The Modern Retail Podcast is a weekly show that hears from executives in the retail space, from legacy companies to the buzzy world of DTC startups. Cale Weissman, editor of Modern Retail, hosts.
‘We break down those barriers’: How Lightship Capital’s Candice Matthews Brackeen has grown her fund
Candice Matthews Brackeen is looking outside of typical Silicon Valley circles for the next billion-dollar company.
She’s a general partner at Lightship Capital, which raised a $50 million fund last summer that’s focused on companies from the Midwest that have Black, Indigenous or People of Color (BIPoC) founders. “Right now we’re trying to build the best portfolio possible to return capital to the LPs,” she said on the Modern Retail Podcast.
Matthews Brackeen first got the investing bug when she began working with startups in the Cincinnati area. She had difficulty raising money for her own company, and made a group for other Black entrepreneurs to talk shop. This group gave proof to how difficult the landscape was for non-white founders. With that, she launched an accelerator program five years ago. Slowly but surely, those experiences led helped Matthews Brackeen launch a venture capital fund.
On the podcast, she talked about how the investing landscape has changed over the last year. Following last summer’s Black Lives Matters protest, funds like hers began to get more noticed. Institutional investors began reaching out looking for funds in which they can participate. “We’re not a social impact fund, but there are investors who are involved with us for a social impact reason,” she said.
Part of her role as at Lightship involves helping both portfolio companies and other investors. Matthews Brackeen and her spouse, fellow Lightship co-founder Brian Brackeen, have spent weeks living nearby to founders to get a sense for their daily rhythms. They would have portfolio companies come out to Cincinnati or Miami and spend time together -- eating all meals together and spending most of the daylight hours working on business development. “I think that it’s important that we break down those barriers,” she said. “That’s the way that we grow relationships with our founders.”
Over the years, Matthews Brackeen has also found herself to both a liaison and a teacher at both ends of the table. She’s instructed other VCs about their invisible biases, and coached founders about presentation styles. “Not only are we teaching our LPs, but we’re teaching our founders, like, how to have grace when people screw up,” she said.
Ultimately, it’s about positioning Lightship as a fund that should be considered alongside every other top VC firm. “I want to be a VC,” she said. “I don’t want to be a Black VC.”
“An unspoken understanding between our customers and our brand”: Fly By Jing founder Jing Gao on how to build community
2020 was the year the Fly By Jing soared to new heights.
The company, which is best known for its array of Chinese sauces, has taken the direct-to-consumer food world by storm. It’s been written about in major publications like the New York Times and Eater, and has become a popular pantry staple in many Instagram kitchen posts. Before the coronavirus first hit, founder Jing Gao told Modern Retail the company was growing around 30% month-over-month. Then the business exploded last spring thanks to pandemic stocking and heightened media attention. “We ended 2020 about 1000% up from 2019,” Gao said on the Modern Retail Podcast.
On this episode, she spoke about how Fly By Jing started as a pop-up restaurant concept, her branding and marketing approach as well as what the company’s future plans are. “I feel like there’s an unspoken understanding between our customers and our brand,” she said.
Fly By Jing first got off the ground because Gao had a core group of friends and followers who supported her vision. She raised an initial Kickstarter (“the highest-funded craft food project [on the platform],” in her words) and was able to grow the business in its first year as a result of this community.
Now, Gao is putting herself more front and center. When Gao founded the brand, people knew her as Jenny -- an Anglicized version of her given name. And over a year after the company launched in 2018, she decided to go by Jing. For her, this was a way for her to present both herself and her brand in their true lights. When Fly By Jing rebranded last fall, Gao unveiled her new first name, making herself more of a focal point of the brand.
The idea behind Fly By Jing is to be a food company that doesn’t try to fit within traditional U.S. brand parameters. So far, it’s worked. Demand outstripped supply for most of 2020. Gao’s current mission is to continue the growth by creating new programs and ways to keep customers engaged. Earlier this month, for example, Fly By Jing launched an OnlyFans account that lets people see pictures and videos of “hot noods.”
For the founder, the most important part is to make sure she has a direct line to those who love her products. “We are putting a lot of thought into how do we create a real community around our biggest users,” she said.
‘The beginning of a new era’: How Zenni harnessed its vertically integrated business model to reach record heights
Even during a pandemic, people still needed glasses. As a result, online eyewear brand Zenni Optical has been riding a rocket ship.
After an initial slowdown in March due to supply chain constraints, Zenni says it saw record growth in 2020. With people stuck at home, the company received an influx of new customers trying to avoid going to the eye doctor. And since most were working from home, Zenni’s line of blue light blocking lenses grew at an unprecedented clip.
According to chief product officer Bai Gan, this past year was “the beginning of a new era” for eyewear brands. He joined the Modern Retail Podcast this week and talked about why.
Zenni, which was founded in 2003, makes very affordable eyewear -- glasses as cheap at $7. According to Gan, this is because the company uses a vertically integrated business model. Zenni owns much of its supply chain, meaning it cut out middlemen most other brands deal with daily. It owns a one million-square-foot manufacturing facility outside of Shanghai, and works directly with suppliers to get the best rates. For its first decade as a company, Zenni focused on creating this infrastructure. “Originally, we just focused on that core competency -- the backend,” said Gan.
Now, Zenni is in hyper-growth and trying to make more people aware of its products. It wields, however, a double-edged sword. “It was a little bit harder to really communicate quality to customers when the price was so exceptionally low,” he said. As a result, over the last few years the company has been on a marketing blitz trying to introduce itself to more customers.
One of Zenni’s big PR approaches is influencer marketing. The company has worked with online personalities and well-known designers -- including Rashida Jones and Coco and Breezy. On the podcast, Gan describe the brand’s “sector by sector” approach. This includes working with gaming personalities to evangelize Zenni’s blue light blocking lenses.
According to Gan, the growth is only beginning. For years, online glasses sales stagnated, but the coronavirus changed all that. Now, he said, Zenni is trying to implement a growth strategy its slowly been building. “That vertically integrated business model,” he said, “now seems to be giving us a lot of edges over the competitors.”
‘DTC companies were late to the omnichannel game’: Untuckit’s Aaron Sanandres on leading a dress shirt brand during a pandemic
2020 was a tough year for casual dress shirt brand Untuckit, but the company was able to adapt.
While many retailers that catered to workwear completely changed their product lines to mesh better with the pandemic lifestyle, Untuckit opted to wait it out. “The decision was no -- no massive overhaul of our brand ethos was necessary,” said Aaron Sanandres, co-founder and CEO. Sanandres joined the Modern Retail Podcast and spoke about all the changes his company experienced.
While Untuckit didn’t drastically change its strategy, it did make some smaller tweaks. Much of that had to do with marketing. The company has become known for casual dress shirts, but it has other products too. “We never really heavily marketed our non-core button-down shirt,” Sanandres said. The new focus, he said, “was shifting the messaging.”
Fulfillment was another big change. While Untuckit began as a digital brand, it’s also opened up over 70 stores over the last few years. The company quickly made those locations fulfillment centers -- which Sanandres said was no easy feat. “I’m almost certain almost all DTC companies were late to the game when it comes to buy online pickup in store,” he said. Why? “The fact is, if you’re on Shopify, you will have a very difficult time executing a very clean [experience].”
These changes -- along with many other -- meant that 2020 was a year of learning. Sanandres described it as humbling. His brand has been in growth mode for the last decade, but had to rethink priorities when stores closed and shopping patterns shifted. “I’m an optimist. I’m always seeing the glass half full opportunity that things are going to get better,” he said. “So this did test me a bit.”
While Sanandres maintained that his company is still growing and healthy -- he said the business is still bigger than it was in 2019 -- he viewed this year and last as a way to rethink fundamentals. “Maybe it’s an opportunity really to rebalance the business,” he said.
‘The purchase cycle is very considered’: Carvana’s Ryan Keeton on how the pandemic changed used car sales
It’s been a big year for online shopping -- online car shopping too.
Last summer, for example, Edmunds.com reported that used car and truck sales were the highest they’ve been since 2007. And online used car retailer Carvana was able to ride that wave (or, perhaps, drive that used ’09 Camry). It reported year-over-year revenue growth of 41% at its third quarter earnings.
According to chief brand officer Ryan Keeton, the nine-year-old company was able to use the momentum it built over the last decade to capitalize on retail shifts during the pandemic. Keeton joined the Modern Retail Podcast this week and discussed his company’s overall strategy.
Carvana relies on a predominately contactless experience, which has worked during a pandemic. But beyond that, this past year’s strategy was about making sure the company was a household name. It was known to many as the online company that also had a car vending machine -- which some thought of as a marketing gimmick. But as Keeton described it, the vending machines are “a very low cast way for us to get our name out there.”
In 2020 Carvana also focused more on inventory diversification. The company had for years relied on wholesale channels from which most other used car lots sourced as well. But over the last few years, Carvana began trying to buy cars directly from consumers. 2020 was the first year that the retailer really let that program hit its stride. When you buy inventory directly from customers, said Keeton, “you can really diversify that and find different vehicles that customers are looking for.”
Which is to say that over the last 12 months, Carvana really tried to make itself stand apart from other used car sources. Part of that is continuing to double down on new inventory sources, as well as heavily marketing people all the time. “Our goal is to build a national brand,” said Keeton, “to change the way people buy and sell cars.”
‘Big companies are not as good at innovation’: Canteen Spirits CEO Brandon Cason on disrupting the hard seltzer industry
Canteen Spirits was ready to take on the hard seltzer industry -- and then the coronavirus hit.
The company launched in late 2019 and began 2020 expecting to grow to new heights. According to co-founder and CEO Brandon Cason, the first few months of the pandemic were hard when the country shut down and many channels slowed down. But things began to quickly ramp up once the first coronavirus peak subsided -- and the beverage brand is in growth mode once again. Canteen makes canned vodka-based sparkling beverages. Cason joined this week’s Modern Retail Podcast and described the year’s journey.
According to Cason, Canteen hit on the right space at the right time. Most hard seltzers are malt-based, but many people have been seeking out similar drinks that are made from spirits. “We recognized that consumers wanted to elevate and go premium when it comes to what they’re drinking,” he said. In the third quarter of last year, things began to take off, with sales doubling month over month during that period. Now, Canteen is about to expand into a new area -- Tequila -- with a soon-to-launch sparkling beverage called Cantina.
Cason has a history in both liquor and CPG -- hailing from both the sparkling water brand Waterloo and the vodka company Deep Eddy -- and thinks that with new types of beverages it’s better to be the disruptor. “Big companies are usually not as good at innovation as they are mergers and acquisitions,” he said. Which is to say that a big company like AB-InBev may only invest in making a brand new product if the market has already bore out the results.
Even with this current success, Canteen has a lot of growth to do. For one, it’s yet to build out its DTC channel and has only been focusing on wholesale. In his view, growing a direct online presence is a mid- to later-stage step for a spirits startup -- getting retail traction was the most important first step. The company is also waiting until the world opens back up, so it can begin more heavily marketing in person. Events, he said, are “still just a big placeholder for us” -- for obvious reasons. But once the vaccine is deployed and people are socializing once again, “there are dollars ready to go.”