Well Made

Ep. 75 Launching a New Unboxing with Nancy Walton and Caitlin Strandberg

April 3, 2019 · RSS · Apple Podcasts

We first spoke to Ollie in 2017, less than a year after they launched. Gabby Slome was on the podcast talking about building a brand on great ingredients and an innovative model for shipping ready-to-serve, refrigerated dog food. Now, two years later, Ollie is scaling to keep up with their growing customer base. 

When launched, Ollie was shipping their human-grade dog food in single-use plastic trays. As their customer and canine base grew, they got the customer feedback they needed to scale and adapt their initial packaging experience. Last week, they launched a totally revamped packaging suite that uses less plastic and takes up less space. 

Before: individual, single-use plastic trays. After: vacuum sealed film packs with reusable pup-tainer. Launching a New Unboxing

Before: individual, single-use plastic trays. After: vacuum sealed film packs with reusable pup-tainer.

Now, food is shipped in vacuum sealed film packs and customers can store the meals in the newly designed, reusable Pup-tainer for freshness. This fresh start for Ollie was over a year in the making. On this episode, we’re talking to Nancy Walton, Ollie’s Sr. Operations Manager about the serious supply chain strategy behind this exciting milestone and their new packaging redesign.

Caitlin Strandberg is a principal investor at Lerer Hippeau, a seed investor in Ollie. She's joining Stephan on this episode to give big picture perspective on how this packaging update marks a milestone moment for Ollie, not unlike other startups at this scale. Read more in this post from Caitlin about delivering a memorable first moment for DTC companies.

 Launching a New Unboxing

On this episode, Nancy talks about interacting with customers early on (6:41) and adapting their cold chain (11:36) to support their growth. Caitlin shares the key indicators that it’s time to make the second bet on your minimum viable product (14:40). Nancy highlights the new Ollie unboxing (17:45), sharing how they addressed the challenges of the old packaging through user research (20:54). As the team at Ollie tested their product, their packaging solutions evolved. Nancy shares how Ollie responded with slimmed down food packs that pair with the new Pup-tainers and optimized their SKUs and spoons to address consistency in portioning and packaging waste (22:43). Nancy and Caitlin give advice on making actionable data-driven supply chain decisions (27:10). Caitlin talks about translating best practices for growing companies from early predecessors (44:53). And finally, Nancy and Caitlin talk about how creating a repeatable magical moment is the key unlock for burgeoning brands (48:11). Full transcript below. 

Dig into Ollie's new packaging and products and follow them on Instagram for your daily dog fix. 

Also mentioned on the show:

Images via Ollie.


Stephan Ango: So today we're talking to two really fun exciting people. Nancy Walton from Ollie and Caitlin Strandberg from Lerer Hippeau. This is going to be a little bit of a different episode because usually we talk to founders, we talked to folks from the press or people who are looking at the space kind of in a meta way. This is kind of going to be a little bit of both because Nancy is with Ollie. It's a consumer brand in the direct-to-consumer space selling pet food online. You're well known for the human grade quality of your pet food. We had your cofounder Gabby Slome on the podcast pretty early on actually episode 20, about two years ago. She kind of gave us a deep dive on, you know, why the business was started and kind of the challenges around how do you sell a product where the consumer is different from the purchaser. How do you make the dogs happy? How do you make the people happy? Talked about the brand and kind of the beautiful branding and messaging that you've designed. But that was very early on right after launch. And since then it's been about two years. Nancy, you're on the operations side of the company. We're going to get into your background in a second. And Caitlin you've been with Lerer who is an investor in Ollie and you've been involved in the space over there in New York. You're coming to us today in Los Angeles. So we kind of have all these three perspectives and what we want to talk about today is Ollie's about to roll out some big changes on the operational side. We're going to talk about that and kind of what we're seeing in terms of what does that mean from a supply chain standpoint. I'll try to bring in the packaging knowledge. Caitlin can bring in the like VC lens and how does this represent other patterns that we see happening across the space. But why don't we start with you, Nancy, and just kind of give us your background on when you started at Ollie and what you do there.

Nancy Walton: Sure. So I've been at Ollie now for a little over a year and a half working on our operations team. So our team covers everything from our R&D supporting when we're launching new products to the actual manufacturing side. And then all of the fulfillment and logistics that are involved with getting our boxes to the customer's doorstep.

Stephan: And Caitlin, how did you get involved in Lerer in and specifically, can you give any background on Lerer's point of view on Ollie?

Caitlin Strandberg: Sure. So I've been at Lerer Hippeau for about a year and I've worked in the venture space probably for the last five or six years, which is how we met way, way, way back. At Lerer Hippeau we're very active seed investors. We're based in New York, but we invest all over. San Francisco, LA, New York, Boston, all of that. And early on we had a pretty early pet tech insight where we saw the emergence of this new type of consumer, which is actually pet parents that are spending a significant amount of money on their pets with the same expectations that they would with any other purchase they would make. So it needed to be branded, it needed to be high quality, it needed to be relatively healthy. We saw a new consumer with a new purchase pattern and all they really fit in with that and that side of things. We had also made a number of investments in the space like Barkbox and the Dodo. So we had seen this kind of groundswell of excitement around pets and pet parents in pet tech. So that was kind of one bucket. When you kind of take the venture lens, you think of massive market. So this is $20 to $30 to $40 billion market pet spend. And then it was growing really rapidly and there were maybe four or five kind of old school brands that were dominating the space. And so when you think of areas that are ripe for disruption and where new brands can come in and kind of take mind share, this totally made sense to us. And was gonna be a great area to kind of build a new modern brand in. So that was maybe the second element. I think in terms of, we always look for team as well. And so when we met Gabby and the team, they were very mission driven. They were really focused on pet health. And that was something that we always get excited about. And we always lean on our founders to really teach us, you know, where the insights are in the space and kind of have the conviction to build something that doesn't really exist. And so those three things combined made it a really good investment for us. And I guess maybe the last thing would be we're also investors in a company called Plated. So Plated was doing this for humans and humans they're actually pretty picky, so you actually need a lot of skews and you get kind of meal fatigue with all sorts of different products. So you need a lot of variation and pets, particularly dogs are really easy customers from that perspective because they don't ever get meal fatigue really. And you can kind of give them chicken, beef, pork, whatever over and over again. And so they're a really great customer.

Stephan: I just want to jump in. Caitlin and I are sharing a microphone. But I want to mention that Flexo, who is like our mascot at Lumi and he's my cofounder Jesse's dog runs around the office eating all and has for the past couple of years. And he's a big fan too. And I think that I'm the primary caretaker of Flexo in some ways when he's around the office, I'm giving him Ollie food. There was that dichotomy we talked about in the first episode with Gabby about you're trying to get someone to purchase this product on behalf of the dog, but also the dog needs to enjoy it and it seems like they really do. And part of it is because this is a refrigerated dog food. It's not dry food that you can put in storage forever. That's the human grade component of it. So going over to you, Nancy, jump in.

Nancy: No, I was just going to say that. That's absolutely it. I mean, at Ollie we're really about putting pets first and trying to make sure we're delivering that truly nutritious food for them. We care about what we're putting into our body. We wouldn't want to feed our kids poor quality food and our pets are part of our family. We want to give them the best quality food that they can have, so that they're healthier, they're happier, they live longer. And that's just really been the priority of our company since day one is putting forward that super high quality experience that starts with the core product of our food but really continues all the way through the customer experience of receiving that box and unboxing box and serving that food to the dog.

Stephan: Do you want to share a little bit about what's coming up here with the new product launch that you're working on?

Nancy: Sure. So, we launched Ollie a couple of years ago and we're a direct-to-consumer company as you said. So we interact with our customers on a day-to-day basis and we really get to know them very well. And over the past couple of years we were really focusing on setting our foundation for our growth to support scale and help us get where we want to be over the next four or five, six years. At the same time as we were listening to our customer and getting more and more information, we started to notice a couple challenges that were popping up. I think every new company that launches you, launched with what you think is a great product for the market, but you know you're going to have to evolve it over time. And as we started to get smarter, we started to identify some of those issues that our customers were having with our product. So the big ones that kind of jumped out to us. Were one — our trays in their current form were pretty inefficient from a space perspective. I live in New York, I have a small fridge. I need to be able to get as much food into that fridge as possible. And our current trays were not very space efficient. We also found that the trays created some challenges with serving. They were plastic trays that had ridges in the corners. And the result of that was when you served your food, sometimes there was some waste that was left in the tray. You couldn't get all of it out really easily.

Stephan: This happened to me all the time. I'm telling you, I saw that happening. I was like, I gotta get that last pea outta that little corner there.

Nancy: Exactly. I mean, since we're tailoring our product to your pup's nutritional needs, we're sending you the right amount of food to meet the caloric requirements. And so it's really important that you can get all of that food out of the tray. And we knew that this was a challenge. And then the third thing we saw was that portioning was challenging. We used a number of different scoops that were different sizes based on how much food your specific dog needed to eat in each meal. And for me, I always think about it like measuring a cup of brown sugar. You might pack that brown sugar down really, really deeply into that measuring cup, whereas I might kind of dip it in and pack it lightly. And the end result is that you might have double the brown sugar that I have. And that was what we found our customers were experiencing. So it became really difficult for them to make sure that they knew they were giving their pup the right amount of food. So those were the big things that we really wanted to address.

Caitlin: So Nancy. Sorry to interrupt you. But I think that point you just had is really critical because this is where as investors, you think about who are the customers and your business has two customers, right? So there's the actual human, the dog's best friend kind of thinking about how they're using and interacting with their product. But you're also creating an entirely new product that is for kind of the pet consumer. And so you're almost building two companies at once and we kind of see this separation all the time with different businesses and it's a really interesting and fascinating challenge because your human customer doesn't actually necessarily get the benefit of the actual pet customer. And so those little friction points, we see our companies over and over and over again and trying to optimize quickly, but you don't really know they exist until someone uses it and tries it and you iterate on that over time, which is a lot like a software company.

Nancy: Exactly. And that's really the process we tried to take. We wanted to get to market with something that we knew was a great differentiated product and then be able to evolve it over time as we got smarter. You know, we always say we don't know what we don't know. We need to test it. We need to talk to our consumer. And you know, the difference, you're pointing out about how our dogs are the ones that are eating it, but our customers are, the ones, or humans are the ones that are purchasing it. We have the advantage as a direct-to-consumer company that we get to talk to our consumers every day. We get to get pretty intimate on what's going on with our different customers' dogs. What's working, what's not working, what's their experience like, what are they responding really well to, what are they not responding well to? And our focus really as a company has to be on providing that high quality experience for the dog and the customer and making sure it's a really easy to use product and a really fun product as well. We have a very inherently playful brand and we want that to come through. Because having a dog is playful and so it maps to what our product should really be.

Stephan: And another lens I want to add to this mix is, you're selling something that needs to get to the customer cold, which is a whole other level of challenge. You know, theoretically you didn't have to do that for dog food. Like you could have sold a canned food, you could have sold the dry food. That was an important thing to kind of the product and the consumer, the customer, the humans that you wanted to attract. And the quality of the dog food that you wanted to make. Tell us a little bit about how the supply chain has evolved over the past couple of years with that particular problem.

Nancy: Sure. So as you mentioned, we're a cold chain business, which you know, has some inherent challenges. So cold chain essentially means at every point in the supply chain, starting with the delivery of our raw ingredients and the way they are manufactured, the room they're manufactured in, to how they are shipped to our fulfillment locations and around the country. And then to how they eventually arrive on our customer's doorstep has to be cold chain. All of our food needs to arrive cold, to keep it fresh because it is meat and vegetables and fruits. So I think the biggest challenge for us really is that this is a new model in so many ways, but we're doing something that no one's really done before in our category. And that model hasn't been fully proven out to date. It's challenging for that cold chain. And it's challenging because we are such a fast growing company at the same time. So we're really having to learn in real time and make decisions today to support our current operations. But then never lose sight of the fact that in five years we'll be a totally different company and we'll be much bigger and we need to put in place today a lot of the foundation to support that growth. So it's really just about scalability. I mean I think back to when I started at Ollie versus today, we were a lot smaller. Our focus was different. So when we were buying raw materials in our supply chain for manufacturing, for example, if a truck load of beef became available that was really high quality and had a good price, we could take advantage of that and buy the whole truck load and that could be sufficient. But today and in the future, that's really not a scalable approach. We have to be constantly thinking about what does our network need to look like. What do our vendor relationships what do they need to look like to be able to get us the right products and the right quality at the right time? And to be able to fulfill those to a much broader base of customers in the future.

Stephan: I think one of the meta things here about what's going on with Ollie is it's only been a couple of years since you launched and you're able to see all of this iteration just because, as you said, as a direct-to-consumer business, you have so much more feedback going on. And this is really a question that I think of from an investment standpoint as a product-market-fit kind of moment where now you've got subscribers who are using this, receiving this on a weekly or monthly cadence. And that introduces like this moment where there's an opportunity to do a version two and we're kind of living in a space where there's this software, you can do this, you can roll out an update to people. And everyone can get it overnight. But when you're talking about supply chain and you're talking about physical goods, it's a little slower to make those changes and it involves a lot of different partners. This is for Caitlin. I'm curious, when you see this happening, you mentioned Plated, you mentioned there's other companies that you've been involved in. What's the typical pattern that you see around this type of challenge of taking something that was working and then evolving it and what's the right time to do that? When do you feel like you've got enough information to now make that second bet?

Caitlin: Yeah, so that's a great question. I think, — I talk about this probably like once or twice a week with our portfolio companies of our team. You know, the world has changed particularly around direct-to-consumer or consumer products where you have one shot to impress your customer and your consumer. And everything gets delivered now Amazon's on every front door in New York City. Like you really have to build a product and build a experience from the moment a box gets delivered that stands out from the crowd that stands out from the sea of brown boxes. So we think that's really important and we think that's critical because you don't have a retail footprint. You don't have anyone that can talk about your product or explain it or sell you on one thing or another. Like you have to surprise and delight with the actual delivery. And so there are different ways you can do that. You can do kind of minimum viable ways. And you can graduate once you have either more funding or more customers over time, but you really have to find that interesting, compelling hook that will make your customers want to share the product. Whether it's on social or tell their friends about it. You basically have like a moment to create organic growth or word of mouth marketing. So a great example is Casper or early investors in Casper, like a mattress in a box. If you Google "Casper unboxing," you'll see hundreds of videos on Youtube of people unboxing and getting excited and taking photos of it. Like that's just a totally different experience. And so every iteration you do from a packaging perspective, you almost have to reinvent yourself in a new way so that it doesn't get kind of stale. And so on one hand it's kind of the minimum viable, make sure your brand is kind of portrayed through the packaging and portrayed through the experience. Make sure your product actually shows well. And then I think it's a lot like what Ollie's doing, where you're optimizing on the packaging based on customer feedback, keeping people happy, but then also being a little futuristic on thinking about where does the future of packaging go? You have to kind of respond to that. So you have to change with your consumers. So like an example of that is we're about to enter into a plastic free, like no single use plastic world. We're at the very early stages of that. And so that's going to have to be incorporated into a lot of different packaging and products and experiences and a lot of brand. There's a lot of localism going on, so you're going to have to kind of make sure that you're catering to the demands of the new consumer in that way, and you'll have to iterate on that. But the product that works when you first start is very unlikely to be the product that works later down the road.

Stephan: Yeah. And you have new economies of scale now because you've got more customers, you're able to make decisions that maybe, earlier on you were just not able to afford or didn't have the scale to be able to manufacture something. Nancy, if you want to describe some of the new components that you're bringing. You mentioned obviously like moving away from trays into sort of like a much lighter footprint, kind of bag style that allows the food to take up less space in the fridge but also just uses less plastic, less material and then the new Puptainer containers, which is like an interesting concept that I would love for you to describe.

Nancy: Absolutely. So I think the best way to do this is to really just describe the unboxing experience because that's really what it's all about. Like when the customer gets the box. So a lot of the things Caitlin was mentioning made me smile because there are things that we're actively thinking about on a day-to-day basis. So when you get home, there's this sea of boxes often delivered on your doorstep. And when Ollie is one of those boxes, we really wanted to make sure it's stood out. So the first thing you see is that it's actually a white box and it has writing in our red color and those sayings on it are really playful, witty sayings. Kind of starting to initially hint at what our brand is about. When you open it as a new customer, the first thing you see is our welcome kit, the highlight of which is the Puptainer that you mentioned along with our iconic red Ollie lid and a spoon. What we've found over the past couple of years as we talked with our consumers is that because we're doing something that's really new and we're changing the way customers feed their pets, there's still sometimes some discomfort with keeping their dog's food in the fridge next to her human food. And with the Puptainer and the lid, what we're really trying to do is change that mentality by giving your dog's food its rightful place in the fridge. So we were really excited about having that Puptainer as part of it. Once you then get past that step, the rest of the box is really all about the food. So we have certain elements in the new packaging that are to really protect the food in transit and make sure that it arrives in the right form. And nothing happens when it's shipping from us to you, and then the rest of it is around making sure the food maintains that cold chain so it arrives at the right temperature so that you can put it right into your fridge or your freezer. The biggest change is really — that the customers will experience — is really in that core packaging of the product. So I mentioned the trays with the ridges and the challenge that that could create with serving the food. We also found that in transit sometimes those trays would crack. And that's just because the boxes, they're kept really cold and so that plastic could become a little more brittle. And so that was one really big thing we wanted to change. And so the new packaging, we actually switched away from trays and now we use a vacuum sealed method. And so this makes those packs really, really space efficient, which was something that our customer highlighted as a challenge within the old packaging and it protects the food better in transit.

Stephan: Yes. A pattern that we're seeing in Lumi and we've been planning a big piece for the blog about, we haven't found the right name for it because we want to make it gender neutral, but it's like the "milkman model" is coming back, like the milk person. I don't know, I feel like it needs a good name, but just the idea that you have a replenishment that requires so much less packaging and doesn't need to like sit on a shelf enables that idea. How much was sustainability a factor in some of these decisions?

Nancy: It was absolutely a factor in our decisions when we talked with customers. We knew that that was something that they were really thinking about and focused on. And so, we were making a lot of decisions and changing a lot of things at once based on all of those insights that we had gathered. And we wanted to make sure that we were truly listening to what the customer cared about. And then thinking very intentionally through how do those decisions translate into our operations to support the scale that we need to build to. And we tried to kind of keep that interplay in every discussion. And one thing we heard from customers was they wanted to reduce some of the waste that comes along with unboxing. And so as we went through optimizing our SKUs and portioning for the new packaging, we looked for a way to make it such that we could send food to customers less frequently and that would really cut down on the amount of waste that they have to handle.

Stephan: You mentioned making a lot of changes at once. That's kind of fascinating to me because you know, you've got variables at play and as we were just talking about a few minutes ago, you now need to make an investment. So with the Puptainer for example, which kind of looks like a regular kind of Tupperware type of container but has the Ollie colors and like the Ollie branding on it, but it looks very classy and minimalistic at the same time. That involves significant tooling costs and that's something that we're on the other side of as a company. We actually help you manufacture that product. You have to kind of be able to make that bet from not just like a design standpoint but a financial standpoint. And if you're working across multiple variables at once, it can be challenging to make that bet. And so is there anything that for you, Nancy, gave you the confidence to be able to move forward with that. Was it just data from your users or something else?

Nancy: Absolutely. So the packaging change didn't happen overnight and I think that's really the key. This was an extremely iterative process. It started, of course with the customer insights that we had gathered and we dug really deeply into those. Our CX team talks to our customers every day so we could understand what the data was saying and then go even deeper by connecting with our agents who are talking to the people every day. And from there we started to formulate an idea of what we wanted to change. But then it didn't just kind of end there. We went really deep throughout the entire process of changing this packaging. So we would pull together an idea of what we wanted to do and then really try and test it on customers to keep that feedback loop live. And it was actually a really great learning experience for all of us because it was just an example of how you really can never stop listening to your customer. We're building a new category and we're learning in real time and things can change quickly. So when we started this process, we were actually initially leaning in a different direction based on some of the initial insights. And then as we went deeper, as we tested it with customers, as we watched them in their kitchens unbox it and put it in their fridge and they're freezer and see what they liked, what they didn't like, we started to notice that maybe they're was a different direction to go in. And so we understood the importance of staying nimble and staying responsive. And that's how we really got a lot of the confidence that you're asking about because we tested it a lot and we talked to customers and we'll continue to test it. This isn't, as Caitlin said, you kind of get one shot to make that great impression, but every day you have to make a great impression. So I foresee over the next couple of years we'll continue to get smarter and continue to evolve.

Caitlin: I mean, you guys have definitely done an amazing amount of data collection and like data that will inform kind of new product decisions. And when you raise venture capital funding, you know, that's, that's what we hope that you do. We hope that you listen to your customer and then assign your own judgment onto what to do and what to wait on and what to execute on. And that type of behavior is kind of like that entrepreneurial mentality that we love. I think one thing that's emerging here and Nancy's touched on it quite a bit, is like there's a new type of startup employee and it's someone who's got supply chain expertise. That thinks about things in a minimum viable way, that prioritizes what are the most important things for the biggest the most customers. And then prioritizes that and spaces it over time. So the software developer is probably not like the core employee for a company like Ollie. It's probably like a pet nutritionist. It's probably a supply chain expert. It's probably an industrial design packaging design person because that is the value prop. And so, that's one of the reasons that I think Lumi is so phenomenal is that it's really a hole for a lot of companies that a new generation of entrepreneur and employee's needs to start filling to serve this new consumer.

Stephan: I'm taking the compliment, but also it's necessary at this point in time because like again, this is a product that really did not exist on the market before. You know, maybe it did to some small places, but most people were really not buying cold, dog food and they are not necessarily buying it online either. So we're only a couple of years into this, there aren't best practices around that. There's not a model that you can compare to and say like, you know, we're going to do what this huge company is doing, but we're going to do it slightly better with different ingredients. You're inventing it from scratch. And this is true across many categories. And when you don't have any best practices to look at necessarily, you have to invent them as you go. And that's kind of like, for Nancy, I mean this is more just kind of a personal question at this point, but you're coming into this you didn't necessarily have expertise in the dog food world coming into this, not necessarily had expertise in like direct-to-consumer. What's been the learning path for you to start picking that up and kind of, to Caitlin's point, become that person who can be very adaptive and responsive to what you're seeing from the data and turning that into actionable product decisions or supply chain decisions.

Nancy: Absolutely. So you're right, I actually joined Ollie not having a lot of supply chain expertise. And so for me, from the beginning it's really been about, what do I know, what don't I know and how can I really quickly figure that out? So what resources do I need at my fingertips to be able to learn in real time, both for myself and also because of what you said that we're building this new category. So really we're all learning in real time and that's where it came down to the team for me and making sure I was surrounding myself with partners and vendors that I could partner with. So Lumi is a great example. We worked super closely with your team on the Puptainer and the scoop or the spoon in the lid and that was a very, very iterative process. Really a partnership of, you know, us expressing some of the things that we needed, some of the challenges we knew we might have. I think it's really applicable to everyone in every business setting, but it's really about the team and you're part of a team for a reason and everyone brings different experiences and different perspectives. So this packaging relaunch was an extraordinarily cross functional project. The entire company has been really focused on it for a while and whether it's the interplay between operations and tech and having those meetings and talking through a lot of the implications of what we wanted to materialize and what we needed from their side to support that. Or talking to marketing really closely and understanding their desire and what kinds of things we needed to balance and how we wanted to prioritize to be able to be able to give the product that we knew would really be playful and easy to use and high quality, and at the same time support kind of that future that we're trying to build toward.

Stephan: Yeah. I think something that I heard from your team about and that made Lumi like helpful in this process is just our understanding of equipment manufacturing methods I think helped through some of the challenges that you were dealing with in terms of like the injection molding that was required for the lid or even things that are as simple as like the tape that you need to put on your box needs to be freezer grade in order to be able to ship and stay sticky while it's like you in a refrigerated environment. Those are very like nitty gritty details that you coming into this like don't necessarily know or need to know. But hopefully the platform and the software that we're building like helps kind of like provide those insights or recommend the right choice. I would love for you to maybe dive into some of those details that challenges that you maybe wouldn't have expected to have to deal with.

Nancy: Sure. So I think the two examples you gave are actually really, really great ones. Like I said, we changed our packaging to be the vacuum packed. And so that was a whole new manufacturing process and we were changing the labels that go on our products and as you mentioned, this product has to stay in the freezer. So when we were thinking about our team, a lot of what we're thinking about is then like the design and making sure we have it ready to go to go into the equipment. And so having the Lumi team kind of highlight some of the other characteristics to think about and make sure we're aware of was really, really helpful. And so like you said, focusing on the freezer grade and making sure that was what we started with, to have it be the best adhesive that endures throughout the lifecycle of the product.

Stephan: With the injection molding there is also, I think a component there that injection molding is actually quite new to Lumi. We're still in the beta testing phases of it and we like to work with companies like Ollie, where we can actually start to really understand your needs so that we can roll that out. Because like with every one of these different challenges that you're dealing with, like, "hey, we need to make sure the adhesive is not going to come off when the vacuum form bags are in the freezer." That's a problem that a lot of companies who are selling things that are cold face. But we're trying to be a kind of a platform that helps abstract some of those problems away because really what you should be focusing on is like making the best possible dog food and working with customers. And so how, how can we kind of like look at the patterns that we're seeing across many, many brands and try to kind of abstract those challenges away? With injection molding, this has been also a great opportunity for us to really like understand kind of the level of quality and finish that brands are looking for. As Caitlin was mentioning with the level of quality that you need to have to stand out when you're buying stuff from Amazon that's sort of coming in not necessarily in the best packaging, not necessarily in the nicest way. What are like the quality expectations and reliability expectations that you're looking at from a supply chain standpoint where you found it perhaps challenging to deal with before and where you think that needs to go regardless of Lumi being involved?

Nancy: I think that in the past when we first launched our product, we launched with our V1, I'll call it, of our packaging and had used the initial insights, the team used initial insights from customers to figure out what that packaging should look like. But we're making a lot of these decisions I think on our own. And probably knew at the time that the packaging wasn't going to be the long term solution. The challenges that we have therefore are when you're working with a lot of different vendors on all the different components of your packaging, you're having to juggle a lot of different processes and a wide spectrum of understanding and experienced and attention to detail, right? Different vendors focus on different things. And part of what drew our team to working with Lumi for example, on this packaging relaunch was that you do have that incredibly wide net of expertise across lots of different categories. And so it really helps when you're working with a partner who can take that more macro perspective on the product and help to understand how the different pieces fit together. The Puptainer and the lid is supposed to be a really premium product that we're sending to our customers to make to make that that experience of holding the food in the fridge really enjoyable and give that food it's place in the fridge. And so we need to make sure that everything from the glossiness on the inside to the matte on the outside and that the injection point on the lid was done in a way that really had a high level of craftsmanship and we didn't always get that in the past. In our V1 we struggled at times to work really closely with certain vendors and make sure they translated what our vision was into the actual end product. And so with Lumi on the Puptainer for example, they had a team on-site that was watching the production to make that all of the details that we had discussed with them well in advance, were really coming to life when the actual production was happening. So I think that has been an extremely helpful partnership and approach for us with this relaunch and something that as we think toward the future and we think about other ways or other products and other iterations we'll do over time, having that level of strategic thinking from our vendors will continue to be really, really important.

Stephan: One of the things that has enabled this category of consumer brands today has been all the tools that have come out over the past 15 years. I mean, 15 years ago if you were starting a company like this, you might've had to mount your own servers in a server room somewhere in your office. And like nowadays you've got that is abstracted to like two or three degrees. You know, you obviously have Shopify, you've got your customer service platforms, you've got your marketing platforms. What we've found and that has been great for us at Lumi is just like everyone kind of has a home base within the company now except for supply chain and operations. Like a lot of that world still lives in spreadsheets and that's a problem that we really want to help solve. But I'm curious for Caitlin, like because you also invest in software, what is your perspective on, I sort of call it like object oriented company building. Cause that concept in software is just like, you can sort of plug and play these different puzzle pieces. Now you can kind of do that for a company, not just for a piece of software. And I'm just curious how you've seen that enable the emergence of more companies or where you see the big gaps that exist today.

Caitlin: You actually, I call it enabling technologies. So I'm glad you use the word "enable." And the way that I think about it and the way that we think about it is in terms of investible opportunities, anything that, any type of software or product or suite of products or insight that enables creators to do what they do best, which is create or build we think is always highly, highly valuable. You see this a little bit on the software side with Adobe with their suite of, you know, Photoshop, illustrator, whatever. With Lumi kind of the packaging manufacturing aspect, if someone is a really phenomenal, in the case of Ollie, pet nutritionist, the fact that they would spend a majority of their time figuring out boxes and tapes and and learning that you need freezer grade tape versus something else feels like a very poor use of their time. And so it's where can you find opportunities to outsource things that someone else can do better so you can do your special talent in your special gift? And so we actually look for those companies all the time. We think they're powerful. There've been many, many phenomenal businesses that have been built in this space, like InVision for example, which is kind of a collaboration tool for video or Stripe. Why should developers be building the same payment platform and payment code over and over and over again when you can just kind of do an API call? So we saw this in the world of developer tools kind of over and over again, and now we're seeing in the world of creator tools. So it's a huge, huge opportunity. A lot of our companies have worked with agencies, so Red Antler and Gin Lane are one of them, I think a lot of the companies work with Lumi and there's still a couple of other places. So I think, you know, a very obvious space is probably like contract manufacturing. So if you're going to be building a new CPG brand or a new personal care brand, where do you go to actually formulate and personalize and build? So that's like a really kind of obvious space for us.

Stephan: Well, one angle on that is just like going forward as we look at the future and this is really for Caitlin or Nancy. What are the holes that we still have in building a company, building a product, and abstracting away some of the complexity that is not really material to the creative output or the unique output of the company? And Nancy, I mean I heard you nodding I feel like when I was talking about spreadsheets, but I don't know how your perspective is on that.

Nancy: So I think that the big thing that comes to my mind is the fact that we're in a world where there's so much to do. Our team comes in every day and there's a bunch of different things that we have to get done. And we're also trying to make sure we're focusing therefore on the highest impact things all day long and really planning for the future. For us, it's really less about what's going to happen tomorrow, next month, in the next six months. It's really about what's going to happen in the next five years. And so when our team is going through different parts of our supply chain, whether it's working with manufacturing or building the process using fulfillment, there's still a lot of time that we're spending on, you know, the data gathering side, the auditing side, the inventory management side. And there are tools that for sure exist out there. But I think, it's a space that when you have for company like us, when you're fast growing, you have limited resources that you're really trying to be thoughtful about how you allocate and make sure you're allocating them to the highest value areas. Sometimes we're not always able to get the tool today that would save us the time on a certain exercise that we're doing in fulfillment, for example. And so I think those are the areas that I hope over time to see more and more tools that are really plug and play, easy to use, help with kind of standardizing certain processes and procedures and making sure you have the right data. That it's accurate at the right time.

Stephan: I'm curious to hear a little bit about the areas where you feel that there are some of the biggest challenges there where you are having to end up kind of like hacking something together. Just using spreadsheets or email or plain old phone call.

Nancy: Oh, there's lots of different examples. So with the packaging, for example, there were so many different components that we're changing. And so we're regularly in spreadsheets thinking through if we choose this product over that product? What's the implication? Obviously we have to focus on delivering the best customer experience, but we also have to understand the cost side of it and what are the implications of choosing this direction versus that direction. And so getting really smart on managing kind of be the underlying costs. We're regularly in spreadsheets thinking about stuff like that. On the inventory side, when you're fast growing, you're really focused on making sure you always have that inventory and also be able to support the growth. Like we're not a mature company where our growth is extremely predictable and stable. Like it's very fast growing. So we have to regularly stay ahead of that. And so we have certain tools that we've built internally to help us really get a strong sense of what every day looks like in the future that we can stay ahead of that.

Caitlin: So Nancy, as you continue to explore the best tools, let us know because we'll be investing in all of them. I mean this is a real area of interest for investors kind of broadly. It's this whole idea of taking things out of email, taking things out of spreadsheets and productizing them, and then marketing them to mass market. There are always going to be opportunities to kind of optimize, but really it's like what are the repeated behaviors that people do day in and day out, over and over and over again that distract them from their work, the true work they do. So we're always looking for kind of elements of that. I think as it relates to kind of Lumi and Ollie, Stephan, like you said, like wide open space. You're really like the first of your kind to kind of be doing this and so there's going be a lot of discovering along the way. Where there is kind of new opportunities to kind of productize on top of that, that I can't even predict because supply chain and packaging and your whole space is so new. We really rely on companies like Ollie and rely on companies like you to tell us what the new areas of optimization are. So really that's for you guys to discover and then let us know, because I can't even predict that.

Nancy: In my experience the past couple of years ordering has really been an area that is ripe for disruption, which is why Lumi has been so great and such a wonderful partner to work with. I mean the typical process of placing an order for a box that goes into your packaging for example, is over email. Reaching out to the vendor talking through what the pricing is going to look like based on the different quantities, agreeing to that and then sending the purchase orders. It's a very manual process typically. And the amount of time it can take on a day to day basis really adds up. So having those things put on to platforms where all the information is already stored and it's accessible at my fingertips when I need to reference back to it, I can just go to the website and find an old order I placed, get all the details I need, automatically place another replenishment order. That saves so much time and it's been so valuable to us and being able to translate that into more areas of our fulfillment processes for example, will be really helpful.

Stephan: We've talked to a lot of different companies and founders on the podcast and uh, folks who've done VC or not people who've gone down the path of bootstrapping or Kickstarter. And for me I just really enjoy kind of sharing all those perspectives for the listeners who might be building their own company and trying to figure it out. I think one place where VC does really help is you have a pattern matching capability. Like you're bringing a lens to the founders of Ollie, the team at Ollie of being able to like help them see around the corner because you're working with companies who are maybe, a couple of years ahead of them in the process. When you look at a company like Ollie or any of your other portfolio companies and you're trying to help them kind of see around the corner, what are things that come to mind just sort of related to this whole conversation?

Caitlin: In venture capital, we have a thing which is called a portfolio. And that's like the universe of companies that we've invested in. And at Lerer Hippeau we actually have a very active and engaged portfolio. So we were early investors in Warby Parker and Casper or investors in Dia&Co. And then we're investors on a slew of companies on the enterprise side. But what we do is we make sure that kind of the best practices from our older companies that have been very successful can kind of get translated down to the newer companies that have just raised seed funding from us. But it's really up to the founder of the young company to adapt that to modern times. So what worked for Casper when they launched will not work today, but they're all sorts of insights and connections of how to think about decisions that we think is what's passed down. So that's kind of the high level of how we connect people. I think from a financing perspective as seed investors, it's our job to get our companies that we've invested in to a successful series A. We want to get them to that next round of funding. And so with digitally native brands, that really comes down to a handful of things. And there are things that are for consumer businesses but also now enterprise businesses. So I mean, I think the first thing is you need to have an authentic, amazing brand and that's gotta be founder-driven. We Love Casper, we love Gin Lane. If you work with them, you have to drive the brand and that's got to resonate through the product. And so we like brand DNA in our founders. So that's like number one. If you sell to consumer, you have to have some great thinking around what your brand stands for, what the mission is, how your consumers or customers will respond to that, and how does the brand evolve over time. And the way that we see that as usually a really big vision and kind of incremental ways that you get there. So a great example is Allbirds. Allbirds is trying to bring sustainability to the world of apparel and they're starting with a shoe. So brand is number one, I think. And you have to kind of have the early inklings of that from the seed to series A. I think on the second side we really look for, I guess I would call it like customer growth. So you can have two types of growth. You can have organic growth or you can have paid growth. And unfortunately we're living in a world where a lot of companies are doing paid growth, which means they're buying ads on Facebook and Instagram, and that's kind of driving. We find that that's not very sustainable. So what we like to see is a good slice of your traffic coming from organic growth. So that's customers that love it, customers that love the packaging and experienced so much. They're posting it on Instagram, they're posting it on Facebook, they're your informal advocates and influencers. And that kind of creates a fly wheel of word- of-mouth marketing. That is something that we must see and we encourage our companies to do that and we use our kind of founders in our portfolio to share that and drive that forward. So that's I think like a real way that we can help people kind of, yeah.

Stephan: No, it makes sense. I just want to jump in because it's so funny. You're talking about packaging as a mechanism for people to want to share things on, on social media. One of the things that attracted me to Ollie, I think the moment that I saw it two and a half years ago when it first first launched, was something so simple, which I had never seen dog food where I could visibly see chunks of carrot and peas and that sounds so basic. I almost feel stupid saying that out loud because my decision making, like I don't know what dogs need. I don't know if they like peas or carrots, but like I know that that seems healthy from my perspective as a dumb consumer. But like that really I think influences people even on a very subconscious level when they're making decisions around this stuff.

Nancy: Absolutely. And we see it every day. So our products or our recipes are formulated. So we really always keep the nutritional needs of our pups first and foremost in our mind. It's everything we do is to bring that truly nutritious food to your pet. That is just fundamental to our business. What we've found is that when customers start transitioning their dog on to Ollie, nothing gets us more excited than when we see the reaction of the dog. So Caitlin, you were talking about when customers start to love a product so much that they want to share it on their own. Our favorite thing is looking at the Instagram posts that our customers share when they receive their box of Ollie and their dog is jumping up and down, just trying to bite the box because they're so excited to get the food that's inside. It's really remarkable the difference that we see when in terms of pets' reactions to the fresh food versus the, the traditional more kibble options on the market. I was just going to say that I think, you're calling out Stephan, seeing the ingredients and what we're finding is that that really is translating, like having those fresh ingredients really translates into our pet's health and into their excitement and their enjoyment of their food. I feed Ollie to my own dog and you know, she gets so excited when it's breakfast or when it's dinner time and she's waiting by her bowl for it and her energy level is better when she's on our food and her coat is really soft and shiny. And so we love that. This focus on providing healthy nutritional ingredients that you can see and you know are in there, really makes a difference in our pets' lives.

Caitlin: And so I think that's really important because, well, one of the other very important things of kind of building a business is your customers love the product so much that they come back over and over and over again. And that's one of the beauties of this. Like this is a really beautiful part of this model where your dog's gotta eat, your dog's got to continue to eat. Once he or she kind of has Ollie gets very sad if like kibble is the next meal. And so like there's this recurring revenue perspective here and that's attractive for us as venture investors. But that's also a great signal and a massive proof point for you to build your business and go to the next. So, you know, now if you have a beautiful product and a great brand, but people don't buy it repeatedly you're really going to struggle to be successful. And so one of the things that Ollie does really well is it's just this magical moment. The dog is excited, the person is excited, that the dog is excited and they do that over and over and over again. And that's a key unlock.

Stephan: This has really been a love fest here, but I feel like everyone's very excited. What I'm most excited about and I hope that listeners will come out of this with is, I think that the kind of the cross functional nature of even just this conversation but also kind of like that the project that you've been sharing with us, Nancy is really important. And I think not enough of these conversations are happening, especially at the operational level in the supply chain level of the companies that we're building because it's freakin hard. Like getting real products out to people is hard. And the companies that have been doing this have been around for 150 or 200 years. Literally. I mean, Procter & Gamble and Kraft and all these different types of companies. These companies have been around for a really long time and they've like learned over a really long time how to do this stuff. You know, some of us are just learning this for the first time and we can use like a community. I learned so much just from hearing you talk right now, both of you. And so I hope that that keeps going and I hope that we can create more of a forum for that conversation to keep going because we're inventing the best practices as we go. So I want to thank you so much, Nancy and Caitlin. Nancy, if people want to find out more about Ollie they can go to myollie.com. Tell us about the launch and the new product line. When is that? I think that should be out now as we release this.

Nancy: We're super excited. We just recently launched the digital side of it and customers should expect the new packaging in their next box.

Stephan: Is there anything else you want to point people to? If they want to learn more about Ollie? Just go to the website?

Nancy: Just check out our website at myollie.com and also follow us on Instagram.

Stephan: Nice. And Caitlin, if people want to learn about Lerer Hippeau, what's the URL? I don't have it in front of me.

Caitlin: So it's www.lererhippeau.com. You'll spell it. But yeah, we're based in New York City. We invest all over. We do both consumer and enterprise. If any of you have a company we'd love to meet you. Just feel free to reach out either through our website or find me on Twitter.

Stephan: Are you on Twitter, Nancy? If someone has a, "How do I make sure my perishables don't go bad as I'm like figuring out my direct-to-consumer supply chain?"

Nancy: We have an amazing Canine Take Care team who is the best source for answering all those questions. You can reach out to our Canine Care Team. It's also through our website and through Instagram where we'll respond there as well.

Stephan: Thank you so much.


You can find this and all future episodes on iTunes, Google Play, and here on the Lumi blog. This episode was edited by Evan Goodchild.

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