880 Heidi Zak: Co-Founder & CEO of Thirdlove

27:02Like there's no one to do anything. Like when you start, it's you and your co-founders and there's zero people on your team. So these things that I had never thought about, like setting up a bank account, paying employees once we had our first few contractors, all the little minutiae, business minutiae, I think is one piece that you just never think about. If you work at a big company, all those things are just taken care of. And then the second thing is really how hard it is to find product market fit and how many iterations and how much pushing and changing you'll have to go through to even get to a place where you're like, this business could be viable.

27:46Like no one really prepares you for that. You can read books about it. You can hear other people talk about it. You can nod your head. But it's very different because when you're working at a big company, you have a purpose. You come in every day. You have a title. you have a job description, you're working on something that is hopefully important in the company and needed. And when you're a founder, and in the early days of a company, you even question, I remember this, I was questioning, like, am I even working on the right thing today? Is this the right next thing to be doing? And like, and, and half the time, three quarters of the time stuff doesn't work at the beginning, and you feel like a failure.

28:25You're like, oh my god, I had this idea. It seemed like it wouldn't be this hard. And it's really, really hard. And so I just think no, you know, no big company, you don't have that kind of day-to-day experience. And you also don't have the roller coaster of emotions that go along with it.

28:43Kara Goldin:Yeah. And I would say appreciation for founders, too, that I did not have until I became one. And it's funny, I've talked to so many people over the years who worked at the company I founded, Hint, who had also worked with me in the early days of I was at America Online before. And, you know, they come back when they're starting their own company. And, you know, they typically apologize for like all the, you know, we're trying to figure stuff out because no one's done it. Right. And so some of the answers we don't have, right? And it doesn't mean that we're disorganized or whatever these things are, but they get it when they go start their own company.

29:32Kara Goldin:But not until they become a founder. There's this language that goes on and appreciation that I think happens when you are a founder that you just really, really get it. So, so interesting. So the third love fitting room, Love, love. Can you talk a little bit about that and all the people that have used it and the technology behind it? And, you know, why did that really take off? Yeah, so the fitting room, inherently, if we think about one of the biggest hindrances to women buying a bra online, and I'm going back a decade, the same holds true today. But it's really, can I buy a bra online that's going to fit me?

30:17and there's a real hurdle to get over if you're gonna sell a bra online. So one of the first things we did was to say, how do we look at an in-store experience and when they do it really well, what is happening and how do we digitize that? And that's really the basis at a high level for the fitting room. So if you go into a bra boutique in your local city or a Nordstrom where they have great bra fitters, you'll sometimes see that they don't use a measuring tape. They'll come and say, can I see you in your bra? And they'll kind of look at you. And what they're doing is they're looking at sort of how your bra is fitting.

30:52So is the bra, are you overflowing? Do you have cup gaping? Are your straps slipping? Is your band riding up? They're looking at all these details. And from there, they're really able to identify maybe you have the right size on or not. What kind of style might you need? Are you more oval? Are you more round? And so all of these things go into the fitting room. So though it doesn't feel like that, that's in essence what's happening. So when we're asking questions for a woman about how our bra fits, we're trying to get at how to make a better recommendation for her. And so 20 million plus women have done this to date.

31:25That's a lot of data on women's fit issues, their needs, the sizes, how often we size, put them in something different. 70 % of the time, our fitting room is going to recommend a size that's different than what she thinks she is. And so it's really been a way for us to help our customers find the right size and also help us identify where there's the most opportunity to better service her. And again, it goes back to like customer first, like you learn a lot. So for example, one of the biggest complaints or asks that we get is that we have cup gaping, right? And so cup gaping also can lead to like a half cup recommendation.

32:08So things like that, that's how the technology works. And it's been really crucial to getting women in the right size.

32:15Kara Goldin:So you mentioned data. So this is intimate data, right, for personal data. So how much is that part of, you know, obviously important to any founder that's dealing with data, but how much more important is it than you ever thought, you know, in terms of making sure that, you know, it's secure, all of those things around it? For sure. I mean, obviously, data privacy is hugely important. But really, our customers are giving us data, as I said, because they trust us to use it in a way that can better help them. And so one of the big benefits we have is because we have size profiles of a lot of women, it makes it much easier to personalize their shopping experience.

32:59And so one of the biggest challenges at Third Love that I never thought about in the early days, and we didn't have when we first launched, is the more sizes you have and the more styles you have, the more women you can service. And that was always our goal. The problem with that is that our brand can serve so many types of women by size that what a woman who is an A cup is looking for is very different than what a woman who's a G cup is looking for. And so if you come to our site and we just show you all the things, some of it's not relevant to you, depending on your size. And so capturing size and really leading with that has allowed us to better personalize her experience so that if I know you're a G-Cup, I'm going to show you the styles that work for a G-Cup.

33:49And I'm going to show you models that are much more relevant to your body type so that you can see what those products are going to look like on you. So data for us isn't just like, oh, we're collecting data and we know data about our customers. It's like, no, no, no, no. But how do we actually use that data? How does that change what she's seeing? and how does that change our interactions with her? Because we know more about her than just her name, you know?

34:14Kara Goldin:This episode of the Kara Golden Show is sponsored by Wayfair. As the seasons change, I always start noticing the little things at home that I've been meaning to fix or refresh. For me, one of those was my home office. I wanted it to feel more finished and functional and a beautiful gray weathered wood bookcase from Wayfair ended up completely changing the room. It gave me the storage I needed, but it also made the space feel warmer and more pulled together. That's what I like about Wayfair. They make it easier to create a home that actually works for real life with quality products, great value, and so many options across every style and budget.

34:52Kara Goldin:I also like shopping Wayfair verified products, which are hand vetted by product specialists using a 10-point quality inspection. That gives me a lot more confidence when I'm deciding what to bring into my home. And when you're refreshing a space, the reviews really matter. Wayfair has more than 20 million verified five-star reviews, plus customer photos and filters that help you narrow things down and find the right fit. And if you're a Wayfair Rewards member, you get 5 % back on every purchase. For me, Wayfair made solving that home office problem simple. And I'd absolutely recommend it if you're furnishing a space, refreshing a home for fall, or just finally tackling something in your home that's been on your list for too long.

35:38Kara Goldin:Transform your space with pieces that hold up to real life. Join Wayfair Rewards today and get 5 % back on every purchase. Head to Wayfair.com or shop the Wayfair app for all things home. That's W-A-Y-F-A-I-R.com. Wayfair. Every style, every home. Wayfair. Every style, every home. Support for today's episode comes from Square, the platform helping businesses run smarter. Building a business is one challenge. Keeping everything running smoothly every day is another. The businesses that make it look easy usually have great systems working behind the scenes. Square brings those pieces together from payments and appointments to staff and operations so business owners can spend less time managing the day-to-day and more time focused on growing.

36:33Kara Goldin:And here's the thing. Square is way more than just a payment swipe or tap. It's a system that keeps an entire business humming, taking payments, managing inventory, running payroll, tracking sales all in one connected platform. And it grows with you, whether you're running a one-person pop-up or opening your next location. One of my go-to spots here in the Bay Area is Equator Coffee, and they use Square, and you can feel the difference as a consumer. Fast checkout, receipts sent instantly, even loyalty rewards. It just feels polished. So if you're starting a business or running one that deserves better tools, Square helps you sell, manage, and grow without slowing down.

37:20Kara Goldin:Right now, you can get up to$200 off Square hardware when you sign up at square.com slash go slash Kara Golden. That's S-Q-U-A-R-E dot com slash G-O slash Kara Golden. Run your business smarter, Square. Get started today. Go check it out and let Square help you do what you do best. So, so true. So when you went beyond bras into other categories beyond bras, how far into the launch of Third Love did that all occur? and what would your advice be to any founder who might be listening on that topic? I can't remember the exact year, but we went into sleepwear in a bigger way pre-COVID. So that would have been like 2018, 2019.

38:17So for the first couple of years, we really focused on adding more bra styles, adding more sizes. Eventually we added underwear. I would say sleepwear was like the first big new category launch. and after that we eventually went into active. We tested swim at one point and most recently we launched nipple covers which has been really exciting. But the biggest learning to answer your question is to go slow. So meaning by go slow, I mean don't rush into new categories and then also when you go into new categories, buy tight, keep it small. We definitely overordered in particular in sleep and you have to remember for a brand that people know you for something.

39:01So when I say third love, people think bras. So for me to get them to think sports bra is gonna take an extra couple of years or more, depending. And every new category, you have to train somebody that you have it, why it's great, how it's different. And so I think they take more time to grow than maybe you think they will. And so you shouldn't get discouraged and you shouldn't not do it, but you should also approach it cautiously and tight. Because what's the best thing? I say this to founders when I'm advising them. What's the best thing that could happen? You sell out of it. So like our recent nipple cover launch, we just sold out.

39:43So we're restocking. Like that's the best thing that can happen. The worst thing that can happen is I have way too much inventory and I put a lot of money into something that's gonna take me four years to sell. Mm-hmm.

39:54Kara Goldin:So, yeah, definitely. And so how do you know when a product is going to make it, I guess? Is there any example where you waited too long to, I mean, I think over time you get better at that, right? You know, you don't want to kill a skew because you're like, oh, give it more time. Let's change color. But it might just be that this just isn't the right one for us. Maybe not right now. It could maybe come back later. But I'm curious what your thoughts are on that. Yeah, I think it's volume. I mean, I think for most companies, usually, and there could be other reasons you're launching a product, right?

40:31But usually you're trying to drive volume or trying to drive revenue. Oftentimes, you may be trying to drive either a new customer or a repeat customer. And I think that's important to track and to have goals around. So oftentimes people launch a product and then I'll be asking them, well, what was your goal? Like, is it to attract a new customer? Is it to drive more repeat? And they're like, I don't know. And I'm like, usually it's good to have a hypothesis and then to track it. So I think it's that's a really important question. And for us, another thing we look at with every single style is the return rate and the repeat rate.

41:06So it's not just volume top level, right? And again, for you with water, right? People were drinking it and not returning it. So you didn't have this. But for bras, certainly, like that's a really important metric. So we're really looking at those metrics as well. And we have different thresholds. And so simply when we launch a new product, we always wait three to five months because we need to get a read. But at that point in time, it's volume plus repeat rate plus return rate. And looking at all those three things together, we'll make a call like, is this, better than our average or worse. And from there, we'll also look at other things, intangibles, new customer acquisition, cost of new customer acquisition.

41:45But usually those three things really do help guide, like kill it or keep it. And I do think we kill probably a third of things along the way because you have to. And I think a really bad thing to do that I've also at different times done at Third Love and seen others do is like hold on to too many SKUs. And then you have SKU proliferation. You're not getting great returns. And that is not good. So killing a SKU is actually like a really positive thing. And I think that's important to frame it that way in your company.

42:22Kara Goldin:This episode of the Kara Golden Show is sponsored by Wayfair. As the seasons change, I always start noticing the little things at home that I've been meaning to fix or refresh. For me, one of those was my home office. I wanted it to feel more finished and functional, and a beautiful gray weathered wood bookcase from Wayfair ended up completely changing the room. It gave me the storage I needed, but it also made the space feel warmer and more pulled together. That's what I like about Wayfair. They make it easier to create a home that actually works for real life with quality products, great value, and so many options across every style and budget.

43:01Kara Goldin:I also like shopping Wayfair verified products, which are hand vetted by product specialists using a 10 point quality inspection. That gives me a lot more confidence when I'm deciding what to bring into my home. And when you're refreshing a space, the reviews really matter. Wayfair has more than 20 million verified five star reviews, plus customer photos and filters that help you narrow things down and find the right fit. And if you're a Wayfair Rewards member, you get 5 % back on every purchase. For me, Wayfair made solving that home office problem simple. And I'd absolutely recommend it if you're furnishing a space, refreshing a home for fall, or just finally tackling something in your home that's been on your list for too long.

43:47Kara Goldin:Transform your space with pieces that hold up to real life. Join Wayfair Rewards today and get 5 % back on every purchase. Head to Wayfair.com or shop the Wayfair app for all things home. That's W-A-Y-F-A-I-R.com. Wayfair. Every style, every home. Wayfair. Every style, every home. Support for today's episode comes from Square, the platform helping businesses run smarter. Building a business is one challenge. Keeping everything running smoothly every day is another. The businesses that make it look easy usually have great systems working behind the scenes. Square brings those pieces together from payments and appointments to staff and operations.

44:35Kara Goldin:So business owners can spend less time managing the day-to-day and more time focused on growing. And here's the thing. Square is way more than just a payment swipe or tap. It's a system that keeps an entire business humming. taking payments, managing inventory, running payroll, tracking sales, all in one connected platform. And it grows with you, whether you're running a one-person pop-up or opening your next location. One of my go-to spots here in the Bay Area is Equator Coffee, and they use Square, and you can feel the difference as a consumer. Fast checkout, receipts sent instantly, even loyalty rewards.

45:16Kara Goldin:It just feels polished. So if you're starting a business or running one that deserves better tools, Square helps you sell, manage, and grow without slowing down. Right now, you can get up to$200 off Square hardware when you sign up at square.com slash go slash Kara Golden. That's S-Q-U-A-R-E dot com slash G-O slash Kara Golden. Run your business smarter, Square. Get started today. Go check it out and let Square help you do what you do best. So you launched Third Love digitally first and then physical stores came. Can you talk about that expansion and give us sort of what was the thinking behind it?

46:10Kara Goldin:Obviously, this is creating more of an omni-channel experience, but how will you know that it's successful? Retail. So how did I know retail was something to try? So we had a lot of our customers asking to experience third love in real life. And that was in the early days. And it took us until 2019, where we, right before COVID, opened our first pop-up in Soho in New York. And that was really exciting for us. But one of the really interesting things about that store was how we designed it and what the customer experience was. It was very tech forward. So for anyone who might have gone in, you might remember that we presented you with an iPad and asked you to do the fitting room on the iPad to get your size.

47:05And it was very much like a guide shop where we had products around the store to look at and we had products to try on, but we didn't have a lot of inventory that you could walk out with. And what we learned very quickly is that nobody wanted to interact with the technology. People wanted to talk to a person, communicate with them, be fit by a real person, and importantly, walk out with whatever they wanted. And so those were some really great learnings we captured. Unfortunately, COVID hit. We did not renew our lease. We kind of walked back from retail for obvious reasons. And the goal was always to, at some point, get back to it.

47:43And so a couple of years ago, we said, we're going to go back into retail. and we spent the past few years really testing location, format, getting learnings, getting ourselves set up to be an omni-channel company, which is actually a hard thing to do when you're a D2C company because it's really changed. A lot of things change. And here we are today where we're really doubling down on retail. And I have deep belief that 3rd Love 2.0, like this next iteration for us, will be centered around in-person brand building and, you know, customer acquisition in a different channel for us.

48:24Kara Goldin:So if you were launching Third Love today with AI, TikTok shop, ChatGPT, you name it, all the buzzy kind of platforms that are out there, what would you do differently? Well, I think, look, I think today, it's always about finding a way in. with your core customer. And at any moment in time, there's usually different opportunities in finding a way in. And so, for example, for Third Love, when we launched, it was Facebook, like Instagram didn't even, you couldn't even advertise. And so we found a way in on a platform that was growing in popularity. And so if I was net new today, I would probably build a brand that was very much focused on AI and all the shopping as like the core of what we do.

49:19And of course, today we have a focus on, you know, how are we creating our content to be, work better with the LLMs and we're doing all that work. But if you were starting from scratch today, that would be, it'd be AI forward, right? Like why would you build any other way? And so I think for brands that exist today, you're thinking about how do we work our way in? But today I would be very much like, what does that look like? And it wouldn't rule out wholesale or retail. But I think digitally thinking about how you build an AI first shopping experience would be probably the most important thing.

49:55Kara Goldin:Yeah, definitely. How has your customer acquisition changed? Obviously, you're doing physical stores as well, but everybody talks about all the algorithms have changed. It's so much more expensive. And I feel like in many ways, if you've survived, you've been around long enough and you've taken care of your consumer, you have a base, right? Versus somebody who started a new business and is trying to find these new customers. But what do you think is really working today that maybe, you know, you just you've been either surprised by or you've just seen it change over time? I think the same thing holds true from early days of third love, which is a real test and learn mentality and an ability to get out of your own way to test things that feel uncomfortable.

50:50I think that still works because today more than ever, you need to be unique. You need to differentiate yourself from competition and try different angles. so that's always been true but I think it's even more true today because I do think as brand brands can get caught in ruts of like this is how we talk about things or this is the products that we sell to new customers and even yesterday I was in a meeting and I was looking at I was looking at repeat and return rates for our top 10 styles for new customers and there were definitely some standouts there where you're like when you see those kind of numbers where customers are loving certain products.

51:28As a company, what I took away from that is like, we should be doubling down on those products, more ads, more content around those sort of like newer hero products that can create an amazing customer experience today. And that's always changing. It changes because of the platforms. It changes because of your customer. It just changes because of the what's happening. So I guess the answer is like nothing is static and it's always changing. So what are you looking at to make those decisions? And then two, how do you create a cycle that is quick? You have to be fast. Digital marketing evolves. So like, you can't just be like, oh, this is what we always do.

52:09Like, wrong answer. Like, you'll be dead, right? So there is not one answer, but it's like, you have to have a couple of things that are working. And then if they are, like amplify them.

52:22Kara Goldin:Yeah, no, I totally, totally agree. And I think that it's oftentimes when you've got to figure out who that base is. And I think to our earlier discussion, I mean, really to focus on that base, right? And especially when things get too expensive or you don't have a ton of marketing dollars in the bank to be able to, you have to figure out like, how do you take care of that base and continue to grow that? And you've been just excellent at all of that. So you and your team, so you guys have done such a great job. I cannot end this conversation without talking about, I remember, I've known you and Third Love since the beginning, but you launched an ad years ago that I feel like that if there's a timeline for Third Love, that put you on the map.

53:15Kara Goldin:Can you talk about that a little bit and about that experience? Yeah. So in 2018, we were kind of quietly, I think, building Third Love. Like we were kind of doing our thing, acquiring customers, really focused on that. And we were wondering why Victoria's Secret kept doing their fashion show. And that was something we kind of started talking about like why why do they keep with this angel thing like what's the deal and the chief marketing officer of Victoria's Secret did an interview with the editor of Vogue and it was supposed to be a Q &A before the fashion show and what ended up happening is the next morning instead of kind of writing up the article she published the full Q &A just like the whole thing which is like a 20 to 30 minute read in itself but worth worth it if you have some time to read it and I woke up that morning and had like my my phone was blowing up my email was blowing up everyone's like have you seen this Vogue article and the title of the article was were nobody's third love were women's first love and that's what this the chief marketing officer had said in this interview and that was the title and so this whole article kind of it didn't directly talk about us besides the title but it was very much like all the reasons why they felt like the fashion show was like the thing to keep on doing.

54:43Deep belief in women want to see the fashion show. It's an entertainment event. All the things. We'll never have plus size models. We tried it in 2000. It doesn't work. I mean, one thing after another that inherently we had a deep belief that was untrue. And so we kind of were like, this is a moment for us. So we took out a one-page ad in the New York Times and wrote an open letter to Victoria's Secret. So it was Dear Victoria's Secret. And it was basically like me saying, I have a different point of view. Like, you said this, and we believe the opposite. And like, we believe women are all these things that you are not recognizing and that women deserve and want more for themselves, for their daughters, for their sisters, for their mothers, and for themselves, basically.

55:30And that letter went viral to some extent. And it really put us on the map as a brand who was going to stand up for women, have a different point of view, and also just be like, what is this crazy narrative that you're putting out into the world? And like, there are other options. So it was a very exciting time for us as a brand.

55:48Kara Goldin:Yeah, no, I absolutely loved it. I was cheering you from the Hint offices. I was like, this is so good. Like, I mean, kudos to Heidi and the team at Third Love because you guys did such an amazing, amazing job with that and really hit it head on. So it was super, super good. So, well, Heidi, thank you so much for joining us today. And sometimes you're just such a great reminder that sometimes it comes from listening to the consumer, figuring out that problem, taking it on. It's not easy, and especially in your category, for sure. It's complicated, but you were not willing to settle and you wanted to dig in.

56:33Kara Goldin:And I really admire that a lot. And thank you so much for sharing all of the tidbits about building the business, A Third Love. And for everyone listening, we'll have all the info in the show notes. But thank you again for doing what you're doing. I mean, it's just, it's awesome. So everyone's got to check out the fitting room. It's really pretty awesome. So all good. Thank you. Thank you so much. And thanks everyone for listening. Thanks again for listening to The Kara Golden Show. If you would, please give us a review and feel free to share this podcast with others who would benefit. And of course, feel free to subscribe so you don't miss a single episode of our podcast.

57:15Kara Goldin:Just a reminder that I can be found on all platforms at Kara Golden. I would love to hear from you too, so feel free to DM me. And if you want to hear more about my journey, I hope you will have a listen or pick up a copy of my Wall Street Journal bestselling book, Undaunted, where I share more about my journey, including founding and building, Hint. We are here every Monday, Wednesday, and Friday. Thanks for listening and goodbye for now. Support for today's episode comes from Square, the platform helping businesses run smarter. Building a business is one challenge. Keeping everything running smoothly every day is another.

58:00Kara Goldin:The businesses that make it look easy usually have great systems working behind the scenes. Square brings those pieces together from payments and appointments to staff and operations so business owners can spend less time managing the day-to-day and more time focused on growing. And here's the thing. Square is way more than just a payment swipe, or tap. It's a system that keeps an entire business humming, taking payments, managing inventory, running payroll, tracking sales, all in one connected platform. And it grows with you, whether you're running a one-person pop-up or opening your next location.

58:40Kara Goldin:One of my go-to spots here in the Bay Area is Equator Coffee, and they use Square, and you can feel the difference as a consumer. Fast checkout, receipts sent instantly, even loyalty rewards. It just feels polished. So if you're starting a business or running one that deserves better tools, Square helps you sell, manage, and grow without slowing down. Right now, you can get up to$200 off Square hardware when you sign up at square.com slash go slash Kara Golden. That's S-Q-U-A-R-E dot com slash G-O slash Kara Golden. Run your business smarter, Square. Get started today. Go check it out and let Square help you do what you do best.