778 Shae Hong: Founder & CEO of Made by Gather

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. Hi, everyone, and welcome back to the Kara Golden Show.

0:45Kara Goldin:Today, I'm super excited to interview my next guest. I'm joined by Shea Hong, who is the visionary founder and CEO of Made by Gather. This is a company behind beloved kitchenware brands, including Beautiful by Drew Barrymore and Bella, now found in homes across America. Shea's story is incredible and remarkable. He launched Made by Gather at just 25 years old. So if there's any 25-year-olds out there, there's hope for you. We're looking and listening to Shay's story here. And while many were chasing direct-to-consumer hype, he bet big on some of these retail partnerships. I cannot wait to dig into how he was able to do that and build a$5 billion-plus powerhouse brand and redefining what design innovation accessibility looks like in the home and kitchen category.

1:48Kara Goldin:So also, Turbo Crisp and Fits Anywhere are just a couple of the trademarks under Shea's company. And I cannot wait to see how and really telling us how to build and how he's been able to scale Made by Gather into the company that it is today. So welcome, Shea. Thank you so much for coming on and really excited to meet you. Yeah, thanks for having me. Excited to be on. Absolutely. So how would you describe the brand Made by Gather? And let's start there. Like, how would you describe it? Made by Gather is really a parent company. And we call it the brand behind the brands. So Made by Gather is the brand and the parent company behind the brand Beautiful by Drew Barrymore.

2:41and the brand Bella, which are two of America's fastest growing kitchenware brands, which we're very excited about.

2:48Kara Goldin:Very, very cool. And you started this company at 25, just last year. No, I'm just kidding. So, right. You've had a few years to incubate this company and grow it to what it is today. But what was the original vision and how has that evolved over the last couple decades? needs. Yeah. The, you know, the original vision was, was really simple. Um, I was just a kid, you know, I was 25. This was my third startup. So I had failed twice, which, uh, I think was really important to, to me getting here. Um, learned, learned a lot of lessons through those failures, but the idea, original idea for made by gather was really just as a kid, I was 25 and, you know, you kind of think that, you know, everything.

3:36And, um, I was looking at kitchen products that were in the market. And, you know, most of them were all just the same. And they were, they were very kind of, they lacked design, they lacked anything that as a, as a, I've always been very into design and fashion. So anybody that cared about design would look at these products and just say like, why do they have to look this way? So when I got into the business, it was, the idea was just simply like, I'm going to design really cool kitchenware products that don't look like everyone else because for the most part, like everybody's products look the same.

4:12It's, it's actually still that way today. Like if you walk the floor at Walmart or Target or even, you know, a Best Buy, like everything kind of looks the same. It's black and stainless. It has kind of a commercial feel to it. Very masculine to be honest. And, and yeah, so I just, so the original idea was just this design better products. And I just started with a couple products. And, you know, what's crazy over 22 years is that the mission hasn't really changed, but I learned so much along the way about how to deliver that at scale and do it successfully. So, you know, really the first 16 years, I designed a lot of product.

4:56When I say a lot of product, I mean, we launched 100 to 200 new items a year. In some years, 400 new items. And, um, but they were just items like they were products. Um, I call it products with a name on them. So they weren't necessarily a brand or they didn't have that emotional connection. And what I learned through that experience is that in order to really deliver to the consumer, something that kind of hits on all fronts that makes them loyalists and, and diehards of your brand, you, you have to not only deliver on the design of the product, but you also have to deliver on that brand experience, the emotional connection, the content, the story, like all those pieces together.

5:39So, yeah, so it's been a 22 year journey to put all those pieces together and have really seen those pieces come together in the last four to five years.

5:49Kara Goldin:It's incredible. So you built this company during a time when D2C was booming. I was doing a little bit of research and then you doubled down on retail and really allowing other people's brands to flourish. And you were helping people, whether it was, I guess, private label products, but then also people like Drew Barrymore who wanted to launch her own brand. So can you talk to me a little bit about why you decided not to have your own brand initially and just instead work with other brands and retail, I guess? Yeah, I think, look, it was what we were really good at. And it's really tempting, I think, as an entrepreneur to see trends happen in the market and to just jump in without really being thoughtful about what it might take or whether or not you have the skill set on your team or you have the infrastructure to support it or you have a capital structure to support it.

6:57So as DTC, you know, in kind of 2018, 2019 really started to take off, we just knew that it wasn't at the core who we were yet. And so we just really leaned into what we were really good at, which is we had great relationships with some of the biggest retailers in the world. And we were really great at designing and making product. And at that time, in 2018, 2019, I had bought out my partner and had just started to really transform Made by Gather and move to the direction of creating our own brands. That's where the birth of Beautiful came from and the relaunch of Bella. Um, but it was really just about trusting what we were really good at and, uh, and knowing that we could get to the consumer, um, probably with more scale, um, through these partnerships at retail.

7:50And if we could get them to buy in to what we believed in and, and, and show them the results of what we were doing, um, which is we really brought the same, uh, creativity and the same richness and content that D2C was doing direct with consumer, but we brought it to retail. and it just once it hit it just started going and kept going you know so it was it was uh it was you know part partially knowing what you don't know we weren't experts at d2c and we already had a fairly big business and so it's like do you risk your whole uh business that's already successful by trying something that you don't have the skill set to do yet um and then just leaning into what we knew but also evolving with the way that the consumer was um you know consumer was reacting to to content and marketing and brands and emotional connection across the board.

8:41Kara Goldin:So how do you decide when to launch a new brand and even a new category within, within that brand? How does that come about? Well, it's changed over the years. So, um, the, the, the strategy behind beautiful, um, which we created before we met drew was that we really identified a white space in the market of a lack of a brand and kitchen that had emotional connection with the female consumer. So when we looked at the category and we looked at the Black & Deckers and the Hamilton Beach and the Oster and all these brands that dominated the shelf, just none of them had any emotional connection with the consumer at mass.

9:24And we were really focused on how do we bring this to mass, to the mass market. So for that brand, we identified this white space. We made a big bet. We looked for a partner. We found Drew. It was like love at first sight. She and I just clicked and connected and we were just off to the races together and developed something really special. So for that brand, that was around identifying a very big white space. And then as we've launched other brands, like for example, the relaunch of Bella, it was around a different type of white space, a white space around functionality. And that was the, the idea behind fits anywhere that through COVID and the trends that were happening then in the kitchen, people had just amassed all these kitchen products and they just had so much stuff on their counters.

10:14And, you know, the trend of, you know, minimalistic, the idea of minimalism. You think about the home edit. You think about kind of all these things that were going on around kind of creating space in your home, literally. That birthed the idea for Fits Anywhere. And so that was really the idea behind the launch of Bella. So as we've grown and our team has grown, one of the things that we've really invested it in is insights with the consumer and data analytics. And that's now that is kind of the next iteration of the next brand we're going to launch, which is coming soon, where it's been really driven by the combination of insights and analytics coupled with innovation.

11:01So it's been a little bit different along the way, depending on the timing.

11:05Kara Goldin:So you've said that design is a competitive differentiator, competitive moat, I think you use the term. So what does that mean in practice and how do you scale that? Because I think that the one thing that I noticed about your brand too, that is really awesome and unique is the different colors that you're using. And, you know, and a lot of people don't necessarily think that color is maybe part of design, But I think that it's clear that you view it as a component. Yeah. You know, it started with our, you know, in our culture as a company, design is really table stakes. And so as we've built the team over the last five or seven years, we've really made sure to invest in a culture that design is just table stakes.

11:58And that's different than our competitors. And so as a result, when we're designing product, because that's part of who we are, the design starts to across the board. And it was, to be honest, it was really hard to do because it first had to start with the leader of that area. So we have this incredible chief product officer, and she came from a much different background in fashion. But she really brought the vision that I had for chic design-focused products. And she really brought that to a scalable model for kitchen appliances and kitchenware, where the entire team understood it and could replicate it.

12:38Because it's very easy to fall back into what everybody else is doing, especially as you're growing quickly and you're, you know, you're trying to turn out product and scaling. So it started with the table stakes that design was the lead, you know, for us. It was really important. And then putting the right people in place to make sure that we could execute that.

12:57Kara Goldin:That's awesome. So many products you launch include the proprietary technology and the trademarks of Turbo Crisp and Evergood. How did that all come about? That's sort of a next level in products that I guess many people, I'm sure that wasn't easy to do, but you were able to do that. And I think it's pretty interesting. Well, you know, to me, product is always first, right? So you have to have product that consumers get excited about. And when they see it, there's a reason to buy, then you have to have great design, great brand, great experience, content, all those things. So being somebody that's always been a product person, product has always been first.

13:50In this category, innovation is really important because the reality is, is like everybody has what they need for the most part in their kitchen. so in order to get them excited about buying something new there has to be something that's better than what they already have and so that's this art of marrying chic design with innovation that gets people's attention and innovation always doesn't need to be like um something that didn't exist two years ago you know innovation can be you know turbo crisp is is really just a an innovative tray inside of our air fryers that makes the air circulate faster, which cooks faster, right?

14:31It's not highly complicated, but it really works. So that's kind of a simple innovation. We also look at color. You mentioned color. Color is innovation for us because color in kitchen had historically been kind of kitschy and cheesy. It was bright. It was bold. It was a certain demographic that loved that part of the product design, the color aspect of it. And, and this is where, um, to be honest, this is like one of Drew's secret sauces is she has this, um, unbelievable ability to create colors that are, um, that are, that are chic and very muted. So they're not bold there. They kind of, they kind of just work in the environment.

15:21And so if you look at, especially with beautiful if you look at some of the colors that we make they're they're beautiful colors but they're not bold they're they're they're more muted they have a tone to them that allows them to fit in a lot of different kitchen designs and i think that's really caught on with consumers like they love it she also has uh created palettes that all work with each other so even though we've got this wide range of colors we actually do studies where we put them together to make sure that they work. They have like an undertone that matches across the board. So yeah, so innovation comes in a lot of different ways, but I really believe you have to be innovating to get the consumer's attention.

16:07Kara Goldin:So the overall small appliance industry has been relatively flat. Your company has grown 50 % year over year. I think I have that stat, right? So how do you do that? I think any business owner would love that, especially when you hear that the industry as a whole is fairly flat. How do you grow beyond creating the next new toaster or whatever it is? I mean, that doesn't get you to grow at the rate that you've done, but you've been able to do it over and over again. I'd love to hear what your thoughts are. Yeah, so we lean a lot. We have as an organization and as a leadership team, we have really built expertise around strategy planning.

17:00And so we spend a lot of time and this is, I think, my advice to most entrepreneurs that I meet that are earlier in their trajectory. this usually is the first advice I give them because I wish I would have gotten this advice like 15 years ago. But strategy planning is really important. It's really important to continue to drive growth because the point of strategy planning is to always kind of be looking around the corner to what's next and making sure that you have both the opportunities in front of you as well as you're building the infrastructure and the support system to fuel those opportunities along the way.

17:39So, so I would say that most of it comes through really good strategy planning. We're also an extremely, you know, it's a very entrepreneurial culture. So like everybody is extremely aggressive about new product development and new ideas and just continuing to push the envelope. And, you know, we're in a category where, you know, if you look at our team and I I keep mentioning the team because to be honest, it's really all about the people that make this work and allow us to scale. Our team just looks very different than the industry. And I think that's part of what makes us special is that we have a lot of different team members from different backgrounds that have different talents that have brought them to the kitchen business.

18:24And we all have bonded under one type of culture. and then it allows us to combine strategy planning with our culture, with innovation, with design, and that continues to keep the growth coming.

18:38Kara Goldin:That's so interesting. Do you tend to bring in people who come from the industry or do you tend to bring in people who are coming from different industries and maybe are creating other types of products? Yeah, that's a good question. So I, um, we tend to bring in people that fit our culture. So that, that, that is a first priority when we're interviewing, um, somebody, uh, that is interested in joining me by gather, like they have to be a culture fit first. Like that's, that's most important. And, and we've created what we call our house. It's literally on the screen next to me, but it's like our culture map, um, of what we stand for and, and the principles that we operate by every day.

19:21And so finding the right culture fit is most important. To be honest, we don't get hung up on trying to find talent that is from our industry because to be honest, the industry has been doing it the same way for so long that we've gotten so many big unlocks from talent that just come in and they have no preconceived notions of how things are supposed to be done. And so they just come in with these great ideas. And, you know, part of our culture is being growth minded when you're growth minded and somebody comes with an idea that sounds a little crazy at first, like you're open to it. You, you, you vet it, you check it out.

19:56And then there's a lot of moments where you're like, oh, wow, that is amazing. Like, we're going to do that, you know, like that could really work. So, yeah, so it's, it's really culture fit. And then, and then it's not really industry specific. It's to be honest, it's almost better that you come from a different industry because we love to learn from, from new members on our team.

20:17Kara Goldin:So kitchen is, I mean, correct me if I'm wrong, I mean, that's really been kind of your bread and butter, right? And creating those products. I also saw with Drew's line in particular, beautiful, that there is some home as well. So would you go into other categories or do you think that I'm curious, do you think that kitchen is really where the focus needs to be? I mean, how do you think about that? Yeah, so we've thought about it a couple different ways. In the kitchen in particular, we've expanded into a lot of categories that we now do on our own. So we've had category expansion. So we started in kitchen electrics, which is appliances.

21:08We added cookware, which is now a big business for us. We now do tools and gadgets, which is another big business for us. So we've expanded product categories within the kitchen. when we're creating brand identity and brand strategy. And this was something that Drew and I really believed in and stayed true to from the start when we created the brand identity for beautiful. We really wanted it to live outside of the kitchen. Like we wanted it to be a true lifestyle brand that if you saw it on a outdoor furniture or on a mattress or on a piece of luggage, like you wouldn't be surprised that it's there.

21:46And so that was in the DNA of the strategy early on. And then as we started to develop this relationship with the customer that was just so loyal and so connected, we realized, okay, this formula of elevated design, innovation at affordable price points, like can apply to a lot of different categories in home. And it allowed us to expand. And we did it through partnerships with other manufacturers that are experts in those categories, but still led through the design process that Drew and I created from the start. So it just depends on whether it's home outside of the kitchen or expansion within kitchen.

22:25Kara Goldin:So interesting. So when you think about this consumer today and maybe, you know, different than two decades ago, are they changing a lot? Is it, is it, what do you see as like the biggest shift, I guess, for, for the future if you had a crystal ball? You know, they're changing a lot. I think that there is so much more, like when we look at our opportunity, like there's so much more room to grow with design and innovation. And when you look at the total market size, there's just massive, I think it's an$8 or$9 billion market. So we have a lot of room to grow there. But they're becoming much smarter and they have access to, I mean, it's amazing how much consumers will check their phone in store before they buy to get reviews, to check comparisons of product, to check price.

23:30Like it's truly like the, and this is another reason why selling to the Walmarts and the Amazons and the targets of the world has been so important in Costco is because we, we truly live, I think in a, in a world where an omni experience is the reality, right? So you could be walking in a Walmart, see a product, but end up buying it from Walmart on your phone, you know, or you could be walking in target and see a product and looking at the price on Amazon and deciding to buy it at Target in the store because of price competitiveness. So it's, it's, that part is, is really changing the landscape.

24:09I think for brands is this multi, you know, the multi-channel experience for consumers. And then, you know, reviews are really important, right? Consumers, consumers really tell you whether they believe and they love your brand or they don't. And, and I think that we, as like, I know that I do, I know that my wife does, like when we're looking at products to buy, like we pay attention to reviews and what people say about the product. So, so I think that part is, is changing. And now, you know, look, AI is throwing a whole nother element in it because there's a different level of research or insights that you could get if you're using chat GBT to research a product.

24:47So yeah, I think it's evolving and changing fast.

24:51Kara Goldin:So interesting. So when you think back on any product designs that you've created that you thought this is going to be amazing, but maybe it didn't sell as fast, are there any that kind of come to mind? I remember the founder, I asked him this question, a bowl and branch was on, And he thought that every bed had to have a bed skirt on it. And so he went to town on getting all kinds of bed skirts. And he said, I think I still have the original bed skirts that I ordered from that first run because it ends up that not a lot of people change their bed skirt if they even have a bed skirt on their bed.

25:37Kara Goldin:And he said that he still has plenty of bedskirts. But are there any that did not sell as many as you thought or as many as you thought were going to do? yeah i mean we've we've had a couple i would say that you know in in call it like 2016 17 we launched a product that integrated kind of color in a way color and design in a way that we thought was so disruptive to the space and we launched it with target it was like a perfect you know perfect place for us to launch at just because they're known for you know being tarjay and the design and everything there. And literally when you put it on shelf next to the competitors, the price competitiveness and the design to me seemed like a no brainer.

26:27Like this is a home run, you know, like this is next to a black and Decker black plastic toaster and it's the same price. And this is, you know, Chrome and, and red or Chrome and Turquoise beautiful design, like chic gold, et cetera. It didn't work. It didn't work. And, and I think it was just the timing, the consumer that we were targeting, the millennials were still a little bit too young. They really weren't shopping up for kitchen products. The color at the time, you know, it just, it wasn't chic like what we've done today with beautiful. So that was like one example where we thought for sure we had a home run and, you know, it didn't work out that way.