#236 - Patrick Campbell, Profitwell: Bootstrapping Pricing SaaS to a $200M exit

What's up, DTC Pod. Today we're joined by Ronak TREVETTI, who is the co founder and CEO of Pietra. So, Ronak, why don't you kick us off, tell us a little bit about Pietra and the services that you guys are building out for the creator economy.

Thanks for having me. Pietra is a platform that allows creators to launch and scale their own consumer product lines without having to hire a team or really figure out any of the hard operational stuff.

One reason I was really excited to have you on is because, first and foremost, like, a couple of the creator led brands that we've had on the podcast already have used you guys. I know there's a lot of overlap. You guys are backed by Founders Fund, who are Miami based. We're Miami based, so we hear great things about Pietro all the time. And obviously, in the podcast, we're really focused in on not only consumer and commerce brands, but as well as creators who are launching their own brands as well. So why don't you walk us through the traditional process? Like, what does it look like for someone? If you're a creator, you have an audience, and you're looking to now extend the reaches of your entrepreneurial sort of spirit and get into other sort of stuff. What does the current landscape look like with Pietra? And actually, before that, what does it look like without Pietra?

Yeah, great question. I think this is kind of the underpinning of our company, but when we were looking at creative individuals and entrepreneurship, now you can call them creators, influencers, social savvy, entrepreneurs, whatever you want. We noticed kind of two ways that someone can start a business. We found on one end, there were these super mega creators that were big enough for operating partners to essentially come to them and say, hey, look, we're going to give you a bunch of money and we want to start a business with you. And when they say with you, they literally meant we're going to take most of the money and we're going to use you as a marketing figurehead, essentially, and you're big enough that we can actually put a bunch of risky capital behind because we are betting that we can build a business around your name and your likeness. And that was a very popular and still is a very popular model for the top 0.1%, right? If you're big enough, someone's going to be able to back you with their cash, their team, and you as a creator at the top of the totem pole, can kind of sit back and play that creative director role almost, right? Just go promote and get some money in the bank. That was one end of the spectrum. The other end of the spectrum is this other industry that was built out over the last ten years or so, which is this made to order ecosystem where it wasn't the top mega celebs that were designing really cool product lines like George Clooney and his alcohol brand or the Rock or whatever it was infrastructure around.

Hey, look, you're a small creator. You want to launch some merch you don't have to take a lot of risk on. So we're going to have ten to 20 products that you can basically drag and drop a logo onto, and we'll print it on a commoditized T shirt or mug or cell phone case. So what we saw prior to starting Pietra was we were missing this component in the world that was like, I would like to launch my own candle brand, sneaker line, denim know, chocolate line, whatever, my own Athleisure line. And all of these things were not really available to the regular entrepreneur who wants to sit behind their desk and figure out how to get it done. And if you were someone who went deep into that hole, you'll realize that it would take you tens of thousands of dollars in a year or two to actually get a real meaningful brand off the ground. So Pietro comes onto the scene, and what we do is it's fairly simple, which is we provide three core things to anyone who wants to start a business. Any creator of any size.

Doesn't matter if you're a mega Celeb or you have ten followers, we have a platform where you can work with the world's best manufacturers in the world to create a custom product. Could be anything you can think of. We could basically make it through Pietra, and then instead of learning how to actually operate your business and ship your products around the world and import it. We actually remove all of that difficulty and say, look, set up your website using Pietra or connect an existing website that you have, and we are going to receive your products from your manufacturer. We're going to put it into a fulfillment center. And when someone makes a sale on your website, on your Instagram account, on your YouTube account, on our website, whatever it may be, we're going to ship it to them anywhere they are in the world. So you, as a business owner, went from having to master this supply chain and understand all these pointless things like warehousing and labor and importing and exporting and whatever, to I have a website. I have a place to sell my product.

I have access to the world's best factories. And now all I have to focus on is design and promotion. Everything else is taken care for you through the platform of Pietra.

I think that's so cool and so powerful in terms of what you're really enabling, because it's not just enabling like you were saying. It's not just about creators. Creators obviously have probably a leg up because they've got a built in audience, they've got something that they can tie their brand into, and they're like halfway there in terms of being able to sell something so long as they create something the right way. But all these other parts that you had just mentioned about figuring out the supplier for something, managing the importing, managing the fulfillment, the warehousing, all of that is just stuff that really makes commerce, businesses, hard to scale, right? Hard to build, hard to scale from a capital perspective, from an operational perspective, from a team perspective. And those are all these things that might seem trivial in size, but as they stack up, it makes it so. Whether you're an individual, a solopreneur, or a creator, it makes entering business almost prohibitive. Right. Because it's just too much to take on when you have other life and other career ambitions going on at the same time.

Well, I think the biggest value add two is like, a content creator is going to grow the business by making great content, because that's what they do. And if they're not an influencer yet, they can always stay consistently making content. You can grab them while it's still early and they haven't blown up, and they can just keep making content. I mean, could you imagine, like, a creator having to learn how to figure out storage for inventory, cash flow management, et cetera, and have to stop making content? I love that about the business.

Yeah, it's kind of interesting. There's this realization I had when I was in San Francisco. So I worked with Uber before starting this company in the heyday of Uber back in 2015. And it was so funny. I'm from Toronto, so I moved to San Francisco. I was new to the area, and I was thinking to myself, wow, if you're an entrepreneur in San Francisco at the time, in 2015, and you had an idea the infrastructure around the Bay Area seven years ago was that very quickly. You can have everything you need to actually focus on the part of the company that matters. You can have office space, you can get funding.

You can have a data center that you set up on AWS and, like, an app template for you to start coding in Android or iOS or and, like, literally in a week, you could take an idea and start building that company, and then we fly back home, Toronto for Thanksgiving. And if my buddies, who would be like, I'm launching my own Watch brand, and he's like, I've been at it for two years. It cost tens of thousands of dollars, and I'm still trying to look for a movement supplier in Switzerland. I'm like, Dude, there's such a discrepancy from creative people designing cool things and the world that I was living in with tech. And if you really think about, like, it's because the infrastructure around technology was built out. You didn't have to go spend six months building a data center, because in a couple of clicks, amazon just set up your data center for you. You didn't have to go figure out a commercial lease, because in a couple of clicks, WeWork gave you office space. And that discrepancy, I think, just like in the tech sector, allowed all of these amazing developers to make apps and start companies, uber being one of them, there needed to be some sort of huge push on the other side of the spectrum, and that's where we really saw an opportunity.

I'm like, it shouldn't be that hard for someone who has a cool idea to start their own sneaker line. They shouldn't have to spend three years of their life trying to do this.

Right now, you guys have multiple services, offerings for the creators that cover different elements of launching a brand. But taking a step back when you were thinking through this about your friend trying to launch a Watch brand, what was the first thing you tried to prove out to sort of see where was the biggest bottleneck or something? How did you approach whatever that was? That was the first thing that you wanted to prove out?

Yeah, so it's kind of an interesting story. I remember before we pivoted fully into this business, we had a platform at a super small scale, and it wasn't really about the creation of products and helping them get packaging and produce their products. It was more about helping them sell on this marketplace. And the first insight that we had was I remember it was Christmas a couple of years ago, and we were super small. I remember thinking to myself, our top seller was someone who had an amazing instagram, always on private jets, selling a lot of products, making this content, but was always behind on orders. And I remember thinking to myself on December 23, I'm like, man, this person is like 50 orders behind everyone that came to shop on Pietro is going to get so pissed at me. And all I wish I could do is be helping that person with their business so that we would then not have angry customers for Christmas, right? And so that was the first insight of like, if we could help these people, is there demand on the other side? So there was never really this question of do people want to shop from people who make great content and visit their platform? That was kind of already proved out. It was actually proving out the other side, which is, could we build a system that these jet setting creators who literally don't spend more than a month in one place at a time, love their vacations, make a ton of money on other things and side hustles? Could we actually build a system that is strong enough and flexible enough to support these types of businesses? And so that's the first thing we set out to do.

And why it took us a little bit to actually build this platform is the first thing we wanted to test is can someone come in with an idea for a blush cream as a beauty blogger? And can we get from that idea in their head to products that they're selling online? Right? And each step of the process, can we produce a custom product with the manufacturer such that it's an awesome product that the creator really loves? Can we get the packaging made and can we put the product in the packaging? Then can we store it in a warehouse? And can we do this that's under 100 units in their early days? And that was what we set out to solve. Which was like, can we get the world's best suppliers such that these creators can work with them? Then can we operate the infrastructure such that these creators can do a product drop, sell a million dollars worth of product and then fuck off to Bermuda for two months to enjoy their victory and then come back and say, I actually want to make something completely so, like, I'm now doing linen. You can we do like, could we build a system step by step that cater to that type of customer? And it took us almost a year to actually build out all the components. And so we knew the demand was there. We knew that creators wanted to be entrepreneurs. That was not something that we really had a question about. You talk to any creator over the last three years? They are business people already. So launching our product lines, it's a natural extension for them.

It's just a different form of being an operator, right? Like, their thing is distribution in content, which is not the norm of what we're used to see from operators. It's just a modern age kind of operator. So that being said, would you consider this as a three way marketplace then, where you have their customers, you have the creators, and then you have the suppliers? Or do you not interact directly with the customers? Your people are the suppliers and the creators.

Yeah, I would think of it as it's definitely not a traditional three sided marketplace. It is more like a platform that hold your breath here, has a marketplace inside of it as one of the components. But we say platform because these creators use the tools to build their companies using pietra. We facilitate as much as we can, and we use things like a marketplace as a way for us to service the most number of creators with the capital that we have. Right. And so it's not like we set out to say, let's build a three sided marketplace. It was, how can we get a million creators talking to a million different factories in 50 different product categories at the same time every day without us? And it turns out that the marketplace is a perfect construct for that type of interaction. And so when I say platform, it's because when you create a custom product, you're actually using a marketplace.

When you use other parts of the product, you may not be interacting with the marketplace in that way. You might be setting up your ecommerce website or you might be connecting your website to the platform. And so it's more of a larger platform than a pure marketplace or a traditional marketplace right.

Than something like Alibaba, for example, where you're just transacting with the supplier.

Yeah, exactly. I used to say these things in the early days, which is, like, back in the day, there used to be this thing of like remember when before the iPhone was invented, everyone had an ipod touch and then a phone and then your wallet and then keys. And at some point you were like, I had a mini disk player and an MP3 player. And at some point I'm like, yo, we have got to the point where innovation has had a lot of these awesome point solutions, but someone needs to aggregate these things because the problem now is not that each individual one of these things is not providing value. It's actually cumbersome to figure out how all these things interact and keep them all with me. I think that's how we got to where we are today. It's not that a young, smart entrepreneur couldn't figure out how to stitch all these things together. It's just that there's actually so many complex things to stitch together.

And you take someone who's like, I'm going to a Revolve party next week, they're not going to spend the time downloading an app from some app store and then figuring out how to import something from overseas and then connecting those two channels together so that the Alibaba suppliers get to the Illinois Fulfillment Center. Someone had to come in and be like, look, no one cares about stitching these things together. That's the problem. They're not going to stitch it together. So bundle it all up, make it easy to use, same functionality, maybe better, and present it to these customers so that they don't have to ever worry about these things for the next 2050 years. Why does someone who's selling a candle, selling candles online and has like, this really cool candle brand, why do they need to care about labor and importing and warehousing and staffing and sourcing? Like they don't. They want to design candles, they want to show up in a warehouse, and they want two day shipping everywhere in the US. For a cheap price.

That's it. Like everything else, take it off their plate. Let them go on their vacations. Let them be creative. Let them make content. And that's where we find so much value that we're providing.

And so I'm curious what you guys define as a creator. So we mentioned the huge creators that are pushing a lot of volume, but then we also mentioned the smaller creators that don't have access to this. So are you guys trying to serve any level of creator? Like, what do you define as a creator?

Yeah, so this is a good question. I think in general, the term creator is very ambiguous. And so we define it internally as someone who either is or wants to build a business and a living online. Right? And when you really think about someone who wants to build a business online or a living online, I should say they basically bucket themselves into two categories. You're either selling digital content or you're selling physical products. Physical things or digital things. You might be selling content to brands or content directly to your customers, or you're creating merch. But broadly speaking, you have two avenues for monetization.

And an interesting thing that we don't do at this company and we haven't done from day one, is we have not built pietra to cater to the really big creators. We have built pietra after realizing the really big creators, they have the means to get someone to give them a million dollars to start their own beauty brand. Like Selena Gomez doesn't need help starting her beauty brand. Trust me, there's people lining up to do that. But that's not truly where the opportunity lies. Right? The opportunity lies in what about the other 650,000,000 creators just on Instagram that have over 10,000 followers? Think about that. Mind boggling stat, right? These people are trying to build an audience online or have an audience online or it's big enough to support a small business and they don't have access to the tools to essentially push their craft forward and monetize in a different way. What's actually happening is if Pietro wasn't there, they'd find out that as each new influencer is minted, to borrow a phrase from Web Three, the brand deals are getting smaller and smaller.

The check sizes are getting smaller and smaller. Why would someone pay more and more when there's so many of them? And I was talking to a creator who was launching her product line, and she was a model. She's like, we saw this in the modeling industry, like, years ago, which is at some point, you were getting thousands of dollars a day to go on set and take photos. And those days, it's been five years since you get that. Now the average is a 10th of that to go on set. And it's because the supply is so plentiful, right. When we think about creators internally, we think about the social savvy entrepreneurs that want to make a living online. And we think about it as not selling our products into the biggest, baddest people, right? Like, let's all just get the Kanye West of the world to launch some products using our tools.

We look at it very democratically and say, how do we build a platform such that anyone in the world who has a dream to start a business can use our platform and start it? And you pay exactly for what you use. And it doesn't matter if you pay. If you want a warehouse that stores a million dollars worth of products, you'll pay for that. If you want to store 20 products, also, you can pay for that.

Yeah, and creators might oversee this, but that's another huge value that you provide with economies of scale, which is then, because you have that volume, you can get special deals with suppliers that these creators by themselves just couldn't get.

Exactly. This happens everywhere in the supply chain. And honestly why we see such a huge influx of existing brands, existing creator brands, coming to our platform. What we find is our role in the ecosystem is to go to all the world's best suppliers and say, look, working with any individual person is hard, but if our platform can bring you thousands of these people over a year, will you lower your minimums so that instead of one person getting 110, people can get ten? Right. And that's how we even brought in, like, Kim Kardashian launched a candle brand or a candle line at one point, I think, a couple of years ago. And we were able to get that same supplier to come onto our platform. And I think his minimum order now on Pietra, because he gets so much business, is like 200 units. So think about that.

You got the world's biggest creator who literally just came out saying they're doing like 400 million plus in sales, and you get to use their same supplier, same quality. You have to design your own product, of course, but now something that you can spend $1,000 and make like 200 units. And so we've done that for production, we've done that for shipping and logistics. You don't have to go and buy boxes and pack your stuff up and go to the Ups store and pay them now we will bring you the economy to scale and say, look, we'll provide you two day shipping anywhere in the US. Under a pound for $5 flat. What does this mean? Your clothing brand has US wide Amazon style efficiency and we can then go to our brokers and say, look, we're going to negotiate these rates because we have the volume. And so never along the path would you be able to say something like, I can do this faster and cheaper. It just wouldn't make sense, right.

We have the economies of scale to say, look, we're not trying to screw you here, we're literally trying to negotiate on behalf of all the creators and then you get to take your little piece of it and that's why our rates are better than just about anything you can get in the world.

Ronak I think that's really amazing to see where you guys have been able to go now that you've been able to build out this marketplace, get those economies of scale onboard a bunch of creators and be able to provide that experience, which is going to be amazing, right? If I'm a creator or I'm just an entrepreneur and I want to come on and build my business through pietra to know that all know the sourcing, the fulfillment, all the hard parts about building the business are taken care of, right? And I think the other thing that's really important that you kind of pointed out was the idea that some of the biggest, biggest creators you guys focus on the long tail of all creators. As opposed to saying, let's worry about Selena and a couple of these really big people, because, like, you're saying, they have enough money to hire feastables, right? Like when Mr. Beast launched feastables, they have a whole team built out with founders, operators, they're like running this like a proper business, right? He's the biggest creator in the world, but for every single other person, they don't have access to 50 people lining up, being like the minute you're launching your brand, we're all there working for you and that's where you guys are able to come in, which is so, so awesome. So one of the questions that I have is now that we've reached this point where you've created this marketplace, where you have the suppliers, where you have all the people who are able to do this, I know from my experience, Ramon's done this as well. Building marketplaces and building these services is hard, right. It requires a lot of capital, a lot of time, a lot of effort, and there's a million different chicken and egg problems that you're solving at every moment of the journey. So what was like the first iterations of this? And what did your marketplace look like at the earliest of stages and how.

Did you build it up from there? Yeah, I think it was hard to build it from the ground up, which I don't talk about this very frequently, but I should for the other founders that are listening, which is like, the reality is we got a little up. We started knowing that we had to build this marketplace, and most valuable marketplaces start by really owning the supply side and making sure that if you take a look at Uber, for example, one driver is very valuable compared to one rider, and losing that driver, I should say, is very hurtful to the ecosystem. And we built it up brick by brick, I like to say, with our bare hands. And then we got a little bit of luck from the pandemic. So what happened was we knew that we had to get the world's top thousand factories on the platform, and we had to negotiate with them to bring the lowest minimums for the marketplace to even have a chance of working on this demand side. So what we did was we went and spin up all these teams around the world to go and find the region specific suppliers. For example, mr. Beast's chocolate supplier is on Pietra.

You want to go compete with them directly, go find him on Pietra and go launch your health, know, chocolate, spinoff brand, whatever. Don't copy him, but like, do a hot chocolate or something, I don't know. But we went and had the opportunity to say, look, we're going to invest in building up the supply side. At the same time we did that, the world shut down, so you couldn't get to those countries. So we had people on the ground overseas, india, China, et cetera, literally with a two year head start to go. Go to every region that you can find the best suppliers and bring them onto the marketplace. By the time the restrictions are lifted by the like, the restrictions aren't even lifted right now. We now have the top categories and some of the best suppliers both in North America and around the world.

And because of a little bit of that luck and our brute force hustle that we learned from, kind of from our Uber days, we were able to bootstrap a marketplace that now you can come and NBA players can design sneakers with factories in, like, crazy sentences that I never thought I'd be saying. Mega celebrities, which I won't name their names because they're dropping new products, but all household names can come in and say, hey, I was in this name. A big retail partner. I'm out of their deal now. I want to do my own stuff. And the marketplace was full enough and big enough to actually get that initial set of that demand. And so there was a real tipping point. It wasn't at ten factories, it wasn't at 20 factories, but probably around 5100, 200 factories.

We really started seeing, like, holy cow, we're seeing Nike suppliers show up on this platform. Gucci supplier show up on this platform. This is kind of cool. And then we were able to we know from our Uber days and our team is a bunch of ex Uber people. We got that flywheel spinning where we could say more suppliers brought more creators, more creators brought more suppliers, and the flywheel was finally spinning. And now I think it's like something crazy. Like, every day I open up our Slack channel and we're approving factories and profiles that have been submitted, like in the hundreds per day, which is pretty nuts to see. We don't approve 100 per day.

That would be crazy. But people are like, submitting their profiles for review and there's like tens of thousands of semi customizable private label products that are listed. It's kind of cool to see. So the brute force day one stuff doesn't go away. The cold start problem that Andrew writes about in his book, that didn't go away. We just had two years where the world thought it was going to explode. And so we were like heads down building and we kind of had a little bit of air cover and so, yeah, I don't know how another company can come and compete with us, given that there is no way that money can solve this problem. Good luck flying to Xian Province and Shenzhen and finding factories to train.

They're back to business now. They're back to being backed up. It's very hard for them.

That's the biggest beauty of the supply side of marketplaces. You just can't pay for that.

Yeah, I mean, in Uber's case, we learned the very hard way you can, right? And so we knew starting this company, we knew that if you go into an industry and build your company such that money can steal your supply base away, then you're probably going to be in a very bad position long term. For us, what we found was like we were in the opposite position where we did all of the hard work and it was all hustle based and person based, where now we can have a self service sign up platform that people can just come in and sign up themselves and we could just approve their profiles and interview them, et cetera. You can't pay anyone right now to go sign up 500 factories in China. You can't even fly there. So again, there are companies where money will like, your supply base is so fungible and there's such a low cost of transferring, like Uber versus Lyft versus Get versus whatever. You can just literally turn on another app where for us, it's way different. It's on the other side of the spectrum. There's a huge switching cost for these suppliers to get retrained by another platform.

It was hard enough for us to negotiate with them that they were already on these other scaled platforms like Alibaba, et cetera. So we got to be like the second one in there and they were open to that during a time of like, no one was purchasing stuff during COVID And now that we're back up, it's like money. And even hustle won't solve that. Even if you have a team of 20 people, I'm going to know that you have a team of 20 people and it's going to take you a year, and I'm going to have a team of 30 people following you around to do the same thing you're trying to do. Right? That was a joke, guys. I'm not going to follow anyone around. We like competition. We welcome it.

No, that's a really good point. In terms of defensibility, also, when you're building a marketplace, in the case of, like you were saying, if you're a rider and you're picking between Uber, Lyft and maybe another service, it doesn't really matter because it's the same service. But where you guys and your relationships with suppliers, they're looking for business, right. So you're driving them demand and you're driving them demand in a way where you're like, we're helping you take instead of having to manage relationships with all these people, we're giving you a ton of business. So they're not going to be like, turning you away for being like, oh, we don't like your business, we like someone else's business, because you're giving them what they want, which is business. Right. And then, like you were saying, in terms of the defensibility, in terms of building out the supply side of a marketplace, it would just take an extraordinary amount of time because all these factories and suppliers are individual operators in different countries. For a different service to come in, even to do the same things you guys are doing, it's just going to be a total schlep.

And they could buy it. But even if they bought their growth, they're not buying you out, which is kind of different, right?

Right. Yeah, totally. And I think the thing that people forget is, and maybe even some listeners, it's worth kind of clarifying, which is the world's factories. There's a finite set of factories in the world making stuff, right. And so a lot of people go like, oh my God. So do you think once you digitize the world's manufacturing, that everyone's going to be creating the same stuff? And I say, obviously not. Right. How long would it take? I'll give you an example of someone creating, like, a candle that looks like a cereal.

Yeah, this is really cool. If someone was telling me that magic spoon should do this as one of their merch items or something like that, and I'm like, yeah, it's pretty good. And what I was saying was like, how long do you think it would take if I said, here is a candle supplier who can make anything, any fragrance, any shape? How long do you think it'll take you to launch a line of popcorn scented candles? I don't know. You could probably line up a million people and how many people are going to overlap with that? You can make anything in the right? Like, it's not limiting the creativity, right? The factories make what they can make. You can make whatever textile you want. And so I think a lot of people think, oh my, like you have Mr. Beast's chocolate supplier on the platform. In fact, those suppliers are going like, we are just chocolate.

Like, we want to work with people who want to launch unique brands and we're not going to copy these big brands that we're already working with. That's not the thing they'll literally say, like, sorry, that's like a patented custom formula that we made for them. But if you have another idea, then let's work with you on that idea. I think a lot of people jump to the conclusion that everyone's just going to be making the same stuff. 50 of the same lipstick formulas. It's actually not true. What's going to happen is just like apps, it's like they're all not the same. Some people copy some people, but for the most part, you're working with someone and the most unique products are going to rise to the top and sell.

And these suppliers are not incentivized to go copy rip off Nike's designs. They'll be like, no, Nike is one of our like, we're not going to compromise copying Nike's designs for you creator X. But if you want to change these designs and you have something else you want to do, we're happy to work with you.

Ronak, one question that I've been thinking about, and I'm sure a lot of other entrepreneurs have as well. With any service, it seems like what you guys are doing is you're really knocking out all these different problems that an entrepreneur is going to have when they're building a business. But with everything, there's like costs and things involved, right? So for all the convenience that you guys are providing, you guys are obviously making money as a business. I'm really interested if you could kind of talk a little bit about what the costs are to start your traditional business, which involves all the things that we're talking about, right? Like the sourcing, the warehousing, hiring staff, dealing with the import taxes, all this stuff, versus what your solution is. And I don't know if you've thought through that just like in a really simplistic way, right? Like, if I'm launching my business, what are the costs I'm considering to launch my brand with Pietro versus what are the costs am I considering by launching my brand the old fashioned way?

Yeah, good question. I think it depends on where you are in the process, but I think that this is a solution that takes something that quite literally would cost you probably 100,000 plus. If you think of people that you have to hire, plus cost of goods for your minimum order, you're really in the order of 100,000 plus in investment. If you want to launch a real brand that has a chance of making noise, right. And selling and growing and becoming an awesome brand. And we've taken something that's literally, like, in the hundreds of thousands of Dollars mark, let's say between 50 and 100,000. And you can go and use Pietro. You could pay $39 a month to get access to all of this stuff.

And you could probably do a production run with custom packaging for, like, under $800. Think about that for a second. Yes, you'll have a low number of units, but you don't have any people. You're not paying people 50, 60, $70,000 a year to work on your operations team. Right. You're not paying $2,000 a month to a factory to have an account that you can then use at some future.

Date or giving up half of your equity to a person who's an expert in supply chain.

Exactly. Even worse, that's like the worst case, right. Where a creator has no control over their company, and so they're like, because you know how to set up a factory, I guess. And you have some homies in Switzerland that knows how to make watches. You're taking 75% of my business. We take that and say, you can start your business for $39 a month and literally under $1,000. And when I say under $1,000, you could probably start a clothing line for under $300. Right.

You won't have a lot of units, but you could. And so we really bring that down to really bare minimum to give every creator the opportunity to do so. But let's say it's like even 1000. It's from 100,000 down to 1000. Then you start looking into you just pay for what you use, but you're only paying once you make a sale. So if you pay, for example, there's a one dollars packaging fee when you make a sale. We literally go to the warehouse or we go to the shelf, we package it up in your custom packaging, let's say, and we ship it to your customer. We put in a polymailer, we ship it out.

You only pay that one dollars on shipment when you make a sale, right? And so a lot of the costs are not even real costs when you think about it. They're just taken out of your profit. But this is why I think that what we are building is truly just going to change the way businesses work, which is you're taking something and you're making 100 X cheaper and 100 X faster, right. And 100 X easier, for sure. But it's very similar to the virtual kitchen space. Right. You take something that starting a restaurant is, what, $200,000 or something of investment in two years and finding a head chef and a fitness space. And now Travis Kalanick in La is like, get a ghost kitchen for like, I don't know, hundreds of dollars a month in rent.

List your product on Uber Eats and all of a sudden you took something that's like, you can launch a Mr. Beast style restaurant for what, one 100th of the cost, and we're basically just doing the same thing, but for consumer products. Yeah.

And the other thing that I think that resonates with all entrepreneurs here is one of the most important things is being able to quickly and cost efficiently test and validate ideas, right? So if you're an entrepreneur, this is like the best thing ever. Because you can spin up a brand without being like, oh, we just poured a million dollars into this thing and oops, it doesn't work. Right? It's like you can actually validate these consumer sort of direct to consumer plays really quickly. Is this something that looks good? Is this the product that we want? Is this something that consumers like? And if they do, then great, you have a great problem. Now you have a scaling problem. You don't have a product market fit problem to address. So even thinking of you guys as a way to be able to evaluate that is an amazing tool for an entrepreneur.

And even the way before that you would validate, and some people have talked about it in this podcast, it's like to derisk validating, it's like, oh, just make a fake brand or something. Don't have the product, charge people. And then worst case, just refund them and then go and start the business. But it's like as a creator, you have a brand. You can't just take money from people and then be like, oh, okay, here's your money back. We'll be back in a few months. And then go and try and launch the business. That's your biggest asset as a creator.

It's your brand.

Yeah, I think honestly, that's so funny. I think a lot of people outside of this space just think, just go do that. It's fine. Another kind of interesting, I bet you all the DTC founders on this also feel this pain, which is like, just go ahead and do a preorder. It's like, have you seen you're going.

To starting a shopify? Yeah, it's hard.

It's not like preorders are destined to succeed. Like, you'll have a ten X less conversion as soon as you say, like, ships in twelve weeks. Right. I think that the future is not like, oh, do this riskless thing because the consumers are actually like, I just don't want to wait eight weeks to figure out if you're going to ship me your collagen powder. That's just like, I'm going to forget the world is working faster. Right. What you want to do is you want to say, I want to bring a product to market in the absolute lowest cost, fastest way, give you the best experience that I know I can scale up, and then gauge your interest on if you like this brand. Right.

All these hacks that I think we've seen over the last seven, eight years, I just see them working less and less. And there are a lot of talking points from VCs, from people who haven't started brands, who are like, just go, just draw a picture and put it on a website and see if people want it. And it's like what you find is, I would say to that person, you actually don't realize how valuable the audience and the attention is that these creators have built over time. You're dismissing it as something that you can toy with these customers or these potential customers and this is not true. It's honestly the same with content. You just can't throw away pieces of content. It's like that doesn't exist anymore. No, there is no such thing as mailing it in.

You got to do it properly. Same with your podcast. You can't just be like, you have enough episode to fuck it just like, fuck the audio, fuck the mics, it's fine. Just see if this works. And you can do a pod on a plane with your iPhone. No, dude, you don't get it. We've built something that's like the quality matters now in this day and age. So our job is to not we take this very seriously.

We are not trying to shortcut you into something that's going to be shitty. We're trying to give you the best quality thing for the lowest possible price at the fastest possible speed. It's not going to be zero cost and it's not going to be zero time. Right? You're not drop shipping something from some API that you've connected to your shopify website, but we want to give you the ability to experiment with the best possible experience and then go figure out if you want to scale that out.

And also that's assuming that the creator gets their first sample or their first batch, it could be totally messed up because it's not a vetted supplier like they are on your platform. So if I were to play devil's advocate here, let's say, how is pietra there for you if shit hits the fan with a supplier in one way or another? Is it completely self serve? I'm completely on my own if it was on me and miscommunication or whatever. And the packaging now isn't, right?

Yeah. So there's a couple of ways that we handle this and it really comes down to the framework of our company or it comes down to the last point I made, which is like not skipping steps. So what we do is we are a platform and we have a marketplace where you could produce products and creators are there to connect with suppliers and go through the process. And you'll see on the platform, we walk you through the process. Go and order samples before you do a production run. Don't go off and talk to someone and be like, I want you to make this T shirt. And the supplier goes, Cool, I can make it and order 10,000 units. We really say go and get a sample.

Because at the end of the day, we are here to facilitate a relationship between you and the supplier. We do have a relationship with the supplier to make sure that when shit hits the fan that the creator is protected. And the supplier is protected, by the way, right? So there's fraudulent payment on one side, for example, 50% upfront and couldn't pay the rest, et cetera. And then there's like, you made the product wrong. And so what we do is we take a very human centric approach to solving these problems. We tell the creators, look, your job is to make sure that you are getting in writing through the platform, through your chats. You are working with your supplier to make a sample and then a final product. And you're having that conversation before you pay for the invoice.

You are going to make 1000 of that thing that I've said yes to. Then let's say the supplier goes rogue and we've had this before. We agreed that the sample was like white wax and you've poured green wax into the things like, what's going on here? And we'll jump in and mediate the situation. So we'll say, look, there's proof from the supplier, right? We go to the supplier and we say, look, the customer has complained. We have proof that you said that you were going to ship this thing and you make this thing. So now we're going to work with you. We're going to refund the customer and we're going to work with you to pay this back or refund the batch or do it again. And there's a bunch of different conflict resolution paths that we can take.

But for the most part, we go and protect the customer. If the customer has done their job of making sure that they've done their work as well, what we don't do is we don't say the creator goes like, make me 1000 candles. And then we look back and you say you didn't even ask for the fragrance or the vessel or the vax type. We don't know if you phoned the supplier afterwards. And there's nothing here for us to say that they made a mistake. Why did you pay for a $5,000 invoice on something that you had never seen before? And so we'll take a very human centric approach, but we do protect the creator around and the supplier around. Things like fraud and blatant. Like we like to say going rogue.

And yeah, that costs the company money, but it's one of the things that you pay us for. Similar to lost packages, right? Like if you're using our shipping service and someone's like, hey, I bought this thing, we ultimately then go work with DHL and say like, USPS, DHL, whatever. It's like, hey, you lost this package. We're going to file a claim on behalf of this creator. We're going to try and get it back. We'll refund the creator and then work with DHL to recoup that cost. So we play a mediator role, but by default, this is a self service platform and you're working with the suppliers, and it's your job as a creator to kind of inbound us and say, like, hey, something happened. We need your help to resolve it.

Totally. It's the same in our marketplace. I mean, you have the data, right? So it allows you, if you have to intermediate, to get in there inside with whoever you think followed the proper instructions based on your onboarding processes for both sides. And these experiences then improve the onboarding processes. The team learns, gets implemented into the product and just prevents that from happening in the future. But Ronak, I know you guys did a fundraise recently. I know you mentioned earlier that there was an inflection point around 100 suppliers. So just want to learn more about what has been the stages of the business.

What did you guys prove out in that seed stage? I know you did the Series A, so let's talk about that and where you guys are going and what gets you excited about the future of Pietro.

Yeah, I think a lot to unpack there. I think in terms of stages, we lived in a different world last year, but I think the stages are not coming back to reality. And so we used our seed stage to prove out this nugget of an idea, which was actually pretty hard to prove out, which is, do creators want to start their own businesses in general in the physical product space? Do suppliers want to power these businesses in some form? And can we build a platform that can cater to lots and lots of people at scale, where it works as an automated system by itself? Right, and so that was the first stage of the company. Can we even convince ourselves, forget investors for a second, just convince ourselves that these three parties we can make happy through technology? And so getting to the Series A was that you're talking about single digit thousands of customers that are happily using this product. You have some glimpse of like, wow, this could probably be tens of thousands of customers you're really raising at the Series A to say, we're going to get to the next level. And you're probably talking in the single digit millions of transaction volume, or GMB. If you're a marketplace, if you're a SaaS business, it's probably a couple of million dollars of arr, et cetera. But you're really looking for that Series A, like nugget.

And so for us, that nugget was like, I remember we turned it on, so to speak, where we had three categories before we fundraised, and we were like, wow, we went from signing up hundreds of people in a week to thousands of people in a week. So something meaningfully changed by ten X, like, holy shit, there's something here. Now we're probably at that, like, daily so we got the Series A to kind of say, look, we've been toiling away in this infrastructure world and we have this squeaky platform. And we took the Series A money and said, we're investing in making this. We're proving out this concept that this could cater to 100 million dollar business. Just the next step. Like, literally from single digit millions, can we 100 X this? And we're not going to say we are going to 100 X it right away. We have some crazy growth numbers of probably like 60 Xing it or something like that.

But what we were proving to ourselves was with the Series A money, can we meaningfully power these businesses as they scale up? And can these businesses reach millions of dollars in sales? And so prove to ourselves, like, holy crap, this isn't like powering your mom's candle business with 50 units. We have people that are selling their products in Urban Outfitters and Anthropology and selling a million dollars of product in a month online. We're proving out that our platform gets to that level. And so now, as we look to the future, I think what's very exciting to now have proven out those two phases and we think about growth in the future is we're really proving out now, can we become the cheapest, fastest, easiest way to start or scale a consumer product business? Right? And that is a really fun future to think about, because if we become the fastest, most affordable, easiest way to do something, it becomes the default way to do that thing. And then in five years, just like pre Uber, we forgot how we got around. It's like, oh yeah, buses. You move into this world of we see the future looking like if you have a website that's selling an awesome product, why would you ever need to hire more than two people at your company? Right? Are you building something that necessitates you learning these things, or are you really just hiring like, a head of growth and like a marketing person, and you're the content head? And that's now what we are really building out with this world of like, what does $100 million look like? What does a billion dollars look like? How do you support millions of merchants through these services? And how do you scale it up in a balanced way that doesn't crush the company and make money while doing it and all that fun stuff? So I think that the advice that I would give other founders is and something that I fell victim to is like, I don't think, looking back, that you could skip any steps. I think you got to prove at the small scale it works.

And you got to go zero to 1,000,001 to 1010 to 100 and choose any metric, GMV, revenue, whatever, and you'll realize that you can't really skip from 500,000 to 50 million. That world doesn't exist. You want to as a founder, you want to go and fundraise and try and skip some steps. But in our world, we are building infrastructure and we need these businesses to actually mature and get better and prove to ourselves that we could support them. Now, we're fortunate to have gone through that pain over two years and now we can go and do some of the fun growth things. And I'm fairly confident that maybe by the end of this year, or even maybe by mid next year, for most of our product categories, most of the products being created, we will be the fastest, most affordable way for someone to start a business. A person, not just a creator, a person in the world. And so that's really exciting for us and that's how we look to the future.

And I know that's like a grandiose vision, but I think we're closer to it than we think.

No, I think that makes a ton of sense. I think one thing that really stands out is how thoughtful you are in terms of building the business and not saying like, oh, we can just cheat through this stage and build things the wrong way. You got to build things the right way and you have to build it. Otherwise it's just going to be a bigger headache for you down the line, right? Especially when you're dealing with something so physical and all these other businesses are depending on you. If you don't build it the right way, it's going to just an exponential headache, right?

Right. And look, I will be the first one to admit that when we came back to the presales and stuff, look, I remember sitting in a WeWork having someone who shall not be named. And I remember very vividly being like, they sent me a photo of what the candle will look like. Let's go ahead and start selling it. And the final product turned out not to look like the photo. And I remember being like, holy shit. Imagine this was someone who was actually prominent and their livelihood depended on this being what they said. Even that person at a small scale was like, this is devastating.

How do we make this right? I literally told people that they're going to buy this really awesome looking thing. And you realize it was all like Photoshop tricks. And I'm like, wait, we have these people's livelihoods in our hands, so we got to take this stuff pretty seriously. And so that's where we learned you can't skip the steps, these preorders, these photos, it's like, no, go make the product that you're going to make 100 of because guessing it is going to ruin the customer experience. And that's all you have at the end of the day, right? These people that are getting duped, they're not going to buy from you again. And then what did you do? You spent the last five years building an audience, and all of your audience thinks that you're a. Fraud. That's brutal.

So we learned the hard way, and.

Especially when you grow organic, growth is going to come from creators who hang out and run in circles with other creators. Oh, how'd you build your business? Oh, we built it on Pietro. This is how you do it, that sort of thing. So really being authentic to that customer experience, I think is really important. Renak as we wrap up here, just a couple questions, just, like, for fun. And then also I have one for d to c pod, but one question is, I know you have a bunch of brands, so I don't mean for you to shout out any in particular, but why don't you name one really cool brand that you think is awesome, that's built on pietra?

This is a tough one. You're asking me to pick between our kids. You know what I'm going to do? I'm going to pick how do I do this in the okay, you know what? I'm going to pick one of the brands that here. I'll pick a good one. I got one. I got one. I would say my favorite brand is a brand called erin evy. It's a swimwear brand.

And the reason it's my favorite brand is she started using Pietra and then was the first person that ended up working for the company after using Pietra. And so that one I can't get in trouble with. She was an early employee of Pietra after using it and basically saw that her swimsuit brand that wasn't big by any stretch of the imagination, but she saw and she was like, I want to build this and help other people. And after that, I think, like three or four people at this company already also had their own businesses through the platform. So I'm going to take the easy path and know employee number five or something like that. Aaron evie swimwear. Check that out and definitely support her. She's a swimwear brand.

Love that.

And then when it's a customer as well who's used the product, you're going to just get even more insight. So I love that. Next question. This sounds like something that could be cool, even for me and Ramon, right? We have the podcast. We've always thought about building different products, and we both have venture backed SaaS businesses. I don't really have the time or bandwidth to create my own consumer package business, and I don't want to just phone it in like you were saying on Printify or something. So if we wanted to start something for d to c pod and just approach it as like, a merchant signing up with you guys, right? What would that process be for us? Say we want to start making really cool hats with you guys. What would that look like on pietra?

It would be pretty straightforward. I think you can sign up. You can literally in the first search box that you see, type in the word hats. It's going to give you all the private label hats you can customize really quickly order samples for. And then it's going to give you a bunch of suppliers that with their past projects, you'll see that you can work with to make these custom hats. What's really cool about that is for time strapped creators, we actually have introduced a premium plan where if you want to, you get access to a sourcing specialist for 30 minutes. You could book a time for 30 minutes who can basically get you from like, I have this idea. I don't have a lot of time.

Help me with three brands, three suppliers, and she'll work with you on that call to very quickly say, like, here are the top three suppliers. This is what you want. I'm a specialist in this space. Let's order you some samples. If you like it, here's how you order inventory. And you can basically leave that call being like, wow, I have everything I need. Once those samples arrive, I know exactly what to do. And so I would say you can launch a custom hack collection in under an hour's worth of work in a week.

And it could be something that you'll never be able to get from a made to order website.

Now you're put to the test, Blaine.

Now you have to do it.

Otherwise I'm about to book a call right now. Let's get it done.

You got to sign up. You got to subscribe. But what I would say is the one thing I want to add is our product is best for people who are not looking at a smash and grab type of solution. But for example, if Dtcpod wants to have a website that's called like Dtcpodmerch.com, and it wants to feel more like cash, apps, clothing line, where it's this ongoing thing that is going to generate revenue for your pod and people can support it, and you actually know that you want that to always exist. It's not like we're doing a hat drop of 50 hats. It's like, keep this core collection. There's a hat, a T shirt, a crew neck, a candle or whatever. And that kind of runs in an automated way.

That's where you can think about pietra being super valuable, because then you'll get ongoing value for something after just doing the initial setup, right? So I wouldn't say start with just a hat. That's cool. Do like a hat, do a T shirt, do a crew neck, design them all with one theme. And then be like, this is our core collection. It's on our website or on our Pietro shop. You could do it really easily from that, and then it's there forever. And when your inventory goes low, you'll get a notification that goes like, hey, your inventory is low. Do you want to re up? Hit this button and your suppliers will already be notified.

So that's how you can think about leveling up your merch. I like to say, like, you'll have a consumer brand around the podcast at the end of it. Yeah.

And that's what we want to do. I don't want it just to be a throwaway thing. If we're going to do it and we're going to have anyone wearing anything associated with us, I want to do it right. So I'm really pumped to be able to check that out and give it a shot for ourself. And then the last thing for our listeners, where can they find more about you personally? Like, are you on Twitter, LinkedIn? Where are you? And then where's Pietra?

Yeah. So you can find Pietra@pietrastudio.com and then on Twitter, the real Row show on Twitter. And that's what happens when you create your Twitter profile in high school. But the other thing I'll say is, anyone that hits me up on Twitter and is listening to that podcast, I'll give them a little perk when they're signing up for the platform so we can help support their brand in some way. So if you find me on Twitter and you DM me and you're listening to this Pod, The Real Row Show, ping me and I'll give you a little promo code or something to get started.

All right, man. Well, thank you so much for coming on. We learned a ton. Excited to see you guys continue to grow, support the next wave of creators, entrepreneurs, and yeah, man, can't wait to have you when you're down in Miami for your next board meeting. Let's run it back in.

Definitely, definitely. That will be a fun one. All right. Later, homies. Thanks for having me. Bye.

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