Podcast: The Future of Ecommerce and How to Start Lean
March 17, 2020
Here’s a glimpse of what you’ll learn:
- John talks about co-founding the Rollins Center at Brigham Young University (BYU)
- John’s philosophy for picking business partners
- The 3 key founders of a business and the different roles they play: the hipster, the hustler, and the hacker
- John’s role in mentoring the founders of MyoStorm
- Should the primary founder of a business bring in a co-founder?
- John’s insights on product development and the best frequency of product launching
- What is the lean startup method and how to do it right
- How John’s daughter started Dirtylicious Dance Fitness and how crucial it is to identify your target market and product-market fit
- Why Seek Augmented Reality was created, how it works, and how it was able to market itself to eCommerce players
- John talks about how brick and mortar retailers can become more adaptable to market changes
- John’s concerns on Bitcoin and the future of robotics
- Why learning new skills can be helpful to you in the advent of robotics
- How to get in touch with Startup Ignition
In this episode…
Entrepreneurs go through a lot of steps in putting up their business. From product research, product development, product marketing, all the way up to its launch, entrepreneurs need to act fast and be on their toes for changes in the market that could affect their business. The pressure to get it right is incredible and having an expert advisor guide you in the process is definitely a big help.
John Richards from the Startup Ignition entrepreneurship bootcamp teaches founders and entrepreneurs basic entrepreneurial skills and knowledge to help them guarantee their startup success and to be able to manage the growth of their company more effectively.
In this episode of The Buy Box Experts Podcast, Eric Stopper talks to John about the various aspects of starting up a new venture. They dive deep into the topic tackling things such as John’s philosophy for picking business partners, who the 3 key founders of a business are, the future of robotics, and what John’s company can do for you and your business. Stay tuned.
Resources Mentioned on this episode
- Buy Box Experts
- FREE ANALYSIS by Buy Box Experts
- Startup Ignition
- John Richards on LinkedIn
- Rollins Center at Brigham Young University (BYU)
- The Mom Test: How to talk to customers & learn if your business is a good idea when everyone is lying to you
- Dirtylicious Dance Fitness
- Seek Augmented Reality for eCommerce
- Kiln Co-working Space
Sponsor for this episode
Buy Box Experts applies decades of e-commerce experience to successfully manage clients’ marketplace accounts. The Buy Box account managers specialize in combining an understanding of clients’ business fundamentals and an in-depth expertise in the Amazon Marketplace.
The team works with marketplace technicians using a system of processes, proprietary software, and extensive channel experience to ensure your Amazon presence captures the opportunity on the marketplace, not only producing greater revenue and profits but also reducing or eliminating your business’ workload.
Buy Box Experts prides itself on being one of the few agencies with an SMB (small to medium-sized business) division and an Enterprise division. Buy Box does not commingle clients among divisions as each has unique needs and requirements for proper account management.
Welcome to the Buy Box Experts Podcast with your host, Joseph Hansen. We bring to light the unique opportunities brands face and today’s e-commerce world.
Eric Stopper 0:18
Hello and welcome to the Buy Box Experts Podcast. This is Eric Stopper. our episode today is brought to you by Buy Box Experts. Buy Box Experts takes Amazon brands and makes them unbeatable. We have a current program right now, this free listing analysis, we’re actually working on an overall marketing analysis. So please reach out to us. We have a team of consultants who will talk to you about your business, help you understand maybe some of the the the things that you’re missing, right like, Do you have enough pictures are you spending enough on ads we’ll take a categorical look and we’ll just tell you if your listing is ready for advertisements. So please reach out to us He’ll talk to me or one of my team. That’s BuyBoxExperts.com click on the free analysis button at the very top. Today, I am joined by none other than John Richards. John is a startup veteran, a proud father a grandfather of seven. Now his son recently had another baby. He is a golfer a traveler, a cure a Holic? How many questions on cure? Did you have? Have you answered now? It’s like hundreds.
John Richards 1:30
Yeah. I mean, I have I it got to be almost overwhelming. Someone response there?
Eric Stopper 1:35
Yeah. He’s a venture capitalist, a Bitcoin enthusiast, a pickleball champion. And he was a Seahawks fan before it was cool. The list goes on. And on john. He’s one of my favorite people. He was honestly one of my first mentors in the business world. And I’ve always viewed him as this sort of Paul Revere of the Lean Startup methodology. In his years as a professor at BYU and his subsequent years investing and speaking And on and on, he has mentored hundreds of students and startup founders. His main hustle startup ignition is a 13 week entrepreneurial boot camp that has borrowed parts of his business model. From the more traditional coding and developer boot camps that have spawned over the last decade or so, it is sure to take your business to the next level. I’ve had several friends go through the program, and they have nothing but excellent things to say about it. And the network that he gives you is just absolutely incredible. So john, welcome to the show.
John Richards 2:30
Wow. Thank you, Eric. That was a wonderful, very nice introduction. So thank you for those kind words, of course. And you you founded, like co founded the rolling Center at Brigham Young University. Right? Well, it goes back to I definitely came down from Seattle to BYU and worked on both the Business Center and the Entrepreneurship Center, and then those two merged and so yes, I’ve been involved the for many, many years. With that center, even through mergers and different growth,
Eric Stopper 3:03
it’s it’s incredible the program that they have over there. You’ve got Scott Peterson and Steve Liddell, running, running that program at the tip top. Those guys are amazing. If you’re if if you have the opportunity to send a kid through that program, I would do it. I got to start a company and john mentored me during my time starting that company, and the resources there were honestly indispensable, but I want to talk to you about a bunch of different stuff. I feel like reading your Facebook posts and reading your LinkedIn posts. You have your hands in a lot of a lot of different pots. But I want to focus on three specific businesses. The first company is a is a product company called Mio storm. The second is a fitness company started by your daughter, right? Yes, called dirty licious. And the third is an augmented reality platform called seek Now milestone let’s go back to milestone. So I met john Oh, we had lunch and he was able to share bits and pieces of his story, but can you help our listeners kind of understand the journey that he has gone through and kind of what role you had played in their story?
John Richards 4:15
Well, that one is definitely because of my involvement at Brigham Young University and being involved with the Entrepreneurship Center there. So as a mentor in the program, generally I met miles storm, but also this past summer. And I should back up and let everyone know that Brigham Young University runs a great accelerator for the top 20 student ventures every year get to go through a summer accelerator if they choose. They get some money, and they don’t go do other internships and then they work on their companies for the summer months. And I myself my my program called startup ignition was the curriculum for this past summer in which milestone was one of those 20 companies. So again, Got to mentor them even more heavily during this past summer. And it was fun because they had just been on Shark Tank. And with all the confidentiality surrounding that waiting for the Shark Tank episode to air, and it’s been really fun being around that and of course, they came up with, you know, an innovative product in the exercise space. The device is, you know, heated or vibrate. I’m not sure which features exactly it all has, because it has so many features for being used for massage and exercise.
Eric Stopper 5:36
Yeah, they it’s it’s pretty cool. Go check out their bit on Shark Tank, those. Those pitches are like an hour, but they only show us 15 minutes. So it’s kind of I feel cheated every time that I think it’s
John Richards 5:48
even. It’s amazing. Yeah, it’s even a higher ratio on that you’re really in there quite a long time.
Eric Stopper 5:54
And you’re just getting drilled by these business professionals. Yeah, he had. He had two guys flanking him on either side when he was pitching on Shark Tank, are those his his partners?
John Richards 6:03
Yes, I think so.
Eric Stopper 6:05
Now, you one of the first lessons that I ever learned from you was to pick your partner’s really well and to actually have partners, right? Like don’t go at it as a one man band. Yes. Now, there’s a philosophy behind that, I’m sure. People who are listening. They are typically one man bands. They started on Amazon, they started selling products. And they’ve been able to some of them have carved out some pretty good niches. Can you kind of tell us about this philosophy and what you would suggest for these, these Amazon company founders?
John Richards 6:44
Well, let me back up and then it’s definitely a cardinal rule in the theory behind entrepreneurship, that scalable ventures and even backing up further from there I should explain that there are lifestyle small business There’s startups. And there’s a scale ups or scalable ventures. And when you’re a startup, you could be by yourself working on validating business model looking at something. But if you’re going to be a scalable venture, and the two chief types are software driven companies, and then consumer product companies that are manufacturing and putting out into the market, a consumer product, those are three, two very common types. They need multiple founders, it’s very hard to be a lone wolf entrepreneur. Matter of fact, most of the tech accelerators that are aimed at software companies have as their first rule of application. If you’re going to apply to enter into any accelerator, you cannot be a one person founding team. And, and that’s just, like I said, a cardinal rule. And there’s just too many things in a scalable venture that need to be covered by multiple founders in order to get things done properly and cover all the bases As you need to now, e commerce, where you are not manufacturing the product where you are an e commerce company, you know, an E tailor, so to speak, that is something that’s not quite in the same level of scalability and requiring multiple founders, so you could pull it off with one founder. And obviously, there’s a continuum there from, you know, if you’re, you know, manufacturing and, and, and putting out the product yourself and then using Amazon as your sales channel, then you’re going to have some scalability issues on the product development side that are going to be better done with multiple founders than just one person most of the time. But there’s exceptions to every rule, and sometimes that can happen.
Eric Stopper 8:45
Now, you’ve talked about these three key founders, the hipster, the hustler, and the hacker.
Unknown Speaker 8:55
Eric Stopper 8:57
I think a lot of the people who are listening are very much 100 Right, they want some YouTube videos and they’re like, you know what? I’m working on nine to five that I hate. I’m getting out of this. Right? Do you think given that like, a lot of these guys are kind of doing lifestyle businesses, but some of them probably want to scale? What What role do you think these other two founders would would play in that in that scalability process for that,
John Richards 9:21
you know, that three H’s to describe a kind of an ideal founding team that has the elements of a hipster hacker hacker and huckster? The huckster and the hipster often can be the same person you know, that’s the business lead the sales lead plus the person brain common X Factor, understands customers is really, you know, in touch with the, you know, the cool coolness factor of what they’re doing. And, but it is very hard to have all three in one person and it’s very, very, very rare to have all three aspects in one place. person. But so a lot of times two people can feel that all three. So having a business co founder and a technical co founder together is a really strong team and the business co founder could definitely be the huckster and the hipster. So it’s very rare to have the hacker and the hipster be the same person to be honest with you. And so, you know, and then even when you look at the hacker himself, there’s three different categories underneath them. That needs to happen. Like for instance, in software, you know, you have to look at the back end full stack coder, is it the HTML front end guy, or is it the UX UI guy, and there’s different combinations within that too. So some complexity and looking at team formation, but team has everything. And if you’re going to be more than a lifestyle business, I would venture to guess that most people are going to need to have a team surrounding them, not just one founder.
Eric Stopper 11:00
Now I imagine for our, for our product salesmen out there, those people who have started these product companies, even if you manufacture that, if you’re not doing arbitrage, right, and you have your own product like miles storm, the hacker is probably your data driven junkie, right? You’re the person who can navigate your your advertising platforms, the one that can use all the tools to actually make good decisions. And so even if you’re listening to john, and you’re like, look like, I’ve been running this thing for like six years, and I’m fine. If you really want to scale it, you probably need to bring somebody on that can fill that other role, wouldn’t you say?
John Richards 11:36
Yeah, it’s just, you know, it gets to be so much and also the main primary founder, who a lot of the people you’re talking about where they’re only one right now they’re the primary founder, bringing in a co founder. And maybe if it’s late into the project, you know, it’s a key hire instead of a co founder, but somebody else to really help is important because it’s more important at times. On stage to be working on the company more than in the company. And what I mean by that is working on creating and driving value for what you’re doing. And working on aspects of the company instead of just being involved in product development and sales all the time working on the company and making the company more valuable. That’s really what the primary founder should be all about. As far as working operationally in the company, they should be constantly striving to get themselves out of operations if they want to really drive the value of that company.
Eric Stopper 12:32
So you think he mentioned product development specifically, a lot of these people and even I’ve had a few people on the on the show who have talked specifically about the frequency at which you launch products being one of the indicators of your success on platforms like Amazon or Walmart or even your own e commerce store. And so, if if I step away from the product development, I just need to make a very strategic hire that’s able to do that for me. right have you have you found that people are are reluctant to take their hands off of that wheel? And what would you tell those people?
John Richards 13:06
Well, I you know, I have a little bit of a different viewpoint, I think what they need to do is make sure that they’re really strong with a product before going too wide because I see I just had breakfast this morning with leading local product company that gets into Walmart and Amazon and different things. And if you go too wide, you can really thin out you know your success with with with a product. So I like that idea. You got to keep it fresh and come out with new things because there is a life cycle. And the life cycle seems to be shortening on some of these things. But at the same time, if you’ve got a good product, make sure it’s strong enough before you go with another product so that you just don’t start just coming out with a bunch of products that are only kind of mediocre, you know, products or mediocre and how they perform in sales. You know, you don’t want to be a one hit wonder and have really mediocrity for all the rest of your product. So I like it kind of getting the tree trunk a little stronger and getting the root set on the first product before you stick a big branch coming off of it so that it doesn’t tip over. If the branch starts taking so much time, and it doesn’t go quite as well, is your first product way. But that’s just what I’ve seen.
Eric Stopper 14:15
So you’re you’re speaking this is this is the power of year of the lean startup that I was that I was talking about, right? You touched on some points that are that are core kind of theses in this Lean Startup method. But can you just talk a little bit about that help people understand what you’re what you’re really mentioned,
John Richards 14:32
with lean startup, if I were going to, you know, let’s say I was an e commerce person, I developed my own product and were, you know, selling in a, you know, the your audience, the, you know, in you came out with a good product, and it really did well and came out before I would do a second product, I would make sure I’m very thorough, and just as thorough as I was with the first one and making sure that there’s product market fit that there’s market demand that it’s a large enough market. But I’m making a good decision not just rushing to get a second product out and capitalize on my current user, or customer base. And because it seems like when you come out with a second, third and fourth product that just don’t do as well as your first one, you actually really thin the perception and the reality of your company and what it is and how well it’s doing. So I’m just saying, Be a little contemplated and deliberate and not too wild and fast. Does that make sense?
Eric Stopper 15:30
I think it absolutely does. I, to put this in a little bit more perspective to I did 2436 interviews from my previous company. I went to these i was i was servicing pregnant women, right? So I went to these OBS and I was just clipboard in hand, right getting all these all these data points to find out how much they would pay for it. Right? Like what they wanted to see out of it. Is Is this level of validation necessary or do you think that people can start at a much smaller scale, much fewer numbers, what do you think?
John Richards 16:03
Well, each company each vertical, each niche is going to be different in what kind of quanta, fybel and ours quantitative and qualitative research is needed to really validate product market fit. So that’s hard to answer, generally. But I think more is better than less. What you don’t want to do is bet your life savings and bet you know, one or two years of your life on a guess, and assumptions. You want to go out and validate those assumptions. Before you actually, you know, bet the farm split, so to speak. So I think that’s, that’s important, but you maybe don’t need to do quite as much as you were saying for most companies, because that was a that’s an awful lot of numbers. Once you get past 400 subjects in any way you can extrapolate extrapolate really well and To start forming conclusions you can do a lot earlier in that too, for b2b products, it’s more like, you know, 40 to 80. If you’re doing all adult in the United States as your target market, you know, two to 400 is the number I like to see. So, anyway,
Eric Stopper 17:18
does that make sense? Yeah, that’s, that’s really interesting. So I mean, there’s kind of kind of the law of statistics on, you know, relevancy and being able to extrapolate extrapolate with confidence. So for those who are listening, who might use Jungle Scout, or helium 10, right, these these tools that allow you to see market data and market numbers, you should probably make sure that you run your product idea by a few people who aren’t biased, right? Like go where the customers are, and figure out if they’re going to buy your stuff and if they’re going to buy it on Amazon, and it will just make the learning curve a lot. A lot less painful.
John Richards 17:53
Yeah. Eric also, I would say in the last five years, one of the most important books to come out in the office. Moreau field is a book called The mom test. And so that’s exactly making the point you just met. It’s a book written on how entrepreneurs tend to feel validated. But they usually get that from very biased, close circle friends, family, associates, and acquaintances. And they don’t understand the need of absolutely arm’s length away from anybody that they’re making conclusions from. And getting validation from.
Eric Stopper 18:28
I’ll never forget, I saw this this product company doing interviews on the BYU campus. Interviewing students right for this product that was definitely not going to go to students. And I just call it a waste of time. Yeah. So switching gears a little bit. I want to talk about dirty licious. I saw the signs in the gym. Before I heard about it from Emily Smith A while back but started by your daughter, can you can you tell me a little bit about the business how it functions why it’s awesome.
John Richards 19:00
Well, interestingly enough, so she started you know, she was a dancer all growing up and you know, at you know, some of the kind of elite places around Utah and then of course you get older and and you don’t start dancing as much and what she wanted to keep up dancing for, you know, exercise and health and she’s done that and then it turned into where the local gym Gold’s Gym which is now Vasa, offered her to teach classes because she was so good at this. And she did that start teaching it at the the Vasa gyms around Utah and the she started attracting very large classes, you know, hundred plus people coming to classes and things like that. And so those people were coming to Vasa, buying memberships at Vasa just be able to take her class which was amazing. Amazing. And so they like that. And a lot of people it’s kind of funny to me going around as you said, I mentor hundreds I’ve actually mentored thousands in my life entre Knights mentor a lot of entrepreneurs. So I mean a lot of times with young male entrepreneurs who tell me Oh yeah, your daughter, she teaches those classes at Vasa, Jim. And my wife just raves about and loves them. And then I went watch one time and I started doing it. I go, are you kidding me? Oh, I love it the several times
Eric Stopper 20:27
it’s not an isolated incident. So So this dirty licious is very much a Dirty Dancing class, right? Yeah, they’re like twerking in there. And man, like the website says you’re burning 1000 calories plus, so yeah, these entreprenuer is also doing it.
John Richards 20:41
Yeah. And so I watched my daughter doing this. She I haven’t really paid attention till she came up and told me that one of the class members who’s very business oriented, a very energetic and aggressive woman in business, said, Erica, you’ve got to take this and do something with this as a business. And so they got together. And then they went through my boom startup entrepreneur curriculum. And they went through the whole lean startup process and the pre Lean Startup tests, we run on ideas, the sales strong there. And she literally got one of the highest scores ever tested with this idea with her target on. So you identify your target market, and you measure how likely it will be that you can find product market fit before you start investing all your time and energy into it. And she got a very high score, which, you know, was interesting. So I took notice of this and then looked at what the sturdy dance was all about. And of course, the first time I watched I go, Oh,
my retinas burned a little bit.
Unknown Speaker 21:46
Have you done it? Have you done that? No, I haven’t. John.
Unknown Speaker 21:51
John Richards not supporting his daughter.
John Richards 21:54
But but so this, the idea is that she does Real, I guess intellectual property of the company is her dance routines, I guess are exceptionally good. And so the content of her dance routines that she makes up and she’s able to do that being put into enabling other women around the country to start these classes, in the same way that she’s done locally, and then training them to do this and giving them an entrepreneur outlet to be an entrepreneur in their local market doing this. That’s what dirty licious is now is training the trainer’s how to create their own small businesses around the country in their own local market and being affiliated with your delicious brand. And so it’s a certification of being trained and doing all that. And so they’ve held they started just a couple months ago and it’s going pretty well.
Eric Stopper 22:44
Yeah, so this is very much like a personal training course for for for Dirty Dancing instructors, right. It’s I think it’s genius. On one side, you have gyms and plotting studios who they get to fill their roster with really low injury risk classes and the instructors get to make money. And the barrier to entry is just a class, right that they have to take and get certified. And the people who take the class have a have a ton of fun when when you were going through this process and validating the business with them, did you know that this kind of affiliate structure this, this training structure was going to be a part of it? Or did that evolve as revalidate
John Richards 23:26
they had that they had that idea really, when they came to me, and you know, my daughter, you know, is married with children, and so is her partner. And so, but this is getting bigger and bigger for them. And it’s interesting, they, that that affiliate, that’s how they came up with and thought and I’ve helped shape that but that’s their core idea that they wanted to do this. The real question is, you know, are they going to be you know, just licensees and working for the corpus and being you know, very, you know, much under the umbrella of dirt Delicious, are they going to be really independent? You know, they get certified and go off on their own independently or how that works. And they’re they’ve got that nailed down and they really did a good job, doing testing and going out and talking to their target audience on this. I’m, I’m really proud of her for what she’s doing.
Eric Stopper 24:18
And she didn’t take the class. So that’s another shameless plug as well.
John Richards 24:21
Yeah. Well, and, and, and they want to and it’s it, you know, stopping mission is not just teaching you lean startup, that’s certainly the skeleton of the curriculum, but it’s soup to nuts. I mean, it’s about, you know, ownership and founding it properly, capitalization tables and understand that finance and getting bookkeeping set up properly and efficiently. And, you know, raising money and capital dealing with investors. It’s the whole shebang. So they needed all of that.
Eric Stopper 24:51
And there’s a lot of resources out there. I’ll link to a few of them. For this episode. We have a startup, not even a startup anymore, Divya. You’re in Utah, for those that are that are needing bookkeeping and all that I would point them that direction as well. So speaking of companies that are growing like crazy, seek, okay, now listeners, if you haven’t heard about seek, go look them up. I met a few of these guys at kilm. It’s, they’re like an incubator here in here in Utah. And these guys are honestly building the future now. John, we’re gonna we’re gonna put on our futurist hat for a minute. And I want you to, I want you to look forward with me. You invested in seek? Yes, right. Can you tell me a little bit about these guys where the idea came from?
John Richards 25:35
Well seek started from the reality that you know, you have virtual reality and you have augmented reality and the new technologies coming up. It turns out that virtual reality is important and going to achieve and do a lot of cool things, but eight times the magnitude of impact and applicability is augmented reality. And so when pokemon go hit, it really caught a lot of the world that augmented reality is fun, but also could have some real practical applications. And so seek was born with the concept of taking. And the founder john Cheney, taking the Pokemon GO type of environment and helping local and national businesses reach consumers through finding deals and treasures and coupons etc for doing transactions. So for instance, if I wanted to get to for one on swig soft drinks at swig here in Utah, I could have been found a treasure chest with my augmented reality application and found that and then gone in and got a discount rate swig and it was kind of an interesting concept. And they got some really nice national brand contracts to test that advertising and that was how it started. Started off. But like all businesses and like we are taught in lean startup, we often pivot to even stronger business models. And so what happened was seek pivoted, because they found that augmented reality was really going to have an impact in the next evolution of e commerce. And so what happened was, as we see, you know, in the.com era, the late 90s, just going up on the web, and making sales, the early days of e commerce, that having a photo instead of just a textual representation of a skewer product, really increased conversion and sales, right. So you went from photos, and then the last 20 years, we’ve gradually gotten to where now is the heyday of how much videos associated to promote products, or increase, you know, and you probably know much more about this than I do, Eric, about the conversion power of video. Right. It’s crazy. Yeah. And so and so that is really had an impact. And so now so you think of photos on the rise and impacting online commerce, and that had its run for, you know, 510 15 years. And then now, it’s video is in its heyday, but it started, you know, 10 years ago. Right now what we’re in is the early upswing curve of augmented reality to sell ecommerce products. If you go and look at overstock and look up a piece of furniture right now, for instance, with no need to download any other app or anything, you can be looking at a chair, for instance, and you can be right looking at the chair, and then click on Oh, I want to see how that looks in my living room. And you can hold the phone up and click on that and you see the chair properly in its proper size and everything sitting in the corner of your room. augmented reality, to see how it looked there.
Eric Stopper 29:00
I had a friend of mine who was building a business, basically. And I don’t think that he quite knew what he had stumbled on. But he would have people go into these these little chambers, these rooms and the room had all these really special cameras all around. Just 360 view. Yeah, he would make a 3d model of a of a person and that and then he could project that model of that person into Sims or into he was using some other virtual engines to display these has seek crack the code on like things like clothing, right? Like, can I look at a piece of clothing on myself yet?
John Richards 29:41
I don’t know. I can’t answer that. So unfortunately, I wish I could. I wish that I know the first crack code by seek is definitely selling, you know, house furnishings and goods around your house that you can walk around with augmented reality and see products how they would look on a table, you know, in the corner of your room. as a replacement couch a refrigerator whether it literally fits the dimension of the hole in the kitchen left in the counter, things like that it’s done all that and the conversions with augmented reality are really really high because a person seeing the chair in you know, they’re seeing a live picture on their you know video on their phone of their living room and now the chairs put in there and go wow, that does look good there. I’m buying it click and they buy it from Overstock.
Eric Stopper 30:28
So they have seen that conversion rates go up with it. Oh,
John Richards 30:30
yeah. Very good conversion rates happening. Yeah, it’s, it’s it the difference from photo to video, you’re gonna see the same difference from video to augmented reality.
Eric Stopper 30:40
So tinfoil hat right after augmented reality. Yeah. Where do you think we’re headed?
John Richards 30:46
I don’t know. It’s gonna. It’s interesting that you say that I don’t know it. Someday, you know, you got to wonder Are we going to have what we’ve seen in some of the movies, the Star Wars movies and other things with holographic images. Right, right? Where you don’t need to look into the screen of your device, the device, you place it down there and IT projects up the image in a hologram. That would be the future man. Right? I guess the bridge between that would be like these AR glasses, right? Like the Google lens and a few other companies. But I don’t have a pair. You don’t have a pair, right? Like, yeah, well, you take Google Glass, you know, that. That didn’t work. So well. There’s, you know, there’s some interesting intrusions that the glasses are for some people I don’t know. But But the interesting thing is with secret now the phone works for what it’s doing with this first generation of impact in e commerce, because that’s the perfect vehicle is the mobile phone, which isn’t you know, of course, the most amazing electronic story of all time or smartphones but that’s created such a vehicle to have augmented reality really come into practical use in commerce.
Eric Stopper 31:55
Now if if I am a little company Right, maybe I’m brick and mortar, this is this technology is advancing at such a fast rate, right, this whole idea of recursive learning, you know, like, the next stage of us getting smarter is is much, much higher than the previous, like jump in information that we’re able to have. So, how do you keep up? Right? Like if you’re a company trying to get the edge and incorporate seek into your, into your suite of services? I mean, how are you? How are people even being made aware of this as the seek actively sell this to people they advertise to people try to get mass adoption?
John Richards 32:38
Yes, I mean, you know, obviously, going with a direct sales force one by one to you know, it’s b2b clients is, you know, a longer haul. So, seek, this is kind of odd to seek a seeking that’s maybe not a good you know, channel partners, you know, that can help get to More ecommerce companies, but they’ve got some, you know, the pipeline looks really good. And they’re they’re approaching lots of good, you know, larger e commerce players. And so it’s exciting.
Eric Stopper 33:13
Yeah, I saw on their website that said something like, companies that trust seek, I think is the tagline on their website and Amazon is listed there.
John Richards 33:23
Yeah, among a bunch of other ones that are pretty staggering. what’s what’s the word on that? Well, the the deal is this seeks unique intellectual property. And when the code they cracked and they just have a brilliant CTO is that they can put augmented reality on an existing e commerce site without the user or the e commerce site having to have any special applications or technology that’s it sets krauser augmented reality browser based easy to implement. That is that’s the game changer because Up until that, to have augmented reality, a user would have had to download an app. And that’s a huge amount of friction obviously for just a, you know, it with the speed and rapidity that online shoppers move at to sit and have to download an app to see Oh, do it. That’s just not gonna happen. Right? So
Eric Stopper 34:18
we’re really we’re really that, that lazy or that entitled, we can’t even download an app. Okay, so I’m an Amazon seller, right? I want someone to see my awesome thing that I developed through their their seek app, how do I, how do I take my widget? Do I scan it? Do I have to, like get a 3d rendering done by
John Richards 34:38
Yeah, you have to get the 3d file to my understanding, and that’s been the you know, there’s, I don’t want to want to guess it would be way better for you to talk to the company directly because I don’t want to go, you know, out of my area of knowledge, but a lot of it you know, it’s a gig economy for people you can there’s lots of people that will create 3d renderings of products in kind of a gig economy. But at the same time, almost all manufacturers have created 3d versions or renderings of their products. And there’s some standardization in those files that’s happening to where they can be utilized very quickly. I mean, the speed with which seek put a massive amount of the products on overstock up and available through augmented reality with augmented reality solutions was pretty amazing for a relatively early stage smaller company like seek to pull it off.
Unknown Speaker 35:39
It’s It’s incredible. I I think
Eric Stopper 35:43
I’ll bring those guys on. That sounds like a fun that sounds
John Richards 35:45
like a fun time. I can help you with that too, if you’d like. Yeah, it’s it’s interesting, just where that’s all headed. But again, it’s back down to, you know, video right now. It’s videos, heyday and we’re just on the beginning curve for augmented reality. But you know, just you know, seeing a video of a product is fantastic and seen its features and all that. But seeing it sitting in the middle of your own living room or up on your shelf or on the wall in your bedroom, if you like that TV or whatever, it’s just, it’s just a whole different ballgame for conversion because it that’s a lot of the reason why people still want to go to the stores to actually see the product, but now you’re having the best of both worlds. If you go to the brick and mortar store, you can’t see how it looks on your wall. But with augmented reality you can
Eric Stopper 36:34
I guess the alternative that is is you would just augment reality, your home outside of your home. You’re working on that. So I have I have the juncture of two ideas to bring to bring. Okay, so I had an idea speaking of my friend who was doing the 3d scans of people to do like clothing and stuff. essentially taking like malls, you know, malls have just been devastated in you all VR goggles or you let people augmented reality project these things on their phone and you allow each each like storefront to create their own. You know their own racks, their own mirrors their own pictures in store and you just you can walk into any store that you want. But you can shop anywhere right like if I want to shop at a Nordstrom I can project a Nordstrom onto this onto this mall kiosk if I want. So this is kind of my thoughts because brick and mortar is is hurting. The reason I’m bringing this up is because you’ve talked in the past about a retail apocalypse. You ranked you links to to an article by CB insights a few days ago. Yeah. 81 companies who have filed bankruptcy in what people are calling this apocalypse. And one of those was Payless right February 2019. They’re gonna close 2100 retail stores nationwide is unprecedented. And in the article they say this is a quote. Amazon is not the only reason that Retailers troubled mounting debt and retailers own missteps and lack of adaptability are also to bring to blame among other factors. I want to talk about adaptability, right? You’re all about agility for these companies that you mentor, you want them to be quick and lean and, and an agile. So let’s talk about what adaptability looks like in 2019 2020. If you’re Payless, how do you avoid something like this?
John Richards 38:29
Well, that goes back to the you know, you know, the, you know, legendary book by Clayton Christensen, the innovators dilemma that came out in the mid 90s. And it’s probably one of the most important business books ever written based on his research. He’s a Harvard professor, and it spells out the problem with the incumbent. If you have an incumbent leader in a market or a niche, and a disrupter comes along, the incumbent keeps doing what it’s always worked for it and that is usually taken care of its most premium customers. And the disrupter actually takes care of the low end customers until it chooses way up and steals the whole market away from the incumbent. And the dilemma. The name of the book is the innovators dilemma is the one time innovator has now become the incumbent and now is getting disrupted. And so there’s a lot of research and anecdotal history to look at that shows that is there even anything and income it can do to stave off this problem? And a lot of it comes from serving two masters and you can’t serve both masters for instance, one of the great case studies of all time on something like this is you know, blockbuster handling the advent of Netflix, right? Geez, what a disaster blockbuster was a $4 million business alright to $4 billion business, renting video movies and alarm company. Netflix and they ignored Netflix because they thought it was just a nuisance little thing. Until all sudden, B started growing and Netflix grew and grew. And then the mistake made by blockbuster was, oh, let’s try to be Netflix and our brick and mortar blockbuster business. And so the very first thing you do to compete with Netflix, they thought was, everybody hates our late fees, so let’s get rid of late fees and overnight, 800 million of their $4 billion disappeared. That was pure profit from late fees. And they went down further from that and Netflix kept growing. So I said, Okay, so I guess we got to go all the way in and we’re going to do the same type of DVD rental program through the mail, just like Netflix. And so they set up everything to just duplicate Netflix, but they added a feature saying, hey, since we’ve got all these stores, we can let people take them Back to movies to those stores. And that’ll save us the mailing costs because mailing was a big expense for Netflix. Well, what happened was their inventory systems got completely screwed up because people would rent a movie. It’d be sent to them maybe from, you know, Cincinnati, Ohio, but they take it back to the Tampa, Florida blockbuster, and their inventory started piling up in the wrong places the wrong time couldn’t get it to a distribution warehouse. It was a mess. And it completely messed up the inventory system to where they had a momentary gain of getting customers for their Netflix clone. And then ultimately, the inventory problems killed them. And they filed for Chapter 11 bankruptcy and the rest as we know is history. They’re long gone.
Eric Stopper 41:47
So So incumbents are screwed, right? I’m starting a business today in seven here. I’m just gonna be out because
John Richards 41:53
the answer the questions are very hard because it’s but this has happened in 1980. The number one most famous tech company was Digital Equipment Corporation. And it did mini computers larger than micro or PCs. And they were Harold is the best management team in tech incredible on the cover of all the business magazines. That same team by 1990 was considered idiots and they were bankrupt and out of business. And that’s because of the PC revolution. And the peak personal computers completely disrupted mini computers. And what happened was they that management team just kept doing what it had done in the middle minute with its many computers and doing the same channels the same way of sales and they just got completely creamed by Intel and Microsoft and the personal computer and apple and all that. And that’s what happened to blockbuster, you know, and Netflix story. And you’re seeing that now, throughout the massive, you know, quantum shifts in retail. I’m not an expert in this but I’ll just give my thoughts because I think your interest In this on where retailing is going, is I think you’re gonna see this massive clash as they go the brick and mortar stores are doing their best trying to be like a fully online retailer or e commerce company. And the e commerce companies are opening up experimental brick and mortar stores, you know, like bonobos, I think is name one and then you see some of these doing that and it’s like they’re meeting in the middle and going to have this gargantuan clash but I think a lot of brick and mortar stores on the way have experimented with e commerce are serving two masters and going to suffer the fate of of all these other companies that ultimately die because of it. So the question is, should a brick and mortar just completely go ecommerce while they’ve still got the strength? That’s an interesting question. And some might have to face that especially naturally ones to survive. But ultimately, you’re going to see this gargantuan clash, you know, Amazon Walmart and, and what’s going on? We know target already suffered a big hit I’m not sure what their current status is and their health but you know they would they shut down over 100 stores about it.
Eric Stopper 44:16
Yeah, something like that. And then Kodak survived. They’re kind of incumbent disrupter right because they had developed the first digital camera and then they ignored it. Or somehow
John Richards 44:30
Polaroid and Kodak are largely brands I think being kind of repurposed, you know, like Polaroid got wiped out. And Polaroid now is a nice brand. Everybody trusts just like Kodak and so a lot of products get that brand put on it. And it’s kind of a brand marketing play to my understanding. I don’t know if they’re really, you know, Kodak had did something interesting with their crypto offering last year that got a bunch of cash, but I’m not sure exactly what they’re doing with products
Eric Stopper 44:59
in you. You’re a big Bitcoin advocate.
John Richards 45:02
Well, I, you know, I definitely was I liked some of the ideas, but I’ve had some concerns over just because the reaction the United States government towards a lot of these things, if the government’s don’t allow it to happen, I’m a little worried about where it’s headed. But still, there’s great promise and hope with blockchain technology, and all that, but I don’t know, if bitcoins going to be a transactional solution, it’s definitely become a store of value like gold. And, and it’s interesting to see where this all shapes up. But, you know, the federal government of the United States and other you know, first world governments have a real keen interest on not allowing this to get out of control. And they’ve shut down and are taking a lot of legal action against some of the early actors that were going a little too hog wild. And it’s really created a you know, ongoing nuclear winter in this so we’re still seem to where this has been, you know, shake, shake out a little bit. So that’s how I feel on that
Eric Stopper 45:58
we were talking about today. tariffs on our on our previous episode I mean there’s there’s all sorts of regulatory risks that are affecting e commerce stores and brick and mortar stores i just i wonder then because you you shared an article about the growth of Bitcoin as compared to Amazon Alibaba all these like high growth companies which Alibaba was surprisingly low it was only like 100% increase yeah um the Bitcoin one was like 9,000% increase or more by being 18,000 yeah yeah it was it was crazy well so now you’re you know you’re talking about this this this risk and hire little little unsure about if it’s going to be a transactional piece for people. Now my question is I’ve seen you do all these friendly bets with your friends when you’re playing pickleball when you’re doing golf, I think total total amount of dollars maybe like 40 or 50. From what I from what I’ve seen and between New and worn off was born and your son. Now you’re a betting man, right? Like, let’s say that you have to put your money on one emerging part of the market, where do you put it? And why?
John Richards 47:11
Oh, boy, that’s a interesting one. So Well, well, I I’m gonna answer that. But let me go back to Bitcoin just say, I think bitcoins an important part of a portfolio though, just like gold would be an important part of a person’s portfolio right now. So whatever that means, do you have 5% of your net worth in Bitcoin and 5% in gold? That seems like that could be really prudent. So that’s something to think about. But now as far as where opportunities and technologies and, and new things are going, you know, there’s just got to be
a huge, you know,
look at two key areas. One is robotics, and where robotics is going to take us and the question of what are all the humans going to do as we keep disrupting jobs? mean, literally, the top 40 jobs that humans participate in are all easy manual labor jobs, that robots are already disrupting massively, and they’re going to disrupt even more. And it’s not until number 38, which is computer software engineer, you know, computer scientist or software coder. And that you get to something that, you know, might survive a little bit longer in the face of the first wave of robotics. So I think it’s going to be very important for entrepreneurs and people to think about how do I own robots instead of being displaced by robots? I think it’s an interesting question. And then and it’s not just physical robots, but software bots, software robots, because after the blue collar positions get very impacted, then you’re going to see you know, white collar jobs 60% of the of America’s workers. Push numbers from one spreadsheet to another, so to speak. And there’s a lot of software bots could that could do a lot of that work as well. There’s software that can write other software. And you’re seeing that, you know, even software engineers might be threatened someday by other software bought so I think robotics is a gargantuan area. Another area is also the area of the combination of genetics big data, and you know, and software combining so genetics and big data and what that’s going to mean to healthcare and just many other aspects of life and then combining in artificial intelligence not to get too too geeking out here, but if you you know, saw the movie Gatica, some of the things we saw in Gatica, that movie if you’ve seen it, that’s maybe not too far off potentially. You know, maybe I our time
Eric Stopper 49:56
there is there is no such thing but for anyone who He was probably born after 1995 who didn’t see Gatica in 1997. Yeah, go and watch it. It’s available everywhere. It’s $1 on YouTube, great movie. We nerd out here this is this is the place to do it. People should be googling, right? Like their fingers should be flying, learning about all these all these different fields because the barrier to entry to learning something like AI and software engineering and genetics is getting lower and lower. You can learn a lot, very quickly. And so, you know, this is all really spooky and kind of fun to talk about. But for those who are legitimately worried about the future of their job in robots, right, like they should just start learning. Right? They should just boost themselves up with as much technical acumen as possible, don’t you think?
John Richards 50:46
Yes, absolutely. And just making sure that you know, you’re keeping your brain alert so you can learn new things, I think part of the hallmark of the future for those that are going to be participating in The economy of the next 40 years is that you’re going to have to be very, you know, fast footed and be able to pick up new topics, new subjects, and be conversant and be able to move laterally so that you can then move up if something happens to your industry to your niche or your position with what you’re working on. I mean, one statistic Eric, that’s really fascinating that some people don’t always realize is that about 40 years ago, the top five most influential companies in the world that had you know, a most impact on our daily lives, we knew their brand names and all that. The top five had about 4 million employees, those five companies together. Today, those same five companies that we would consider very influential in a part of our lives. You know, the Googles the apples and the and Microsoft’s all together. only have a few hundred thousand employees. Think about that, and arguably way more centralized. We think that maybe the internet’s democratize things, but not really way more centralized impact and control with very few employees, relatively speaking, which is just an interesting thing to think about, right? Because, you know, Google opens up a 250,000 square foot facility and has two employees assigned to 250,000 square feet. Well, you know, a company, a city or a county gets excited Google’s building a 250,000 square foot building, and there’s no jobs. And because it’s all computers, right, and, and so you know, when you think about that, it’s, you know, something to think about Google search, Google search, you know, the process of search of this incredible database, this incredible thing called the internet. And Google is so dominant in that search business, that nobody’s ever had a monopoly grip on anything the way that company does on search. If you think about it, Microsoft spent something like $10 billion to get being launched and going. And it’s still around and existing. But just ask the average hundred people, Eric, within the last 24 hours where they’ve used Google or Bing, and what do you think you’re going to get? I think after those billions spent by Microsoft and only got 2% market share away from Google search, nobody’s ever had that kind of launch money and only gotten that little market share. And I love you know, I’m not saying anything about Google, whether you like them or don’t like them and all that. It’s just an interesting, fascinating world, where we’ve put a lot of power and centralization into a lot of things that really don’t produce a lot of jobs. And it’s really interesting. We’ll see where it all heads up. If you are starting a business, this is for our listeners, if you’re starting a business, if you’re in a business, obviously talk to john. He’s got a wealth of information a wealth of knowledge, connections.
Eric Stopper 54:00
Go to startup ignition Comm. Right? That’s where we want to direct people reach out, they have, you know, a contact us button there. please reach out to them and see what they can do for you and your business. If you can fly out I know you’ve had some international people come in if they can fly out and come and spend some time with you, I think it’ll be extremely valuable and anything else that you want to direct people to
John Richards 54:23
knows. Thank you. That’s just great. Yeah, starfish calm. We’ve had we had multiple people from outside the state come just this last week for a cohort that started and there’s a new hotel right in Lehi, Utah. That’s very affordable, right in the heart of our tech area where we hold these entrepreneurial boot camps. So it’s great, john, thank you so much. Thank you.