Andrew: Hey, everyone. My name Andrew Warner. I interview tech companies about how they built their massively successful company. So what am I doing talking to a company that makes packaging?
Frankly, forget about me. What about this thing that I discovered where Y Combinator, the backers of Airbnb and Reddit and Dropbox and Stripe, they invested in a packaging company? Why? And how big did it get? And what are we missing here? That’s what I want to find out in today’s interview and also how did she build up this business? How did this business become something so big that we want to learn from them?
Joining me today is Jesse Genet, the founder of Lumi. Lumi streamlines the supply chain by finding the best packaging options for your business. I promise that sounds a little bit boring, but if you saw the visual of what this stuff looked like, you’d get why it’s exciting. We’re going to talk about why it’s an exciting business.
This interview is sponsored by Toptal, the company that will help you hire your next great developer and by Acuity Scheduling, the company that will help you actually get on calls with people.
All right. Jesse, I think what’s exciting here is–one of the things that’s exciting is the packaging. Can you describe to me what’s different about, say, the way that you package MeUndies versus the way that they were packaged before?
Jesse: Well, that’s a great question. In reality, we’re not a package design agency. So we haven’t like fundamentally–MeUndies is actually using a very similar style of packaging.
Andrew: So this beautiful bag that I saw, you guys didn’t design it?
Jesse: No. We didn’t design it. Like MeUndies and most of the brands we work with have incredible design teams. They usually have a very specific vision for what they’re going for, something design–we have a background in industrial design. So we care deeply about how this stuff looks. But what we really do is help them optimize the supply chain, like how are they getting the stuff? Are they getting it produced on the best equipment to produce that item, and do we get it to them with as few layers as possible?
There is a design element to it, even though that all sounds very supply chain-y and scientific, which it is. The design element is when you have beat the extra layers of the supply chain and gotten the design team at the brand access essentially to the best equipment, the design opportunities open up. So using the MeUndies example–
Andrew: Yeah, please.
Jesse: Yeah. Prior to working with us, they had the grey pouch, their beautiful grey pouch. They had already designed that. We didn’t revolutionarily change that item. But when we explained the manufacturing process better to their design team, got them basically closer to it, they realized they could change their designs far more rapidly without increasing cost. So we helped them do that. Now they actually do seasonal design changes. Prior to working with us, they had that same pouch for I think two and a half years. Since working with us, they’ve done, I think, four or five different design changes in the past year.
Andrew: Because it’s easier for them to change because they understand what’s possible.
Jesse: Yeah.
Andrew: So then are you guys consultants who go in and see what it takes for a company like–let’s not keep talking about MeUndies. Let’s look at Sock Fancy, another company that has beautiful packaging. Are you guys consultants who go in and say, “All right, you guys make the socks, you design the packaging. We’re going to figure out where you’re shipping your stuff and how they’re shipping it to your customer and we’ll come up with a better way or something else”?
Jesse: Yeah. There’s definitely some areas where we consult our customers, but at the end of the day, the underlying element that makes us good at this is we’re tracking the data of–take that pouch. Actually, Sock Fancy uses a laminated pouch, a very similar material to MeUndies. That pouch can only be produced on a certain type of equipment.
So we map where that equipment is in factories all over the U.S., also internationally and then we can advise brands better on, “Oh, okay, you’re shipping the majority of your products out of Hebron, Kentucky. Well, we can geolocate production as close as possible to that facility. So it’s like consulting, yes, but there’s a data layer underneath that that helps us do it well.
Andrew: I see. But do you then take responsibility for getting the product to the customer?
Jesse: Yeah.
Andrew: You do?
Jesse: 100%. People, they’re buying from us, ultimately, yes.
Andrew: I see. Then you make the deals with the shipping companies, etc.
Jesse: We work with what we refer to as manufacturing partners. So there are actually hundreds of factories and basically equipment and boots on the ground facilities that make what people are buying through Lumi.com. Yes.
Andrew: So then why does Y Combinator care so much about logistics of packaging to want to work with you guys to back you? Where’s the unicorn here?
Jesse: Yeah. I think there’s a growing awareness, and I think you see the early parts of this trend in companies like Shopify and Stripe even though they’re very digital. There’s this growing awareness that it’s becoming easier and easier to launch a physical product brand. But at the end of the day, let’s say you get your shop up with Shopify. You start charging things with Stripe, you’re using MailChimp.
At the end of the day, you’ve got to ship something. That’s hard. It’s very hard for entrepreneurs. So I think the barriers to entry for actually launching physical products and disrupting direct to consumer markets like Dollar Shave Club did with their industry, etc., that whole cadre of entrepreneurs needs a lot of support. The physical element is still relatively unsupported.
Andrew: So why wouldn’t a company just use a shipping company? What’s the one that Cards Against–Blackbox, for example.
Jesse: Yeah.
Andrew: That Cards Against Humanity came out with. Why wouldn’t they just say, “I’m going to ship you all my stuff. You take care of it. Leave me out of it?”
Jesse: Well, Blackbox, we actually make packaging for Blackbox.
Andrew: You do?
Jesse: Yeah. So everyone who ships stuff, still needs packaging and sourcing, and managing your packaging supply chain is complicated no matter who you are.
Andrew: By the way, for anyone who doesn’t know, Cards Against Humanity, great irreverent cards that make you say whacky, dirty things at parties. These guys also have an interesting style. They came out with something called Blackbox.cool. They said, “We’ll ship your stuff for you. Ship it to us. Tell us who to send it to, which customers, and we’ll ship it out.” And it looks really cool. I thought they took care of it. You’re saying you guys work with them.
Jesse: We manufacture that slice of the supply chain of actually getting the packaging manufactured for a solid price, getting it to its ship from location and in this case Blackbox, we worked with them on a packaging front. But the second answer to your question, the other reason if you’re starting your own brand to create your own packaging is branding, the fact that the package is a new storefront. If you’re MeUndies, the concept of shipping your underwear out in a plain corrugated box or someone else’s box, like a Blackbox-branded box–that’s a mouthful–is not going to work for you.
Andrew: I see. I’m thinking of someone like Cathryn in our audience who had a great Kickstarter campaign for something called Best Self Journal. She cares about design of everything. I can see she wouldn’t want to just put stuff in a cardboard box and send it out and she wouldn’t want to do it herself. I see. So she would work with either you guys directly or with someone like Blackbox that you guys work with and it’s then your headache. She comes up with the good design, you guys figure out how to make that box, how to put stuff in it and how to ship it out at the right prices.
Jesse: Right. Blackbox falls into a category of like a 3PL, third-party logistics company handling the actually shipping of your stuff. We sit between you and your 3PL. You actually want to get your own branded packaging experience. 3PLs just say, “Send us some stuff. We’ll ship it out for you.” They’re not kind of thinking back in and helping you figure out your packaging supply chain. So, in many cases, we sit between those two parties.
Andrew: Okay. I don’t usually spend this much time trying to understand the product because I do my work ahead of time, but I had no idea.
Jesse: Yeah.
Andrew: So I had these beads that I wanted to send out to my audience. I found a shipping company. I had someone on Etsy make them for me. I took a huge bag of them. I shipped it to a company and I said, “You send it out.” I love the work that they do and I like the company, but the box looked ugly. It just looks like this chintzy little bead with a receipt that said something like $7 but I paid the shipping.
Jesse: It’s just folded in the box. So you’re getting the standard 3PL box, right?
Andrew: Right.
Jesse: What’s funny enough, if you check your bills, they probably charged you for that box. You probably paid for it. That’s part of the irony too is it’s not a good experience and you’re paying for it.
Andrew: So when I come to you and say, “I have this. It can either look like really crappy beads or it could look like a really nice gift that I give you because you’re a member. Can you find a nice package for me and figure out how I can get it put in?” You’re nodding. So I can do that?
Jesse: Yeah.
Andrew: And then you’ll find–
Jesse: Yeah. We’ll help you shop. Again, we’re not an agency, but we’ll say–we work from dimensions, we work from a spec. It’s like your bracelet is this big. Someone on our team would say, “Here are 10 different form factors. Here are 10 different package concepts you can go with.” Then we’ll either work with your designer, or we can link you with one to actually get graphics applied. Boom. You move into manufacturing. We can ship the packaging directly from the factory floor to your 3PL, and then your 3PL doesn’t have to think about it. They just use your packaging and it looks beautiful.
Andrew: I see. A 3PL has basically got some warehouse somewhere. They pulled my product off the shelf. They put it on one of my packages. They ship it out. Got it. Then they give me the bill and the way that I signal to them is my software will just tell them, “Hey, ship it.” Got it. I see. Okay.
Jesse: Yes.
Andrew: So the reason you’re saying this is a big business and a huge opportunity here is that more people are shipping stuff out like Cathryn, who I mentioned earlier. I got someone in my audience, he’s selling fanny packs, freaking fanny packs from Amazon and a Shopify store. Amazon, of course, can handle the packaging themselves, but the Shopify store, he’s got to have it look nice, otherwise it looks like a fanny pack and you look a little weird. Frankly, you’re going to look a little weird anyway, but apparently he’s playing that up on his website.
Jesse: Exactly.
Andrew: I see the opportunity. All right. So where are you now? How much revenue in the last couple–you’ve run this business for what? How long have you run this part of the business?
Jesse: We started launching–I’ll give you a number to kind of sink your teeth into. For the first year of the business, we launched the company, we were making some revenue, but we were building out the packaging supply chain. So we launched a core packaging option, like printed boxes, printed poly mailers and stuff in the first quarter of last year. Last year, we launched those first quarter and last year we brought in about $1.6 million and then we’re on a really nice cliff at the beginning of this year as well.
Andrew: You and I are both active on Product Hunt. We vote things up. We keep an eye on what’s new. I kept an eye on you on Product Hunt. You guys launched something called Lumi Custom Silkscreen and Rubber Stamp Toolkits on the Cheap. Then I see another thing you’re a maker of, also called Lumi, Turn Your Logo into Rubber Stamps, Vinyl Decals and More. And then another thing called Lumi also, Ship Your Packaging. So this company, Lumi, has had lots of different iterations.
Jesse: It has. Yes.
Andrew: The first thing was you and your cofounder studying industrial design in Pasadena–in fact, before even Lumi, let’s go a step before. You were studying industrial design–by the way, every freaking thing you touch looks beautiful. The backdrop looks good. The camera angle looks good. I watched you freaking do a video on YouTube where you’re describing different tape and I don’t give a rat’s ass about tape but I can’t stop watching and hitting replay because you keep things interesting. So I can see how you guys are into industrial design and then you launch something called Inkodye, right? What was Inkodye or what is, it’s still up?
Jesse: So Inkodye was the first product–actually I was working on it originally in high school. I met my cofounder, Stephan, in school. We launched this product called Inkodye. We were an early part of the maker movement, if that means anything to you. We did a Kickstarter back in 2009 for this product and then in 2012 again.
Inkodye is a special formula for fabric dye. It develops its color in sunlight. It’s an actual formula that I worked on, perfected and then Stephan and I brought to market in the most like boostrapped maker-y way possible. The reason why that has any connection to what we do now even though it sounds a little esoteric is that the fascination with dye chemistry, ink chemistry, printing processes is what makes us very good at custom packaging because whether a box looks fantastic or not fantastic, it comes down to the printing process.
The other thread through here is that we were product founders. We spent four and a half years doing our own ecommerce, our own shipping to retail. So, when we build Lumi.com and we build the tools we think the entrepreneurs need to run their physical product business, it’s not all guesswork.
Andrew: I see. I saw the stuff. It does look really good. Everything else you guys touch just looks hot. I can see why it would sell. You told our producer, “We’re dying things on clothes. I want to solve a bigger problem.” And he said, “If I want to build a website, there’s Shopify for it or Squarespace. If I want to sell, there’s Stripe. There are all these different tools.” Actually, that seems a little too neat. It’s not like you said, “What’s the one problem that’s not solved?” which is boxes, “Let’s figure it out.” You actually went through all those iterations I described a moment ago, right?
Jesse: The fact that you can go to Product Hunt and you can see I’ve launched that website that sells decals and rubber stamps, that’s what we did during YC. If you want to really take a hit to the good old ego, why don’t you try being in Y Combinator, like someone’s talking about their biotech company and you’re talking about rubber stamps.
Andrew: Right.
Jesse: So the kernel in there–I actually had a conversation with Paul Graham about this because I even felt out of place. I was like, “What are you even seeing?” I actually asked him. The kernel was that we were like–brands are getting physical. We live in a physical world. I’m wearing a shirt. This would be a very awkward conversation if someone didn’t make this shirt and I wasn’t wearing clothes and I wasn’t on a computer.
There’s this physicality to our world. Brands need a way to get access to the manufacturing prowess that it takes to get their products to market. That kernel, even though at first we were talking about rubber stamps and decals and a little bit more esoteric stuff, that kernel was always connecting people with ideas to the manufacturing processes.
Andrew: I see. I get what you’re talking about. I always feel like we at Mixergy are too intangible, that if I sent you something, which is what I had in mind with the beads except it maybe looked like a chintzy guy who didn’t care. Meanwhile, I was spending $10 to ship out each bead. I have them on my mic. I have them on my arm. If you come in for scotch night, you might want one and I’ll give it to you. I don’t just toss at you. I give it to you in a nice presentation and I still see why it matters and so on. I get it.
You’re saying a lot of people need, even if they’re not in a physical product space, they want to send something physical to people and frankly, more and more people are in the physical. You wanted to find a way to take brands and make them more physical, more tangible, more the kind of thing you connect with because you’re holding it in your hands. So the first thing you did was which one? Was it stamps or was it something else?
Jesse: Right. So the Inkodye was in the past. By the time we joined Y Combinator, we had decided definitively like we’re going to stop doing it–
Andrew: Why? Let me ask you that, actually. Why stop Inkodye?
Jesse: Well, to be perfectly honest, it’s a single-product company. At a certain point, a single product runs its course unless it’s just an incredible product that never needs to be altered. But when you look at most people’s products, physical products, if you want to keep the business running, you start like doing Inkodye 2.0 or you say, “I’m going to do this and I’m going to do this new brand of kit.” We kind of felt like we had fought the good fight. We had brought Inkodye to market and we didn’t actually have a reason to do Inkodye 2.0. It was like we let that business run its course. We made plenty of–that business had very real revenue, high margins.
Andrew: What kind of revenue did you guys do for that?
Jesse: The biggest year for Inkodye was $1.2 million, but it’s like a 90% margin product.
Andrew: Wow. I would have thought it would be more expensive. I’m looking, by the way, I’m on your Kickstarter campaign to give people a sense of what it is. There’s a woman wearing a sleeveless t-shirt. It’s in green and it’s got a black–actually, in her hand is a black and white photo of a car and that is actually in green on her green shirt.
Jesse: I think that woman is me.
Andrew: Oh, it looks fantastic and I get immediately what you guys are doing over there. You didn’t want to say, “You know what? I put it on shirts. Now let’s see if I can put it on hats. Let’s see if we can have a different thing on clothes.” So you decided, “I’m going to look for something different.” You started hunting around for the next thing. Then Y Combinator accepted you for what? What was the idea that they got you in?
Jesse: So Y Combinator accepted us, we were talking about brands need to make their brands physical, and most people with ideas running fast growing companies don’t understand manufacturing processes well enough to effectively order what they need. It was just a lot of that.
Andrew: They accepted you for that?
Jesse: Yeah. To be kind to them, we did of course make it sound a little more cohesive, but to be honest with you, I think that we were really figuring it out at the time.
Andrew: Okay. One of the things I’ve learned about them is they like people who can produce, who can actually show results. Like the Wufoo guys were on early on, on Mixergy and they had some kind of online magazine people were fans of. They were able to produce and generate money and create a real business. I can see how that would work in your favor. The first thing you created was what? Was it the stamps?
Jesse: Yeah. So we launched–those rubber stamps are still on Lumi.com. That product exists. We launched the first version of Lumi.com March, 2015 and you could buy–you could upload–the software element was you could drag and drop your logo and the site would take that JPEG, whatever you drag and dropped and it would vectorizer it and turn it into an actual vector graphic and that’s the actual manufacturable vector graphic we need to produce a rubber stamp or produce something for you.
We have this kernel of taking someone who is a novice, they just have a logo sitting on their desktop, and allow them to buy something that two days later would ship to them that’s like this physical rubber stamp. There was certainly this magic of like from the digital to the physical already taking place, but of course it wasn’t the big business that we’re growing now.
Andrew: I see. All right. Let me take a moment to talk about my first sponsor. It’s a company called Acuity Scheduling. You know, before I talked to you, I talked to a Mixergy fan who’s now someone who’s got a really successful business. His name is Latif. Latif told me that within three months of his business, he got 50 customers for fairly expensive software. In fact, that’s the dig against him on Product Hunt, “Your software is too expensive.” But within three months, he got 50 customers.
I said, “Latif, how’d you get 50 customers to pay you?” Latif said, “You know, before I started the company, I talked to 150 different product managers in person over coffee and on the phone. I talked to them. I understood their problem. They understood the kind of solution I was going for and they kept guiding me. So when we finally launched, we had 50 of them ready to go and buy from us.”
So, when I think about someone like Latif or I think about some of the other founders on Mixergy like the founder of Carb.io who is emailing so many people on LinkedIn trying to talk to them that LinkedIn and I think Facebook too banned him for a little bit because he was trying to reach out to so many customers, when I think about how you do that if you’re listening to me, the answer is to have software that makes it so easy for people to book with you and so impossible for you to double book.
That’s the idea behind Acuity Scheduling. If you want to talk to your potential customers, do customer discovery calls, talk to your existing customers, you need a system to really make it easy for people and that’s what Acuity Scheduling does. It gives you one link, you send it out to potential customers or anyone you want to talk to and they click it, they see your calendar and they get to pick exactly what day and time they want to talk to you from your list of availability.
Once someone picks a day and time, that’s blocked out for the next person and block out for the person after that so that you’re never double-booking. If you happen to have a day you need to take off, you just block it off on your calendar and no one else gets to book a time with you then.
In addition, after they pick a time with you, they also ask for their name and phone number so that you never miss the important information. I even customize my Acuity Scheduling form to ask for people’s Skype name because I know some people prefer to do video so we can see each other. You can also take that data, send it to your CRM, so many other things you can do.
One last feature–I don’t want to go through a whole feature set, I’m not going to be Microsoft from 2001–the last feature is you can embed it on your site. A lot of people who use my Acuity Scheduling calendar don’t even realize I’m using it. They just know it works and makes it easy for them to contact me.
All right. If you want to try it, Acuity Scheduling is created by a long-time Mixergy fan. So he’s just giving you a bunch of free time to use his software. Go check out AcuityScheduling.com/Mixergy. That’s AcuityScheduling.com/Mixergy.
They’re going to give you 45 days to actually use the software, see if you can make phone calls to customers, see if you can get them–if you can actually get them on the phone and you’re going to see how happy they are and you’re going to want to continue with them and you’re also going to get a private one on one consulting session with a pro at Acuity Scheduling which will help you actually understand how you can use these phone calls to grow your business. Frankly, I would sign up just for that. Go check them out. The special URL is AcuityScheduling.com/Mixergy, AcuityScheduling.com/Mixergy.
How did you know that the first version of Lumi wasn’t working? What data gave you the understanding that you were on the wrong track or not the right track yet?
Jesse: Yeah. I think it was a bit more iterative for us. Like I said, the products, we did take decals down, but the rubber stamps, for instance, still live.
Andrew: So does the paper embosser. I see that too.
Jesse: Yeah. That’s still there. What’s funny is what we view it as now is now those completely self-serve items are a great way for people to come into our funnel. As crazy as it sounds, we’ll have customers who have a $5 million a year packaging spend where when we ask them, “How did you learn about us?” They’ll say, “Our designer bought a rubber stamp from you and really liked it.” It’s like okay. So that concept of letting people start branding at the baby level and then letting them grow up in our system is, I think, still strong.
But the how we learned, of course, that wasn’t–just sticking with that product alone wasn’t going to bring us where we wanted to know is that Stephan and I knew that we really wanted to connect the brand to needed–we wanted to solve a real pain point, to kind of like make it blunt, we wanted to solve a real pain point. At the end of the day, making people rubber stamps is sort of still a nice to have.
People don’t have this burning, urgent need, whereas on the path we were on, after we basically spent a lot of time talking to our customers and people who were buying things like from us, they’d be like, “Oh my gosh, it was so painless buying a rubber stamp from you but I’m out of my mind trying to source my boxes. Can you do that?” So we were getting like very real feedback–
Andrew: They would specifically tell you, “I’m out of my mind finding boxes?”
Jesse: Yes, of course. People do not understand how massive a pain point is. I’ll give an anecdote and I can’t say the company name, but I’ll make it pretty crystal. A company that uses about 10 different packaging components with an annual packaging spend of about $2 million, the head of supply chain, when I specifically asked, “How much of your time goes to the supply chain for your product,” it was an apparel product, “Versus the supply chain for your packaging?” They said, “60% of time goes to supply chain for packaging. I only have 40% of my time for supply chain for my product.” That should be like 90-10.
Andrew: Really? They spend more time on, “How do I get the packaging?” versus, “How do I get the product?”
Jesse: Yes. So that really I think illustrates the pain point is you’re hiring these employees. You have a team of 30 or even a team of 300, even if you’re somewhere between 3 and 300, the concept that you have, your head of supply chain focusing more on the packaging than on the product is of course concerning.
Andrew: Is that when you got into paper bags?
Jesse: Paper bags were an in between, where we were launching new categories. Paper bags were not a huge component for us. That’s not a part of actual ecommerce fulfillment packaging, but it was something that someone else had asked for. They’re still sitting up there and people buy them. I wouldn’t refer to that as a core product of ours.
Andrew: So you’re watching all these other companies take off. Do you feel at some point like, “Maybe we’re failures, maybe we’re not the entrepreneurs we thought we were when we were operating in isolation?”
Jesse: You mean like from watching pre-YC to post-YC?
Andrew: Before you actually figured out that you were going to do the supply chain business, did you feel like, “What are we doing here? We screwed up?”
Jesse: No.
Andrew: You didn’t lose confidence at all?
Jesse: To be honest, no. I’m not trying to paint ourselves as some geniuses over here. I think every entrepreneur has an existential crisis like every Sunday or something. I think that’s very normal in a weird way. So I’m not saying we didn’t second guess ourselves, but I would say that we have always–my cofounder and I have always been very proud of the things that we do know.
We have a very solid cofounder relationship. We have a great team, low turnover. Every customer we earned, whether we had the right product or not, was very dedicated to us. So I don’t know, we’ve seen worse. We’ve seen worse. We felt like we were still fighting the good fight. Of course, it all comes down the wash, like whether we actually succeed of course. Yeah.
Andrew: All right. So now you finally figured out what it was you were going to do based on customer conversations. It was time for you to actually start looking for customers. Who was your first customer?
Jesse: Our first major customer was MeUndies. Our first major customer where I realized the product offering was a fit for the market, basically that we were experiencing a certain amount of product market fit.
Andrew: How did you find MeUndies? This was April, 2016, right?
Jesse: We met them socially. It was an interesting process because we met one of the founders socially. I was like, “Hey, we’re doing packaging now and we have this interesting way of determining if your packaging is data-driven, blah, blah, blah.” I talked his ear off and he was like, “Okay, you can talk to my head of operations.” But he said, “As a warning, we’ve sent and bid this job out all over town. I really doubt you can do better than that.” I said, “Okay, understood.”
And what was interesting is like this is very common. They had in fact bid the bag out to various people. But what entrepreneurs don’t typically understand or not just entrepreneurs, it’s very complicated in the packaging world, there are so many layers. Their job was being sent to essentially distributors are brokers who are then bidding it out if not once, then twice. So, really, I would like to say it was some heroic effort, but really all we did was build their components into a dashboard for them on Lumi.com, only allow the older to flow straight through a manufacturer with the equipment and saved them about 25% in the process.
Andrew: So their orders would go to manufacturers who didn’t have the equipment?
Jesse: No, no. Their orders would go to people who were brokering–effectively, yes. Their orders would go to people who say, “We sell packaging.” That’s not a lie. They’re not lying. They sell packaging. They do not make what you are buying and that’s extremely common. The whole packaging world is like you call up a guy and you say, “Do you make boxes?” And he says, “Yes, I make boxes.” He’s sitting in a high rise in Houston or something. He’s not like making boxes.
Andrew: I see. He’s just really good at getting your business, and then he passes it on to someone else who’s going to do it. Then you’re saying that other person passes it on to someone else. So you just cut out all those people.
Jesse: Yes. Whether people buy directly from the instant purchase options online or whether we build out custom items for them in their dashboard, every time they click a button and check out on Lumi.com, the order is funneled directly to what I refer to as the people with the machines. It’s another way of saying factories. I’m very specific that we only send jobs to the people with the machine.
Andrew: Just to the people with the machines. How did you learn so much about this?
Jesse: I’m always–I’m from Detroit. I grew up around manufacturing. My stepdad used to do like contracts for the military and interesting weird R&D projects. So I always grew up–I thought it was normal that like we would just go and visit manufacturing facilities and walk around steel plants. I thought that’s how people grew up. I really had this sort of kindred although deep appreciation for manufacturing and how it works and the fact that it’s a very hard world to exist in. So it’s actually very intrinsic, like I’m very intrigued by what if the excess manufacturing capacity of these facilities could be readily accessible to the people who need to buy stuff.
Andrew: Interesting. I see. I think about that sometimes with offices. All these offices are sitting empty in the afternoon and the evenings and many of them on the weekends. What a waste of space and prime real estate. So you would have thought the same thing about factories. They’re just sitting there empty. Got it.
Jesse: Yes.
Andrew: In fact, you were also entrepreneurial. You told our producer, “When I was 16, I had this t-shirt printing company.” What was that?
Jesse: I ran a t-shirt printing company. It was–I started in my parents’ basement in Detroit. I thought to myself–I lost the cross country captainship my junior year. It was super traumatic. I decided like I need to do something else. It was like a big turning point for me. I decided I’m going to start a business. I didn’t have any money, so I figured I would start a business I could afford to start.
I bought a little t-shirt printing press and started a brand. I can’t really do anything in a half sort of way, so after I launched it and started printing t-shirts, I convinced my parents to let me come to Los Angeles to visit a family friend over the summer from sophomore into junior year and I sold t-shirts to boutiques and I actually started a business that made a little bit of money.
Andrew: How did you get t-shirts into boutiques? How did you get them to say yes?
Jesse: Well, it doesn’t hurt when you’re 16 years old and people don’t want to say no to you. Use what you’ve got. But at the same time, the technique was extremely simple but very difficult for me at the time. I would pinpoint stores I thought had a look and feel that fit the shirts I was trying to sell. I didn’t know any better. I didn’t call them or anything. I would drive over there, park my car, walk back and forth in front of the shop trying to like scope it out and get the guests to walk in. Then I would walk in and I had a clipboard. I thought that business people held clipboards at all times.
Andrew: I used to have ideas like that.
Jesse: Like I’m just going to take their order, like I just accost a sales clerk. I would take their order.
Andrew: Right. That’s pretty gutsy walking into the store and trying to get them to buy from you.
Jesse: Yeah. I don’t know. I went through this transition, like around 15 or 16 where I realized that you–I don’t know, fortune favors the bold. You’re going to go out there and do things and people will tell me no. I also realized that the world is a friendlier place than your fears make it out to be. When I walked in the stores, I would walk up to the clerk and I’d say, “I have a t-shirt line. I’d like to talk to the manager about whether you’re interested.” Some people just say, “We’re not interested.” But they didn’t like shove me over. They just, “We’re not interested.” It’s actually not that scary.
Andrew: I see. I picture you going up and down Melrose. Is that where it was?
Jesse: Melrose, of course.
Andrew: That’s so good. They’re looking for new things that nobody else is going to have, right?
Jesse: Yeah. You walk in and you’re 16 and you’re wearing a cute t-shirt. I was very self-aware as well. I’m from Detroit, like the whole thing worked.
Andrew: All right. I want to come back and ask you about this really amazing thing you did with Kickstarter and how effective it was. In my mind, that seems like a real winning strategy. I want to talk to you about whether you’re in a sexy business or not and if that bothers you and finally about your relationship with your cofounder. I’m having lots of private conversations with people who hate their freaking cofounders and they’re dying to talk about it. Let’s see if that’s going on with you.
But first, I should tell everyone listening about a company called Toptal. If you’re looking for an incredible developer, what you need is someone who’s actually frankly going to do the screen for you. I actually had this dinner with a few Y Combinator founders who were just like fresh out of the program.
One of the things they kept talking about was like the hiring. One of the people, one of the teams there asked another team, “Would you do the first screen for me of developers because I really like the way you think about development and I don’t have your chops?” So, the whole like hiring process and the screening process was something they talked about over dinner the way other people might talk about, I don’t know, their kids and where they’re going with their lives or the detail of the product they’re creating because it’s so important.
That’s why Toptal decided they were going to focus, obsess on that. They were going to create a process for screening out not just bad developers, but really good developers too so that they could only have the best of the best, the top three percent of developers out there. They’re so proud of that. Frankly, I’ve seen some really fantastic developers here in San Francisco who are a little upset that they were rejected by Toptal, but at the same time, I’m kind of proud. I’m proud that Toptal has done that.
So, if you’re looking for great developers and you want to–frankly, I would even say just have a conversation with Toptal before committing. Here’s the thing–go to the special URL because the first thing they’re going to do is setup a conversation for you with someone called a matcher. I’ve met these matchers. They’re really good people. The reason that’s important is that they want to understand what your business is doing, where your business is going, how you operate, the quirks of the way you communicate with your team and then they’ll find you the perfect person to work with.
So here’s a URL where they’re going to give you 80 hours of Toptal developer credit when you pay for your first 80 hours in addition to a no-risk trial period of up to two weeks that is exclusive to Mixergy listeners. That URL is Toptal.com/Mixergy. Toptal.com/Mixergy. I’ve had a lot of great results from them–I mean we have at Mixergy and I urge you to go sign up and check them out–Toptal.com/Mixergy.
All right. The thing about Kickstarter–how did you get Kickstarter campaigns to work with you?
Jesse: So we did our first campaign way back in 2009, like I mentioned. That was when Kickstarter was about six months old. So we have two interesting–
Andrew: But that’s you promoting your product. I think you did something like about a quarter-million dollars in sales, $268,000.
Jesse: Yeah. That’s the 2012 campaign.
Andrew: Oh, I see. Okay.
Jesse: We had two. In 2009, when Kickstarter was a baby company of its own, then 2012 is when we raised a quarter-million dollars. In that one, we had learned and we had seen Kickstarter grow up over three years of like being closely following them since we used them in 2009. We met the founders. We helped them host their first LA meetup. We were part of their story a little bit.
So, when we came around to doing the 2012, I had already come to terms and realized that the power of that platform was that people want to fund people. People want to fund fun ideas and things that they want to see in the world. It’s like giving your dollars like, “I wish that existed. Look at those people. They’re crazy.”
So, when it came to 2012, it wasn’t like, “Do you know what the world needs? Fabric dye.” The world doesn’t need a new crazy fabric dye. I know that as well as everyone else, even though I was the fabric dye entrepreneur. What the world needs is more people working on their ideas with actual passion. It’s energizing to everyone.
So that’s really what we sold. That’s what we were selling. When you watch the video, you can see that that’s kind of how we got people to share it so much and whatnot. Then of course what you got in return was my fun fabric dye and I hope you enjoyed that as well.
Andrew: I see, kind of like what–who was it? It was Seth Godin who said, “The book is really not the content. The book is the memento of the content that you’ve got.” You’re saying it’s the same thing. It’s not about the fabric dye. It’s the experience that the fabric dye is commemorating for you and the feeling.
Jesse: Yeah.
Andrew: I get it. You went back to other people on Kickstarter knowing that this thing is now growing, that there are more people like that. And you said, “How do I get them to use me to ship their stuff out instead of putting stuff in a box and throwing it out the window, essentially?”
Jesse: Yeah. Right. We went full circle. We went full circle using–Stephan and I talk about this a lot, but we started using Shopify in its first existence, Stripe and Square in its first year of existence, Kickstarter in its first year of existence, MailChimp the same. And I think that we just had this like formative experience of actually watching these products grow. So, we were like we want to contribute. I think there was a feeling like we were on the other side using these things and now’s our chance to try to contribute to that stack, you know?
Andrew: Okay. So here’s what I’m kind of teeing up for you. You went back to them and said–I think that you are going to–actually, here’s the quote. It looks like you have stuff to ship. We have packaging. That was essentially the message and you were sending it out individually to each one of these Kickstarter campaigns.
Jesse: Yes. Ultimately we’ve created a tool, right, that is for the past us, like we joke about that when we have a real product snafu of what should we do, what feature should we launch. We ask ourselves like what would 2010 us have a burning desire for right now? 2010 us was running around with our heads cut off trying to ship stuff and we had a bunch of problems but we used that lens. Like we–us of five years ago or six years ago is the current customer in many ways.
Andrew: And were you at the time thinking and your clients are thinking, “First lets get people to buy and then we’ll figure out shipping and then as soon as you get people to buy, you have to figure out, “I kind of thought about manufacturing. I didn’t realize we were going to have to ship this out.”
Jesse: Yeah. When you look at that anecdotal pie I share, like okay, so a head of supply chain at a company that’s clipping along really nicely already spending 60% of the time on packaging and 40% on product. Pre-launch, usually people are spending 100% on product. So you can imagine that once they launch, they are like, “Whoa, I had no idea how unprepared I was for the packaging parts of my project.
Andrew: You know what? I get it. I started Googling and I said, “Let me show her that there actually are tons of suggestions here for alternatives. Let me show her what’s out there.”
Jesse: Yeah.
Andrew: Here’s what I came up with. Kickstarter has 12 tips on shipping rewards. Tip number three, I think, to test it by sending it to yourself, which by the way, that’s actually really important. When we had these beads, we put them in a standard envelop, number ten envelope. We beat the hell out of the envelope, nothing broke. Great. We started shipping out 100, then 200 of them. These are like mediation focus beads.
We wanted to give them out to people in our audience. We shipped out a bunch of them. Not one actually arrived. “Why’d it not arrive?” People said, “Why’d you send me a blank envelope? What kind of joke is this?” Just come back and say, “I think there’s a bug here.” It turns out the post office will take an envelope, even though we beat the hell out of an envelope, they put it through this thing that basically does a hard U-turn to the envelope–
Jesse: Squeezes it–
Andrew: What is it called?
Jesse: I forget, but I was just saying it squeezes the beads out.
Andrew: We must have fired missiles off in the post office and nobody at the post office caught this. So we had to go and redo the whole thing. So I get it.
Jesse: Yeah.
Andrew: So the thing I’m picking up from this post from Kickstarter is they’re telling their best users, “Here’s how you can do it yourself. Be aware of hidden costs, like tape,” they’re saying, “Consider shipping insurance.” So they’re teaching their people not how to find a company that sends it out, but how to do it themselves.
Jesse: Yeah.
Andrew: I see. You’re saying, “You wouldn’t print yourself. Why ship yourself?”
Jesse: There was another step that they just–every step they lay out in a post like that is very valid. We would encourage customers to have those things in mind, but what we would say is you should probably spend as much time as you can focusing on how you want your product to be. So the thing I like it to–and again, just to use Shopify because I really respect them–is that like prior to Shopify, of course they have competitors as well, but prior to them and their competitors springing up, when someone wants to sell online, they had to start by hiring a developer to build a shopping cart.
We are in that moment of packaging, where every time someone thinks, “I want to start a swimwear company. I want to start a fashion company. I want to start a sunglass company.” They’re typing “custom boxes” and stuff into Google, like it’s all fresh. Well, actually, sunglasses, swimwear and stuff, those are all different, but the corrugated industry is the same for everyone.
We are consolidating that knowledge, building it into a software platform that’s easy for you to interface with. It’s like why would you all build your own shopping cart. Why would you all research boxes from scratch when you could benefit from group knowledge. I feel like it’s similar to that moment in time.
Andrew: I’m buying into your vision here. Now I see. Paul Graham is super smart, huh? How did he know that you’d be able to do this, that you’d come up with the solution? For example again, I keep going back to the beads, if I had something else on my arm, I’d talk about that if I had a bracelet.
Jesse: It’s a good example.
Andrew: I see you guys have like custom drawstring cotton bags that I could have with my logo on it. That’s $0.54 each one is the price, right? That’s where it starts, so that means it can be a little bit higher because I’m not going to ship that many of these out. I’m not in the business of shipping beads out. I would buy one of those and you guys would get my logo on it. You’d figure out how I can get my logo on it. Then in addition I’d buy a box and then you’d tell me who can ship this out for me so I think pay them for the postage and the shipping cost?
Jesse: Yes. We sit between–a lot of our customers already work with a 3PL or already have a plan, but when someone does not, we make 3PL referrals all the time, in which case that first question to you would be that geography. Where in the country are you based? Do you have any strong preferences about where you ship from? Let’s say you’re like, “I’m in San Francisco. I really want to keep it local,” then we would give you three or four names of 3PLs in San Francisco area to potentially work with. So it is not us, but we–
Andrew: Why don’t you just do the whole thing? Why can’t I just say, “Look, here’s what I need. I’m going to click this. I’m going to click that,” and then you give me an address and I ship it there.
Jesse: There are some really interesting companies–there a lot of companies doing fulfillment right now, whereas we are in a space where I feel it’s far more overlooked, so it’s one like very practical reason. The other reason is it’s a fundamentally different set of priorities, when you get really good at fulfillment, you’re owning warehouses, you are staffing up, you know, warehouses–
Andrew: But you also don’t own the factories and you just send it out to the right factories. Can’t I just, “Look, here’s the thing. You tell me where to ship it. You guys make the deal with the warehouse company.”
Jesse: Well, the way we actually do that–I understand where you’re going with this. The way we actually do that is for Lumi to partner with 3PLs, which we’re already actively doing. There’s a company also out of Y Combinator called ShipBob. ShipBob is a fulfillment company that does exactly what you’re saying. We have a casual partnership with them that we might formalize at some point.
But essentially if you’re working with Lumi and ShipBob, you get that end to end service. Like you order packaging, we work with them all the time. We flow everything through to them. It’s such a–the 3PL element is such a known commodity, whereas what we do is a very different–
Andrew: I see. You’re saying, “Listen, Andrew, this is just too basic.” What I’m looking for exists with a company like ShipBob. So I work with you guys, you get me the boxes, you ship it out to ShipBob, I ship my stuff out to ShipBob, they send it out and then my software can easily tell ShipBob what to do.
Jesse: Yeah. That connection between Lumi and ShipBob is strong enough where you can have that end to end experience, but we’re still doing the slice of the supply chain that we’re trying to dig deep on.
Andrew: You know what then? What I’m looking for is like, “Does Zapier work with ShipBob?” What I want is as soon as somebody buys from me, I want Zapier to tell ShipBob, “Here’s the address and here’s what goes out,” and then they’ll ship it out.
Jesse: They have great software as well. They would get you set up so all orders are going automatically to your ShipBob dashboard and then we would have an arrangement with them where you could log in to the Lumi dashboard, see your packaging inventory and reorder as necessary.
Andrew: That’s so good.
Jesse: That’s my point.
Andrew: You know what I was doing? I was getting so mental with shipping stuff that I said, “It’s got to look good.” Sometimes the box makes the product more special. What if I go to Etsy and I buy boxes from them. Then I get it from Etsy. Where do I ship the boxes? How do I make sure the shipper doesn’t stick in their piece of garbage–like packing inventory, it’s one thing. What do you need this whole dummy inventory thing?
Jesse: Right. So my suggestion on that is if you were looking for a turnkey–most customers that we work with, to give you a specific number, probably 80% of the customers we sell to are working with a 3PL, so we are actually liasoning our dashboard communicating straight to their system. So you as the brand really do have this kind of turnkey feel, but I’m still focusing on our aspect of the supply chain. I’m not trying to own a bunch of warehouses.
Andrew: It makes me want to sell stuff. What about this? One of the things I’m finding is a lot of people will sell stuff themselves. They sell it in their Shopify store and on Amazon and it’s really Amazon where most of their sales come from because it’s hard to get customers on Shopify, right?
Jesse: Yes. Is that a question?
Andrew: Are there any success stories there about people who are getting customers directly to their site, anyone I should be interviewing about that?
Jesse: Yes, of course. There’s a whole genre of ecommerce companies that we refer to as vertical commerce brands. That’s a term that comes from Andy Dunn, the founder of Bonobos. He wrote a great Medium piece about that term. So we refer to those people as–those companies from day one have an intense focus on shipping their product directly to the consumer and packaging becomes a huge element of the experience and you’re talking about Warby Parker, Casper, Dollar Shave Club.
Andrew: I see. Right.
Jesse: MeUndies, Parachute Home. There are hundreds of incredible companies with that focus, and those people are not going to hock their products on Amazon, not now, maybe not ever. They’re getting their margins and thus their high level of customers through selling direct. There are a ton of people that comes to Casper that come every day and some people that go to MeUndies that come every day because they’re excellent marketers and they’re building an incredible product.
Andrew: I interviewed someone like that. Why am I forgetting? Essio–this is aromatherapy for your shower.
Jesse: Yeah. That’s awesome.
Andrew: You pick your aroma. You put it up by the shower. When you take a shower.
Jesse: Yeah. If they’re really–those brands that have that focus, you’re not going to see MeUndies pop up on fulfilled by Amazon. That’s not going to happen. So if it’s something that’s more commoditized, you’re going to see it happen, but brands are being very careful about that.
Andrew: I remember talking to the team over at Shopify in the early days. They always had a lot of success stories to keep telling me over drinks. A lot of them were people who had really good audiences around something they really cared about. Sometimes it was like nonprofit. They’re not going to sell this nonprofit stuff on Amazon. They’re looking to say to their audience, “You like us. You want a memento of the experience you’ve had. Buy this.” I get that. You’re very excited about this. Do you ever feel like, “This is actually just freaking boxes? I’m now like Millhouse’s dad from The Simpsons?”
Jesse: Many people have brought up that episode to me.
Andrew: Really? I can’t believe that came to me, actually.
Jesse: Yes. It’s a brilliant reference to literally my whole world being a joke. Yes.
Andrew: When I saw the smile on your face, I thought, “Andrew just came up with something no one’s come up with.”
Jesse: No. People have said that to me on Facebook messenger and stuff. So, anyway, I never feel that way. I feel–it actually thrills me that anyone thinks my space is boring because it’s like a less competition for me feeling. The deeper I dive into this space and realize the people, the competitors, we have competitors who have revenue of $1 billion a year.
Andrew: Really?
Jesse: Old-fashioned competitors, not startups, not startups you’ve heard of, that manage their entire workflow out of emails and whiteboards. I’m looking to the side because I’ve got whiteboards over here. We are in a space that is in desperate need of an interface and a way of especially younger and younger entrepreneurs and people who are in supply chain to buy this stuff, understand it, manage it. So, obviously, it’s a big bet, but I think that we can be the people who build that and as boring as anyone else want sit to think, that’s fine with me.
Andrew: So you talked to Jeremy, our producer, Jeremy Weisz. He’s a great interviewer on his own. One of the things he talked to you about was you told him, “On my lowest moment, in my private thoughts, I question if I even have what it takes to get from where I am to where I want to go. I wonder if I actually have it or maybe I’m going to be a $100 million company and completely unimportant in the industry and that’s a big issue for me,” right?
Jesse: Yeah. And that’s true. I think that that’s the hardest thing is like I don’t question–to clarify, I don’t question that this needs to happen and that there’s a huge opportunity there. I don’t feel like, “It’s boxes. Does this really matter?” I don’t question that. Do I question whether we have like every insight needed to build what’s necessarily? Of course.
Andrew: I see.
Jesse: There actually is an allure that this is actually–despite how it might sound when I talk all jargony and stuff–it’s actually a fairly low barrier to entry space, meaning that anyone with like a pretty decent rolodex of manufacturers, some good product knowledge can just start going into packaging, essentially. We’re taking a heavy investment into software and heavy investment into areas that other people are just using phone and a rolodex.
That has to work. We have to build software that’s meaningful, otherwise people who have less investment into the technology aspect who are just doing it the old-fashioned way can just go out and grab accounts. I’m not saying it’s going to be the–I think we have to really continually question whether what we’re building from a software perspective is the right direction as valuable?
Andrew: How are you going to get more customers? You found a way with Kickstarter.
Jesse: Yeah.
Andrew: It seems like Medium posts are doing well for you. Recode, you did this post on Recode, “Five Things You Should Never Ever Say to a Woman in Tech.” That sent some traffic your way, right?
Jesse: Uh-huh.
Andrew: What’s the strategy? What are you going to do to get customers on a regular basis?
Jesse: You already mentioned my crazy videos. That’s not like a dominant strategy, but it’s part of the grander strategy, which is where are people looking and where are people’s heads at when they realize they need help with these subjects. As obscured as like a video on–
Andrew: Sorry. I’m smiling like a dork. Does this actually happen?
Jesse: What?
Andrew: “Five Things You Should Never Ever Say to a Woman in Tech,” did someone actually ask you if your dad helped you draft a document?
Jesse: Yeah. And if you read down, I say, “My dad is dead.” He definitely did not help me draft–yeah. I sent a document over to someone, a contract, I guess they thought it had particularly gruff terms and they immediate question, “Who wrote this for you? Did your dad help you write this document?” I wish I was making stuff like that up. It’s impossible to even make things like that up. I understand. But I’m 29. I’m not a baby. It’s interesting.
Andrew: I wonder if I’ve ever done anything like that.
Jesse: Who knows?
Andrew: I wonder what weird things come out when people don’t recognize them. Who’s going to call it out? You’re not going to stop and say, “Hang on a second, Andrew. . .”
Jesse: Exactly. That’s the thing. I’m also a very reasonable person. I don’t enjoy calling people out on the spot. Usually when something is said in a good-natured way, I’d be the last person to want to pick it apart, but I wrote that article because it’s like I think sometimes people will just say a lot of those things unwittingly.
Andrew: There was something I interrupted that you were saying–oh, customers, how are you going to get customers on an ongoing basis? The YouTube videos aren’t going to be the big thing.
Jesse: No. The point was the reason why we even do something like that, it’s not just for our own amusement, although it definitely is helpful. When someone searches like gummed paper tape or someone searches these very specific things, we want to make sure that we are being surfaced as an authority on those subjects, which is important.
The key way though is that this sort of thing I’ve alluded to of actually mapping the manufacturing prowess, we are like–there is a kind of like long tail searching, where people start searching like, “Box manufacturing, Lebanon, Kentucky.” We’re working on ways of making sure we surface as that, as opposed to just random offerings.
Andrew: I can see that. All right. I get that. We are searching for it and your ideal customer is looking everywhere for it. Why is Shopify not writing more blog posts about you guys as an option? Why is Kickstarter not recommending it, etc.?
Jesse: Well, to be honest, we’ve realized that we are becoming most valuable to companies that are a couple years old or more. So Kickstarter and Shopify, their content strategies are focused around the very beginning, like just starting out.
Andrew: How about ShipBob? Should we call ShipBob’s founder right now? Is Bob the guy who did it? Should we say, “Hey, why are you not promoting this company as an alternative?”
Jesse: They refer us business daily.
Andrew: Oh, they do. Okay.
Jesse: Yeah. I don’t want to call them out.
Andrew: All I have is access to what I see online and they just have one post that includes you. That’s why Lumi, we’re all about the physical–did you guys write that? It looks like you did?
Jesse: I don’t even know. Basically to answer your question even more explicitly, most of our customers that turn into revenue generating customers quickly are coming referrals and we get referrals from 3PLs, we get referrals from other customers. Referrals from 3PLs are particularly powerful. So we work on that pretty heavily.
Andrew: Is Nuts.com one of your customers?
Jesse: I don’t think so.
Andrew: It seems to be. That’s an image–
Jesse: I think I would know.
Andrew: It’s hard to say. It seems like they included their photo in an article about you. I’m now looking at boxes with a whole new set of eyes. Some of this stuff is really gorgeous and now I understand where they get it. Nuts.com designed their stuff really nicely.
Jesse: That should be on your promo, “Do you have any backdoor deals with Nuts.com?” Their boxes are beautiful.
Andrew: I really admire good design, largely because I don’t have it. Like when I was a kid, I would always fall in love with girls who could talk to adults and be social because I didn’t know how to talk to adults. I didn’t know how to be social. All I could do was if you called on me in class, I could give you a wise ass answer or the right answer, I don’t know. But that’s it. So, whenever I see good design like this, I’m just in awe of it.
Jesse: Yeah.
Andrew: Finally, you and your cofounder, you guys always look like you’re having fun. Am I going to find that you guys are really secretly angry with each other? If I ask people for rumors, am I going to hear you guys hate each other?
Jesse: I really don’t think so, no. I think what you would hear–Stephan grew up in France and I grew up in Detroit. We are very different personalities. I’m like the crazy American person who’s boisterous and passionate and will convince you I’m right about things, and he is like this reserved French person, where if you met him, you would think he hates you. He doesn’t actually hate everyone, but he has the hate look on his face sometimes, although he’s friendly once you get to know him. So we have this like yin and yang relationship.
I think that we don’t agree on everything. I would be shocked if anyone says they do agree with their cofounder on everything. I think the biggest struggle for us is like I feel–like we operate in very different roles. He’s leading the dev team and I’m leading like sales and growth. Then we group together on strategy. But because of the different focus areas we have, he is usually willing to take more time to think about something. I feel the pressure of the rush. I feel the pressure of growth and rush. So it definitely potentially is an area for friction, but we’ve been working together for seven years every day and we’ve made it work.
Andrew: He’s the guy who designed your logo, huh?
Jesse: Yeah.
Andrew: I can see his Dribbble account. And you guys didn’t take any money outside of Y Combinator, did you?
Jesse: We did. We did a seed round with Homebrew and Lowercase leading.
Andrew: Oh wow.
Jesse: Coming out of Y Combinator.
Andrew: So what do you think now of Chris Sacca not continuing to invest?
Jesse: I feel like we’re like a legacy investment. I feel like it’s a classic baseball card or something. They’re awesome and they’re both going to go on to do incredible things after this–when I say both, I mean Matt Mazzeo and Chris. But they’re also going to remain, I think, fully available.
Andrew: I feel Chris made so much money from Uber that that’s it.
Jesse: I know.
Andrew: I could have sworn that Jason Calacanis basically said that at some point, some of these guys are making so much money they don’t care, right?
Jesse: Yeah.
Andrew: Early Uber investor. Uber is one of the biggest success stories in tech financially.
Jesse: I think everyone deserves–I thought it was interesting. I have so much respect for them. It makes a lot of sense to me that he–it’s like when you develop a certain mastery over a subject and you still aren’t 85, it’s like go on, have a new life. I think it’s great.
Andrew: So one of the things that Chris Sacca said is that he only and they as a team will only make investments in companies that they can actually help in. What kind of help could they offer you?
Jesse: Yeah. I think that we were very–I think we were very green around the subjects of fundraising in general, of certain elements of the way to operate and scale a company in a venture capital capacity because we ran a bootstrap business the first time around. I think that Matt and Chris have been really helpful as a resource to lean on. They’re very no BS, like you ask them a question, you get an honest answer immediately. They’re a great resource. So I view them as a lens for me into a world that they have mastered.
Andrew: All right. The company is Lumi. I’m so–one of the reasons I like doing these interviews is because I get opened up to new ideas I wouldn’t have discovered and frankly, this has just been around me for a long time. I get specialty coffee delivered into the office, specialty candy delivered into the office. I never realized or didn’t stop to pay attention to how so much of like the Brooklyn maker mentality is creeping into the rest of the country. People are making stuff. They’re selling it. Some of them are making nice money on the side and a few of them will actually end up with explosive growths.
Now they need all these different resources around them. Shopify was the early one. I remember doing ads for Shopify. I said to Toby, “My audience can code up websites. Why are you promoting Shopify to my audience?” He said, “Yes, but they are the people who care going to tell their friends when their friends can’t code up a side here’s how you can have a good shopping experience.” You have to convince people that Shopify works and now frankly it’s just an easy thing. It just makes sense.
All right. I get the feeling the same thing is going to be true for Lumi, for companies like the ones that are Shopify. All right. Lumi–how much did you pay for that domain?
Jesse: You’re so evil. I think we did actually plop down about $15k for it.
Andrew: That’s it?
Jesse: I’m just like such a bootstrapper at heart I’m even embarrassed to admit that, but yes, we did.
Andrew: I used to own Grab.com. I paid $150,000. A good domain makes sense.
Jesse: Wow. Okay. It is a four-letter domain and it’s Lumi.com. I’m partial. I like it.
Andrew: Yeah. It feels good because it’s got a nice look to it. Maybe it’s actually your cofounder’s design that made it look good. All right. So the company is Lumi, L-U-M-I, Lumi.com. If you want to hire a great developer and frankly even a designer–we’ve hired a designer that we work with through Toptal–go check out Toptal.com/Mixergy. If you finally want to get people on the phone, Acuity Scheduling.com/Mixergy. I’m grateful to them and to you for being here and to everyone for listening. Bye, everyone.
Jesse: Thank you for having me.
Andrew: Thank you.
