Rebundling Culture: How Cîroc is Building a Next-Gen Community in a Fragmented World

0:00Everyone's doing one thing. The only way to stand up is to do the counter. So TikTok, when we initially set out to build this thing, it was this idea of democratizing content and allowing everyone to have a voice and spotlighting voices that were less seen or less heard. What it ended up doing was it kind of watered down creativity. Anyone can make anything with AI, but it's going to be at this very superficial level. And if we don't have the folks that seats authority to really push that further and get it to the point where it's maximizing what AI can do, it's going to be lost in the CSA industry.

0:32We're not going to be able to even want to look at that creative because it's all going to be the same anyways. What are the campfire conversations that people are now having with each other when they're not on their screens? I'm Eric Fulweiler, and this is Scratch, bringing you marketing lessons from the leading brands and brains, rewriting the rulebook from scratch for the world of today. Hey, everyone. My guest today is Nick Tran. He is the president and CMO of First Round, which is a joint venture between Diageo and Main Street Advisors. This portfolio includes Ciroc and Lobos 1707. So they are getting into and actually doing really well in a challenging category right now of alcohol.

1:13Nick, many of you have probably heard of him. He was the CMO at Farfetch. He was the global head of marketing at TikTok. He was the VP of brand and cultural marketing at Hulu. I first met him when he was the senior director of marketing at Samsung in the Americas. So he has a pretty incredible career, to be honest, at the forefront of social media, digital media culture, and some of the biggest brands that are moving culture in the world over the last 10 years. and of course, Taco Bell, who could forget what he did at Taco Bell in the early days of social media. This is, I mean, my brain is full after this conversation.

1:49So I'm going to give you a couple of things that have bubbled up for me. We of course spent a lot of time talking about culture, but I really pushed him. And to be honest, he really pushed me to kind of get to the next level of some of these conversations that we're having in the industry right now. We're all talking about microcultures. What's the next level of microculture and how do you apply that. We have a really interesting conversation around like bundling and re-bundling and how brands have an opportunity to re-bundle culture now in a different way. We talk about constraints and abundance.

2:15If culture is becoming more abundant in terms of what people are exposed to, what are the constraints that are really going to drive creativity and innovation and effectiveness? We talk a lot about AI as well, what he's doing, not only within the business, but also how he's staying ahead as a CMO and an executive right now, which I think for anybody in those types of shoes, feeling like maybe they're falling behind, he's got some great advice there. And then we do talk a bit about, of course, what he's doing at first round, including this Ciroc Athletic Club platform, really, this media property that they're building with an event-based activation that they're doing once a quarter and how it became what he said was the most obscene thing that happened at Cannes in a good way, but I will let him explain it to you.

3:00So without further ado, I know you're going to enjoy this conversation with Nick Tran of First Round. Nick, how are you? How are things in New York? Things are good. I'd say, you know, being able to be in New York City for July 4th was a pretty incredible opportunity, especially, you know, given there was an amazing like boat parade and fireworks and air show all along the Hudson River. So my kids and I had an amazing view from our apartment so very fun times yeah it's weird i've been over here in the uk for 10 years now and every year that goes by kind of july 4th becomes like less than a significant state on that i'll tell you a funny story okay so funny story about that uh we were in london the last three years yeah and i really wanted to come back for july 4th even though we were actually in london the last you know two weeks prior after can uh with the intention of seeing what the 250th anniversary festivities would look like.

3:55And it didn't dawn on me that my daughter who moved to London when she was three and then moved back to the U.S. when she was just about to turn seven, she didn't understand the concept of why we celebrate July 4th. And when she found out that it was because, you know, the U.S. declaring its independence from Great Britain, she lost it. She's just like, why would they do that? Like, I was happy being in London and being in like, you know great britain and i'm supporting england in the world cup can't we just like all bring it back together and i was like no it doesn't really work that way it's just she was uh you know trying to boycott our celebration but then as soon as she saw the the boats and the the plane she's like okay this is kind of cool it's funny i've got i got three kids two of whom they're all american but two of whom have been born in london and then the other one was actually born in australia so So trying to kind of like teach them American history and American culture has been a fine job for my wife and I over the last 15 years of having them.

4:57Awesome. All right. Well, listen, I know it's been a long time. You and I originally connected when I was at Vayner and you were at Samsung way back in the day. But yeah, I think we've kind of maybe crossed paths briefly, but certainly haven't had a proper conversation since then. And you have been busy. So I'm very excited to talk to you today about everything you've been doing. and of course the work that you're doing at First Round. But before we get into the interview, can you please tell us about a challenger brand that you are particularly passionate about right now and why? Any challenger brand in the category?

5:26Totally up to you. The analytical side of my brain immediately says, well, how did we find a challenger? Because in the current state, I would say Nike is back into a challenger position given the landscape of where they've been and where they're looking to go and the aspirations that they have as a company. I look at places like Sam's Club and what they're doing with the hire of Jeff Jenkins and seeing them as a challenger brand. I look at Gap as being just past that challenger status and getting back on track with what Fabi's been doing, which is obviously an amazing job. And then you have the more traditional, quote unquote, challenger brands that are the small startup, these, you know, groups that are really trying to make a big run for it in the in the space.

6:11You know, whether it's like these new beverages that are popping up or whether it's these new snacks, especially anything that has protein or fiber, you just see challenging the status quo on the big cereal brand. So, I mean, it depends on how you look at it, but as far as who I'm looking at the most right now, I always love a good comeback. My career has been in taking brands that may have lost a little bit of their luster, a little bit of their shine, or maybe are in a bit of a crisis and getting them back to dominance. And that's probably why I'm most fascinated in looking at what Nike's been doing and what they're continuing to try to do.

6:48Yeah, I think that's great. And, you know, that's kind of our first principle and the whole concept behind Rival is that being a challenger is a choice. It's thinking and acting based on a set of principles and practices rather than a position that you hold within the market at any given time. The Nike series is super interesting. That's a great call out. So, I mean, everything you said of kind of a turnaround story and kind of taking legacy brands and reinventing them as challengers is, of course, a great segue into what you are doing right now at first round. So I think people would have heard of Ciroc, maybe Lobo 1707.

7:21But for first round overall, where you are president and CMO, can you give us an overview of what you're up to with that business? Yeah. So to the point that we were just discussing, I love a big comeback story. and right now in the space, especially with the challenge that the category of alcohol has, to be able to really operate and run a brand that had a huge moment over the last decade and is now maybe trying to find its way. It's been very exciting and humbling to try to steer this ship and partner with folks like Mainstream Advisors and Diageo to try to essentially bring back Ciroc and then grow Lobo 1707.

8:05So what we're doing is we created this joint venture. We are partially owned by Diageo, partially owned by Main Street Advisors, and the goal is to really bring Ciroc back to growth while just launching the Lobo 1707 brand, which is a tequila brand. So the first chapter of our conversation is about culture. And obviously the roles that you've had in a bunch of different categories, And I'm not sure that I really put all that together before our conversation today. But I mean, you've been in entertainment. You've been in fashion and retail. You're now in kind of alcohol. You've been in TikTok, Samsung, consumer electronics, et cetera.

8:45But across all of that, it definitely seems like, you know, one of the red threads for you is kind of understanding and helping brands navigate and leverage and be relevant within culture. And so the title, I'm actually going to, because you said you were up for talking about anything. So I'm going to throw out the questions that are in here and just go off the script immediately. Because, you know, the title that's in here in the brief says culture is fracturing, fragmenting, fracturing, and brands are not ready. And I want to ask you about culture and how brands should understand and take advantage of how culture is changing.

9:21And, of course, the way into that is this conversation about microcultures, microcommunities, right? Culture is no longer one thing to many, although I know in places like sports, we've got the World Cup going on right now. Those to me seem to be kind of like the few and far between moments, realities that do have some type of like macro cultural appeal and connection. But a lot of it and a lot of what brands are trying to figure out is how do you understand this culture is fragmenting where the pockets of passion and relevance lie and how to actually activate them. And so the title of this chapter says brands are not ready.

9:53But something that I've been thinking about a lot that I want to bounce off of you is, you know, we put out a white paper on microcultures maybe two years ago. And at the time when we were talking to people about it, when we were promoting it, people were like, oh, that's interesting. Kind of been thinking about this maybe, but like explain it to me. And I feel like more recently everybody is talking about it. Everybody is doing kind of like their version of microcultures. And I want to get your thoughts on where we're going next, right? So if everybody is now, and I met with even some like very kind of traditional marketers and traditional agencies and can that are activated in microcultures, what do you think the next level is?

10:33If it is no longer, and you of course can disagree with me if you think this is wrong, but I think most of the industry has kind of come to this realization and this reality of you need to activate against microcultures, not macroculture. what's the next step from here? Yeah, I think this is something that people struggle with all the time, but I would say one cycles, uh, abound in the world of marketing. So once you see one cycle go through, for example, you just mentioned that every brand is talking about microculture and how to activate those impassioned, you know, audiences. Uh, I immediately think then that, you know, once everyone's doing one thing, the only way to stand out is to kind of do the counter.

11:14So if you're now saying everyone's looking at micro culture and micro communities, I'm now going to start looking at the macro stuff just as a immediate pivot to ensure that we stay relevant. In regards to your question on what do I think is next, I do feel that the way that we've been fed content over the last, call it two to three years, has become a lot more personalized. So the way that people are marketing to micro communities makes a lot of sense. But you kind of called out the World Cup and saying that this is, you know, maybe one of the things that brings a lot of people together to talk about one specific topic.

11:51And I would argue that there are a lot of one-off things that actually drive that. And when we look at the way that I look at culture, now to go back to your first question, like what is culture? I used to define it as big C culture and then little C culture, little C being the things like music, sports, entertainment, fashion that you kind of just like mentioned as potential categories within culture. And then big CV and like the macro landscape of, you know, what's happening at a larger level of society. I'm finding that the easiest way for me to define it now is what are the campfire conversations that people are now having with each other when they're not on their screens.

12:31And that's kind of how I've talked to my team about what culture is today for us and why it matters. When we look at the things that were very relevant in culture. The easiest one that I can think about top of my mind is like MTV was very relevant in culture for my generation when we were growing up. And we would watch everything from TRL to figure out what the top 10 music videos were to watching the VMAs or the, you know, video music awards, and ultimately understand what was popular through the lens of pop culture through what MTV curated for us. In today's world with that being so, you know, removed from today's culture uh brands are stepping in and filling that so whether it's the gaps of the world that are i think i just saw it this morning gap just teased some kind of like a 90s vibe with this like old boom box that has either like a cassette or a cd i don't remember which one it was but it's like a very old you know like stereo system and they're teasing some new a music, potentially music launch.

13:34And you could see Gap with Cat's Eye and to Young Miko into this tease with their latest endeavor. They're kind of filling that space where people are having these conversations around these campfires around music, let's say. So when I think about where brands should play, it's identifying those white spaces and where the conversation is no longer being had because of the rise of social and the rise of these platforms and the rise of the algo. And where do you just find communities connecting with each other in a meaningful way? Those are the little cultural moments that I'm trying to figure out for us.

14:09And I think every branch should focus on for them. Yeah, that makes so much sense for Gap. They're crushing it right now. Crushing. Man, a couple of things kind of come up for me. So one, you know, that expression, there's only two types of business models, like bundling and unbundling. Yeah, it kind of came to mind as you were talking about it, right? Because like, it's true, maybe, maybe the next stage of the cycle, there was the macro culture that was all bundled. There's the micro cultures that were all unbundled. And now there's this opportunity for brands to kind of rebundle different fragments of culture into something that they want to stand for, or that they can kind of have, you know, taste, a term that's obviously thrown around a lot in this AI world that we're going into.

14:52But they can have a point of view that then other people wrap themselves around or call out or become part of that is a rebundled set of micro brochures. I don't know if that makes sense. No, no, that makes perfect sense. I've had that thesis since I was at Hulu when we were trying to claim that Hulu was decoupling or unbundling the world of cable and you could just get the stuff that you wanted to watch. And then all of a sudden that became the new cable. And then people wanted to see things that were a little bit more specific. And then to your point on the analogy, you have the large platforms, whether it's Instagram or TikTok or even YouTube.

15:27And they're essentially the bundled version of cable for this new generation where like every type of content you could possibly want to see is getting fed to you. But instead of you picking it, the algo is just pumping it to you. But at some point, someone's going to say, hey, I don't know if the algo actually is clear on what I want to watch right now. I just really want to watch sports. I just really want to watch fashion. I really just want to watch food stuff. So there could be a case to your question earlier on, like, what's the next cycle that we see a lot of these unbundled, you know, category specific platforms that not only let you see content, but that they've merged in commerce and community and a few other things that are, you know, now, you know, more top of mind that brings the whole experience together so that you could shop and buy and reserve and order all within like this one sort of like super app, which, you know, we basically borrowed from a lot of the Asian countries, but it's category specific.

16:21So if you really just want to like dive into sports, you could buy your sport tickets there. You could see content there. You could get a review from the community on like who they think is going to win. And then, you know, nowadays you could probably make a prop bet on like whatever it might be. So like, that's probably where I see the future going in terms of the way that people are consuming content. It's going to go back to the bundled slash unbundled where you're bundling the capabilities, but then you're unbundling the categories. There's something interesting to that that I'm definitely going to take away and think about more in that, you know, the best brands, the best marketing have been ones that have led culture, right?

16:58You think of like Coca-Cola, you think of Tiffany's and the Diamond Ring or De Beers, sorry, who came up with that for engagements and all that stuff, right? Like they lead culture. And in this kind of new world of the microcultures that are getting rebundled, the way to lead culture is if you have the money, may be still the top-down way. But if you don't, if you need to take the challenger approach where the time and the money are the constraint and the innovation is the opportunity, then it's kind of rebundling culture and putting that out there as a way to lead once again. So a lot of what we see with challenger brands, they don't have the time, they don't have the budget.

17:32And so these constraints drive creativity. What does that mean when it comes to culture? Yeah, I'd say that's literally what moves culture because culture doesn't operate in this place of abundance. if it had all the money, all the time, all the different resources. I don't think we'd see anything innovative. We'd actually just see the same thing on steroids. So typically when I look at how culture is moved by brands, it tends to come from the ones that are truly doing something different, which is, you know, in essence, because they have some key constraint that drives that, which is why even in my world, I've always pushed for those constraints, regardless of, you know, what we had financially, what we had as far as resources, what we had at time, the more you can constrict the team and the thinking, the better the actual drive into culture can be.

18:20It's funny. I've always thought that one of the biggest opportunities for big incumbent brands is to actually do an exercise where they cut their budget by 90 % or something like that, or they cut their headcount by 50%. And they're like, how would we do things differently just to kind of force that innovation of challenger brands. But the other thing that comes to mind with what you were talking about is actually, you know, we're spending a lot of time thinking through and kind of building, you know, the next gen marketing model for an AI native world, which is of course what everybody is trying to figure out.

18:51But the focus for us is less on how the technology can replace parts of how marketing has historically been done and more what from a first principles point of view and approach, what does the new system need to look like around what's possible now that wasn't possible before, But also, as with any system, it is limited by the constraints within it. So what are the constraints of the new model? And I think it's really interesting, this idea of thinking about the constraints of culture. And also, to your point of if there were no constraints, then we'd just get a bunch of crap. That's kind of what's happening with AI right now, right?

19:29Like the old constraints of time, of money to go into production, of scalability, of kind of marketing work have gone away. And everybody's still running around doing it the same way, which means that we've got a bunch of crap. And so the new constraints of AI, which I think are data, taste, and technical fluency, those are the things that are going to drive innovation that's actually going to move the needle for businesses. So I know we didn't have AI in the brief, but we'd love your responses to that. And then I'm sure I think the thing that might be really interesting and differentiated to get your point of view on besides like the question I'm sure you've gotten a million times of how are you applying AI to what you're doing at first round is for someone who really has climbed the ranks and made a name for himself and had this skill around how to understand and make brands relevant in culture.

20:21What does that look like as you apply that to this increasingly AI native world? so the system that you're talking about isn't in my mind drastically different from what we might have had in the past so uh the thing that you mentioned which is what can we do today that we can't do or we couldn't do before is where i'm really trying to push our team and our approach to how we use ai what i love is you know less so the efficiency play because that is less consequential to me, but more so what is the white space that we can now explore that we couldn't have explored without AI? And I think that's where I find it to be really fascinating.

21:03And then your point on constraints not being the traditional constraints of time or money because AI is able to basically overcome both of those to create iterations in infinity. I think to your point, it does water and dilute everything down. and you know it's kind of like that whole old design idea where if you were to ask you know 25 people in a room to draw the moon uh all the moons would look the same for the first five iterations and if you were to say each time you draw the moon you have to make it different or draw it differently you then get to maybe like the 25th or 30th permutation where all the moons that are drawn in that room are now different.

21:46People aren't using AI like that yet, where they are pushing the prompt further down the rabbit hole to get to something that feels uniquely specific to where they want to go. They're just kind of taking the first couple iterations where they all kind of look the same so that if I were to do that prompt, I can generate the same exact response to someone else. And I think to your point, the superficial layer is creating that sea of sameness and it's not allowing us, because we think it's good enough, We're not allowing it to really do its thing and dive deeper. I tend to look at the way that our team uses AI and not talk about efficiencies because I think when you go down that path, it's just optimizing something to create incremental change.

22:30I'm really questioning, is there a white space area that we could build that we couldn't have built previously? And what does that look like? And I'll give you an example. With First Round, I'm trying to create this idea of these loops of marketing that drive infinite marketing scale without the need to either burn through money, time, or resources, or other things. so the whole reason why we built the cirak athletic club um you know because we were looking at me like i'm crazy saying how in the world are you going to push enough cases of alcohol through these pop-ups that are only happening once a quarter and the response i have is that's not the way that we sell alcohol that is the marketing but if i can bring in brands and we can build a community that's mutually beneficial and symbiotic to other brands to want to invest into this more of an events and media platform.

23:27Now we're able to scale the marketing to then eventually show people this community and this world that we're building. And at the end of the day, it should be self-funded while at the same time driving infinite marketing for us. Because as we are able to bring in more brands to partner with us to build these things, it'll actually be able to be scaled. So I think in the question with AI is like, you could take models like that and figure out how AI can fill those pieces to build more of that. But I don't think AI is going to replace, to your point, like the taste and the ability to come up with a completely new, unexpected approach to, in this case, sell more alcohol.

24:03I love that analogy of asking somebody to draw the moon 30 times. And I'm totally going to steal that because it's a much better way of describing that that I've been describing it, which is the same point, right? But it's that it can give you something that's pretty good, but to get from pretty good to great takes more time and also more of what I was talking about with technical fluency. Well, and taste because like, how do you know you have the best idea of what that 30th moon should look like unless you have the taste and the experience to say like, that's the one that we want. And it's not these other 29 versions of that.

24:37And the other thing that I've been thinking about with taste, cause I feel like it's this term that's kind of everybody's grabbed onto and it's become kind of the default to talk about this thing but it's really more than taste right because my argument is old constraints new constraints we talked about the old constraint being time we talked about the old constraint being production like scale really we talked about the old constraint being money but actually expertise was an old constraint right like internally you didn't have somebody who knew how to be a brand strategist in the way that your agency person did or a copywriter in the way that your agency person did and now ai can do all that stuff like pretty well like the top one percent The top 5 % maybe is still a constraint, but 80 % good enough is no longer a constraint.

25:16So what's the difference between expertise and taste in the way that I think it needs to get applied in an AI native world? And to unlock the constraint of what I think will drive effectiveness going forward, it's really more about having a proactive point of view. So you need to know what good looks like, but then you also need to be willing to challenge the convention of everything else that is going on, which is kind of what you were talking about earlier as well. It's the, um, you know, the Steve jobs, nobody knows what they want until you show it to them type of thing. So it's kind of this, I haven't found out the perfect word yet, but it's this like bundle of terms and connotations, taste, judgment, proactivity, uh, agency, I think belongs in that bucket as well.

25:58But I'm really curious to see kind of how that terminology and that part of the conversation evolves over the next year or so. Yeah, but even let's say terminology aside for a moment, we've already seen what happens when you give that, I'll call it like that seat at the table to dictate taste to the 95 to the 97 % of the people that maybe didn't build up that expertise or have that authority in the world of like literally TikTok, right? So TikTok, when we initially set out to build this thing. It was this idea of democratizing content and allowing everyone to have a voice and spotlighting voices that were less seen or less heard.

26:41That was like kind of the initial like way that we were thinking about the mission of it all. What it ended up doing was it kind of watered down creativity. Because when you look at, let's say the world of fashion is like an easy example that's not in the space of it now. You know, there was a time when the editor-in-chief for Vogue magazine would dictate what the styles were for that season and would outline who is really driving, you know, fashion forward. And you would have these creative directors at these big fashion houses who are pushing the edge, like literally the bleeding edge of what fashion could do and bringing to life things that were only, you know, imagined, you know, by a select few who had the ability to think of these crazy things and then see it come to life.