Welcome to the Atlanta startup podcast, the briefing room for the innovation ecosystem. I’m Lisa Calhoun, your host and general partner Atlanta venture capital firm, Valor Ventures.
I’m excited to welcome Jennifer Silverberg, the CEO of SmartCommerce here on Atlanta startup podcast today. How are you doing, Jennifer?
Jennifer: Fantastic, thank you.
Lisa: And I also have my cohost Robin Bienfait, co founding partner at Valor.
Robin: Hello everyone. Great to be here.
Lisa: Robin and I are really excited to hear a little bit more about your story –what are you working on right now?
Jennifer: Last year, I’m proud to say, um, we went, we went like five times the amount of products that we help get into carts. We got over $200 million worth of products into cart. Those are massive numbers. Now is the beginning of 2020. And so it’s a beginning of so many things. Our clients are big consumer packaged goods companies, so they tend to think of cycles and years. So we kind of have all of them right at the beginning of the year, wanting to think through what is this next year gonna look like, what do we need to change?
How do we adjust what we’re doing? And what’s awesome is because we have kind of a strategic space in our, in our client’s portfolios– they tend to bring us on at the beginning of the year and help define some of the changes in the strategies as they’re going to have based on consumer behavior we saw over the previous year. For me, this is like the coolest time of year because it’s less about the technology and more about why the technology and how the technology and how to apply it in new ways that, that maybe they haven’t before so that they can get more benefits. Today, I had two major strategy sessions with two major CPGs and we have some more coming up. And that fires me up cause I get super excited about how people use things and how people, how the path to purchase is shifting over time.
What brought you to this? How did you get involved with this major CPG strategy sessions?
Jennifer: I have to go back in time a little bit. My team is almost all from a company called Channel Intelligence. Channel Intelligence was one of the first companies to recognize that we needed to create a path between where consumers were finding products online and how they could buy them in real world. Because you’re buying toilet paper, it’s not a digital product, but you’re making a digital purchase. And so we created the first thing, “where to buy.” It was this multistep process that turned out, it worked really, really well in certain categories like electronics and sporting goods and so forth. It worked so well that our technology was underpinning Google Shopping, and Google acquired that company back in 2013.
So one of the things we noticed is that the path to purchase we had created at Channel Intelligence, while it worked really well in certain categories, it left CPG hanging because the way you shop for iPhones or computers is fundamentally different from the way that you shop for toilet paper or green beans. That need was becoming more important because I know we all as consumers are seeing our own behavior shifting to where we’re buying more of that stuff online. And so the brands actually had a greater need to be able to drive that. So back in 2016 we had a theory that if we did something a little bit differently, if we made it a little bit easier, if we met consumers where they are rather than trying to take them somewhere else to buy products, or to act on their impulse to buy a product, that we would be able to help these brands out.
I spent about 20 years doing strategy. That’s why it’s fun, maybe because it’s like a callback to what I was doing but 20 years in, in how consumers behave and building brands that consumers would want and helping understand the path to purchase with brands. So for me it was sort of natural to say there’s a gap here and I think we can fill it. And then I had these brilliant team members that had worked with me at Channel Intelligence who were able to build the technology to fill that gap. So very quickly, I brought on some team members–we all spoke the same language and knew what we were doing already. We began to move in lockstep and I’m able to do what I do, the marketing and consumer behavior side of it.
They’re able to do what they do, the technology or understanding of data because we’re underneath the covers or a massive data company, um, all at once. And so I have fun because it’s kinda like having a ready-made family, having a ready-made company. Same people.
You know, a lot of people would say that this is the kind of startup that might be built in New York or some of those other centers, but you’re building it in Atlanta. So how is Atlanta playing into all this success?
Jennifer: What a great question. Cause it’s interesting, a lot of our clients are actually outside of Atlanta. We actually have fewer, you know, big CPGs that are based in Atlanta, but the talent in Atlanta, because of the cost of living being a little bit lower in Atlanta, and because of the airport in Atlanta, makes it easier for us to get around.
Plus we have this sort of major technical funnel that’s coming from Georgia Tech, Georgia State, which, you know, we hired somebody from there. It’s the great tech centers that help make everybody smarter around us in addition to the people who we have as a talent pool to be able to call from. So it’s kind of like a confluence — it’s affordable. Some people have asked, why are you not in San Francisco? You know, why are you not in the Valley? Because the same person who costs $100,000 here would cost us $400,000 and or more in the Valley.
So Atlanta–it’s smarter, it’s more capital efficient and access to technology and access to the world’s greatest airport are important to us.
I mean, I’m in the air probably three days out of five most workweeks. And so for me to be able to, you know, be close to an airport that can take me directly, almost anywhere really matters. I know that sounds silly, but that’s massive.
You know, and Robin and I think also access to the world’s greatest investors. I’m being a little bit facetious here, but I definitely want to make sure our listeners know Valor is really proud to be an early investor in SmartCommerce. It’s fun to interview a founder whose journey we’ve been tracking for so long. But speaking of that, I mean you’ve raised quite a bit of capital from others as well as you move forward. Who is becoming your ideal investor?
If someone’s listening to this and they’re, and they’re starting up, I would highly recommend that you sit down and try to define who you think your ideal investor’s going to be now versus, you know, maybe, maybe don’t think of it in terms of time, but think of it in terms of, of checkpoints for the company. You know, when you go from idea to something you can sell, when you go from something you can sell to something that you’re selling a million or 2 million or whatever, and then as you move beyond that. For us, the first thing we needed were investors who understood the vision and were willing to participate with us in forming the vision. Because if we’re only as good as our team, you know, we’re only as good as our team. I have a great team, but we’re only that good when we bring investors around with us who can add to that, that thinking and can and can push us in some of the directions.
Valor was one of those. Valor invested twice. I guess I can say this–once when it was a vision and another time in what I would call early growth. So the first thing you need are people that buy into the vision and an ability to help you get from vision to reality. Then you need investors who want to push you to take the next step and really start driving real revenue and to feel confident that you can go out and make the decisions that you need to make. And sometimes that’s hiring somebody and understanding that an investor has your back. Even if there’s a down month or something like that, you, your investor has your back through that time and you can get through it. Now we’re in a different place now.
We’re scaling to growth stage. We’re looking more for investors who’ve been there before, who’ve taken a company through a growth phase. Because I understand personally and my team and my team and I all understand that what it takes to go from a concept to $3 million is a massively different thing than to go from $3 million to $20 million to, you know, $100 million, which is where we’d like to get. And so, or where we’re planning to get and where we’re on a trajectory to get. So there are a gazillion decisions on timing and, and resources allocation and partnering and things like that that um, uh, an investor who understands that space and who can bring new thinking that we don’t have internally to that is, it has become very important. Whereas a year ago that would have, or two years ago that would have been disruptive.
That’s what we need now. So it was interesting you asked the question that way because it definitely has shifted over time and now we want active involved investors who can help us in that space, before we wanted ones that kept us in going in the right direction. They were corralling. Now we need pushing.
Lisa: Now as you’re thinking about advisers, team members, um, building the future out this year, what are some of the key roles on the staff or in the advisor board that you’refocusing on as the CEO?
Jennifer: The first year we were just building, so if you think of our company is, is this core technology, there’s two pieces in that core technology. And we were, we were building those pieces.
The second-third year we were gauging product-market fit while continuing to build these core, the core technology into something that was kind of bulletproof that was ultimately very, very scalable. We never built for where we were, we built for where we were going. The engine that we built, you know, may have only been powering a go-cart for a little while, but we were building one that could power an airplane. So those pieces, we had to get the smartest and best in greatest people on from the very beginning. For the last year to year and a half, we’ve been focusing on those pieces and we’ve proven product-market fit and client demand and that sort of thing
Now it’s time to put our foot on the accelerator with sales because we’re to the point where we have incoming leads that we can’t even get to. Sounds crazy, but it’s true. And so, um, they have to ping us again. That’s not okay. So we need great salespeople who think, who wants something that, um, already has demand and pull in the marketplace. That’s really where we’re focusing and we need super smart people who also understand how to leverage. This is a complicated category. There are retailers and, and, and brands and advertising agencies and um, I don’t, I can’t think of the right word, but advisors, that’s the word I’m looking for. They’re all weighing in at the client level. And so you have to be pretty smart to understand all of this. But what we’ve learned is when we leverage the agencies, when we leverage the advisors, when we leverage these, they become selling arms for us. So I need not just salespeople who can go out and sell X to Y person, but somebody who can think very broadly and look for ways to make, um, other people go out and sell us or other paradigms, completely new paradigms that we haven’t thought about that will help build the business faster than we can on our own.
So as you’re looking at your next step, what is the thing that you see this year that’s going to be big for you?
Jennifer: We’re growing really fast right now. So we’re bringing on big, big clients. Over the last few years, we focused more on getting an initial contract with a client that has massive expansion potential than building expansion. So this year it’s, we’ve opened up about, there are 32 or 35 major CPG companies. Each one of those has, let’s say 60 brands. So we’ve opened a door that just on the other side there are 60 brands sitting there. So I think walking through the doors we’ve unlocked is the big thing this year. The second thing that we’re doing is the technology that’s shifting underneath us at the same time that we’re growing.
Um, three, two years ago there were two Walmart groceries.
Today there are 3,200 different stores and we have to deal with it. We haven’t gone deeply into what we do, so it’s a little confusing, but we’ve, we have to deal with inventory and pricing and everything like that from all of them. And it’s not just Walmart, Amazon Fresh and the same thing. Instacart’s growing, you know, purchased by Target. All of these are shifting around and right in the middle of all of this we have retailers that are being bought by other retailers and shifting around. So dealing with the shifting sands better than anybody else’s at the same time that we’re going through a rapid expansion phase, it’s kind of fun. It’s like riding waves every day is riding a wave and you just kind of go, here comes another one, let’s ride it.
Lisa: You’ve been growing really fast and have some amazing customers. Who’s one person every founder in Atlanta should meet, who’s been invaluable in your journey.
Probably the most important from an attaboy standpoint that made us know we were on the right path was Frank Blake. Frank used to be the CEO of Home Depot. Now he’s involved with Delta and several other CPG companies even. So he understands that early on when we went to him and he immediately got it and said, this is the thing that brands are going to need if they’re going to build through this next phase of consumer evolution was the most amazing thing. Now for me, that was Frank because Frank. I can’t, honestly in the whole world, can’t think of anyone else that knows more about that has a better viewpoint for understanding what we’re going through right now and what the brands are going through then him.
For other founders, there’ll be somebody, you know, their founder and automotive and there’ll be, you know, whoever who is the kind of the guy who’s watched or the woman who’s watched the changes in that space. I would say somebody who has a long view over time, a broad view, who understands all the moving parts of your industry. For us, it was unequivocally Frank–he made all the difference in the world for us.
To have somebody put their faith in you who you respect that person’s viewpoint 100%. I, I, there’s no amount of money that, that, that, that’s not worth.
Robin: That’s amazing. So when you think of the validation he gave you, you’re like, okay, he gets it and he’s in that space. Should I get more than one person’s validation or do you just kind of every now and then test the fences with some other people?
Jennifer: That’s a great question. I think we test, we validate every day. Um, I don’t, we can’t trust every person because there are, there are, you have to remember that people only see things through their own lenses. So sometimes people will give you feedback and you have to remember that their lens is dirty or their lens is, you know, warped in it to be a little bit tainted based upon yesterday or today.
And that’s why you have to be careful who you’re talking to. But no, that’s a great point. He wasn’t the only source of validation I think. Um, you know, Valor, I think you guys have a lot of people who’ve have a history in marketing and technology. So running what we’re doing up against you makes a big difference. Lisa, a couple of times this had some suggestions of things we might want to think about some, some places where we might be not be looking and should. She’s great because she says, Hey, you might want to go look over there. Just a thought there. If you don’t want to look over there, that’s okay. Actually that’s how Frank works is he will say, you know, you might want to think about this.
It’s gentle, it’s a gentle form of that. But when that jives with what we thought we were going to do or what we’re thinking we’re doing, that’s validation. And when it causes us to think more broadly, you know, that’s acceleration and we need both of those. So I think we look for both of those in anyone that we’re working with. And if somebody doesn’t do that and they’re constantly saying, Oh, are you sure this, you know, slow down..I try to stay away from those people because it’s not really helpful. I do plenty of that myself. I do plenty of second-guessing. Um, you interact on a day to day basis with your in-point customers. Are you getting any insights from their validation of what they’re doing? And you know, I do –every, every, every time they buy something from us.
I’ve also surrounded myself with people who feel the same way in the company. I guess that’s what we do. People’s jobs are very important to them and when they make a vendor decision and that vendor decision is going to cost their company money and it’s usually, you know, there are more vendors who could do this, but they’re choosing this vendor– that to me is a sacred trust. And my team sees that as a sacred trust because they are putting their career in our hands because if we screw up it looks bad for them. And so we treat every client choice every time they choose to do business with us as a as now we have to have their back. That’s our job.
Our job now is to go and make sure that they’re successful. That’s the most important thing. But the second most important thing is what you just said, which is they just told us that this makes sense to them, that this works for them. And so our job is to make sure to make them right. And that to me is the biggest validation that consumers are actually doing what they need to do help build a brand because they have the tools that we put into their hands. You know, it’s a relationship there. They’re driving more than a partnership. They’re thinking, Hey, you’re in this relationship with us to be successful.
So Jennifer, how should our listeners reach out to join the journey?How does someone get on board and get involved with smart commerce?
So our website is the easiest way to contact us. If you go to smartcommerce, all one word, smart commerce.co.
Thank you so much. Thanks for taking a moment out of your incredibly busy schedule.
Thank you for fitting me in.