Why Celebrities Are Getting Into Business (And What Most Get Wrong)

0:00Kimberly Kreuzberger:Celebrity has audience. We like the new commercial.

0:08Kimberly Kreuzberger spent five years at Goop taking the company from zero to a hundred million in revenue. Then she started her own celebrity brand building machine, executing strategies for Halle Berry, Channing Tatum, and Chrissy Teigen.

0:19Kimberly Kreuzberger:We sit across 30 brands. She's now growing her company pivot projects into one of the industry's most well-known partners when it comes to finding the right talent that really converts. The best storyteller wins. And I've seen a fashion influencer in Summit, New Jersey drive as much conversion as a celebrity. Surprise! Follower count means almost nothing when it comes to actual conversion. And she's here to share what the world's best storytellers all have in common. I'm your host, Adam Leventer, and welcome to Shopify Masters, your companion for starting and scaling a business. Kim, thanks for being here today.

0:51Kimberly Kreuzberger:Thanks, Adam. Why don't we start with that early statement that follower count almost has nothing to do with conversion. In the context of, say, building a business or building a brand, what is it that makes it so? I think more than anything, the best storyteller wins. So it doesn't matter how many followers you have. And also because of paid and distribution, you can drive the follower count or the audience. So you have to first start with really good content. And so not necessarily the men or women who have 40 million followers are the best marketers. I think they're good storytellers most likely if they were able to attract that many followers.

1:33Kimberly Kreuzberger:But we sit across 30 brands right now. And I've seen a fashion influencer in Summit, New Jersey drive as much conversion as a celebrity with millions of followers, if not more. and there's platforms like ShopMy, which we like live and breathe by, which does an amazing job of tracking that conversion. And you'll see on that platform, it's not necessarily the influencer or the celebrity that has the largest following. It's truly like who is telling the how, the why, the when, how often are they doing that with trust and authority? Those are the storytellers that are kind of rising to the top and becoming really important to brand.

2:13And is it that celebrities aren't great at conveying that trust or authority? Is that where they're falling short? I don't know.

2:21Kimberly Kreuzberger:I don't think that's, I think it's a trade like anything. And I think these influencers grew up talking in camera to their audience and their following almost like they're on FaceTime. And there's just a different comfort level. And I think some celebrities have done a really good job blurring those lines. But for the most part, I think there's a comfort level of those who are able to talk in camera and continue to market a product probably to the point of almost like discomfort. And I don't know if every celeb is willing to go to bat that often and that frequently for a brand where I think some micro influencers will do it, you know, consistently and create a lot of impact by doing that.

3:01When did micro influencers start to take shape?

3:04Kimberly Kreuzberger:You know, when I started the business in 2019, I was really working with just celebrities. And as we started working with brands, that's where I started getting a lot more exposure to the conversion. And when you would go under the hood, I would look at these men or women who had under 50 ,000 followers, but they were incredible storytellers. and I would watch them convert and I would use the platforms, you know, whether it's ShopMy or turning those assets over to a paid social agency and watch the conversion and how well their assets performed. And that's when I started really kind of keeping them on the radar.

3:43Kimberly Kreuzberger:But I think, I mean, everyone's like a micro-influencer. If you have influence in your society and your circle of trust, I think that's gonna make you a great storyteller and a great converter. Pivot Projects is now near six years old. You've worked across, you said you've got 30 brands in your portfolio. You worked with all of these celebrities. Some big names from Molly Sims, Chrissy Teigen. It's a long list. What are the patterns in terms of the actual success of the business model build or the brand build that you've been able to identify? Yeah. We procure talent, first and foremost, whether that's A-list celebrity or 50 creators.

4:20Kimberly Kreuzberger:From that, we create premium content. whether that's social first or produced content in any capacity and then experiential and that's just the flywheel of what we're seeing and what marketers want they want more than just casting talent right after you cast out you want to produce some sort of content and then of course you want to create some sort of event and at that event you want a ton of micro influencers or social first attendees that can help you amplify the event so that's kind of the three muscles of the business. When I started the business, I think it was really casting big names. So it was either celebrity was the demand, or it was quantity over quality, which you've seen like brands like Unilever really wanted to scale up.

5:05Kimberly Kreuzberger:And a lot of their budget is shifting to influencer, and they want a lot high throughput. I think that's shifting. I think there's a lot of brand safety issues. So it's not as easy. And an example of this, we work with Chase Infatuation, which is owned by Chase. You can't just cast a thousand influencers using a platform. There is like an art and a science with really doing an audit of these users. What's in their bio? What did they last speak to? And we use platforms like Sprout Social as a brand safety regulatory component. But you really at some point need the mix. You really need to go on the handle and say, I don't care if they have X followers and they meet all of these prerequisites.

5:47Kimberly Kreuzberger:It's not the right fit for the brand. And I think sometimes when you're moving fast at high throughput, you can't be as high touch. So I think there's a shift in quality over quantity. And I think the best marketers know that getting five incredible assets they can use to boost or whitelist on paid is going to be more impactful than hundreds of assets that they're testing with that are less impactful. Okay, for listeners or viewers that don't understand what that term whitelisting means with respect to paid, can you just double down on that for a moment? Yeah. We've seen a shift recently over the last, like, I don't know, year.

6:21Kimberly Kreuzberger:We're beyond just getting paid rights that you're contracting an influencer for so that they can use the content in Meta or TikTok. Whitelisting is when the ad comes through from the influencer's handle. So you almost look like you're getting an ad from Ashley Tisdale when she's talking about a brand versus the brand providing you or showing up in your feed. Which is more personal, more authentic. Yeah, and you have to say the brand name within the first three seconds. You have a very short window to capture attention. So you need to make sure it serves as an ad, but also catches their attention with somebody that's maybe recognizable or someone that, oh, do I follow them?

6:58Kimberly Kreuzberger:Should I be following them? So it tends to be way more effective in paid. And it comes at a premium. The influencer will charge more for whitelisting than just paid usage. When you look across your portfolio at Pivot, you've seen so many businesses at this point. Could you just share a few sort of business model tips with respect to go to market in terms of what advice or what you'd think could make a business successful? I think if you are a creative and an entrepreneur and you're out there trying to start a business, you might not be a master of numbers. And so I don't think anyone should engage either putting their own money in or raising capital unless you have an amazing CFO or finance lead.

7:44Kimberly Kreuzberger:And the reason ultimately you have no business if you can't manage margin and EBITDA and really be hyper, hyper thoughtful on how you're building and scaling revenue. So I think first and foremost, think of that operating team. And if you are creative and entrepreneurial, really think of that strong number two as a finance ops lead. And that should be, you know, your key hire before you do anything. And I think people get excited about marketing, which is sexy or the merchant. But I firmly believe that you have to know your numbers better than, you know, just as well as your CFO. You have to wear the CFO hat for as long as you're driving that business while you're the CEO, while you're the founder.

8:25Kimberly Kreuzberger:So never take your foot off that gas until you feel really comfortable with that number two, building and scaling into the business. I think that's essential. And I think thinking about how you're capitalizing the business and the people you're going to put on that cap table, they're not just bringing money, but what kind of experience and strategy are they bringing and how influential will they be on that journey? And has any of them had exits? You really want people with a history of doing something and showing success and then hopefully exiting the business. I mean, those are the best people to learn from because it's a playbook that you can model against.

8:58And by default, I mean, if they're on the cap table, they're essentially your partners. Yeah. So choose wisely.

9:03Kimberly Kreuzberger:Yeah, and you report to them. I mean, it's their money, their product. Right. Yeah, so I think that's strong. Yeah, I think that's great. Choose wisely. Take me back to your experience with Goob. So before Pivot Projects, you were with Goob for a while, right? And largely responsible for scaling this business from zero to north of$100 million in revenue. Yeah. from a small team to north of 300 employees. Yeah. You must have learned a ton throughout that experience. You've said that was your sort of quote unquote MBA in real time. Yeah. If you could just share a few of your biggest takeaways or your biggest learnings from building Goop, what would they be?

9:41Kimberly Kreuzberger:For me, it was all the mistakes we made in a good way. It's funny, our team was so small. So even when we were like moving email service providers, like it seemed like a decision we were all part of and weighing in. And so moving and migrating too many emails, You just learn along the way. And I think as our leader, we were all learning together. And that's what I think I loved most about Goop. The leadership team was like best in class. When I think back of the CFO and the chief merchant and our chief content officer and even Gwyneth, we had something really special in those early days. And there was a lot of testing that happens.

10:15Kimberly Kreuzberger:And anyone who's worked at a startup, zero to 20 million, 20 to 50 million, just a game of test and learn. You know, you make really wise decisions and you lean on experts, but at some point you have to take the leap. You know, we were testing retail doors and pop-ups. We were testing new media channels, podcasts. We built InGoop Health, which was a big community event. InGoop Health was one of those things that for the rest of my career I'm so proud of. Bringing 400, 500 goopies together. It was a ticketed event. It was executed beautifully. I think from a consumer experience, it was really celebrated.

10:48Kimberly Kreuzberger:And I just think about all of those things that you're able to build and design an architect because you built a business case that said, I'm either going to lose my job or get promoted. And if I do this right, it's worth putting my stake in the ground. And so you're just taking a lot of risk and a lot of swings. And I think that's what makes startup world addicting. And I think a lot of people who work for startups end up going back into another one and another one. And it's hard to do that in a rigid, highly bureaucratic, established business. During your tenure at Goop, you obviously had a lot of success.

11:21There were obviously some mistakes along the way. What were some of the biggest mistakes?

11:28Kimberly Kreuzberger:One that comes to mind, I think we were always on the lookout for a Net-A-Porter hire, an Estee Lauder, a L 'Oreal, someone who has done all of this and can teach us and waiting on the Messiah to walk in the door. So we'd wait months for these hires from these huge organizations. And most of the time we were completely disappointed. I mean, I think there's a level of grit and resourcefulness that's needed at a startup. that sometimes when you come from those big organizations, it doesn't translate. And so we wasted a lot of time waiting for some of those key hires to really guide us and teach us.

12:10Kimberly Kreuzberger:And most of the time we were disappointed. And it always came back to like, okay, now it's back to us having to do the work. They're not grinders. Not grinders. Probably don't have scarcity mindset and worried about running out of money. Right. What was the urge for you to start Pivot? Like, how did you know it was the right time to transition to a new startup? Yeah. I moved to LA for the first time after, you know, never living here. So my kids were going to school with agents and managers and all of that was new to me. I come from a publishing background. So when I would share with people that I'm working at Goop or I've been at Goop a long time or I'm the chief revenue officer, you know, a lot of people would be like, do you mind sitting down with Kate Posworth or my client X and, you know, this talent and just talking to them about their experience, they're really passionate about starting something, or they have a nascent stage business, and they would love some advice around it.

13:02Kimberly Kreuzberger:So I took a few of those meetings. And I really saw the opportunity between a lot of people investing in celebrity. This is in 2019, 2020. That seemed like an easy check to write and a no brainer due to like, you know, exits like Casamigos and aviation gin. And I mean, we can name a bunch honest. And then I saw a lot of talent camp representation. So like inner circle, you know, the best friend or the agent. And I didn't see a lot of people sitting in that hardcore operating role, like a CEO that was going to shepherd a business from zero to 5 million, 5 to 10 million. And I'd meet with a lot of talent.

13:39Kimberly Kreuzberger:And they talked about their idea and what they have, but they didn't have those fundamentals, a brand deck, a go to market strategy, a high level financial model. And so I think the catalyst for me leaving was early days of Goop, which I loved because it was so exciting to decide which revenue streams to lean into, which revenue streams to prioritize, testing into those revenue streams and being able to do that for a slew of business. So Magic Mike with Channing Tatum was so special and Hallie on Reespin in the early days. And then I met Molly Sims. She had ideas, but she was like, I know I want to do something, but I really want your help like architecting what that looks like.

14:21Kimberly Kreuzberger:And so we spent a lot of time together on. And that was one of the only ones that I would say that we incubated together. Most of them were nascent stage businesses that needed commercial strategy. I think one of the big misconceptions in the market, let's say, is that said company or product simply needs a celebrity or celebrity influence or influencer to become successful. And that simply attaching a big name to a brand or a business model is enough to make this thing succeed or scale. I mean, case in point, you know that not to be true. that operations that go to market strategy. There are a few, but let's say it's people look at the Kardashian playbook and think like, well, it's just easy because they're celebrities and anything they touch turns to gold.

15:06And people are borrowing from these use cases that they're seeing, whether it's aviation gin or Casamigos or goop and saying, well, look, I have this great idea. If I can just have a celebrity involved, this business will be successful. But based on what you're doing and the work that you've done at Pivot, you know that there's so much more work involved. And in fact, that is not the case. And these use cases that I just mentioned are really more of the minority.

15:36Kimberly Kreuzberger:Yeah. Really. Agree. What feels obvious is that celebrity has audience. Right. So technically like the new commercial, you know, it's really hard. You have to be talking to community and to potential customers all the time with frequency. And so I think from that perspective, it feels obvious that anyone with millions of followers that can talk about your brand on an ongoing basis would be a marketing lever. What I think happens is celebrity take on a lot of projects, you know, in their share of mind ships. So sometimes you catch them in this, like during COVID while I was doing this, I caught a lot of celebrities at the right time who were very focused on brand building while production was shut down or projects were limited.

16:22Kimberly Kreuzberger:As that scales up and they go back to their day jobs, I think you lose that share of mind or it's hard to have them in full-time operating mode. And I think what I have found with any business, you need incredible operators to build and scale. You need amazing marketing. You need ongoing marketing. I think part of the evolution of pivot projects, I think there's a lot of ambassadors that can help build and scale a brand. And they can talk to different segments of audience to avoid that cross-pollination. And that can be very effective if done really well. And that's part of the quality over quantity, more of like a really thoughtful ambassador group.

17:00Kimberly Kreuzberger:So how are these 15 ambassadors that are different audiences and regions and diversity, how are they talking about your brand on an ongoing basis? What's the incentive for them to do that? Are they on the cap table? Are they not on the cap table? I find that to be more interesting as a model. And then I think there's a brand risk component, betting your business on one celebrity that could have one interaction that can ruin your business. And I think that could happen with a CMO that does something stupid or a CEO. But I just think there's a lot of risk. And I think if you can expand that mindset into a broader group, I think it's a more interesting way to approach scaling the business.

17:40Right. What makes for a successful brand these days when we're talking about generating deep lifetime value and engagement over time? Like, let's say your go-to-market is successful. You have good celebrity product market fit. You have good early indicators and good early traction in the market. But your lifetime value just isn't there over time. Like, competition is fierce, let's say. Yeah. How do you think about ensuring that consumers still remain attached to that initial engagement they first had with the brand?

18:17Kimberly Kreuzberger:I think it's hard. It's like immediately I thought of like supplements and beauty. It's super competitive. You know, the FDA blended. You know, I don't know what's regulated, what's not in some of the supplement brands. But you see brands like Bruins, you know, which is using a ton of influencers and really pummeling your feed. And it must be working. I mean, I don't work on that brand, but I think that's a great question. I think lifetime value is hard. I think there's a loyalty piece that right now is very, very difficult. I think as brands or as consumers, we're tempted to try if it's a modest price point.

18:54Kimberly Kreuzberger:I know I will, like I'll serve an ad, I'll swipe up, I'll convert. Not necessarily like, I'm not gonna be a high lifetime value customer probably, but I'm willing to try things at modest price points. I think it's a good question. I don't have the right answer of like what's going to keep them forever unless you have a product that is showing results that, I mean, I think of like anything fiber focused or GLP-1 or high protein. I think people become obsessive with something that they feel like is making them feel better or showing results. I think that would be the only thing I'd bet my life or even like a beauty product that changes their skin.

19:30Kimberly Kreuzberger:I think you'd have to see something like visible or feel something for the product to be irreplaceable. Okay. So in a way, I'll say then based on what you said, that a brand that can successfully bake in their product into the everyday routine of the consumer, it's almost like this engagement becomes a daily habit or a daily ritual. And therefore you're generating deep lifetime value over time because the consumer is now so addicted to the routine of it all. can become something. But a couple of other keywords that you mentioned earlier on storytelling, community. I mean, this was in the context of Goop, but these are buzzwords that are, you know, I think in the zeitgeist of just brand building or business model building these days.

20:16Are there frameworks around storytelling or around narrative or around community building now that you find are successful in terms of the way that you guys work with brands?

20:28Kimberly Kreuzberger:I think a big part of the success with working with talent is briefing. And I find we even get better with each creative brief. So basically, instead of just letting the influencer create UGC, with maybe two or three key messages, it's getting maniacal with what they're shooting, how they're shooting, what the lighting looks like. I mean, even in our briefs, you have to follow the brand, you have to engage when they post, you have to comment. I mean, it's just building a much deeper relationship so that it doesn't feel inauthentic. I think the best influencers push back when it's too scripted.

21:03Kimberly Kreuzberger:And I have influencers that won't even commit to a campaign until they see what captions need to look like, to see how copy heavy it needs. And I appreciate that because ultimately we want it to work for their audience. So they have to protect that component. But I think the briefing has to be really, really detail oriented, thoughtful, has to really understand what they're doing well on their handle and how do you leverage that. So a little bit of like the magic of what Adam does for on behalf as a creative proxy for a brand that should be thoughtful. And that should be integrated when you when I send you the brief, I should also be thinking of what's worked really well for you.

21:41Kimberly Kreuzberger:So an example of that is, I always tell the brands like go through their feed for an influencer, find the two or three assets that are either high performing assets, or ones that caught your attention. And let's use them on North Star. So when we send the brief to the influencer, let's say we really liked these two that you did, whether or not it was for a brand, but how you spoke in camera, how casual you were, the environment, how you closed out that content piece. So I think really trying to get really narrow. And so you're giving them creative freedom within the reins of what they do well, but it's not a free for all.