764 Sandra Oh Lin: Founder & CEO of KiwiCo

0:00Kara Goldin:I am unwilling to give up, but I will start over from scratch as many times as it takes to get where I want to be. You just want to make sure you will get knocked down, but just make sure you don't get knocked out. So your only choice should be go focus on what you can control. Hi everyone and welcome to the Kara Goldin Show. Join me each week for inspiring conversations with some of the world's greatest leaders. We'll talk with founders, entrepreneurs, CEOs, and really some of the most interesting people of our time. Can't wait to get started. Let's go. Hey, everyone. Welcome back to the Kara Golden Show.

0:45Kara Goldin:Today, I'm thrilled to be joined by Sandra Olin, the founder and CEO of an incredible company called KiwiCo. It's the global brand inspiring creativity, curiosity, and confidence in kids through hands-on play. And it's more than kids. It's also adults as well. Sandra started KiwiCo in her garage with a simple but powerful mission to help kids see themselves as makers and problem solvers. What began as an idea for a single activity crate has grown into a billion-dollar company that shipped over 50 million crates worldwide, built a community of millions of families and earned a reputation for making learning so much fun.

1:33Kara Goldin:I can attest to that. Before founding KiwiCo, Sandra held leadership roles in many known tech companies, those little companies like eBay, PayPal, and also consumer products company, Procter & Gamble. But KiwiCo, that's where purpose met passion. And I cannot wait to hear a ton more about it. So Sandra, welcome to the Kara Golden Show. Really excited to see you. Thanks so much. Happy to be here. Absolutely. So let's start with the founding. So what inspired you to start KiwiCo? It was really a personal need that started it. So my oldest two kids were almost three and almost five years old. And they were at that age where I wanted them to get hands on.

2:23I wanted them to create. I wanted them to feel like they could make things. and I think part of it was because I was an engineer by training. Part of it was because growing up, I made a lot of things with my mom, who's kind of like a MacGyver of sorts. So I have really good memories of this too. And I started to pull together different materials for my kids to engage in and they're having fun. But I was like, wow, this is taking a lot of time. Like I really need to amortize my time and effort against this. So invited my friends, their kids over. And one of the moms was like, Sandra, you should start a business around this.

3:05This is amazing. Like we're having so much fun with these activities. And my first thought was, I mean, this could be a really, really fun business to work on. But the other thought was like, hmm, Well, if this is an N equals one issue, like my own, like this isn't going to really go anywhere. So long story short, we've been really fortunate that there are a lot of busy, well-intentioned parents out there who want these like fun and enriching activities for their kids. Kids just want something that's super fun and delightful to play with. And so like you said, we've now shipped out over 50 million crates to families and it's been like a really fun journey.

3:46That's so wild. So what year did this actually start? We launched it at the tail end of 2011. So we just literally celebrated our 14th birthday.

3:57Kara Goldin:Wow. Congratulations. That's super, super exciting. So when I read that it started in your garage, there's many other Silicon Valley companies that have well-known Silicon Valley companies where that's where it started. But when you think about those first kind of prototypes, do you remember what those were that you put together as, you know, possibilities? Absolutely. What we were trying to do is create these experiences for kids. So as much as it's a consumer product, it really is an experience for kids, too, because they are literally making these products that they are then going to experiment with or play with.

4:45ongoing. And so what was really important to us is that that whole making experience and creating experience was really fun and engaging for the kids and that they would really kind of enjoy it. And we had started off saying like, let's make this really convenient for the parents. We wanted to make it subscription based. So the company is one where we are sending out what we call a crate or the product every month for the kids to engage in it again and again. So it was really important that that one experience would encourage the kid and the family to want another experience the next month too.

5:22And so there are all these things that we're thinking about kind of in the product design process as we were sitting in my garage. And the fact of the matter is, it was also really important that we were working with different materials and inspiration that weren't the things that you would find every day in your child's preschool or kindergarten class or elementary school, right? Because there had to be value added to it, a reason for them to actually want to engage and pay for the product and for the experience too. So we were thinking about all those different things as we were pulling together the product design and really coming up with, when I think about it, the foundation for our brand when it comes to the brand pillars.

6:01And so if you look at our brand pillars today, they're very much based on that experience that we were creating way back then. So some of our brand pillars are, it needs to be seriously fun. It needs to be profoundly enriching. It needs to be deeply engaging. And then we have this other kind of one that kind of is our own, which we call Woe Awesome. So it's that moment of discovery for a kid. And that was something that was really important to us. The moment where they had that aha moment and that light bulb really lights up. And so those are things that we really incorporated into each of those experiences starting then.

6:38And I have to tell you a story when you mentioned the garage. I mean, it was, it's funny because my background has been in consumer products and in e-commerce. But really, I was in product development, in consumer products at Procter & Gamble. And then from an e-commerce perspective, I was at PayPal and eBay, like you mentioned, where there's no inventory. And so the fact that we had inventory, and I remember purchasing the first set of just boxes that were printed out in the East Bay here, and realizing that the amount of space that takes up was half of my garage for the first, because we were trying to send out these alpha shipments.

7:22And so just lots of kind of lessons learned. And I think just really fun to reflect on, you know, that time in that small space, the ideas that were flowing then, but also some of the things that we learned that were like very, very like good lessons that we had to take with us throughout. It's like, oh, space planning for fulfillment. Very important. Right. Ever since the time that we were in the garage.

7:45Kara Goldin:So the original business plan, you were focused on kids. Was there a certain age group that you said, let's start here, and if this works, then we'll continue to expand out? That's a great question. So we started off saying we want to do kind of early elementary school, kind of preschool or early elementary school age range to start. And that was our first subscription line. And we called it KiwiCrate, and the company was actually called KiwiCrate back then. We were doing pretty well, so we were seeing some decent growth at the time. but we knew that we wanted to see more. And so we actually took a bet at the end of 2014.

8:27So this was about three years into the business, where we said, hmm, maybe the thing that we need to do to accelerate the growth in the business is launch three more lines. So three additional subscription lines. And we're like, you know what, if any one of them takes off, then we'll double down on that one, but we're going to try these three. So one was specifically for preschool. And then we had two more that were for kind of older elementary school age, where one was more geared towards art and design, and one was very heavily more STEM based. So really about science and engineering. And we're like, yeah, we'll kind of see how it goes.

9:04And luckily, all the three of them sold out that holiday season. So we're like, okay, we're going to double down on all of them. So you could imagine we had to scale up the resourcing and everything else at that point. But what was really exciting is that was a really important inflection point for the business at that time. So when you draw a line from that launch at the end of 2014 to our first month of profitability, so we've been profitable and cash flow positive since the beginning of 2016. And so there were things that we knew were going to happen when we launched those three additional lines, right?

9:40It's like some obvious things like you have a bigger total addressable market, right, because you have more kids that you're addressing and that type of thing. But there are some things that are a little bit more unexpected that worked out really well for us, too. So, for example, the majority of U.S. households have more than one child, actually. And so what happened is that we ended up getting a number of orders where we could actually consolidate crates into one shipment. And if you think about the unit economics and the costs, right, that was really helpful to us. And then another place where it became really helpful is that we were able to use different marketing messages.

10:18So one might be a little bit more about kind of childhood development, more kind of preschool appropriate. One might be more, like I said, like creativity focused. One might be more about like science and learning about science and engineering. And so what happened is with those different marketing messages, you might find that the STEM message really resonated because very tangible for parents, right? But then it might be the parent of a preschooler. So it would draw people in, but then they would self-select into the right age. And so when you think about kind of customer acquisition and efficiency, it started to work really well for us at that point to being able to leverage all these different messages across the audience.

10:58And so that was a really important kind of time for us. So now we actually have eight different subscription lines spanning even a wider age range. So really from infant, you know, newborn all the way through to teenagers and, you know, kids at heart as well. We're still majority subscription commerce. We have been direct to consumer for a very long time. So just last year we opened up to wholesale to retail. We can talk a little bit more about that. But subscription commerce has been very core. And now we've opened up additionally, like single products, too. So the way that you and I typically shop online, we now design those one off products as well.

11:45Kara Goldin:So when you think about now you've got all these different ages, are there two that are like really in the strike zone that are sort of the runaway sort of core, I guess, that you really see this is where people like really want to buy the subscriptions for? Yeah, I would say that we see really good traction across the ages. I think given we have eight different subscription lines, we have different flavors, though, for certain ages, right? So one, like I said, example was one might be more STEM focused, one might be more art focused, one might be more geography focused, and that type of thing.

12:29And so what we do find is that where people gravitate and what we're known for maybe the most is kind of that STEAM angle. So that angle that brings like science, engineering and art together. I think that is what we're really known for. And if you think about kind of our mission and our intent, which is to encourage kids to be creative problem solvers, to really develop their critical thinking skills, to really build their creative confidence, I think that makes a lot of sense because it's the combination of mindset as well as some of those skills. And I think when kids start to really understand whether it's an art technique or the way the world works through science, hopefully they're able to then apply that and really build themselves up to be these young innovators.

13:17Kara Goldin:I would imagine that COVID was big for you all from a sales perspective, that many people were really paying more attention to how do I help my family learn better. Can you share any stories from that time that you heard from consumers? That was a little bit of an understatement, Kara. Like, people were dying. They're like, my kids are home and I really need to engage them. And so it was a crazy time. There are a number of stories, but when COVID hit and when we all kind of hunkered down, we initially did not know what was going to happen, right? We were just saying like, okay, we will see what happens.

14:10But one thing that we do know is that parents and kids are going to be at home and we can serve as a real resource for them. We have a lot of content. We can explain, you know, for example, why handwashing is important through science that makes sense for kids. And that weekend, we created a resource hub for parents and kids. and fortunately this was outside of our main website but once we put it up it crashed and so we were like oh like okay this is a real need right like clearly families are clamoring for content engaging ways to play um from home um and so we did see a really big uptick in the business at that time.

15:05And it is one of those times where you really appreciate certain things working well. So if you reflect on that time, it was crazy, right? Supply chain issues were trying to get PPE over. The cost associated with shipping had gone up a lot because everybody was buying online. And so there's a lot going on there. And when I think about that, those are the times where you really appreciate when you have robust supply chain and fulfillment and operations. And I think kind of in every day, at least for me, sometimes I just almost take it for granted. Like these things should work seamlessly, right?

15:53It's kind of like your utilities. It's like your water. It's like your electricity. You're like, it should just work. But during those times, it is so important that those things work. And I have to say hats off to those teams, because they had done a great job of establishing relationships beforehand, really making sure that we were able to fulfill kind of our customer promise ongoing during a very, very crazy time. So really proud of that. And I think it is so true that sometimes in those times that are kind of tumultuous, or there's a lot of change, that there is opportunity too. And I think we were able to really grasp that opportunity.

16:37I love that. How did you come up with the name? I really liked the idea initially of having an animal and an animal that meant something to our family. And at the time, something that meant container. And so we initially called the company Kiwi Crate. And my husband and I had traveled to New Zealand. We love the country. We love kind of just the spirit, the nature, the adventurous part of it. and we had brought back a stuffed animal kiwi and our kids adopted this kiwi and it would go on adventures with them and so kind of long story short we ended up calling the company kiwi crate and then the other kind of funny story associated with the name is as we were coming up with a logo we were looking at different kiwi kind of drawings and we actually ended up putting them in front of kids and saying like, which one do you like?

17:37And they all kind of gravitated to the one that looked very round. So that continues to be our logo and the Kiwi character for KiwiCo today.

17:47Kara Goldin:So what's been one of the hardest lessons you've learned as a founder and CEO? I guess, you know, you've had amazing experience in other companies prior to launching, but, you know, know, the buck stops with you, right? So as founder and CEO, and oftentimes people, no matter what role they've played inside of a large company, no matter how successful it's been, it's always a little shocking, right? That you're, you know, there's, you have to be the, not just carry the mission, but also make sure that the growth is happening, make sure that the bottom line is happening, all of these components.

18:34Kara Goldin:So what has been one of the hardest lessons you've learned as a founder and CEO? There have certainly been a lot of lessons, including some of the ones that we've talked about. There's some like tactical ones when it comes to, for example, you know, when we talked about supply chain or fulfillment and that type of thing. But maybe I can mention a leadership lesson. So I think that as I started KiwiCo and throughout a number of the years, as a leader, and just as a person, even, I tend to be the kind of person who wants to kind of take all the information in, and then kind of synthesize it in my head.

19:12And then say, Okay, here's, here's, here's the deal, right? Or like, here's my thought around this, or here's decision, or here's a path forward. And I actually think that during the pandemic, in particular, it really challenged that because there was so much happening, so much that I was synthesizing at the time, and also so important to communicate with a team kind of in real time. And so I think a real lesson for me was that that was okay, right? That I could show up and not have the answers, that I could show up in a different way, kind of in an authentic way for that time. And I think previously, my style may have been a little bit more brittle in a way, and I think that allowed for more fluidity as a leader.

20:08Kara Goldin:So interesting. So you've said that play is a tool for learning. How does that philosophy really show up in, I guess, the culture as well as the products. When you think about, I mean, it's tough, right? Like to actually create something that is, I think, both educational and super fun. Sometimes, not all the time, but you guys have done it. So I'd love to hear you talk about the philosophy and how do you execute on that? Absolutely. For us, it comes down to being extremely customer centric. So from the very, very beginning, we would have kids converge at the garage and engage with the different projects.

21:01And so we were able to evaluate and see like when our kids engage, when are they having fun, when are they actually wanting to come back to something again and again, and when are the times where they walk away? Clearly, that means that that was not very engaging, too. And depending on the age of kids, sometimes they will voice what they think and sometimes it'll be through their actions. And so I think we learned a lot in that way, too. And so every week to this day, we have several groups of kids come to the office. The noise goes up a notch and they're engaging in the different projects. And we learn a lot from that.

21:39And I think that's really part of our kind of secret sauce is getting close to the customer in that way and being able to take that and bring that into our design process. I think the other part that's really interesting is as a direct-to-consumer company, too, we have a lot of data about our customers. Ever since the first crate that we sent out in October of 2011, we have scores for every single experience. And so then we're able to look at those scores and say, okay, these are the experiences that are really working for our customers. And how do we replicate some of that? And not only that, how do we make sure that the experience that we're providing for someone throughout their journey in a subscription is really optimized as well?

22:26So that's been a really handy tool for us.

22:30Kara Goldin:So people always see the success. You have grown this company into this incredible, incredible company. But can you share an example of, I can imagine maybe there was one or two products that didn't actually work out the way that you wanted. Maybe there was a component of it that was harder for consumers to build or something was breaking. And obviously, you fixed it and moved on. But maybe it just wasn't sort of how you envisioned or how you would have preferred it to turn out. Is there any examples of that? because I think often founders and especially people listening to this podcast are in, maybe they're in the early stage or maybe they're going through something that is just yuck.

23:23Kara Goldin:And I think that's something that I love for people to hear that it's not always pretty or perfect. For sure. For sure there are examples of that. So I'll give one quick example, which is we catch these types of things all the time. So I just mentioned the idea or the notion that we leverage testing with kids, what we call kind of playtesting, in order to evaluate different products and experiences. And there are times where we are very, very convinced that we have a product or an experience that we think is going to be really fun. And then we will bring it to the kids. And we'll be like, oh like that did not go so well so i remember there was this one time we were we were um creating a crate around a safari theme and so we had ideas on animals we had ideas around a jeep we had this one idea that the kids could create their own safari vest and that they would love the fact that they had a lot of pockets they could stick their things in it and then we brought that to our testing session.

24:31And it was a dud. Like, kids had no idea that you wore a vest on a safari. Like the notion of, right? And so it's just really, again, it just comes back to being close to the customer. And then I remember early on, this one was, we really had to pivot very quickly. We had shipped a few, kind of a smaller sort of crates out. We were shipping more out soon, But we found out very quickly that when you ship crates out in the winter, things can freeze. And so what happened is that some of the paints that we were sending out were freezing and there were kind of liquid paints. And so that was not a good situation and was creating a bit of a mess.

25:18And so we had to pivot very, very quickly around that. So not only send notes to our customers, but also we set replacement product and we're able to swap out products for additional shipments too. But if anything, in a journey like this, you have to be able to be flexible and to be able to kind of pivot and be resilient at a moment's notice.

25:45Kara Goldin:And own it too, right? I think that that's the key thing that, you know, the consumers, I always say that time is probably the most important aspect of that, too, that the longer and the more cycles that you spend trying to pass the buck on to somebody else and do research, just figure it out. Right. And solve the problem as fast as possible so that the consumer figure the consumer knows you you matter. Right. I think that's exactly right. They matter, I should say. Absolutely. I think that this is about building a brand for consumers and for a community. I think building a brand is inherently really at the core about trust.

26:28And so, Kara, to your point about owning it, right, and taking responsibility, I think that helps build trust with the consumer. I think the fact that we say, hey, sign up for this thing, we're going to ship you a box. You don't know what's inside that box, but believe us, it's going to be really fun and magical for your kids. But then that they believe us and that we are able to actually fulfill that promise month after month. Right. That is the thing that really builds up the trust, too. So I think that's absolutely true. I think that that is so critical and important.

27:04Kara Goldin:You have an amazing line of holiday that I just received, like an advent calendar and other things. Do you want to talk about that in case people are wanting to get ready early for the holidays? I mean, it's such a great, great thing. So can you talk a little bit more about that? We're really proud of our advent calendars. We think that they fill a very, very unique space in the world of Advent calendars, which have become very hot. Our Advent calendars are basically every day the child can open something up and make a small build, make a small creation. And our latest one is they make a series of mechanical ornaments that do different things that they can then place on the tree.