S2 E14: Aaron Schwartz (Loop): The consumer has been trained to look for pitfalls while buying


On this episode Yaw and Mariah chat with Aaron Schwartz, President of Loop Returns, the leading returns & exchange platform. Aaron tells us about his past ventures as Founder of ModifyWatches, which was acquired by Custom Ink, Founder of Passport Shipping, and previous Chief Business Officer of Returnly. We also chat through;

  • the notion of influencers on a local level,
  • when there’s demand but people aren’t buying if shipping isn’t up to par,
  • carrier handoffs,
  • keeping track of feedback from different channels,
  • sustainable growth,
  • and how consumers are trained to look for pitfalls.

Be sure to subscribe to our pod to stay up-to-date and checkout Malomo, the leading order tracking platform for Shopify brands.

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This transcript was completed by an automated system, please forgive any grammatical errors.


brand, people, customer, watches, building, product, company, return, influencer, big, loop, buy, passport, retention, shopper, business, sold, spent, modify, shopify


Aaron Swartz, Mariah Parsons, Yaw Aning

Mariah Parsons 00:04

Hi there, I'm Mariah Parsons, your host of retention Chronicles, ecommerce brands are starting to shift their strategy to focus on retention in the customer experience. And so we've decided to reach out to top DC brands and dive deeper into their tactics and challenges. But here's the thing, we love going on tangents. And so with our guests, you'll often find us talking about the latest trends, as well as any and all things in the Shopify ecosystem. So go ahead and start that workout or go on that walk and tune in as we chat with the leading minds in the space retention Chronicles is sponsored by Malomo. A shipment in order tracking platform, improving the post purchase experience, be sure to subscribe and check out all of our other episodes at go malomo.com. Retention Chronicles we are joined by Aaron Schwartz at loop and yeah Inang who is our CEO and co founder here at Malomo. So, Aaron, so great to have you on you are the current president at loop we thought it would be great just to have you walk through your typical background, but yours has been pretty insane. So we're gonna go into the weeds of it. Can you kick us off kind of starting with Yeah, I was informed me to loi kind of chat through your experience there and then work us all the way up to loop softball question to get you started

Aaron Swartz 01:30

saying you've been like you're pretty old.

Mariah Parsons 01:33

So thank you for reading through that. Yep.

Aaron Swartz 01:38

Background most importantly, I grew up in Cleveland, Ohio, which is America's favorite city, as we all know,

Yaw Aning 01:42

wasn't, isn't it called the armpit of America. That's Michigan.

Mariah Parsons 01:47

So surprise, we wait, we have to pause. I'm surprised you didn't say New Jersey, because I'm from New Jersey, and I'm gonna get the armpit of New York a lot. So maybe this is a good, good relational factor for it.

Yaw Aning 01:59

I love Cleveland, by the way I love my sister lives there.

Aaron Swartz 02:02

I like the flexibility to pump my own gas, which is why I don't like New Jersey.

Mariah Parsons 02:06

Yeah, that's a toughy. I did succumb to the stereotype on that too. I did not know how to pump gas until I was 17. Yeah, and I was stuck in Delaware. And a stranger had to help me because my family wasn't picking up and I was calling them. I pulled up to the gas pump actually. And I because I was road tripping down to see one of my college friends to in Delaware. And so I was road tripping pulled into the gas bomb, freaked out and pulled back out into the parking spot lot like a parking spot. And this old guy like he must have been like 80 years old saw me do it. And he's like, I see your license. Like you don't know how to pump your gas. No. No, in my car, like following all of my family members, and no one was picking up. So yeah, it was it was quite humbling.

Yaw Aning 02:55

Usually now that it's got on tape.

Aaron Swartz 03:00

Yeah, this one Forgive me in trouble maybe a year and a half ago, four years after we've had our car. My wife was called me and she's like, Hey, how do I how do I open the gas tank? And I'm super confused here. Have you literally not? Yes. And the two and half years in the answer she has. So anyway.

Mariah Parsons 03:17

It's really funny. Thanks. So yeah. I'm glad. I'm glad someone who relates just a little bit.

Aaron Swartz 03:28

I don't even know. Okay, so Cleveland, it's great. School school in New York. And yes, I was at Deloitte. I spend two years in New York and normally go to business school. I didn't feel like I'd done enough sighs like, I felt like I still like more to get there and more to learn, certainly. And so I ended up having an opportunity to transfer to the London office. And so I ended up spending two years in London. It was awesome. Yeah, I love it. And then got into business school at Berkeley moved out west for that. And so did a two year like full time MBA, which was wonderful. And, you know, like growing up, I think, in retrospect, we actually do a lot of entrepreneurs I didn't like think of them that way. But like, you know, I thought about startups as you like, make enough money. You get a Subway franchise, you spit out some cash, you get a second one. Maybe you get a laundromat or whatever. Third, if you're lucky. Yeah, that's right. And like, you grow that way. And then, you know, what got into Berkeley was like, oh, high tech entrepreneurship. What does this mean? And so I started three companies. One was not even gonna talk about his sustainability business, like too many good ideas, your execution. And then the second one was kind of the opposite of high tech where I started a watch company in 2010. And so that's kind of what brought me into the consumer space. Business was called modify watches grew very quickly. It was meant to be a three month project after business school, it'd be like, okay, cool. All the mistakes I made for my first startup during school. It's like, great, let me go start a business as quickly as possible. So I had the pleasure of taking classrooms Steve Blank and Eric Ries Like, customer discovery, lean startup movement. Yeah, like it was this wonderful class, which was perfect because I was like, Oh my God, I've done everything wrong. So I started started a watch company, which was meant to be three months, and then it turned into seven demo.

Yaw Aning 05:12

Yeah. You're like, why watches like,

Aaron Swartz 05:15

my buddy. My buddy was like, Hey, I was traveling in Southeast Asia, and I saw these products, and everybody seems like, um, you want to sell them? And I was like, let's do this. And like, that was a it was it was it was like, April of our second year B school we were. I remember, like, we whiteboard it in library. Like there was a second life I still this picture is like, things we don't know. It's like, how to source watches. Legal, like, literally, we knew nothing about this is like, let's see if we can sell watches. I think we started like our whiteboard session was April. I think our first sale is July 9. I'm 90%. Sure. Every micro scam, like a kid I grew up with or like what one of my best friend's older brothers. And And what year, what year 2010 2010 and 2010. Yeah, and then we grew up business very quickly. And we grew. By doing corporate sales, we sold washers to like 1000s of watches to Google Facebook for their seventh anniversary. Like every employee got, like 2500 people or whatever about a watch. One of one of the dads who's in our school was like in the seat like now with our kids was in the Seattle office at Facebook, so he never got to watch. And so like, I still have a couple of guys. I just gave him a watch a couple of weeks ago. Anyway, wonderful experience that ran its course. And then like 2017, like I stepped away from full time operating, we sold a couple guys who are working. We end up selling the business in 2019 to custom ink, print on demand. And then in 2017 actually end up switching from the brand side into the commerce tech that commerce infrastructure side and co founded a company called passport, which does international shipping for DTS. Yeah, that company is still going very, very well. And set aside from there in 2019. It was like 10 years of being a founder, we'd had our second daughter, it was like it was time. And yeah, I don't know, I've now worked. I worked at return Lee for a year, which was a great experience. And then I actually took a year off, which was my intent after a passport to begin with, and was an advisor or an investor in a bunch of companies like very, very proud to be an advisor to Malomo don't think I had any cash to be an investor what I would have done.

Yaw Aning 07:20

He's no good with us.

Aaron Swartz 07:24

And one of my biases is loop and I joined loop full time. Little bit more than a year ago. So yeah, August of 2021.

Yaw Aning 07:33

So okay, so on unpack this a little bit, yeah. 2010 How old were you were like 550. Then back into those

Aaron Swartz 07:42

are the worst. I'm a millennial, which is my favorite thing to talk about. We all are with all the all the young ends at the office. We're like, we're on the same generation. I was 28 when I started modifying.

Yaw Aning 07:55

Okay, all right. I'm just getting

Aaron Swartz 07:59

40 This scenario. Thank you. I made it wow,

Yaw Aning 08:03

you missed all the 40 under 40 list. Here this close. But wise many years. Okay, so modify like, what is what is what was the watch? Like? Why would CustomInk even want this? I'm curious. Yeah. Oh, this is gonna be great. Print on Demand, or Yeah, I

Mariah Parsons 08:21

was gonna ask the same question. I was like, I need the connection there.

Aaron Swartz 08:24

Can you see this? Sorry. Turn off my Yeah. Oh, yeah. You see what it is?

Yaw Aning 08:28

It's a watch. Yeah. There's a baby on my chest. For those listeners who can't see, there's a video I didn't realize

Aaron Swartz 08:36

that this works. There is a watch and it is print on demand. So that's a picture of my younger daughter on my chest, giving my wife the middle finger. I love that watch company started it was interchangeable watches. So the watch face and watch band are separate. And the idea wasn't like I'm a watch I like hadn't worn watches. I wasn't like passionate about it. But it was the ability to do customization. So if you think about like modular components, if you own three watches like a blue, a green and a black you know nine watches because a blue watch face could go with the black strap and then green could go with the blue and whatever. And so it started as like the original name was swap watch like interchangeable and can get swapped in and out. And the thing that we were testing from the beginning wasn't like do people love the watches? Or do the watches work are they like the best watches in the world it was Will people buy three pieces or more because of what you were doing was buying a single watch then we were competing with swatch or convenient like real watch companies. But if you were to buy like the blue face and then like a black strap and a green polka dot strap, the intent is obviously like you're mixing and matching and then like we felt we were onto something completely different. So it was like getting into the customization world. Right and then what we ran towards was like not just color blocking but also print on demand. So we have people who did like photos of kids or houses or dog like whatever was you know their passion. We did sports licensing. So we the NBA Major League Baseball we did NFL through a partner. It's like all the way like We Live Nation dead mouse was one of our first licenses Domo, like a character like random stuff. And then we started doing influencer work as well. So we did like, like in her last name Catherine, somebody who was like one of the first I'm like the early bachelor Bachelorette. Like we started, like everything that you're seeing with like, influencer, like we started doing that where like they would get 20 or 30% of the revenue and like we have printed on demand when things would sell. And then we did corporate gifting, too. So we did Nike watches and Google watches and Facebook watches and God knows what other like, Beachbody like you name it, we did custom swag for them, which was awesome. But it was a mistake. Because we had like, if you think about everything I just said it was like five different type five different personas that we were selling to five different sales channels. Like the business was just very complex. And it was all from like, operationally, it was simple, because we built it. So like everything was like literally made on demand. So you're sitting on blank canvas, cool, we can do anything. But from a like go to market perspective, we created just too much complexity, like I should have cut for the channels and focused on one maybe Yeah, after that many years.

Yaw Aning 11:07

Yeah, yeah. That's fascinating. Were you so like, when was that print on demand happening in the US? Like, were you like actually manufacturing? And yeah, so it seems together? Yeah. So

Aaron Swartz 11:18

the first year was buying watches that were made overseas, which like, so the first like three months, the MVP, where I didn't care if the watch worked was literally like, what is your buying behavior. We bought, like garbage watches, just like literally whatever we could find on Alibaba factory, and we started doing production runs, but our minimum order quantity was like 300. But if you think about the cost of goods is like five bucks a watch or something. So it's like $1,500. But I would need like 300 Blue watches and 300 Black watches. And then we got to the point where in 2013, we did a Kickstarter, which finished in 2014. And we moved to print on demand in the US. So in San Francisco, like we were part of that stuff made and like we basically had a factory in San Francisco, which sounds crazy, where we import all the components that were made custom for us. Batteries weren't made custom for us, like watch movement was like a good Japanese movement, like, the components were good. But then, you know, we built our own casing and our own back and our own whatever, right? The straps are our proprietary design. Like if you see that, like Apple, like everything about like modular straps like that, that was effectively what we were doing. But then we got like a really dope laser printer. And we built it so that like, you could print like 40 watchfaces at a time type of thing, or 101 traces, I think for one of our bigger printers. And yeah, so I'm like, my co founder or shields like an incredible creative director, like he would do just insane designs. And we built an awesome design staff, which is cool to see them all go to different places. I'm like you guys, much better situation with that was that

Mariah Parsons 12:52

for getting into like the influencer space, I feel like earlier than most Was there ever any like question mark from like other people that like mentors or other people that you're talking about, like this? Like kind of that channel too, because I feel like now you say influencers? And there's still like a little bit of like, is it really like a true channel. But that was even before I

Aaron Swartz 13:15

haven't thought about this stuff in years. But I'm waiting up because it's very fun. So we stumbled into it. And you know, if you believed at the time that sports licensing made sense, because there's affinity and like growing up, I spent a summer working for MBNA America, which was a company that did all the affinity credit cards. So if you were bought like a University of X credit card, the company that would power that or like, I mean, I'm sure they did like Hello Kitty, like literally infinity credit card was from this company. And so I've always thought about that as like an interesting thing, which is like people have affinity and they will, byproducts are being that are like tied to their community or to their passion. And so the spirit of modify was like our tagline was show your colors. And so like, if you want to enable people to wear things that they care about, then you need to like go find the things that they care about. And so we we started working with nonprofits, right, we start with the big licenses. And then we kind of stumbled into Oh, wait, there are micro influencers, right, like we talked about it that way that you have these like really small affinity groups. And if you think about like a DTC brand today, what you ultimately want is you're talking to a narrow audience. And they're like, Yeah, I'll wear something and is what is Okay, that looks cool. And like he's an influencer on like the like, really, really, really local level. Right. And so, I think people saw it, and they got it. And we actually, like were able to raise some money when we switch to that model. The thing that I screwed up on is we had very high sell through of our early influencers. And then what I tried to do is game it where and it was like intentionally trying to get it but I was like, the metric I care about is having more influencers. It wasn't more high quality influencers and high quality not defined by like my taste or your taste, right. But high quality is defined by people were buying this product. And so we spend a lot of time onboarding more and more and more people, not time. In onboarding the right people and making sure that we were like, holding the model. And so that's where it went sideways as we took out all this fixed cost of doing the onboarding and the sales and the partnership work, instead of being like, hey, maybe we just need 50 This month, not 500.

Yaw Aning 15:15

Okay, yeah.

Aaron Swartz 15:17

I still think this is a huge business. I just like, I'm not the one to build it anymore. I've like, I've seen a lot of different aspects that we're doing, like, come to fruition in a massive way. And I'm like, it doesn't matter, like execution matters. And we'd like, you know, that that was my feeling.

Yaw Aning 15:31

Is CustomInk still selling like these?

Aaron Swartz 15:35

Six months ago, I think I think they deprecated during COVID. I mean, it was, it was a super small acquisition. I think it was like, a nice to have product. It wasn't, you know, I don't think it was a core piece of the strategy. Yeah, I still have maybe like, 1000 in my garage. If you guys want any, let me know.

Yaw Aning 15:55

I would 100% take 100%. Like, what, okay, what made you what made you like, switch from that to launching? Passport? Like?

Aaron Swartz 16:08

Yeah. So in 2017, I knew I wasn't going to be doing my full time. And I took a step back. And I started helping a bunch of buddies with their companies. And it was I hadn't been gainfully employed in almost a decade, if you think about it, right? Like I left Deloitte in 2007. And I've been running my own business. And like, we did a lot of stuff. I didn't like I didn't know what a product manager was, I didn't really know what being a BD was, I didn't like I didn't know any of this stuff. Like, I remember interviewing with like, a very senior business development person at Facebook, and like, literally 20 minutes on the call, he goes, you this isn't gonna work. Like you never know what this term means. And I was like, Well, now that you explained the term, like have done that thing, but correct, I have no idea what that term means. By the way, I think he was right not to even like consider, because like, the bar should be extremely high. But it was like, I truly didn't know what to do. And so I wanted to just go broad. And so I spent time with half a dozen different founders, one who was doing an aircraft like, like, basically like a private airplane company, who's just like a brilliant guy. And I was like, This is not something that I'm passionate about, but like interesting, and I was helping him with like, customer service messaging and how to like communicate and how to think about like business strategy. One of my friends runs that company boba guys, which I don't know if you see him as like a killer multi company is like the kind of like the new wave of loyalty, like all sprouts from who but these guys built us my year in business school. And so I spent like, four months helping them a couple days a week, like this is all unpaid. It was just like, let me spend time with you guys and explore. And then Alex, who's a passport CEO, and my co founder had an idea around something to do with shipping. And there's like some loophole, and he was like, Hey, I think there's something here anyway, that loophole and have not really existed. But we spent a bunch of time together and like, the insight that I think we got to was like, modify, had 20% of our traffic was international, but 5% of our revenue was International. Does that make sense? So like, there was a disconnect between like, we have money, like there's latent demand for the product, but people aren't buying it. And maybe part of it is like, it's a different shopper. So they wouldn't buy it. But the reality is, like they weren't buying it, because shipping is a pain in the butt. And if you live internationally, you don't know if you're gonna get the product or not, do you know what I mean? Like, you don't show up, it was gonna get stuck in customs. If you're gonna get hit with a fee, it was just like, a very bad experience. And so you have to really trust a brand to do that. And so that was the genesis of a passport was how do we build a shipping company that has like extremely high touch customer service, and removes anxiety. So it's like, frankly, a big piece of it was tracking, right? Russia knows music curators, but it was like, you live in Canada, you it's going to, it's not going to be there in two to four days, it's going to be there in four to eight days. And you don't know if you're going to get hit with a fee. What if we were to give you actual visibility to where your packages tell you exactly what your fee is going to be? And just like, God forbid, something goes wrong, you have somebody you can contact and say, What the heck is going on? And so the experience before passport was used to contact the brand and the brand be like I don't I don't know what's going on call canadapost if you work with us, we solved the problem for you. Right? And so like, if you're a shopper, it's easier if you're a brand, you no longer have the headache of customer service. So that was kind of the insight behind passport and the company has grown like a weed which is cool to see.

Yaw Aning 19:30

Yeah, that's incredible. In like what what is there anything around that like around international shipping that like makes it like uniquely hard or complex?

Aaron Swartz 19:41

Yeah, I mean, if you think about so think about you ship from your three PL you're a brand owner and you shipped to somebody in Canada. Let's just keep it simple. And you use FedEx or DHL. There's a reasonable chance that it never touches a FedEx truck in I picked up by a USPS truck, because it's like a USPS worker and then deposited. And then it might get handed over to Canada Post. And then it might get handed over to a local last mile delivery company. So you're paying FedEx or DHL or whatever that example, but FedEx has never actually touching their product, right? They're coordinating somebody else doing it. And so if you think about like, logistics is easy, it's like walking your neighbor, right? When you start adding legs, or different consolidation points. And it's further so there's different weather patterns, like everything is just more complex, because first of all, you do not own the whole chain. So you're at the whim of somebody else. And you if you're a big partner, you don't know what's going on. Like, you know, I mean, like, a couple years ago, one of our partners don't like, tornado in Tennessee, and that warehouse is down. It's like, everybody's okay. Do you know, I mean, like, if you Yes, yeah, the business, the human side, all of that, then it's also like, okay, cool. But we have no control over what happens with with those packages, it's going to take an extra week, you can't like go pick it up and go solve that problem, right? It's already in there. So I think just like globally is painful. Because the logistics, you can't own assets everywhere. So therefore, it's better to own no assets. Assets are like the crucial points. And then getting information from different people systems is hard, right? Because in that example, is like USPS heading up to Canada Post any up to the last mile, or your three PL heading up to USPS. And you have to get right. So it's like, there's visibility concerns. And then there's like different tax regimes where this country pay X percent if the products provenance was in Pakistan is different than if it was in China is different than if it was made in Mexico or whatever. So it's just like, all the complexity in one, and you're shipping, something that's this big, like, still gotta get there. And people are like, well, it needs to be around seven days. Probably a pretty hard challenge. So I think that's it, it's like the things to do or, like, obviously, choose good partners get good visibility, step up with customer service, and like, get really good at pattern recognition. Like, theoretically, every package into into Berlin is stuck, stuck in customs for three days. Tell your customer, hey, don't worry, it's going to be there in three days. It's in customs. This is normal, versus don't give them any information. And each day they check in the system, and it says health and customs, health and customs that creates anxiety that creates a customer service ticket. Get away from that.

Yaw Aning 22:21

Yeah, I think that's so so two things, like, as you're talking through that that's sort of fascinating to me. And like I didn't, I didn't really realize this or recommend this until we got deep into mormo. Like the amount of packages that are maintained or delivered by not the people who you bought the shipping.

Mariah Parsons 22:45

I'm learning in real time right now.

Yaw Aning 22:48

It is astounding the amount of care handoffs that happen. The other thing that's kind of interesting is like, like to think about FedEx as a delivery company. It's like, oh, actually, a lot of times they're broke. And like, they themselves are like working with the whole host of third parties. And then you start to think like, Well, why are they doing that? And then and then, like, the other thing that was in my mind is like, it's amazing that anything makes it anywhere. Any delivery service, like legitimately billions of packages moving across the country in a very coordinated way. Like the fact that anything gets anywhere is sort of nuts. Yeah, it's sort of nuts. Like I think about like I it takes me an hour to drive in rush hour traffic. Like, if I'm driving something to somewhere like it's just yeah, just insane. Yeah, so. So you have an interesting perspective, because you've been both a brand operator and like been on the SAS side of the of the ecosystem, like, what do you think about the two roles? Like, is there anything about those two worlds? That translates? Well, like, if you if you, if you move back from being a SAS operator to a brand operator, like anything that you've learned or picked up or like, discovered translates back and forth?

Aaron Swartz 24:10

It's a good question. So I'm trying to think about, like the principles on which like I bring to our product team, for example. I think this will dovetail with what I was saying before, probably two main things, and I'll think if there's anything else, the first one is like stakeholder intimacy, and like customer discovery. So if you think about the first version of my watch company, like the watches went bad after three months, it sounds dumb, but like the goal, like the thing I was trying to learn was like, buying behavior, and then I refunded everybody, right? It wasn't like trying to be a scam. I was like, hey, it's broken. Let me refund you and send you two more watches. Right. Thank you. Right. Like it wasn't it wasn't anything other than like a learning opportunity. And then throughout the entire life of the company, we wrote handwritten notes to all of our customers. Like literally in every package at the beginning. I was like arrest somebody and I was like, thank you so much. Something's wrong, like it was quick at the end. And then I would send an email to everybody to for the first year plus, which is like, hey, thanks so much, by the way, How'd you hear about us? Because like, and then something be like, Oh, y'all reformatted it and said, Yeah, I'll text message or email. But hey, thanks for referring Jenny. And like, the goal of all that was one to build. Community is a weird word, but like to build affinity, let's say for the brand. And like, Oh, this is a cool brand. And like, there's actually human behind it. Or at some point, it wasn't just me, it was like a team behind it. Like Michelle who were in customer service, like will get letters, we have letters just like, against more, you know, more than my random background, like on the wall in the office of like, Michelle, thank you so much, you saved my like, whatever, you know, it was insane how like close we got to our customers, the big piece was getting customer feedback. So I always felt like I want somebody on a scale of one to five, three to one or five, I really didn't want a three. And so I figured the more that I would like make it easy for people to contact us by giving them a phone number by sending them a personal email, the higher likelihood that I can remove friction for them to give us feedback to make the product better. If you think about that, from a SAS side, it should be the same thing. Like you shouldn't be thinking about the NPS, OD customer. Like you don't think about the NPS of Allbirds. If they're a customer of yours, you think about the NPS or like like how much does a customer like how does a human like or dislike you? Or what do they want better? From the CFO, from the CTO from the line level customer service person from the operations manager from the three PL like, think about all the personas within the company and go get their feedback. So I think like number one is stakeholder intimacy, or customer intimacy, whatever you want to say, like, build products that people want, don't, you know, don't just like sit in your room and assume that you're coming up with the right idea. So that's one. I think, number two is just focus. So like think about again, that the Modify story, we found like four or five channels that were going well, we should have shut down three or four other channels, right, like we just should have been focused. And if you think about that with like, with loops, and with products, one of the things we've talked about, like a mantra for last six months has been building fewer better products. So like, we should be responsive, we should fix things. But we should also be listening to 100 merchants getting their feedback and then building like a great product that solves like the underlying need not just like kind of doing a lot of small stuff. You still need to do the small stuff, you still need to remove bugs. That's not the point. But like, build fewer better things, I think is is kind of just in general. Like if you're spending 5% of your time on a party business, you precious with 0% of your time, because better to put that all into, like keeping the main thing, the main thing. I think those are probably the two big ones. Yeah, I'll keep I'll keep noodling on. And yeah, yeah.

Yaw Aning 27:40

Okay, so that was that was awesome. Two things. I wanted to unpack a little bit there. So on the first one, when you when you mentioned like NPS, like you were focused on trying to drive people to a this, I might have Miss misheard you, but like, Are you focused on the scores that were like a one or five? Right? Or like you want that reaction?

Aaron Swartz 27:57

Want to get? Yeah, sorry, that's probably a bad bad example. I wanted to get feedback. Think about this. Yeah, like, I want to get feedback. I want to lower the bar for people to give me feedback. So I put out as many trial balloons tentacles as possible for people to, like, grab it, they could email they could text they could write, I would email them, like they literally like on our packaging and had to contact us. Do you know what I mean? Like, yeah, our marketing wasn't just bicep it was like, Hey, give us feedback. Like read customers vote on what watch we should produce next at the beginning, before it's print on demand where we had to build 300 It was like, what should we build? And by the way, which we named these watches, were like, there was a black and gold on we called the GoldenEye. I mean, it was it's done. But like, you know, our fans voted on, like whatever should be. And so it's more about getting in the feedback. The thing that is bad is if people are like okay with the product, and they're like quiet, Li not engaged with it. And so I wanted to get all those people to tell me like, What can we do better to make them? For four to five? Yeah,

Yaw Aning 28:52

yeah, I think that's really important too. Like, yeah, focusing focusing like your attention on like, not the lukewarm people, but the people who are super, super passionate, or the people who are super pissed off. Right? Because like, that's probably where all the insights lies in the polarization that I think a lot of people will look at, like the averages of your NPS score and be like, Oh, I'm just, I'm actually just the floor. And that's okay. Well, it's like, no, maybe.

Aaron Swartz 29:15

Ultimately, it was like, move those lukewarm people into loving us and like maybe for them to tell us what it would take for them to enjoy us.

Yaw Aning 29:22

So then did you focus on Did you moreso focus on the threes versus the ones trying to move the threes to fives or, or like,

Aaron Swartz 29:31

going to be very loud. I feel like I'm mixing metaphors now. So this is probably a bad I've probably, like set us down a bad path. The way to think about is like the ones we're going to be loud threes. We're quiet. I wanted to make it easy for the threes to tell me like the ones we're going to tell me. I want a refund. I hate this fine. Have a refund. By the way. I've already not like oh, here's what I could do. I like would send an email or just say, I've already refunded you and I've sent another one. I'm so sorry. Can you please tell me something right? Like so I've tried to learn from them. But the answer is like try it I thought about like, we should be getting insights from everybody.

Yaw Aning 30:03

Okay, that's super powerful. Yeah, I love that. So yeah, go ahead, Maura.

Mariah Parsons 30:07

Well, I was just gonna ask because it seems like there's a lot of different channels that you're offering for your customers to give that feedback in, which I think is great. But was it kind of chaotic ever to, like, take all those different ways that chain that customers could contact you and then, like, aggregate it into one? Because you said like phone number, like surveys, you had, like,

Aaron Swartz 30:26

you know, we had a Google Voice number, which was 619, which is like the San Diego area code for whatever reason, that was what was available modify five. And then we were like, This is dumb. Nobody wants to pick up the phone, or listen to voicemail. So like we finally deprecated that. No, I mean, we use HelpScout which is years ago, and I think it's still like a good tool. Just anything like consolidated all we didn't leverage, like gorgeous or customer present, like we were never at the scale to.

Yaw Aning 30:53

Okay, then the second thing you mentioned is focus like, yeah. I'm curious too on this because, like, I think this is kind of interesting topic. Especially right now. I feel like in the in the ecosystem generally, right, like merchants are, are looking to their tools to do more so they can have like, one tool to rule them all. Versus like, the emergency like that, like that lays like, what's that? The Swiss Army knife, right. was super tactically good at this one thing.

Aaron Swartz 31:30

I think now you're mixing metaphors by No, I am do I follow what you're asking? That'll be the

Yaw Aning 31:39

army knife. Yeah, this is there's a one thing but also seven other things.

Aaron Swartz 31:45

And of course, I mean, you you're not you and I've talked about this, I think. I think for most things, you probably just want a bundled solution. And like Done is better than perfect. Make it really easy. I think there are a handful things where like, you want something great. And so I don't think that's the same for every brand. But if I if I'm building my brand right now, right? And I'm hyper focusing on what to do, I'm like making maybe half a dozen decisions, or I'm like making very considered decisions. And I'm not looking like I'm looking within my budget, I'm not looking for cheap. I'm looking for like the best product I can afford. So that makes sense. And I think those are like certainly your platform. So you choose Shopify, or maybe you look somewhere else, but like, I don't know any brand, who's starting today, who's not like defaulting there, right? You choose a help desk. If you're like, I think it's very good for you to be close your customer. So again, what let's talk let's talk about if you get to like 250k in top line, like you started growing and like you have ambitions of building your brand, right? You choose a helpdesk. So that's gorgeous, could be Zendesk could be customer could be gladly, whatever, right. But like you do a considered purchase there, you choose your three PL your fulfillment sack, whether it's like us a great three PL you decide to do yourself, like you're released very, very thoughtful about that. You choose your email marketing tool, maybe your text messaging tool, but definitely like you're probably defaulting to clay vo but like there's Omni center, there are others that like might be better or worse for you. You definitely choose your return platform. Because like, every one of your customers is going to look at return policy, depending on vertical 30 plus percent are going to return a product. If you give them a bad experience, they're going to not come back. If you hit them with an incredible ad, if you give them a simple experience, even if they don't keep the product you've paid to acquire those customers, you should be trying to drive them to exchange so they don't leave right like it is a big retention tool. And you choose a tracking platform. Because that like both helps with retention and with customer service. And with like what we talked about password like obviating tickets, because you give people good visibility, they will not email you and take three minutes of your team's time was saying that like you can just help them not be stressed. There's marketing tools, there's reviews, like they're awesome reviews platforms like Juniper, whatever, whatever. But I feel like that is like the beginning of the stack. Right when you're going Yeah, yeah. And so like, I would I'd be very cautious about going to get like a family of apps type of product which is like a B plus in each of those. Because like I don't know you want you it's expensive to acquire a customer so you want to retain them it's expensive to serve a customer so you want to do it in like the most efficient way possible to Murata your question about all the different channels you'll want to use something like a gorgeous because you not only want to like simplify your your team's ability to support but like support quickly and also get all the analytics which all these guys provide. And then like as you start adding more and more features and stuff sure like start doing bundles are going cheap but I don't know I don't I would never buy somebody to just go like choose an app that like quick quick does it all because like going back to focus you're probably not getting assignments purpose built for that problem. You're getting something that's like engineer to make more money. Yeah, you do good enough it like you're not going to turn but they really push thing like there's always a conflict and what problem you're solving which means they're unlikely not impossible but unlikely to be solving the like most impactful problem within that kind of space

Mariah Parsons 35:12

that's super interesting.

Aaron Swartz 35:13

So whatever else you guys are thinking about pick it up don't thinking about going into

Yaw Aning 35:22

I got a vision we're gonna go into

Aaron Swartz 35:27

there now metaphors.

Yaw Aning 35:29

Yeah, metaphors mixing scrutiny these gave me okay, that's, that's super helpful. I think I think that's a good way in like mental model. But think about things like there's this core parts of your customer experience that are incredibly important. And you will likely want those core parts to be like best in breed for those things.

Aaron Swartz 35:47

I mean, look at the growth of like clay vo look at the gorgeous look at the growth globally. Look at passports growth, like Jaco, even right ventured out and bought some other companies. But like, look at loop, we do returns on Shopify, and a handful of markets. Yeah, it's an extraordinarily fast growing company that reads like a monster Series B last year, and Shopify is an investor along with like, you know, like, you can, if you're focused, and you're solving a big problem, and you solve it better than others, you will grow. Mm hmm. I love that. And I think the flip side is like, if you are a brand, and you're choosing who to work with, again, within your budget, choose the people who will actually like be most committed to helping you solve that problem. Because like, if you don't have a problem with anybody, but if it's like a core part of building your business, and you care about like customer acquisition, and customer happiness and customer retention, like choose good partners, who are who are like invested in solving that.

Yaw Aning 36:40

I love that you that you specifically say choose choose the right people that are going to help you solve that. That problem. Yeah, I think I think like what Shopify was very good at. And I think it helped spur the ecosystem was like building in apps that were simple to work with. Because most brand operators are not technologists, right? They want, they want simple tools that they can execute, which causes an explosion of these apps. And then then you reach this point where you're getting very sophisticated, and you're like, I can't, I myself can't use 30 tools, and like, I need a partner to help me attorney. Get the most out of this.

Aaron Swartz 37:18

Yeah, it's also good. Like I was looking at it, when Shopify rebuilds something basic for the masses, it was much easier to then be a good provider, because now somebody's already educated the market that you should care about this problem. Yeah, yeah. With passport, it was much easier to convert somebody who's who'd already chosen DHL, FedEx, because it's like the we're better than them at these things. But you've already opted into doing international shipping. Does that make sense? Like, educate you on turns out, there's a big world

Mariah Parsons 37:47

there's like a higher launching pad to start from,

Aaron Swartz 37:50

that's exactly it. It's like, somebody who's already like, tried to be sold tracking product is much more likely in my eyes to be able to convert to Malomo. Because, like, actually understand all the value you're creating, on top of just like, where's my package that a generic brand? Who has never even thought about this with promises? Like your issues, people email us and say, Where's our package? It's like, okay, you'll see that there's like, so much more you can do on like, new revenue side. And on the retention side? Yeah,

Mariah Parsons 38:14

yeah, feeding into that awareness, too. If someone's already used the software to solve for cite the, like, one issue of say, order tracking, and they use a different software than they're also aware of like problems or things that they weren't able to solve for using some of their platforms. So they go in like with that higher Launchpad of knowing this is just, you know, what, what are the best practices, what you should be aware of in the space, but they also know, specifically to their issues, that they're looking to solve what they need to do more

Aaron Swartz 38:46

and more, I think it's very helpful at that point for you to interview them and be like, we're all things you didn't like. Not to say we fix them all. But just your and like, figure out okay, cool. What are the things that we like, what else have we solved also? Right, it helps you make better?

Mariah Parsons 39:01

Yeah, I completely agree.

Yaw Aning 39:04

Yeah, so Oh, no, go ahead.

Mariah Parsons 39:07

Well, I was just gonna ask another question. But if you have one relating to this, then

Yaw Aning 39:10

no, no, I was gonna switch gears. Yeah, go. Okay. Okay, cool. So

Mariah Parsons 39:13

Well, I was gonna say we're talking a lot about and usually with pretension, customer experience. I mean, that's, that's the, you know, bread and butter. And so, you kind of alluded to Aaron of, you know, if there are things that are like not you're not able to solve this problem, or having issues around the customer experience, have you been, have you seen, like, anything that merchants are ignoring right now, that is, like not helping their long term growth?

Aaron Swartz 39:46

It's a good question. I mean, I think the world's changed in the last year in a very big way. Right. So what are we fall fall 2022. There used to be free money, and it used to be easy to acquire customers and this was before like Apple ATT so Cost acquisition was reasonable. And now, it is not. It is growing and growing and growing. And like there also isn't free money. And so therefore, I think you're seeing a shift from like growth at all costs to prop, like focusing on profitability, focusing on sustainable growth, right. And like building sustainable business. I don't I mean, obviously, yes, on a green perspective, but like, just for me a viable business, right? Yeah. Can we do it ourselves. And so I think like, retention is a massive piece of this. I think if you think about like, what goes, like profit, it's both sides. One is top line and two is trickier. Bottom line. So like I'm a, I'm a trickier bottom line. You know, you want to work with partners who are going to help you like saying that we spent a lot of time doing is like helping route packages through more efficient means helping you get products back on shelves quickly, help you get products on the secondary sales channels, like arrive or re curate or treat or trove, right, like so that, even if it can't be sold through your primary channel, right, like you can still like capture some revenue from it, instead of letting it sit on a warehouse when it's returned. And so like, there's a big focus there, there's a big focus on loss prevention, like not allowing bad shoppers to scam you, most people are honest, and will send back a good product, there are a handful who will, you know, send back something completely scuffed and get a full refund and you don't so like getting insights into, like, you know, we know a lot of our customers that our brands don't necessarily or they like don't have the capacity to tie it all together. It's like we help brands with that, right? So there's like the cost side, on the retention side, like, Okay, if you want to do sustainable growth, like how do you how do you grow? Literally, just think about the fact that you've paid to acquire a customer 30% of your customers are going to return you should be doing everything in your power to retain that shopper. Like we spent 50 bucks from Orion to buy our product. There. There are a couple of outcomes there is she returns it. And we give her a really, really, really bad experience. Guess what? We make her jump through hoops. It's painful. Logistically, we charge her $10 restocking fee, we charge her $10 shipping fee, but we didn't tell her that this and like the FAQ is like she's surprised by this data. It's only returned for store credit. But again, we weren't explicit about that upfront, as long as you're like clear, right? That's fine. But we're bad. It doesn't matter how great our next collection is. There's no world which Mariah is repurchasing. Now, alternatively, you right, like none of us, like you return. It's like, cool. We're sending a pickup to your home tomorrow. You don't even need to package it. Oh, by the way, we've already refunded your credit card, something something's like you see an ad in six months, you're like, Well, this was painless, like, sure I'll try that brand. Again. It's cool. It's called the mixed metaphor, T Shirt Company. It's phenomenal, by the way. Okay. So that's, that's like, if you're returning and like there's nothing, a better outcome is your return. And the brand goes, Hey, no problem like this will be seamless, again, like still good experience. But oh, by the way, before you return, you should try this another product. And we'll send it to you for free. Or oh, by the way, like, here's some credit. If you want to buy the other product that's slightly more expensive. You can get it for saving money out of pocket for you like, well, we'll do the symbol return us a customer. Now you spent your 50 bucks with Instagram or whatever to like, get the customer and you're retaining her and she's got a product that she loves, which means she's a micro influencer, right? Like she can walk around and people will see it. She can talk about he had a great experience on the return and like the logistics, being a good experience this and that people will still be like, Wow, had a really seamless experience. Like, that is great. Right now you're talking about retaining, retaining, retaining. And so I think, like, you know, depends on the brand, right? Like, you might track a 90 day repurchase window 183 60. It doesn't matter. Like by retaining the human, even if she downgrades from $100 item to a $10 pair of socks, you're still retaining that shopper, and like that is absolutely crucial. Now. Yeah,

Mariah Parsons 43:48

yeah. And you take away some of that, like buyers grief and like the worry of oh, if I go back like, is it going to is it going to be stress free in any way you take away that if

Aaron Swartz 44:00

that's it, I mean, think about like, if you're trained that that's not the case, even if you're training, like it's free returns, but it's going to be a pain in the butt to do an exchange or something. Then buy three products up front, because you're like, I want to keep one. Now what you're doing is you're hurting the brand because they're doing free, and now they're paying more for shipping. And they have inventory out of stock for weeks or months that they can't get back in stock, which means they can't sell to somebody else. Like it behooves a brand to treat you so well that you're like yeah, I'll just buy a single product. Hopefully it fits. If it doesn't fit, I know that I can get the next one. Three days later because like the brand uses a loop you get like an instant exchange, for example. You use Malomo So you get like your visibility on like the whole journey so there's no anxiety, like that stuff really matters. And again, like we don't even talk about numbers. Just think about your own experience and be like okay, cool. I couldn't go to two brands, each of which has like a cool pair of shoes one has a $25 restocking fee one doesn't have a restocking fee, or am I gonna shop yeah and has like, makes it dead simple. Do returns, I can drop it off, pick up at home something else. One is like you have to go to a FedEx store. Where are you going to shop? And like, we're all consumers?

Yaw Aning 45:10

Yeah. I think I feel like the world has now been trained to, like pay attention to the potential pitfalls of buying from a brand before they buy. Like in I'm wondering if there's like, even if you guys have any have seen any insider on this, like the silent killer of like, not having the transparent returns or exchange policy, like what revenue did they actually lose by not having a policy that was, like super seamless and easy?

Aaron Swartz 45:39

Sure. Or if you have a policy that's only returns for store credit, you're usually hurting your upfront conversion rate. Yeah, that might get. So I mean, like, I think the biggest thing I'd say is like, you know, Luke's vision is to empower the world's most loved brands to deliver their ideal post purchase experiences. So like, the the like the language and there's intention, which is like Empower, if you think about who we serve, we serve 1800 Shopify merchants, we serve like Allbirds kizi, like some of the biggest footwear brands, we serve some of the smallest brands, or that you would have never heard of. We also serve intimates, brands and swimwear brands, right. And so like the idea that like we would tell them what their policy is, is crazy, like everybody had should have a different policy. And like every shopper within that branch, you get a different experience, a VIP customer might get a different experience on a first time customer. And it's like our job is to empower them to create the experience that they want. Regardless of what experience they decide, if it is not transparent to a shopper, you can under promise and over deliver. But if there's anything like negative that isn't communicated, that is a huge risk to the brand. Or it then creates somebody tweeting like can't trust these guys something something and like, how detrimental is that? Yeah,

Yaw Aning 46:46


Mariah Parsons 46:48

Yeah, it's an interesting concept. Because I don't think I've necessarily thought about as a consumer, you look for the pitfalls first. Like it's never it, but I've never consciously thought about it necessarily. But it is something I look for. It's like, Oh, you are trying to make sure that online, you're not going to be like scammed or anything, or you're not going to get a bad product. And so it comes with the connectivity of all of us now of social media and the internet and everything. And so now you can look for those pitfalls, because odds are someone else fell for them, and then you can find them. And so like you said, like on Twitter, it's like, oh, you can't you can't trust that person. And you might think like, oh, that's one person who thought that but then reality is there are people who are looking for evidence to support if they should buy something, or if they shouldn't, and people are never going to search for like, all birds, you've listed them right, like, you're never going to search for positive reviews, you're going to search for negative ones. And so like the more or just like reviews in general and so the more that you can Yeah, create that great experience and diminish any risk then yeah, you're gonna you're gonna have more success and more happy buyers.

Yaw Aning 48:10

What? So like, you have worked, it's funny like, from like, you can tell from your days that modifies spent a lot of time around how customers feel and think about you and the brand. You then spent your career kind of shifting to a couple of companies passport around shipping, then loop in return they are on returns and like Korea, has it gone to more like post purchase related platforms that I think is kind of interesting, like what with like, maybe loops specifically, like what is what would you say is like, hard about doing returns or changes from like, I'm building a platform perspective in like, what what do you think like makes loops so special in that? Yeah, yeah.

Aaron Swartz 49:02

Yeah, I mean, I think it's a it's a broad space right. So think about like for big companies right you got loop and return the and happy returns and ARB are are kind of like the four big ones. And by the way, there's some awesome smaller guys who are coming up. Yeah, like I don't know who's going to be the next big one type of thing, right but, but there are a lot of people who are still trying to innovate in the space and are just think about like the founding like the origin story of the four different companies. So the CEO return these brilliant, he was like a four time I think FinTech founder, and return these a FinTech company, right they got sold to a FinTech company like a firm and it does this wonderful like it came up with the innovation around like instant credit. So like validate if y'all is a trustworthy shopper if he is I'm like let him buy the second item before returning the first one. Now like we and others have like taken that and built that in a different way but for like I think three years, the job would be done is get the right product before we turn in the wrong one. So you bought the medium you want to large you will get The large before you even put the medium in the middle loop also offers that I'm sure other people do too, right. But like, it was a FinTech founding company. And our Amen. CEO brilliant was that he's at Walmart, I'm sure is elsewhere too. Yeah, Apple, I believe to Yeah, like understand supply chain understands the notification rolled into like in our Versa tracking company, and notifications. And now they've added on returns. So it's like it's coming at it from a different place. Right. It's like more about the notification less about the like return exchanges experience. And you can see that and their product and what they have what they lack, you look at happy returns, like David, and I'm like in the other co founders name, but like, you know, had like sold a company to Nordstrom like, again, brilliant in E commerce brilliant in customer service and logistics and built a logistics company. And have returns also as a software product, like loop partners with them because our customers want use our software, but they still want access to the happy returns return bars, for example, like most of our biggest customers are actually using both of us. Even though they could use free Aboriginal software, they choose to pay us with like a premium product because we were like we create so much value, but they create so much value on the logistics side. And then you look at loop. And like the loop finding stores loop was spun out of Chubbies. And like the first few customers were Chevy's orders unquote, epoxy. And so like loop was founded by a team of operators plus Shopify agency owners and like, you know, the team at the Shopify Plus agency. And so like, if you think about it, like, I think the DNA of the company is like, is actually understanding the customer. It's not coming and saying like, Hey, we're FinTech company. We're a logistics company. We're a trucking company, it seemed like we're a supporting brands company. What are the biggest issues? It's like, issue number one was like, some of your email four times for an exchange? How do we just make it so self serving, too, and you can do an iPhone? Cool. Issue number two, is we paid a lot to acquire this customer, how do we make sure that she can stick around as a customer, right, like Mariah we were talking about before. So it's like, you have the bonus credit and shop now, which is like the second innovation from whoop. And if you think about, like what we built, it is building things that people want. It's not building things that come from our brains of like, oh, we are logistics people. So we see the world this way, or we're tracking people. So we see it this way. And so like, you see, what we're doing now is we are not agnostic, I would say like we have a very strong opinion. But we're building a ton of logistics partners to help our clients get much more profitable, and like to, like we are big enough that every every logistics company wants to work with us. So we can negotiate better rates for our customers. And we can help them with route into a refurbishment place to get it back on shelves as quickly as possible as cheaply as possible to then resell through arriver recurring, like I mentioned, right? Like I think that's it's more of a DNA thing I think for the company is like what problems you're trying to solve? And for us, it's always been about, like, how do we help brands grow? And for three years, it was how do we help brands go and shoot quickly? And now it's about how do we help brands grow sustainably. And so like, all those learnings from before, so useful, and then you add on the scale that we have in there for like the negotiation ability that we have with all logistics providers, and you kind of blend those in, I think that's where we kind of shine.

Yaw Aning 52:59

That's great. I like I love that. I love that perspective around like, who was the founder and the founding story, like it obviously influences the way in which that company views the world and how they build products and like, like, it's such a, it's such a beautiful way to like, look at those differences in like,

Aaron Swartz 53:18

a simplified version. But I think more like who are the first like 20 or 30 people, right? So

Yaw Aning 53:22

the first Yeah, yeah, sure. Yeah. Yeah.

Aaron Swartz 53:25

The next it's like, actually think because I wouldn't say that that sort of works necessarily everywhere. But in this industry, it almost for sure does. If you look at the products of how they've been built in the perspective. And again, there's no judgment. There's like good or bad. Yeah, just different. You can see the difference.

Yaw Aning 53:39

Yeah, yep. And yeah, and the merchant as the as the choice to figure out what is the most you know what

Aaron Swartz 53:45

the right choice is, but

Yaw Aning 53:49


Mariah Parsons 53:53

we're all human.

Yaw Aning 53:55

Welcome back. Welcome back. Yeah.

Mariah Parsons 54:03

Oh, my God. No, that's great. Like, I think it's super important to take all those learnings in and I know we're coming up on time, so we can if we if either of you have any closing remarks, feel free to share those but this has been so fun. Aaron, just to get to learn to chat. I know you and Yao do this, like all the time, but to kind of be on the fly to kind of be a fly on the wall and get to post some question has questions. That's been fun. So thank you.

Aaron Swartz 54:34

Great. Thank you. I don't I don't think I have any insightful closing remarks by by early by often is that good.

Mariah Parsons 54:42

That's great. That's great. You'll get your payment later.

Aaron Swartz 54:45

Yeah. 20 bucks.

Mariah Parsons 54:50

I can manage that.

Yaw Aning 54:54

Thank you so much. Thanks. A lot of fun. Yeah. Bye Bye.

Aaron Swartz 54:59

Cheers. See you