← The Digital Executive
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- [00:00]
A
Foreign welcome to Coruscant Technologies, home of the Digital Executive podcast. Do you work in emerging tech? Working on something innovative? Maybe an entrepreneur? Apply to be a guest at www.corazon.com brand. Welcome to the Digital Executive. Today's guest is Sebastian Nelson. Sebastian Nelson is The founder and CEO of Kruva, a California based SaaS platform. Helping over 400 brands collectively generate 10 million in monthly sales on TikTok Shop. A pioneer in the social commerce space, Sebastian started an e Commerce in 2018 selling on Amazon before pivoting to TikTok shop at launch. Frustrated by the manual time consuming process of managing hundreds of affiliate creators, he built a tool he wished existed, one that automates creator outreach management and performance tracking. Today, Kruva is an official TikTok Shop partner and the Godo affiliate management platform for brands looking to scale faster without scaling their workload. Well, good afternoon, Sebastian. Welcome to the show.
- [01:12]
B
Thank you so much for having me.
- [01:14]
A
Absolutely, my friend. I appreciate it. And traversing two time zones, you're in California, the LA area, Long Beach. Today I'm in Kansas City. So that makes it easy. Unlike some of the other times I've had to traverse from Sweden to India to Russia to, you name it, I've been there. So I appreciate again you making the time. And Sebastian, jumping into your first question, you began your E commerce journey on Amazon, but when TikTok Shop launched, you committed to it early. What made you see TikTok TikTok shop as a better opportunity and what were the risks or signs you looked at when deciding to pivot?
- [01:51]
B
It's kind of funny. It was really a means of survival for me at the time. So I was getting squeezed on Amazon from all sides. So my advertising costs had gone up a ton and a product that was once a cash cow turned into a liability. And I literally couldn't sell the units at a profit, so I needed somewhere else to sell them. This was mid 2023 and at that time TikTok shop had just come out, so I decided to just give it a shot. It's not like I was some savant where I was like, oh, TikTok shop's gonna be huge. It was just necessity. I was, I needed to sell these units. I had debt that I had to on the, for the business. And so I launched on TikTok shop. I worked with about 10 creators and was able to go mega, mega, mega viral with my product that fourth quarter during the Christmas season. And that's really when the light bulb hit me of like, hey, working with affiliates getting content videos at scale and seeing this snowball effect of content get put out and just hundreds of videos every day for my product, just that's when the light bulb really moment really happened for me.
- [02:51]
A
It's amazing. Love the backstory. Always do, always a challenge. Typically that happens that sparks a creator, an entrepreneur, the founder to do something different. In this case, Amazon can fluctuate quite a bit. And as you saw there, your story when TikTok shop launched, you knew that you had to do something else because of the challenges you ran into. So I appreciate the story and our entrepreneurs in the audience certainly do as well. And Sebastian, I'm sorry, Kruger was born out of frustration with manual creator outreach and management. What features or functions were non negotiables for you in building krugerva? What early hypothesis did you test and which one surprised you?
- [03:35]
B
Yes, I mean it was born out of necessity. Like I said when I first launched that brand, we had a ton of early traction and managing and outreaching to affiliates was one of the most manual parts. It just drowned me in manual work and so I knew it could be automated. I didn't know exactly what it looked like yet. But the main thing was we needed something to save time for brands to, to regain. For solo founders like myself, I needed that time back the hours, every day, messaging, back and forth with creators. So I would say early hypothesis that we tested was really just scale. It's like back in the day when we first launched Kruva, it was really about just volume, it was a volume game. How many messages could you send out and then how many creators could you onboard? That was just the absolute most important thing.
- [04:27]
A
Thank you, appreciate you sharing that. And again you highlighted this necessity drove that change. You were looking for efficiencies, you were bogged down in a lot of manual processes and again jumping in out of pressure, out of need, you were able to pivot and make this change. So I appreciate the backstory and, and Sebastian Kruva is an official partner of TikTok shop. What was required to achieve that status? How does being a partner change your opportunities, constraints or integration approach and what doors has it open for you?
- [05:02]
B
Yeah, great question Brian. So it's really, it's changed the game for us. Frankly. TikTok has been absolutely amazing partner to us. Really what it's given us more than anything that we appreciate is just having a say. So they, we work with 650 brands across the world and so they actually value our feedback and they take our advice and then they actually will go and try and implement the changes and the things that we suggest. So that's been amazing. And then on the opportunity side, they've put us in front of a lot of sellers, right? So we're on the official App Store where any brand comes on, they get a chance to see us and our service offerings. Integration. There's definitely some limitations with the integration and it hasn't always been smooth sailing. But what is. And we've really, really just worked with them over. We've been a TikTok shop partner now for over a year. And through that time, TikTok has evolved so, so much. And we really, really value like being able to see the evolution and our tool has just changed so, so much. Where in the beginning we were so focused on outreach, how many creators are you reaching out to? But then that kind of got a little bit outdated. Where now you really need to be thinking about, okay, who am I reaching out to? Right. And that's why we've built all these tools to use AI to actually be able to identify the right creators. Where now instead of just going, hey, I want a creator with 5,000 followers who's promoted a beauty product. You can come into our system and say, hey, I want a mom who is blonde with 5,000 followers. Right? And then we will actually use AI to go find those affiliates. So again, TikTok has been an amazing partner for us and really allowed us to grow and develop all these new features.
- [06:48]
A
That's amazing. And it's good to have. It's great actually in your case to have a good partner like TikTok here in the official App Store. Your brand gets put out there. I think that's great that they highlight you. But also what I really took away here is I know you did a lot of outreach early on, but using tools, AI, machine learning, help you dial in those to find the right creators or affiliates that are again, maybe niche to something that you're trying to sell in particular. So I again appreciate you highlighting the technology there. And Sebastian, the last question of the day, Looking ahead maybe five, 10 years, how do you see the evolution of social commerce, meaning TikTok shop, Instagram shopping, live commerce, and the role of affiliate creator platforms like Kruva. What's your vision for brand creator ecosystems in that world?
- [07:43]
B
Yeah, absolutely. I don't say this lightly, but I really think it's going to change where every brand is looking. The smart brands who are adopting it early are seeing the results. As an example, today, one of the brands that's dominating in the social commerce space is comfort clothing, they sell hoodies, they have an amazing product. But what they do so, so well is they recruit and train affiliates in house. And they've achieved in just about three and a half, four years a build hit 500 million in revenue this year, which is an unbelievable achievement for a company that's only four years old. The way they've been able to do that is 100% through affiliates. So they don't work with influencers. Right. Every brand is still thinking about Influencer and really what we're seeing on the front lines is that there's a shift, there's a major, major, major shift going on. So in five to 10 years, I think a lot of the dollars being spent on Influencer will now be spent on affiliate. And our role for our platform kind of in that ecosystem is really to be the operating system. Right? So when you think about what is an at scale affiliate program look like you're working with thousands of creators creating tens of thousands pieces of content on a monthly or even weekly or even daily basis for some of these really, really high level brands. And so we see ourselves as, hey, you want to come onto our platform, be able to see all of the analytics, be able to find the right creators for the future. So it's like a, just like a traditional sales funnel at, at a company you have a sales funnel for your affiliates. How many creators are you reaching out to? Then how many are responding and then of those finally how many are actually making product? And then the key metrics there is retention. So how many of those creators who make one video actually stay with the brand and end up making 4 or 5, 6, 10, 20, 30, 100 videos for the brand because that's where we see real, real scale. So we want to look ahead five, 10 years. We want to focus on helping brands, helping find the right affiliates, reach out to those affiliates, manage those affiliates and then retain those affiliates.
- [10:00]
A
That's awesome. Thank you. And again, I'm not keen on enough to speed to a lot of this stuff out on these e commerce sites, right. In this industry. Do talk to a lot of folks that are in here. But I appreciate you sharing the insights and I would definitely though agree every brand in the future will be definitely looking at this model. Smart brands jumped in early like you mentioned. But affiliates are key here now and in the future, not necessarily influencers and I didn't know that. But again, I appreciate talking to creators and founders like yourself that share those insights and nuggets with our audience. Most appreciated Absolutely. And, Sebastian, it was such a pleasure having you on today, and I look forward to speaking with you real soon.
- [10:46]
B
Yeah, thank you so much for having me.
- [10:48]
A
Bye for now.