped us gift free product to folks ahead of the launch of our first product. And then, ahead of the launch of our subscription as well.
Rod:
Our first product was a baby Play Gym. And then, as an example, I remember, Jessica and I, we wanted to do as much press as we could. And there was like a trade show in Las Vegas for a product, and we were like, “Okay. Well, we’re not going to buy a booth, but this is where all the press are going to be. So let’s just buy tickets as if we’re just audience, just sort of customers going to the trade show, and then to try book press interviews.”
Rod:
And so, I went with our first product, the Play Gym, kind of tucked under my arm and we just sort of like said, “Hey, we’ll meet you at this booth. We’ll meet you at that booth.” Then, we just sort of like hijacked other people’s booths and-
Stephanie:
That’s great.
Rod:
… chased reporters down. I think our best interview was when my co-founder Jess cornered a writer for PopSugar in the nursing room. And she was captive audience for like 40 minutes and opened the product up. And so, we did stuff like that. And then, came to like paid media, we found really quickly if you’re a new brand, it’s all about social proof. It’s all about people seeing that other people are doing something. And it’s also all about explaining.
Rod:
And so, very early on, we did our best to take advantage of kind of other people’s sort of testimonials, posts, articles about us, and I was making our ads on like apps on my iPhone basically. Today, we’ve got a very large creative team that does a much better job on this, a very professional growth marketing org. And we crank out hundreds of ad variants kind of every month. Like there’s tons of ad variants going on across lots of channels, Facebook, Instagram, of course, but connected TV, YouTube, et cetera. And it’s a much higher quality of creative, but when we started that’s how we thought about it.
Stephanie:
Wow. Okay. So now that I’ve heard about these, you have a big growth team and creative team, what channels are you all leaning into or trying out right now, maybe betting big on? Is there anything new that you’re looking into outside of the more traditional channels like Facebook and Instagram?
Rod:
I would say that for us, because we’re so specific about our brand and we care so much about our brand. It was a really big leap to get onto connected TV. I think it’s like less scary for some people, but we just really cared about getting things right with our brand. But connected TV has been great for us. We talked to other founders who were having success on that channel. And I would say probably it’s emboldening us to kind of probably do linear TV after that.
Rod:
Now we have more and more products. There’s more likelihood that the people who see the ads are going to be likely customers. So I think we’re feeling good about TV channels.
Stephanie:
Yeah. Okay. What are some of the differences when you’re going to connected TV? What were some of the learning lessons there jumping from maybe Instagram ads to then connected TV?
Rod:
It’s funny because one thing that’s consistent is if you can break format, if you can do something that’s divergent, that’s not what people are seeing over and over again, that’s going to be successful. The other thing that’s different is the spots tend to be kind of like a 32nd spot is kind of sweet spot for connected TV, while on paid social with a 15-second spot, you can often do what you need to do and need to get that done like faster. So I would say a little bit longer, but continue to break the format.
Stephanie:
Cool. Okay. You mentioned you had 250 employees now?
Rod:
Just under 250, I would say. Yeah.
Stephanie:
Okay. So how did you think about growing that team? And what are some lessons you would give maybe new founders who are maybe scaling quickly? How did you know when to have a growth team versus creative versus I know you have engineers, because you have software? What did that look like scaling up?
Rod:
Yeah. It’s a good question. I wish that I had a super structured, brilliant answer for you. I guess some concepts I would say are important for us are, one, kind of the trite… Everybody says like slow to hire fast to fire and kind of hire A players, B players, hire C players kind of thing. What does all that mean? I think we definitely don’t always get it right, but we try to hire kind of the strongest possible people that we can in their respective disciplines and give them room to maneuver to identify like, “Hey, if you want to do this right, if you want to do this best in class, this is what your team needs to look like.”
Rod:
It’s really a strategy that’s focused around finding the best people in their disciplines and giving them room to run. In terms of how we prioritize what teams we build first, I think Jessica and I both sort of are very aligned around like, “Okay, we’ve nailed this. We got to nail this next, and then this next.” Right? And sometimes it’s super logically, right?
Rod:
So I’ll give you an example. We have a pretty large business at this point in the US, and so now that we’re pretty well established in the US and we have tons of inbound demand coming from international markets, we’re starting to move into international markets. And so, then it was, “Okay, well, which inter a market offers us the most opportunity with the kind of the best ease of execution and we’ve got a GM we can do it with?” And for us, it was Europe and UK.
Rod:
So we launched with a couple of products, just individual products, first, a little over a year ago in Europe and the UK. And then, we launched subscription on our subscriptions offer play platform in August in Europe and the UK. And then, and now that we’ve kind of proven out that, hey, that seems to be working. We just hired a GM for Asia. And so, we’re like working on our strategy now around like where do we prioritize first in Asia?
Rod:
And again, it’s really all about like ease of execution and capital efficiency versus how big are different markets we could go after? And putting those things together.
Stephanie:
Got it. I can imagine, are you having to change the play kits based off of where you’re going? Because I’m sure people in Asia maybe don’t have the same kind of educational style that maybe we do versus UK. And also, we’ve taken our educational style from other countries too, like what’s popular here. So how do you think about those play kits when you expand internationally?
Rod:
So I’d say like Asian markets are still like the jury is out on figuring out like what we’re going to do for each of those. But what we found in Europe and the UK, which I think will in some ways be the case in Asian markets is basically babies are babies everywhere and the way in which humans develop is fairly universal.
Rod:
So in terms of the products themselves, other than language or in the US, we have a book about a child seeing a pediatrician and children don’t go to pediatricians in Europe. Right? So things like that, we’ll change products a little bit. The main thing really around product for us has been making sure we’re complying with the local regulations around everything from kind of safety, quality, to kind of how we describe the materials and things like that.
Rod:
So we always do that, but we’re fortunate in that kind of we’re still selling products for babies and young children and they’re the same everywhere. I think when it comes to the marketing, even the marketing concepts themselves, the ones that perform highest in the US are often the ones that perform highest in Europe and the UK. We’ll see how that goes in Asia. Marketing channels are different in Asia, much more different in Asia than from the US than European ones are from the US. So I think there’s going to be a ton for us to learn.
Rod:
On the other hand, the level of demand we’re seeing from Asian markets is pretty massive. So I think we will have lots of trade off decisions to make around where to localize and where not to. And I think it’s just going to be, again, all about what’s going to give the customer the experience that they want and do it in that’s capital efficient for us going after the market, given the size of the market.
Stephanie:
Got it. Yeah. Makes sense. When it comes to the app that you guys built, I mean what kind of traction have you seen around that and how do you kind of keep people coming back and wanting to use it? What kind of engagement did you set up on that platform?
Rod:
Yeah. So really the app is built around your child’s age. So depending on how old your child is, you’re going to be seeing a certain set of content and you’re going to be cohorted with other people whose child is the exact same age within like a month of yours. And so, you’re all going to be accessing the same content. You’re all going to be asking questions of experts around the same kinds of topics, and then seeing Q&A live with experts.
Rod:
And kind of our point of view has been that if we can just do that, if we can just be super relevant and efficient with your time, then we’re going to be highly engaging. And so, we’d look at all the typical metrics, time in the app, L-28, and things like that. And while I don’t want to disclose specific metrics, I’ll tell you that the engagement has been extremely high, and higher than we expected. And the people really digging into all of the material.
Rod:
I would say kind of similar to our physical products. We spend a long time in the developmental stages of this app before we launched it. We had stop some starts. We did multiple design sprints, lots of prototyping. So I would say it’s a pleasant surprise to see the level of engagement be really high, but we’re not shocked that there’s good engagement now.
Stephanie:
Yeah. I mean I’m definitely not surprised. I think back to this app that I had when I was pregnant, it would tell you, here’s what’s happening to the baby every week, and every week I would go in there and kind of see like, “Okay. How big are they? What’s happening? What’s developing right now?”
Stephanie:
And then, once they were born, I was kind of like, “Oh, now what?” And to me, it even more important time, now they’re on Earth, I don’t know know what to do with them. Especially, during that first year. It’s kind of tricky. So yeah. I’m not surprised that the app is going really, really well for you guys.
Rod:
Thanks.
Stephanie:
So when I’m thinking about, you’ve got this app now, you have people in the subscription programs as well, and you also sell one off products too here and there. How do you think about balancing, wanting people to probably be in a subscription just because that’s easier, more helpful, and it’s more predictable, and then also having one off products? How do you view those two?
Rod:
Yeah. So what I would say is when we think about the subscription and the app, we think of those as all part of one program for families, right? And so, and that’s the core. We want to have a direct relationship with our customer. We want them on the program, because that’s going to be what’s best for their child. And what’s going to kind of like involve them the most deeply with Lovevery.
Rod:
So that is the aim of everything that we do. That being said, we try to make really great individual products that we can sell in different places. So for example, when we launch the business, we didn’t have enough money to kind of design and manufacture all these different SKUs for subscription, because we design everything ourselves. We’re not curating other people’s stuff.
Rod:
So when we launched the Play Gym, it was the most registered for our item for parents of babies and it had a lot of developmental aspects. And that product continues today to be a meaningful contributor to our business, financially. But perhaps even more important, it’s a product that makes people aware of the brand. And that’s really how we try to think about it. Whether we’re talking about the Play Gym or we’re talking about our recent exclusive launch with Target where we created some SKUs specifically for Targets around the country.
Rod:
What we’re trying to do is create a quality experience in that individual product and do it in a way that kind of onboards people to the brand where they want to like learn more, because they like this experience that they’re having, where they’re actually feeling more informed about what their child wants to do. They like the way that it looks in their home. And so, they become more aware of Lovevery. They spend time with us maybe online, and then they ultimately become subscribers or at least start consuming more of our content.
Stephanie:
Yeah. What kind of metrics are you looking at when it comes to the subscription program?
Rod:
All the ones that you would expect.
Stephanie:
All the normal ones?
Rod:
So we look at retention very carefully and we look at, okay, how do we retain somebody depending upon what kit they come in? How do we retain somebody depending upon how they’ve purchased the kits in the very beginning? We look at now that we have them on a mobile app as well, there’s a lot more event data that we have to really understand. Like, “Are we giving them a great experience?”
Rod:
So those are all the things that you would expect. And then, of course, for acquisition we’re looking at CAC a million different ways. One thing we’re proud of with CAC and with the way that we acquire customers is about two thirds of our customers are required through organic means.
Stephanie:
Wow.
Rod:
Which kind of at this stage in scale, for us to see a persistent sort of organic kind of growth going on-
Stephanie:
That’s amazing.
Rod:
… [crosstalk] proud of. Yeah. And it speaks to the… We put a lot of love into the products and into the content and I guess kind of our customers are responding to that and talking to each other about Lovevery.
Stephanie:
Oh yeah. I can see why. After I got this, I’m like, “Oh, every new friend that’s pregnant, they’re going to be getting this.” I mean it’s also such an easy thing to gift and not even have to think about it, because how often do you go to the store and you’re picking out a bunch of random things? Like, “Oh, I feel like my baby needed that or they needed that.” But yeah, so nice to be like, “Here’s a whole subscription and you’re good.”
Rod:
Thank you.
Stephanie:
Yeah. So the other thing, I mean when thinking about, I know I was asking about metrics, but have there ever been a subtle tweak that you’ve done in something that’s kind of given you a very surprising outcome? Where you’re like, “Oh, we changed this one thing when it came to customer acquisition, or within the app we did this,” or anything that was a smaller tweak that had big results?
Rod:
I think probably the most important thing that we did was invest in creative capacity to create more and different kinds of ad creative. And that was really an effort that was led by our head of growth marketing, Alex, who had previously been running acquisition at Allbirds and had worked in [inaudible] before that.
Stephanie:
Nice.
Rod:
So he knew he’d forgotten way more about growth marketing than any of the rest of us had ever learned. And he was pretty firm about the importance of kind of not only creating really great creative, but doing it at a high velocity and making sure that we’re divergent in that we are creating lots of different kinds of concepts, and then leaving our channels as wide open as possible to take that creative in and determine what’s going to be successful.
Rod:
I think before we started doing that, we probably had a little too much structure in our campaigns and we were relying too heavily on a handful of concepts that had been successful over and over again for us, instead of really getting creative. And also, kind of like hiring a team that could give us the capacity to do that.
Stephanie:
Got it. Okay. So when you say that you were too structured before, what were you doing before? And then, what new things did you start trying?
Rod:
Well, I would say like on Facebook and Instagram, for example, we just were really specific and targeted about who we wanted to see our ads and who we didn’t. And we completely changed that to just make it wide open and let the algorithm determine who should see it. And then, when it came to ads, we just started brainstorming as a company around ad creative on a much regular basis, and then staffing up video people, designers, et cetera, so that we had the capacity to be able to crank out a lot of different kinds of ad creative, kind of all at the same time, and drop them in so they could compete with each other.
Stephanie:
Got it. Okay. So I’ve heard companies saying a couple times on the show that coming up with enough ads is very hard. We had one CEO come on and was saying that essentially her design team would be crying every week because they had to create so many. So are there any tools that you guys are using or trying out right now that you or Alex are loving or is it really all just in-house, like [inaudible] is creating everything?
Rod:
I mean we do it all in-house. I mean 95% of the ads that we’re making and running are ads that we’ve made in-house in Boise, Idaho.
Stephanie:
Nice.
Rod:
I think we invest a lot in our capacity. We do a ton of photo and video shoots like every single month. We’re constantly creating stuff. I guess one thing that I would say has been important for us is we have a pretty robust influencer marketing team as well that is reaching out to influencers on Instagram, YouTube, TikTok, et cetera, and kind of making sure that they get Lovevery product that they can experience it so that if they want to, because we don’t pay for posts or stories, but if they want to, they can share about their experience.
Rod:
And what happens when we do that is we get a tremendous amount of UGC that we can use in ads. We do use a platform called GRIN for managing our outreach to influencers. So that would be an example of the technology.
Stephanie:
Got it. How have you seen celebrities impacting the awareness? Because when I was searching your name, of course, a lot of celebrities are talking about you all. I’m like, “Hmm, how has that impacted [inaudible] company?”
Rod:
Yeah. I mean we’re flattered, right? When Gigi Hadid or Shane Mitchell or Ayesha Curry or Mandy Moore are-
Stephanie:
Mandy. I love her.
Rod:
Yeah. Just sharing our products and talking about the experience. I think what’s cool for us is that because it’s not an ad, right? Because they happen to get our products, either we gifted it to them or somebody else did, their post is super genuine. And it’s actually in many ways very similar to the post that you would see from maybe a stay-at-home mom in Oklahoma. Right?
Rod:
They’re noticing the same stuff. Their child’s noticing the same stuff. For the brand, I think it’s, it’s definitely helpful. And it definitely raises awareness. Generally, when we look at acquisition between 10% and 20% of our subscribers joined because they became aware of the brand due to somebody that they follow. So it’s a meaningful contributor and kind of beyond that, I would say it’s also helpful with earning credibility with press, because press is always more interested in writing about you if they can also kind of mention famous people who are into the products and into the brand.
Stephanie:
Yeah. I’d say so. I mean there was this chart that I saw, we were showing the lifetime value of you all versus two competitors. And you guys were like really a lot higher than the other two. And of course, my first question is like, “Okay, what are you all doing to keep that lifetime value continuing to increase while the other two, maybe similar companies are pretty flat?” Is there anything you can share there around why you think you’ve grown so well and kept that LTV so high?
Rod:
Yeah. I mean I don’t know. Off the top of my head, I’ll mention a few things and they might sound trite, but I really think that these are important. So, one, this is going to sound the most trite, but it’s really hard to overstate just the amount of heart and soul that we put into every single product and every piece of content that we publish into the customer experience. I mean we, as a company, at every level in the company, we’re obsessing over every word. We’re obsessing over every element of every product. After it’s in market, we’re obsessing over it again. If a customer’s unhappy about something, we go out of our way to try to make it right.
Rod:
And so, I think that that just shows up. That shows up in the brand. On our social posts, there’s engagement levels on our Instagram, for instance, are much higher than some strong leading brands, not just in early childhood, but kind of across the board, because I think people respond to that. And then, they bring their own heart and soul to the conversation. And so, I would say that’s number one.
Rod:
Number two, I think is the fact that we do invest so much in content. And we recently hired a GM for our content business that we’re going to really build up. And I think because we’re investing so much in content and obsessing about that content, we have tremendously high like click-to-open rates when we send emails to customers about their child’s developmental stage. We got great engagement on the app. And people see it as more of a system when they’re really integrated content specific to their child’s age.
Rod:
And then, I think the third thing that’s really important is we co-create with our customers. Right? So when customers give us feedback that they’d like to see, for example, more indigenous peoples represented in our book sets, right? We go out and we make a book. When a parent says, “Hey, I have a child with a limb difference and I’d like for her to be able to see children with limb differences in books.” We make that book. We believe that our books can be both mirrors and windows.
Rod:
So an opportunity for children to see kind of other experiences that are different from theirs, and then an opportunity for children to see themselves as well when maybe they don’t typically in other books. But those are just some small examples. There’s a lot that we do working with our customers to make these products. And so, the customers feel invested in what we’re doing. And I think loyalty follows from that.
Stephanie:
Yeah. I’d say so. Are you closing the loop with the customers after they ask for these things even if it takes maybe six months or a year to get out into print? Are you kind of circling back with them saying, “Hey, go to page seven and 12 to kind of see the differences that were made because of you?”
Rod:
We absolutely do. I mean if there’s a customer who has individually had a conversation with us and often it’s with my co-founder, Jessica, that they might have a one on one conversation, then there will be follows and it could be that that customer even ends up with them and their child in a photo shoot and on a product. Right?
Rod:
If it’s kind of a larger discussion that we’re having with our customers on social through Instagram stories or somewhere else, then, we’ll typically follow up and explain what we’re doing with a blog and with Instagram stories.
Stephanie:
I love that. All right. So I want to shift gears a little bit into money, raising money, taking on debt. I’d love to kind of hear your thoughts behind when to raise money and when to take on debt? Because you have some very good investors and a lot of companies that come on the show, they, sometimes I hear a little hesitancy around getting investors. Of course, I don’t want to give away equity, want to just build profitably. And I want to hear kind of how you thought about that process.
Rod:
Yeah. I mean I think it’s admirable folks who are able to bootstrap like huge businesses. I think it’s very, very rare to even be able to build a big business. And then, if you can bootstrap that, that’s really unusual and kudos to them. For us, we knew when we were in our kind of like seed funding stage, trying to raise money, we were telling investors that we were going to build a billion dollar brand with Lovevery.
Rod:
And some people got it, a lot of people didn’t, but we’ve been committed to that from the beginning. And given that we’re selling physical products as a major part of our business, that’s a business that takes some serious cash to build. There’s also digital ad markets. So CAC also takes a meaningful amount of cash to build. And so, we always knew we were going to have to raise money.
Rod:
And I think we just did our best to try to do that in cycles where we’d raise some money on the premise that we were going to get to some next inflection point in the business. And we knew that if we got to that next inflection point of the business, it would be way more valuable. And so, the next time we would raise money, it would be less dilutive for us and we would have more options of different things that we could do. And that’s the way it’s worked out.
Rod:
I mean we’ve done seed funding, series A, series B, series C, and it’s been that way all the way across. And then, when it comes to debt, my co-founder and I, we hadn’t really thought about debt when we started the business. And one of our early investors, a firm called Founder Collective, the partner there, Micah Rosenbloom, who himself was a former entrepreneur, pulled us aside kind of and said, “Hey, you really should think about debt. You should think about incorporating that into your capital structure because it’s not a smart use of money to just be funding all of this working capital for physical products with equity. And I think you’ve got a business that can be funded with debt as well.”
Rod:
So kind of beginning with when we were sort of series A, we started adding a debt component to the business. So we started off with like a million in kind of debt capital. And that has since grown kind of quite a bit over time. We’re not upside down in our balance sheet structure or anything, but we’ve seen debt as an important component to go alongside equity as we build the business.
Stephanie:
Got it. I could see it also having like a big mindset shift too being able to have access to new funds as well, because to me when you’re building in such a scrappy way, I think it can also keep your thinking small. But how do you go about finding good investors? Because there’s the ones that can just offer money, and then there’s ones like, it’s Micah, right? That can offer great advice, and even if it’s not in his best interest. How do you find those good ones?
Rod:
Yeah. We’ve been blessed with a lot of great investors who have helped us shape our thinking. And I agree with you. It’s kind of a chicken or the egg thing, thinking big and raising money kind of to fund that are important. But Micah Rosenbloom of Founder Collective, [inaudible], Jennifer Carolan at Reach Capital, education focused fund. Jason Stoffer at Maveron, which led our series B. Vivian Wu at Chan Zuckerberg Initiative, Laura Melahn at Google Ventures, at the Chernin Group TCG, we’ve got Michaela Venuti and Mike Kerns. And I’m sure I’m leaving some folks out, but-
Stephanie:
It’s a baller list though. Just saying.
Rod:
It’s a good list and I think we’ve been fortunate. I would say that the part of it that wasn’t luck was the amount of work and time that we invested into the fundraising process. And so, our perspective was investors and investor capital are a strategic asset. And also, once you’ve got them, you can’t really get rid of them so you better make sure you like them and you’re align around mission, right?
Rod:
And so, the key to all of that is making sure you have lots of choices so that you can make a thoughtful choice as opposed to having a choice imposed upon you. And so, in every fundraise, we manage it like a sales pipeline and we manage it toward really building relationships with everybody, helping them understand our business, because maybe they’re not going to be interested in our business when they learn more and helping us learn about them.
Rod:
So we really put time into it. We didn’t just view it as a burden. Like, “Oh gosh. I have to do this.” We viewed it as something that we really wanted to get right because it was fundamental to the kind of business we were going to end up with, who we ended up having to invest with us.
Stephanie:
Cool. Okay. All right. So where do you want to be with Lovevery in the next one to three years? What are some moonshot that you’re taking right now, and then where are you hoping to be?
Rod:
Yeah. So I think we view Lovevery as having the potential to be an iconic, transformative, early learning brand that’s worldwide that kind of as much a digital content business as it is a physical product business, the core of which is a recurring revenue relationship with parents. And we see ourselves aging up at least until a child is six years old, potentially beyond.
Rod:
We see ourselves providing more and more specialized services to parents to help them along the way. And we think this can be a really big, really important business that changes the way that people parent. I think kind of if we think about capital structure and how we make that happen financially, we’ve shared with press that it’s our goal to take this company public over the next couple of years. I think for this company to realize its full potential, it needs to tap into public markets for lots of different reasons, for funding, sure, but also to have an interactive relationship with public markets investors.
Stephanie:
Okay. I don’t think many people, maybe some listening, but many wouldn’t be thinking about the benefits of maybe going public. And I know you’ve obviously taken companies public before. This is kind of your area, so maybe if you could touch on that for a bit? Just tell me like what do you see being beneficial other than the funding piece to it, because to me, I hear a lot, of course, think about a lot more regulations and all the other things you have to deal with and kind of the new distractions. So what’s the upside to why to go public?
Rod:
I mean the upside is really credibility, and also for people who really believe in your brand, giving them an opportunity to invest in your brand and see it kind of like flourish and see them benefit from that is a great way of alignment with your customer base. So those are both important aspects. It’s also important for credibility with your supply chain and with new markets that you want to enter.
Rod:
So it’s valuable in all those respects. Also, we’ve got like a lot of an employees who’ve been working really hard on this business and it’s important for us to make sure that we can get the early employees in particular, like compensated for the risks that they took early on. So that’s another thing why it’s important.
Stephanie:
Got it. Okay. Have you been able, like what have you seen in the environment right now when it comes to, I know you mentioned like wholesalers and suppliers and all that, and I’ve heard a lot of brands coming on here and saying there’s been huge price increases and they can’t control costs and shipping’s been a struggle. How are you kind of controlling that as a bigger company, what are some maybe secrets that you have around kind of keeping that a bit more stable?
Rod:
I don’t know that we have any secrets other than that we have a really talent to the operations team and procurement team that are kind of like working hand in hand at every stage of the supply chain. It’s tricky because we’ve got kind of all this growth going on and depending upon when customers come in, it can shape kind of like what the mix is of kits that we need to be producing. But the flip side is like a subscription business is more predictable than some of these other kinds of businesses.
Rod:
So our dedication to subscription actually helps us. So I think it’s just a combination of having a good business model for supply chain, and also just having really talented people who are obsessed with every point across this cycle from source all the way to getting to a parent’s home.
Stephanie:
Yeah. Always comes back to team. I feel like that’s the theme of this interview is like got to have the A players everywhere, growth teams, supply chain, operations.
Rod:
That’s true.
Stephanie:
Completely agree. All right. 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 a minute or less to answer. Are you ready, Rod?
Rod:
I guess so.
Stephanie:
All right. What’s the best piece of business advice you’ve ever received?
Rod:
Gosh. Best piece of business advice. Sure. I would say to be self-aware about your own gaps and to try to hire people who are stronger than you are, kind of in every single gap, whether that’s a behavioral gap or a knowledge gap, an experience gap. I think some people can be shy or intimidated or jealous about hiring people who are better than they are at different things, but self-awareness, and kind of hiring to make up for your weaknesses is super-duper important.
Stephanie:
Yeah. I agree. What’s one book that’s had a big impact on you that maybe you actually keep going back to year after year, every couple of years?
Rod:
Oh gosh. Book. I’m going to say that actually the thing that I keep going back to all the time is not a book, it’s a newspaper. I read the Wall Street Journal every day in paper form, because I want the kids to see that I’m like reading a paper and I read the Economist every week. I just think that like it’s really easy with digital media to just sort of get your brain hijacked around what’s news or what isn’t or what’s going on or be very US-centric in your view. And there’s nothing like print, so I’m just going to say I love print and I love getting regular news.
Stephanie:
Yeah. I feel that. We’re getting print of that as well for a while and I’m like, “This is so much nicer than going somewhere and seeing ads, and then linking all around and one hour later I’m reading something that has nothing to do with what I should be looking at anyways.”
Rod:
Newspaper is actually like a great form factor. It’s usually pretty good. Yeah.
Stephanie:
Yeah. Maybe it’ll come back and become more popular again as old is new again. I feel like it’ll go out of style, and then come back strong.
Rod:
Gen Z. Right? They’ll start TikToking about newspapers and it’ll be-
Stephanie:
And direct mail.
Rod:
Yeah.
Stephanie:
Yeah. All the benefits. What’s one thing you don’t understand today but you wish you did?
Rod:
Oh gosh. Something I don’t understand today, which I wish I understood better. I think I mean probably lots of people say this. I would say I wish I understood crypto better, because, not because I’m like trying to become a crypto billionaire or something, but it just seems like in the last year or two crypto, NFTs, this whole sort of world has sort of taken over for the way a lot of people are thinking about building businesses. And I feel a little bit like I have a blind spot around this. So I would say, I would say that.
Stephanie:
Yeah. I love that. All right, Rod. Well, thank you so much for hopping on here, hanging out and telling us all about Lovevery. Until next time, where can people learn more about you and Lovevery?
Rod:
So just go to lovevery.com. That’s L-O-V-E-V-E-R-Y.com. You can also follow us on Instagram, YouTube, TikTok, anywhere where you get content. We also have a great podcast called My New Life.
Stephanie:
Nice. Amazing. Thanks so much, Rod.
Rod:
Thank you.
