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Show Transcript

Shane Madden: Really excited to have on the pod today one of our esteemed guests, Jack Cohen. Before I pass over to Jack, the theme of today's discussion is consumer consumption. So Jack, thanks a million for joining us today and why don't you start with giving us the skinny in terms of who you are and what your company does.

Jack Cohen: Absolutely. Thanks a lot, guys, for having me on. This is a pleasure. I'm Jack Cohen, I work at FirstMark Capital, which is an previously early stage now full-stack venture firm in New York City. You might know us from some of our earlier investments in Pinterest, Shopify, Airbnb, Discord, and many others. I run their expert network on their platform team there. So how that comes to life is I run about a hundred events a year for the firm, internal, external. I do all the content, all the marketing, all the community engagement for the firm and the portfolio. And as a part of that, I run these things called guilds, which are our latest, greatest product that we're really excited about. They are these verticalized networks for C-suite executives, each of them designed to accelerate the success of the founders. On the side, I also run a professional photography business and I guess the reason why I'm here today is I'm also an avid early adopter of consumer apps and all things consumer.

Shane Madden: Wow, well, you're certainly the right guy for the podcast. So thanks again for joining us, much appreciated. I'd love to kick off with the hit TV series on Netflix, Queen's Gambit, which I don't know if you've seen, it was incredible, and that actress was mesmerizing. I guess one of the things that you had spoken to us about pre-record, which I think is super interesting, is the concept of co-branding on a collaborative experience. And I'd love to get your thoughts on the Queen's Gambit, as it relates to maybe Netflix or the producers missing an opportunity to market and sell maybe chess sets as part of the rollout of that program. I'd love to get your thoughts on that and on whether you would agree or disagree with that.

Jack Cohen: Yeah, absolutely. It's a great, interesting topic to dive into. When you think about co-branded marketing experiences or deeper engagement on a given platform or medium, you have to think about, first of all, the platform's restrictions and the ability for that platform to enable additional levels of engagement, right? While I think it would be a fantastic opportunity for Netflix to try to sell merch or to sell chest sets, we know that Netflix doesn't have a merch component of their platform built into the system yet. That might be something on the roadmap. So first you have to tackle the platform restrictions and constraints. And then you have to think about, if that's a constraint, where are the other brands or products that I could partner with that might be able to get me to an end goal. 

So if I'm Netflix and I'm Queen's Gambit, I'm thinking creatively about other cultural brands that might be able to step in and fill that gap to help me build deeper engagements. It could be shoe companies like Vans thinking about the checker squares on the shoes that might be a nice pop for them or it could be Uber and designing small experiences around cities that make it feel like a chessboard. There are creative ways that I think they could have probably partnered with others outside of just selling works themselves. But it's a really interesting point. Happy to dive in further.

Whit Harwood: I think that Jeff, one of the things that you and I have talked a lot about is that the partnership side is super important. Understanding the platform limitations are really important, but then, both of those things are really avenues into building communities and building groups of like-minded people. And I mean, obviously that's your day job, but the interesting thing that I think, we're using streaming as one example here, but it really can go across multiple different apps and products and brands. What is the best way that you've seen so far of multiple brands coming together to build a community that wasn't there. Because when you start to bring products together, you bring audiences together. You're bringing together people in a way that is taking it out of a niche or silo. And then you're saying, this is not an either-or proposition. This is a both-and proposition, and this is now a community that has greater relevance and meaning to those people.

Jack Cohen: Yeah, definitely. I think it's tough to build community, it's the buzzword of 2020. Every company is now focused on building community. Some, I think, with more ulterior motives than others. But one brand that has built community around a product that you might not think is super sexy or requires a community or warrants a community, is baking flour. King Arthur Flour is a company that you may or may not know. If you're a baker, you probably know them. They have one of the most vibrant, high-engaging communities on social of any brand out there. And they're kind of under the radar. If you don't bake, you don't know about King Arthur Flour, you might not be on their channels, but they've done an incredible job of marketing at a higher level than functional.

So if they were staying at the functional level or the scientific level of flour and trying to engage people on that, you wouldn't get that much engagement. You wouldn't get people getting really excited about the ins and outs of the molecular composition. But I think if you start to come to that higher level, you know, the Apples, the Nikes of the world where they're marketing an experience, a feeling, baking is one of the, warm feelings, being cozy at home with your friends and family, activities. That's what they lean into. And I think a lot of brands stay too low at the functional utilitarian level of their product in terms of trying to build community around that. And you need to push further to that experiential or emotional level of marketing, which is really at the top and also affords you the ability to market against competitors that might be stuck in those functional realms. And you leapfrog them to be at more of an emotional level. So that's just one example, I don't know if that answered your question but just wanted to give King Arthur Flour a plug.

Whit Harwood: It actually is really interesting too, because I think especially as the world of various different products, and I mean this less about the digital space and more just about kind of anything in the world that is something that we use on a day-to-day basis, especially as that becomes more direct to consumer each individual product means something different to that person because they have self-selected to align with that brand, that product, that promise. And I would love to talk to you a little bit about, either from the direct-to-consumer brand and product side, or just broadly speaking, when you're thinking about growing a community, or you're thinking about growing a product into that non-functional or beyond the functional space, what's some of the data that either you or other founders look at to really say, okay, you know what, we're actually seeing we can go beyond what we think that is our addressable market. We can actually tap into, if it's flour, then maybe we should align with butter and maybe that's just the cheesiest reference I've ever made. But what is kind of the data set that you look at to say, okay, you know what, there's actually something beyond what we think our threshold is.

Jack Cohen: Yeah, absolutely. It's a great question. I think it probably comes more from user research and qualitative feedback than it does from quantitative metrics that are in your product or which skews are selling more than others. I don't think you're going to find the insights there. I think you're going to find the insights more in the deeper user research that you're doing around, how does this person identify? What are the brands that they identify with? I think identity is something that's not discussed enough alongside community. You have to identify how people identify. And so think about, asking your consumers the classic questions like, what does a day in the life look like? You know, what other products do you associate with ours? What other products fill out the puzzle piece of this part of your life?

Traditionally, people think about it as rooms in the household. So what does the living room look like? What does the kitchen look like? What does the entertainment room look like? And those are kind of easy places to start. So Sonos, thinking about partnerships with Wayfair or, Sony, or other things in the living room might make a lot of sense initially. But I think the deeper subset are folks the ones that I think are on the cutting edge are on the forefront of this. Folks like Allbirds or Glossier, who don't wait for the data to come to them, they go out and seek it and they validate it with massive customer engagement journeys and customer engagement projects. So for Glossier, they obviously have been a leader in user-generated content, listening to their consumers, making their entire brand showcase what their consumers are thinking about, and what they're feeling.

On the Allbirds side they're a shoe company. They could very easily stay at that utilitarian level. We have comfy shoes and you can run 200 miles before you need to replace them. But I think they've leaned into, not only the sustainability piece but also trying to become one of these more cultural leaders within the brand sense. Their partnership with the Met, to partner with artists and collaborate on their future shoe design. There's a lot of different ways that folks can do it, but I think if you want to be leading versus following, you have to be creative about pulling it up one level higher than just the room in the household or the skews that are most frequently purchased.

Shane Madden: I have a quick story on that. And I'm actually wearing Allbirds as we speak. I have two quick stories, so I'm such an idiot with online e-commerce purchase or buying. I love their shoes. I have them in black, white, walnut, you name it and I have it. So I literally have six pairs in my wardrobe. Not on purpose. I went to buy one white shoe, size 11 US. And instead of buying one, I bought three mistakenly, so if anyone needs a spare pair of Allbirds. So it’s interesting you talk about some of those that are really fitting. I worked back in the day for a smoothie company called Innocent Drinks that subsequently got bought by Coca-Cola. One of the coolest experiential activations that they rolled out was a campaign over the summer of about 2006.

And it was buy one, get one tree. So for every product of Innocent Smoothie that you bought, they would plant a tree in the Amazon. And it was fundamentally cored to especially millennials at that point on with climate change and all that. Now on top of that, they rolled out a new product as part of their new product development. They rolled out a new package for their product. I think it was the first brand in the UK and Ireland where it was made of PET. So the packaging was recyclable and it was, as a result of those two activations at that time in 2006, 2007, was the fastest growing brand in the UK. So just to a testament to kind of what you're saying here about the experiential, not just more than the functional use of the shoe, or the functional use of a smoothie, the net benefits are great. It's going to make you feel healthy, but it's a lifestyle decision.

Jack Cohen: I think that's a fantastic point, Shane. One of the things that I think builds the most affinity with a product is whether that product makes the consumer feel like they're doing better in the world, that they're progressing the state of the world in some fashion. Now, climate change is a massive issue. One that is not solved by one pair of shoes and can feel overwhelming when it's like, hey, you have to go buy an energy-efficient car, or you need to cut down on your consumption by X amount. So any ways that brands can creatively tie sustainability or social progress to their products, to each purchase, I think is something the smartest brands out there are doing day in and day out.

I mean, even mega-platforms like Shopify now on their shop tracking app shows you every single purchase and the carbon offset that you're providing. That makes me feel good. That may be the decision for me to use Shopify over Amazon or PayPal or some other platform. It's simple things like that. And there's also the social component, and this is what I love, a new trend in consumer apps. There's actually an app called Arial that the whole purpose is to socialize your reduction in climate footprint. So being able to kind of game-ify it, and we all know gamification is a great tactic for engagement. Toms is a classic example. Bombas does a great, one-for-one donate program. So I think not enough brands really lean into that, and there are simple ways that you can do it where it makes consumers feel like by purchasing your product, which is beneficial for you from a revenue standpoint, they're benefiting the world. And therefore that builds a stronger affinity than a simple transaction.

Whit Harwood: I think if you, and there's a broader point there too, Jack, that you talked about a minute ago, which is really there's the competitive aspect of it. And thinking about this from kind of the go-to-market side or the product strategy side, there are the competitive aspects of every product. Where you kind of have your eyes set on a competitor within the industry somewhere you want to be, but then there's the complementary component of it. And I think where there's a lot of growth that other products or brands might not realize is you don't necessarily have to have your Jack Donaghy mentality, just to use the 30 Rock reference, trained all the time. I'm going to go out and I'm going to steal market share. There are aspects that you can take from adjacent markets, adjacent products, and concepts to say, you know what, I'm going to go out there and I'm going to save a tree like Shane mentioned.

And I think there's an interesting insight there, which is the consumer doesn't think in a hyper-competitive way at every moment of the day. And you mentioned something that was really interesting, which is about the day in the life, the life cycle, the listening to consumers. If you're really listening to your consumer, the consumer goes through different sets of emotions every day. They go through different peaks and valleys in their day, and their brainwaves aren't trained on their opposition all the time. So as a brand, as a product, you actually, sure there's gamification, there are growth engagement methods to fully try to capture every moment of attention that you can, but the life cycle of a consumer's day, they're going through a lot.

And we want to make sure that your product is there at every moment of that consumer's daily journey. And I feel like that's a point that we're all making here, but we've all kind of gotten away from it. I have friends at Peloton and I'll stop here in a second, they're thinking about what's a Peloton day look like. It's not just, I wake up in the morning and I worked out and I go to sleep and I meditate before bed. There's gotta be a way to capture time and attention from 8:00 AM to 7:00 PM and every other moment in between.

Jack Cohen: That's a great point. I don't know if it's a controversial take, but I do have a slight rebuttal to that. So I used to run social and community at Blue Apron, which was a once high-flying food delivery company. Incredible mission, loved my time there and the entire team. We grew the community from about 75,000 folks to close to 2 million folks across all the platforms. So, incredible journey, happy to dive in more there, but one of the things we used as a framework on the marketing team was three different personas with respect to the engagement depth, and we can dive into a little bit of a pool framework that I have in a bit, but in engagement depth on our product.

So with respect to cooking, there were three different types of people. There were avoiders, which are your cereal, Seamless, GrubHub, Doordash orderers, just absolutely despise cooking. And we didn't really talk to them that much in our marketing materials and our product. We didn't really focus on them. There were aspirers, which was the center group, which was folks that wanted to cook more, maybe don't have enough time, maybe have other commitments that get in the way, or don't know how to really up-level their cooking. And then there were enthusiasts and I consider myself an enthusiast most of the time, cooking four to five nights a week, loving to explore different ingredients, and so on. The key insight is not that there are three groups of people. The key insight is that any one individual can be one of those people, one of those personas multiple times throughout the week.

And so it's not about saying they're all avoiders and they're all enthusiasts. It's about identifying what percentage of the time are they the respective buckets and how do we serve them the right depth of content that they're going to want to engage in at every level. So avoiders, they might not want to read a 20-page playbook on how to roast a chicken, but they might be interested in five ways to up-level your knife skills. And so it's thinking about how it's both for content creation and application, and also the engagement levels really manifest themselves in which platforms you're talking to consumers on and how deep you go.

Whit Harwood: Let's dive into that pool framework for a second because you mentioned a few things that immediately evoke the pool analogy in terms of depth. And you didn't say drowning in a 20-page recipe, which I would be drowning. But I think that there's a lot in that pool framework. And then it just kind of that approach to thinking through, there are people that are naturally going to be in a shallower set of any individual community.

But there are ways, to migrate users from the shallow to the deep end. I'd love to just hear your thoughts on that.

Jack Cohen: Yeah, absolutely. So I think the first note that I'd say about the pool is similar to what I just said. People aren't going to stay in the deep end forever. They're not going to stay in the shallow end forever. They might get out of the pool altogether, which theoretically we don't want. Maybe that's considered churn or who knows. Maybe they're just going to take a break and bask in the sun for a bit, but in terms of moving...we've got a whole persona built around this person at the pool. In terms of how to get people deeper in the pool, I think series are a really great way to do this.

Building habitual reasons to come back and engage on deeper and deeper levels with more people in the same community is a really great way, one that I've seen work well, both at First Mark in our portfolio and at Blue Apron. So one example of that is, think about the consumers, they’re not thinking about your marketing strategy all the time. They're not thinking about all the different products that you provide them or all the values that they get. They're just thinking about the use case, typically that one little moment in time, and the more you can habitualize that moment, the stronger affinity and identity you'll build with that user. So something that we did at Blue Apron that was super simple was, just testing constantly on different platforms, having a perspective on each platform, being able to, if a consumer comes up to me on the street and asks me, why should I be a part of this platform or this community, your Twitter versus Instagram versus Facebook versus Snapchat, I should have a really good answer as to why there's a difference of the platforms. And typically it relates to depth. At Blue Apron, Facebook was for the community. It was for bi-directional engagement. So we wanted to talk to and hear from the community on Facebook. Instagram was for inspiration and wanderlust. The platform is not great at two-way communication. It was really more of a one-way inspiration-giving community. And then Twitter was more for those news nuggets, quick tips, you may be able to tie those to the three different personas I discussed.

The concept, the series that I used on Facebook, which was one of our most successful ones, was called Fan Friday. I had the creative team take a bunch of photos of empty plates. They thought I had three heads when I asked them, they were like, why do you want empty plates? We are a food company. Don't you want food on the plates? I was like, nope, just give me some nice empty plates. And I put major questions in big, bold text, in a shared image that I would post each Friday in the morning. And these were fun questions. It was like what's your desert island food. Is a hot dog a sandwich? Is cereal a soup? Things like that really get the blood boiling of the community.

What it did was it gave the community a space to be very lightweight. So thinking about barriers to entry, a really lightweight way to say, I have an answer to that, I'm going to contribute. And that then made that series one of our most explosive in a good way series where people would come back, they'd be expecting the series each week. And that moved I think a lot of people from the aspirers or the avoiders to the respective bucket one above, which just enables you to have them closer to the other material that you're serving them, whether that's video content or what have you. So that was a really successful campaign and one that I was glad we and found some success with.

Shane Madden: In terms of our listenership, we've got a lot of e-commerce companies, brands, retailers, FMCGs, CPGs. So one of the things that you touched on before recording was this idea of brand communities, not just in terms of the migration from the shallow end of the pool to the deep end, but as the development of those brand communities, such that you're trying to penetrate the opinionated communities and strong views, because they're really the vocal people that are going to carry your brand, probably represent the brand equity assets and liabilities to your brand. I guess the question is, what advice do you have in terms of firstly penetrating those strongly opinionated brand communities, and then how do you optimize them?

Jack Cohen: Are you talking about identifying your super users within your community and then how do you activate them? That's exactly right. Not to belabor the analogy, but if you have a jacuzzi, that's your VIP or you're your most highly engaged users. It has to be a much smaller group. You're not trying to build a massive community of super users because I think any healthy community has those variations of engagement levels. You're not going to have everyone be super engaged. So I think early on, it's super important to identify maybe 100, 500, 1,000 early adopters, super users, however, you identify that group. There are some ways you can do it where it's highest LTV, most referrals; for Blue Apron, 50% of the business had come from the invite program.

So that was a really good way to say this person has shared Blue Apron with a thousand of their friends. So, they probably like us, and we should probably talk to them. We should probably get them in the jacuzzi and start engaging with them a little bit more. But I think someone somewhere recently said, and I don't have a source for the quote, but they said, your most opinionated or most outspoken users will get you to 1 million in revenue or 10 million. But your ability to ignore those same users is what's going to get you to 100 million. And so I don't think that it's the same group that takes you from the classic 0 to 1 that takes you from 1 to a hundred. But I think that's natural. I think people evolve, people's relationships with communities and brands evolve in such a way where I think what's imperative with that early group is that you drive home the message that they are a part of the team building from that 0 to 1 or the 1 to 10.

And that at some point it's almost like a consumer advisory board in B2B, you're going to, at some point have to mature that group, expand it, refresh it. So I think being super clear upfront about what that time horizon looks like for engagement and what the cadence of engagement and activity set looks like for that group. It could be something as simple as every quarter we're going to get together on Zoom and do a debrief on the latest product developments. And that's going to last for eight quarters. It could be as simple as recording a Loom of you using the product or checking out through the flow and narrate where you feel like there are issues. Those are just a couple of ideas of how to engage that group.

I think one thing that a lot of brands miss on because they don't think it's a top priority and it absolutely should be, is loyalty early on. It is building structure around loyalty. Obviously, retention is something that everyone wants. You want to keep your customers around. You want to keep them happy. But I think frankly, this was an area where at Blue Apron, we didn't do enough in the early days. We had people spending thousands of dollars on our product and we had no loyalty program for them. We had no way, in the most basic sense, for them to feel like they were special. And it's shocking and also inspiring or hope-giving because it doesn't take much to make people feel special.

One of my favorite new brands is a coffee company called Cometeer, which is actually a Massachusetts company. So go Sox. It's a new take on coffee and sort of K-cup-style pods, but they're a couple of months into existence and they already have a "refer three people, get a tumbler," or "refer 10 people get a special espresso kit." That's enough. That can be enough in the early days. And I know it's an expense; it hits the bottom line. I do think it's important to at least find that subset that you're really going to build that loyalty with.

Whit Harwood: You mentioned something that I think is really important with the growth in general, which is, your most avid users are the people that are also most likely to evangelize new customers. One business that I think has done really well, Morning Brew. You mentioned something really interesting, which is acknowledging, that these users have a reason for being a part of your community. And I think that there's a concept that you and I have talked about long before the podcast, which is around the social Dunbar number, which is how many communities can I actively be engaged in?

And it's funny, you used the man on the street. If you walked up to me and asked me, why am I on Facebook? Why am I on Snapchat? The first thing that I thought about was I'm only really on Snapchat because I had in college. I'm only really on Facebook because I had it in high school. And I think that, especially when we take that to the brand level, you want to have these loyalists and those loyalists are going to drive your next phase of users on the platform. I phrased the question back to you first to kind of frame how you continue to use the social Dunbar number, but then also how can brands think of being in that top five communities or whatever our threshold is?

Jack Cohen: The backstory for the Dunbar number, if you don't know, if you're listening, the Dunbar number typically represents the number of relationships that an individual can hold and the depth of those relationships. And so the higher the number, the less engaging you can be with that respective person, I've now used that a little bit more to talk about, there's a platform Dunbar number, there's definitely a community's Dunbar number. And so just quickly to touch on the platform one, if brands expect a given user to be deeply engaged on all of the different platforms, I think that's an unrealistic expectation for the users.

It goes back to the depths of content and knowing that Twitter is a lighter-weight engagement versus Facebook. But for the community Dunbar number, every brand is launching a community. I have not seen one brand ask me what other communities I'm a part of. And that's a huge mistake. One, just for user research, understanding what other brands affinity to be and what other communities I identify with, but also opportunities for collaborative communities, similar brands building those communities together. Slack is a great example because on the left side, there's a workspace list, and that's really all the communities that you're a part of, but you can sign out of those and only have three or four in there at any one point.

So how I think about it a lot is, how does a brand stay above the watermark, right above the water level of not being relegated, so to speak, for using English  Premier League speak, how do you not get relegated to sign out world? The way you do that is first by asking your members what other communities they're a part of. And then just driving a little bit deeper as to why they're a part of that respective community, not trying to hit them over the head with too many forms of engagement.

Whit Harwood: First off, relegation right now as an Arsenal fan is something that hits a little too close to home. But I think that's a great point and I think that's a great place to wrap, too. So Jack, thanks so much for the time. Thanks for coming on the pod and hopefully we'll have you back and we can keep going further on this stuff, cause I know that there's a lot to get to.

Jack Cohen: Yeah, absolutely. Shane, Whit, really appreciate it. And all the listeners out there, thanks for taking some time. And happy to continue the discussion on Twitter at @itsjackcohen or you can find me on email at jackcohen@hey.com.

Whit Harwood: Amazing. Thanks, fellas.

Shane Madden: Awesome. Thanks, guys.