Advice Line with Gary Erickson of Clif Bar (May 2024)

29:52So this all really got started when they increased their fees a second time by 30 % in 2022. And they announced that fee increase in the same week that they announced record profits. And that was just something that struck a lot of small makers and artists who rely on this income, kind of struck a nerve. And so it kind of spontaneously organized into a protest online through social media, which is how I got involved. It was called the Etsy strike and thousands of shops took their listings off of the site for a week and protest. and it actually caught some pretty good mainstream attention, but didn't change the fact that the fees were going up again.

30:37It's at the point where a sales commission might vary anywhere from 10 % to 40 % per sale, and you won't really know what that is until the sale happens. And how do you differ from Etsy? Presumably you're charging much lower fees to your sellers. Not necessarily, no. So the big difference is that we're owned and operated or owned by the members themselves. So a cooperative is a member-owned business that's organized on a principle of one member, one vote. So we have a multi-stakeholder cooperative, which means that the artisans themselves can be owners of the business and the shoppers or any general supporter can become an owner of the business, which means they get governance rights.

31:23They get a vote and they get to have a say in how things are run and they get financial rights so that when we have profits, the dividends are distributed among the people. How many artisans do you now have involved? We have a little over 300 members now. Yeah. And we have about, I think, 200 shops on our marketplace. Okay. So, Valerie, you brought us this question about you've got, say, almost no funds, but you've got a strong bottom-up community. How do you break into a marketplace kind of dominated by Amazon, Etsy, eBay, and other massive retailers? Gary, you want to take the first crack at this one?

32:03Oh, man, this is a tough one. Well, you've got a real targeted competitor. You would call Etsy a competitor. Is that correct? Yes, although we're not necessarily trying to replace Etsy. if we could get the 1 % of artisans who are looking for alternatives and the consumers who are looking for ethical options, I think, you know, that's a great starting place. So the answer is yes, there's your competitor. You just don't want to say it. So yeah, we used to say that at the beginning when we were at Cliff Bar, like if we could just get 10 % of their business or 20 % of their business, I'll be set for life, you know, and that would be like, We'd be revenue of a million dollars, and little did we know that we far surpassed that.

32:50So yeah, you could target that. Don't be shy about that. Is there a place where you would feel like if we got here, then we've got momentum, and we're able to sustain our business for the long haul? How far are you from there right now? That's a great question. I think that's one of the special challenges we have in trying to build a marketplace. is that we're in a bit of a chicken or an egg situation. We need enough artisans to provide good consumer choice for the shoppers who are coming on so they have things to sort through and to find what they're looking for. But we need enough customers to make it worthwhile for artisans to want to sign up.

33:31And so I hope that we're growing both in step with each other in a balanced way. We're not there yet. We just started. We launched our beta marketplace with existing tech in October of this year, so six months ago. And I would say we're probably, you know, at least half of where I'd want to be to start feeling like we were getting there. And I think about, you know, it's really interesting because we've done a whole series on the show recently about content creators and the business of content creation. And, And, you know, 10 years ago, in order to reach mass scale in media, you had to be on CNN or, you know, be at a major media organization.

34:13Today, you can be some dude with a YouTube channel and reach 50 million subscribers, right? And so what's interesting about how social media platforms work now is that they want to attract all these creators, right? So for a long time, it was YouTube where they were trying to get onto because YouTube paid the most. And then they went to TikTok. And now a lot of people are migrating to Snapchat. Now, they all use all of them, but these different platforms offer different incentives. And now it's getting me to my question for you, which is, is there a world where you could offer an incentive that is so good, like no fees for the first year or something radical where that kind of message spreads among crafters?

34:57Because there are craft fairs all over the country. Crafters talk to each other. You guys have a Discord channel, I see. Is there some kind of incentive that you are able to offer to bring this critical mass in? That's a really good question. I absolutely think that we could come up with such an offer if we could find the right audience and the right moment to share it. But I do think one of the things we've had a challenge with being on a platform is that we don't have a lot of ways to connect with other artisans other than at like craft fairs and things like that because places like Etsy control the narrative and control their forums.

35:39Yeah, but you – right. That's right. But for you to control the narrative, you've got to give your members the tools. You're going to make it easy for them, right? I mean you've got 300 members. Each of those members is on social media. I mean, they may not have hundreds of thousands of followers, but they might have hundreds or thousands on their social media. And I wonder whether you can leverage your community in a better way to have them promote what you're doing. I think our members are not only committed, they're literally invested. They're co-op member owners. They've invested in this company, and we're all equal owners of it together.

36:17So it brings up an interesting point that I hadn't fully thought through, which is that, you know, artisans have, we have people who are just starting their careers, people who are doing it just for fun, and then people like me and my partner who do this full time for a living. And so everybody comes with it with a different set of skills and a different background. And, you know, using everybody's strengths where they are makes a lot of sense. um valerie once people come onto your site for the first time and maybe they buy something do you got them do they do they come back they're like wow i never thought this existed this is really different and i think i think we've had uh repeat customers um already yeah i mean in our six months of of operating i think one of the ways that we try to encourage that is you know through email campaigns and trying to make people aware of the variety of things on our platform, everything from wooden coasters to hand-woven silk shawls.

37:20You know, there is such a wide variety of products, and that's sort of the treasure hunt of it. You know, one of the things that I've noticed, I'm going to give you some feedback on this. I know the site's early. It's still in beta form. But there's too much. It's too much stuff. There's Join the Member, Four Artisans, Handmade, this. There's all these drop-down things. And what I think Etsy does well and what I think you could do really well is they just have pictures of different categories. And you have some of that. But Gary, you know, I know Gary is a cyclist. And is there a world where you've got, like, people who love cycling or, you know, you've got clothing and accessories, arts and crafts.

37:59But could you break that down even further, like beanies or games? Instead of like personal care and leisure, like domino lovers. I mean you don't have to get like super, super like micro niche, but you can get kind of niche. And I understand you guys don't have massive budgets, but you're working with artists. I mean I know you have a lot of talent in your group to really kind of think a bit more intentionally about the design of the website, to make it pop a little bit more. You know what I mean, Gary? I like that a lot. And I like also that you're trying to move toward something that Etsy isn't doing on their website or with their product line or whatever is available.

38:46I mean, you know, there, okay, you could go to, if you want to differentiate, you know, it could be your headline, you know, you may not find this on Etsy. Yeah. You may not want to say you won't find this because maybe you will, but you could say you may not find this on Etsy. that would give them like, well, maybe there's other stuff on here I won't find in Etsy. Because you've got to create – you can't be an Etsy with better values. You've got to be Etsy with a different product. I'm telling you, I agree. I'm just spitballing here, but maybe think of a different way of categorizing what you offer and you focus on the things that people love or might be attracted to.

39:25So here's a question that follows that, I hope perfectly, is how many people come to this and buy a gift versus buying something for themselves? That's a great question. I would say so far more purchases have been personal and yet that contradicts my own experience with my own business that when you make these niche things that are perfect for that one person, you know, more, a higher percentage of them is gifts. I also know that Etsy is pushing gifts hard right now. Oh, okay. That's interesting. That was their Super Bowl ad. Is that right? Yes. But gifts is – Gary, you're right. I mean gifts is the way to go.

40:09It's the way – I mean if you push gifts, you might find something for yourself too. You know, like you're going for like – I go to wherever, wherever and buy a gift for my family or my wife or something. And then I ended up like, well, this looks – I think I want to get this for myself. Yeah. I mean there's a lady here who's making knit beanies with like an octopus on it. I'm seeing that. I'm on the same page. And the chicken and the lemon. I mean, there's lots of people of octopuses or flamingos. I can't believe I'm on the same page. The yellow one? Right. The yellow picture? Yeah. Gifts. I'm looking for gifts.

40:42I'm looking for a gift for somebody. And I don't even know where to begin. You could have a revolving top gifts, top sold gifts. Yeah. And if you just had like a headline of like, first thing is top 50 gifts. Because if I'm looking for a gift, I wouldn't know where to start here. Yeah. And I would like to be led to something. And I might come back here and be buying gifts all the time because I'm always searching for a gift for my friends and family. Valerie, I think we're onto something. I think we might be onto something. You have given me so many great ideas and feedback and direction. And I absolutely loved Gary's point too that gifts are a great add-on and a great way to increase our per order amount.

41:27look for yourself and also think about other gifts to add on. You know, and back to trying to get that message out is wherever you get, if you could just say, a gift you may not find on Etsy. Yeah, try that. And you know, Etsy's not going out of business. They'll be fine. And we love Etsy, by the way. They've been on the show. Big fans, too, so no shade to Etsy. Valerie Franklin, Artisans Cooperative. Thanks for calling in. Good luck. We'll be watching. Awesome. I was delighted to be here. Thank you so much. All the best, Valerie. Great job. Gary, I'm going to get you a chicken hat, I think. Which one?

42:08I don't know. Or the lemon, the big lemon on the side of that knit hat. I think that one's for cat. I think you look good cycling through Italy on your racing bike. Oh, that'd be sweet. I have to put it over the helmet if I can get it over the helmet. Put it over the helmet, yeah. All right. We're going to take another quick break, Gary. But when we come back, an inventor whose fluffy dog gave her a great idea. Stay with us. I'm Guy Raz, and you're listening to The Advice Line here on How I Built This Lab.

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44:57Hello and welcome back to the advice line here on How I Built This Lab. I'm Guy Raz. Gary, what do you say? Let's should we go ahead and bring in our last caller? Let's go. All right. Hello, Elsie. Are you there? Can you hear me? Yes, we can. Hello, Elsie. Please tell us your name, what your company's called, their business, and where you live. Hi, Guy. Hi, Gary. Hi, Elsie. I'm in Denver, Colorado. and I started my company Lily Brush 14 years ago after I invented a pet hair cleanup tool that's faster than vacuuming and better than sticky rollers without creating single-use waste. I've since invented four more pet hair cleanup products and now we have this incredible core group of pet parents and professional cleaners who love our products, but I'm still struggling with how to scale up our marketing so more people can find us.

46:08Right. Okay. So before we, so you're looking to figure out how to scale up to get more people to find you, how to do it efficiently. Before we get there, let me ask you a couple of questions. Lily Brush is the – so this is a pet hair remover for like furniture and whatever pet hair. I'm a beloved pet. I've got two cats and a dog. So this is a big problem in my house. We have a lot of pet hair. I have one cat that has particularly bushy hair, Morty. He's a great cat, but he sheds everywhere. How does your – like how is it different than like, I don't know, a roller or other pet brush removers? Oh, let me count the weight.

46:51Please tell us. Yes. Count them out loud. Okay, I will. So if you have pets that have that very heavy undercoat, that soft, fluffy stuff that sheds all year long, we make these fantastic bristle products that you just brush back and forth across the hair. It picks it all up. There's no sticky roll or waste. There's no peeling. And it's faster than vacuuming. And you just pull the hair out and you just toss it in the – It stays right on top of the bristles. And you just – I like to tell people take the hair outside because birds like to use it for nests. Wow, that's cool. It's like you're recycling like James and the plastics.

47:45You can build a nest for a bird and then your cat can go and eat the bird. Oh, dear. No. How did you – tell me how you started this business because I see you started in 2010. What were you – I mean did you have a different job? Were you doing something different in your life at that point? I was. It's kind of one of those crazy stories. Yeah. But I used to be a painter. I was a portrait and still life artist. And in 2009, I was a single mom, and I shoveled a driveway full of snow. And it caused my widowmaker artery to dissect at the family dinner table. So after I was very lucky to wake up the next morning, but I went to reach for a water glass and my hands were shaking.

48:55They were like nervous parakeets. I'm sure you can hear it in my voice. I have now a pretty prominent tremor. And so I knew that morning that my painting career was over. So, you know, I've never looked back. I just – I knew I had to find a new career. I mean, it's an amazing story because you have this, of course, near-death experience with a heart attack. And it completely changes your trajectory. I mean, you're a painter. You need still hands, but you develop a tremor and you have to pivot. But it's like it's so – I mean it's one of those weird things. It's like that happened and that – as a result of that, you started this thing, right?

49:54Like this – none of this would have happened without that horrible tragedy. But it's an amazing kind of turn of events. I just, that's how my life has always been. I've had a lot of faith and just followed the lead. If something happens, you just keep going through it. I love it. I love your website. It's really clear. It pops. I like the logo, Lily Brush, the red. It pops. How did you invent this thing? so I had to go to rehab for my heart and I always wear this polar fleece jacket and this little dog Lily used to enjoy sitting on the couch with me she's an Australian shepherd yeah she's a very fluffy dog all right and so I'd go to rehab with all the other 80 year olds and I was only 48 when I happened so I'd go and I'd be covered in pet hair and it was embarrassing but so I went to to PetSmart and I looked to see if there was anything that would take care of the pet hair and all they had was a sticky roller and I I hate single-use products I just I so But I wasn't allowed to lift a vacuum, so I took this sticky roller home, and I would carry it with me and roll my fleece.

51:27And I just thought, there's got to be a better way. And then one day, I was scrubbing around the fixtures in my kitchen, and Lily happened to jump onto the couch in front of me, and she had muddy paws. So I went over with a toothbrush and I went to wipe the mud off of the couch. And I noticed that her hair stuck to the bristles. And I was like, oh, I just, it was like, oh. So I ran upstairs. I have two sons. I took both their toothbrushes, cut the heads off of them. And I found this little palm-sized block of wood in the garage, and I superglued these three toothbrush heads onto mine as well. And my kids came home, and they found me cleaning the whole house with this little block of wood with toothbrush heads on it.

52:33And I'm sure they thought I'd had a stroke. So, Elsie, Guy has a question. I know this is in your head right now, Guy. Did you keep that prototype? Of course. That's a Smithsonian museum piece. That is so awesome. Yeah. So Elsie obviously is coming with the question of how can she scale this? How can she get the word out? How can she grow this thing? She's been doing it since 2010. Yeah. Gary, what's your take? I need I've got a lot this is I mean I just got it I'm so inspired by this story all all of it so it's awareness and trial now how do you do trial uh question do you are you in like Petco or any of the you know Pet Mart or any of those retailers so we're in this i'm very proud of this we're in a container store that was our first big company and i it took me a long time to get there um we are we kill it on amazon even though after like the first year uh alibaba just started pumping out uh copies but cheap copies of our products and the thing i hate about the products that these guys are making that are copying ours is that they they only last for a week or two and i built our products to last for really the lifetime of your pet i mean that's that's the competitive advantage gary makes me think of uh episode we did on TRX straps with Randy Hetrick several years ago because that happened right away.

54:32All of a sudden, all these copycats and they were poor quality. But, you know, he spent and still spends a lot of money suing them. And I know you don't have those kinds of those resources and time and it's a pain. But I feel like a simple fix is to emphasize what you just said, the original and best, because I feel like the brand is your advantage here, right? Right. It's a tough one, Guy, because when I first started talking to buyers, they used to laugh at me because they're like, why would you make something that lasts for years and years? We don't want that. We want the repurchase. But the fact that these things last so long has been kind of one of our problems.

55:30I wonder whether they're – I think about partnerships, right? And increasingly you're seeing collaborations with brands and certainly in apparel. Adidas and Gucci or Liquid Death, that's not apparel, but they're doing partnerships with different kinds of brands like grooming, men's grooming, for example. I wonder if there's a way for you to partner with a product that is associated with cleaning cars or carpets, something like that where they get it with that product. I think about that too. Like a different vacuum, like a Bissell or something like that. Yeah. Yeah. That's that's a great point, Guy.

56:22Yeah. Especially a product like Bissell or like a brand like that. That's not that's probably a little easier to get to the to the right person there. It's not an Adidas where there's a bazillion people pitching them. And I don't think a lot of people are pitching Bissell for for collaborations. You know, it could be kind of cool. Right. Or like you like like this to me seems like, you know, Slim Jim is it like Slim Jim is at the checkout counter of every convenience store. Right. And like that's basically how Slim Jim and now Five Hour Energy is there too. Like I see this as a product that's at the checkout of every car wash, right?

56:57That would be ideal. And I do go to the car wash trade show. And the first year I went, I thought I'd made a terrible mistake because I had this little 10-foot booth. And I'm in this hall with all these spinning brushes and bright lights. And I sort of timidly went and started doing demos. And the next thing I knew, my booth was three people deep just mobbed for three days. So that's when Gary talks about going and giving away product at bike events, you know, that resonates with me because I knew I'd hit something. But we're still just a little tiny brand. We're still, you know, they talk on Shark Tank, they talk about the cockroach that people can stomp on.

58:09We're still that little guy. And it makes me nervous. It's 14 years in, you know, we're trying so hard and we're still that little guy. Well, first off, don't give up. Okay. I'll never give up. Because I think you have something here. I wouldn't even – I'm embarrassed that I didn't know your brand before this because we've had – I've got these sort of sayings about innovation. You've solved a problem. Cliff Bar, to me, solved a problem with a better taste in energy bar. And, you know, it's inventive. It's totally original. I mean, how can you get more original than using toothbrushes to make the first product?

58:55And it's transformative. You know, for people that have this issue, everybody that has a dog and a cat pretty much has this issue. And we all want to solve it, but we just are lazy and we just, you know, and it's hard. And you try to vacuum, vacuum doesn't work and the rolly thing doesn't work. So there's that. I feel like it's a matter of time in some ways. This is the kind of product that if you could get it into the hands of a couple of the celebrities who just have, you know, who post with their pet all the time. Like, I don't know if Chrissy Teigen has pets, but I just think of somebody like that, you know, like Chrissy Teigen, who's like associated with like cooking and a beautiful house.

59:38And like, you just imagine her like, oh, my God, this like, you know, here I am brushing this off with this thing. I think to get to some of those really high-end ones, you've got to incentivize them. You've got to say something like, look, we're trying to scale this and we'd love to partner with you in some way. I don't know what that would look like. But to me, it's just a matter of getting it into a place where somebody like that, who's a real lifestyle influencer, gets people excited about it. Because as Gary said, it's a great product. it's just a matter of getting it getting in front of the right eyeballs question how many people are with you in your company there are four of us four people is pretty lean it's tough yeah so I love guys idea of the retail thing like at the counter I mean we've all bought stuff that when we're in a store like I never what's that oh okay I'll buy And you may have to bring on a salesperson that you've never thought of needing before that can go to the car washes and the Walgreens and the Fridays, whatever.

1:00:55You know, we bootstrapped it. So it's been slow growth. Yeah. But we've got money in the bank. That's awesome. So I just have to figure out who to hire. I'm really into giving people a shot. You know, show me what you got and do your best and let's see. So I'd get, you know, marketing people from University of Denver. And it was cool, you know, two, three years watching someone develop. But I think it's time that we go and we find someone who really knows what the heck they're doing. and we do have the money to do that. I just, honestly, I've done this whole thing. I've flown by the seat of my pants this whole time.

1:01:56That's super impressive. And, you know, for the record, I think if you can do it self-funded, then you control your destiny. And Kit and I never took a dime from anybody over our 30 years of running Cliff Bar. We never brought on an equity partner. Elsie, we're going to be following you and Lily Brush. And good luck. Thank you for calling in. I think you've got something there. And I think in about six months' time from now, if we check in on you again, you will have hired somebody to take the load off and hopefully to start to really do some of that business expansion that you're not able to do because of the other stuff you have to focus on.

1:02:40I hope so. And Guy and Gary, thank you so much. I just – you guys are my heroes. This has been really so cool. Well, you're so welcome. And thank you. And, you know, we're just starting to roll. So just keep this momentum going with other people and keep this conversation going with other people that can support what we've talked about and help you take it up a notch or two or more. Thank you. Thank you, Elsie. Thanks, Elsie. And we'll be in touch. All right. Great job. So I'm ordering one tonight. You're going to be saddled with all these products after today, Gary. I'm solving all kinds of problems today.

1:03:19I'm going to get my sunglasses, goggles. What's up with all these packages coming to our house? I know. We're getting ski goggles. It's great. I've got a brush. And now I've got all these crafts. crafts. What's going on? Well, you know, I have, like all of our friends have animals. I'm probably going to order a dozen of these and then pass them around and then tell them to, see, that's the other way to do it. You know, this is a word of mouth product. It's a total word of mouth product. And you could have a brush in every vehicle you've got, in every room you've got. They're just sitting there because then you don't have to go, where's that brush?

1:03:56It's, they're everywhere. Okay. All right. Gary, thank you so much for coming back on the show. It's awesome to have you. I'm honored. Thank you so much. That's Gary Erickson, founder of Cliff Bar. And by the way, if you haven't heard Gary's original How I Built This episode, you've got to go back and check it out. It's so fun. You can find a link to it in the podcast description. And here is one of my favorite moments from that interview. You know, I remember setting up a little table and standing out there in the aisle with a tray of cut-up bars, and as people walked by, I'd say, hey, try this new energy bar.

1:04:29And they were like, no, no, no, I've had an energy bar. I don't want to try it. Oh, come on, just try it. And they would try it, and then they would walk along, and they wouldn't want to look back, because they didn't want to embarrass me. And then they would be chewing it, and they would turn around and go, come right back and go, what is that? And by the way, since we first ran this episode, a few cool things have happened for the startup entrepreneurs we talked to. James' company actually collaborated with an eyewear brand on a pair of snow goggles made entirely with stoked plastics, and it's now available at REI.

1:05:00And Elsie, well, back in May, she underwent surgery to correct her tremor, and it was a success. Slowly but surely, she is regaining control of her hand and voice again. It's awesome news. Congrats, Elsie. Thank you, everybody, for listening to the show this week. If you are working on a business and you would like to be on this show, please send us a one-minute message that tells us about your business and the issues or questions or problems that you would like help with. And please make sure to tell us how to reach you. You can send us that voice memo at hibt at id.wondery.com or you can call us 1-800-433-1298 and leave a message there and we'll put all of this in the podcast description on your smartphone.

1:05:44Thanks again. We will see you back here next time. This episode was produced by Sam Paulson with music composed by Ramtin Ereblui. It was edited by John Isabella, and our audio engineer was James Willits. Our production staff also includes Alex Chung, Carla Estevez, Chris Messini, Elaine Coates, JC Howard, Neva Grant, Devin Schwartz, Catherine Seifer, and Kerry Thompson. I'm Guy Raz, and you've been listening to The Advice Line here on How I Built This Lab.

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