Shoppable Revenue & Funding (2024)

hello everybody my guest is heather marie she is the founder and ceo of a company called shopable a technology company that helps media companies brands and retailers bring the checkout experience to anywhere a consumer discovers or engages with their products while the shoppable sorry while with shopable she won the 2013 women in digital award from l'oreal and was named one of the 10 most powerful millennials in manhattan i love that title by gotham magazine and one of the 11 tech gurus changing the luxury game by refinery29 the company was a 2014 webby award honoree for online shopping a 2016 webinary for technical achievement and named one of the 100 brilliant companies by entrepreneur magazine heather are you ready to take us to the top yep absolutely my gosh you're winning awards all over the place so do you own new york city yet not yet just a small part of it it's a small goal right small goal exactly so tell us about the company tell us you know what it does specifically yeah so we um you know uh kind of taking it from from the top here we created a technology that essentially lets you purchase anything that you see anywhere online so if you think about e-commerce in general you can of course purchase things directly on any retailer's website but if you think about everything else that exists from social media to blogs to publishing content to ads videos everything else you see as consumers were discovering products so many other places and prior to shoppable there was no way to really make anything shoppable unless it was a shop itself so what we're doing is we've created patent pending technology that we're bringing to all these different locations outside of traditional retail shops to create shoppable experiences so like you have this beautiful chicken and egg problem right like it won't work unless you get a lot of these retailers actually using it so as a consumer like me when i go and see my friend wearing a pair of jeans on facebook i can click it and buy it from whatever the gene company is right how do you solve that yep yeah um great question so we um when i first started the company in in 20 um 2011 um have to go way back but when i first started that was definitely a huge problem which was how do we you know decide who to go which one to get first and um you know of it was we found we kind of pitched the concept um to a number of different retailers got their um kind of loose buy-in enough to say you know these brands are coming on board and then bring them to find our launch partner and we actually launched the technology with the wall street journal um during the holidays and by having them on board they actually you know as someone with the wall street journal that caliber of um branding and that that type of company was able to bring in a bunch of retailers and advertisers that they already work with and then that kind of helped fulfill the need of the products out of the gate for that particular partnership and it really created this amazing flywheel type of experience where once they were onboarded in general for them they were onboarded for the next company and the next company and the next company so you have to start somewhere and start small but we've grown tremendously since since then so in last year 2016 how many just individual transactions were processed through your platform would you estimate uh we don't share specific transaction um level but as far as like on the the product catalog side of things we um have grown to um just under 30 million um products across the whole platform yeah but see heather i'm gonna ask this question again because like that doesn't necessarily mean anything like like here's what i mean i go to your website and i see the marketplace with most popular stuff listed here but then i look at your your alexa ranking and it's super low which means people necessarily aren't seeing these like the key to making your thing work is they have to see this ralph lauren black and white striped scarf like on somebody on instagram or on facebook like you have to make the sale happen there like which is maybe why you don't share you know you know transaction numbers like how do you solve that problem uh well so we solve it by so we actually are not about um bringing people to shoppable.com it's about bringing the technology to where consumers already are so integrating the technology across a number of other different websites can you give me an example i would love to actually see that yeah sure so like going to um like going to let's go to um like dove.com it isn't easy yeah d-o-v-e and then um if you click the product tab yep and then just click on anything okay okay got it well it might take you a second to load but once you get um get into product detail pages um everything you see here is powered through shoppable so without shoppable um an incredible brand like like dove didn't have the ability to sell products um from walmart and walgreens and target and all their favorite retailers on their own website they had to redirect consumers off their site and weren't able to make that final make that connection uh directly for their for their customers so they've integrated shoppable technology and if you click through um i can't see what you're looking at i'm buying i'm buying i'm buying the white beauty bar right now because this face needs more beauty baby that is a very popular product so you go go through that and you'll see all the way through to the checkout experience you're able to stay directly within that experience where you're getting all that product information where you you've um seen that product so on the back end this is like less yeah this is like less about sorry i had this misplaced in my brain this is less about influencer marketing right buying stuff you see on facebook and social and more about letting these brands that didn't have sophisticated backends to even have their own merchandise on their website and you giving them the tool set to be able to do that yep yeah it's well it's um we bring the technology to uh a number of different types of companies one um you know big category for us are um major um fortune 100 brands and cpg companies like like the dub example we're looking at um but yeah we've done stuff um shoppable things with other types of publishers like i mentioned the wall street journal and conde nast and time bank what would wall street journal sell like their digital publication or their print publication um digital okay it's all digital interesting and and so what's your business model how do you make money so we um we uh charge it it's basically sas so we charge an annual license fee for access to the the technology and creating a shoppable experience on on someone's site or app or um video ad etc and do you is that license i imagine you have all kinds of cohorts big and small so i'll just ask a generic question what's the average shoppable customer paying you um we don't share that out outside well give me give me a big range it stays vague as vegas you want to have it um it's typically i mean it's an annual license so it's it's typically in the five figures okay got it and is the is it being you know way more than five figures or way less than five figures dependent on like what specific metrics is it is it number of skus is it number of average checkouts what are the levers that you pull there uh so it depends upon a few different things part of it is excuse part of it um is the size of the site an api call so you know some are obviously significantly bigger than others and then other things you know like service tiers things like that got it okay now that we kind of know more about how the business operates tell us the juicy stuff the story so 2011 was launch date huh uh well we started in 2011 we launched in 2012. so what were you doing before 2011 before 2011 um i was so i was post acquisition at monster.com just before that so i had been on the founding team of um a digital media company called affinity labs and uh there i was there i was the ceo's chris michael and um you know it was his idea and his um genius behind everything but um you were at monster no at uh affinity labs at affinity okay it was pre-monster yeah and then um but i was there from the time it was a powerpoint and um led sales and business development and account management and sales ops you know was it kind of a team of one for a while then monster.com acquired that company in um well don't quote me but um a couple years like what are we talking like 2008 2005. yeah i want to say 2008 2009 around around that time okay so just to be clear you were in the did you do the agency right out of college uh no it wasn't an agency it was digital media it was a digital sorry sorry i keep saying agency yeah digital media that was called affinity did you do that right out of college i did yes okay so college affinity digital media you're bought by monster is there an earn out do you guys have to all stay on um so it was it was all cash but then additional incentives afterwards so i stayed um i um i made it two years after the acquisition that's pretty good most don't make it that long i think of the original i'm trying to think of like the five people that were there at the beginning i there may have been one other person still there when i left but they may have all gone too i may have been the last one of the five so i stayed there until i was ready to to leave and um had been um you know doing an enormous amount of research on the idea of shoppable which i um you know kind of stumbled across um through an aha moment while i was working for um for a monster during that time in my life got it and what you part of what i want to understand is like what was in your brain when you thought about leaving monster to take the risk to start shoppable financially did you already kind of build up a pillow like a buffer from the monster acquisition and from just saving your salary and or or were you really going balls to the wall you had nothing and you had to make shoppable work oh no no the the former 100 percent you know i i think i think a lot of entrepreneurs like tell a certain story and not the truth behind things that does no one else justice and um you know i try to to say the truth about every single detail that you can um so no i um post acquisition you know um i knew i knew at some point i was gonna start my own company even before i took the position with affinity labs i thought about starting a completely different company at that point in time didn't do it so after the acquisition um you know obviously paid off any debt and anything like that and what debt did you have um student loans and um i don't even remember at that point in time i just graduated it was two years later so it wasn't i and this was now i don't know i feel like 10 years ago are we talking though like are we talking like 10 grand or 100 grand no probably closer to like 10 wasn't that it wasn't that much but you know paid off everything and then um set aside um a portion um of of cash knowing that i'm going to be doing this relatively soon tell me tell me your secret formula what portion of cash did you make sure you put away so you could live with the rest um i assumed that you could go you know as you know i think it depends on what people want but i wanted to make sure i could go for two years without taking a dime and i want to kind of overestimate what everyone else says and then just plan because that you know nothing else you're sitting on extra cash which is you know never a bad place to be in but you also don't want to be desperate as an entrepreneur either so i set that aside and then while i was still at monster making a nice corporate salary getting sales bonuses and things like that i took that opportunity to um you know continue to set stuff aside start to um you know pay out for for certain things that i needed to to do on the weekend to prepare to to quit my job and then i also downsized from my nice condo in the soma district what did that cost the condo i was probably paying at that point in time as a one bedroom and soma for like 2400. crazy like that what'd you downsize to i moved to sausalito um so i moved across the golden gate bridge and lived in a tiny one bedroom that like it sat on the hill i had like a tiny water view um but like floors so thin that you could hear your neighbors walking and i'm pretty sure the guy hit this ceiling with a broom whenever i went what would you pay for that i probably paid around a thousand dollars or something um it wasn't a lot but it was enough to know okay i need to start downsizing gonna get rid of um i'm gonna have no income pretty soon and just prepare for that so that was kind of the prep i wanna pull this out of heather's story because she talks about it like it's vanilla but one people rarely talk about this and two people assume she mentioned she put away and heather correct me if any part of this i'm repeating is wrong like i want to get it right she put away two years right of what if she had no salary what her living expenses would be that she could live and not have to worry right so she's giving herself basically a two-year runway on shoppable once she had that put away she's going okay now i have two more triggers i have to pull before i jump in full-fledged one save some of my monster salary as risk capital right that i can throw out shoppable right so i don't have to give up equity to investors and then two you can also limit your expenses people so many entrepreneurs i talk to nathan i don't have any money i don't have any money baloney you have it right there's two ways that you can increase your buffer one is save more money the second is live on less heather did both and that's one of the reasons i think that's one of the things that makes entrepreneurs successful because you do that in business as well yeah no it's a huge thing and honestly going from from someone right out of college to a great job and then post acquisition acquisition money it was very i i had to change so many habits because i in habits that you i probably shouldn't have had in the first place but you know the bill comes at dinner and you just add the tip and you sign it and it goes away and someone's like how much did that cost i couldn't tell you because i wasn't paying attention to those details because at that point in my time at that point in my life i just kind of was a little too fast and loose with money so i had to stop those types of things stop any online shopping but for someone for starting an online you know ecommerce business it was your a b testing it was it was incredibly difficult i had to make manage return policies and anytime i was testing i had to make sure it went back again that's so funny um but yeah you definitely have to change your habits and so fast heather we're running out of time fast forward on the shoppable story so bootstrapped or have you raised capital no we've um we've raised about five million okay you raised five million and what year i i assume you probably did that in many rounds what was the most recent um that was last um july august they're about okay so about a year ago that's right so right now you're either raising another round of capital uh or you're selling to shopify which one is it not selling to shopify it's neither and not come on heather come on she's smiling i don't believe you all right just kidding what are you so are you guys are you break even right now are you still burning cash no we're um we're above break even that's great the goal was you know and part of this was my strategy is i don't want to be one of those companies that's making announcement after announcement taking cash and then giving up equity forward i don't think that um venture capitalism um you know it was a metric for success i'd rather have the equity and have you know take care of the the team and the original investors and give out as little as possible and create a real business that's generating revenue yep what's your team size to date uh we're about 20. okay 20 all based in san fran no all based in new york now oh new york now okay very good oh okay so you made the tr you were talking about soma and moving over the golden grey bridge at some point you moved to the east coast i did after i made it was in sausalito for about six months and waking up early every morning um calling on retailers and media companies in new york and um it was just taking forever it was going so slow so i went on a business trip to new york and on the second day um second or third day i was i was here i you know it became so obvious i said like i you didn't leave did you no i mean i came back and got my stuff and came back 30 days later it just became so obvious that this type of business need to be based in new york and we can move so much faster so so where are you at last few questions here where are you at today in terms of you said 30 million i think you said skus or products on your platform but how many merchants is that across is can i just pull that number off your on off your shoppable thing yeah we're about for 400 and some merchants yeah 438 is what you've got listed here and then what's the difference between merchants and brands you say 2000 brands so um one merchant could have hundreds of brands so a merchant could be someone like saks fifth avenue whereas a brand could be someone like theory oh i see yes does that make sense it makes perfect sense yep and then can i do you mentioned earlier you're you're kind of annually and this is a kind of a general thing you threw out but you said annually these folks it depends but they'll pay on average you know low five maybe high five figures per year so can i add a minimum which would be call it a grand per month which comes out to about small small five figures per year but a grand per month multiplied by 438 and assume you're doing somewhere north way north of half a million per month in revenue um more way more right yes i'm trying i'm trying to be respectful that you don't want to tell me the exact number but also put a floor so people understand some of your success yeah yeah yeah um that's that's fair do you want to make that more specific no i don't want anything out there keep it keep it quiet that's smart look sometimes it's smart sometimes it pays off to be it all depends on your strategy but that's good stuff it's good to control the information 100 100 is all right let's wrap up here with the famous five number one what's your favorite business book um i would say um never eat alone by keith ferrazzi number two is there a ceo you're following or studying um i would say jennifer hyman from rent the runway uh yes so good uh number three is their favorite online tool you have like acuity scheduling um right now it's still boomerang for gmail yep number four how many hours of sleep you get every night usually about six okay that's pretty good and what's your situation married single you have kids um engaged getting married in three weeks oh congratulations that's so exciting okay good so no kiddos yet right all right and do you mind me asking how old you are um 32 okay so last question take us back 12 years what do you wish your 20 year old self knew um i would say um just how long everything takes i mean everything um i think patience is incredibly important and preparation is important which um we've been but um yeah i think having an idea of how long certain things things take uh would certainly um be a helpful thing to know there you guys have it from heather things take longer than you expect you got to be patient and she was right out of college went to work again at an early agency it was a com acquired by or digital marketing that was acquired by monster and about five people before it was acquired she stayed there for two years saved up saved up saved up knowing she wanted to take the risk of shoppable which she did in 2011 launched officially 2012. has now a team of 20 based in new york city they've raised about 5 million bucks have over 438 merchants with over 2 000 brands using their platform paying anywhere between 10 grand and 90 grand per year some smaller some more but doing well north of 500 grand per month in revenue heather you're on a tear thank you for taking us to the top all right thank you