What's up, DTC Pod. Today we're joined by Jesse Puji, who is the founder and CEO of Kahani. So, Jesse, I'll let you kick us off. Why don't you tell us a little bit about what you're building with Kahani and then we can kind of jump backwards in time and talk about your past as well.

Yeah, sure. So the best way to think about Kahani is ask the question, if Shopify or Squarespace or any of the big e. Comm website builders were to build today, what would they use? Would they use a website? Our answer is no. We think that what they would use is something that looks a lot more like TikTok and Instagram. And so that's what we're building with Kahani. The vision is, in three or five years, you won't go to a URL where you'll start scrolling and tapping around. You'll land on a video or really a picture that sort of takes over your phone. And from there you'll start to kind of swipe, tap, and use all the mobile features that we're used to using in apps.

You'll use those on an ecom URL. That's kind of the big vision. The first product we launched is really that's like the crazy vision. So we're like, we can't just start telling ecom people to do that. They'll laugh at us. Let's find something that everybody gets and everybody's familiar with. So we launched kind of the Stories functionality. So we have that sort of NAV bar at the top.

You can tap on those circles, and inside of that you'll have video picture exactly like you're on Snapchat or Instagram stories. And we've seen it have a pretty tremendous lift and impact on the websites that were our private beta customers. So that's kind of Kahani in a nutshell.

Yeah, and I think it's really exciting as you just think about form factor and the way people interact with different sites. Right. Mobile isn't, I think, one thing that was really exciting about when Instagram, TikTok, all these platforms popped up, their experience and their user interface for the way people actually want to consume content is so much more engaging than mobile websites. Like you were saying, just have these busted hamburger menus and it's always like an afterthought to the web experience. Whereas the way Instagram and TikTok and these other platforms, they design a truly mobile first experience. So that's kind of what you guys are being able to tap into, coming.

Up with this idea. We've been ideating a lot of different things and so we want to validate that these are good ideas but one of the things we did was have websites even changed in ten years and I kid you not, we went back to the Wayback machine, we started looking at ecom websites and they literally look exactly the same. Maybe the pictures are a little bit bigger, there's certain small things but generally speaking the experience hasn't changed in ten years which sort of blew our mind. Yeah.

And I mean it just gets me thinking, it's like being able to provide that as a service is obviously great for the mobile shopping experience but I'm sure even down the line we don't need to get too ahead of ourselves. It's like being able to provide different sorts of engaging experiences across any device right? Is that something you've thought about as well?

Yeah, I mean one day right? I think I'm one of those I always say entrepreneurship is like a video game, you got to beat the boss on level one before you get to level two. I don't know if you're a big gamer, but as a kid, you'd put the cheat code in, you'd go to Level Five and you'd get crushed. Because even if you could cheat your way to Level Five, you didn't even know what to do at Level five, because you had to have beaten Level three and Level four to figure it out. So I think the same is true for building businesses.

Yeah, absolutely. I just think it's always fun to like when you're ideating in a space right? And when you're pursuing a business you also always want to have the idea down the line like where can this go? So I think it's really exciting to just have some of those considerations and obviously as you beat boss one, two and three stuff is going to change but it's always cool to keep that stuff in mind so why don't we go a little bit backwards in time to the start of your career right? You've obviously been in the space for a little while so for our listeners who maybe aren't as familiar with you, why don't you give us a little bit of background about yourself in terms of how you got into the space know? Well now you're in SaaS but as well as e commerce, advertising, performance, marketing.

Everything yeah, yeah so I grew up, I was born and raised in St. Louis. My dad was a small business entrepreneur so kind of had entrepreneurship in my DNA, learned it as a kid, had a DJing company in high school, had a t shirt business in college so kind of all know, check the box of a kid who wants to be an entrepreneur one day. And I spent a little bit of time in consulting management consulting, and then a little bit of time on Wall Street. And I joined Goldman Sachs three months before Lehman filed for bankruptcy. So I was there during the craziest period you could imagine to be working at then, you know, after a couple of years, just my heart, wasn't it? I wanted to be an entrepreneur. And I'd always told myself, if I love those jobs and I'm in the top 5%, I will stick with them. But if not, then I think I want to be an entrepreneur.

So I sort of built this career up and then kind of on a dime. Moved to San Francisco in 2010 and said, I'm going to build a business. And talked to friends and mentors. They're like, oh, you're good with numbers data, go look at digital marketing, go look at online advertising. And we started poking around, and there's a longer backstory, which I could tell you if you're curious. But the long story short was that was right around the time Facebook launched their self serve ad platform. And we started playing around with Facebook, and next thing you know, it was performing for us and some kind of performance marketing clients we had. And we took that.

And next thing you know, we got a call from Facebook about 15 months in, in 2011 saying, who the hell are you guys? You're one of our top 100 global advertisers. And then we became one of their earliest marketing partners. So we had access to their API, we built software on top of their API, and eventually Twitter, Pinterest. And our early clients and customers were companies like, there was a bunch of companies that kind of fizzled out or startups that didn't work out. And then there was uber clash of Clans birchbox Dollar Shave Club, Peloton Blue Apron. And so we grew and scaled that business. We had a liquidity event in late 2015, early 2016, and I continued to run the business through 2020, and then in 2020 transitioned out as CEO. I continued to be on the board and then kind of got Gateway X up and running, and that's led to Kahani getting going.

So that's kind of the quick backstory.

Yeah. And I think that's really exciting because you've seen a couple of these transformational times. Right. I think the experience you have putting together Ampush is really exciting because you guys were at the forefront of Facebook, and this was a time before anyone was advertising there. Right. So you were coming from the lens of performance marketing, and you were being able to provide a service to now what are like major, major household brands that even they weren't able to do just because was it sort of like right place, right time? And you understood there was a massive ad arbitrage opportunity for them.

Yeah, there was a good three years where we were probably one of five companies who could make direct response work on Facebook. And so we actually had a line. Our hardest thing was hiring and training fast enough to be able to build the business up and build it. Yeah, we saw also lots of waves. We saw the daily deals wave, then we saw the mobile gaming wave, then we saw the Meal kit wave, and we were watching each of these waves take place. But yeah, we were super early to it and able to kind of build up that performance marketing. And I spent my first two years out of college at McKinsey and a lot of what we built was based on what I had. Like, this is one of the only jobs I'd ever had.

So I was like, all right, well, this is how they work with clients. Okay, what's the performance marketing version of that? And so we now have a lot of alums out there that are running growth at a lot of brands because we were able to really create a big talent training opportunity. Ampush has probably hired over 200 people out of college and trained them to be growth marketers over the last ten years.

Wow. And that's something that's also really cool. And I'd love to talk a little bit about your approach to talent because you have experience having scaled your own company before and now you're obviously getting back into it and doing again. But I mean, one of the things that we found when we first started building seeded was the fact that we could find smart people who maybe didn't have all the traditional check marks and we could train them really well. And some of our best performers on growth, on CX, on a lot of these different teams, they were people that we even one of our all time best people. She was literally working in Chipotle and we found her and she applied to us through Indeed and started running CX and was absolutely crushing it. So I just always think it's really funny that you're able to scale this up. So I'd love to dig into that a little bit more about who are the people you were hiring, what were you training them, what were they doing? And then where did they go on to? What kind of work did they go on?

Yeah, in general we were very similar. Right. And I always say there's this two by two matrix. There's kind of like smart and sort of like go getter on one side and on the other side is experienced and people in some ways not in a crude way, but can be like stocks, like people who are really smart and really experienced. They are sort of discovered already. Right. And it's really hard for early stage, especially at that time, we were unproven to attract those kinds of people. Then it's like pretty easy to attract the experienced, not go getters.

And they're actually dangerous because they can talk the talk. Everyone has hiring mistakes they've made and of course, you don't want the people who are neither. But then there's this category of go getter, but not experienced. And that was really we built the business around that category. And I think in general, we went after the top 25 universities, hired a lot of people out of undergrad. We also went and found ex bankers, ex consultants. I think the most interesting, the guy who's the CEO of Ampush right now, and then another guy who runs Growth at DoorDash, both of them, we had a couple other people through the years that came from this background is they were professional poker players. So I'll talk specifically, Trevor Reader went to Georgetown and then was so good at poker that he ended up playing poker professionally for four or five years.

And then eventually that didn't work mean he made enough money, but he was looking for a real job, and he came to Ambush, and he immediately understood growth and paid media. He just got it right. His brain just worked that way already. But then he's a creative guy. He come up with stuff. He built some of the biggest relationships we had, and he worked for Ampush for five years, and now he runs Growth at DoorDash. And he was super early. He was pre IPO to DoorDash, so he's done really well.

And I'm like, those are the things I'm really proud of. And John, our CEO. He went to NYU Law School, worked at Kirkland Ellis, this really fancy law firm. So he had kind of the pedigree, but then he literally played poker professionally for three or four years, and then he came in and he's worked at Ambush eleven years. So he started as an analyst buying ads, and now he's the CEO of the company. That's probably the most creative version, but we were always in the market for people who seemed to how to assess risk, like to experiment, trying different things. And then we'd hire kids out of college who had that entrepreneurial bent, who were analytical and quantitative. And most of the training, I'd say we had a pretty formal training program early on to get you the basics.

But there was a lot of apprenticeship modeling and a lot of career development. And so it became very clear in your first year, we wanted you for say, twelve to 18 months, become an analytical expert and become a T shaped growth marketer. Find one area where you're going to really go deep in and understand it and then make sure you understand everything else at a high level that would get you promoted to then taking a little bit of project management. A little bit of interacting with people, making sure. Then you get promoted one level up where you're the quarterback of everything and then you'd basically be the business owner after that. So the director would be kind of, you'd have a PNL, you'd be responsible for whatever. So we were very intentional about making it like a school of growth marketers. Really?

No, that's amazing. And one thing I'd also love to touch on a little bit is because you have so much experience in the discipline of not only building Ampush and starting your own brand. I'd love to just chat a little bit about what's the current landscape in performance right now. How are you thinking about that? What are some of the opportunities that you think about? Because I know over time more and more companies have come into platforms like Facebook and TikTok and all these ad budgets have gone digital. So as a performance marketer, what are some of the channels that are table stakes for you and then what are some of the other channels in performance that get you really excited?

Yeah, I think there's some kind of like staples. And I think frankly, the staples tend to be underinvested in the two most common ones that I think are really places I start or have started when we launched a brand is email and affiliate. Right. And I just think that one of my former employees, she's the CMO of Hone Health. It's a testosterone subscription and she's very blunt and she characterized it as follows I'm a testosterone subscription, I'm not your friend. Why are you on my email list unless you're going to buy from me? So her policy is like, you're either buying or you're getting off my email list. I don't want you in between, which is different if you're a multi skewer. But I love that perspective, which is like she's not afraid to hammer people with emails.

And I just think there's just a lot of juice in that orange that people still under squeeze and then affiliate. Affiliate is just a lot of labor and elbow grease and so people chronically underinvest in it. It's risk free. It's an agreement with another party. It doesn't really take a lot of effort itself to generate once you make the relationships. And I just think it's an area that I chronically see people in performance marketing underinvesting in, and always have and always will to some degree. So that's that. I think frankly the most underrated channel right now is Facebook, which I can tell you more about.

And I think the most excited channel out there is like I think TikTok is going to be a gargantuan channel.

Yeah, let's talk about real quick. So you were talking about affiliate, right. What stage do you think makes sense for brands to really be thinking about that? Is that something where out of the gates you want to be thinking about? Or maybe after you've got your real product market fit, you know, how your product is performing, then you want to start thinking about building out your affiliate strategy.

I think affiliate and email are day one strategies because you get someone else to send you traffic for free. Right. So even if you don't have product of course they're not going to like it. By the way, I think affiliate, you can treat it like they're early customers if you're a brand, right. You call them, you build a relationship with them. Hey, this is I'm Jesse. I'm trying to sell a new type of iPhone charger. Here's why I think it's a winner.

I'd love for you to place it on there. Look, I'm early. It's funny how much people hide that in the early days. And in my experience in my career, even as an experienced entrepreneur, I've found that sharing that truth and that vulnerability, people want to take a bet on you. That's what I would do as an affiliate or as an early, I would definitely do. An email, of course, is like, not only am I getting traffic for free, now I can get the person's email, and I can email, like, to me to build that to be like a baseline profitable business before you invest in anything else. And it takes one human to do that these days with shopify and kind of the supply chain. So in theory, anyone can do that.

No, I love that. And then moving forward, one interesting one you mentioned was yeah. What do you think about Facebook? Because I know maybe is it a different demographic that you have to be thinking about, or just in general, people are still hanging on, like, how do you think about that as an ad platform? Or do you mean it in terms of Instagram or whatever?

No, I think Facebook, instagram ads. I mean, look, there's a couple of things to remember when we zoom out. Number one is Facebook is 100 billion dollar revenue business, which means every morning a bunch of people wake up and they decide to spend a certain amount of money in an aggregate. That is a hundred billion dollar business. Even if we assume, let's say it's flat from last year, so it's not growing as fast. It's literally bigger than it's ever been. Right. When I started Ampush, it was less than a billion.

Even like 2015, 2016, when we had a liquidity event, I looked back recently, it was 24 billion. It became four times the size after we had sold. There's a lot of money being spent there, and there's a reason for that, right? It works. So that's number one. Number two is like, let's remember, CPM is not a number that Facebook determines. The amount of people on Twitter or I hear whining about, oh, Facebook CPMs are up. This thing is there's an auction running and a bunch of advertisers are bidding on that auction. And based on what the results of that auction are, facebook, the price is determined by essentially the marketplace.

It's my number one piece of advice for D to C entrepreneurs or even CMOS at bigger companies is when you complain about your CPA relative to your CPM, all you're saying is that I'm not a very good marketer and you go, well, what do you mean by that? It's like, well, other people are somehow making their business work up for a $20 CPM. It's your job as a marketer to figure out the click through rate and conversion rate needed to be able to compete in the market because somebody else is willing to pay $20. And so that was like a big focus as we built Ampush for a lot of brands, was, how do you improve that CTR and conversion in a way that's not just today, but continuous? Because the whole market is going to get smarter and more sophisticated. There's these creative players, there's other things. So you as a brand have to keep beating that. Essentially, you have to grow your CTR and conversion at a faster rate than the market CPM goes up, and that's the only way to keep your CPA from jumping. Right. That's the other big thing, which is those are all a lot of jargon and stuff there.

But I think the point is it's still a big pond of fish in one of the biggest, if not the biggest, certainly for demand gen. But the way to fish, you got to get better at it. You got to be thinking about more creative concepts. You have to have better hooks. Your landing pages have to be more compelling. You got to really market your product and market what you're selling effectively. And I think a lot of that is creative landing page, but a lot of it is also getting into the head of your customer and understanding their pain points and challenges and why they might want your product. But, yeah, it's certainly not as easy as it was in 2016 or 2017.

It's harder, but that doesn't mean there's not an opportunity.

Then moving to Kahani. Is that kind of where you started to see some opportunity saying, if part of this equation is getting conversion up, obviously you need to have great ads to be able to click through. And you're coming from all these different platforms. Were you kind of thinking of it in terms of now the back end experience? Now what happens? What can we do? And what's the service that we can provide to help lift that conversion?

Yeah, obviously we weren't sure if it would convert better when we first launched it. I thought it might because that experience works. And we said, well, who's good at engaging people instagram and TikTok? What if the ecom experience was redesigned in that way? But, yeah, I think that part of the reason conversion rates are 2% or 3% on mobile is because the answer today is I look at a video, then I go to this shrunken down desktop website and the way people drive you is like long form landing pages where you read a lot or a quiz or something interactive. Now, meanwhile, some people sit on Tinder and they swipe all day long with that Interaction Feature. Why is that not the way we're shopping? And so I think our idea is to really build a bunch of these tools and form factors that we think will ultimately convert higher. It's like convert more customers, but also get customers to buy more, which is also one of the most important pieces of profitability for a retailer. So we're thinking about all those things and we're learning as we go. By the way, one of the weird things for me about this business has been as we build the software, we then have to get it on people's sites to see what it's going to do and how it works.

So we're grateful to lots of customers who are willing to work with us and let us figure that out.

So one question I also had was so you did the Ampush thing? You kind of transitioned away in 2020 or so. Why don't you walk me through a little bit of your thought process? I know that part of it was like you building out your own brands to kind of come to this conclusion. So why don't you talk to us a little bit about what it was like getting back in the saddle after having started your business and trying to create a new business in the ecom space? What was that like?

Yeah, sure. I kind of transitioned out of Ambush in 2020. Took some time off. I relocated my family, actually, back to St. Louis, my hometown. And I was just like, what do I want to do next? And I grateful and lucky. I have people say, hey, why don't you go roll up a bunch of shopify stores? Buy a bunch of shopify stores. Right? A lot of friends were like, SAS, you got to figure out a SaaS idea.

Jesse you can sell the companies, and that's what you should do. And what I actually did in early 21, before I'd gotten anything going, was I said, the only way I'm going to know this is I'm going to try to do some of this stuff. And so I actually went and I talked to 25 small ecom businesses. I was like, Should I buy them? I know how to do growth. Marketing. Okay. What do you do? Tell me about your problems. Whatever the other thing I did was, I was like, I kind of want to launch an Ecom brand.

I want to learn. I want to get my hands dirty. And at the SaaS thing, I tried to force it, and I didn't want to because the ideas, they just weren't getting me excited. I wasn't feeling excited about these ideas. And there's plenty of ideas. I just wasn't feeling that excited. And it's something I've spent a lot of time learning to both first know what I feel excited about and not just chase everything and then also okay, cool. Then I'm going to follow that thing I feel excited about.

And So after talking with 20 or 25 entrepreneurs, I think rolling up shopify or whatever is a great idea. Like, it's a good business idea. I did not feel excited about the idea, and the way I've described it to people for myself is if you talk to me about my dream home or my house I wanted to live in, I would never buy somebody else's house and renovate it and change the drapes. I just wouldn't do that. I would go to an architect and I'd say, give me a blank piece of paper. Let's draw some blueprints, right? And so it was actually helpful for for me, kind of in my second act of like, oh, no, I'm an entrepreneur. I like to build things from scratch. And that was just a helpful learning for myself.

And then, yeah, on the ecom side, I started launching something, and I think it was just fun. It was fun how fast you could go. It was fun how everything was kind of self serve. But as we talked about just a second ago, it's harder than ever, I think, to launch an e comm store. The big guys are struggling. Small guys are harder to launch. And I kind of lived that. And I thought, here I was, this guy who had done all this growth marketing stuff, and the first brand didn't even make it off the launch pad because Facebook was really challenging.

And the funny story, by the way, there was like, facebook forces you to start off at $100 a day or $50 a day or something. And I have all these friends at Facebook, so I call in a favor. I'm like, guys, it's me. It's Jesse Poochie. I don't need this. Get rid of the daily limit. They're like, yeah, okay, fine, whatever. So, hey, Jesse, you could spend as much as you want.

And so, like, Labor Day weekend of 2011, I remember Memorial Day weekend. I'm like, yeah, we're going to spend $2,000 a day with this amazing gifs, and I'm going to run the Ampush playbook here. And I literally spent five grand and maybe got two conversions. And I was like, holy shit. And then I talked to someone, a friend of mine, Nick Sharma. And he's like, dude, what are you doing? I thought, I know how to do growth marketing. I'm the man. And he's like, yeah, you know how to do it for, like, $25 million.

Businesses, when you're first starting, you got to spend very little. You got to let Facebook learn who your customers are. You got to season this pixel. That's what they call it. And it was a very humbling moment. I was like, oh, shit. Because they don't know who your customers are. It doesn't matter how good your ads are, what you're spending yet.

But I was back in the game, which I think was the fun part. And then from there, you're like, okay, we're installing the quiz software, and. We're installing these themes, and I'm seeing this market and how it works, and that's kind of what got my wheels turning on what could be an interesting idea here. And I did immediately. I remember when they first showed me the first version of the site, I was like, God, is there nothing more interesting than this? This seems so aged. And they're like, no, there's nothing. Here's one theme that lands a picture. And I was like, really? And that's kind of when the kahani thing hit me.

It was like the summer of 21.

Yeah. And I think it's such an important part because that's such a big part of entrepreneurship in general. Right. It's like a lot of times, the best builders are the people who are solving their own problems. And you had to build in the space yourself. And then everything kind of became clear. You understood how all the pieces fit together. And you weren't just like, Speculating being like, oh, this is a SaaS that I should build because it makes sense.

In my head. You actually experienced the problem and then you were able to build off of that. So then what were the next steps? Right? You're building this company? You figured out how to kind of start growing an ecom brand, maybe from the ground up, which is obviously different than when you're running major, major ad budgets.

But.

How did you get started building Kahani? And what were the first steps there?

Yeah, I had started kind of this thing I was calling Gateway X, which is sort of the Venture Studio and still figuring out as I go and so we were building the brand. And honestly, at first, kahani. So what we would do for every there's this thing if you google Sequoia business plans sequoia has this like ten categories for outlining a business plan. So we had just thrown that in like a notion. Doc and anytime someone had a good idea, we would just write it up. So I sat down. I wrote it up. I'm like, what's the problem? This solves? Okay.

Engagement, conversion. They're super hard for ecom on mobile. What's the solution? Why is the solution different? Why now? How big is the market? I literally just outlined it, and I literally put it on a shelf because it was like, I'm not a developer, so I can't build it. And then I got lucky. That's like the next part of the story, which is like, a company I've invested in. A close friend of mine, David Rabie. He pings me literally out of the blue, going, my first developer. Who's the man who can get anything done.

He's looking. And it seems like what you're doing at Gateway X with the studio thing could be really interesting. And then kind of like the rest was history as soon as Adam joined. And then Adam. He's not only a unique builder but he's a very unique business and product guy. He really understands things at a level that I've never seen someone who's a developer do before. So I just got lucky. That's a huge part of every story, right?

Yeah, of course. And team is so important, and having complementary skill sets and being able to start building something out together is very important. So then once you guys have the idea you have a developer partner that you want, then what are the next steps in terms of setting the roadmap? You had the idea for the product pretty much ready to go because you've experienced it. How did you get your first couple?

I had this idea. One of the hallmarks of the way I like to build things is back to the video game analogy. You never want to eat your own BS when you're building a business, and everyone does to some extent, but if you start doing it, then you stop seeing reality clearly. So it was like, okay, well, let's think of this as stage gates. So the first stage gate was we were like, will people even engage with this module? And so before we spend all this money building out this product, let's just literally make like an HTML and CSS circle thing. And I think there's some people that links to other parts of the site, and internally we call them waypoints, but you can call them stage gates. And it's like, okay, to beat level one. If we debate level one, we want to see an engagement rate of like 10% with this thing.

We want to see that it actually we can move traffic around in smart ways. We put this on the site, the supplement site we had launched. And then we also got a couple of friends, small companies, who threw it on their site. And we're know it took us, by the way, six weeks to build. It took Adam six weeks to build. That was very fast, right? And we were blown away. Like, it got engagement. If there was a Hero product, it tended to drive a lot more traffic to the Hero product.

And we were like, OOH, okay, this is exciting. Like, we've seen something that it actually has an impact. And then we said, OK, let's build the rest of it. And so from November to February, we built kind of the first version of it, and we didn't have any CMS, any backend. We literally would say like, send us your media files. We upload them on a JSON file. We wrote a thread on Twitter, got a bunch of people to be the customers, to be our private beta customers. And we charged them, by the way.

Importantly, we didn't charge anyone for the menu, but lots of people will do me favors. And that's actually what I want. I want to see that they're going to pay me money or not. And that's a very valuable data point as an entrepreneur. And so then we got on a bunch of sites and we had no idea what to expect. And I'd say there were three things that got us really excited at that point. I'd say number one is we probably talked with 50 or so brands and every single one of them said, yes, my site, it looks old. I don't know how to fix it.

It's stuck in this format and I want something that's going to make it look more interesting. So that was awesome. The second thing was we saw that when it started to work well for people, they would make it a part of their website, like it was just part of their workflow. And we're like, oh, that's awesome if you can get them to that level. And then the third thing was it started to perform. It didn't perform for 100% of sites on day one, but as it started to perform, we started to see more specific use cases come through. And the way I describe it is we have two that we feel like we can see very clearly in a lens, and then we have probably like three or five that are very blurry in the lens, but we think we'll see them clearly at some point. And the first two, number one, the most interesting one was when we put it on fashion or multi skew websites.

It's a fun and engaging shopping experience and people will look at more SKUs during a session than they otherwise would, and they'll see more things faster and then they frankly buy more stuff that's kind of intuitive. So that was one use case that just immediately we saw people adding more to the cart, more AOV. And then the second one was for kind of a confusing product or a hard to understand or expensive product where the bar is higher and people are kind of they have their objections. People engage a lot with Kahani because it's like this interesting thing, they know what to do with it. And so if they could tell the story or explain what it does or how it does that with Kahani, then we started to see conversion jump for those sites. So, for example, there's a business called Halle Hair, who's a great customer. And their big challenge, it's a hair dye. And so people will come in and they would get to about to buy it.

They go, I don't know what this is going to look like on my hair. And so at the top of Ghani, it says, for dark hair, for light hair. They'd tap it and they could see stories that show the hair colors. And we saw conversion rate jump up pretty meaningfully on the PDP, like in the double digits. It was a really exciting process. And then we spent the whole summer building the back end CMS because the biggest complaint was, what the hell do I guys, I need to change things, right? And now we've launched open beta, which now has the back end CMS. We're building more automation tools in where we can look at your entire product catalog and actually develop the stories for you. So suggested kahanis? Essentially.

And so we're going to keep building that. But that's how we built. We built as little as we needed to to get to the next level. That was always how we built, to kind of validate the next data point that we were going against.

Yeah, and I think that's so important when you're building any sort of business is to understand what's the MVP of it at that stage and how do you get there and understanding how to set those up, right? Because I think it can be really easy to say like, oh, we're going to build and you're making an unrealistic investment without being able to assess if there's traction. I think the other really important thing you mentioned was let's get our customers to pay or not pay, because that's the only way you're really going to know. And I think that's something that I think about a lot. It's like when you're building a business, you want to see if not just people that like it because they're doing you a favor, but because they actually need it. And that's how you know that there's a broader market. So having that in your mind as you're building, I think is really important for any service that you're doing. Not just this. This also applies to D to C products too, right? You want to make sure that people genuinely want to buy it, not just because they're like, hey man, yeah, I'll buy your thing, but because they actually need it and because it solves a need.

The other thing that I think entrepreneurship is incredibly scary. It's a really scary thing to put all your time and your whole life into one thing. And I do this, everyone does it. But entrepreneurs are very good at lying to themselves. It's a common trait in the industry. I kind of want to put myself out there, but then I'm going to do these small things that are going to make me not quite put myself out there. Like, I'm not going to charge anyone, just give the product away for free. That'll get people to do things.

And so, yeah, I agree with that. I think that's a big area to be concerned of. And the other thing you said that I totally agree with, and it's the number one advice. Someone the other day was like, I want to start a wealth management for millennials and it's going to be an app. And they had this huge game plan, or it's like financial planners. And I was like, oh, cool, why don't you start a newsletter for those millennials telling them about financial advice and see if you can get 10,000 people to sign up for your newsletter. And then they'll talk and they're like, oh my God, that's so hard I'm like. So if you can't get people to give you their email, then don't charge them anything.

Just realize how hard it is to get anything to kind of go and get them scale.

Yeah, the best part about that is like you said, it could be the newsletter example that you just used. But for every business that you're building, there is an MVP of it, that you can prove traction and in certain cases, yeah, you're going to actually have to go build to the next stage to see if that's the thing that people want to go pay for. But whether you're building a SaaS, a consumer product, an app, there's just different ways to test out that the demand will be there. And the other thing that you mentioned that I think is really important was that idea about being vulnerable and being honest with yourself and not lying to yourself. This is something that I've seen with a lot of fellow founders and I think a lot of it also has to do with the funding environment with different VCs. So as a founder, right, you don't want to put all your cards on the table because you're thinking about how you might go raise your next VC round. But sometimes that same logic starts to affect your own business, because then you start either buying into the BS or not wanting to actually be vulnerable and be just straight up with yourself and what you're seeing. So I think that's always an interesting thing, because a lot of founders get Kind of Wrapped up, and they're thinking about, like, oh, I need to be Able To tell the public this, I need to be able to tell The VC.

This.

Our numbers need To Look like this, and through that, they get Lost with their own path.

Yeah, I think that's spot on. I think the reasons you come up with that you're doing something, a simple test for me, by the way, is like, if it's not my customers and it's not my employees, those are the two sort of people I serve, groups I serve right and maybe suppliers and some, depending on your business or whatever. But then starting to say, I have to do this for this group. Every time you do that, it's going to pull you off mission and pull you off target. But you're right, if people say, oh, I have to do this because PR requires that I do this or investors need that I do this, or whatever, and you can just really tie yourself up in knots and people do it all the time.

Yeah, and it's ironic too, because the more kind of vulnerable and true you can be with yourself and with all those parties, those tend to be the businesses that start with a really strong foundation and can kind of grow out and tap into the other opportunities from there. And then the other thing that you had mentioned that I think is a really cool, actually, opportunity for a lot of these commerce brands is that example you gave between the dark hair and the light hair right. And being able to use your product to do that? I think yes. While many DTC products are the same, each one has its own customer, it has a different thing and everyone kind of has something they're trying to solve for in some way. They're trying to communicate with a specific buyer. Right. So in the case if it's a hair product, it's like, okay, well, what color is your hair? If it's a supplements product, it's like, okay, well, what's your diet like? If it's a physical product, it's like, what's your body shape like?

Right.

So anything that you're selling kind of has all these different personas and if you can't quickly tap into and personalize for that persona, you're going to have a harder time converting because you're not being specific.

Right.

So I think that that's a really cool opportunity to be able to tap into with Kahani.

Yeah, I think it's now just a natural way people take in information on their mobile devices. Right. They have a thing they tap and they want to watch, they don't want to scroll even just like a crazy one that came up as we're thinking about the vision is like filtering on a mobile website for lots of different products is sort of insane. Like you got to click this X thing, you got to add things on your mobile phone. It seems nuts, right? It's almost like you want to talk to it and just say, filter for red size twelve shoes and then it shows you all. It's crazy to me, that just how behind the ecom mobile UIUX is.

That sounds like something you can integrate down the line. It sounds like it'll forget that one, right? No, that's super cool. And then the other thing I kind of wanted to talk about is so you obviously went about building things the right way for Kahani, getting your different levels of acceptable MVP done before you move to the next stage, but how did you think about capitalizing the business as an early stage SaaS founder? How did you go about, you know.

I'm luckier early on I could kind of fund some of this myself. And Gateway X, I had built it and I had some investors at Gateway X and Gateway X is kind of a venture studio, so we had enough, but we got to the point of, I'd say validating demand and sort of with less than $300,000. And that was me paying salaries to people, essentially not paying myself. And again, I'm lucky. I actually didn't pay myself at the beginning of Ambush. I'm not paying myself now, but like paying enough to kind of get the thing off the ground and validate that it works. And to me, that's where urgency comes in. You want to move fast you want to make because the meter is running in the taxi, right? And so I think you want to get going and figure out if there's going to be a there there or not or putting money against something else.

And startup founders are really capital allocators. They do a lot of deciding where things get spent to generate a return, which is kind of the core of capital allocation. So, yeah, we try to keep it scrappy, we try to get off the ground. I did think about bootstrapping it, especially once we launched in February, because we quickly, I think within a month and a half we're at ten K in MRR. We probably could have gone harder and faster, but one of the things we saw for the product was it had to be easy enough so someone could find the value quickly. And I think one thing that was lucky in this case was I was like, well yeah, the product wasn't there yet. There was no CMS when we launched and I didn't want it to turn into a services business, I wanted it to be a software and product business. And so over the summer, I actually decided that we'd go out and raise our seed round for it because really getting the right product and engineering team around, building this was important in my case.

Yeah, I think that's how we're thinking about capitalizing it wanting to kind of raise enough money and I still think you can raise that amount. There's a certain amount you can raise where you still have a lot of flexibility with how you build the business. And I think that's an important thing entrepreneurs should keep in mind is not every business will become a billion dollar business and that's okay. And sure I'd love for this to become a billion dollar business, but I also don't want to maintain flexibility with how we grow and scale it.

Yeah, and that's the other thing that we see a lot of. It's just like founders that may overcapitalize their businesses just because they don't understand what the opportunity and what the ceiling is. So in the early stage, it doesn't matter as much, but down the line there are certain businesses that have lower ceilings than others and that's just a fact. And if you capitalize them the wrong way, you're going to be in trouble. So I think just having that ethos of like, okay, how can we do this in the scrappiest way possible while still being time efficient as well? So using capital to, like you're saying, buy time if we know this needs to be a product that we need to build and code and that's what's going to be the next driver of our business. Let's not wait forever till we do this because we already see the traction here, so let's invest in that. Right?

Even if we raise a few million bucks for Kahani, we're still going to focus on getting kind of PNL break even in the next year. Because the other thing that's nice about Bootstrapping is it really makes it hard for you to lie to yourself. If we can't get to break even in the next twelve to 15 months, we might not have product market fit because we don't have enough revenue to offset, which is frankly, low expenses in the grand scheme of things. Right. Even if the company, say, spends $50 to $75,000 a month, if we can't get I'm only describing let's say we charge a customer $500, that's only 100 customers. We can't get 100 customers to buy this. As it stands today, maybe it's that idea is not that good. So I think one that's nice thing about Bootstrapping is it's harder to lie to yourself because you got to pay the bills, right? And I think it's much easier when you're raising money to lie to yourself.

No, that's so true. And before we wrap up here, a couple last things I kind of want to talk about is just like the evolution of commerce in general. It seems like there's been so many different apps and experiences that different companies have tried to really tap into to really help out these people who are operating commerce businesses. But where do you see commerce headed beyond what you guys are building in Kahani? What are some of the trends and things that you're really excited for in.

The future of you know, when I worked at Goldman, one of the most valuable things I learned was how short term oriented people are and markets and, like most of the best long term investors, like, you know, the Warren Buffett's. But even there's plenty of others out there, they're really just good at thinking beyond a few quarters. And that's true for most entrepreneurs as well. And it's pretty crazy when you see what's happening right now. During COVID ecom penetration, I think, was at 14% or something like that, and it went like this, it went vertical. Oh my God. In every market cap, everyone was like, oh my God, these are all huge companies. And it was all because of COVID and everyone knew it too, which is the most weird part about it, right? And then COVID stopped and everyone was like, I want to go travel.

And now that line's gone horizontal. But funny enough, it's like basically going back to the same exact linear trend that the chart everyone's seen. And yet the big fact isn't the big fact ecom penetration is not even 20% of our economy yet, which I'm sure anyone listening to this podcast or anyone in our world goes, what? What do you mean? That means only one in five transactions for stuff happens online. So first of all, I just think it's early. I think we're in the second or third inning of all of this, and I think there's going to be a lot of things that change in the future for how things go forward. I think I was just talking to one of my colleagues today and saying small business has always driven the United States, and the last small businesses were maybe steel mills or random boutiques in a shopping mall or a nail salon. Those are all great, by the way, and they drove the last 30 years of commerce, maybe prior to the internet or maybe from 1970 to 2000 or something. But the next big wave are going to be the small business, are going to be the ecom like things like ecom and small things online.

And I think people just underestimate there's a lot of huge chunk of the economy that's willing to make 100,000 to a million dollars a year, which is typically what a small business makes forever based on running their boutique online. And I think there's going to be millions more stores coming online in the coming years, essentially. So I just think we're early and there's a lot more that's going to happen, especially via kind of small businesses versus startups, obviously. I think the nature with which how we engage with ecommerce is going to change a lot. I think there's going to be discovery. One of the crazy ideas we have for Kahani in the future is like, if we could figure out what everyone's doing, how could we connect stores with each other? Could you look at the kahani kind of like an instagram story ad and go to another site? Are there ways to kind of aggregate a super crazy idea we had is like a discovery app? We'll know which stories are getting the most engagement. What if we had a third party app where you could just go and look at those stories yourself and then go shopping and all of a sudden we have discovery as a part of kahani. So I think there's a lot more weird, crazy stuff that's going to happen in ecom, and I think it will be volatile and it's a little barren right now, but I think that's just a short term orientation.

Yeah, well, that stuff will be really exciting. And I mean, going back to your roots, it kind of solves for the acquisition problem that you were talking about with people who are thinking about performance and different new, innovative ways to reach customers that have really high intent. So I think that'll be really exciting, really excited to see where you guys continue to go with kahani. So for our listeners and anyone who's tuning know, where can they check out kahani, where can they try it out? I know you guys just opened up the beta.

Yeah, we just opened it up today. The open beta, the self serve tools are ready. So kahaniapp.com, kahaniapp.com, or the twitter is at kahani appkahani. And yeah, we've got a waitlist open. We're looking for folks who want to build with us and experiment things with us that's kind of the stage right now, but would love it. Cool.

And for any of our listeners, where can they find you online? I know you're pretty big on Twitter. Where's the best place to connect with you? Is it there?

Yeah, I think Twitter is Jspuji Pujji. And, yeah, I'm on Twitter. That's an easy place to find me.

Sweet. Well, thanks so much for coming on the pod today, and we look forward to tracking your progress with Kahani.

All right. Thanks, Blaine.