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Nearly every company will talk about the importance of data for their business. But once you start digging a little deeper, it is often difficult to really see how that data is being used to make an actionable impact on their business.
Digitally Native Brands are different.
Since they have owned the relationship with the consumer since day one, they have first party data that most of the Fortune 500 can only dream of. For the best companies, this advantage goes beyond just the data. Their Customer Service teams serve as the front lines, using their relationship with the consumer combined with data to take a new approach to personalization. One of the best at this is BARK, makers of BarkBox and BarkShop. To learn more about how BARK has made data and personalization a competitive advantage, I sat down with their co-founder Matt Meeker.
Dave Knox: When we met you had just started as the entrepreneur in residence at Dogpatch Labs. Dogpatch Labs was the center of the New York tech ecosystem before WeWork and other things had emerged. How did that EIR role shape what you’re doing today with BarkBox?
Matt Meeker: What I’m doing today wouldn’t exist without that. That was a super fun role and a really unique space. We’d bring people together, teams together, one to four person teams about 20 in a room, and they shared ideas and expertise with each other. It was a fantastic spot for someone like me. It was also an inspiring spot and you kind of have this collision of all that inspiration, a new dog in my life in Hugo, and then learning my way as an investor. One thing I’d never had exposure to was commerce, but a lot of commerce businesses were starting in New York at that time. I’m seeing one or two pitches a day, and I didn’t have the vocabulary. I didn’t have the knowledge. There was a collision there of “let’s start a commerce business for a dog in this environment. It will be really fun. I’ll learn a few things and become a better investor and make my dog happier and it’ll be cool.” And that all worked out. In fact, it worked out too well and I got pulled out of a job I loved.
Dave Knox: At that point, you decided to go beyond just consumer testing of the concept and actually took credit card payments from people, right?
Matt Meeker: That’s right. We took payments via Square off of an image that I carried around on the iPhone saying what do you think of this idea? And then pulling out the Square and taking credit card payments for it. We did that about 50 times and then had this moment of we actually have to ship something at these people. The origination was really about Hugo and that as a Great Dane in New York City, he’s an outlier. He’s not well served by a pet store in this city. So the entire ideas was about getting him the right products for him. And what we’ve since learned over the last seven years is all dogs are unique. They have their own very specific needs and interests. As a result, today we are sending about 120,000 unique assortments every month and serving about 650,000 customers a month. This year we’ll do about a quarter billion dollars of revenue. Almost all toys and treats inspired by the realization that all dogs are unique.
Dave Knox: One of the things I’ve really always admired about what you guys have built with Bark is your embrace of this mindset of continuous beta and how you take new ideas and new business lines and you toss them out and see what happens. What’s driven that mindset into the cultural DNA of Bark?
Matt Meeker: A little bit of just ADD and personal interest. We’re sort of builders and starters and then it’s about serving the dog and serving the customer. And when you live with a dog, every day there’s a new idea that springs up. There’s something of like, oh, I wish this existed. Take BarkCare. That’s from Hugo wanting to go to the vet or not wanting to go to the vet, let’s say. And we go in there and he’s stressed and he’s having a terrible time and he’s in a room that’s too small for him and he’s not comfortable. It’s just a simple idea of would he be more comfortable at home? These ideas are just really about like what could I do to make him happier? That list just goes on forever.
Dave Knox: One of the things you guys have done amazingly well is been willing to shutter products when they don’t work and admit this was a great idea, but just something’s not working out. A lot of traditional companies struggle with that. Once they’ve committed they’re going all in and they’re going to keep pushing. How do you make that decision to kill an idea?
Matt Meeker: It’s different in every case. Sometimes you make something and it just doesn’t resonate with the customer. That’s an easier one. BarkCare’s a very difficult one because people loved it. I loved it. It’s one of my favorite products we’ve ever done. It was a case of our skills and our way of simply promoting it and marketing it did not align with the right way to do it for that product. We’re direct marketers. We know Facebook, Google, how to get people there on sort of an impulse buy, and selecting a vet is not an impulse buy. It’s kind of a long grind, refer your friends, make the brand well known and then eight months later someone might think of you and that’s the way it should be. But it didn’t align with us and we hadn’t built the model to be that patient. It just didn’t align with where we were at the time. Doesn’t mean it’s a bad idea or a bad business model just wasn’t for us at that moment. We ending up shutting it down after about 18 months but we probably knew after about six. I feel like everyone lets it go longer than they should. You want to hang on. You want to take that last effort to make it work or try the Hail Mary, and you always just let it go a little bit longer than it should.
Dave Knox: When you started BarkBox, you were selling other people’s products in the boxes. What led you to make that switch from selling third party products to your own products?
Matt Meeker: It was an evolution. When you start off, you’re small, and you go to vendors and you say, “I want to buy that thing.” And they sell it to you and then you get a little bigger and they sell more items for less. And then we get a little bigger and the vendors start coming to us and saying, “We designed this just for the box.” We’re like that’s awesome, thank you. The next step in that was they come to us with that and we say, “Can you change this, this, and this? And eventually it turns into we’ll just hand you the designs and you give us product. So it was this evolution over the course of years that was informed by the customer where we could look at vendor products and say that won’t work for our customers because of these elements of it. We had so much knowledge and so much just day-to-day interaction with our customer that we really knew what they were looking for and could make products better and faster and cheaper than anyone else could make them.
Dave Knox: Over the last few years you’ve started moving into traditional retail, partnering with companies like Target and others. That’s been a real tension point for what I call traditional brands, because they have long standing relationships with the Targets, the Walmarts, and that’s held them back from being able to do direct to consumer. How have you been able to balance that fine line of having a direct business but making the retail partners happy with what you’ve created?
Matt Meeker: We tend to make unique product for the retailer or for the channel where it’s being sold. Every element of where it’s being sold has something that’s unique about it. In the box, people don’t have an expectation of what they’re getting specifically and so it’s about listening to that individual customer and their needs and then surprising them. And you can present a product in a different way in the box where on a retail shelf you hang, let’s say a toy with a squeaker on it, you have to build onto the packaging to say squeak me. You’ve got to expect people will go by on the shelf and interact with it in a different way. Amazon, you need really specific photography that shows every element of it and think about how people are going to interact with it.
Dave Knox: One of the things that gives you the ability to make something unique is the data that allows you to do 120,000 different assortments each month. How have you had to restructure the company differently to not just have the data but make it a competitive advantage?
Matt Meeker: I think people talk a lot about data, but then you can’t really draw the line to specifically what they do with it or they get so overwhelmed by all the possibilities. One of the huge things that’s at the core of Bark is our Happy Team. At its core it’s customer support, but it’s much, much more than that. It is customer relationship but also data gathering. They’re on the front lines of listening to a customer and then having flexibility to respond to them. That’s what took us into more personalization.
Our Happy Team started something called Tailored. The true story of how it started is we had a customer who was ordering BarkBox for their pot belly pig. They called in and said, “We really love this. Our pigs love the toys. We’d like to give them the treats, but you’ve been sending a lot of pork-related treats and we just can’t feed that to our pig. I hope you understand.” And that sort of hit them and they said, “I’ll tell you what, from now on every month we’re just going to pack your box here in our office and make sure that you get the right things for your pig.”. That was number one. In the next month it was 19 and the next month it was about 400 and they were managing this in Google spreadsheets. They were packing boxes. They were ordering stuff out of our warehouse into the office in Columbus. And after about six months of that, the rest of us woke up and we’re like, what’s going on out there? What are you guys doing? So we have followed them. That led to us being thoughtful about what questions are we asking, how are we extracting data, and then how are we feeding it back into a system. And it’s been about two years of evolution and that flows through everything.
Dave Knox: The last six years have been a pretty amazing ride for Bark. What comes next?
Matt Meeker: New product categories for us. Obviously pet is a huge industry in the U.S. alone, over $70 billion spent. And as far as selling toys, we’ve done quite well. We’ve built quarter billion dollar business on toys and there’s a lot more room to run there and we will, but it’s about those next product categories. You see some of those coming to light. We are on Amazon with an essentials line that is beds, poop bags, etc. We’ve got some supplements like hemp oil on Amazon as well. You will see more of those like products in dental. Obviously the big prize is food. That’s somewhere in our thinking. At the end of the day, it will be about more products for dogs, inspired by dogs like Hugo.
June 10, 2019 at 12:09PM
Forbes – Entrepreneurs