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- [00:02]
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Mike Hoffman
Hi, I'm Mike Hoffman, Editor in chief of Inc. And welcome to youo Next Move, produced by Inc. And Capital One Business. Managing a growing business is fun, but it isn't just about keeping up the momentum. It's about handling more people, more pressure and more things breaking along the way. So today we're joined by two founders who've built fast moving and category defining companies. Alicia Yoon is the founder and CEO of Peach and Lily. And Michal Alters, co founder and CEO of visit.org Michal Alicia, welcome to your next move.
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Michal Alters
Thank you.
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Alicia Yoon
Thank you.
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Mike Hoffman
So we're here today to talk about managing growth. Right? And managing growth is fun. It's exciting. It's also not for the faint of heart. It's very difficult for growing organizations to sort of keep on track and it can be difficult culturally. It's certainly a stress financially. There are a lot of pressures on CEOs such as you who've been growing fast. So Alicia, let's start with you. Tell us about Peach and Lily and what your growth journey has looked like.
- [01:27]
Alicia Yoon
So Peach and Lily is all about powerful and gentle skin care. I have severe eczema, so I started the company because I wanted to create skincare that could be really potent with clinically potent, transformative actives, but also gentle for skin. So the company is now going into year 13, but the brand is seven years old. So there was kind of phase one of the business and phase two in 2018 when we launched the Peach and the elite and Peach Slices brands. And it's been an exciting journey. We are now the the second largest prestige skincare brand at Ulta Beauty and also retailing a bit on Amazon and our website. So yeah, it's been a ride.
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Mike Hoffman
And was that second phase kind of when growth really took off?
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Alicia Yoon
Yeah, I would say in the beginning, you know, as a Korean beauty kind of pioneer in the US market, there was a lot of growth in a qualitative way because we're really introducing this category into the US market. But in terms of like revenue numbers, definitely after we launched our brands and it was like a completely different trajectory in a lot of ways.
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Mike Hoffman
Yeah. And you're being modest, right? I mean Korean beauty has been like a real driver of the beauty category.
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Alicia Yoon
Yeah, it's been exciting. In 2012, K Beauty was not a thing. You know, when you walked into big box retailers, you might have found like maybe two or three Korean beauty skus, very little presence. People didn't know about Korean beauty. And so yeah, in the beginning it was a lot of education, introduction. We were distributing these third party Korean beauty brands everywhere. You know, we were at qvc, at Sephora, Target, cvs, Bergdorf Goodman, I mean, you name it, we were distributing to these national retailers. So it was a lot of growth during that period as well. And also just exciting to kind of inform that introduction of this entire category. And then in 2018, I mean, we had been working on R and D on our products for some years before launching. But it's really exciting when you're launching products that you've developed with your team, you know, for a very specific mission. And so the last seven years has also been, you know, super exciting. And it's a US based brand, but we make everything in Korea and it's fueled by these Korean beauty innovations custom created for our community and their specific skincare needs.
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Mike Hoffman
So Mikael, with visit.org your journey also involved sort of two different phases of growth and sort of pivoting the business in ways that are actually kind of similar to Peach and Lily. Can you talk about whatvisit.org started as and then where it is today?
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Michal Alters
Sure, yeah. We started visi.org about 10 years ago as a direct to consumer product in the travel industry. And with the idea of wherever you travel around the world, you can add a local social impact experience to your itinerary. What does that mean? You travel to Paris, you have your seven day vacation. Maybe in addition to going to the main touristic attraction, you want to spend half a day doing a meaningful immersive experience with members of the local community that will either show you around or it could be a cultural experience, a food related experience that really show you a different angle of the city. And your impact will be the dollars that you leave with local hands. Because everything is facilitated through highly vetted and curated experiences with local nonprofit organizations that we bring on board. We grew that very first through distribution partners. So we worked with all the big online Travel players, Expedia, TripAdvisor Airbnb and others. And at some point we realized that to continue our growth, we either needed to go into additional verticals within the travel industry or pivot altogether. We were less interested in expanding into the travel industry. We were still very interested in getting more people be exposed to these local, what we call social impact experiences. And we ended up pivoting to a B2B model. So what we do today is we work with the world's largest companies, such as Colgate, Amazon, Visa and others, and we help them scale their employee volunteering programs and social impact experiences, all team based and across 100 countries around the world.
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Mike Hoffman
I imagine the margins are much better on a B2B sale like that.
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Michal Alters
Exactly.
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Mike Hoffman
And so as you were growing, how did the company change along with that pivot?
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Michal Alters
Yeah, a lot. Well, first we needed to pivot again during the pandemic. Before the pandemic, all of our experiences were in person experiences. When the pandemic hit, a couple of days into it, we had our cash in the bank and we needed to understand where this was all going. The one thing that was clear is in person experiences model is not going to work anymore. So we looked at the cash in the bank, we invited everyone, all of our team members to a Zoom call, and we basically said, we have no idea where it's going to go, but we'll do our best to try to keep our team intact and leverage the money we have in the back to try to pivot and create something that can grow from here. We let go of our entire team. It was a very hard moment that I'll never forget. On Zoom and with the resources that we had, we gave ourselves three months to hit a goal of, I think it was maybe five new customers, B2B customers. And because we had such a short Runway, we decided instead of focusing on the smaller kind of tech industry type of companies that we worked with pre pandemic, we decided to focus on only on the Fortune companies. So we started running a campaign with Fortune companies. And within two months, it was very clear that there was a lot of demand for what we had to offer. We pivoted to a virtual offering, and companies just really wanted to find ways to engage their employees in an authentic and meaningful way. We ended up starting to grow very nicely. And about nine months later, we rehired 100% of our team back, including some of our team members who went on to work for other companies. Everyone came back and we continued to grow and expand our team from there.
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Mike Hoffman
Now, I imagine that there was a period when a lot of what you did was sort of educating customers about what your offering was. Can you talk about that?
- [07:57]
Michal Alters
Yeah. So we are, you know, we bring a lot of innovation into our market. Companies are not used to paying for employee volunteering. You know, the traditional concept is volunteering should be for free. Right. We are giving our time. Why should we pay for it. But I think that what changed over the last year, four or five years, is that the demand from younger generation employees for more authentic type of work environment is there. And this is just the best way to give meaning and purpose to employees in today. And when companies do that, they need to make sure that it's done in a high quality manner, that employees want to come back and do it again, that it really touches their heart and becomes an emotional connection that is translated from a community relationship emotional connection to a peer emotional connection and from there translated to the emotional connection to the company as well as there's a lot of risk involved when you work with local Nonprofits in over 100 countries around the world. So we take care of all of that and we really pride ourselves in how much we care about quality and making sure that it's going to be an ROI positive experience both for employees and corporations as well as for the nonprofits that host them.
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Mike Hoffman
And it's clearly working. You've been on the Inc. 5000 two years in a row and we'll see about 2025 and with a growth rate that at one point was hitting 3,000 plus percent, which is a crazy growth rate.
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Michal Alters
Yeah. So we've been on that growth journey. We raised our VC capital raise during the years where money was a lot cheaper. Right. 2020, 2021. And we've also been on the journey of 23 and 24 where money became more scarce and we needed to completely change our direction and work towards breaking even and profitability, which is a completely different way of managing the company. And I'm excited to share that. We are absolutely now on that journey and with that gaining our freedom and independence to make decision on how to continue growing the company.
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Mike Hoffman
So like cash flow positive this year. Yeah. Congratulations.
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Michal Alters
Thank you.
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Mike Hoffman
So Alicia, talk about educating the consumer and the challenges of that and then also how doing that successfully allows you to unlock growth.
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Alicia Yoon
So when we first launched the Peach and Lily brand, that was in 2018 and we launched with Ulta Beauty and at that time, when you first launch at Ulta Beauty, it's very typical for them to give you trial doors. So we were in 250 of their 1400 doors. And when you're in trial doors, you can't really leverage like retailer wide programs to do training, et cetera. We didn't have budget for a field team at the time, et cetera. So my husband and I, we worked together. We literally went ourselves personally to 100 Ulta Beauty stores. It was like that movie, like Trains, planes and automobiles.
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Mike Hoffman
Right, right.
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Alicia Yoon
I didn't know where I was half the time, but it was a phenomenal experience. We went to a hundred stores, four or five hours each across the country and really got to meet the Ulta Beauty teams on the ground, see how the Ulta Beauty stores operate, really understand the different cultures of how you meet consumers. Our consumers, our community showed up for us. Like we were allowed to announce the day where we would be and we had just like our community show up, meet and greet us. And it was so important to do that though, because when you're introducing a product category, things that really don't exist in the marketplace where you can have, for example, 10% glycolic acid or a retinoid product, but it actually has a national Eczema association seal on it at this point. Like when you're introducing things that people hadn't really experienced before and you're really showing like the best of both worlds and skincare is now possible, people want to understand the how behind it, the why, how do you use it, the story behind it. So to be able to do that on the ground, connect with their community, hear what they're gravitating towards, see the Ulta Store cultures and see how you really need to kind of train the trainer. You know, that was just invaluable experience. And I really do think that that allowed us to become one of the fastest growing brands at Ulta Beauty. And you know, within the first five years we were a top five brand and now we're second largest on our way to being the largest prestige skincare brand. Like I would never have been able to imagine that. And so I think that level of education, you know, we continue to focus on that, but now we scale that out so we think of ways on how do you actually do that at a national scale, how do you do that effectively? And it's something our team is thinking about all the time. For example, like bite sized things for TikTok, when you have really complex science and there are some consumers who want to dig into the sources and read the clinical studies and then there are consumers who want just the visuals. Right. So there's a lot of content that you also need to create per channel and where everything lives. And you know, thinking about that, constantly developing educational series like that is a huge part of what we do with our marketing for consumer brands.
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Mike Hoffman
I think that sort of mix of online marketing and then sort of in person, real world experiences and building that community across both is one of the sort of winning Playbooks. But it's also very hard. Can you sort of talk about when you knew, oh, we're doing something online that's resonating in the real world?
- [13:26]
Alicia Yoon
I would say when it's our D2C activities or social media, it's a little bit more trackable. You know, there's like different apps that you can install where you're like, oh, consumers spend so much time on this thing. And it's actually really interesting because sometimes, you know, our teams are working so hard on developing below the full content that's super rich. And then you're like, nobody really cares about this information.
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Mike Hoffman
They didn't get there. Yeah, right.
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Alicia Yoon
And so then we're able to take, take, you know, that information to our field teams and say people are gravitating towards these three points. Right. And you have to just expect that the consumer, you have five seconds, if they're still engaging, you have 30 seconds. And then if they really want to have a conversation with you, you have a little bit more time. So what does that communication pyramid look like? But the information flows both ways. So our field team is always connecting with our marketing and E commerce teams as well to be like, interesting insight. Did you know people are actually using this product in this way? And that's just such an interesting use case. We should talk about that online. So it's just that fluidity and connectivity across teams has been so important for us.
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Mike Hoffman
But hard to do when you're a startup and even hard to do when you're a larger company. Right?
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Alicia Yoon
Exactly. It requires this culture. So something that we've always believed in since day one. So rewind. You know, 2013 years ago, when the company was first being started, we didn't take our first round of institutional capital until 2020. So we were incredibly scrappy. And in order to grow efficiently and effectively, we had this mantra from the very beginning where we said every single month you have to become smarter. So you have to ab. Test, structure things in a way where you really understand what the insights are. Sometimes the insights are conflated, but you really try to figure it out and get incisive, actionable insights every month. And so you're really looking at the analytics and some, you know, qualitative quantitative analytics and really trying to drive insights and that culture of learning and figuring out what works it, we instill that from the very beginning. So I would say that one unique thing about our culture is that there's this deep collaboration across the organization because that learning is so important and you can't learn in just a siloed viewpoint.
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Mike Hoffman
So you mentioned never imagining that you would grow as quickly as you have. I'm curious for both of you and Mikael, we'll start with you. Did you from the beginning decide that you wanted to be a fast growth company or did that take you by surprise when you really had product market fit?
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Michal Alters
Yeah, I started my career as a software engineer and worked in the high tech industry for several years. So when I just started thinking about creating my own company, it was very clear to me that it had to be scalable, efficient, global, you know, all of that. That was just the way I was educated as an engineer. So I didn't, I wasn't even aware of any other way of creating a company.
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Mike Hoffman
What about you, Alicia?
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Alicia Yoon
I would say that when we launched our products, I definitely had a big vision in that as consumer, one who struggled so much with my skin, it's a very emotional category and for me I understand those emotions. And so I was excited to ensure that our products could really be out there because it would be helpful for people, you know, for people who want results without the irritation, for people who want those real solutions and real transformation. So I had this big vision on, you know, how I wanted the brand to be a legacy brand to be everywhere. But how quickly we got there, you know, at that time we didn't have institutional funding. Like there was no roadmap around that. So you know, we were like, we're not, not flipping a condo here. We're like building this as a brand to last. And the growth rate almost was like a secondary thought. It was just more about building a very strong foundation, a sustainable business. But the brand just started taking off. We launched our iconic glass skin refining serum that was product number one within that launch period. I mean it just kept selling out. Like it became this thing on social media where people were like, did you find one in the store? Like sold out eight times. Like the growth rate definitely wasn't something we were chasing, but it really happened. And you know, there's lots of amazing upsides and we're so grateful for that. But it's also a lot to manage. So it's not something that we were like, that's the goal. Even though the end result was we want this to be a big, big brand.
- [17:59]
Mike Hoffman
Well, it consumes cash. Right. And so I'm curious, Mihael, how much have you raised and how did you use the first round of funding that you brought in?
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Michal Alters
We first, we only raised institutional money when we started to see product Market feed. So we waited for several years before we started to raise that money. In the first few years, our first checks came from different grants and whatnot. We are a for profit Delaware Inc. Company, but also have a mission and purpose. And then you're a B corp. We are a B corp as well. So initially got some initial funding, then raised a little bit from angel investors, looked into raising, also from some impact investors as well. And only later on when we hit the product market, fit in the B2B market, did we really start to raise that institutional money and then invested it into growth.
- [18:56]
Mike Hoffman
And so when you say invested into growth, what are some of the teams that you staffed up or was it the executive team or was it core technology? Like talk about that.
- [19:04]
Michal Alters
Yeah, a lot into our different product offering as well as building our leadership team, which we didn't have before raising. So we are a company that needs to be very good at very different areas. So we need to be very good at working with nonprofits and suppliers very hard.
- [19:28]
Mike Hoffman
Yeah. Very complicated world.
- [19:29]
Michal Alters
Very complicated. You need to build trust. They wake up in the morning, they're not thinking how they're going to generate more revenue from your platform. They wake up in the morning, they think about how am I going to put more kids into school, how am I going to give health care, provide health care to more women. That's the first priority.
- [19:46]
Mike Hoffman
And you have a global footprint too, so there's that.
- [19:49]
Michal Alters
Yeah. So nonprofit expertise, very important. We have the best team in the world with that expertise and then expertise in content design and curation. How do we make sure that when we bring a team of employees to to spend two hours with the local nonprofit, it's going to be a fantastic experience. It's going to be fun, it's going to be intellectually stimulating. It's going to be. They're going to feel the impact that they uniquely were being able to create on their local community. So content design and expertise is something we have on our team. And then of course, everything is served through our technology platform. So R and D, engineering, product, all of that expertise as well. And lastly that global operation. So I'm talking about on the ground operation in over 100 countries around the world where we have our own certified hosts and event support staff on the ground for each team, volunteer experience along with the nonprofit so that the nonprofit, the people who work for this nonprofit and are so passionate and are so intelligent about the topic and the mission that they're working towards, they can still keep that expertise and continue to make an impact on their community. It's on us to make sure everyone is going to have a great experience on the ground.
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Mike Hoffman
And what's your headcount now? Full time?
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Michal Alters
We are now about 40 full time in the US plus 40 across the world.
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Mike Hoffman
Wow.
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Michal Alters
Yeah.
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Mike Hoffman
So that's interesting to have half of your staff overseas. So Alicia, for you, how much money did you raise and what did you sort of spend those early rounds on? Where did you invest?
- [21:24]
Alicia Yoon
So in the beginning, we were completely bootstrapped. I literally just poured all of my savings into it wasn't taking a salary. So it was interesting because I had graduated business school in 2010 and I went to Harvard, I went to HBS. And in 2008, when I enrolled at HBS, it was the financial crisis. So the whole school, it was this magical environment where there was a lot of focus on entrepreneurship. So I had the benefit when I graduated of having a lot of classmates who had gone on to start amazing companies. Blue Apron, Plated Bubble Bar, Rent the Runway. I think it was a year before. It's like a lot of different friends who I could talk to because I started peach and Lily two years after graduation in 2012. So I was just meeting a lot of my friends and asking like, okay. And at that time there was a little bit of a playbook, you know, go D to C, you know, raise a seed capital with like a venture capital growth fund, et cetera. And so I kind of was going through those motions and I, I quickly realized, wait, I'm going to pause here because in a lot of ways it's a new category in beauty, but it's a meat and potatoes type business. I'm not building a tech platform. This is really something where my earliest consumers should be, you know, actually the easiest to convince. And I don't want to be path dependent on this funding round. I want to really ensure that I have a sustainable business model. And so the first few years, it was just, you know, it's cliche, but it's so true. It's always, it takes longer and it's more expensive than you ever thought it would be. And so, you know, it was just like a few years of being really, really scrappy. I think at one point I had like $7 in my bank account. I was like working out of my apartment. I mean, it was very scrappy. And then at one point took on a small friends and family round. And it was, you know, we moved into an office and it was actually interesting. Cause by the time I felt comfortable raising, which was when it was at the point where I was like, I know what I'm actually going to do with this. You know, we had done enough a B testing where I was like, this is the growth marketing that we're going to invest in and so forth. You know, a little bit of inventory, like this is how we would manage it. So ended up raising a small friends and family round. Didn't really end up having to need it, but psychologically just having, you know.
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Mike Hoffman
That cushion is better than seven bucks.
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Alicia Yoon
Better than seven bucks. So that went on. And then year eight of the business, we partnered with Sandbridge Capital, amazing partner. And, you know, again, again, it was interesting because when we were raising, we actually didn't really need the capital at that point, but we realized, okay, this is a really good time to raise because, you know, we wanted to really step on the growth engine given just how quickly things were going. But it wasn't that we actually raised and said, you know, we don't need this. It's just. It just kind of happened that way where, you know, our cash flow started. It was very healthy. You know, the churn was very healthy. But I think it goes back to the root, root of just how scrappy we were. Like, that DNA is so firmly rooted in our company that our marketing team, for example, our brand marketing team. Brand marketing is like one of those things that it's so hard to measure ROI, but it's something that our team, we have this 366 system where we really input all the different growth levers that we actually exercise across the company. And over time, you have this catalog of everything you've been doing, able to isolate the variables and say, I actually think this growth marketing or this brand marketing activity paid off because everything else was the same three months prior and we didn't see that lift. So, you know, just to have that history. And so I think having that scrappiness and not raising until way later into the business, it's something that just has stayed with us on how to think about, you know, your use of funds and the ROI coming from that.
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Mike Hoffman
Yeah, it's interesting to be both scrappy and invest in brand marketing. Sometimes that's the first thing to go.
- [25:31]
Alicia Yoon
Yes. And we're always kind of looking at the balance of things because, for example, we've done activities where we have taken over the New York City subway. How do you measure that? Right. And there are so many opportunities that are just so much closer to the bottom of the funnel that'll just convert. And, you know that that's going to work, but you also know you have to invest in and nurture that brand equity and the top of the funnel. And so, you know, it definitely is like a holistic view that we look at. And I think our team defines scrappiness as not, not investing in your brand and in the marketing, but in how to do everything the most effectively and efficiently.
- [26:07]
Mike Hoffman
Making careful bets.
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Alicia Yoon
Yes.
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Mike Hoffman
I'm curious, Mikhail, talk about Visit.org's culture and how you know what the DNA of the culture is and how that has prepared you for growth.
- [26:18]
Michal Alters
We are very fortunate that we are working on a mission. Our mission is truly embedded in creating these connections with local nonprofit and enhancing the missions of the best nonprofit out there. So our team is on a mission. Every day we wake up in the morning and we are trying to create more impact in the world. And when I first created the company, it was very important for us as we were looking into different business models. Once we pivoted to a B2B model, we iterated on so many different business models and pricing models and so on. But it was always the core to make sure that the three stakeholders that we have in our business, corporations and their employees, nonprofit organizations, and then us as visi.org, it was so important for us that each inter the more we create interactions between the three, the more value each one of the stakeholders gets and creates. So eventually we're able to build a business model where that's just the cycle. The more interaction, the more employees we bring to the nonprofits, the more revenue we help this nonprofit generate. So one of the innovations we brought into the market is with each volunteer experience that a team does with the local nonprofit, the company pays a donation to that nonprofit, which was again, something that didn't really exist as a rule before and was new to the market then we needed to educate it. But for those nonprofits who get it now, it has become a revenue generating activity, a sustainable one where they don't depend on people's good heart to give, but rather they offer something that the market has a demand for. And for some of our nonprofit partners now it become a meaningful part of their annual budget, which is something we are very excited about. We think, think in this way we can create new expanded pie for everyone because these are dollars that are now being added onto the market. These nonprofits all of a sudden understand they have unique assets that no one else has. They have unique trust relationship that they build with their local community, unique understanding of the local culture, history, expertise, all the work that they do within the context that they do the work, they're probably the world's number one expert on that. So we help them leverage it and package it in a way where companies and employees actually want to consume it and pay for it. And that's the cycle we've always tried to build. And again, going back to the team, we always think about new ways to create more of these interactions. So one thing I'll share is when we first launched our offering, we only had one offering that we launch into the market. We call it our signature offering. It's one type of event. The nonprofit is there, the employees are there, we are there. An hour to too long. That's, you know, you learn about the impact, the programs and that's it. And we quickly learned that while this is great and really high quality, and with this we position ourselves in the market as a premium offering, our corporate partners needed a lot more than just that. There's a lot of different needs that they have throughout the year in terms of how they want to engage their employees. So what we've done over the last 18 months is we've launched additional offerings from the lower cost, lowest lift to higher cost, wide glove, almost of a service that we provide and anything in between. And each one of them creates different value to each one of the stakeholders. And in this way, by listening to our customers and understanding, understanding their needs, we are now able to create more value to our non profit partners and us as a team, we create more impact in the world.
- [30:05]
Mike Hoffman
So with visit.org, you've worked with Visa and Colgate and Amazon. Amazon, one of the great growth companies of the last 25 years. You've worked with Ulta Beauty and other major retailers. I'm sort of curious, what have you learned by looking at those companies and how they operate, about how to scale and how to operate at scale.
- [30:22]
Michal Alters
Amazing learning opportunities. Working with Amazon, a lot of experimentation, A B testing on how teams react when we facilitate and let them lead their own team events and learning from that. What worked and what doesn't work very much culture of failing fast and learning fast and then implementing what worked and ditching what didn't work.
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Mike Hoffman
Yeah. And what about you, Alicia?
- [30:46]
Alicia Yoon
I would say future proofing your business. I think a lot of these retailers who have stayed in the business for so long, you know, you don't get complacent with, okay, we're still growing, but what's next? Where is the consumer headed? Where is the world headed? And really continuing to push that edge to, to maintain that Edge.
- [31:02]
Mike Hoffman
When you think about building out your leadership team, what was a key role that you had to fill and how did you fill it?
- [31:07]
Michal Alters
For us, one of the most unique roles is that head of a nonprofit experts team. You need someone who understand growth and scale at the same time of understanding how to work with nonprofits in a sensitive and trust building way. So that was a combination of skills that was very hard to find. And fortunately, we have a great leader on board who's been helping us with that.
- [31:31]
Alicia Yoon
That I would say our brand marketing role was really important because it's really understanding the emotional aspects of the category as well as all the disciplines that come with it. So it was a lot of interviewing, a lot of different projects, and, you know, both looking at that, but also you just know if somebody really understands the brand and it resonates with them or not.
- [31:52]
Mike Hoffman
Yeah. So as CEO, how has your role changed as the company sort of entered into a fast growth phase. Phase.
- [31:59]
Michal Alters
From a fast growth phase to moving the company to break even. I would say that was a big change. Right. Because having the resources to do anything you want to try and test versus being very disciplined about where you are expanding your resources and while growing the company is a completely different challenge. So I think that made me a lot more disciplined and needed to take very hard decisions. But also at the end of the day, learning that, you know, encountering multiple live or die moments along the journey, just making sure that we choose to live, that taught me a lot. What does it mean to live as a business in different circumstances?
- [32:43]
Mike Hoffman
What about you, Alicia?
- [32:44]
Alicia Yoon
I think as you scale, you really go from an individual contributor wearing a lot of different hats to really supporting your team. And so I think I really view it as, you know, our team leads are amazing. And so it's really partnering with them. You know, I'm still very involved, but partnering with them and sometimes just getting out of the way so that they can move really fast, but never losing that connectivity.
- [33:04]
Mike Hoffman
So, Alicia, let's start with you. This time. I'm sort of curious. Was there a moment when everything at the company broke as it was growing fast? And how did you fix it?
- [33:12]
Alicia Yoon
Oh, I would say the pandemic supply chain. Oh, my goodness. Like, we went from lead times of cause, you know, we're shipping things from Korea like, like three weeks when it's fast to six months. And when you're a fast growing company and you're like inventory, is that out of stock? I mean, that just made everything difficult. We had to like adjust marketing plans like two Days out because the inventory wasn't going to come in. And it actually really strengthened the business because we actually put in a lot of redundancies in the supply chain. We re looked at sourcing how we source everything. It really strengthened it and actually built it for faster scale coming out of the pandemic. But that was a tough time.
- [33:48]
Mike Hoffman
I was going to say helpful for today when there are other global issues, right?
- [33:51]
Alicia Yoon
Yes, helpful for. For today, for sure.
- [33:53]
Mike Hoffman
So, Mikaela, same question to you.
- [33:55]
Michal Alters
We recently launched a new product into the market. It's called Project in a Box. And this is where we send out literally boxes with activities inside of them to the offices for teams to do together. It can be creating, putting together a teddy bear that will go to children at hospitals, or putting together letters, writing letters, or putting blankets together that will go to people who need them. And as soon as we launched this product, it grew very fast and has a lot of demand in the market. And this is now our fastest growing offering in the market. With that, we needed to scale that literal operation on the ground of shipping and logistics in the Americas, in EMEA and in APAC, all at the same time. A lot of things broke on the way. Let me tell you, May was our largest month ever at the company. A lot of failures along the way. Fortunately for us, we have great corporate partners who are willing to learn with us and try with us. And then now we are so much smarter for it. And so many new things that we're putting together to become so much more efficient in this logistics as well as as having the support of our corporate partners such as Amazon to help us learn how to do global logistics at scale.
- [35:19]
Mike Hoffman
They're good at that, so I hear. So I'm curious as you think about your peers who may have started other growth companies, or investors, board members, what are some of the helpful pieces of advice that you've gotten about how to manage through growth?
- [35:34]
Alicia Yoon
I would say one thing. I will never forget this rtp. I had it on my computer for the longest time. It means run to the problem every day, in the beginning of the day. But that's the thing that you just need to confront, get it resolved and then the rest of the day is smooth. So that's something that I always keep in mind. Anytime there's like any issue, whatever category it's in, that's the first thing I'll tackle in the beginning of the day.
- [35:58]
Michal Alters
For me, imagine that when you encounter these problems or really tough situations, imagine you have no one on your team. You're on your own, how do you solve this approach? You can do it. How do you solve it? And then once I understand that, then now I have all these resources that I didn't have a second ago and it's doable.
- [36:19]
Alicia Yoon
Yeah.
- [36:19]
Mike Hoffman
Is there something in terms of where you place your bets and the cash that you spend that you've disinvested in as the company has grown because you realized it wasn't giving you the fuel that you needed?
- [36:29]
Alicia Yoon
Oh, yes, a lot of examples of that. I would say that because we're always AB testing and because, you know, when it comes to social media, influencer marketing, et cetera, like, you see so much of the playbook out there. So it's very interesting to see, oh, that brand has done that. Maybe that'll work, work for us. And, you know, one thing that we learned over and over again is that there is no playbook. There is no silver bullet. But we are willing to test and learn a lot of different things and things that could have worked for other companies beautifully. Doesn't work for us. So we always say, you know what, let's do a meaningful, it can't be too small, a meaningful structured test. And you know what, if it doesn't work, that's okay. We're just not going to do that again. But let's understand exactly why that didn't work. So there is a lot of things that we are like. Like we're just not going to do that again unless it's completely different.
- [37:13]
Mike Hoffman
You got smarter as a result of that, right, As a company?
- [37:16]
Alicia Yoon
Yeah, exactly.
- [37:17]
Michal Alters
Yeah. So plenty of things that we scratched once it didn't work. And one example is one challenge in our industry is how to engage frontline employees. These are employees that not necessarily have connectivity. They don't have time to take off and so on. How do you still engage them in volunteer opportunities and do team building together? We have been trying different offerings to solve for that problem. One category that we launched was an on demand category, prerecorded opportunities to volunteer as a team that we launched at the beginning of the week and by the end of the week, we celebrate our collective impact together. It took us so many iterations to get to a point where now we can say confidently, yes, we have a solution for frontline employee engagement.
- [38:08]
Mike Hoffman
So obviously the name of this show is your next move. And I'm curious for you and for your company, what's your next move?
- [38:13]
Michal Alters
We are all about AI right now, both externally and internally. Internally there are, you know, with everything that I discuss in Terms of running a global operation company, There are so many ways to enhance the amazing team we already have on board and using all the proprietary data that we have to make ourselves internally more efficient and be able to serve our corporations at scale without necessarily necessarily expanding the team as before. And then externally we have the world's largest library of its kind for team based volunteer opportunities all over the world. So we have a lot of proprietary data, content participation, data, preferences, passions of employees and so on that we are leveraging to build our own agent that will help our corporate customers do much more, faster, match employees with their passions and in this way increase participation and the ROI of engaging employees in this emotional way and their connection to their company.
- [39:16]
Mike Hoffman
That sounds like a great example of how a company can use AI to accelerate growth.
- [39:20]
Michal Alters
Yeah, absolutely. We're so excited about it. Yeah, for us, we really see AI as an opportunity that will only help us accelerate and enhance the company. Yeah.
- [39:29]
Alicia Yoon
So we're really excited. We're really leveraging biotechnology into our skincare formulations and you're going to see more and more of that. And it's just a very potent, sustainable, repeatable, very effective way of now making skincare formulations. And it's something that really opens up a world of possibilities and formulas that weren't really possible before. So that's something that we're really leaning into and really staying on the cutting edge of innovation. When it comes to product development and then when it comes to education, we're really excited, you know, we're going to lean really, really into our education that we're developing, that we're continuing to evolve because there is now so much information on skincare on social media and a lot of it is conflicting and we're getting an influx of our community members saying, I'm confused, I'm hearing this and this here. So really providing sources, you know, things that are cited, things that are very vetted and empowering our consumers on their skincare journeys.
- [40:27]
Mike Hoffman
Great. Well, Mikel Alter, co founder and CEO of visit.org and Alicia Yoon, CEO of Peach and Lily, thanks so much for being here today on your next move.
- [40:35]
Michal Alters
Thank you.
- [40:36]
Alicia Yoon
Thank you so much for having me.
- [40:45]
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- [41:28]
Alicia Yoon
All right.
- [41:28]
Mike Hoffman
Now let's welcome Emmanuel Afiang, Vice President, President, CTO Business Bank Engineering at Capital One. Emmanuel, thanks for joining us today.
- [41:36]
Emmanuel Afiang
Mike, it's good to be here again. Thank you.
- [41:37]
Mike Hoffman
Now obviously for many small and mid sized businesses, growth is the goal. But as they grow their customer base, what do they need to keep in mind?
- [41:45]
Emmanuel Afiang
Great question. Often businesses think about growth as customer acquisition and that's important. However, it's also important to keep strong relationships with their existing loyal customers. Building a bigger customer base requires both gaining new customers and keeping your existing base space. It's typically less expensive to keep an existing customer than it is to gain a new one.
- [42:05]
Mike Hoffman
And what do companies as they're growing need to keep in mind when it comes to loyal customers? How do they keep loyal customers happy?
- [42:10]
Emmanuel Afiang
I think customers just want to feel like the business cares about them. One way to reinforce that feeling is through personalized experiences which can be tough to maintain as the business grows. But there are some tried and true tools and tactics that can help. You can use a CRM to track customer interaction, preferences and sales history so your team has the latest information to provide excellent customer service. You can try loyalty programs or VIP experiences to encourage repeat business.
- [42:33]
Mike Hoffman
Let's talk about that a bit more. How can they help?
- [42:36]
Emmanuel Afiang
A well structured loyalty or VIP program can keep customers engaged and incentivize them to return. They can take a few different forms like a points based program where customers earn rewards for repeat purchases. The points can be redeemed for discounts or items of value. There are also tiered membership reward programs which offer customers increasing benefits as they join higher levels of membership, and VIP programs for top tier customers that can offer exclusive experiences or access like special sales or invitation to events.
- [43:05]
Mike Hoffman
You also mentioned that personalization is important. How can businesses use personalization to maintain their existing customers even as they grow?
- [43:12]
Emmanuel Afiang
Using the data you already have about customers, you can stay connected with them and show that your business understands their needs. For example automate follow ups or reminders like sending an email message or text when it's time to schedule a service or offering a seasonal discount.
- [43:27]
Mike Hoffman
And obviously everyone's talking about AI these days. How can AI enrich the customer experience?
- [43:32]
Emmanuel Afiang
Yeah, there are a couple ways that AI can be leveraged to impact and improve your customer experience. Here at Capital One, we apply AI to power exceptional customer experiences, which in turn boosts customer engagement and their interactions with us. These interactions give us insight into how satisfying those customer experiences are, which helps us continually enhance and refine the experiences we provide. Through this flywheel of feedback, we're able to apply even more customized real time solutions to unlock impact for our customers and for the business. AI and machine learning use cases are in production across nearly all areas of Capital One. These applications range from fraud prevention to personalized customer experiences to developer assistance and much more.
- [44:13]
Mike Hoffman
Emmanuel, thanks so much for joining us today. I love this conversation about how to keep your long term customers happy as you go.
- [44:19]
Emmanuel Afiang
Yeah, it was great to be here. Thanks for having me Mike.
- [44:22]
Mike Hoffman
Here at Inc. We know there are common obstacles that many companies face as they scale. So next up, inc's own Sarah lynch explains how to navigate growth without losing momentum.
- [44:32]
Sarah Lynch
Thanks Mike. It's the kind of problem every founder dreams of. Your company is growing fast, customers are pouring in, revenues up, and your team is firing on all cylinders. The then cracks start to show. Turns out this kind of dysfunction isn't random. As companies scale, everything breaks at predictable points. It's called the rule of 3 and 10, a pattern observed by Hiroshi Mikitani, CEO of Rakuten, also known as the Amazon of Japan. As your company grows, it hits breaking points, going from three to 10 employees, then to 30, 100 and 300 without any intervention. Processes that once made you efficient start slowing you down, and leadership styles that worked early need to evolve. If you can spot these shifts ahead of time, you'll be better prepared to grow without losing momentum. Let's break down why this happens and how. Leaders like Aaron Levy, CEO of Box, tackled these challenges head on. Back in 2000 2005, when Box was still a startup, Aaron Levy was deeply involved in every decision. But as the company grew and he was being pulled in too many directions, it became clear that this approach wasn't sustainable. This is a classic breaking point. Communication systems break casual, check ins no longer cut it. Hiring slows down because it all runs through the same few decision makers and leaders. Leadership structures buckle under the pressure. But remember, breaking points aren't failures. They're predictable stages of growth. So how do you get ahead of them? For Box, the first major shift was changing how leadership operated. When the company grew past 30 employees, Levy transitioned from being the go to person for every decision to building a team that could operate independently. He hired a COO in 2010 who had moved, managed teams of thousands and identified Processes to take over areas where Levy was decision bottleneck. Next, let's talk about hiring. Growing companies often rush to fill open roles. But more often than not, that approach leads to short term fixes and long term problems. In the beginning, Aaron Levy personally owned early hiring. But as the company expanded, he built a process that ensured strong judgment across the team to scale it. Levy's rule the 10 person test. So as you grow, only hire people you trust as much as you trusted your first 10 employees, no matter how big your company gets. While it's essential for growing companies to adapt and evolve, don't forget to preserve and nurture what works. At 100 plus employees, Box's open culture started shifting. New hires were quieter and used to rigid company hierarchy where it wasn't considered appropriate to alert a superior that they'd missed something or made a mistake. Levy's fix make the company's open communication culture clear. He reinforced to all employees that the company valued input from every level and that he wanted information to flow freely up and down the chain. Strategic growth is also about focusing on the right market. Early on, Box tried to serve everyone, both consumers and businesses. But as the company grew, Levy realized the split focus was holding the company back. Competing with Dropbox in consumer storage while also selling to enterprises was stretching the team thin. Levy made the tough call to go all in on the enterprise market and abandon the consumer side, even though it meant letting go of customers. The result? Box found its niche delivering a product tailor made for businesses. That clarity helped it scale to the billion dollar publicly traded company it is today. Growth isn't just about hiring more people and making more revenue. As your company scales, look out for the breaking points. Be ready to adapt and don't forget to preserve what you set out to create in the first place. Back to you, Mike.
- [48:39]
Mike Hoffman
Thanks, Sarah. In this season, we want to give our audience access to great founders like Alicia and Michel. So here are some of our viewer questions. How do you delegate to your leadership team and employees across the company to prevent bottlenecks as a company expands and to make sure you're making great decisions. So Michal, let's start with you.
- [48:55]
Michal Alters
We with it always encounter challenges and finding that our different departments working in silos. So a big emphasis for us as a leadership team is to understand and continuously improve our internal processes. We have a great mission that we all try to achieve together. We need to make sure that we really put our hands together on it.
- [49:15]
Mike Hoffman
Alicia, what about you? How do you prevent bottlenecks and how do you ensure great decision making across the organization.
- [49:20]
Alicia Yoon
We're pretty big on clarifying roles and responsibilities. But you know, there's that formal process and then there's that informal connectivity on a day to day basis because sometimes things just come up. And so I think it's a combination of really having a structured framework, very clear on roles and responsibilities, but always having that daily communication so that you have that informal connectivity for addressing anything that comes out up.
- [49:43]
Mike Hoffman
Okay, our next audience question is what is one thing that I can do to proactively prepare for a period of rapid growth?
- [49:50]
Michal Alters
Sleep well, take care of yourself. Yeah. Find ways to keep yourself mentally stable and in the right head space because that's what the company is going to need you for in the ups and in the downs.
- [50:04]
Alicia Yoon
I would actually say that the rapid growth is a great thing, but you want to make sure that, you know, you're still staying extremely grounded to your mission, your values and your sense of that, you know, business judgment so that you're not doing things like looking at things very short term and you're really still focused on building a sustainable, healthy business and not letting the growth be what just like leads you and making decisions that may not be judicious.
- [50:37]
Mike Hoffman
So here's another audience question. What does your sales organization look like and what role do you play in sales? Especially as the company's been growing?
- [50:43]
Michal Alters
Yeah, we have grown and expanded our sales team and then needed to shrunk and then needed to grow it again. So we've had multiple iterations. I've always stayed very close to my sales organization. I have a co founder who is focused on the day to day operation of the business and my focus is on the sales and go to market and even when we hired sales leaders and so on and expanded the team, I always spend as much as possible spend time with our corporate partners, our customers, our customer success team and our sales team.
- [51:21]
Alicia Yoon
We have somebody who leads our sales and education team. There are certain things that I'm very uninvolved in in terms of just like the tactics, the day to day operations. But where we have really close connectiv is the messaging that we're getting out there in terms of the education or bigger sales strategies. You know, what are we really working on for the year, for the half year, for the quarter and tracking that. So that has been invaluable.
- [51:48]
Mike Hoffman
And last question from readers. How do you get the right stakeholders inside and outside of the company to be on board with your growth plan, especially as it's changing whether it's moving towards more profitable growth or thinking about the way you position the brand.
- [52:03]
Michal Alters
For me, I always believe that at the end of the day we're going to prove with the results. So I lead with that and then communicate with different stakeholders in bad and good times as much as I can. And I think that having frank conversation, even when there are disagreements, explaining the rationale behind it, and be very transparent about why we think this is the right move is very important. And being very close to my sales team and our corporate partners and customers gives me that opportunity to always be with my ears on the ground so I can really give a good rationale for decision making.
- [52:43]
Alicia Yoon
It's so important to pick partners to begin with who are aligned with your vision. So, for example, brand equity is paramount to us, so we're not going to chase growth and at the cost of brand dilution. And that's something that we're all on the same page about. So there is this lens that we're all viewing things through. I think if that alignment weren't there, there would be a lot of colorful conversations. But it's always just kind of principle driven and that makes the decision making easier and the alignment easier.
- [53:15]
Mike Hoffman
Great. Well, Michal Alter, co founder and CEO of visit.org and Alicia Yoon, CEO of Peach and Lily, thanks so much for being here today on your next panel move.
- [53:23]
Michal Alters
Thank you.
- [53:23]
Alicia Yoon
Thank you so much.
- [53:25]
Mike Hoffman
And thank you. We hope today's conversation encourages you to strategize and adapt as your business grows. Tune in next time for more industry leaders, breakthrough businesses, and the strategies you need to make your next move. I'm Mike Hoffman, editor in chief of Inc. Thanks for watching and we'll see you next time.