Building a Breakout Consumer Brand: Gyve Safavi, Co-Founder & CEO of SURI, on Product, Margins and Scaling

0:00Hello and welcome to another episode of Riding Unicorns. Today we're delighted to be joined by Gyve Safavi, co-founder and CEO at Suri, the award-winning electric toothbrush company. So Gyve, thank you so much for joining. Your journey spans across different little industries before you got into building Suri. Maybe you could just tell us a little bit about that journey in the lead up to starting the company. For sure. James, first, thanks so much for having me. Really great to be on the show. Huge fan. Yeah, so I started my career first in fast-moving consumer goods. I worked at a company called Procter & Gamble for about eight years.

0:37Started in financial planning, and then I moved to marketing. Last on the Gillette business, I was brand manager for Venus for a year of East Africa. And then I moved after that to a company called DIPP, a large advertising holding company. I was recruited to work with the founder and CEO at the time, a man named Martin Sorrell, where I worked with him in a business development capacity and aid to camp capacity for about three years. Learned how to walk through walls. It was quite a great experience. And then I moved to a company called Mirama Ventures, where I worked on startups that they were acquiring.

1:09One was a beauty startup that I spent quite a long time on called Showcase Beauty, helping turn them around, make them scale better and be more profitable. That's where I probably got my first dose of startup life. I think as the saying goes, once you try it, you can't get enough. And so after that, I took some time off, but then went quickly into building Suri. Awesome. And we've had Sir Martin on the podcast twice, actually. He is a former Riding Unicorns guest as well. So it's full circle, lovely stuff. And then the common misconception of Suri is that it's just a beautiful toothbrush, which is obviously a great thing to be known for.

1:44But as the business owner, you want to presumably tell us a little bit more about the actual detail and intricacies around what made Suri a success rather than just relying on this wonderful design, which it obviously is. Oh, well, thank you for that. I still love to hear that too as well. But I will say like when we were starting out, there was a lot more that went into it beyond the design. So our sort of ethos was, could we make exceptional products that delivered a great clean? So delivered on performance, elevated from a design point of view, and then more sustainable at the same time. So three core values, you know, great design experience, meaning you enjoy holding the product, using it every day.

2:23Often toothbrush thing is a forgotten ritual. We do it twice a day. Before I started Suria, I'd never heard anybody say I love brushing my teeth. A very rare and awkward thing to say. But also like when you looked at the category itself, there weren't many devices that had like exceptional design that you would fall in love with. So for us, it was design was very important. I'm not going to deny that. But we knew we need to match it on performance as our second core value, really delivering a product, which is table stakes in our category. Right. If you don't clean teeth well, then what are you doing in the category?

2:51Right. Like do something else. So we knew we needed to deliver a great exceptional clean. And so that was where a lot of work went into. You know, how do we get a slim design, still have a high powered motor? Nobody at the time, and I still don't think today, had slim brushes that had high powered motors in there. So there was a lot of design work that needed to go into getting a strong sonic clean in the form factor. And then the last but not least value is sustainability. We openly say on our website, we are not the most sustainable business on the planet. That's a fact. For us, it's about pushing boundaries and considering it at every stage of the journey.

3:22Can we use an alternative material? Can we offer a recycling take back program for our customers' heads? Can we use alternative packaging? Can we offset our carbon emissions? How do we consider sustainability at every step of the journey when we innovate and run our business? There are many businesses that often champion one of those values. Maybe it's performance. we're the best at this performance angle, but they kind of let design sustainability fall by the wayside or they're very sustainable, but the performance is not very good without using explicatives and or their design and they kind of just here lives on design, but nobody really wants to use the product because it doesn't deliver.

3:54So for us, it was about shaping those three core values and delivering a product that could delight people and delivering on all three value. Yeah, awesome. And the things that really matter in consumer products, startups is getting your margins right, getting your distribution right, and obviously team and things like that. But margins and distribution, those seem to be the absolute pillars of building a successful company. The early stage around margins is really challenging. When you add in an extra complexity of, you know, we want it to be sustainable as well. You know, you're not helping yourself, you're probably making things a little bit harder.

4:28So how did you get that balance right of getting the right products, the right margins with that sustainability angle? And how much work was it to kind of find all the right bits to make that work. So margin, you're absolutely right. Like, I think that's one of the reasons why startups, like top 10 reasons is like margin structure doesn't work. And, you know, for the venture capitalists that listened to the show, we had quite a few tell us like, free recycling, you must be crazy. How are you gonna make that pay out? And they were right, it's harder, but it wasn't impossible. Fortunately, I did work for quite a few people in finance managers that helped cut my teeth, including Martin Sorrell, on helping me understand margin well and underlying costs.

5:06And so we set a high target gross margin for our business from day one, because we knew that we needed to be able to maintain that. But I think what often happens is people don't know what is the sort of price they can sell their product at. And it often is a function of, does it deliver on the consumer benefit? Are the intangibles of design making people feel like it's worth it? And so we did a lot of consumer surveys that helped us understand what price we could sell at and based on our design. And then it was a race to get the best cogs to enable that price point, to hit a margin that could enable us to do the things that we wanted to do with the materials and the recycling program.

5:42And so the research, you know, we did pricing tests. I'm going to butcher the name. I think it's Weissman or Weissman, but there's sort of four key pricing questions that you ask. We use SurveyMonkey. We couldn't afford really expensive survey platforms, but with a hundred quid, we got 500 responses in like an hour. And so we were able to put up a concept slide with a rough sketch of what we were trying to do, ask a bunch of preliminary questions like, do you brush your teeth twice a day? Yes, I do. Great. Part of the panel. And then we asked these four pricing questions, which may be useful for anybody looking to launch a product, which is one, at what price do you think this is so cheap you wouldn't consider it?

6:16Okay, at what price do you think this is so expensive that you wouldn't consider it? It's just way too expensive. 500 pounds is not going to do it. And then at what price do you think it's not too expensive, but you'd have to do more research, right? You'd have to look into it, see if people like it. And then the last one is, at what price do you think this could be a bargain? Like you think this would be a really great value. And you get people answer these four questions. And when enough people answer them, you get these four curves of kind of that sweet spot of like what I could list at, what I should be at sale at.

6:42And that general sort of space is where you should probably put your product price to start with. And then the rest is obviously testing and learning. That is probably the best answer we've ever had on how to price your product on over 250 episodes. That is absolute gold. Thank you so much for sharing that. And then as an investor, we see consumer companies the whole time. And a lot of them will start with not great margins. But the promise is that they will get better with economies of scale. And then in the tech world, we often see high CAC. And they sort of say, well, CAC will come down. But actually, often it goes the other way.

7:17And so I'd love to hear your experience. How has economies of scale impacted your margins over time as you've been able to scale up production? and B, how has it impacted CAC as you've gone to wider audiences? I think the sort of expression of what gets measured gets managed. But the reality is I always say that the deck of cards you've stacked with from the beginning are not the deck of cards you want, right? When you start an early stage business, you have the lowest volumes in the game. And as a result, whether it's using a platform like Shopify, you're just going to get terrible rates. They will charge you a higher billing fee because your volume is lower and you can't really negotiate.

7:56So what you have to do is you have to continually push on every angle, push for savings. So my co-founder and I are extremely cheap and any opportunity, and it's really uncomfortable, right? Like it was a learning experience for me because you have to push and negotiate and sometimes anchor ridiculously low. Might be like, oh, you want 50 pounds? I was going to pay five pounds. Like, what can we get to a common ground there? And so like, it was a learning experience because I didn't really like negotiating price, even with our suppliers. We treated them like investors. So every time we had a press piece, we would send it to our suppliers and say like, look, we got in a daily mail.

8:28Look, we got in a fast company who wrote about us. And they were getting excited. We're like, we're growing and we need a better price because we can't maintain margin and we're scaling volume. And so as your volume goes up, you have to continue to go back and negotiate prices across the board with products. And you have to be comfortable with that. They expect it too, right? Because their supply chain gives them better prices when the volume goes up. And so they're not going to pocket that savings as you grow. so getting comfortable with that coming back to cpas we had in our model early on so you have a manufacturing contract mid-contract mid-production runs you're going back to them and going oh but we need a bit more and you know you're you're kind of umming and ahhing about the next run you know you're pushing them are you at every step 100 and you know i would be lying if i said i did myself my co-founder is very great and he's a great commercial negotiator and so like i run the product side.

9:20And so like, I was a bit like, are you really, we just launched like two months ago. You're now telling them for like a$2 savings. How can we do that? And the reality is you miss a hundred percent of the shots you don't take Wayne Gretzky, right? Like if you don't ask, you don't get, and that's the biggest learning that I have had found in my own company. If you don't ask, you don't get, and if you get comfortable with asking, then you might just get more. There's another expression, like the more I practice, the luckier I get. And so the more you ask, the better you get at asking and asking and getting people to accept what you're asking.

9:51And so we went back, we asked for savings, reasonable, right? We weren't asking for ridiculous savings. We were saying like, look, we're scaling, we need a better price. And that was pretty much in line with what we were trying to achieve. Now, when we did the forecast, we didn't build a lot of it in because we're like, it's variable. We don't know if it's actually going to happen. It's kind of like when you mentioned saying that our CPA is going to go down, but is it really, or is it going to go up? And like, I was that person in my early financial model being like, CPA is going down and we hit it actually.

10:20But you control that too, right? Like we hired a great head of growth who came in and was like, you're doing ads totally wrong. That's where your CPA is not going down. Let's try this. Let's put a new landing page. Let's do more variations. Let's see what we can do. And that brought our CPA down. Eventually, like it's hard to maintain low CPA. So maybe they go up and they stabilize, but whatever you want to bring lower, you have to invest into how are you going to do it building a structured savings plan with your manufacturer saying like when we hit these targets i want to get savings here but if you have good growth then you have the story to be like look we delivered the first 5 000 we're going to deliver 20 000 next quarter and i want a savings at the end of that so that we can continue to grow because you're getting better margin and they might say like it's not going to be five dollars let's start with 50p and then you'll get settled on maybe two dollars awesome but yeah negotiate everything it's brutal right like i hate it i never negotiated anything and i just like i'm a totally different person outside of work let's just put it that awesome have you got any stories about one of the things that you asked for and you guys thought you were being way too cheeky but actually it came off we played a lot of competitions and i probably shouldn't say this too loud but we won a outer net competition early on and it was for like one day of airing on outer net in london the advertising and i think we were like could we do a month for the same price we don't have the money but could you just leave us in rotation and they're like oh that's a lot of investment i don't think that could be possible and we're like all right well we're just asking because we're just a new brand and we we just really need the exposure and they just gave it to us free advertising for entire months and like one of the biggest billboards in london that costs i don't even know what it costs like we just we got it we won a competition to get one day advertising we've got a whole month so i think that's probably one of them there's so many but That's a great example because no one's actually getting sort of hurt from that.

12:05It's just being... The space is there. I'm asking the space is there. Exactly. And people want to support early stage companies. The biggest lever you have is relationships. And this has been another big learning. You know, like I am very demanding. And I often am like, business should just be transactional. I give you the sales, you give me the better price, right? But the reality is when you're starting out, you don't compare to big accounts. on almost even whether I mentioned Shopify in the beginning or whether it's your fulfillment. If you're using a third-party logistics provider, you just don't compare.

12:37And so the only way you're going to get an unfair advantage and sort of share of heart is through building a relationship, right? Because share of mind, people are like, this is the smallest peanut in my portfolio. I'm not going to focus effort on it. But obviously if you delight them, then they'll be like, you know what, guys, we're just going to help you out. And so the relationship that you build, I mentioned like sharing things back with our manufacturing partner, because that was building relationship. We were treating them like investors, you know, giving them obviously updates on what we were doing, how the business was going so that they bought into the story and they got excited too.

13:07Yeah. Awesome. There must have been tough moments along the way. Obviously the business is a very well-known brand now, but there must have been tough moments along the way. What is one of the things that you couldn't have predicted that was difficult, tough moment, you know, maybe even derailed the business that just wasn't on your horizon when you started? I'd say probably the biggest one is paying a step back, giving something abstract that will work with other businesses or other people looking to start a business or in a business is co-founder relationships and dynamics. I think they say the number three reason why startups fall apart is co-founders don't get along.

13:43My co-founder and I have a great relationship. So I'll just start with that. We were friends before we started, met each other eight years before Siri was even an idea. I mean, we were friends for a while and we started working on Siri together. And I never thought We're very different people. So I'm probably semi-introvert, very detailed. He's more extrovert, probably bigger picture. We love different things. I love products. He's not that interested in products. He's more interested in the commercial side. And we came at things in a different way, which is really interesting because when you start a business, in general, in the beginning, you have the same goal, which is to scale sales, right?

14:18There's no denying you have that same goal. But the way you go about it is a very different way. Often, a lot of the times that isn't necessarily from wanting different things. It's everything from the way you're raised. He was born in Brunei. I was born in New York and he grew up in Scotland. I grew up in New York and then lived in Canada and Switzerland. Our parents come from different places. Like just that alone, we think in different ways. And there's an element of learning to respect different ways of thinking. But it's very hard when you're a co-founder and you're like, this is what I want for the business.

14:46And another co-founder is like, this is what I want for the business. And so we learned through, I mean, credit to him. And we had what I called our first Friday bitching session, basically, where he was like, hey, I don't think things are working. And this was like three weeks in or four weeks in. And he's like, I don't know if things are going really optimal. And like, I feel like we should sit down and just have an open conversation. And I was like, I think everything's going fine. What do you mean? He's like, oh, OK, can I share some things? I'm like, yeah, go ahead. And he just let out on like, I don't know, 20 minutes.

15:16If I didn't think that was good, that could have been better. And I was like, well, now that you mentioned that, I've got a list of 20 things I want to share with you. and we just did it so openly and the interesting thing was like normally you'd think oh wow these guys hate each other but the reality was what he was sharing with me i was like that bothered you i had no idea i had no idea that something was bothering him because i was just totally because we think in totally different ways he's like you know when i shared with you the jd even small things like that and i said what do you think can you have a look at it you re-edited the whole thing it just was like do you want me to do it or do you want to do it i was like oh so you wanted help on it you know but generally different ways of working again and we've evolved that over the years right like we don't nitpick on little things but because we respect that we think differently and we respect that we have the same common goal we respect the difference of opinion and we see it through and his thoughts often are very valuable and innovation when i'm thinking of a product because this is the most beautiful thing in the world and so our bitching sessions have evolved into something more i salute in my business optimization sessions but the fundamental thing of you need to invest in your co-founder relationship and i didn't see that as an important thing starting out as one of the fundamental things that I would tell any business starting out figure out the dynamics between each other you know you can even take tests we've had people come in who've coached us in different ways we've gone to many people who've given us feedback and we're still optimizing but we're very clear now that our differences is our superpower because we put it together and slowed in and we're able to achieve more things than we were if we weren't put together yeah complimentary the fact that you both came to the table had it all out could absorb and repair as well is probably incredibly healthy.

16:49Whereas if it had been held onto and just put under the carpet, it wouldn't have been four weeks. It would have been four months and then it would have been a breakdown. So I think it's probably a really healthy thing that that happened. And now you've turned it into almost like a, this is what we do. This is not for everyone, but this is what we do. We have our bitching sessions and that's cool because that's how we operate. And then it gets it all out. I think it's amazing. you've got to find the right way to work together i talked to mark we have more dialogue than i do i shouldn't say this with my wife right i call him five times a day every day whether on holiday or not because we just can't stop thinking about the business and before we started during covid so it was zoom that was on 24 7 it was like a portal i'd walk in out of the room and he was still there and having coffee and it was just like if you don't get these things out it just goes into a place that's unhealthy that's great so we obviously found the relationships matter massively but you must have learned a lot along the way.

17:44If there was one bit of advice that you'd give to founders that you haven't already kind of mentioned, what would it be? Well, my first thing on advice in general is whenever I give advice, I say, you know better than me what's right. I'm just giving you an opinion. And whether you take it and whether you find it useful, that's for you to decide. Because the reality is like early on, I used to index so heavily on it, on advice and from investors, from people who were successful. And I had one investor who didn't invest in us or done. And I was like, what do you think of the product? Do you think we should do for your reciting?

18:14I was a German guy and he's like, well, you care what I think? And I was like, excuse me, you've invested in so many successful businesses. I respect your opinion. And he's like, you're asking me about the product. I'm like, yeah. And he's like, it's not for me to answer, is it? He's like, it's for your customers. And he's like, and if they like your product, they will show you that with their share of wallet. And if they don't, well, you better figure out how to make your product better. And he's like, and you need to be talking to them about whether they like it and they don't, because I'm going to give you one opinion.

18:39you're going to go down a rabbit hole and I might not be your customer. As simple as that. And ever since then, I was like, okay, so every time I get advice, I'm always going to try and rate it whether or not I agree with it and not index so hard on what other people tell me beyond customers because our business is customer related. That's one piece of advice. The other one is it's almost part of the day job. Things go wrong in the startup. Left, right, and center. Shit hits the fan once a week. And I used to get really frustrated, right? Like I used to get really low when the lows happened. Like, oh, this happened.

19:07Well, it had to be more. and I think maybe I become more mature or maybe I just needed to do this to drive sanity. I have two young daughters so like I just didn't have the emotional element to put into it. I try not to get low when things go wrong. I just try to look at them and go cool that happened. Now how are we going to solve it? And I think being able to not index on the low times and to sort of take out that emotion and to just focus on the what's the solution now? Like this was not great. It happens every day to us. How are we going to solve? Sometimes it happens even worse than other moments and actually we often find that in our biggest mistakes we get these amazing learnings that make us much better as a company so that we launch even better products or we're able to drive you more sales because the failures become our biggest learnings that are our know-how in essence that are better than what other companies would have never figured out but that would be my best tip if i was to give one do you think that tolerance naturally improves or do you think you can hack it you can shortcut that by just going if you don't naturally try to improve that you will just get really stressed.

20:06The other thing is like the other end. So I'm talking about don't let the bad times grind you down, find the solutions. The other angle is don't ignore the good times. We were in Hong Kong airport. My co-founder and I, we had just come back from seeing our manufacturers and we had a whole bunch of things that we need to do. And he's like, things are going great. We negotiated savings. We've got press growing. He's like, things are going really early on. And I was like, yeah, I forget that. Let's just focus on the things that aren't going well so we can improve those. And he's like, wow, this is going to be a crazy journey if we're just going to focus on the negatives for the next five, 10 years.

20:37And I was like, what do you mean? He's like, well, you don't want to celebrate or talk about the great things. And I was like, well, they don't need fixing. He's like, that's not the point. That's not why you talk about things going really well. And I was like, you're right. When you say it that way, it sounds terrible. So from that moment on, we've made a deliberate choice, whether big or small, like we won free advertising with channel four and a competition around 120 ,000 pounds. We celebrate that huge. The whole team goes to Nando's. Anything that's, you know, whether small or big, we celebrate because there's a lot of stressful times and you need to have that excitement around the good moments to keep things sane and positive so it's just as important as not stressing out it's just as important to really celebrate those wins when they do come along yeah awesome and then this might be hard to answer but i'd love to hear your answer in a world of investors flocking towards ai and sort of obsessing over it what excites you in the sort of consumer space and the consumer tech space and sustainability, the areas that you really cross over into, what do you think is exciting?

21:35I'll just start with that we don't have a roadmap for AI in our toothbrushes, not in the short term. So it's still just going to be good old brushing your teeth. Many investors ask for it. You know, I don't think AI will brush your teeth in the next 10 years. Like, I just don't think it's going to happen. You still have to brush your teeth like every morning and night. But I'm really excited as a business. We're really excited by AI in the sense that beyond AI answering your emails and using prompts to write your investor updates, which we don't do, I promise. I'm really excited by what it's doing for running the business and getting people a set of data at the speed of light to make decisions.

22:12And so we are building a Suri brain and we are at such a pivotal point in our business's life because we haven't subscribed to any major data warehouse. We're not tied to some like heavily red taped corporate data warehouse that can't be pivoted and brought in AI, we're so flexible that we can be at the cutting edge of using AI to grow our business and distribute insights. For example, Slack prompts our team very set their scorecards. This is where you're at. Then it prompts, this is what I think you should say. What do you think you should say about how your performance has been in the past week?

22:44They put it into Slack. That builds into a weekly report that I get that is everybody's thoughts on everything. Then, you know, it becomes a monthly report and it takes the weekly ones and puts them in into like still want the two page format because I don't want to read 20 pages but just that alone and having AI do any of the admin and like taking out admin work we work with a lot of influencers and affiliates and often they send you proposals in some form of slides whether it's we transfer whatever they send you what they're doing their rates and you have to calculate CPMs and different things to be like oh I think this is good this isn't but it takes time and we've leveraged AI to automatically catalog that into Google Sheets when emails arrive so our team literally just opens Google Sheets and it's already started being put in there and they're not having to do that work.

23:25But that just saves an entire day of time for them. And so the efficiency you can get out of it is huge. I think a big factor with AI is we're not at a place where it's AI runs your business. People, great people, plus great AI make a business go further. Average people with great AI probably go a lot less further. So it is about having great people that know how to leverage AI, know the thinking and can make it run faster. So it's the exciting thing in consumer, the fact that it's never been a better time to start a consumer company because of AI. Better than me. I completely cannot see that.

23:59Like as the end user, you're using the picks and shovels to build your gold reserve, essentially, because there's so much money chasing the AI companies. But actually, it's really hard to be the AI company used by all the companies, what it's much better to be is the company using the AI tools, because you've got abundance of choice, you're not relying on one provider, you can switch whenever you want. And you can drive better efficiency into maybe areas that were slow, mundane, difficult, low margin can become high margin, all these types of things. So we're just going to move on to our final two questions.

24:33I'm sure you're well embedded within the ecosystem. So I'm sure you've seen lots of really cool companies. If there was a future unicorn prediction, another company that's doing really well, who would that be? Don't hate me, James, but it's an AI company. It's a company we started working with called RIG, R-I-G dot S-O. And RIG is helping us create a brain. And so what's nice about it is they map out all the integrations. So to your point of being really flexible of whatever you use, it is a data layer. You can use Cloud, ChatGPT to work with it. It doesn't matter what you, it plugs into that too, but it becomes a data layer.

25:08It builds reporting for you. And then at the same time, it sequences things and connects to a warehouse of your own and a SOC 2 compliant method. So if you're early stage or you're mid stage and you don't have it, and if you have a data warehouse, great, it can run it. But what I love about it is the connections into everything. So it connects to Slack, obviously connects into our customer service tickets and connects into Granola for our note taking. And so I can say things like produce a report of the learnings across the company, look at meetings with more than four people in them that were not private and also our customer service tickets and it'll come and be like top 10 learnings across the company we need more time to launch products documented here for example how amazing is that and learnings are like how early stage companies grow and become better but now i've got an ai tool once a month telling me top 10 learnings just shared passively without any you know somebody mentioned learning in a meeting boom it's coming into my report and that's just one way i mentioned obviously like influencers was another way we were working at it but you could just think of any other way you want to pivot it and it started because it's plugged into every data source we have and when you start to think about that you're like well there isn't enough time in the day to build more things and we had a hackathon where everybody in the company was prompting things to get built and it doesn't matter whether obviously finance or somebody managing amazon was like well can you show me this in the data?