Listen in as Foundry board member Helen Vaid talks about how to build a successful online brand and what it takes to scale your business in this episode of Square One with Romeen Sheth.
A transcript of the conversation follows:
Romeen Sheth 0:13
Square One powered by fin Tech TV, ecommerce and online brands have absolutely exploded post COVID-19 And with a number of interesting platforms have been developed to help ecommerce businesses and brands take advantage of scale. Today I chatted with Helen Vaid, CEO of foundry, a brand platform that acquires and grows in during Digital Foundry recently launched with $100 million in equity capital from Vice a capital and monogram Capital Partners to acquire integrate scale and during online businesses. Helen has a really interesting background and a perspective she brings to the table to lead the company. She was formerly the chief Global Customer Officer at Pizza Hut and has built a career scaling omni channel for CPG companies. She’s also the only woman CEO amongst 60 operators that have raised almost $6 billion in capital since April 2020. Hello, and welcome, and thanks so much for joining us.
Helen Vaid 1:06
Thank you for joining. I’m really glad to be here.
Romeen Sheth 1:09
Yeah, Helen glad to have you on the show. Today we’re gonna dive into you know what, what is one of the hottest business models I think as of late, which is buying ecommerce businesses now you have a unique angle on it a foundry spent a bunch of time you know, deep diving into the model. But before we jump into foundry, let’s just talk a little bit more about your background.
Helen Vaid 1:28
About Me, My God Okay. All right. So I’ve been in the I guess the physical, the digital space, if you want to call it that for a long time. My background is I’ve done startups and large corporates. I was at HP for nine years. I spent a bunch of time at Walmart and then at Pizza hardware I responsible for all tech and operations and now this I think for me the the exciting part is about being able to make connections that grow the business in a nonlinear way. That’s always been the thing that kept me going
Romeen Sheth 1:58
and you’ve got to you’ve got a pretty deep omni channel background. We’ll we’ll dive into that a little bit as well. But that becomes pretty core to foundry. Right. And so I want you to explain to us what is foundry, you know, what’s the state of the company today? What’s the mission, etc?
Helen Vaid 2:13
Yeah. So foundry really is in the business of Unlocking Potential for small businesses that have great potential to become large. Right. That’s the way we think about all the businesses we go after. We know that brands can grow anywhere, great ideas of great people. They’re not the right of large corporates, and our job is to go find these incredible businesses that have the potential to grow but they are stuck because of either you don’t have the right amount of capital, right kind of capabilities or the commitment from the group that is there to keep growing it and we want to come in and effectively give them the platform for those so we are really a growth platform for brands that have potential.
Romeen Sheth 2:54
In this market. I want to take a step back and just talk about the market. Because I think that if you’re not in the database of the market, it’s actually it’s it’s deceptively large, right. So there’s a huge long tail of massive ecommerce stores or brands online. They’re transforming right? They’re moving from brick and mortar to retail that’s obviously been significantly accelerated because of COVID maybe new perspectives on the market. I think one is more of a concept of just how many of these types of brands or E commerce stores are even out there today. And more interestingly, going forward, you know, how fast is the space, you know, growing and evolving?
Helen Vaid 3:29
Yeah, I mean, look, there’s multiple ways for getting some data that gives you like signals of growth as far as size. If you’re looking at marketplaces itself, the brands if you look at Amazon alone, there are like, I think almost 5 million different marketplace sellers and to sell on Amazon alone. So you think about that for a second and think about the scale of that. I always like to proxy with ecommerce sites like Shopify alone has almost coming up to I think 1.8 million or 1.7 billion stores that they support. Now you think about that, add those things out. Now you look at app store, right? If you look at the Google App Store, there’s almost two and a half billion apps on Google Google Play Store. And the iOS store has almost almost 1.7 1.8 Like you keep adding these things up. But you certainly think this is a huge, huge, tremendous market of different types of brands and businesses are trying to reach out to customers. Obviously all on our E commerce, there’s gaming and this whole bunch of stuff. But there are brands and businesses out there that are trying to interact and engage customers in a meaningful way. And so the question becomes where are the growth pattern? So putting these things together, where you can have a portfolio that’s really meaningful for where customers can go and talk about things that they care about, and they’ll find it, but think about the cognitive load for a customer when they buy, right because now I have to make a choice not from the three cereal boxes in front of me in a retail store. I’m looking at, you know, 300,000 items. So I think it’s there’s almost a need to figure out how we shop and help them sell better.
Romeen Sheth 4:57
Yeah, I think that’s actually it’s funny because when you look at the b2b side, that’s exactly the same challenge of you know, SAS was a novelty, you know, five years ago seven years ago, whatever it might be, and our companies are just overloaded, you know, by the amount of subscription products out there actually are and so you’re starting to see kind of from a top down perspective on the b2b side, right? Is this similar effect of how do we operationalize process so that our individual employees don’t have access cognitive load right, how many chat apps are there? How many, so on and so forth? Right products? Absolutely. And so I think we see that same parallel on on the customer side, I like the way you framed kind of all these different buckets of where, you know, these companies or these apps kind of come from, because I think one of the things that I think about a lot is whenever you’re operating in fast growing markets, I think the most interesting thing is that a lot of that infrastructure is actually pretty immature, right? Very yet to be built out. Right? And so we can talk about that a little bit. I think about it. And I’m curious, how many of you, if this resonates with you, I think about it a few levels right? I think about an individual level, micro level, right? So that’s why you’re the rise of platforms like Shopify, just your basic how to even run the show. Yeah. But I think for them, the brands that do really well on a Shopify and Amazon etc. It starts to come at the macro level, right? So a lot of these stores or a lot of these shops actually perform worse at scale, which is very counterintuitive, right? Yeah. So maybe we can talk a little bit more about how you think about the infrastructure. There’s a lot to unpack there, but maybe we can start first just with how you think about kind of that surrounding infrastructure of this space.
Helen Vaid 6:32
Yeah, you know, I always start with a customer lens, because that helps you separate from what you’re trying to do what what is meaningful to be done. And the way I always think about customer is through the flow of journey they go through just typically pre purchase, purchase and post purchase cycle right. Now if you think of infrastructure to do all three of those things, whether you’re an individual, or the other bucket of macro that you were talking about. There’s a bunch of infrastructure that needs to be built for six years. So all three, right, and typically, a lot more time is spent the top of the funnel where you see a ton of agencies and capabilities, infrastructure and prepurchase it’s like demand generation, the Facebook’s of the world to go Google ads, how do I drive traffic to my customers, you know, affiliate networks, all of that infrastructure to drive demand, and there’s a lot of noise and there’s a lot of analogy there. The real Elementor I think, the success factors life is actually the bottom of the funnel is most of the time when customers don’t become loyal or advocates of a brand is because it’s a post purchase experience that’s poor. Things that fail at scale, like you mentioned, they don’t scale is because they spent so much of their energy at the top of the funnel because the business is focused on I need to grow my company I need to get sales in. And so they focus on the top of funnel, but they don’t think about the actual experience of receiving a product, the returning the product, right and that’s where you actually lose customers. And then you become a one and done business which can never succeed because you have to keep buying your customers over and over again. And that becomes the unit economics of the business fails, right? That’s why they fail at scale to scale because actually, that’s what needs to be done. To grow a business well, is to end to end and frankly, more focused on the bottom of the funnel, if that makes sense in terms of infrastructure, the infrastructure is very focused at the top of the funnel.
Romeen Sheth 8:26
That’s exactly what that’s exactly what my observation has been. You have kind of this overload of how do you get the customer in the door, but where brands integrate small businesses really struggle? Not only the post purchase part, but the actual purchase part of this on right, this checkout process. It’s well, right. And it’s because it’s really complicated and it’s really cow intensive. Right. So it’s easier I think, to talk about your product, your brand story, get somebody in the door, but by actually delivering and fulfilling on that floss is a really complicated operation.
Helen Vaid 8:59
Right absolutely. But that’s true, not just for small businesses, even for large companies. Right. I used to always talk at Walmart with my team about, you know, imagine your digital stories like a physical store. What would you do if you had an online checkout? You’d probably open another counter and say, let me move some of your customers over there. What do you do when that happens in a digital store? Do you even think about that, that you know what somebody is the spinning wheel of death like a call it sitting on a page, the customers can fail and they’re going to go to the next door because the cost of leaving the store on digitally is far lower than it is on a physical store because it’s not like you drove to a store and you have to stand there to buy the stuff that you are not forced to buy. So we have to engage really well in the actual flow of purchase to your point of purchase, as well as both participant the customer leaves.
Romeen Sheth 9:50
I like that analogy a lot because it’s intuitive when you’re inside a retail store to say okay, I mean, we do it all the time, right? If you go to a grocery store, you say, I’m going to you know, go to x and I’m going to go to the next line or you’re driving, you’re going to try and weave lanes and go where there’s less traffic. It’s a lot more difficult mentally to think about that in a digital space because space in some sense. is infinite, but experience is not. Exactly right. So I like I like the way you framed. So when we kind of pare back now and we take it in the context of foundry, right. Walk us through, you know, walk us through actually before even getting into kind of a business model of the construct and Foundry itself. Let’s maybe just walk through the business model of buying an individual, right, that’s in the target range of founder. I mean, let’s let’s orient the audience around, what’s the quantitative what’s the qualitative, what are what what kinds of businesses, what kinds of products, you know, apps, etc. are you guys looking for? And we can we can go a little bit deeper.
Helen Vaid 10:48
Yeah, absolutely. So they’re, you know, when we approached the business overall, we said, as a business we are in the business of buying brands. Now that’s That in itself is actually but it makes conversation to have because how do you define a brand? There are a lot of products today that are sold on Amazon that are single SKU businesses. And so are they a brand or not right? It’s a conversation to have. So when you think about the filter, what a lot of the filters we sit down and talk about is this. If this is a product, a single SKU business, is could this become a brand and that’s an important part of the filter for founder to look at a business because for us, it’s about finding vectors of growth. And it’s not just about buying and rolling up a business and saying, This is a you know, enough products have been bought together. So we’ll make enough money because we want to actually grow and build brands. So
Romeen Sheth 11:36
just Just on that point is as you’re when you’re evaluating these, you know let’s say it’s a single SKU business into can it be a brand? I’m curious, what does that decision process look like? How do you determine, right or what are those vectors of growth that you’re looking for, which is, isn’t that they come onto your platform and then because of all the ancillary things Foundry has, they can become a brand or you see certain kind of elements and inclinations. And you know, it’s you can see that in your portfolio of other related products, they can become a brand like how do you make that? What’s the decision to go?
Helen Vaid 12:11
That’s a great question. So let’s think of let’s say product and pets. Category, right? And let’s say somebody is selling dog treats, and it’s a great product is a great brand, great packaging. And that’s all they’ve ever done, because that’s all they’ve ever looked at. But we will look at the brand and say, Could you now launch other adjacent products with the same branding because there’s something unique about the way they’re going to market where the customers are coming to buy this product? Is there something about this product that is actually creating a pull in this business as opposed to is it just a single SKU thing it cannot actually get extended? If you can get extended to other pet food products or you can go into pet like you know, bed cat beds or whatever else you can go into, then we say okay, this extensibility to this we can there’s something about the sourcing in the supply chain that can give me more, more to grow. And there as well as there’s a lot of inbound customers looking for this brand, right because you can look at things very quantitative things like search for this particular brand itself on platforms etc. and say, Are people just searching dog treats or treat pet treats and then finding this while the people are looking for the brand itself Brand X and saying I will actually only buy this because those are two different signals of intent for what the attraction for the businesses and then we say okay, there is extensibility to this right. So there is a whole bunch of the series of data points we look at that will give us signals of indices have a potential to become brand over time. And adjacencies are very important, right when you have single SKU businesses adjacencies and the cap we think yes it meets our requirement and can become a brand it might be already be one even though it’s a single SKU business because there is pull for this product. And if it is then we look at the second filter is where are the available. So our customers finding it on a marketplace like Amazon or are defining it through direct to consumer business because they have their own website or are they available in international or where are they available? That gives us two things one, it tells us where we want to be concentrated as a business in terms of platforms. And two, it tells us how much growth is available to us for this business if we take right if it’s available everywhere is maximizing and doing everything. Frankly, I don’t want my business into that value. Because that’s not the business we are in. We’re in the business of buying a business and adding value. And we look at this and say okay, what are the whitespaces we can see for this business. And we quantify that as attractiveness of buying the business and saying we believe that we can add value to this company. And we can be accretive to what the founder who has done an incredible job is already done. Right and that gives us a second filter. So we started with the brand versus bought like stuff with the whitespaces for channel and then you go into all the other efficiency place can be my customers, cheaper for them. Can we find a better child for them? You know, the child had never tried arrived, they have they’ve done social and didn’t look at all these other elements that we can optimize for them. And that gives us that individual businesses signals. And then of course we look at our portfolio, our portfolio, etc. So I could go on you get the idea, right in terms of other people.
Romeen Sheth 15:21
And we mentioned before you mentioned before, just the long tail on how many of these your application stores, brands etc are out there. I mean, are you guys picking up like two guys in a garage or picking up $20 million businesses like what what is the range of business?
Helen Vaid 15:36
For founders? Actually, it’s all of the above. It’s very interesting. You know, you didn’t actually have to go to the garage in village $40 million business is incredible, which is why the power of the founders is so important. I actually think there are people out of sheer will. And sheer passion can actually create a really meaningful business. And if they actually got us imagine what they could do. So for us, those are the winning combinations where a small team can actually build a really meaningful business and we can add value to it. But sometimes we get a full team. And that actually gives us capabilities to leverage for other brands. Right as the other beauty of acquiring businesses that you can buy capabilities is not just the business, you also get access to talent. We’ve successfully done something in the space and we can then now leverage them and be part of a bigger business. Because a lot of the times almost in my mind hopefully all of the time the business in the Bible has stayed with us and the people who want to stay with us in the long term. And that’s why we want them to be part of the foundry family as opposed to take a check and you know, leave for Tahiti.
Romeen Sheth 16:41
Yeah. One of the things that I find interesting I’m curious here perspective on this as I think I think lower middle market businesses are often like the wild, wild west and m&a transactions right? When public companies are in larger scale these constants preceding transactions, businesses that are sub scale, especially ones that are cashflow in terms of which many of these brands are you know, it’s often difficult to play some actual value on them. I mean, a lot of these businesses also have really strong intangibles, right? Brand Value, Customer Loyalty, etc. I want to talk a little bit more Helen, just the way kind of not quantitatively, but maybe academically. How foundry improves the individual equity value of a business and purchases so for me when I when I kind of look outside and I’m sure I’m missing a ton of factors. I see three lumber tractors, right one is I see there was a multiple you just get one scale right so when you when you become a part of foundry or an aggregator so you are getting the benefit of all the other businesses that they have bought a small stuff. I think the second is I’m sure there’s some sort of operating leverage, right, Common Core. And then the third is there’s probably more acceleration on top line growth right because you guys can do say with resources, best practices, etc. Are those the three vectors are there different factors like how, what’s the right way to think about if I’ve got a brand and I were acquired by clowns, like, am I looking at, you know, the ability to potentially 5x 10x 100x that I might not be able to do on my own? Like, what’s that? What’s that pitch? I guess the founder right. Ran that’s really starting to work. Right? Why do they want to come be a part of the platform versus continue on?
Helen Vaid 18:23
Yeah, I mean, finally, your buckets are absolutely spot on. They are they are exactly what we will look at to do and that’s the exercise we do when we evaluate it right back to my earlier point. I don’t wanna buy a business, not to add value to them. Right I have to be able to add value. And the value add happens in my mind almost in a two stage with all those three vectors that he talked about. The first thing you’d want to acquire a business within the first three months we have an integration team. And if you’d like thinking about it simple to buy two boxes because it helped me think two things. If you think about effort and impact of actions, you that team comes in for the first three months it looks at all the low effort high impact ideas and say how can we very quickly bring something onto our platform and, and set them up for growth even faster than we found? them? Right? So that’s the first activity they did they go and look at all the whitespace and and find the quick wins and implement them. And they typically are in the things like Oh, are they you know, doing the efficiencies spent right? is are they actually optimizing the content of the pages or the images, right? Are people discovering them? Do they have some sort of fundamentals of operating on Amazon and fundamentals of operating the site? Because those typically are the ones that come in. And then you look at the longer term plan where we literally do proper annual planning for these businesses that you will do in any established company. A lot of these entrepreneurs probably go and just run the business on a day to day basis and their hair’s on fire, right? Because they don’t get the time to step back and say, so what do I think I will grow my business in the next four months and what are my levers, they kind of have to begin it every single day. We give them the ability to take that breath. Right? Okay. My skill set is and I’m an NPD person I come up with new product ideas. I don’t want to deal with operations. I don’t want to deal with robots optimization on Google ads. I do not want to think about the affiliate network didn’t pay the commission commission, all of this other administrative overhead frankly, that takes up time that if they didn’t do, they could do all of the other MPD software they’re really great at because they came up with the idea in the first place, or whatever the skill set is I’m using NPD as an example. Give them the time to do what they’re great at. And then we take over the elements that they today either outsourcing or doing badly simply because they don’t have enough hours in the day. Right so for us, those are the buckets, what can we scale to your point? What can we improve the efficiencies for? And then what can we find this new ideas that this person just couldn’t get to internationally as a great example, right? In the product on an international platform going further as we get more brands and we go international that would be this a massive effort for a small business to go into. And once we get that project program running really well, they can just join that and they just get growth in that sector altogether. Right. So those are the kind of things we can do for founders, just because not because they don’t have the you know the brand is not worth it is so good to just have gone.
Romeen Sheth 21:20
Yeah. How do you as the CEO of foundry, think about portfolio management. So there’s kind of an intuitive approach here and we’ve been talking about it right, which is you get all the brands together. They operate at these individual companies, but they can tap into, you know, share services shared capabilities on the back end right, which creates better operating leverage for your company. But there’s also a risk here, right, which is fitting kind of round holes into patents, like over generalizing a platform to plug companies into and the more I’m listening to you help, the more actually in my mind. I’m wondering, is it to not fall into that trap? Right, is that more concerted effort on the front end in terms of which companies you’re acquiring and bringing in? Or is it more concerted effort on the back end of saying you know, how do we how do we maintain this individuality? You know, while giving the strength of scale and leverage, I’m curious how you’ve thought about that balance.
Helen Vaid 22:15
That’s a great point, frankly, and I would hate to give the answer which is to say it’s both unfortunately, it is both. We are right now we have a focus on certain categories because we want to buy products that are complementary to each other and brands that are complementary to each other. So we are looking at pets, for example, as a category we’re looking at home which is a massive space. As a category, we’re looking at outdoor which is again another category. So we are starting with these are categories of focus. And that helps us look at adjacent products that build complementarity of the portfolio, right. It’s not to say we will never look at a business that is in another category, but that would have to have another vector of growth that we believe is important. For example, for me, it is frequency brands that are frequency driven. Brands are frankly much, much more longitudinally available than brands that are one and done. Typically, right when you buy something that is a hardware product, you’re not going to go buy it again, unless it breaks. Whereas if you’re buying cat litter, you’re probably going to need it every time you run out of it right so there is a there is a need for frequency based products. So we look at going off piece every time there is a business that has good frequency based signals that will say okay, we I think it will be a good adjacency for us to build and bring in. So we do a little bit of thinking upfront to say that it goes through our decision tree have to be by this business. Or not. Right. So that’s an important filter. And then second it is can we find efficiencies to your point at the backend? Because if everything is being sourced differently, and there is no benefit to you effectively now created a really complex business with 10 Different sourcing that now you have to manage this are the platform becomes chairs, or how do you look at efficiency of items all coming from China being sourced from China, but China is a very big country. It’s not easy to say everything is coming from China so it’s the same. You have to look at how we optimize the shipping lanes. How are we thinking about the actual vendors we are using to get elements done for us in terms of clearance, etc. So there’s a whole bunch of systems to put in place that are our thesis is that if you move it from an individual running it to a system running it, you will do it better. Again, that has to be proven out with time, but that is the the thesis behind the idea of optimizing shared services that these brands can leverage as opposed to going and paying above the odds because they don’t have the volume. Go for it. And I’m
Romeen Sheth 24:45
interested in actually talking about a framework for guiding principles and how you make those major decisions. So this is this is a cool model right because it’s got both components of building and buying businesses from day one. But you’re building the foundational platform and the linkage between these businesses to tie them together. So you’re effectively running a conglomerate, right? And so when running a conglomerate, so that you don’t have an overly complex operational business. You have to have frameworks and guiding principles for these major decisions. Right. So yeah, do vertically integrating core components, partner ecosystem with like, engage for financing, logistics, you know, so on and so forth? I’m curious, what are some of those frameworks or guiding principles of how you think about elements that you guys believe it might not be a specific brands capability, but you believe that you can vertically integrate for building house versus you need to create an ecosystem of partner because maybe walk
Helen Vaid 25:40
again because you don’t need to build value? Personally, one thing is that we have to own data. Which fundamentally can be difficult when you’re operating, right? Because you can only get so
that’s why direct to consumer businesses really important part of the model because it helps us understand how business how our brands are performing. And that is really important to understand. So data is in a way non negotiable. Based on elements of information we have to own and be able to put it in a way that we can leverage it to make decisions, whether it’s for how much money to spend for marketing or how much money the customer will generate with the lifetime value or any of the calculations that need to do because that’s how we have to own it. We have to build the systems and capabilities to put us somewhere that is easily accessible. The problem with data projects are not that they are data projects that take forever is that they don’t become accessible to the systems that need it. So building it in a way that any system you put on top of it that you buy or build can access your data to make it valuable. So that’s the first thing and make it as open as possible. Then the second question is is this particular component that I’m trying to build or buy a core competence that will make a difference to my business going forward? Or is it something that is a commodity and I can do anywhere? And that decision filter actually determines what live versus built? Right because to me, it is like you can buy everything or you can build but then you also have a series of integrations. Right? Is this system so critical that if I don’t own it, the latency is so high, it will destroy everything. A bunch of decision criteria we have as we look at all the capabilities we need to run this business and I that’s a part because you’re running a full business to your point, end to end, even though it’s small companies. You look at each one of these foundational layers of tiers. And for each one of them we have gone through and said Is it a buyer belt? Or is it a buyer today? Some decisions might just be let’s go by and park them today. Because it’s not the right thing to do today, but over time, a trigger will element will bring us in. So that’s the other thing we have to face in sequencing our investments to what we can afford. That is when a lot of these aggregators and started getting trouble is when you spend more money than you have we can afford. So we’ve looked at the whole map. Just like I always say to people, I draw the blueprint of my house. I don’t need to build the extension right now. Or put the swimming pool, right because I can’t afford it. But I do need the load bearing walls. I do need the kitchen because I need to cook. So what are those elements that I do need to build today that are critical to me. But over time I can then go decide, You know what I need to go bring it house. So that’s how we have taken the approach off the Bible.
Romeen Sheth 28:40
Well, there’s a longitudinal element to that as well right in terms of chronology or sequencing of decisioning. It’s also a function of how your brands are performing themselves. So one of the things I was curious about is when you look at this type of model or so when you buy a business, is the idea that it’s you know, it’s held on to it’s kind of kept in the portfolio for an evergreen period of time, or is the idea that you know, you’ll actually spin out individual brands off the platform after acquisition, like how do you think about the portfolio management part of the equation that’s not the building and supporting the portfolio, but literally the management of the portfolio itself?
Helen Vaid 29:16
Currently, our approach is that we are no different than any other large CPG business, either by the university in DC, you have a portfolio and you randomly grow them over time. Now plans to become you’ll have to refresh them, right but the current thesis is not that necessarily spin out or sell it. The idea is that we’ll own it and build rather durable over time. And these are brands that customers care about. Now, as time progresses, we’ll new data up here and we’ll have to make different decisions, you know, our currencies is really is that we want to build a house of brands as we just small brands with high potential, right and that’s that just really the way
Romeen Sheth 30:00
I’m chuckling because actually, the image I have in my mind, I’ve come across this relatively recently I didn’t I didn’t even recognize this or I wasn’t as aware of this. If you look at all, there’s a fast majority of individual consumer brands that we all buy sodas, chips, cereal, so on and so forth. It really all ties back to six companies. Right? And so you’ve got hundreds and hundreds of brands out there and we as consumers have kind of invented a trick to we have all these choices. They’re all these different companies, etc. But they all roll right back in. Right?
Helen Vaid 30:33
That’s right. That’s right. That’s why my view is there’s no reason why that small brand that that for two person garage, you know, idea came from doesn’t have the same potential as a large brand that was you know, done in a lab in the opposite of a large CPG company, right because it is really about how you nurture and grow that business as opposed to you know the idea was a bad one. So it is that’s what we call it that are in the business of Unlocking Potential.
Romeen Sheth 30:59
Yeah, that makes that makes a lot of sense. So this space and you can correct me if I’m wrong, I kind of call it the aggregator space as the easiest way to at least not is really getting right to the rasio is probably the most well recognized name. I think there’s you know, I’m sure there’s more but there’s I’ve seen at least about 60 aggregators out there. There’s a billion dollars has been deployed right towards this business model of companies really trying to tackle this. How do you think through that and process that I mean, the natural implication for me is, you know, when more people adopt the model, more capital flows and chasing up at the same deals, prices of those deals, go up, start squeezing returns, eventually leads to capital outflows. So my question in sorts is, you know, are we kind of seeing this type of wave that’s happening and this is kind of the business model of the time? I don’t believe that, by the way, I think there’s an enduring business model, but I think there is a cyclical effect going on right now at this moment in time in this business model. So maybe a lot to unpack there, but maybe maybe we could just start with what’s the lay of the land you know, various boundaries unique focus. How do you think about as the CEO boundary differentiating from the pack? Let’s start let’s start there. Yeah.
Helen Vaid 32:11
So look, we believe that we have, but I think of the three strategic modes for us, I think, three different key elements for us as a business. The first is a bag that we will focus on brands. And though we can grow them in a way as operators like our team is full of operators who have done this before in different channels. And we brought them in together intentionally because our goal is that we bring them together because we can get these brands and grow them. Right that is an absolute going to be a mode for us going forward. Second, is data. Like I said to you, I think we have to be able to find signals of growth that are not apparent to someone who’s just a two person company who just doesn’t have the analytical systems available to them to be able to identify those patterns. So by building a unique data model, we will be able to identify patterns of growth that are just not available on the surface. So that’s the second. The third one for me, and probably the most important other founders themselves. One of the things that we truly believe in that the companies we buy when the founders stay with us, you almost want to build a founder and residence program like I call it and they will become our thing. For the next idea. The next idea because they are successful because of who they are. We will be successful for who they are. So they need to join this family in whatever way shape they want, but they will grow the business partner for us going forward. For me those three areas is what makes foundry unique, right and I’m not saying others don’t do that. But what I’m saying is these are the areas of focus with which we want to go to market because it is a big and a busy market right now. And I think we have to figure out how we what is our formula for success as opposed to what anybody else is doing?
Romeen Sheth 33:51
Yeah, and it hasn’t been select rasio focus, right for example, exclusively on Amazon FBA is you know, open store is focusing on shopper rolling up Shopify stores. Is the idea here that you guys are you know, is there a geographic focus is there you know, I know you’ve talked a lot about omni channel so I’m assuming that you know the focus of bringing these brands into Foundry is not just a function of are they on Amazon, Shopify, etc. Where’s the actual target focus, you know, when you when you kind of pare the universe down of those, you know, billions of stores etc. We were talking about in the front part of the conversation. How do you how do you pare down the universe to at least even you know, start processing this is the addressable store population, our addressable brand population, you know, for us to go after
Helen Vaid 34:35
Yeah, we start with the two filters, so operand and categories, as opposed to a channel right? Channel is just where the customer is finding these products, right. So if we look at and therefore it doesn’t matter if it’s FBA, or direct to consumer. For us, what is important is it just got to go signals of brand, and does it have white spaces to grow? And that’s been our filter as opposed to going with a channel focus, which is love the aggregators focus.
Romeen Sheth 35:02
Yeah, I want to round off the conversation how long would this quote you have? I love it. And I want I want to unpack and truly understand the meaning. I think I’ve an intuitive sense of what it means but I’m sure I’m missing something. Your quote is, Amazon is not the point of arrival for foundry, it is the point of departure, unpack what that means for us and maybe you know, use that as a summation of the discussion we’ve had.
Helen Vaid 35:27
Yeah, sure. See, for me, Amazon is such a huge marketplace that you have to participate if you want to grow your business. So to me, participating on Amazon is not the end success. Factor for brands. So for me, that’s a very critical child, we need to participate and be showing up the right way and do all the things we need to do to optimize the business on Amazon. But for me, the actual point of arrival for a brand is when they’re available, wherever their demand is, wherever the customers are, I always start with where are the customers who will want to consume this product and it can be in front of the eyeballs for those customers cannot put that item in there. That might mean a direct to consumer that might mean an app that might mean stop putting it on Lazada in Asia, that might mean putting it on a in the marketplace in the UK, it might mean so many different things just for me just because we’re successful on Amazon doesn’t mean we have arrived. Just because we’re successful in Amazon is the table stakes for us to get right because that is a huge source of revenue and baseline for us. But as we get into other places is when we actually will truly unleash for the capability of this brand is and for us to do that we have to continue as a business have operators who can do enable that and that’s how I think about it. That’s what I meant by it is a point of departure for us. It is non negotiable. We do it right. No one’s saying we don’t do Amazon right? But that’s not what’s going to give us a check in the box and saying is done the work starts when we finish our work on Amazon. So to say it doesn’t end there.
Romeen Sheth 36:59
I love that because I think it kind of summarizes our conversation nicely, which is the whitespace I think there’s a significant whitespace now, where you actually can bring in lots of resources, lots of capital. Loss of sophisticated operators to really take these businesses are these brands that have started, you know, in many cases, actually with no intent to become as large as they have. But they’ve been as you said earlier in the discussion been pulled in, you know, by their customers and they’re kind of on this on this journey and path. Hell this is this is awesome. I so appreciate you taking the time. It’s such an interesting space and generally right now I think people have observed that heard about it, etc. But getting, you know more perspective from someone that’s really an operator and running. This is super interesting. So you’re welcome back anytime. Thanks so much for joining us. I really enjoyed having you on
Helen Vaid 37:47