Latest / Founder Mode / De-Risking Brick-and-Mortar for DTC Brands with Megan Berry

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De-Risking Brick-and-Mortar for DTC Brands with Megan Berry · Founder Mode

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And so then I started looking at the permit and I realized that
0:03
if something was under 8 feet and under 50 square feet,
0:07
technically it was not a building.
0:09
Therefore, it did not need to meet building codes or building
0:12
permits. It just, I just needed a sales
0:15
permit and all I need to do is like the business and that it
0:18
was in front of they needed to approve it.
0:19
And then I needed like a seller's license and I could
0:21
pretty much go anywhere I wanted.
0:23
So I was just trying to hack the building permits and that was
0:26
how I designed the kiosk to be able to fit within.
0:41
Yo, welcome back to Founder Mode.
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Where we unpack how founders crush it.
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Jason, DTC brands going physical, I mean, big move.
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I mean, when you're like sort of going from that online thing.
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I mean, me as a software guy, I've been doing a lot of
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software and so very rarely do I work at or sort of participate
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in startups that end up with, you know, a physical office.
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And so super interesting to learn about like when is it time
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to make that shift? And I mean, even for e-commerce,
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right, where they've, you know, spent all their time building
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their brand online, like when do they go, you know, IRL?
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Yeah, it's a. It's an important question.
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I think if you're selling physical goods, your DC brand
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and you're making money and you're like, man, I wish my
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stuff was in that store. Just think, think carefully
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because there's a lot of stuff that you don't see behind the
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scenes happening, whether you're going wholesale into a big
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channel like the Costco's and Targets and Walmart's or you're
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like, I'm going to stand up my own flagship store.
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It is expensive, right? It is very expensive.
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And it's so this this one's exciting because we're going to
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talk about how to do it on the cheap and kind of test the
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market much in the same way we run all sorts of experiments
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online to best if something's working before we go and make a
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big investment. Yeah, let's talk about, let's
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talk about your, your experience on this.
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You know, your software guy, right?
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But, you know, any brands come to mind that that you've seen
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make that the make that leap into the physical world?
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Good, good, good or bad vibes? Yeah.
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Nightmares. I was thinking back like I, you
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know, I'm kind of like thinking back when was the last time I
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walked in with a box from the mailbox versus when did I walk
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in with a bag that like came from a store?
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Yeah. And and I would and the
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literally thinking back, it's been a few months, but it was
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AII brought some shorts at brewery.
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I'm like a huge brewery guy. And it was literally sort of
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serendipitous. We were just walking to the mall
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in Vegas and I was like, oh, those are really cool.
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You know, kind of saw it and it's a brand that I've already
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had and worn. In the window you saw it.
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Yeah, like saw some and I was like, that's a cool different
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color or whatever. And then, you know, I was
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basically like going to just take a picture with my phone and
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then just order it online. But for whatever reason, we
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walked in and started chatting. I was like, let's see, what else
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is there because that color was cool.
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Ended up not getting the one in the window, but one that was on
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the raft and they had my size, which is rare to be honest.
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And like, you know, and the line wasn't crazy long, like, you
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know, so it kind of required, like I would say a lot of the
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times you go to a store perfect Storm where I actually purchased
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a pair of shorts and then I came home and I ordered like three
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more of the same time online. And that's, you know, they came,
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you know, three days later. So today we're diving into DTC
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brands, hitting physical retail, doing it smart and not crashing
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and burning. There's huge upside here, but it
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is a different beast. You need a tight playbook.
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Yeah, so we're sitting down with Megan Berry to break it all
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down. Megan is a beast.
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She founded by Reveal, which was acquired in 2021, and now she's
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a partner at Mentors Fund. She's got Harvard and Washu
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degrees, and she LED Starbucks first Reserve store.
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Yeah, she knows Retail Insider now.
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All right, let's talk to Megan. Megan, welcome to Founder Mode.
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Thrilled to have you and you know, want to talk of all kinds
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of things, brick and mortar, DTC and yeah, just excited to have
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you and the energy on the pod this morning.
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Awesome. Glad to be here.
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Love what you guys are doing. So it's very exciting.
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Yeah. So let's let's dive into it.
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Megan, your background, which is super interesting, you know,
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from architecture and founding by reveal to your work with
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mentors fund, you have such a unique perspective on the on the
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topic of de risking brick and mortar for DC brands.
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So we're we're excited to dive into it.
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Let's let's kind of hit you with some questions.
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You ready? Always, always ready.
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Let's go. So what was the like initial or
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single insight that sort of convinced you that this pop up
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model could disrupt traditional refill?
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I mean, we've talked in the past and it was just amazing to see
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how that journey. And so I'm curious, like, what
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was that kind of first spark that in your mind sort of kicked
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off but became of it? Yeah, so it was, you know, over
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10 years ago, I was working on my graduate thesis, and I was
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just so amazed that with literally a credit card and
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Internet connection, people could launch a website, a URL,
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and then all of a sudden test and learn immediately.
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They could look at click maps, they could test out skews.
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They could sell their goods globally.
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And it was just such a smooth sale to be able to test and
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learn, to be able to get your products out there.
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Meanwhile, I'm in Graduate School for an architecture
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degree, looking at these projects that take north of 10
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years to do. I'm like, Oh my gosh, in my
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entire life, I'm only going to be able to work on five or six,
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you know, monumental projects. And so there was just like such
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a disconnect between the lifespan of how we build
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buildings versus how quickly technology was evolving.
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And I just, I was like, Oh my God, this is totally diverging 2
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totally different paths. Like there needs to be some sort
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of a middle ground. Yeah, it it was, it was just
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kind of mind blowing too, because you know, you're 20
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something and you're just like, I'm going to change the world,
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you know, like, oh wait, how am I going to do this?
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So. Idealism, right?
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We all, we've all, we've all been there.
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Now we're now we're here. Let's talk about let's talk
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about your architecture training.
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How did that inform the way that you designed the, the customer
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experience when you when you built by reveal?
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And maybe just for those who aren't familiar, just like the
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quick, quick kind of hit on what what is by reveal?
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What was it? So by reveal was a pop up
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company. He basically did small format
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kiosk that got deployed pretty much anywhere consumers were.
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So sidewalks, hotel, corporate lobbies, malls, public plazas,
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parks, pretty much anywhere. And it was this small format
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boutique that could get deployed in under an hour where consumers
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could come touch and feel products and then transact
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directly on site. So I was pretty much just trying
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to hack it and I was like, OK, well, it needs to be something
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flat packed and be able to be able to just, you know, in a
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truck. Basically.
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I was like, I need to be able to rent a U-Haul and be able to
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like get it in there and then get it out and set it up.
6:15
And so then I started looking at the permit and I realized that
6:19
if something was under 8 feet and under 50 square feet,
6:23
technically it was not a building.
6:25
Therefore, it did not need to meet building codes or building
6:28
permits. It just, I just needed a sales
6:30
permit and all I need to do is like the business embedded was
6:34
in front of they needed to approve it.
6:35
And then I needed like a seller's license and I could
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pretty much go anywhere I wanted.
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So I was just trying to hack the building permits and that was
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how I designed the kiosk to be able to fit within those
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parameters. So good.
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And so like what was that sort of KPI that sort of triggered
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like OK, pop ups there it's activated like when is it ready
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to scale into a permanent store? What is that indication that
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like, well, it's ready to go to the next step?
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Well, my business was pretty much all on only pop ups, so I
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was just convincing clients that they always need to test and
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learn and just keep on going. But what we did get to is
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realizing that once you had aided brand awareness with the
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customer and wherever that was, whether if your target market
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was on the East Coast, on the West Coast, in vacation
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destinations, etcetera. Once you had that, then you were
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ready to deploy that large amount of capital which to do a
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good flagship it's a couple $1,000,000 and you're, you're
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set and done. So a lot of it would came down
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to just how can you test and learn in these hyper local
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markets and then create nuances that you could potentially scale
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online with targeted specific marketing campaigns.
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Makes total sense. And for these early D2C brands,
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you know $1,000,000 ARR, how do you think about and you know to
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give them talking to them now founders that are doing this,
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what's the kind of budget and timeline for that first pop up
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to, to de risk the move before they you know, go spend
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2,000,000 on a flagship store? How would you how would you
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advise somebody wanting to do this today?
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Yeah. So I think it's really important
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to understand what are you trying to test and then how can
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you design an experience or piggyback off of an experience
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that is already has some sort of like a time bound initiative
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around it. And so that's why I think a lot
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of these festivals and conferences have really blown
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up. So you think of Coachella, you
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think of South by Southwest, Art Basel, Miami, you know, those
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are areas where you already have your demographic selected, you
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already have these time bound experiences selected.
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And for us, it we found that it was great to be able to
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understand where could we insert ourselves, you know, and insert
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our clients into these experiences.
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So for example, if you spend all day listening to music at South
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by Southwest and you come back to your hotel, you have a couple
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hours to kill before you go out to dinner.
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What do you want to do? Well, the number one thing you
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want to do is you want to sit, you want to relax, you want to
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have a drink. And so we launched a series of
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different beauty brands in hotel lobbies at South by Southwest by
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giving people, you know, a complimentary glass of bubbly
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and they would sit down, they would try on a face mask, They
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would, you know, engage in a product, they would get a Mani,
9:01
pedi, whatever it was. And then we'd be able to give
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them like some sort of gift bag where then we could measure the
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bounce back after the activation or after South by or after, you
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know, those different areas. So I think a lot of brands
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struggle because they decide to go into brick and mortar with
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this idea of this beautiful 4 walls and they're like, oh,
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we're just going to open up a store and then they will come.
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Not necessarily. So you need to be very, very
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hyper specific about who you're going after, why, why you're
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doing it, and then what you're looking to test ideally with
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almost like a teaser, like a subset of the product offering.
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So then you encourage people to come back to either your site
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or, you know, follow you on Instagram or whatever, whatever
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it is. Yeah, it's in fascinating.
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And so how do you judge like a digital native brand
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storytelling? Like how do you know that that
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will translate to a physical space?
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I think you said that it's like you're not just going to go and
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build a flagship, you're going to do something.
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How do you sort of know? Like, hey, they've got a set of
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storytelling that's going to make sense for something IRL?
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Well, a lot of times it doesn't because we usually, I mean, if
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you think about your phones, which is where a huge amount of
10:04
mobile converse transacts, you have two eyeballs and most of
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the time 2 hands and you're completely focused on that
10:09
thing. And when you're walking down a
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sidewalk or you're in a mall or you're shopping in some cute
10:13
little St. you are so distracted.
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You're constantly looking up. Maybe you're with your kids,
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maybe you're with friends you're meeting there.
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So I think a lot of times people need to understand that you need
10:22
to really sort of optimize every single square inch of that
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physical area. You know, a consumer may just
10:28
walk by the front store and be like, oh, that's interesting.
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They'll pull it up on their phone, or they may just walk in
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and be like, oh, this is nice, this smells pretty, I'm gonna
10:34
look at this later. Or they may come in and try
10:37
something on and then decide they want to buy it later.
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So I think those elements are really important and understand
10:42
the consumer journey and knowing that it's not going to be
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sequential, like how you're scrolling in a very sequential
10:48
way online. So it comes back to just picking
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something hyper specific that you can test and say, OK, what
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is the message? If somebody glances at us for
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three seconds, what are they going to receive from that?
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And then are we aligned with what the current mindset is of
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that particular location? You'll notice there aren't a lot
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of great retail stores next to banks.
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Why? Because banks are boring.
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You're never in a good mood when you go to a bank.
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Well, maybe you are, but I'm not.
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You know, it's like I'm trying to get in, trying to get out.
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But you know, when you think about like the best restaurants,
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you think about, you know, great experiences, whether it's
11:20
cultural or what have you, that's where great retail is
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because people are in that mindset of taking a moment to
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pause and they want to walk and they want to see like, oh, what
11:28
is that? What is this?
11:30
And then that's where you have those opportunities to kind of
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insert your brand in a in a great way.
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Is there a non obvious signal that you look for to say, OK,
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we're ready to go to a physical retail presence for a brand?
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Is there something that's like, oh, if this if this bit flips
11:45
now I know we can green light that that physical store.
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Yeah, I think a huge amount of it is dwell time and figuring
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out a particular location, if there's the dwell time that
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supports it. You know, a lot of brands,
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because brands that succeed nowadays, it's beautiful
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pictures. And if you could put together
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beautiful pictures and captivating videos or things
12:05
like that, that's what helps you succeed on online, on
12:08
e-commerce. But in physical retail, it's not
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like that. So sometimes I'll have brands
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where they say, oh, you know, we really want to go to this little
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area and we just think it's so beautiful and quaint.
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And I'm like, yeah, it's quaint, it's quiet.
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That's not good. So we don't want that, you know,
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we want, you know, busy and bustling and things like that.
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So if you can figure out if a location has, you know, a high
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dwell time where people are hanging out there for a long
12:30
time, whether it's groups of people or, you know, families or
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things like that, then you more likely have an opportunity to
12:37
help have your brand discovered in that moment.
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But the in and out transactions, those, those are very difficult
12:42
to be able to have a have an experience that's horrible.
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What assumptions are like sort of brick and mortar CAC like our
12:49
founders getting wrong in 2025? Like what, what, what did you
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mention like the dwell time? Like, are there other things
12:54
that, you know, founders are sort of getting, you know,
12:57
wrong? Yeah, a lot of it is just it's
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matching the consumer experience with the cadence of of purchase.
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So for example, you know, if you're selling socks, you know,
13:07
how many times a year do you want consumers to buy your
13:10
socks? That is probably a lot lower
13:12
rate with a higher quantity versus a aesthetician or some
13:18
sort of a spa service. Ideally with spa service you
13:20
want people coming back every. Week that recurring, sort of,
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yeah. Exactly.
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So it's like if you want people to come back every single month
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or every single three months, like how are you designing that
13:29
consumer experience in order to match that?
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And I think Zara does this really well.
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Like they want people coming in their stores at least once a
13:36
month, so they swap out their merchandise every two to three
13:39
weeks. It gets people coming back in.
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Then you look at some of these department stores and these
13:43
legacy department stores and they're like, gosh, we don't
13:45
understand what's going wrong. It's like, well, you know, you
13:47
don't switch out your merchandise.
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You know, it's like 3 to 6 months.
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It's like, well. The same suits, the same pants,
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the same shoe. Like literally nothing new.
13:55
Right, great. It's like you don't, you've seen
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it once, like you'll come back in three months when they swap
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it out, you know, so, so matching that cadence and if you
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can get the cadence of purchase aligned with a consumer
14:06
experience, then you can really start to see your CAC dive down.
14:09
But a lot of times people get false hope from a pop up or from
14:13
a short term activation because they get a huge amount of people
14:16
coming in and huge amount of people buying, but they're
14:18
buying one time and they haven't really designed an experience or
14:22
helped people understand the value of building a relationship
14:25
up with that brand. And that's where sometimes
14:27
things don't translate well into a longer term, longer term
14:31
store. Let's talk about COVID so, you
14:34
know, contact, I mean. Where I cried every day.
14:38
So many of us did you know, Contactless retail talk about
14:43
how your playbook has shifted to de risk.
14:47
You know, on the flip side, the physical store world in a world
14:50
where you know, the shifting between D to CE com and and the
14:54
physical world, and this idea of the pop ups is kind of a step
14:57
step function there. How do you think about it now
14:59
post COVID? And what's that playbook that
15:01
you would articulate to the founders that are trying to do
15:03
this? Well, I think there's a lot of
15:05
things that have stayed with us. I mean, I think if we think
15:08
about these QR codes, which we all just thought was so ugly,
15:12
really, really another QR code like tapped onto a gift bag,
15:15
really like how are we doing? But most restaurants still have
15:18
the QR codes, like it's still kind of working, right?
15:21
So I think that when you think about contactless retail, it's
15:24
really about how can you have the lowest friction experience
15:28
and the least amount of barriers to entry to help the consumer
15:30
get what they want, when they want it in that little micro
15:33
moment, They have to be able to pop into your store in and out.
15:36
And so that really comes into one, the sequencing, which we
15:39
spoke about, but also understanding, you know, a lot
15:42
of storefronts are designed like a shotgun.
15:43
And so you only have, you know, 1015 foot feet of frontage and
15:47
then it goes back 30 or 40 feet. And traditionally that was
15:50
because people had a lot of inventory.
15:52
They had a back of house inventory.
15:54
Now people don't really need that back of house inventory
15:56
because ideally if you want to have a, you know, low CAC, high
16:00
ROI store, you want to ship to the consumer so you can get more
16:03
data. So you ideally want someone to
16:04
come in, try out all these products and say, you know what,
16:07
ship it to me and then you get all that information, all that
16:09
data. So with stores now it's about
16:12
how if somebody comes in for if somebody just walks by, are they
16:15
going to have a good experience and is the brand message going
16:18
to resonate? If they come in for two minutes,
16:20
are they going to have a good experience?
16:22
Is the brand message going to resonate?
16:23
And then, you know, if they stay for 10 minutes, if they stay for
16:26
20 minutes. And one thing that we also
16:28
realized is, you know what taints an experience and
16:32
gentlemen, not to not to scrutinize on you, but most of
16:34
the time it's the spouses that taint the experience.
16:37
Where's? The chair I.
16:39
Need to sit. Down, yeah, need chairs you need
16:41
a good place to sit and sit on your phone.
16:42
I need. To look at my well.
16:44
My wife takes as long as she needs.
16:46
Yes, so don't. Bring me.
16:49
Right, right, right. Exactly.
16:51
So you know, it's, you know, the contact list is just one area of
16:55
reducing friction, but also, you know, making the whole group of
16:58
the shopping group, you know, and spouses and children
17:01
comfortable is also like another way of, of reducing the
17:04
friction. What do you think about like
17:06
emerging tech like AI or some of the new insight stuff and how
17:09
will that kind of reshape? I mean, you talked about
17:11
analytics and what can happen in the store, but how do you think
17:13
that will just change how physical retail works over the
17:16
next coming years? Well, ideally it will solve one
17:19
of the things that has still not really been cracked.
17:22
And that's just understanding the consumer journey right now.
17:25
You know, consumers are getting educated on so many different
17:28
platforms and it's it's all over the place.
17:31
So you think about just buying a car.
17:33
You know, traditionally you just go down to the dealership, you
17:35
talk to Joe Schmo and you say, Hey, I'm looking to buy a car.
17:38
He would talk, you're off for like 45 minutes.
17:40
And then you'd be like, all right, fine, I guess I'll get
17:42
this one. But nowadays when you walk in,
17:45
you're like, hey, I want to test drive this one and this one, and
17:49
these are my questions. Like tell me the answers right
17:51
now. So consumers are so much more
17:53
educated on what they want because of that.
17:55
They're dancing around all these different channels and all these
17:58
different platforms. They may have walked into a
18:00
department store and then walked into your flagship and then
18:02
scrolled on Instagram and then went to your website.
18:05
And right now where the analytics are, we can't trace
18:08
that. So we're guessing about how
18:11
educated a consumer is and we don't know if was it a
18:14
billboard? Did they get lucky?
18:16
Someone message it to them on Instagram?
18:18
Did they see it, you know, at a department store and then they
18:21
tried it on, but they didn't have the colorway.
18:22
So that now they're in our store.
18:24
We just have no understanding of the entire, you know, collage of
18:29
the consumer. So ideally with all the
18:31
different tags and cookies and you know, all the analytics are
18:34
coming in, ideally we'll be able to sync that much more and be
18:37
able to provide much more specific and accurate consumer
18:40
profiles and understand that consumer journey a lot better
18:43
because right now a lot of us are guessing at the wall.
18:45
No one, I'll admit that, but that's the truth.
18:47
Another one I'm interested in is, you know, how does, how does
18:50
like AI revolution and ChatGPT changes?
18:53
Kevin and I talk about this a lot, but you know, next time I
18:55
want to buy something, I'm I may not be going to Google, I may be
18:58
going to ChatGPT and it's then how are those are those results
19:01
optimized to send me to your brand or somebody else's?
19:04
Right. So continue looking into the
19:06
future. What is the optimal Omni channel
19:09
footprint look like for a consumer brand that has
19:12
successfully de risked its physical presence?
19:14
How do they how do they set themselves up for success?
19:16
I think it's it's going to be even more channels than we have
19:20
now. I think it is going to continue
19:22
to be a really solid mix between the social media and the
19:26
websites, but also these flagship stores and these pop up
19:29
stores and these activations as well as the department stores.
19:33
I think you know, right now a lot of brands because of how
19:36
it's set up, you have to hit a certain revenue mark in order to
19:39
get to the department stores in order to even have a sit down.
19:41
And so that's why a lot of brands started with pop ups
19:43
because they need to kind of proof out that concept.
19:46
Now there's going in order to grow because it's so expensive
19:50
with the custom, you know, the acquisition cost with marketing
19:52
and all of that. Brands need to push like on all
19:55
cylinders, all of the channels. And so I think, you know,
19:57
growing ideally, you know, when you spoke to a brand, you know,
20:00
seven years ago, their goal was just to have three to five
20:03
flagship stores and that was it. You know, and then it started to
20:06
change and now hands are very much like they're trying to push
20:10
the hotel partnerships, they're trying to push any sort of
20:13
Pilates partnership, whether you're a Wellness company, a
20:15
nail company, whatever. It's like we are in the studio
20:17
and you're also trying to get to the department stores.
20:20
You can have that long term kind of business continuity of like a
20:23
clean buying cycle. And then you're also trying to
20:26
have these small short term leases, which now are a little
20:29
bit difficult to get to be able to be wherever you want, be
20:32
wherever the consumer is. So I think it's just going to be
20:34
consistently evolving and the dream mix of what it was 10
20:38
years ago and five years ago and today is it's all changing
20:42
because the consumer is changing because how we shop is changing,
20:44
how often we leave our house is changing.
20:46
You know why we leave our house is changing.
20:48
And that all impacts, you know, our discretionary spend and
20:51
where we're spending in our mindshare.
20:53
Super good. I mean, shifting gears a little
20:54
bit in your work with Mentors Fund, I think, you know, now
20:57
when you're like looking at a pitch and sort of thinking about
20:59
that, like that first 30 seconds, whether they're
21:01
considering physical retail or not.
21:03
Like what is it that you as you think about like these shifts
21:06
that we've seen over the last decade?
21:07
And what is it that you're like, wow, when you heard this, that's
21:09
like something that's exciting and makes you want to lean into
21:11
that pitch and feel like you want to hear the rest of the
21:13
Founders story. Yes, well, I, I think as much
21:16
as, you know, so many founders having extreme amount of passion
21:19
and I'm just like, oh, I love this, this is great.
21:21
But you really have to take a step back and realize like, is
21:24
this a fad or is this something that's durable and that is kind
21:27
of, you know, the investor's job of figuring out like, OK, can
21:30
this scale, is this just a one off thing?
21:32
Is this just a short term fad? And so I think, you know,
21:36
understanding if they can cross that mark and make sure that
21:38
there are certain indicators and catalysts that are not just
21:42
today's headline, Like that's super important.
21:44
And sometimes we get carried away and we have to catch
21:46
ourselves like, OK, no, this is definitely a fad.
21:49
We love the fad. We're on the fad, but it's a
21:51
fad. It's not going to be around in
21:53
in a year and a half. Cupcakes, cookies, Donuts,
21:56
anybody OK, no, so what's what's the the red flag deal killer?
22:00
Like what's something that you, you hear this in a, in a pitch
22:03
in it, you know it's dead and you think they're not going to
22:06
make it. Yeah.
22:07
You know, it's, it sounds cliche to say, but the passion, so many
22:11
founders try to be so serious and just so like this is our
22:15
solution and it's going to be great.
22:17
And we know it's going to be great because of this.
22:19
And I think sometimes people come off of not being very open
22:23
minded. And I think it's very difficult
22:25
because you're trying to raise money and you're trying to show
22:27
that like this, we've figured it out, we've cracked it.
22:29
All we need is your check and like then we're good to go.
22:31
But I think now more than ever, you need to be super nimble and,
22:36
and just just very open, super passionate, but very, very open
22:40
and a little crazy, right? Like you don't be a good
22:42
entrepreneur and even a little bit nuts.
22:44
So you know if you're too, you know, monotone and you know
22:48
it's. Like you embrace the crazy here.
22:49
Unfounded. Definitely into the crazy thing,
22:51
like that's kind of a first and foremost first principles.
22:54
Yeah, yeah. You know, if you knew how hard
22:56
it was, nobody would do it. So.
22:58
Exactly. So I mean, when you're coaching
23:00
portfolio CEO's or talking to founders, like what is your sort
23:04
of viewpoint on, you know, balance of like this speed and
23:06
execution versus saving cash? And sort of, I mean, just the
23:09
difference in building teams with AI these days where like
23:12
the efficiency that you can get on small teams is pretty insane.
23:14
Oh, it's unreal. I was literally thinking how
23:17
much money I would have saved if I started my business.
23:19
Like five years. Don't we?
23:20
All right. Seriously, So you know, I kind
23:23
of go back to like the main ethos of, you know, how do
23:26
businesses fail? Like the first one they fail
23:27
with Co founder fights and the second one they fail is running
23:31
out of cash. So I think those two things need
23:33
to be optimized like do not fight so far that you ruin a
23:36
relationship and do not run out of cash.
23:39
And I think it's, you know, you always need to have some sort of
23:42
a conservation capital because it's very easy to get swept up
23:46
into what investors are saying or what your advisors are
23:49
saying, what your customers are saying and just tailspin without
23:52
having a reserve. And I like to just say you, you
23:55
always need to have fuck you money just to be able to walk
23:57
away if something tailspins and you're like, shoot, wait, wait,
23:59
we are too far. This did not work.
24:01
And you don't want, you know, something to destroy the
24:03
business. I think that's very important.
24:05
You need to just make sure you always have certain amount of
24:08
capital reserves. And it's just it's it's like a a
24:11
rainy day fund, right? You just, yeah, you don't ever
24:14
want to do anything that puts your livelihood at risk.
24:18
But that's my more conservative approach.
24:19
And I think a lot of people have winning stories is going the
24:21
opposite way. I think in 2025 that's smart.
24:24
We see so many companies at least in the last 12 to 18 month
24:27
cycle run out of money. So being a little bit more
24:29
conservative is, is, is the right way to go.
24:31
And then pairing that with small teams and leveraging tools and
24:34
AI is, is smart kind of on the other side of this when it comes
24:37
to doing good while also doing well financially.
24:41
How do you think about social impact metrics and community
24:45
building as you, as you look at like a brand to invest in on the
24:50
mentors fund side or or just you know, looking at a brand and
24:53
thinking about their retail strategy, How do you, how do you
24:55
do that? How do you do good and not
24:56
dilute the ROI side of it? Well, it's, it's very easy to
25:00
get carried away on doing totally divergent things like,
25:04
oh, this is what's going to make us money.
25:05
And then this is what's going to, you know, make us, you know,
25:07
sound great. And this is what's going to do
25:08
all this. But ideally, the consumer
25:11
experience is completely interlocked with that.
25:13
So for example, we launched a lingerie brand during Breast
25:18
Cancer Awareness Month and we had an experience where
25:22
consumers could come up and write notes to, you know, people
25:26
fighting cancer to like a heartstring moment where we're
25:29
able to establish a community impact, be able to establish
25:33
feel good moments for people, and also give that brand a way
25:37
to identify with their community members in a totally different
25:40
way. And then from there, you know,
25:41
we donated a variety of different skews toward to UCLA's
25:45
Cancer Research. So I think it was, I think if
25:48
you can find moments to really tie in your brand ethos to the
25:52
consumer experience and do something that people actually
25:55
care about, it's very important. I think brands you try to do it
25:58
and you know every week or every month like you know.
26:01
Not authentic, yeah. Yeah, it comes a little too far.
26:03
I mean, if you can do any more, power to you.
26:05
I'm sure AI will give you a great solution of all the
26:07
different events you can attack, you know, just stay authentic
26:10
because now more than ever, it's very easy for consumers to to
26:13
pick up on this. But yeah.
26:15
Looking back, you talked about AI, but what would you have
26:18
automated earlier or what would you have been like the first
26:20
couple things that you would have automated to accelerate
26:22
growth and just make building, you know by revealed easier?
26:25
Everything. No, I think training, training
26:28
and logistics. So that was something that took
26:30
a huge amount of time. And I think if you think about
26:34
think about the best salespeople, the best
26:36
salespeople in retail and events or whatever it is, they are on
26:39
their feet 18 hours a day. They are running around, they're
26:42
speaking a mile a minute. They do not learn by sitting in
26:45
front of a Zoom for an hour and a half session like on a
26:48
PowerPoint. Like that is not the best way
26:50
they learn. So if you can use AI to be able
26:52
to take like, hey, look, here's this training manual and here's
26:55
all this brand data I need this person to absorb.
26:58
This is their, you know, personality skew test, whatever
27:01
Myers break, whatever it is like give me a video sequence of all
27:05
this information that they can listen to while walking, you
27:08
know, or doing their morning run.
27:10
Done. Like, I mean, we would have had
27:11
such a higher rate of high quality people being able to
27:16
absorb super custom information. So yeah, that would have been
27:20
amazing. Awesome.
27:21
So thinking about the folks that are listening and giving
27:24
yourself advice, kind of reflecting back like you just
27:27
did. If you could talk to your pre
27:29
MBA Megan what what is the piece of career advice, the one piece
27:34
that you would want her to know about navigating the
27:36
intersection of design, business, technology in.
27:40
I would say if it's annoying, fix it.
27:43
I love that. I kind of, you know, I, I went
27:45
straight through from my undergrad into my MBA.
27:47
So I was the youngest of my cohort and I spent a lot of my
27:50
time just trying to look at other people and be like, oh,
27:52
wow, they were like 5 years of consulting firm.
27:54
Like, oh, they did this. Like I should try to be more
27:56
like that or I should try to think like this.
27:58
And at the baseline, like, look, if it's annoying, just go fix
28:01
it. There's no reason why these
28:02
legacy system, just because they've been around for 30-50
28:05
hundred years should exist. If it's annoying and you don't
28:08
like it, so just, you know, forget about how things have
28:11
been done historically and just go fix it.
28:15
Go do something better. Megan, this has been fantastic
28:17
work and listeners. Find you online or learn more
28:19
about your work. I think like LinkedIn right now,
28:21
I think that's probably the best.
28:23
So we'll include that in the show notes.
28:25
Just really fun conversation. And thank you so much for
28:28
sharing your insights with us on Founder Mode my.
28:31
Pleasure. This is a lot of fun, so thank
28:34
you and keep it up. I'm excited to listen to your
28:36
future episodes. Wow, that was a master class for
28:38
Megan Berry on DE risking brick and mortar.
28:40
Absolutely. So many actionable takeaways.
28:43
What stood out to you Kevin, from what Megan shared?
28:45
Yeah, a few things. So I think first pop up retail
28:47
is this kind of low risk bridge. So to go from like your online
28:50
DTC all the way to brick and mortar.
28:52
I think the flat pack kiosks of like keeping it less than 8
28:55
feet, you know less than 50 square feet.
28:57
This sort of gets around the building permits like that's
29:00
true founder mode right there in terms of figuring out, you know,
29:02
how to how to get it done. And then those core KPI's like
29:05
when to scale up, you know, unaided brand awareness, sort of
29:07
high dwell time, really understanding that.
29:10
And I think, you know, COVID obviously being a big thing for
29:13
for sort of in person and understanding like what is that
29:15
frictionless design, like contactless checkout, minimal
29:18
inventory. And I mean a big one for me.
29:20
It's like if you're going to be shopping all day, I want to have
29:22
a place to sit and play on my phone and kind of hang out.
29:24
Where are we sitting, you know, while you're shopping?
29:26
And so and then finally, I mean this just notion of how AI is
29:29
impacting Omni channel and sort of of aligning the sort of
29:32
tracking or cadence across that customer journey from online to
29:35
offline. Yeah, couldn't agree more.
29:37
It was a great a great interview and a great conversation.
29:40
So if you're a founder that's navigating these waters or knows
29:43
someone who is, this is definitely an episode to share
29:45
with them. And if you haven't already
29:46
subscribed to Founder Mode, it's your favorite podcast on your
29:49
favorite platform, Apple, Spotify, YouTube, and you know,
29:53
leave us a review if it helps and would love to share the word
29:55
with others. Yeah, you can find links to
29:57
Megan's LinkedIn and everything else we discussed here in the
29:59
show notes today. And coming up on our next
30:01
episode, we're going to shift gears back into the tech side of
30:03
things. And that's right, we'll have JJ
30:05
Zhuang, my long term partner, 27 years, joining us to talk about
30:08
how to bootstrap your tech team using AI.
30:10
It's going to be a fantastic discussion, leveraging AI to
30:13
build and scale your engineering efforts efficiently.
30:16
All right, that's a wrap for this one.
30:17
Remember, when it comes to retail, don't just follow the
30:20
foot traffic, follow the data and de risk your dream.