Creative Marketing Strategies That Actually Work

0:00New York just doesn't have a lot of space for a lot of pieces. storage is always a huge issue. And so as we approach the product design process, we really had to think about all the ways that people live, what their kitchens look like, and adapt a product that really worked for all.

0:23Hi, I'm Shuang Esther Shan, and welcome to another episode of Shopify on location from New York City. This is the place you want to be if you're trying to make a statement with your brand. And that's exactly what Jordan Nathan did when he created Caraway, a line of non-toxic ceramic cookware. Instead of featuring food or chefs, Caraway's marketing showcased design and functionality, an approach that resonated not just with customers, but investors. Successfully securing Caraway with multiple eight-figure rounds of funding, Jordan is here with us today to share how he's built Caraway and carved out a space for himself within the competitive cookware space.

1:06Jordan, welcome to the show. Thanks, Schweng. Happy to be here. Excited to chat today. So for our listeners who might not be familiar with different types of cookware, Can you tell us what makes ceramic cookware so special? Ceramic is a material that was introduced to the market about a decade ago. What's great about ceramic is it has the same nonstick properties as Teflon, which has been around for decades, but doesn't contain any PTFE or PFAS, which are toxic chemicals. And it's a great alternative to Teflon or traditional nonstick pans if you want to cook healthier and cleaner. Mm-hmm. And this is, I think, something that you had to communicate, educate not only customers, but also to retailers and investors.

1:57How were you able to get this story across, maybe without the product, but just through a pitch deck or through a conversation in the early days?

2:11when i started caraway back in 2018 i was a single founder actually just had a pitch deck no product and basically needed to lean into the story of ceramic and the opportunity so you know five years ago when i was looking to launch the business there was a clear kind of trend in the market towards healthy products healthy eating healthy living across many categories. And when you looked at kitchenware and cookware, there's still a lot of categories today that use plastics and toxic materials. As we went to launch the brand, Pitch Investors, we focused on the ceramic opportunity. And I think what was exciting was there was a great kind of comp to BPA.

2:50If you look back a decade ago, BPA was kind of the main material in the plastic market. It obviously doesn't exist today. But looking at kind of nonstick cookware, a similar opportunity existed.

3:09We talked to investors and potential partners and retailers. We like to use that as a good comp of what the cookware market could be. And as we dove into research and talked to customers, we actually found that ceramic was the largest growing segment within the nonstick category, which made up 70 % plus of cookware sales. And one of the just interesting, I think, opportunities in white spaces we saw was it had been around for a while. It sat on retail shelves and the brands out there who are selling it didn't really have the educational opportunity that you do through a direct-to-consumer medium to tell the story of why ceramic even exists.

3:47And so we got really excited and so did investors and potential retail partners about the ability to leverage a digitally focused brand where you can tell that story, educate consumers on why the material exists, why it's better, why it's an alternative. And so we really focused on that out of the gates when we launched in 2019. Yeah. And you truly did dedicate yourself to tell that story. I understand in the early days, you were doing about 10 different investor meetings a day for about 10 months, crazy amount of meetings to go through funding. Tell us some of the tips that you had approaching different investors and also just the mental mind state of staying positive when you're going through so many pitches and hearing some rejections?

4:38Yeah, it was a really challenging process. Fundraising for 10 months felt like it was a never ending cycle of conversations. Yeah, I think a lot of great learnings out of it. I'd say my if I think back to my initial kind of pitch deck, first off, I was a single founder, which, you know, I think for any business is challenging, I'd go into meetings and use the word we and they'd be like, who else is on the team? I'd be like, oh, just me. And so not having that support and rest of the team, I think, you know, was a learning and would have been great to have put that in place kind of prior to going out to market.

5:11A lot of my initial angle was focused on ceramic and cookware. But, you know, as venture investors typically are thinking five, 10 years out, one of the things kind of early on that I massaged and kind of updated later with my deck and pitch was focusing on the long term of Carraway and what it could become. We always have had this vision to take on the whole home. The reason the brand's called Carraway Home, starting with cookware and a lot of that long term vision, kind of product pipeline, omni-channel presence that we wanted to have initially was missing from the pitch. And so as I started doing it more, like you said, had pitched probably 10 investors a day for about 10 months.

5:51We had over 100 investors invest in our first round. So a lot of resilience and fortitude needed. But I think each kind of month, we were able to close a few checks. We used that capital to make progress on the business. And kind of towards the end of the round, we had prototypes, we had product, and we're able to circle back to maybe initial investors who passed who wanted to see something actually physical to touch. And it sounds like while you were pitching and meeting these investors, you were also adjusting the way that you were presenting and sharing the story. I also wonder about just being in New York.

6:28There is a huge entrepreneurial space. A lot of great direct-to-consumer brands actually come out of New York. So has the city influenced you or has the community of founders helped you in building Caraway as well? Definitely. You know, most direct-to-consumer brands, I'd say, are in the New York area. Obviously, they exist everywhere, but a huge community here, which was tremendously helpful. I still have a lot of founder friends today who launched brands at similar times as I did. You have access to some of the upstarts like your Warby Parkers and Harry's and Quip, et cetera. And so it's an amazing community here to bounce ideas off of, kind of hear what works, what doesn't.

7:10And I think one of the benefits of being a New York resident, which really played into our product design was New York just doesn't have a lot of space for a lot of pieces. Storage is always a huge issue. As we approached the product design process, having lived there for a number of years, we really had to think about all the ways that people live, where they might live, what their kitchens look like, and adapt a product that really worked for all. And you kind of see that coming to life through our current Carraway core set, which has a minimal amount of pieces, just what you need, has storage that comes with it to help organize your cabinets.

7:50A lot of great kind of learnings out of New York with a great community. And then, you know, as we spoke about the investor process before, hundreds and hundreds of angels in the city that focus on consumer and being able to just go to a coffee shop or meet at their office and bring some samples is really beneficial having started here.

8:15and speaking to angels and investors that's just one part of the puzzle the other part is actually communicating to the potential customers and what I find really interesting with Caraway is the fact that even though you started in cookware you actually don't talk about food or feature chefs you took a very unique approach to create buzz for the brand tell us more about that? One of the gaps we saw in the market, obviously, we were focused on non-toxic materials and wanting to tell that story. But I'm someone who really loves design, appreciates the details. And as we were kind of researching the market, we actually were the last direct-to-consumer kitchen brand to get to market.

8:58And it was really interesting watching all the other brands who had launched, many which are still around today and successful, who are focusing more on that professional chef, bringing pro tools into your home. And I think for me as a consumer, I'm not a great cook. I don't want to be a professional chef. I don't need the best. I just need something that's easy and looks good. And the big gap we saw in the market was this opportunity to focus on design, focus on color. And kitchenware is such a big piece of your home decor and design. And no other brand was really thinking about it that way. As we launched Carraway, all of our photography, we shot beautiful shots and sculptures to present the products as art.

9:42We like showing the products on beautiful stovetops and kitchens to create an aspirational brand. And when we thought about our influencer strategy, there's always the opportunity to go after more of the kind of cooks. And so we focused a lot of our strategy on interior design, a lot of lifestyle influencers and individuals who could really tell the material and design story of the brand.

10:10I also like that for, I guess, like more of a full circle moment as well, because you were saying how investors made you have this long term vision of having Careway Home and entering into different categories. So you kind of brought that value or that vision into the initial campaign because you're taking images out of the whole home and you're showing that holistic interior design. The other part I find so fascinating when you launch was the way that you worked with influencers to prep for creating that buzz. So talk to us about working with influencers and selecting that initial group before launch.

10:49So on launch day or launch week, I should say, I believe we had about 100 to 200 influencers post all at the same time. And it was incredible launch strategy where having so many influential folks talking about the brand at the same time created this amazing halo effect. And we actually launched on November 5th of 2019. So about four years ago, it was during holidays, people are starting to shop and to have folks who've tested the product. We're a new brand. We have no reviews. Our influencer base samples early to use and test and to have that kind of source of truth for the product quality was really important.

11:35It's something we've carried through to today. We actually have around 3 ,000 ambassadors that we work with. And I think it's one thing hearing from the brand about how great your products are, but it's another hearing from individuals who actually love them and use them. And so, yeah, it was a great launch strategy and something we've built upon, you know, four years later.

12:01Yeah, I was going to say I noticed Caraway because Emily Mariko was using your products on TikTok. So it's really cool to hear how you set that system up. but it must have taken a lot of planning and strategy to actually select the right partners and make sure that they have the right products. Can you share some tips about managing so many initial relationships before launch and working with influencers to get ready for that launch? I think a big piece of it is education around the product, the brand, why it exists, what are the core features, getting products to individuals who really love it.

12:41You want the people who are representing the brand to have used the product. A lot of times with our ambassador base, we'll select folks who have beautiful kitchens or have a great design style. And so a lot of that initial 100 to 200 base were interior design type folks who could focus on the design. We also had a cohort of individuals who maybe recently had kids or were focusing on creating a non-toxic home to tell that story. A big part of the selection process is figuring out who can kind of hit on certain angles of the storytelling that we're trying to put out and also pull it back to, you know, relating it to their own experience and, you know, value that their customer base would see.

13:26Well, it's really cool to hear about Caraway's influencer program. It's giving me a look behind the curtain. we want to take a moment to thank you our listeners for tuning in to our mini series from new york city we want to keep making episodes you love so leave us a review with your feedback and make sure to share this episode with a friend so we can continue to grow thank you so much so another side of the business i would love to dig into is the fact that you've created a cash flow positive business from day one. Can you talk to us about working with manufacturers and creating a pre-order model that really worked for Carraway?

14:11Definitely. One of the challenges for any young startup is cash, especially when there's not a lot to go around. But when you're in a consumer business, you have inventory, a lot of your cash gets tied up. And so being last to market in the cookware category, I think our fundraise was a lot more challenging than had we been first to market. And we had less capital than competitors. We knew access to it would be challenging without hitting certain metrics. And so as we launched the business, we had to think creatively about how do we extend this cash runway? And the way we did that was working with great factory partners, logistics partners who are willing to extend payment terms.

14:53And we created actually an efficient kind of model of working capital where we actually were selling the products before we had to pay for them.

15:08And that required really tight inventory terms and management of cash. And on the front end, when we launched the brand November 5th, 2019, we actually launched on a pre-order where goods came about two months later. And we actually continued that model for about the first 24 months of the brand.

15:32There were certain points where you could get product and it shipped to you in two days, but we started selling products kind of six to eight weeks out. And that also extended the cash runway that we had for the business. Interestingly enough, actually every product launch that we've done to date since the cookware, we've actually launched on a pre-order. So I've taken a lot of those learnings into new product launches, and it's been a successful model for us to date.

16:02For sure. And I think that financial discipline is also important and probably very attractive for investors that you were speaking to, to showcase that you do have this long runway you've created yourself. I guess the question here is when you were successful with fundraising and you have to do that mental switch between very disciplined financially to actually start to invest in marketing dollars or in growth strategies. What were some of the initial things you did to invest in growth levers? Yeah, and I think one thing we also did was take that cash kind of efficiency model to marketing. We did a great job focusing on ad channels where actually we were pushing out the payments on those extra 30 or 60 days and had the cash coming in first.

16:52So that was one really important area that didn't actually limit our ability to spend within certain growth channels. And then as a young startup, you have very little capital to spend on marketing. You really need to focus on core few channels. I think a lot of startups have the tendency to just go very wide at first. And we focused just on Meta and Google to start, kept it really tight for a long time and set very strict return on ad spend numbers. and acquisition costs. And one thing we did as a company was once we kind of set a floor, we weren't allowed to drop below that. And that was just a really important model that we still run today where we make sure we're first purchase profitable and the business model works.

17:37And we're not overextending spend to ever go below that, which could put the company in a financially difficult position. So setting those initial guardrails for yourselves to test and experiment in marketing Has there been any new channels or new strategies you've deployed that are different from the initial days of marketing? We've definitely added channels over time. We now sell and advertise through podcasts, TV, a number of online channels. You know, I think one thing we're doing differently today that we didn't do in the past was leaning a bit more into kind of video, showing the product more in use in a kitchen.

18:18And a lot of those early channels are still our most successful today. But, you know, as the world of advertising's evolved and, you know, the iOS 14 rollout with privacy and tracking and GA4 changes on Google, we've kind of had to adapt our strategy. and where you're kind of seeing a lot of those platforms lean today is more into the creative of your advertisements. Whereas, you know, five years ago, it was more about kind of account structure and working with the algorithm in terms of how you set up your targeting. So a lot of that has just kind of evolved over time. And we've certainly added a ton of new channels.

18:56I think one of the challenges we have today that we didn't have in the past is we now have five or six core product categories and each one kind of with its own story and persona and customer base. And so one of the evolutions of our advertising strategy has been, how do we actually tell the story of each of these products, which are all big categories and big opportunities? Yeah. And speaking to those different product categories, I know that you had to be very thoughtful about product design because you are heavily influenced by New York City living, that limited counter space. So talk to us about initiating those new product lines, having the ideas and testing and iterating for those new products.

19:43Yeah, so product is, I'd say, kind of Caraway's core competency. And we actually spend about three years designing each product that we've launched. We really make sure every detail is perfect. We always kick off the process with consumer surveys. What do they like about their current products? What don't they like? We also like asking what are challenges in the kitchen that need to be solved? And, you know, there might be ideas or product categories that come out of that, that we can help solve or make easier. And then as a business, we love focusing on big opportunities. So multi-billion dollar categories that have been around for a while.

20:23We always want to make sure we're having a non-toxic solution or something eco-friendly, somewhere where design is maybe an afterthought within the category. And so we love choosing opportunities like that. And in kind of the three-year development process, we're doing a lot of product testing. We're working with manufacturers. We're asking customers for photos of their cabinets to see how they're storing things today to make sure we can create a solution that actually works with what they're doing. And then once the product's actually tooled up and ready to go, we actually do a few months of consumer testing as well so that we can work out any kinks with the product before we get it to market.

21:15It sounds like you've really honed in on this feedback loop to make sure that the customer feedback is at the heart of how you're developing these products, which kind of leads back to your career before Caraway. I think listeners don't know that you were developing hundreds of products for brands before. Talk to us about those experiences and what you've learned from them to actually be able to understand kitchen products better and market them to the customer that you want to reach. Yeah, so for two years before Carraway, I worked for a company that owned a number of Amazon brands. I worked on their kitchen brand, launched dozens and dozens of products.

21:59And a ton of learnings from that that we brought into Caraway. I think one, the prior brand I was working on was very colorful and we were selling primarily on Amazon as a channel. And when you're sitting next to kind of black and stainless steel products, color is a great way to stand out, reach the customer and also create a retention loop built into the product where customers want to match colors across products in their kitchen. And so that's obviously something you see here today with Carraway and we've really leaned into. One of my biggest learnings from my past career is it takes the same amount of effort to launch a$10 product as it does a$400.

22:39And so as you think about prioritizing your time and what products you launch, making sure you're putting your efforts into big opportunities, ones that can really drive revenue, I think is important. And I think it's really easy to get caught up into smaller products or accessories that are great for the brand, but don't actually drive significant revenue. And when you're in your first one to five years, you need to stay very focused on what's going to drive performance. And you can always come back and launch those brand products at a later point. So I think that prioritization has been really key to us at Carraway.

23:15And then the last thing, sets are a great way to get into consumers' homes with great unit economics. There are a lot of brands in the space that focus on selling single pieces. We do today, but they're kind of at the back end of what we do as an operation. And so took a lot of kind of set learnings and bundling learnings from my prior role into Caraway, which has driven a lot of our product strategy. the most interesting part to me is you're the quintessential story or the theme that we've heard a lot from our new york merchants you've actually worked in a category that people think have been very saturated and there is no space for new ideas so i guess what is your advice for people who might be working in established industries in a corporate job and they're learning lots, how do they keep their eyes open for opportunity in a space where people might think that's already been really saturated?

24:16Yeah, I think when launching a business, everyone wants to create something that's, you know, you hear these words disruptive and innovative. And, you know, I think some of the best products are in the simplest categories, just done better and have more focus on higher quality details or cleaner materials. And so I think for other entrepreneurs out there focusing on a product category that you know really well is important. I think, you know, having that gut instinct or intuition in terms of what consumers want is a huge advantage. And then, you know, if the market's big enough and you create a great product, consumers will come.

24:53And so not every brand needs to be a billion dollar business. There are great opportunities out there and consumers who will buy if you create a great product. And so I think focusing on something you know well and looking for what's a storyline or what's a material or, you know, what's an area that's not being pursued within this category. Yeah, I love that advice so much. To close out the show, we know that you're constantly thinking about new products and new lines. Are there any new releases you can tell us about for Caraway? Yeah, so we actually just had three major launches in the past three months.